Lords Sitting of 19 July 1990

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Southwark): The LORD CHANCELLOR on the Woolsack.

Message From The Queen Mother
The Lord Chancellor (Lord Mackay of Clashfern):: My Lords, I have to inform your Lordships that, pursuant to the Order of the House, I together with the most reverend Primate the Archbishop of Canterbury, the Lord Privy Seal, the Lord Aberdare, the Baroness HyltonFoster, the Lord Cledwyn of Penrhos and the Lord Jenkins of Hillhead, waited upon Her Majesty Queen Elizabeth the Queen Mother today with the Message of this House of 17th July and that Her Majesty made the following reply:
"My Lords and Members of the House of Commmons:
"I thank you from my heart for your kind messages which I am delighted to receive. I am, indeed, most touched that you should have come here to Clarence House, in the midst of your many commitments, to wish me well on my birthday.
"To me it seems just the other day that in this same room I accepted your greetings on a previous anniversary, and I am delighted that 10 years on there should be here today four members of that delegation.
"One of the consolations of growing older is to find pleasure and interest in the younger generation, whose qualities became very evident to me during the 25 years that I was Chancellor of the University of London.
"My belief in the fundamental good sense, wisdom and integrity of those in whose hands lie the destinies of our country is as firm now as it was in the long years of the Second World War.
"Throughout my life I have seen changes and developments, new patterns of behaviour and fresh outlooks. Much has been transformed but the loyalty and devotion of our people to the Crown remains constant.
"It is my prayer that, with God's help, our country will go forward from strength to strength in the years ahead.
"And now, once again, may I tell you how touched I am by your messages of good wishes at this time."

Package Travel: EC Directive
3.4 p.m.
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether they will amplify their answer of 28th June (HL Deb. col. 1721) with particular reference to the Commission threeyear plan and the EC Directive on package travel.
The Parliamentary UnderSecretary of State, Department of Employment (Lord Strathclyde): My Lords, the answer given on 28th June listed those items dealt with at the 13th June Consumer Council. As indicated, the Commission presented its threeyear plan to the council. However, there was no prior discussion of the plan by member states, nor was the plan debated at the 13th June council, although EC Ministers were able to offer comments on it. The council acted by unanimity to adopt the text of the package travel directive on which EC Ministers reached a common position in December last year with two minor amendments.
Baroness Burton of Coventry: My Lords, that repeats the answer I received some time ago. As the Government share in the disappointment of the consumer organisations that this threeyear plan lacks specific proposals, will the Government press for action to promote consumer integration in Community policies? As regards the package travel directive, can the Minister say how swiftly the Government hope to be able to implement that so that holidaymakers may benefit at the earliest opportunity?
Lord Strathclyde: My Lords, I hope that I can give the noble Baroness some comfort as regards the first part of her question. The Government have lost no opportunity to press for progress in this area of concern. They will continue to raise the subject of consumer integration whenever appropriate. Concerning the package travel directive, we shall be taking very seriously the date laid down in the directive of 31st December 1992.
Lord Williams of Elvel: My Lords, can the noble Lord tell the House to what extent, in the Government's view, the members of ABTA (the Association of British Travel Agents) are aware of the opportunities available to them to expand their businesses as a result of the package travel directive? We understand that they are being a little slow in this matter. What measures are the Government proposing to ensure that they are so aware?
Lord Strathclyde: My Lords, it is up to ABTA and its members to decide whether or not they want to expand in the European Community.
Baroness Burton of Coventry: My Lords, is the Minister aware that it is very pleasant to see him back at the Dispatch Box answering questions on this particular matter? Will he let me have any dates for future meetings of the Council of Ministers?
Lord Strathclyde: My Lords, I am not sure what to say in reply to the noble Baroness's comments. With

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reference to the dates of future meetings of the Consumer Affairs Council, there is a provisional date for 22nd October of this year.

Securities: Tax Allowances
3.7 p.m.
Lord Monson Lord Monson asked Her Majesty's Government:
Whether they will reconsider their intention to disallow for capital gains tax purposes the indexation allowances accumulated up to March 1990 attaching to units or shares in trusts specialising in giltedged and other fixed interest securities, in view of the retrospective implications of their proposal.
The Paymaster General (The Earl of Caithness): My Lords, no. I should make it clear that the proposed change is not retrospective. It applies only to disposals on or after Budget day.
Lord Monson: My Lords, I thank the noble Earl for that predictably disappointing reply. I take this opportunity to declare a very minor interest in the matter. Is he aware that the Government's proposals are indeed retrospective? Indexation is added to the original purchase price on a monthbymonth basis. Therefore, under these proposals, an investor could lose up to 96 months of accumulated indexation at a stroke. Moreover, the proposals are doubly retrospective in that they apply from the morning or early afternoon of 20th March, before the Chancellor made his speech. Is the Minister aware that when, in 1986, giltedged stocks were exempted from capital gains tax, 365 days' notice was given for investors to arrange matters to their maximum advantage by realising losses and deferring the realisation of gains? In this instance, is the Minister further aware that not even 365 seconds' notice was given?
The Earl of Caithness: My Lords, capital gains tax changes, whether increasing or reducing liabilities, normally apply to disposals on or after the date on which they come into force.
Lord Bruce of Donington: My Lords, perhaps the noble Earl will elaborate a little. Will he inform the House of the rationale behind the original decision?
The Earl of Caithness: My Lords, yes indeed. The purpose of the change is simply to close a loophole through which capital gains tax losses could be artificially created. I am sure that that is a measure that your Lordships will welcome.
Lord Monson: My Lords, is the noble Earl aware that someone who invested £10,000 in a perfectly respectable giltedged unit trust in March 1982, and who sold the units for £15,000 in June of this year, would have made a loss in real terms of £890? Nevertheless, that person may have to pay up to £2,000 in capital gains tax. In other words, tax of £2,000 would be payable on a loss. Does the noble Earl agree that, according to Mr. Nigel Lawson's own words, that goes totally against what he had been trying to achieve since he came to Parliament?
The Earl of Caithness: My Lords, I know that the noble Lord will agree that if somebody had bought an investment in a unit trust that dealt in the way that specifically relates to this Question, and invested £1 million at par and sold that investment for £1 million a year later, due to indexation that investor would have a theoretical loss of £100,000 to set off against other capital gains tax. That is why we are closing the loophole.
Lord Diamond: My Lords, am I correct in my understanding that, as a result of the new arrangements for separate assessment of husband and wife, those of us who are fortunate enough and rich enough to have wives who as well as ourselves have large investments on which they make capital gains will have double the capital gains tax relief that previously existed?
The Earl of Caithness: My Lords, that is a separate question, but the answer is yes.

Scotland: Unemployment Levels
3.10 p.m.
Baroness Elliot of Harwood Baroness Elliot of Harwood asked Her Majesty's Government:
In which months during the last three years unemployment in Scotland has fallen.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, the seasonally adjusted estimate of unemployment in Scotland has fallen in every month since April 1987. Scottish unemployment has fallen by more than 40 per cent. since the beginning of 1987.
Baroness Elliot of Harwood: My Lords, in thanking the noble Lord very much for that Answer, may I congratulate him on the fact that as a Minister he has been able to help in these matters and has been so successful? Thank you.
Lord Carmichael of Kelvingrove: My Lords, we are always glad to know that unemployment is falling. The Minister will be aware, however, that we have a long way to go. Unemployment in two Glasgow constituencies is as high as 19.9 per cent. and 18.3 per cent., whereas in certain parts of the South East it is 1.1 per cent. and is as low as 1 per cent. in midSussex. The Scottish figures do not include the fact that 770 steel jobs will be going soon. I wonder whether the Minister has any idea of what the knockon effect of that will be. More important still is the fact that in the past year the Scottish Office budget allocated to training was underspent because there were not enough young people to take it up. Can the noble Lord say what the Government intend to do to increase the confidence of young people in the training programme?
Lord Sanderson of Bowden: My Lords, the noble Lord asked about confidence. I turn to the Fraser of Allander report of 4th July which said:
"Scotland's economy continues to show clear signs of outperforming that of the United Kingdom as a whole".
From the point of view of confidence among young people, that must be some good news. I accept that

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some areas in Scotland show high levels of unemployment but I am equally aware that in areas such as Cumnock and Sanquhar the decrease in the rate of unemployment between 1987 and 1990, which was a very bad blackspot, has been 10.6 per cent.
The noble Lord mentioned Lanarkshire and the problems arising from the proposed closure of the hot strip mill. We are aware of those problems. Unemployment in the Lanarkshire traveltowork area could rise by up to 0.7 per cent. as a result of the closure. The noble Lord should also be aware that Lanarkshire has shown a remarkable recovery. In the past three years the number of unemployed in Lanarkshire has fallen by 46 per cent. and the unemployment rate dropped from 18.3 per cent. to 10.2 per cent., which is indeed still too high. I hope the noble Lord will realise that the moves by my right honourable friend the Secretary of State and the Scottish Office to encourage further investment in Lanarkshire are ongoing.
Lord Stoddart of Swindon: My Lords, if interest rates remain at their present unacceptably high level, how long will it be before unemployment in Scotland and indeed elsewhere in the United Kingdom starts going up?
Lord Sanderson of Bowden: My Lords, the noble Lord touches a chord with me when he refers to interest rates. He realises of course that the major underlying problem is inflation. He may look back on May 1979 with rose tinted specs because at that time unemployment in Scotland was 140,000, which was a very low figure. But we were also experiencing inflation rising to 20 per cent. shortly afterwards—
Noble Lords: Twentytwo per cent.
Lord Sanderson of Bowden: All right, 22 per cent. But let us not forget that between March 1975 and March 1976 the inflation rate was more than 20 per cent. That was a very long time for industry to have to cope with the situation.
Lord Williams of Elvel: My Lords, we always enjoy it when the noble Lord quotes all kinds of exciting figures from the mid1970s. Perhaps we can return to the Question. Will the noble Lord confirm that unemployment in the United Kingdom as a whole is now on an upward trend as demonstrated by today's figures? Is he saying that unemployment in Scotland is still on a downward trend, thus bucking the United Kingdom trend? At what point does he think that unemployment in Scotland will start to turn up?
Lord Sanderson of Bowden: My Lords, the noble Lord may be a forecaster of great repute but I am not. All I can do is to take today's figures. The June figures for unemployment in Scotland still show a downward trend.

Timeshare: OFT Report
3.15 p.m.
Lord ClintonDavis Lord ClintonDavis asked Her Majesty's Government:
What action they propose to take in response to the recommendation of the Office of Fair Trading concerning timeshares.
Lord Strathclyde: My Lords, the Director General of Fair Trading's report on timeshare was published on 3rd July. It makes a number of legislative proposals. The Department of Trade and Industry is considering his recommendations carefully.
Lord ClintonDavis: My Lords, I am obliged to the noble Lord for that reply. Do the Government recognise that speed is of the essence here because abuses identified by Sir Gordon Borrie in his excellent report will continue unless and until legislation is invoked? Does he recognise that Sir Gordon has very strongly urged that legislation is required to deal with unethical practices which prejudice consumers and ethical companies alike and that selfregulation simply will not suffice?
Lord Strathclyde: My Lords, all I can say to the noble Lord is that the DTI will make a comprehensive response as soon as possible; and after that we shall be able to see exactly what course of action to take.
Lord Williams of Elvel: My Lords, can the noble Lord tell us whether other countries in the European Community have similar problems to those identified by the director general; and if so, how do they deal with them?
Lord Strathclyde: My Lords, I cannot answer for what happens in other countries of the European Community.
Lord Ezra: My Lords, can the noble Lord indicate the extent to which the industry is itself trying to remedy the defects identified in the report by the Director General of Fair Trading and the extent to which he feels that this might go some way to solving the problems?
Lord Strathclyde: My Lords, I am aware that the Timeshare Developers Association was criticised somewhat within the report. We have had a period of selfregulation for some time. Now the department must study the recommendations of the report to see what should be done in the future.
Lord Jenkins of Hillhead: My Lords, what does the noble Lord mean when he says that he cannot answer for other countries in the European Community? He and his ministerial colleagues are constantly trotting out comparisons when they happen to think they are favourable to the Government, whether yesterday or the day before about the number of directives implemented by different countries or about inflation rates or growth rates when the figures were favourable long ago.
Lord Strathclyde: My Lords, all I can say is that I am not responsible for the decisions taken by national

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governments of other European Community countries There is a European Commission dimension to this and I understand that the European Commission is also looking into the problem.
Lord Williams of Elvel: My Lords, will the noble Lord discard his position of total ignorance about what happens in other member states of the Community? Will he kindly find out what happens, report back to the House and see what lessons the Government should be learning?
Lord Strathclyde: No, my Lords. The Office of Fair Trading has just made a comprehensive report about the whole industry. We have now received that report; and in the light of considerations we shall then be taking further action.
Lord ClintonDavis: My Lords, will the Minister give some further and better particulars as to what he means by urgent consideration? Can we in fact expect legislative proposals in the next Parliament to deal with this matter, bearing in mind, as I said before, that the abuses continue? Secondly, is he aware that the European Commission has introduced, or is about to introduce, proposals dealing with this very matter? Does he consider it appropriate for the European Commission to do that? I hope he will say yes.
Lord Strathclyde: My Lords, the matter is still under discussion as it comes under the threeyear future plan. As regards the timing of the department's response, that will be given as soon as possible.

Business
3.20 p.m.
Viscount Davidson: My Lords, it may be for the convenience of the House to know that the Committee stage of the Broadcasting Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment the Meat and Livestock Commission Levy (Variation) Scheme (Confirmation) Order 1990, the Sea Fish Industry Authority (Levy Powers) Order 1990 and the Air Navigation (Noise Certification) Order 1990 will be taken.

Landlord and Tenant (Licensed Premises) (No. 2) Bill
Lord Williams of Elvel: My Lords, I beg to introduce a Bill to amend the Landlord and Tenant Act 1954 in order to provide for compensation during a transitional period for tenants of licensed premises to whom Part II of that Act applies by virtue of Section 1(1) and Section 1(2) of the Landlord and Tenant (Licensed Premises) Act 1990. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Williams of Elvel.)
On Question, Bill read a first time, and to be printed.

Business of the House: Debates, 24th July
The Lord Privy Seal (Lord Belstead): My Lords, I beg to move the Motion standing in my name on the order Paper.
Moved, That Standing Order 38 (Arrangement of the Order Paper) be dispensed with to enable the Motion standing in the name of the Earl Russell to be taken before the Motion standing in the name of the Lord Henley on Tuesday 24th July.—(Lord Be!stead.)
On Question, Motion agreed to.

Broadcasting Bill
3.22 p.m.
The Minister of State, Home Office (Earl Ferrers): 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.—(Earl Ferrers.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES In the Chair.]
Earl Ferrers Earl Ferrers moved Amendment No. 163A:
After Clause 20, insert the following new clause: (&Restriction on changes in control over Channel 3 licence holder
.—(1) Where
(a) any change in the persons having control over—
(i) a body to which a Channel 3 licence has been awarded or transferred in accordance with this Part of this Act, or
(ii) an associated programme provider, takes place within the relevant period, and
(b) that change takes place without having been previously approved for the purposes of this section by the Commission,
then (subject to subsection (4)) the Commission may, if the licence has not yet been granted, refuse to grant it to the body referred to in paragraph (a) (i) above or, if it has already been granted, serve on that body a notice revoking it.
(2)In subsection (1)—
"associated programme provider", in relation to such a body as is mentioned in paragraph (a) (i) of that subsection, means any body which is connected with that body and appears to the Commission to be, or to be likely to be, involved to any extent in the provision of programmes for inclusion in the licensed service; and
"the relevant period", in relation to a Channel 3 licence, means the period beginning with the date of the award of the licence and ending on the first anniversary of the date of its coming into force;
and paragraph 3 in Part I of Schedule 2 to this Act shall have effect for the purposes of this subsection as if a body to which a Channel 3 licence has been awarded but not yet granted were the holder of such a licence.
(3) The Commission shall refuse to approve for the purposes of this section such a change as is mentioned in subsection (1) (a)—
(a) if it appears to them that the change would be prejudicial to the provision under the licence, by the body referred to in subsection (1) (a)(i), of a service which accords with the proposals submitted under section 15(3) (b) by that body (or, as the case may be, by the body to which the licence was originally awarded), or

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(b) it appears to them that the change would be prejudicial to the provision of Channel 3 as such a nationwide system of services as is mentioned in section 14(1);
and the Commission may refuse so to approve any such change if, in any circumstances not falling within paragraph (a) or (b) above, they consider it appropriate to do so.
(4) The Commission shall not under subsection (1) refuse to grant a licence to, or serve a notice on, any body unless they have given it a reasonable opportunity of making representations to them about the matters complained of.
(5) Where under subsection (1) the Commission refuse to grant a licence to any body, section 17 shall have effect as if that body had not made an application for the licence; and, where under that subsection they serve on any body a notice revokin3 its licence, subsections (5) to (7) of section 37 shall apply in relation to that notice and the revocation of that licence as they apply in relation to a notice served, and the revocation of a licence, under subsection (3) of that section.").
The noble Earl said: It may be for the convenience of the Committee if, when moving Amendment No. 163A, I speak also to the proposed new clause in Amendment No. 293A, together with Amendments Nos. 163B to 163F, 169B, 341A and 341B which are tabled in my name and that of the noble Baroness, Lady Birk.
The Government noted the many strong arguments which were put forward by this Chamber and Members of another place for a moratorium on takeovers, in order to provide for a period of stability at the commencement of the new licence period. The proposed new clauses therefore provide for a moratorium on takeovers of Channel 3 and 5 and national radio licensees from the date of the granting of a licence to the end of the first broadcasting year of the licensee.
The three other related government amendments are consequential. In the case of Channel 3, this will mean effectively a twoyear moratorium. The period of one year from the date of broadcasting is the time period which Mr. Russell, the chairman designate of the Independent Television Commission has asked for. Thereafter, we believe that it would be right to allow takeovers of licensees. The prospect of takeovers is an important market discipline. But that does not mean that there will then be a free for all. Takeovers and transfers of licences will still be subject to the oversight of the ITC. It will have to be satisfied that the original programme promises and licence conditions can still be met by the body which takes over the licensee, and that the new owners are people to whom it would have been prepared to grant a licence in the first place. I very much hope that this development will essentially meet the concerns expressed by many noble Lords on Second Reading.
With regard to the amendments tabled in the name of the noble Baroness, Lady Birk, these would deny the Independent Television Commission any discretion in agreeing to a change of ownership during the licence period, and would require them to revoke the licence in all circumstances where any such change occurred. I do not believe that that can be right. Moreover, I think that when the noble Baroness looks deeply into the matter she will also agree that that cannot be right. There may well be circumstances
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where it would be positively beneficial for a change of ownership to occur, and the ITC should have the scope to recognise that fact.
Amendment No. 163D would give the Independent Television Commission discretion to refuse changes of ownership after the moratorium period and through-out the whole of the licence period. I find it difficult to accept that amendment for the reasons which I have given. Takeovers are an important market discipline and after the initial moratorium period it would be inappropriate for a light touch regulatory body to he able to interfere with issues of ownership, other than to satisfy itself— and this is important—that the new owners would continue to stick to the licence conditions. Of course, as matters stand, it will still be able to do so. The other amendment would extend the moratorium period to two years after the commencement of broadcasting. That is unnecessary, as it is a longer period than Mr. Russell would consider to be appropriate.
Clause 5(3)(b) and (c) deal with changes in the control of a licensee. If the ITC is not wholly satisfied that new owners could continue to satisfy the licence conditions, it could revoke the licence. The prospect of that happening will almost certainly mean that no takeovers will occur until the company effecting the takeover has satisfied itself that the commission would approve. That situation is bound to take much of the heat out of predatory takeovers. But if the ITC is fully satisfied that the new owners could continue to fulfil all the licence conditions it should not have a power to block a takeover. The moratorium period is designed to give a period of stability at the beginning of the new licence period. But after that time, the licensees do not need to be unduly cosseted.
There was a great deal of concern expressed about the moratorium both by Members of this place and those in another place. For the reasons which I gave on Second Reading, we felt that it was right to have the disciplines of the market place. However, in view of the fact that so many Members of this and another place thought that there should be a moratorium, the Government have agreed that it should be introduced.
I hope that Members of the Committee will agree that a oneyear moratorium, which as I explained would, in essence, as regards Channel 3 programmes, mean a twoyear period of stability, is acceptable. I beg to move.
Baroness Birk Baroness Birk moved, as an amendment to Amendment No. 163A, Amendment No. 163B:
After Clause 20, Line 7, leave out from ("period") to end of line 9.
The noble Baroness said: Perhaps I may start by thanking the Minister for explaining the government amendment so clearly. I should also like to say that the fact that we have amendments regarding a moratorium before us today is a great triumph for Members of this Chamber on all sides. I say that because when the Bill left another place, although there had been a great many objections to the omission of such a provision from the legislation, nothing was done and it arrived in this place with no clauses referring to a moratorium. However, we now

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have these proposed new clauses and we are most grateful to the Minister. In my view, this provision makes very good sense.
We on this side of the Committee, together with the Social Democrats, had tabled an amendment on a moratorium before the Government put their proposal forward. However, in the circumstances, we thought that it would be preferable to table amendments to their amendment rather than to leave our original amendments on the Marshalled List.
The main difference and bone of contention which arises between the Government's amendment and those which we have tabled is the length of time for which the moratorium will last. The Government's proposed moratorium would last for 18 months or two years. It would extend from early 1992 to December 1993. In another place the Opposition argued for a moratorium of at least three years.
It is not just because Members of another place argued for a moratorium that we have put these amendments forward. The inclusion of such a provision in the Bill seems to us to be much more sensible. As we see the situation, there will be a year from the time when the licences are awarded. After that time, according to the professional opinion which I have sought from the industry, what we really need is a period of two years to enable the companies concerned to work out what they are doing and to plan the screening of programmes. A year is not long enough. The main difference between us is the length of time. I ask the Government to consider that point because if the Bill goes through we all want the companies to be successful and to put out good programmes within a sufficient period of time without having to look over their shoulders in case they are about to be taken over, which of course was the main reason for the proposed moratorium in the beginning. The government amendment does not give long enough. The idea of having two years' screening should be seriously considered by the Government.
The new clause is permissive, as the Minister said, because the ITC may refuse to grant or revoke a licence during the licence period. We believe that any changes of ownership during the relevant period should require the ITC automatically to revoke the licence. That would be achieved by changing "may" to "shall" in line 10. The ITC's power to refuse to approve a takeover is qualified by the fact that such a takeover must prejudice the service or the network. The moratorium is limited in its effect by the length of the relevant period, while the danger of takeovers continues beyond. We believe that the same takeover provisions should continue to apply after the relevant period, albeit with the retention of the ITC's more permissive power provided by the word "may" in line 10.
We turn now to the more permissive side of the amendment. Not to make the power mandatory in respect of takeovers in the first instance is wrong because it would put the ITC in a position, which I do not believe it wants, where it has to decide whether the takeover is correct, whether it should be allowed,
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whether it is too big or whether it is small enough not to be taken notice of. That is wrong when one wants as clear and decisive a situation as possible. By making the provision mandatory and not therefore putting the burden on the ITC, it will make the clause clearer and stronger.
Once on air, companies need a reasonable period in which to demonstrate what they can do. We must remember that the companies which will eventually gain the licences will not all be the same companies as now. Some of them may be, but some may be new and will not have had the opportunity or the experience to be able to get their feet quickly under the table.
The amendments deal not only with the period but also with the change. There is a letout in one of the amendments which gives the ITC a certain amount of flexibility. If it wishes to be more permissive, it is always open to it to discuss the matter with the OFT or one of the government departments. My impression is that the ITC would be happier if the matter were completely clear cut. I beg to move.
3.30 p.m.
Lord Thomson of Monifieth: I support Amendment No. 163A and the associated amendments tabled by the noble Baroness, Lady Birk. Like her, I warmly welcome the fact that the Government have moved an amendment proposing a moratorium. It has taken a long time and a great deal of argument in this place and another place to bring the Government to the view that it is a common sense modification of their free market ideology. However, better late than never. It is a sensible change.
I support the noble Baroness's proposition that one full year of broadcasting is too limited a period. With all the amendments that we are discussing, I try to do my best to apply the test of the interests of the viewers and the listeners. What has been true over the years about the commercial broadcasting system—it will be true about the new system—is that the period during which one reallocates commercial contracts and licences is immensely destabilising for the companies involved and therefore for the programmes that they produce. It is a period during which the viewers suffer from a degree of destabilisation. It is important in the interests of the viewers and the listeners that one should do one's best to produce as much stability as possible during a period of change. There is a degree of separation between the shareholders and a company's senior management and the creative people who produce the programmes. It is important to try to allow the people who are making the programmes, which are what interests the viewers and the listeners, to settle down and get on with the job so that when under the new arrangements the company is inevitably in the market place, the dust will have settled on the programme-making side and the programmes will be available. When the ITC has to make the judgment as to whether the company making the takeover bid is likely to be able to fulfil the licence conditions relating to the programmes a degree of continuity will be possible. The advantages of two years of transmission over one year are considerable.

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I do not know what the IBA's view is as to whether the provision should be "may" or "shall". I should have thought it would have been a help to the IBA and the ITC in what will be a difficult situation to have a clear and unequivocal statutory position which will enable them to say, without fear of having to face a judicial review of their decision, that Parliament has laid down a closed period for takeovers and that they have no alternative but to impose that closed period. For those reasons I strongly support the amendments tabled by the noble Baroness.
Lord Boston of Faversham: I join my noble friends Lady Birk and Lord Thomson of Monifieth in their welcome of the Government's decision and commend them on providing a moratorium on takeovers. That is excellent. It shows that the Minister and his fellow Ministers Mr. David Mellor and the Home Secretary, Mr. David Waddington, have once again listened and taken account of the arguments advanced in this place, in another place and elsewhere. In their approach to major changes sought in the Bill, Ministers have not just said to themselves, "We have one concession to make. We do not much mind upon which, topic we make it; but we shall give something away". On the contrary, they have treated on their merits the arguments on the various proposals put forward. They have treated each case separately and have decided accordingly. So often governments of different complexions have decided to make one concession, irrespective of the merits of the arguments on a variety of amendments. I feel it right to pay tribute to the continuing constructive approach of Ministers to the Bill.
As has been said already by my noble friends, now that the Government have decided in favour of a moratorium in principle, we—and the Government too—wish to make that moratorium as effective as possible in order, in part, to achieve the Government's aims as effectively as possible. Hence, the only point on which we now need to concentrate, as has been made clear, is the length of the moratorium.
At Second Reading I pointed out that in the debates in another place a popular period among Members, not just from one side but from all sides, was at least three years. There seems to be general agreement that the moratorium should start so as to cover the period from the time when the franchises are awarded.
Perhaps we may concentrate on what the period should be after broadcasting has started. Also at Second Reading, I went on to argue that it should last for at least twoandahalf years from the time when broadcasting starts, with an an absolute but rather unsatisfactory minimum of oneandahalf years. My noble friend Lady Birk in her Amendment No. 163F has proposed two years. I hope that it will not embarrass her if I go a little further than that, but hers is an excellent proposal.
Two years—twoandahalf years is better—would allow time for the companies to establish themselves and for a proper assessment to be made of their programme performance. That is important. The bare 12 months which the Government propose would not
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be enough to enable that to be done. Here I take up one point which the noble Earl, Lord Ferrers, has just made. He referred to the period mentioned by the chairman of the IBA, Mr. George Russell. I remind the Committee that Mr. Russell said that he would like at least one year. He clearly wanted—and has said so elsewhere—more than one year. No doubt that is for some of these reasons.
I remind the Committee that companies have been bringing their year ends into line at 31st December. Annual reports do not come out until some months later so it would be reasonable for the moratorium to go at least to the middle of the year. Thus the reports could appear and a thorough annual assessment could be made.
Again I remind the Committee that if the moratorium finishes on 1st January 1994, as is proposed under the Government's amendment, there would not even have been a complete winter schedule of ITV Channel 3 programmes. We would still only be a little way into the winter schedule and would not have seen a full year's service right through.
Presumably in specifying one year after the new franchises start broadcasting, the Government felt it would enable contractors to establish themselves and allow their programmes to be assessed. Neither of those aims would be achieved by the bare 12 months. I refer to the views of the IBA once more. It has given its view in the ITN context that the new contractors will not have established themselves until the end of 1994. That is after two full years, the period proposed in my noble friend's amendment.
I very much support what my noble friend Lord Thomson of Monifieth said about the viewers' interests being paramount. It is surely in viewers' interests and would secure another government aim to achieve consistency in producing good quality programmes that there should be time to see not just how one but two years' programmes have gone. I submit that it is clearly desirable to compare the first year with the second, to see whether improvements have been made and the new contractors have established the start of a consistently good series of programmes. That is part of the case for allowing the time for a full assessment to be made after two years of broadcasting and to make that assessment for preference after about twoandahalf years of broadcasting. I very much hope that the Minister will at least say that he will have another look at the length of the moratorium. To do so would be both in the viewers' interests and in the interests of securing most effectively the Government's aims.
3.45 p.m.
Baroness Macleod of Borve: Perhaps I may intervene since I have been privileged to be a Member of the IBA for four or five years. In my view and my experience what Members opposite have said is absolutely correct. It does not seem possible to me for new franchise holders to put their potential on air or on television within such a short time. People can change their programmes according to the publicity they receive and for all kinds of reasons. Two years

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seems to be the minimum that should be given to the franchise holders either to improve their programmes or go further down the road they have chosen. However, they should be given the opportunity of two years in which to improve, if improvement is needed. I support the noble Baroness's amendment.
Earl Ferrers: My noble friend Lady Macleod is concerned that there should be a twoyear period during which there would be a moratorium. In practice, that is what there will be. The moratorium only begins to operate for a year once the broadcasting starts. The broadcasting will not start until about a year after the licence has been granted. So from the time when the licensee knows that he will have the licence, in effect he has a twoyear period, under the Government's amendment, during which he may not be taken over. That is quite a long time.
Mr. Russell is, after all, the chairman designate of the ITC. He indicated that a moratorium lasting until the end of 1993 would be sufficient. The main reason for the moratorium was the risk of disruption before the start of broadcasting or immediately thereafter. This is what the Government's amendment seeks to secure. A number of people have told me that the potential broadcaster, the potential licence holder, must make his bid. To do so he must go to a tremendous amount of trouble and expense in formulating his bid, with all the costs involved. Other predators will be sitting in the wings and as soon as he gets the licence along comes another predator who has had none of that trouble or expense and eats him up. "That's not fair", people say. The Government agree that that would be disturbing and disrupting.
The noble Lord, Lord Boston, said this at Second Reading. The argument went that if during the following months there was a potential takeover, the management of the new licensed company would spend its time trying to fight the takeovers as opposed to getting on with putting the licence into operation. This is the vulnerable period. So we decided that there should be a moratorium for that year. Thereafter, the licence holder would be able to display his ability by broadcasting. The moratorium would last for the whole year of broadcasting.
We believe that that is a pretty generous length of time. I know that some people would like longer. During the Second Reading debate some people suggested a moratorium of three years, others two, and some said that one year would do. We have provided a moratorium for one year which, in effect, comes out to two years. It is rather like horse trading. The noble Lord, Lord Boston, says "We have got one year, now what about two years or perhaps oneandahalf years?" One has to draw the line somewhere. If one takes the view that there is a certain market discipline in allowing takeovers, it is not unreasonable to say to these companies, "You have virtually two years of quietude when the takeover will not be allowed".
I feel that we should not seek to extend that. I now turn to the words "may" or "shall" which appear in Amendment No. 163C standing in the name of the
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noble Baroness. If we were to substitute the word "shall" for the word "may", it would mean that the ITC would have to revoke every licence should there be a change of ownership. There could be circumstances where a change of ownership could be beneficial—for example, where a licence holder was going bust. If another company sought to take over that licence, that could be a beneficial arrangement. However, under the amendment of the noble Baroness, that licence would have to be revoked and all the screens in that area would go blank.
It would be a pity to deny the ITC the right to allow a licence to continue in the hands of a new person. In the example to which I have referred it would be beneficial for a new licence holder to take over the licence of a company that was in financial straits. I hope that the Committee will agree that the word "may" is correct and that it will not impose strictures on the ITC. I hope that the Committee will appreciate that, while we understand the reasoning behind the speeches of the noble Baroness and the noble Lord, Lord Boston of Faversham, on the whole we believe that the oneyear moratorium from the date of broadcasting is the correct solution.
Baroness Birk: I thank the Minister for that reply and explanation. I shall deal with the words "shall" and "may" before I discuss the length of time of the moratorium. The Government's proposed new clause states in subsection (3):
"The Commission shall refuse to approve for the purposes of this section such a change as is mentioned in subsection (1) (a)".
In other words, certain mandatory duties and responsibilities will be placed on the commission.
I am afraid that I did not agree with the Minister's general explanation. Perhaps we were talking about two different things. I should like to take that matter away, think about it and perhaps return with it at a later stage. As regards the length of time, I believe there was a little misunderstanding over this at one point. The Minister said that two years had been decided upon and implied that we had been asking for that in any case. However, I think that later on he realised that that was not the case. What we are asking for is one year while the arrangements are being made, but two years of screening. That is the important point. My noble friend Lord Boston expressed that point well when he said that such a period would enable the ITC to take stock after a year's screening and be able to discuss the screening. However, one year altogether is far too short a period.
I take the point about horse trading. However, as I have pointed out, we tabled an amendment many weeks ago, long before the Government's amendment was tabled. At that stage my noble friend Lord Boston suggested a threeyear period. I would prefer that too, but finally in our amendment we were cautious and modest. I should like to see that modesty rewarded. We are talking about three years in total, but that period includes two years' screening.
The Government have come such a long way from the stage when they were saying no all the time in another place—we are grateful for that—but they are

1019
spoiling the ship for the sake of a ha'porth of tar, or one year. I hope that the Minister will consider taking this matter away for further consideration and coming back on Report with it. We would all be grateful to receive such an undertaking.
Earl Ferrers: I quite understand that the noble Baroness would be grateful if I gave that undertaking. She is enormously persuasive when she says that it is a pity to spoil the ship for a ha'porth of tar. It is hardly a question of a ha'porth of tar. We are giving a oneyear moratorium from the time at which screening starts. However, the noble Baroness says in the most charming way that she would like a twoyear moratorium. A twoyear moratorium would mean in fact a threeyear moratorium—we are agreed on this —because there is also the period before screening commences. The noble Baroness is in fact saying that companies in the independent television business should have the privilege of a threeyear break from being subjected to market forces, and that if any company wishes to take those businesses over it should not be allowed to do so during that period. She believe s those companies should be isolated and insulated from such pressures.
With the greatest respect to the noble Baroness, that is asking for a little too much. We have given a oneyear moratorium. We think that that is right. That concession represents a considerable change of heart on the Government side. The noble Baroness, and the noble Lords, Lord Boston and Lord Thomson, have been kind enough to recognise that. We have made a considerable change, and we think that is as much of a change as we can reasonably be expected to make. I hope the Committee will agree that to ask for a threeyear moratorium for the independent television companies, during which period they cannot be taken over, is going too far.
Lord Annan: I hope that the Minister will think again on the limit of two years—the one year, plus the waiting time. I do not know how much experience the Minister has of companies being taken over. I have no such experience, but two of my friends have recently undergone that experience. They tell me that when one is faced with a hostile takeover bid, one's entire energies are spent in repelling the invaders. One has to put oneself in the hands of one's public relations advisers who then mount a campaign to persuade the institutions and one's shareholders that one's company is doing a good job. One has no time whatever for forward planning or for running one's company.
That is why some of us feel that if this period could be extended to what will amount to a total of three years in all, companies would be given the chance to get going and to devote their energies to programming within the limits of satisfying their shareholders. We should not put such a weight upon companies in the early stages that they must convince shareholders—in this case we are probably talking about the institutions—
that they are maximising profits to the fullest extent, when the ITC is looking at them to see whether they are living up to the promises which they made when they won their franchises.
Earl Ferrers: I go along with what the noble Lord, Lord Annan, has said. The people I know who have been subjected to takeovers have found it a most disagreeable business. The noble Lord is right to say that in such circumstances one directs one's energies to defending one's premises and one's organisation. That is why we have said that there should be a moratorium. It is obviously a matter of opinion how long the moratorium should last.
Clearly there comes a time when people have to defend their organisations and it is quite right that other companies should be allowed to take them over. However, to say that a twoyear period is not enough and that there should be a threeyear period, or perhaps even a fouryear one is, I think, going a little too far. One cannot insulate companies from the general marketplace for too long a period. I would suggest that two years is long enough.
Baroness Birk: I am disappointed but at this stage I do not think that we shall get any further along this road. Therefore I shall withdraw the amendment while reserving the right to come back at the next stage when I hope that there will have been some change of heart. I beg leave to withdraw the amendment.
Earl Ferrers: With the greatest respect to the noble Baroness, I do not believe that we were speaking to her amendment; it was my amendment.
Baroness Birk: I was attempting to amend the government amendment. I think that I am right in saying that an amendment to an amendment is dealt with first.
Earl Ferrers: I stand in sackcloth and ashes. The noble Baroness is quite right; she was amending my amendment.
Amendment to the amendment, by leave, withdrawn.
[Amendments Nos. 163C to 163F not moved.]
On Question, Amendment No. 163A agreed to.
4 p.m.
Clause 21 [The Channel Four Television Corporation]:
Lord BonhamCarter Lord BonhamCarter moved Amendment No. 164:
Page 22, line 23, leave out subsection (4).
The noble Lord said: The amendment addresses the power of the Government to veto appointments to the board of Channel 4 made by the ITC. It is an important matter and I hope that we shall be able to persuade the Minister to change his mind wholeheartedly on this occasion rather than halfheartedly as on the last occasion.
As I understand it the Government's argument for introducing the power to veto appointments made by its own appointed body, the ITC, to the board of Channel 4 is that the ITC has less direct oversight over the activities of Channel 4 than over those of the old IBA, and therefore the Government's role, as representing the public—if I follow Mr. David Mellor's argument in another place correctly—is necessary and more important than when the IBA carried out that function.
If that is the case the Government are saying that the powers with which they have endowed the ITC are insufficient for it to carry out one of its most important functions, which is to appoint the board of Channel 4. I would much prefer the Government to change the powers of the ITC rather than to bring the Government into the very arena of broadcasting by themselves making appointments to that body and therefore running the risk of being thought to be or actually politicising Channel 4.
The Government have undermined a basic principle which has governed broadcasting in this country for many years, namely that it should be the object of policy to introduce a buffer between government and politicians and the broadcasters and everyday broadcasting. That is an extremely important principle and one which has been followed in many other fields, such as the Arts Council, with very great success. It was a brilliant invention and one which we should hang on to at all costs.
In reality, the Government are saying that they do not trust the ITC to make those very important appointments, to appoint suitable people to those jobs. I ask myself what constitutes an unsuitable person for such jobs. They can only be either professionally unsuitable or politically unsuitable. The ITC will not appoint a lot of crooks to the board. It is very unlikely that the ITC will be so ignorant of the area in which it operates that it will appoint to those jobs people who are professionally inadequate. Therefore one is reduced to concluding that what the Government mean by an unsuitable person is a person who is politically unsuitable to the Government. It is precisely that which must be avoided because of the danger of politicising appointments these days by governments of all parties, not least this Government whose record in this matter has not been without blemish. The risk of governments using their patronage to put their own people in places of authority is something that we have to avoid and if we do not, it is at our peril.
The system under which this country has run such institutions in the past is one based on selfrestraint in which governments do not pack bodies like the BBC, the IBA or the ITC with people of their own political persuasion. There have been far too many signs over the last year that that selfrestraint has not been properly exercised. The introduction of this clause in this Bill, providing the Government with the capacity to veto appointments and the ability to remain as a threat to the board of Channel 4 in all its daily operations, is something which we should not allow to pass. I beg to move.
Baroness Birk: In supporting the amendment of the noble Lord, Lord BonhamCarter, I should like to clarify one point. Perhaps the Minister can help. I gained the impression recently from Michael Grade, head of Channel 4, that there has been a change in the arrangements—which is not yet in the Bill. I understand that the arrangement would be very much more distant: the Secretary of State would not make appointments, but Channel 4's choice would be made
1022
openly and the Secretary of State would only have the power to veto it. However, the matter would already be in the open and it would be a much less closed arrangement than at present appears in the Bill.
Is that true? If the Secretary of State is to have such a power does that mean that Channel 4 would be prevented from making public the name of its choice before the Secretary of State used his power of veto? I should like to know what change is to be made. I have the impression that there is to be a change. If there is to be a change I should like to know what it is and how it will be reflected in the Bill.
Lord Winstanley: Naturally I support the amendment moved by my noble friend. I believe that having set up the machinery the Government should trust it to do the job. I do not believe the requirement is necessary.
I speak merely in order to ask a question which the Minister may be able to answer when he replies to the amendment. Hitherto there has always been an age limit. Under the existing statutes members of the boards of independent television companies have been obliged to retire at the age of 70. So also have members of the Independent Broadcasting Authority. It appears that the age limit has now disappeared. If I am correct in saying that it has disappeared, can the Minister tell me why?
Lord Sanderson of Bowden: At present Channel 4 is wholly owned by the IBA, which broadcasts its programmes, approves its schedules and decides its income. The Government appoint the members of the IBA. There have been no objections to those arrangements, even although they involve government responsibility for the appointment of the ultimate controllers of Channel 4.
In future Channel 4 will be owned by the corporation, which will be appointed by the ITC, with the Government retaining only a long stop power of veto to be used in the remotest of circumstances. The ITC will have the power to dismiss members of the corporation without government approval. We see these arrangements as involving a considerable withdrawal of government influence over Channel 4 and as giving Channel 4 a much larger degree of independence than it has hitherto enjoyed. Channel 4 will be a statutory body operating to a statutory programming remit. We therefore believe that the Government are justified in retaining some interest in the process of appointments to the corporation.
The noble Lord, Lord Winstanley, asked about an age limit. There is currently no age limit on appointments to the IBA, nor will there be for the ITC. I should point out that Channel 4 itself, having been consulted about these matters, is quite content with the new what I might call lighter touch involved in the Government's proposals for Channel 4 so far as concerns the board.
I hope that I have explained this matter clearly enough to the noble Baroness. There is a change and we believe that it is a change for the better. I hope that this explanation will mean withdrawal of the amendment.
Lord Thomson of Monifieth: I listened carefully to the Msinister's explanation of this change but I am bound to say that I remain unconvinced by the arguments that he adduced. It is true that the Bill changes the status of Channel 4, which now becomes a separate Channel 4 corporation, where previously, nominally at least, it was a wholly owned subsidiary of the IBA.
But as the Minister will know, in practice the IBA dealt totally at arm's length with its relations with Channel 4 in regard to its regulatory responsibilities. There have been references in earlier debates in this Committe to criticisms of the degree to which the IBA carried out that regulatory responsibility for programme matters that came out of Channel 4. But in practice the IBA treated Channel 4 at arm's length, exactly as it treated all the other programme contractors.
In the past members of the board of Channel 4 were appointed by the board of the IBA without needing to seek the approval of the Government. I cannot understand why in these circumstances it is not perfectly possible and consistent to continue that arrangement. The Government appoint the members of the ITC as they appointed the members of the IBA; then the members of the ITC appoint the members of the Channel 4 corporation. That insulates the Government from what is an especially sensitive appointment. I should have thought that from the Government's point of view it was a healthy insulation which protected them from the kind of charge about which my noble friend Lord BonhamCarter was concerned.
Given the facts as I have sought to describe them, I do not believe that the change in the structure of Channel 4 is an adequate justification for a change in the method of appointment of the board of Channel 4.
Lord Sanderson of Bowden: I do not know that I can add very much to what I have said. I said that this is a long stop power. Channel 4 will be a statutory body operating to a statutory programming remit. As the noble Lord said, if there have been statutory requirements, as in the case of the ITC, the BBC, the BSC, the BCC and the fourth Welsh Channel, they all have boards appointed by the Government.
I thought that we had moved on a long way since 1978. I do not want to be churlish about this matter but the other day Sir Robin Day's memoirs brought the issue back to me. I noticed that the White Paper produced by the previous government spoke about plans to secure greater government control over the BBC's output by inserting a new layer of management appointed by the Home Office.
In this area we are trying to have a lighter touch but I do not think it unreasonable for the Government to retain a long stop power as contained in the Bill as it stands.
Lord BonhamCarter: I must confess that I found the Minister's answer completely unsatisfactory. He spoke about a long stop power which will only be used in the remotest possible circumstances. He did not tell us what the remotely possible circumstances would be.
1024
I put to him two possibilities: one, that the person was professionally unsuitable (which did not seem to me very possible because I thought it unlikely that the ITC would appoint a professional dunce to the board); the other, that he might be politically unsuitable (which seemed to be all too possible).
The Minister said that they were trying to introduce a lighter touch. In point of fact, as he must know, he has introduced a heavier touch. The IBA did not have to obtain approval for the chairman and board of Channel 4. He cannot deny that. Now the ITC will have to obtain approval for the chairman and the board of the ITC. In my view that is a very funny definition of a lighter touch. I am sorry that the Minister has been unable to meet me in what I believe to be a very important constitutional position. I am afraid that I must test the opinion of the Committee.
4.15 p.m.
On Question, Whether the said amendment (No. 164) shall be agreed to?
Their Lordships divided: Contents, 81, NotContents, 115.

Division No.1

CONTENTS

Abinger, L.

Jenkins of Hillhead, L.

Airedale, L.

Jenkins of Putney, L.

Annan, L.

Kennet, L.

Ardwick, L.

Kilbracken, L.

Aylestone, L.

Leatherland, L.

Birk, B.

Lindsay of Birker, L.

Blease, L.

Listowel, E.

BonhamCarter, L.

Lloyd of Kilgerran, L.

Boston of Faversham, L.

LovellDavis, L.

Broadbridge, L.

Macaulay of Bragar, L.

Bruce of Donington, L.

McCarthy, L.

Campbell of Eskan, L.

Mayhew, L.

Carter, L. [Teller.]

Molloy, L.

Cledwyn of Penrhos, L.

Mulley, L.

ClintonDavis, L.

Nicol, B.

David, B.

Peston, L.

Dean of Beswick, L.

PrysDavies, L.

Diamond, L.

Rea, L.

Dormand of Easington, L.

Richard, L.

Ennals, L.

Rochester, L.

EwartBiggs, B.

Russell, E.

Falkland, V.

Sainsbury, L.

Fisher of Rednal, B.

Scanlon, L.

Foot, L.

Seear, B. [Teller.]

Gallacher, L.

Serota, B.

Galpern, L.

Stallard, L.

Gladwyn, L.

Stedman, B.

Graham of Edmonton, L.

Stoddart of Swindon, L.

Hampton, L.

Strabolgi, L.

Hanworth, V.

Thomson of Monifieth, L.

Hatch of Lusby, L.

Tordoff, L.

Hayter, L.

Underhill, L.

Hollis of Heigham, B.

Varley, L.

Holme of Cheltenham, L.

Wallace of Coslany, L.

Houghton of Sowerby, L.

Whaddon, L.

Howie of Troon, L.

White, B.

Hughes, L.

Wigoder, L.

Hunt, L.

Williams of Elvel, L.

Jacques, L.

Willis, L.

Jay, L.

Winstanley, L.

Jeger, B.

NOT CONTENTS

Abercorn, D.

Balfour, E.

Aldington, L.

Belhaven and Stenton, L.

Alport, L.

Belstead, L.

Annaly, L.

Bessborough, E.

Auckland, L.

Blatch, B.

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Borthwick, L.

Long, V.

Brabazon of Tara, L.

Lonsdale, E.

Brigstocke, B.

Lurgan, L.

Brougham and Vaux, L.

Mackay of Clashfern, L.

Butterworth, L.

Macleod of Borve, B.

Caithness, E.

Monson, L.

Caldecote, V.

Montgomery of Alamein, V.

Campbell of Alloway, L.

Morris, L.

Campbell of Croy, L.

Mostyn, L.

Carnegy of Lour, B.

Mountevans, L.

Carnock, L.

Mowbray and Stourton, L.

Cavendish of Furness, L.

Moyne, L.

Clanwilliam, E.

Nelson, E.

Cockfield, L.

Norfolk, D.

Colwyn, L.

Nugent of Guildford, L.

Constantine of Stanmore, L.

Onslow, E.

Cottesloe, L.

Pender, L.

Cox, B.

Platt of Writtle, B.

Cullen of Ashbourne, L.

Pym, L.

Davidson, V. [Teller.]

Quinton, L.

Denham, L. [Teller.]

Rankeillour, L.

Derwent, L.

Richardson, L.

Eccles, V.

Rippon of Hexham, L.

Effingham, E.

Rochdale, V.

Ellenborough, L.

Rodney, L.

Elliot of Harwood, B.

St. Albans, Bp.

Elliott of Morpeth, L.

Saint Oswald, L.

Ferrers, E.

Salisbury, M.

Flather, B.

Sanderson of Bowden, L.

Fraser of Carmyllie, L.

Seebohm, L.

Fraser of Kilmorack, L.

Sempill, Ly.

Gridley, L.

Shannon, E.

Halsbury, E.

Stanley of Alderley, L.

Hankey, L.

Stockton, E.

Havers, L.

Strathclyde, L.

Hemphill, L.

Strathcona and Mount Royal, L.

Henley, L.

Hertford, M.

Strathmore and Kinghorne, E.

Hesketh, L.

Sudeley, L.

Hirshfield, L.

Swinfen, L.

Hives, L.

Taylor of Hadfield, L.

Holderness, L.

Thomas of Gwydir, L.

Home of the Hirsel, L.

Thorneycroft, L.

Hood, V.

Trefgarne, L.

Howe, E.

Trumpington, B.

HyltonFoster, B.

Tryon, L.

Joseph, L.

Ullswater, V.

Kinnaird, L.

Vaux of Harrowden, L.

Lauderdale, E.

Wedgwood, L.

Lawrence, L.

Wharton, B.

Layton, L.

Wigram, L.

Lindsey and Abingdon, E.

Wise, L.

Lloyd of Hampstead, L.

Young, B.

4.24 p.m.
Clause 21 agreed to.
Schedule 3 agreed to.
Clauses 22 and 23 agreed to.
Clause 24 [Revenue deficits of Corporation to be funded by Channel 3 licensees]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 165:
Page 24, line 33, leave out from ("(1),") to ("by") in line 35 and insert ("then (subject to subsection (4)) the amount of the difference shall be raised by the Commission").
The noble Lord said: I shall speak also to Amendment No. 166.
Clause 24 makes provision for the ITC to impose a levy on Channel 3 licensees in circumstances where Channel 4 is unable in any given year to achieve an income of an amount which is at least equivalent to 14 per cent. of the total television revenues for that year.
As it stands, Clause 24(3) leaves it to the discretion of the ITC whether to impose the levy. Upon reflection we now feel that the ITC should be required to impose a levy and this is the purpose of Amendment No. 165.
Amendment No. 166 simply recognises that at the stage where the ITC is required to establish a Channel 3 company's qualifying revenue it may be in a position to determine rather than estimate the amount. I beg to move.
Baroness Birk: have one question. Is the ITC happy about the provision? Does it quite happily accept the argument that the Minister has put?
Lord Sanderson of Bowden: Yes, indeed. It is very happy about it. It feels in a much stronger position to deal with the situation.
Lord Thomson of Monifieth: Before the Committee approves the amendments, and Clause 24, it ought to be aware of exactly what the Government are proposing with this device. It is a very curious proposition to which I believe not enough attention has been given during the debates on the Bill.
Channel 4 is a well established success story. Perhaps I may say to the noble Lords opposite that it is entitled to be called a Conservative success story. It was the creation, in the political, parliamentary sense, of the noble Viscount, Lord Whitelaw. The arrangements with regard to the financing of it have now been changed in a fundamental way. The reasons ought to be examined before we continue.
The basic proposal is that Channel 4 should now sell its own advertising in competition with Channel 3. That has been proposed ostensibly on the grounds of promoting competition. In practice it is a concession to the advertising industry which has grumbled over a long period—and I think justifiably in many cases—about the high prices that it has to pay for television advertising. But we ought to be aware that the proposition in this clause will not help the understandable grumbles of the advertising industry. It will not bring down the cost of advertising.
Why is television advertising at such high cost? It is because it is an extremely popular and effective form of advertising for a wide range of goods and services. The supply of television advertising time is limited by the necessity under statute to ensure that there is not too much advertising at any particular hour of programmes. The demand outstrips the supply. The difficulty about the Government's proposal ostensibly to create competition is that it does not in the least increase the supply and it probably will increase the price.
Channel 4 I believe is now setting up its own national selling organisation. There will be two sets of overheads to be met; one from Channel 3 and the other from Channel 4. I am not sure of the final position but it is extremely difficult for Channel 4 to sell other than national advertising whereas the present arrangements enable Channel 4 to carry regional advertising. They make it possible for local specialist advertisers to enjoy access to television advertising that is impossible for them on a national basis because it is too costly.

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The thinking behind the proposition is very dubious indeed. In the proposal to which these amendments relate, such advertising will be bolstered by an economic device that I believe would make Adam Smith turn in his grave. There is to be competition between Channel 4 and Channel 3 for selling advertising. But if the competition does not work well enough, then Channel 4 will be compulsorily subsidised by Channel 3 with which it is supposed to be in direct competition.
My noble friend Lady Birk asked whether the ITC thought that was a good idea. It might have been more pertinent to ask what the ITV companies thought about it. It is a curious competitive device and I did not feel that the clause should be allowed to pass without the Committee's attention being drawn to the fact that the Government are putting before us an elaborate to and bogus charade in respect of Channel 4 advertising.
4.30 p.m.
Lord Sanderson of Bowden: I note what the noble Lord says. I am sorry that he does not like the arrangement—which may appear to him to be curious but which to others is satisfactory—to try to move Channel 4 on from the current position. In relation to the amendments to which I have spoken, Channel 4 and the IBA, to which the noble Lord contributed such distinguished service, approve of the amendments. The advertisers themselves have welcomed the separate setting up of Channel 4 air time. It is wrong to suggest that the clause will cause disruption to the advertising market. Of course there will be difficulties and problems when new arrangements are made. But by giving some kind of comfort to the company to proceed along the lines that we would wish we are letting it flap its wings—the wings that are now emerging from the little chicken that the noble Viscount produced. I thank the noble Lord, Lord Thomson, for the remarks that he made about this being one of the Government's good decisions and for acknowledging the part played by the noble Viscount. However, he is being a little tough in pouring such a large bucket of cold water over the whole of Clause 24.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 166:
Page 25, line 21, after ("estimate") insert ("or determine").
Clause 24, as amended, agreed to.
Clause 25 agreed to.
Baroness Birk Baroness Birk moved Amendment No. 167:
After Clause 25, insert the following new clause: ("Research into feasibility of new commercial television service
. The Commission shall conduct such research as may be appropriate to investigate the technical and commercial feasibility of a new national commercial television service, taking into account the requirements set out in sections 26, 27 and 28 below.").
The noble Baroness said: I shall speak also to Amendment No. 168. Amendment No. 167 is a probing amendment designed to test the willingness of
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the Government to establish a viable Channel 5 that enhances the existing broadcasting system. There is considerable concern that Channel 5 was designed partly to satisfy the advertisers' desire to bring down the advertising rates. A channel that aims to reach only 65 to 70 per cent. of the population, with proportionately low revenue and no distinctive programming remit as yet, appears more likely to undermine the existing broadcasting standards than to enhance them.
The prospects for a significant number of highquality original productions appear on that basis to be limited. It is more likely that without a strong programme remit Channel 5 may he forced by commercial pressure to rely on a large amount of cheap, boughtin and repeated material. Have the Government conducted any research into the commercial feasibility of Channel 5? If so what did it reveal? Secondly, why have the Government not helped or encouraged the IBA to begin work on the necessary engineering infrastructure for Channel 5?
A further anxiety relates to the startup and transmission costs, including the need to retune domestic video recorders even in areas without Channel 5 reception. I understand that that will be necessary because of the interference that will be caused. The number of VCRs affected exceeds 750,000, as confirmed in a written reply given by Mr. Mellor in another place to a parliamentary Question.
The purpose of the amendment is to ensure that such issues are examined in advance and before rushing in to establish the new Channel. Ultimately our argument is not negative; everyone would welcome an extra channel of sufficient quality. We merely wish to ensure that sufficient preconditions, including a strong programming remit, are set to ensure that Channel 5 enhances our broadcasting system rather than undermines it.
Although the amendments are grouped together many questions are attached to them. It may be convenient for the Minister to reply separately to Amendment No. 167 relating to research and viability. I do not mind, but we may become bogged down. I beg to move.
Earl Ferrers: It would be easier to deal with this amendment separately. The noble Baroness asked whether the Government have carried out any research. The Department of Trade and Industry has conducted research in relation to Channels 5 and 6. As a result the Government decided to go ahead with Channel 5 but not with Channel 6. Channel 5 will be larger than any single Channel 3 company and there is no reason to doubt its viability.
The IBA has carried out detailed financial modelling which fully confirms the commercial viability of Channel 5. That is so even bearing in mind the costs of equipment and transmission. It is a completely different kind of channel to Channel 3. It will be a national channel but it will not reach everyone; only about 70 per cent. Therefore, the conditions are different.
Lord Thomson of Monifieth: The Minister gave an inadequate reply to the proposal put forward by the noble Baroness, Lady Birk, that there should be serious study. He says that a study has been carried out by the DTI. From my experience the DTI tends to rush into such matters with great ideas but without exploring them in depth. I remember a famous occasion on which it suddenly called the chairmen of the BBC and IBA to this building in order to try to persuade us to transfer Channel 4 and BBC 2 to satellite. The idea was shot down in about 50 days as being technologically foolish. The more comment that has been made on the proposals for Channel 5 the more one is glad that the ultimate responsibility for broadcasting policy will remain with the Home Office.
The comments that have been made about the economics of Channel 5 become increasingly worrying. One of the highest regarded financial commentators on broadcasting economics is Bronwen Maddox. She writes a good deal about such matters and is on the staff of one of the merchant banks involved. Recently she suggested that the worst obstacles are the startup costs. She suggested that the transmission might cost £40 million. Then there is the case of retuning most of the country's VCRs in order to avoid interference. That has been estimated at £60 million. Those costs must be borne by whoever is willing to bid for Channel 5.
Thirdly, everybody will need a further aerial for Channel 5. At present we have aerials for the four terrestrial channels and we are all busy wondering whether to buy a Sky dish or a BSB squarial. When Channel 5 comes along, we shall have to stick another aerial on to our roofs. It is estimated that the overall cost to householders of receiving Channel 5 will be £250 million.
Those are formidable figures. They may be mistaken figures, I do not know, although they come from a reputable source. Before we launch into a major new project like this the Committee is entitled to know that really serious research has been carried out so that we have the material on which to make informed judgments as to the best way forward.
We should all welcome a further channel and on another amendment we shall come to the possibilities of using Channel 5. However, the starting point is to know a good deal more about the realistic costs of the project in order to decide whether or not it is viable.
Earl Ferrers: The noble Baroness's amendment suggests that the ITC should conduct the research into the technical and commercial feasibility of Channel 5. At the same time, it requires it to set up Channel 5. The noble Lord, Lord Thomson, said that he was glad that broadcasting remained in the hands of the Home Office. I took that as being a somewhat backhanded compliment.
Lord Thomson of Monifieth: It is a real compliment.
Earl Ferrers: That gets me into even greater difficulties. I am delighted that the noble Lord should compliment the Home Office in such a way. I shall
1030
satisfy him by saying that had he complimented the Department of Trade and Industry in the same manner, that would be equally acceptable.
The Department of Trade and Industry has already conducted research and has concluded, as is fairly well known, that Channel 5 should be commercially viable and that it could achieve a coverage of up to 70 per cent. of the United Kingdom population. That is one reason that we decided to go ahead with it. If it is not likely to be viable, then there is no point in going ahead with it. That does not guarantee viability but it is considered to be potentially viable. On that basis we decided to go ahead with Channel 5.
The Government are not obliged to take a position on the financial viability of Channel 5. A full study has been carried out. We conclude that as the availability of frequency is there, and as the study indicates that there is a possibility that it is viable, then we should make that possibility open to the market. The best estimate which we have of the retuning costs is £20 million. That is based on the Department of Trade and Industry's study.
There has been a study which has shown viability and it is now up to the market place to see whether anyone wishes to take this on. Of course, if all the sets are to be retuned, that is an expense. However, that expense should be undertaken by the person who takes on the licence and it is not as high as the noble Lord, Lord Thomson, suggested.
4.45 p.m.
Baroness Birk: I shall now deal with the arguments as regards Amendment No. 168 because the amendments go together. The Minister seemed to think that, because the amendment states that "the Commission shall conduct research", that lets the Government completely off the hook. However, when I began I pointed out that this is a probing amendment which tests the Government's willingness to establish a viable Channel 5. As I also understand it, the IBA wanted to start on the infrastructure but the Government would not put up the money. How is it to get the money for the infrastructure of something which it has not yet been able to sell and as regards which at present there is no chance of putting out bids?
The following amendment, which deals with programme requirements, is closely linked to the first amendment, because if research has not been carried out and the viability is not known and there is not much idea of what its structure will be, then it will be very difficult to have a proper schedule of programmes.
Under the Bill as it stands, Channel 5 would be the first national terrestrial channel to be established without any deep thought as to how it should enhance or bring something different to the existing broadcasting system. When Channel 4 started, it was given a very specific remit and a great deal of thought was put into it. Originality was given a very high priority. Thus we achieved the quality of programming which there now is on Channel 4. When commercial television started, plans were made as to

1031
what it was meant to do. When BBC 1 and then BBC 2 were set up, there was a complete understanding of what was required and needed.
Here we have a blank. There is a vacuum. We just have the title: Channel 5. Without a strong and distinctive programme remit, it seems destined to become a poor parasitic relation of Channel 3, competing for revenue with little scope for original production and reliant on a large amount of acquired programming. Neither viewers nor programme makers could possibly gain from that.
Given those problems, the only justification for the establishment of Channel 5 will be if it has a distinctive programming remit. This amendment provides such a remit by requiring a reasonable proportion, including at peak times, of local programmes of interest to and made largely within the relevant local area as well as educational programmes. Local programmes could be provided by as many as 40 or 50 local stations.
I wonder whether the Government have thought out that point. Is there supposed to be one franchise or do they wish to break it up into different franchises? Will Channel 5 be new and distinctive or will it be a replica of Channels 3 and 4? Do the Government accept that Channel 5 should have a specific remit for local programming in line with the IBA's research into the citybased local optout services? That is one line which could be followed. Is Channel 5 to be a truly national service or will it be made up of a number of different services with one or more licences, which I have already mentioned?
Because of the shortage of frequencies, this could be the last opportunity to offer truly local television services in the United Kingdom. Cable television, with a more limited coverage and an emphasis of syndicated satellite channels, seems much less likely to produce a significant amount of locally originated service.
In addition, Channel 5 could have a distinctive profile as a knowledge channel specialising in educational and documentary programming. It could provide a significant boost to education and training in the UK including programmes from the Open University and Open College, schools, polytechnics and universities. That could be one stream of the channel's national programming and would complement a continuing commitment to education on the main terrestrial channels. That could compensate for what we discussed yesterday when so much anxiety was expressed about the quality of programmes on the new Channel 3 when the new auction system comes into being. That would be a means of providing a quality guard.
These programme ideas are probably feasible; they are certainly desirable. To provide Channel 5 with no remit at all would be a wasted opportunity. One has the impression that it is there as a name and a number, but that the Government have washed their hands of it; that it might just disappear into the distance and that we will not hear much more about it.
Earl Ferrers: The noble Baroness has given Channel 5 a pretty good spike, and says that it will not
1032
be much use; that we will not hear much more about it and so forth. I believe that she is being a little pessimistic. She asked a number of questions —in fact she moved to the following amendment—and I shall try and answer her points because they are important and require an answer.
The timetable for the award of the Channel 5 licence will be a matter for the Independent Television Commission. The ITC may decide that the licence for Channel 5 should be awarded after those for Channel 3 so that the unsuccessful bidders for Channel 3 licences have the opportunity to bid for a Channel 5 licence.
The ITC will be aware that the Channel 5 licence will be more valuable to a bidder the earlier that the service can be transmitted. The Government are proposing that arrangements for a transmission network for Channel 5 will be a matter for the successful Channel 5 licensee. The choice of transmission system may be a crucial element in the Channel 5 business plan. We do not feel that that decision should be preempted by the private transmission company, which will take over the IBA transmission network, being allocated a transmission contract in respect of Channel 5 before the Channel 5 licence has been awarded.
I appreciate the desire of the noble Baroness to see Channel 5 providing local television programmes. There is nothing to stop an applicant from arranging his Channel 5 service in that way. We do not believe we should make it a statutory requirement. The Government have identified that two additional broadcasting frequencies—UHF channels 35 and 37—could be made available for broadcasting. We felt it right to make those frequencies available, even though they could not in themselves achieve 100 per cent. coverage, in order to give wouldbe broadcasters an opportunity to expand the choice for viewers and for viewers to have the opportunity of greater choice where possible.
We are not predicting that Channel 5 will be a success. We do not see any reason why it should not be, and hope that it will be. We are giving further opportunities for entrepreneurs to provide additional broadcasting services where they want to, "have a go". A number of economic assessments of Channel 5 have recently been performed, some of which illustrate that even if Channel 5 is provided as a single national service it will be only marginally viable.
It is the intention that there should be one licence for the Channel 5 network, although it could be split into two; for instance, breakfast time and another. The viability of Channel 5 will depend crucially on the business strategy of the licensee and his success in winning and retaining an audience for the programmes which he chooses to show. Our view is that it should be for the licensee, with as little constraint as possible from statutory instrument, to determine how best to use the channel to build an audience that will be crucial to its commercial survival.
The Bill lays down detailed programming requirements for Channel 5. It will be for the licensee

1033
to develop a distinctive remit for the channel in order to compete effectively with Channel 3. It is wrong to suppose that unless the Bill lays down the precise programming policy for Channel 5 it will not acquire a strong distinctive identity.
The noble Baroness said that there would be no remit. With the greatest respect, that is not so. We have imposed basic consumer protection requirements on the licensee and also the full quality threshold in Clause 16, which applies in the same way to Channel 3 with the exception of the regional requirements. That exception is not included for two reasons. First, it is likely to be a national channel; secondly, it is not likely to cover 100 per cent. of the country.
The Channel 5 licensee will have to satisfy the Independent Television Commission that it will give a sufficient amount of its services time to news and current affairs programmes of high quality, to other programmes of high quality, to children's and religious programmes; that its planned programmes, when taken as a whole, are calculated to appeal to a wide variety of tastes and interests; that a proper proportion of the material included in the programmes will be of European origin; and that for each year not less than 25 per cent. of the total amount of time is allocated to broadcasting independent productions.
That is a very demanding remit for any organisation and for any channel whose prosperity is not taken for granted. It demonstrates that when the noble Baroness says there is no remit for Channel 5, with the greatest respect, she is not correct.
Bearing in mind those substantial standards being imposed on Channel 5, it is right that the licensee should decide how best to organise the service. Some argued that the Channel 5 licensee may wish to subcontract for local services. That is what the noble Baroness refers to when she talks of "optouts". The licensee may contract for local services for part of the transmission time. There would be nothing to stop different programmes being transmitted from each separate transmitter. Those are matters for the licensee to decide. We cannot require in legislation that a Channel 5 service should be organised in any specific way beyond the existing requirements of the quality threshold, which are very important. I am sure that the noble Baroness will appreciate that there is no point in imposing obligations on licensees which could have the effect, if we are not careful, of making the service nonviable. We should leave those matters to the commercial decisions of the applicants.
I hope that I have managed to explain to the noble Baroness some of the ideas that we have in mind for Channel 5, and that she will realise it is not as grisly a picture as she portrayed.
Lord Thomson of Monifieth: The remit which the Minister just described is acceptable so far as it goes, but it is very basic. My noble friend Baroness Birk has performed a notable service in tabling these new clauses. They will enable the Committee to begin to
1034
apply its mind to what might be best in the public interest regarding this very valuable national resource —a possible fifth television channel.
I am bound to say that given the doubts that have emerged regarding the costs associated with a fifth television channel, and the basic remit that will be included in the Bill, the likeliest course of action for anyone willing to take on the very great risks involved is to make Channel 5 a general entertainment channel. If that is so we should face the consequences of what that would mean for the general overall quality of British broadcasting.
A general entertainment channel with very limited regional or local optouts would give the kind of competition to Channel 3 that might make it extremely difficult to maintain the standards of Channel 3 that we have been painstakingly seeking to write into the Bill. The knockon effect if Channel 3 is undermined would, as many noble Lords have said in the course of the debates, in turn undermine BBC 1. Therefore very grave implications are involved.
Behind all that is the question of what is likely to be the totality of advertising available for the various new television channels that are coming along. I said that proposals in relation to Channel 4 were totally bogus in regard to helping to bring down the cost of advertising. I welcome the fact that one of the advantages of Channel 5 would be to provide real competition in advertising instead of bogus competition. It would help to bring down the cost of advertising which would be a healthy development.
However, there is still the question of the limits of television advertising. How much is available? How many channels can the potential pool of television advertising in this country finance at a reasonably acceptable standard? Those are big issues. The Government's approach, which is almost purely entrepreneurial—to propose, within a general framework of basic standards, to offer almost a blank cheque to those who might be willing to bid to take the risks—raises big issues about the future standards of broadcasting in this country. The two new clauses that we are discussing raise big issues on which the Committee should take a view.
5 p.m.
Lord Ardwick I: have rather friendly feelings towards Channel 5 because it gives the possibility of introducing real additional choice. We shall, of course, have real additional choice with cable and satellites, but they will cost money. Channel 5 could offer choice to the nonaffluent. I am particularly interested in the possibilities of local television broadcasting. I do not know what its effect will be on local newspapers, but it would certainly have a good effect on local communities.
Advertising is the only source of revenue. I go along with the doubts of the noble Lord, Lord Thomson. When I looked at the forecast, I wondered whether the Government were serious about Channel 5. Was it just a dream in the mind of some young man in the DTI? Could it earn enough revenue? There is no law which says that, when a new channel is created, advertising

1035
is automatically created to support it. As the noble Earl told us only the other day, advertising bears a reasonably constant relationship to GDP. Although that has been less true in years of great buoyancy, we must accept that it has been true over a period of time.
It has also been suggested that Channel 5 will bring relief to the advertiser. I do not see much relief being brought to the advertiser. If a channel with 2 million viewers loses 1 million to another, the cost per viewerhour remains identical, apart from some marginal competition between two companies that are now competing; and it may be that there is a bit of a market from some advertiser who does not want a wide span of television. However, it is extremely difficult to look even with minimum confidence to the future.
I wonder about the timing of the introduction of Channel 5. After all, Channel 3 will face a considerable ordeal if the satellites are as successful as people think they may be and if they fractionate the total audience. If the audiences on Channel 3 are smaller and then there is a proposition to introduce Channel 5 and reduce the audience still further, the viability of commercial television generally will be in grave doubt.
Lord Holme of Cheltenham: Perhaps I may add one reason why the prescriptions that the Government set out for the bidding process on Channel 5 may pose particular problems.
The Minister spoke yesterday of the general relationship between the quality threshold and the highest bidder. He conceded that in certain circumstances the highest bid might indicate that the quality of the bid was not all it should be in that the very high field bidder proposed to improve his profitability by putting out programmes that were not of an adequate quality. The Government have therefore established that there is a possible relationship between a high bid and inadequate quality and that the quality of money, to which my noble friend Lord Thomson of Monifieth referred, was a potential judgment that the commission would have to make.
If that is true in general of Channel 3, how much more true is it of Channel 5? The Minister has eloquently explained that the maximum area of entrepreneurial discretion will be given to those bidders who wish to conceive and invent the way in which Channel 5 will provide television services to the public but that the widest possible latitude is to be given. If there is to be the widest possible latitude, we shall give the commission an extraordinarily difficult job of judgment to know whether the quality of money with regard to any particular bid is a good quality of money.
I urge that the amendment, which asks the commission to conduct research, be taken seriously, not least because it will give the commission the grounds and the information on which to make the, judgments that are necessary to the Government's proposed highest bidder method.
Earl Ferrers: When I listen to noble Lords opposite, I begin to wonder sometimes where their spark of excitement and enterprise is. The noble Lord, Lord Thomson of Monifieth, poured cold water on all the new arrangements for Channel 4 and said that they were perfectly awful. Along came the noble Baroness and started on Channel 5. She said that it will fail, and will not achieve an audience and will fade away. The noble Lord, Lord Thomson, turned round and said, "Well, I don't know. It might be successful and, if it is so successful, it will cause all Channel 3 licensees to be in a muddle". He then asked whether we were right to give Channel 5 people a blank cheque.
Channel 5 is different. Those frequencies are available. It is something new. There will be all the problems of retuning. We shall not be able to reach 100 per cent. of the country. We shall only be able to reach 70 per cent. There will be extra expenses, but those people who want to take a risk and are prepared to make a go of it should surely be entitled to do so, provided that they accept the standards of quality threshold that the Bill places upon them. The noble Baroness said that we should do more research. The Government have done their research, and, as a result, we believe that it is a viable proposition.
The noble Lord, Lord Holme, made a point which I think is mistaken. He said that I said the other day that there might be opportunities where someone who was not the highest bidder was given the franchise. He said that that meant that the highest bid might be of inadequate quality. I did not say that. I said that all those who were entitled to bid would show that their quality was above the threshold and above the requirements. Anything above that was of adequate quality. There might be occasions where someone who has not given the highest bid can show that he would provide a better programme than someone who has submitted the highest bid. In those exceptional circumstances, the ITC could award the contract to someone who was not the highest bidder. That is not the same as saying that it is of inadequate quality. I am sure that the noble Lord realises that.
I appreciate the concern about this matter. I hope that the noble Baroness will not press the amendment. The research that has been done shows that Channel 5 can be viable. We believe that a commercial opportunity should be given to companies that wish to take advantage of it.
Baroness Birk: I do not want to repeat everything that I said. There are points that have not been dealt with. It is not a case of the noble Lord, Lord Thomson of Monifieth, or myself having gloomy views. I am very unhappy about so many features of the Bill. However, if something exciting were to come along which created more balance in the Bill I would grasp it. If people are to have a chance or an opportunity, what are they to have a chance or an opportunity about? I return to an earlier point. We are talking about a situation which is in a vacuum.
As I pointed out, Channel 4 came along and, before that, commercial television and BBC 1 followed by BBC 2 which was intended to add another dimension to the BBC. All these channels had a purpose. As

1037
regards commercial television the arrangements were not made in such detail except for the public service broadcasting, and the "must carry" requirements. However, within those provisions there was plenty of room for initiative and creativity. That is what we want. We feel that the Government should have some idea about what should happen.
If, as the Minister said, the quality requirements are exactly the same as for Channel 3 contained in Clause 16, why, in Amendment No. 169D, are the limited time services proposed for Channel 5 free from the programming obligations placed on Channel 3? The Government may feel that it is a small point. It is an indication that Channel 5 is not receiving the attention that it should. We are not going to make any headway; I must divide the Committee.
5.13 p.m.
On Question, Whether the said amendment (No. 167) shall be agreed to?
Their Lordships divided: Contents, 68; NotContents, 100.
Resolved in the negative, and amendment disagreed to accordingly.
5.21 p.m.
[Amendment No. 168 not moved.]
Clause 26 [Channel 5]:
Lord Thomson of Monifieth Lord Thomson of Monifieth moved Amendment No. 169:
Page 26, line 43, at end insert:
("( ) The licence period for Channel 5 shall be 15 years").
The noble Lord said: In view of our rather thorough discussion on Channel 5 I shall not take up the time of the Committee. Perhaps the amendment will be taken by the Minister as a sign of repentance. He believes that we are so unsympathetic to enterprise; but in this case we believe that the risks associated with setting up Channel 5 are so considerable that we wish to suggest that, in order to reward enterprise, those who take the risks should have a 15year contract instead of a 10year one. I beg to move.
Lord Sanderson of Bowden: I appreciate the intention behind a 15year licence period for Channel 5. It is to provide greater security for the licensee faced with large startup costs and a more uncertain financial climate than Channel 3. However, we do not believe that the proposed amendment will help because it fails to appreciate how the licence system will operate in practice. I shall try to demonstrate what I mean by that.
The Channel 5 licensee, like his Channel 3 counterpart, will be awarded a licence for 10 years

1039
with the option of seeking a semiautomatic renewal after six years. While the licence runs, the licensee is committed to the cash bid and the net advertising revenuerelated payments fixed at the outset. These payments can be changed only at the time of renewal. The present arrangements thereby provide a break-point after six years at which the financial terms can in effect be renegotiated. Were the licence period to be extended to 15 years, that breakpoint would presumably not come until 11 years into the licence period.
A licensee who at the outset took too optimistic a view of the financial prospects and who ran into subsequent financial difficulties would therefore no longer be able to look forward to a relatively early breakpoint at which the level of payments could be reviewed. The result of lengthening the licence period would therefore be to impose an additional, possibly damaging, inflexibility as the licensee found himself locked into financial arrangements that could not be altered.
I understand what the noble Lord seeks to do. He suggests that because of the risks involved the timescale could perhaps be longer. However, with the breakpoint indicated, and as we know that interest has been expressed in this channel, I think that the present arrangements are the ones to which we would wish to stick.
Lord Thomson of Monifieth: Perhaps the Minister will be glad to know that for once I am persuaded by his arguments. I beg leave to withdraw the amendinent.
Amendment, by leave, withdrawn.
Clause 26 agreed to.
Clause 27 [Application to Channel 5 of provisions relating to Channel 3]
Earl Ferrers Earl Ferrers moved Amendment No. 169A:
Page 26, line 44, leave out ("subsection (2)") and insert ("subsections (2) and (3)").
The noble Earl said: In moving this amendment I shall speak also to Amendments Nos. 169C and 169D. In passing perhaps I may say that I am mortified that the noble Lord, Lord Thomson of Monifieth, should be persuaded by my noble friend and yet not be persuaded by myself. At least I shall try on these modest amendments to take the noble Lord with me.
They are minor amendments designed to provide that in the event that the ITC were to advertise for two or more Channel 5 licensees, the remit for Channel 5 as a whole which is set out in Clause 16(2) should be shared between the licensees as the ITC may determine. There might, for example, be a Channel 5 breakfast licence. It may not be necessary for that licensee to fulfil all the obligations set out in Clause 16(2), such as providing religious programmes and programmes for children. But the service taken as a whole should certainly cover all those aspects. I beg to move.
Lord Thomson of Monifieth: I am becoming positively worried because I think that the noble Earl is right in his arguments. If in fact we divided the clock different considerations would apply to different times
1040
of day. It is important to have the necessary flexibility, which I understand is the purpose of the amendments. I am happy to go along with them.
Earl Ferrers: I am deeply appreciative of the noble Lord's ever widening sense of understanding.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 169B:
Page 26, line 44, leave out ("20") and insert ("(Restriction on changes in control over Channel 3 licence holder)").
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendments Nos. 169C and 169D:
Page 27, line 5, after ("shall") insert ("(except where subsection (3) below applies)").
Page 27, line 7, at end insert:
("(3) Where the Commission make a determination under section 26(3), section 16(2) shall, in its application in relation to each Channel 5 licence, have effect to such extent as they may determine to be appropriate having regard to the nature of the service to be provided under that licence.").
On Question, amendments agreed to.
Clause 27, as amended, agreed to.
Clause 28 [Initial Channel 5 licensee required to retune equipment susceptible to interference]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 170:
Page 27, line 38, after first ("equipment") insert: ("(aa)").
The noble Viscount said: It may be for the convenience of the Committee if I speak also to Amendments Nos. 171 to 173. The only substantive amendment is Amendment No.171 which exempts the holder of a Channel 5 licence from liability to return or modify equipment if the only reason for interference to relative equipment is the installation of an aerial to receive Channel 5. Engineers who install a Channel 5 aerial will almost certainly have to retune the VCR as part of the installation procedure, where otherwise interference would be caused, in order to obtain a clear reception of the Channel 5 signal.
The remaining amendments, Amendments Nos. 170, 172 and 173 are simply minor drafting improvements to subsections (3) and (6) of Clause 28. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 171 to 173:
Page 28, line 3, at end insert ("or
(bb) if the equipment would not be liable to suffer interference caused by the transmission of Channel 5 but for the installation at the place where the equipment is kept of any apparatus for enabling that service to be received there;").
Page 28, line 4, leave out ("such") and insert ("relevant").
Page 28, line 26, leave out ("likely") and insert ("liable").
On Question, amendments agreed to.
Clause 28, as amended, agreed to.
Clause 29 agreed to.
Clause 30 [Nomination of bodies to provide news for regional Channel 3 services]:
[Amendments Nos. 173A and 173B not moved.]
5.30 p.m.
Lord BonhamCarter Lord BonhamCarter moved Amendment No.174:
Page 30, line 22, leave out from ("provider") to end of line 28.
The noble Lord said: This amendment is concerned with the ownership of ITN. It is an important amendment as news on television is an important item in its programmes. Indeed, 80 per cent. of the population receive their news broadcasts from television or from the radio. Therefore, the quality of news provided by television or radio, whether it be on the BBC or ITV networks, is a matter of the utmost concern.
The purpose of the amendment is to ensure that the ITV companies keep complete control of ITN. That, in point of fact, is the ordinary pattern of ownership as regards television. Major television companies, without exception —although there may be one which could be regarded as an exception—all control their news providers. The exception to whom one might refer is Ted Turner, but he is a provider to cable television and I am talking about conventional television.
The reason this consideration is important is that those companies want to be assured that the quality of the news they receive is in accordance with the standards which they lay down. As they are liable for mistakes, they like to have control over those who provide them with this vital element of their programming.
The case as regards ITN is rather special in that it is regarded by the ITV companies as a cost and not a profit centre. That is an important factor. Its purpose is not to make profits, it is to provide news. Indeed, it has achieved a formidable reputation in this role. ITN and the BBC compete with each other to provide news and that competition has proved to be extremely effective.
Over the past few years the output of ITN has substantially increased to nine hours per day. Added to this there are the three or four radio bulletins which it supplies to a number of commercial radio stations. It has tripled its air time in the past three years and, at the same time, cut its news staff by 12 per cent. Its features are shown world wide and it provides news for 1,000 broadcast and cable networks. Its broadcasts are widely admired not just in this country but also throughout the world. Its success is evidence of the fact that, if you treat your news provider as a cost centre, rather than a profit centre, it pays dividends in terms of the end product. Indeed, there is much evidence to show that those who do otherwise find that the standard of their news broadcasts suffers.
The excellence which ITN has attained is a direct result of the nurturing and the investment undertaken by the ITV companies. As I understand it, the proposal in the Bill is that they should be forced to disinvest at a moment when ITN is being expanded, when it is exploring new markets which are opening up as a result of new technology and when, in addition, it is about to move into a new building. I believe that that situation should concern everyone.
It is wholly reasonable that the Channel 3 companies should wish to have control, for the reasons I have already given, of the organisation which provides them with news broadcasts. Finally, to retain it is to follow a wellknown Conservative argument:
"If a thing works, don't muck about with it!"
I cannot understand what has compelled the Government to try to change the organisation and the financing of a body which has provided an excellent service over the years, which is now on the point of expansion and to which we all owe a debt of gratitude. I beg to move.
The Deputy Chairman of Committees (Lord Aylestone): I should remind Members of the Committee that if this amendment is carried I cannot call Amendment No. 175.
Baroness Birk: In speaking to this amendment I should like to include Amendment No. 175 which is tabled in my name. I shall not repeat what the noble Lord, Lord BonhamCarter, has already said because I agree with him. The problem with his amendment is that it will not work. I agree that the status quo appears to be working very well at present. I also understand that the ITN people have plans for the future as regards how they will improve their organisation and management and that they are moving into new premises. However, in my view it is unrealistic to hope that the Government will leave matters as they stand. Nevertheless, if they were to do so, I would be as pleased and delighted as the noble Lord.
Further, if the proposal put forward by the noble Lord, Lord BonhamCarter, does not work, then my amendment is designed to ensure that the existing ITN franchiseholding owners can maintain their control over the company. The breakdown in those circumstances would be 70 per cent to 30 per cent. It means that there would be a 30 per cent. chance for outside investors, which is quite a sizeable proportion. The noble Lord was absolutely right when he sang the praises of ITN. There are very few outstanding news services in the world. In this country we have the BBC and ITN and in America they have the ABC, CBS, and NBC. ITN is one of those outstanding news providers. Therefore, it would be a great pity if anything were to rock that particular boat. It could result in a diminution of the quality of our news service in this country. It does indeed appear that the maxim, "If it works; leave it alone", really applies in this case.
In my view, the Government must exercise restraint upon themselves as they seem always to be throwing everything into the market and leaving it to market forces. It is rather like the Romans throwing the Christians to the lions, one after the other. Of course, any restraint can only be selfimposed. However, I hope that that factor will be taken into consideration. I know that my noble friend Lord Ardwick who has a great deal of experience in this field will want to make a contribution to the debate. I have, therefore, kept short my remarks.
Lord Ardwick: I feel the same kind of vehemence with regard to this subject as some noble Lords expressed towards midnight last night when confessing their religious faith or lack of it. I have a religious faith. It is that an adequate and pure news supply is a basic essential for a civilised democracy.
In my view this is one of the occasions on which the Government have made a mistake. It is a mistake which shows their innocence of the real world. It may well be that the same young man at the DTI of whom I was complaining a few moments ago was the person originally responsible. However, the Government seem to regard the television news service as a commodity which can be bought or sold, extended or contracted as the demand grows, or diminished; or that it can be replaced if it is not quite up to scratch. However, that is not so.
Anyone who has been in the news business will tell you that ITN is most inadequately described as a news service. It is much more than that; it is an electronic newspaper with all the ethos and drive of a newspaper. It is old enough now to have a tradition of excellence and dedication, often to be pursued even at the risk of life. It is today two newspapers. There is the major one that serves ITV and the minor one that serves Channel 4. "Minor" may be the wrong word since many people regard Channel 4 news at 7 p.m. as the best of all news programmes.
ITN is strangely constituted. It is wholly owned by the ITV companies, and so, in the arid language of the accountant, it is an item of cost, and not one of profit. That is identical to a newspaper. The advertising people and the circulation manager bring in the money, but it is the journalists who spend it. Journalism is always a cost in a well run newspaper, and although from time to time a newspaper may try to sell a service, it never gets far. The only things that are saleable are pocket cartoons and crossword puzzles.
The idea that the service is a cost is not convincing even to those who measure profit and loss in monetary terms. Prestige is also a business asset. ITN is a source of great, prestige to independent television. The fair name that independent television has in this country depends upon the quality of its news programmes. "News is sacred", as C. P. Scott said. Until ITV came along and developed, the BBC was the sole custodian of the Holy Grail. ITN now shares that honour. It is largely because it does so, that so many people in this country are battling for the survival of ITN. We do not want the ITV companies to be defenceless opponents of richer companies that shudder at the words ''public service". To quote Scott again:
"newspapers are of course a business, but they are like no other business".
Electronic newspapers are the same. That is where the Government have gone wrong. They see ITN as a monopoly, sheltered by the ITV companies, incurring large costs, never facing competition, and never fighting to produce and sell other services to other customers.
The Government have therefore come up with the remarkable proposition that 51 per cent. of ITN
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should be sold to others to encourage it to get into the market place. It is all very well to argue that with 49 per cent. of the stock, ITN will still be in command of the company—technically and practically yes; but morally, no. The company will have ceased to be a company oriented to service and become one oriented to profits. There are two ways in which an efficient company such as ITN can show a profit. It can find new markets for new products (novel kinds of news services) or it can cut its costs by spending less on the news services it provides to the companies.
A reduction in the richness of ITN's services would make BBC again the outstandingly respected news service, and Channel 3 would lose prestige and revenue. There are ways in which ITN could increase its revenue from time to time. It could provide a few needed services, but within limits. Once profit becomes its main aim, its morale as an electronic newspaper would be sapped, and it would no longer be a serious competitor for the BBC.
The Government have been good learners as they have battled on with the Bill. They have changed what were once firmly held but erroneous opinions. I should like to see them do so again. They should leave ITN as it is, as the noble Lord, Lord BonhamCarter, has suggested, and make it the sole supplier of Channel 3 and the chief rival to BBC and Sky News, or they should encourage it to be a little more commercial. If they have modest proportions of nonChannel 3 investors some of them should obviously be members of its loyal and devoted staff. I have received a great deal of paper about ITN. I have had many conversations. I have heard some sensible suggestions. I have heard some bizarre suggestions; but the wisdom of ITN's future is contained in the two amendments.
5.45 p.m.
The Earl of Stockton: I shall not move Amendment No. 176A which is in this group because its scope has been covered in another and better way by the amendment tabled by the noble Baroness, Lady Birk. The argument to keep ITN under the control of the Channel 3 franchise holders has been elegantly and forcefully put by the noble Baroness and by the noble Lord, Lord Ardwick. All that I can do is to endorse them most fully. The best regime for ITN is the status quo. If not, then majority control.
However, what concerns me is that I fear my noble friend the Minister will resist the amendments. I should like to consider the situation that will prevail in that eventuality. If the Government insist on changing ITN's structure, they must avoid creating a longterm monopoly. Therefore, the ITC should be cautious about committing itself to the full 10year term as regards ITN without a review. If institutions purchase 51 per cent. of ITN's shares, they will require a return at least equal to that obtainable from other investments on the Stock Exchange. That is the purpose of institutional investment. Most UK institutions own shares in any given company for about six months only. They will therefore have little interest in the longterm perception of ITN as an effective news provider if ITN gradually loses ground

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to the BBC news service because it cannot swiftly bring resources to bear on events such as the Romanian revolution.
The IBA stated earlier this month that the requirement for a nonlicence majority shareholding is intended to support the independent thrust and underpin the financial basis of a nominated news provider with a genuinely national and international structure, and to open up the possibility of competition. They are strong arguments. ITN's independent thrust and financial basis have hitherto been wholeheartedly supported by ITN shareholders. ITN has been allowed to invest in a flotilla of development businesses and ancillary exploitation businesses. At the last count, ITN had 10 different revenue sources. That may not continue if there is an outside majority investor.
There is also the possibility that Channel 3's financial position could change for the worse and that it could obtain a less expensive, but high quality, news service from elsewhere. The nominated news providers' costs might rise significantly, which would lead to a significant rise in the cost of its news service to Channel 3. If ITN loses the Channel 4 news service contract, which is a twoyear contract, at some point in the future, will its shareholders accept the considerable losses without attempting to recover a significant proportion of such losses through an increase in the price of the main news service to Channel 3? If they do not, will they not face possibly insurmountable financial difficulties?
I believe that if the Government wish to preserve a national news service of high quality, it will be counterproductive for such a service to be owned by a majority of nonChannel 3 shareholders. If the nominated news provider is majorityowned by nonChannel 3 shareholders, such shareholders could only be expected to maximise profits. Since new ITV licences would be required to take that service, the shareholders would be in a position to charge a monopoly price for the service, in the knowledge that Channel 3 had effectively no bargaining position. Channel 3 would not turn to a competitive supplier for a lower price or more efficient service. The outcome would be a news contractor which would use its position as a monopoly supplier and which would not be subject to the competitive pressure to be efficient.
At a later stage in the Bill I may well move amendments to attempt to give the flexibility of supply in national and international news. There may be other ways of achieving the same object which closer scrutiny will reveal. Certainly, referral to the OFT seems to me to be a lengthy and cumbersome process. The Government have called their White Paper on broadcasting: Broadcasting in the '90s: Competition, Choice and Quality. These words should also apply to the provision of an international and national news service on Channel 3.
Lord Boston of Faversham: I wish to join in supporting the amendment proposed by the noble Lord, Lord BonhamCarter, and the amendments to which my noble friends Lady Birk and Lord Ardwick
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have spoken. Perhaps I may endorse what they have said, that ITN has established a reputation as a leading news service in world terms. I believe that it has served the nation splendidly and proved itself alongside and in competition with the BBC. Even though I come in part from ITV, perhaps I may be forgiven for saying that; I happen to be one of those in ITV who has had no direct personal involvement in ITN.
As other Members of the Committee have said, it seems foolish to do anything to impair ITN's effectiveness. I share their views to the extent that it seems best to leave the structure and status of ITN alone. In view of its record, it seems in the best interests of viewers to do so; again we bring in the criterion of the best interests of viewers because that is our prime test. However, there is no harm in encouraging ITN to sell its services and to earn money —it has been doing so quite extensively already—as well as to maintain the strictest possible control on costs.
As part of the aim to operate on a more commercial basis, the Government's desire to introduce outside investment and shareholders is understandable. However, to do that it is not necessary to go so far as to require the existing shareholders, the existing programme contractors or any new ITV Channel 3 licensees to sell 51 per cent. or more of ITN. It is worth noting that if ITV did so—and the noble Lord, Lord BonhamCarter, has alluded to this—perhaps that formula would overcome the exception that he mentioned in the case of the Turner organisation. If ITV sold a majority in ITN, it would become the only first rank broadcaster in the world not to have complete control over its own news service. Moreover, it seems reasonable that as the users, the programme companies should have responsibility for the quality of the service provided and stand to account for that quality.
The Government's aim to widen the ownership of ITN could surely be achieved if 30 per cent. of the equity were sold to new outside shareholders. This is along the lines of the amendment mentioned by my noble friend Lady Birk. It would also ensure that enough of the ownership remained. It has after all stood the test of time and helped to maintain a first quality news service over the past 35 years.
I turn to one other point. One of the Government's aims is to seek to reduce costs and keep them under control—an aim which which many, if not all, of us agree. I certainly do. To leave the programme companies with only a minority holding would not do that. I very much share the view put forward by the noble Earl, Lord Stockton. Since he has spelt it out, I do not need to go into it in detail. I simply add a further voice to what he said and put it in this way. As the customers, it is in the interests of the present shareholders to ensure that the costs of ITN are kept under the firmest possible control. After all, they do have a direct incentive to keep costs down in the interests of its own shareholders, to whom it has a duty. If the majority shareholders were from outside and were not customers, the incentive would be the

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other way round: it would be to maximise the dividend payments. The danger then is that it would be at the expense of the quality of the service which is and has been provided. It would be in the interests of the outside shareholders to charge as much as possible to the customers, the programme contractors and the existing shareholders.
One must also bear in mind, as the noble Earl, Lord Stockton, said, that the programme companies are not just the customers but captive customers, as it has been put. They wish to remain captive customers because the status quo is the ideal situation, but not in a situation where they would be exploited. That is the point for any outside shareholders who had a majority interest.
So the Government's proposals are not the solution that they might at first sight seem to the problem of how to keep down costs. Quite the reverse. It is in the interests of viewers that the ITV Channel 3 companies should be solely responsible for the national and international news programmes on ITV Channel 3. That is best achieved by keeping the existing structure and status of ITN, although my noble friend's amendment would go a long way towards doing that and serve the purposes of some of the Government's aims as well.
I ant attracted by the idea which the noble Earl, Lord Stockton, put forward, particularly his point that the ITC should keep a close watch on any single news provider. Perhaps this is one of the points which the noble Earl had in mind; it might lead to the attraction of a review during the franchise granted to a single news provider by the ITC.
6 p.m.
Lord Willis: I wish warmly to support the amendment. I beg the Government to rethink their philosophy and go back to their original philosophy. It seems to me that this is a complete contradiction. From the beginning, the ITV companies took a big risk and have subscribed to ITN for many years to set up a news service to supply them. That news service has been eminently successful and is recognised throughout the world as being one of the best news services one can find. It is successful; therefore the Government's reaction is to say, "Let us break it up. That our reward for your initiative and your investment." That is totally wrong. It is like saying a cook should not own his own frying pan or his own gas stove, that he can only own, say, 49 per cent. of it. It is a total nonsense. We have here a marvellous service. I wonder why the Government want to tinker with it.
In m y fevered imagination I have a picture of a group of civil servants, or perhaps junior Ministers, sitting down together and deciding that now that they have finished with the Broadcasting Bill they should turn their attention to something else. At that point one of them suggests looking at ITN. Another one may say that it is all right and they should leave it alone. However, then the others say, "Come on. Let us have a go at ITN". That is a totally pointless exercise. Here we have a superb news service. It is competitive
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in the sense that it must now compete with Sky News, BSB News and other services. It also competes with the BBC. Why do the Government need to touch it? Why do the Government want to break up a fantastic news organisation of which everyone is proud? I beg the Government seriously to think again.
Lord Jenkins of Putney: I wish to add a postscript. The noble Earl, Lord Ferrers, paid tribute to this side of the Committee for our great reasonableness in accepting the good amendments that he has put forward. I believe that this is an opportunity for the noble Earl to reciprocate. He could say that he is so impressed with these amendments and the good sense with which they have been moved that the Government have decided to change their mind and will not proceed upon the course they have chosen. In the feeling that that is likely to happen, I shall not say more but simply sit down.
Earl Ferrers: The noble Lord, Lord Jenkins, is always ingenious. I paid tribute to the noble Lord, Lord Thomson, because he had become so broadminded and had understood the point of view of the Government. I was happily placed in the position of paying that tribute. I am content to remain in that position. I believe that the noble Lord, Lord Thomson, will realise that the Government are right.
The noble Lord, Lord BonhamCarter, seems to have become infected by the pessimistic virus that is prevalent on the Opposition Benches. His only contribution to the challenges and excitements of the future is to advise that ITN should not be touched as it is doing very well as it is. He suggests that as it is doing very well we should not try to find out whether it can do any better. He does not believe that we should try out any fresh ideas or try to get some fresh money or fresh thoughts. His is the philosophy of leaving a plant alone in case it dies if one waters it. No one is complaining about ITN. We all think that it produces an excellent service. All we are saying is that, with the future opening up before us, we wonder whether it is reasonable for the whole of ITN to be owned by Channel 3 companies.
Lord Ardwick: Yes it is!
Earl Ferrers: I believe that the noble Lord, Lord Ardwick, said "yes" in a particularly unhelpful intervention. I do not believe it is reasonable for it to be owned by Channel 3 companies. The noble Lord, Lord BonhamCarter, says that he wants ITN to be owned by Channel 3 companies. However the Government think that Channel 3 companies should not have 100 per cent. ownership. There is a difference of approach here.
We believe that the shareholding of the Channel 3 news provider should be broadened and that a majority shareholding should be held by nonChannel 3 licence holders. We have always believed that and the Bill puts that into practice. Amendment No. 174 standing in the name of the noble Lord, Lord BonhamCarter, and Amendment No. 175 standing in the name of the noble Baroness would allow the Channel 3 licensees collectively to have unfettered control of a nominated news provider. At the moment

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we are talking about ITN, but this measure does not apply just to ITN. Even with a 70 per cent. stake, any proposal favoured by outside shareholders could be voted down by the Channel 3 licensees. Amendment No. 176A would allow Channel 3 licensees to have a majority shareholding at the discretion of the ITC. All of these amendments are designed to make quite sure that the Channel 3 licensees hold the majority shareholding.
There are four main reasons why we have thought it right to provide that Channel 3 companies should have only a minority shareholding in the news provider. First, this should help to encourage the news organisation to act efficiently. Secondly, the wider share base gives scope for directors with outside experience and outside thoughts. Thirdly, the advantage of diversification and expansion is the introduction of greater scope for risk capital for investment. Fourthly, the proposal would ameliorate the tensions that otherwise might exist because of the conflict of interests among Channel 3 licensees themselves who at present collectively own the news provider.
There may be some misunderstanding about the need for Channel 3 companies to own their own news service. We naturally want the news service to provide high quality news—there is no difference of view here—but this does not mean that the Channel 3 licensees have themselves to own the news service.
The noble Lord, Lord Willis, produced an enchantingly domestic analogy. He said that on the whole the cook has to own the frying pan and not just 49 per cent. of it. Perhaps I could direct the noble Lord to another analogy. If he chooses to move house, he will move his furniture from one house to another. He does not have to do that by putting it all in his car and humping it over to the new house himself. He can employ a contractor to do that because contractors are professionals and specialists. They are good at that job and they know their business. The noble Lord would pay a contractor for moving his furniture. He does not have to own the contractor. The same position applies to the matter we are discussing.
Lord Willis: Such a person would not get the contractor to cook his sausages, would he?
Earl Ferrers: If the noble Lord went out to a restaurant, the sausages might be a good deal better than those he cooks for himself.
The ITC will, under our proposals, be required to nominate a news provider who is capable of providing high quality news. In order to retain nomination by the ITC, the news provider will have to continue to provide a high quality news service. If he did not, his nomination would be withdrawn.
My noble friend Lord Stockton and the noble Lord, Lord Boston, were worried about what would happen if the news provider charged too much for his services. If the supplier tries to increase the price unreasonably, on the basis that he is the monopoly supplier, he could risk being denominated by the Independent Television Commission. He may find
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that another news supplier is offering better value for money and that supplier could be nominated in his place.
On a similar point my noble friend Lord Stockton was worried about creating a longterm monopoly. The Bill already provides that the ITC must, at regular intervals, review the performance of the nominated news provider. The first of these reviews would almost certainly take place well before the fiveyear period, which was suggested in an amendment of my noble friend which he did not move. The review would probably take place after three years.
If, as a result of one of those regular reviews, the Independent Television Commission concluded that another news supplier could offer a better service, it would be obliged to terminate the nomination of the existing news supplier and to nominate the other supplier instead. The Bill therefore already contains a slightly more detailed and more sophisticated review mechanism than that which might be expected at first glance.
I wish to make the following point clear because it has worried every single speaker this afternoon who has spoken on this group of amendments. The Government are not seeking to exclude Channel 3 licensees from holding the controlling share of the news provider. If Channel 3 were to hold the 49 per cent. share for which the Bill would allow, that would almost certainly amount in practice to a controlling interest, particularly as the Bill provides that no other single person or company could have a shareholding that was greater than 20 per cent. In other words, although 51 per cent. of the shareholding is owned by people other than news providers, no one of those other owners could own more than a 20 per cent. shareholding. Therefore the chances are that the 49 per cent. shareholding held by the licensees themselves would create a controlling interest.
Lord Boston of Faversham: I am most grateful to the noble Earl, Lord Ferrers, for giving way. Perhaps I may take up one point that he has just made. He used the qualification "almost certainly". That is a very severe qualification indeed and does not amount to complete control.
Earl Ferrers: I am trying to recall in what circumstances I said, as the noble Lord, Lord Boston, suggested, that they would almost certainly have a controlling interest.
Lord Boston of Faversham: The noble Earl also said "for all practical purposes". No doubt he would wish to include that in the phrase. Those are the terms in which he put it. One has to look very closely indeed at that very severe reservation—"almost certainly"—because if it is almost certainly controlled it is not certainly controlled. That is a severe drawback.
Earl Ferrers: That is a perfectly fair point. If all those who were the owners of the 51 per cent. were collectively to gather together on some point they would overrule the 49 per cent. As nobody on the other side can own more than 20 per cent. the chances

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of that happening are remote. However, it could happen, I agree. Our reasoning is that there could be cases where that should happen.
We have tried to create a sensible balance between the legitimate interests of Channel 3 companies to have a say in the affairs of the company which will provide the news for them and the desire to avoid too narrow and introspective an ownership base.
Amendments Nos. 174, 175 and 176A, which would permit Channel 3 licence holders to hold a controlling interest, are misguided. Amendment No. 176, which relates to staff, is unnecessary. I know that the Committee feels strongly about the matter and has anxieties, but I hope that I have been able to explain that although there will be an influx of fresh thought in the 51 per cent. shareholding, that does not necessarily mean that the Channel 3 licensees collectively would lose control of the organisation.
Lord Annan: Is one of the arguments that the noble Earl is deploying that when the late Lord Thomson was required by the IBA to divest himself of a very large proportion of his shares in Scottish Television that it was because it was in the public interest to bring other shareholders into that company and to limit the power held by the late Lord Thomson in that company? Is he saying that that is one of the reasons why he believes that it is in the public interest to bring new blood into the running of the company?
Earl Ferrers: The analogy with the late Lord Thomson is not relevant to this particular case. Our view is that here is an organisation which has been immensely successful. We all accept that it has done very well. It is owned and controlled by those who purvey the news. We believe that to permit outside ideas, outside thought, outside money and fresh views will make it even more lively and enable it possibly to provide news for others as well. In providing that service it will be open to competition, because if it does not do well others will be able to do better. As a result it may he able to provide even better news than it does at present and it will not be such an enclosed organisation.
6.15 p.m.
Lord BonhamCarter: In one of his happier moments the noble Earl described me as having been infected by the virus of pessimism, which appears to have infected every single speaker on this topic this evening, with the exception of the noble Earl. Possibly the virus of pessimism has spread through my veins after watching the activities of the noble Earl's Government over 10 years. I regard their initiatives and their itch to meddle in everything even if it is going well, with a good deal of scepticism. I find that his arguments for meddling in ITN arouse my scepticism in an extremely acute form.
The Minister asked one or two rhetorical questions which perhaps I may answer. He asked whether it is reasonable for ITN companies to be owned by the ITV companies. The argument which I put forward and which most other noble Lords expressed was that it was reasonable not only on the basis of our
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experience of ITN as a producer of news but also on the basis of the experience of other television companies elsewhere in the world.
The noble Earl asked why activities should not be contracted out to experts in the field. ITN is an expert —an expert recognised throughout the world—in the field of gathering news. I do not know of any newspaper which contracts out its journalism. ITN regards itself as an expert in that field and therefore it wishes to retain that within its own control because it wants to control the people who provide it with news, for which it has a real responsibility.
Nor do I understand why, by bringing in outside shareholders, who presumably know nothing about news or television, one should expect to produce new ideas which would vastly increase the quality of the news provided by ITN. I suggest that those people who would have invested in ITN from outside would have invested in it to make money. The making of money is not the best way of judging what has previously been run as a cost centre. Nor is it very easy to value a cost centre. There would be considerable difficulty in obtaining a true valuation of ITN.
We have had a long and interesting debate on the subject. The overwhelming majority of opinion expressed in that debate has been that the Government have not yet convinced us that what they propose is a good idea. I believe, as the noble Earl, Lord Stockton, suggested, that the best course would be to leave things as they are. However, the second best course would be to see whether we can persuade the Government that it is unnecessary to give outside investors a majority interest but that they should have a minority interest so that ITN can use their ideas but not have those ideas forced down its throat.
Therefore, I shall seek leave to withdraw my amendment at this stage, but if the noble Baroness, Lady Birk, decides to press her amendment I shall, of course, support her. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Birk Baroness Birk moved Amendment No. 175:
Page 30, line 26, leave out from ("to") to end of line 28 and insert ("no more than 70 per cent. of the shares in that body; and
(ii) possess no more than 70 per cent. of the voting power in it.").
The noble Baroness said: I have already spoken to the amendment. I have listened very carefully to everything that has been said. It is interesting that the Minister has a number of his noble friends around him but none has supported the view of the Government on this subject. Everyone who has spoken, including the noble Earl, Lord Stockton, has taken the view that has been taken on this side of the Committee. It is not a party political view but a realistic view which reflects the views of the IBA and the association of independent television companies.
ITN, quite rightly, would have preferred everything to have been left as it was. No arguments have been put forward by the Government to persuade any of us to change our view on the matter. I believe that we

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should follow the view of the ITA, which has agreed that the initial release of onethird of the equity and voting power in ITN will be more than enough to meet the Government's concern. That is what is proposed in my amendment. Therefore I wish to seek the opinion of the Committee. I beg to move.
6.20 p.m.
On Question, Whether the said amendment (No. 175) shall be agreed to?
Their Lordships divided: Contents, 56; NotContents, 75.

Division No.3

CONTENTS

Airedale, L.

Kilbracken, L.

Annan, L.

Kilmarnock, L.

Ardwick, L.

Listowel, E.

Aylestone, L.

McGregor of Durris, L.

Birk, B.

McNair, L.

Blackstone, B.

Monkswell, L.

BonhamCarter, L.

Morris of Castle Morris, L

Boston of Faversham, L.

Mulley, L.

Carter, L.

Nicol, B.

Cledwyn of Penrhos, L.

Peston, L.

ClintonDavis, L.

Pitt of Hampstead, L.

David, B.

PrysDavies, L.

Dean of Beswick, L.

Rea, L.

Diamond, L.

Rochester, L.

Donoughue, L.

Russell, E.

Dormand of Easington, L

Serota, B.

Ewart Biggs, B.

Stedman, B.

Gallacher, L.

Stockton, E.

Galpern, L.

Stoddart of Swindon, L.

Graham of Edmonton, L. [Teller.]

Thomson of Monifieth, L. [Teller.]

Hampton, L.

Tordoff, L.

Hirshfield, L.

Turner of Camden, B.

Hollis of Heigham, B.

Underhill, L.

Houghton of Sowerby, L.

Varley, L.

Hunt, L.

White, B.

Jay, L.

Williams of Elvel, L.

Jenkins of Hillhead, L.

Willis, L.

Jenkins of Putney, L.

Winstanley, L.

NOT CONTENTS

Abinger, L.

Fraser of Kilmorack, L.

Alexander of Tunis, E.

Gridley, L.

Allenby of Megiddo, V.

Halsbury, E.

Arran, E.

Henley, L.

Auckland, L.

Hesketh, L.

Balfour, E.

Hives, L.

Belhaven and Stenton, L.

Home of the Hirsel, L.

Beloff, L.

Howe, E.

Belstead, L.

HyltonFoster, B.

Bessborough, E.

Kinnoull, E.

Birdwood, L.

Long, V. [Teller.]

Blatch, B.

Lytton, E.

Blyth, L.

Mackay of Clashfern, L.

Borthwick, L.

Macleod of Borve, B.

BoydCarpenter, L.

Milverton, L.

Brabazon of Tara, L.

Morris, L.

Brougham and Vaux, L.

Nelson, E.

Butterworth, L.

Norfolk, D.

Campbell of Croy, L.

Northbourne, L.

Carnock, L.

Orkney, E.

Cavendish of Furness, L.

Pender, L.

Clanwilliam, E.

Peterborough, Bp.

Constantine of Stanmore, L.

Platt of Writtle, B.

Cox, B.

Pym, L.

Davidson, V. [Teller.]

Quinton, L.

Dilhorne, V.

Rankeillour, L.

Elliot of Harwood, B.

Reay, L.

Elliott of Morpeth, L.

Renton, L.

Ferrers, E.

Rochdale, V.

Fraser of Carmyllie, L.

St. Albans, Bp.

1054

Saint Oswald, L.

Swinfen, L.

Sanderson of Bowden, L.

Thomas pf Gwydir, L.

Selkirk, E.

Ullswater, V.

Soulsby of Swaffham Prior, L.

Vaux of Harrowdean, L

Strathcarron, L.

Wedgwood, L.

Strathclyde, L.

Wise, L.

Strathmore and Kinghorne, E.

Young, B.

Sudeley, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.28 p.m.
[Amendments Nos. 176 and 176A not moved.]
Clause 30 agreed to.
Earl Ferrers Earl Ferrers moved amendment No. 177:
After Clause 30, insert the following new clause:
(" Conditions requiring holder of Channel 3 or 5 licence to deliver promised service
.—(1) Any Channel 3 or Channel 5 licence shall include such conditions as appear to the Commission to be appropriate for securing—

(a) that the service provided under the licence accords with the proposals submitted by the licence holder under subsection (3) (b) of section 15; and

(b) the implementation of the proposals submitted by him under subsection (3) (c) and (d) of that section.

(2) In subsection (1) the reference to section 15 is, in relation to a Channel 5 licence, a reference to that section as applied by section 27.
(3) Any conditions imposed in pursuance of subsection (1) may be varied by the Commission with the consent of the licence holder (and section 3(4) (b) shall accordingly not apply to any such variation).").
The noble Earl said: This amendment was spoken to with Amendment No. 156. I beg to move.
On Question, amendment agreed to.
Clause 31 [Schools programmes]:
[Amendment No. 177A not moved.]
Lord BonhamCarter Lord BonhamCarter moved Amendment No. 178:
Page 31, line 16, at end insert ("provided at times appropriate for schools").
The noble Lord said: This amendment stands in my name and that of the noble Baroness, Lady Birk. These programmes concern television used for educational purposes. I need not emphasise to the Committee that it is an extremely important and growing aid in education in our schools. The question that it raises is a relatively narrow one. We know that a large number of teachers in schools use television, appreciate it and depend upon it.
A recent survey showed that 12 per cent. of primary school teachers find television central to the education of their pupils and 74 per cent. used it from time to time and found it useful. In secondary schools the figures are the same. In the same survey they are 8.5 per cent. and just under 49 per cent.
I understand that the Government envisage that the ITC will continue the procedures of the IBA in this field. However, there is some concern that the licences only "may" have conditions with regard to schools programmes which implies, as ever, that they may not. I suggest that it be a statutory duty. Amendment No. 179 turns "may" into "shall" which serves that purpose.
There is also concern that with the growth of popular daytime TV programmes, schools programmes may be scheduled at inconvenient hours, perhaps late or very early, on the assumption that all schools have videos with which they can record those programmes. The fact is that at present that is not so, however desirable it might be that it should be so. A survey by Moses and Croll showed that 23 per cent. of teachers in primary schools and 26 per cent. of teachers in secondary schools had inadequate facilities for recording those programmes. Hence it is genuinely important either that they should be provided with equipment so that they can record the programmes, or, if not, that the programmes should be scheduled in hours when they can be used. The problem is particularly important and acute in rural schools where TV education is particularly important. Amendment No. 178, which stands in my name, would ensure that schools programmes are shown at appropriate times. I beg to move.
Baroness EwartBiggs: I should like to say a word in support of the amendment of the noble Lord, Lord BonhamCarter, and then to speak briefly about Amendment No. 179.
I believe that it is very important to make sure that schools programmes are broadcast at appropriate times for schools for all the reasons that the noble Lord, Lord BonhamCarter, has given. It is true that in some schools it may be convenient to record programmes. But there are other schools which do not own a video recorder. I think that it is fairly unlikely, as the noble Lord has suggested, that, miraculously, they will all be provided with one. If the schools do not own a video recorder and do not have the staff capacity to work the equipment outside convenient times, then the schools programmes cannot be shown.
This amendment does not determine rigidly the appropriate times for schools but leaves it to the ITC to ensure that the services are provided at those times.
Amendment No. 179 has the effect of ensuring that commercial channels must contribute towards schools educational programming. The requirement is necessary because it is possible to imagine a time when education authorities might be expected to subscribe to TV schools programmes when such programmes come in sponsored packages. I therefore do not think that it is a very contentious amendment. All those who sincerely believe in public service broadcasts will welcome it most eagerly.
Baroness David: I should like to say a word in support of these amendments. The provision is important because if the programmes are not shown at appropriate times, then unless the schools have videos, they will be in difficulty. We all know that at the moment schools are short of cash for books, equipment and so on. Some schools may well have difficulty in providing sufficient videos, tapes and so on.
With the existing shortage of teachers, television programmes may be relied upon more heavily. They are a very good aid to teaching if they are used properly. Of course teachers need to be present but
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such programmes are a very great help. It is therefore extremely important that these programmes should be made. That is the provision in Amendment No. 179. They should also be available at the right time.
Lord Sanderson of Bowden: I should like to draw the Committee's attention in particular to Clause 31(1). It states:
"The Commission shall do all they can to secure that a suitable proportion of the programmes which arc included in Channel 3 services and Channels 4 and 5 (taken as a whole) are schools programmes".
The ITC shall do all that it can in that regard.
On Amendment No. 178, the relevant point is in Clause 31(2)(c)(ii) which refers to conditions requiring the licence holder to ensure that schools programmes included in the licensed service,
"are suitable to meet the needs of schools in the area or areas in the United Kingdom for which the service is provided".
Clause 31(2) (d) refers to,
"conditions specifying the minimum number of hours in term time or within normal school hours that are to be allocated to the broadcasting of schools programmes in the licensed service".
Those are the paragraph and subparagraph that we wish to address. They give the ITC power to ensure that schools programmes are suitable to meet the needs of schools, and to specify the minimum number of hours in term time or within normal school hours that are to be allocated to schools programmes. The Bill's provisions will give the ITC ample power to ensure that schools programmes are broadcast at times appropriate for schools. It would not necessarily be the case that all schools programmes would have to be broadcast during term time. Increasingly schools have access to video recorders and can be expected to use these facilities to reschedule programmes broadcast outside normal school hours. However, again I draw the Committee's attention to Clause 31(1). The commission would have to be sure that that balance was correct in that area.
Amendment No. 179 would oblige the ITC to require all Channel 3, 4 and 5 licensees to show schools programmes. The intention of the Bill is to give the ITC the flexibility to determine how best to provide schools programmes. It may indeed conclude that schools programmes can best be provided on three, four and five channels. On the other hand, the ITC may prefer to concentrate its schools programmes on one channel only. The important point is that the ITC is under an obligation in Clause 31(2)(c) to ensure that the schools programmes are suitable to meet the needs of schools. It will be a matter for it to decide how it can best achieve that. We believe that the Bill should not include a statutory requirement which might impede that objective. Surely the way that schools programmes are to be provided is a matter for the commission to decide given the obligations in the statute under Clause 31(1).
I hope that the explanation that flexibility would not come easily if Amendment No. 179 were accepted will determine what Members of the Committee think about the amendment.
Lord BonhamCarter: I have listened to what the Minister has been good enough to say. I agree that Clause 31 goes a long way to meet the requirements of the amendment that I moved.
However, I hope that he will have drawn the attention of the ITC to the importance which Members of this Chamber attach to this aspect of those responsibilities. I reiterate that although it is surprising, the figures indicate that 23 per cent. of teachers in primary schools and 26 per cent. of teachers in secondary schools do not have video equipment. Therefore the hours at which the programmes are broadcast is still extremely important. The evidence is that those least likely to have the equipment are small schools in rural areas.
In the light of what the Minister has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 179 not moved.]
Clause 31 agreed to.
Lord BonhamCarter Lord BonhamCarter moved Amendment No. 180:
After Clause 31, insert the following new clause:
("Promoting the arts on television
. The Secretary of State, in order to ensure the availability in the licensed services of a wide range of high quality programmes on the arts, shall

(a) set a percentage of the annual revenue obtained by the Commission,

(b) allocate a sum equal to the amount set under paragraph (a) above;

and shall ensure that the sums so obtained are paid to a body corporate established by the Arts Council for the purpose of promoting the arts on television.").
The noble Lord said: We return to the arts, upon which we touched briefly yesterday. I hope that on this occasion I shall be presenting an exciting entrepreneurial idea which the Minister will pick up, welcome, accept and carry out. I do not see him looking very forthcoming at the moment.
When the White Paper was published the Arts Council, to its great credit, noticed that there was an opportunity for it to take an initiative. It embraced the idea that the increased viewing choice which was to be made available should include the production and transmission of programmes showing the activities of its clients—those in the arts. It commissioned Messrs Coopers and Lybrand to assess the opportunities should the Arts Council try to increase the dissemination of the arts to a wider audience through increased coverage on television and video. The Arts Council has had experience of making such films and distributing them successfully. The films have been regarded by most people as being extremely good examples of their kind.
The Coopers and Lybrand report concluded that an opportunity existed for an agency to invest in such programmes. It should coordinate them with the broadcasting companies and the businesses interested in arts programmes for sponsorship and so forth. Therefore, it set out a plan. Its objectives were to bring the work of the Arts Council's clients to a wider audience by those means and to do so with a minimum call on private funds. To achieve that worthy objective
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it planned to set up an independent company and commit £1.5 million annually from a new broadcasting incentive fund beginning in 1991. The company will commission highquality arts programmes from independent production companies mainly derived from the productions of existing arts companies. In accordance with the Coopers and Lybrand report, it will be financially selfsufficient within five years given adequate investment. It will earn its revenue from domestic and international sales and it will develop a secondary market through home videos.
The Arts Council is persuaded that the plan will work in part as a result of the response that it has received from sponsors, arts organisations and broadcasters to the idea that it floated. Secondly, it is persuaded because of the Coopers and Lybrand projections and assumptions about the themes, the cost of production, marketing and administration and its conclusion that with sufficient investment profitability can be achieved within five years. Those two responses have encouraged the Arts Council to believe that it is on to something that can work.
The idea complements and reinforces the Government's objectives for increasing competition, choice and quality in broadcasting. The company's programmes will offer to millions more people the chance to enjoy the best works supported by the Arts Council. The venture is not large but it is significant. It launches a new idea and I hope that the Government will embrace it. I beg to move.
6.45 p.m.
The Earl of Bessborough: I was interested to read the amendment tabled by the noble Lord, Lord BonhamCarter, relating to the promotion of the arts. I have always believed that if we are to have 27 channels, which is more or less what we have now with perhaps more later, one or two might be devoted entirely to highquality programmes on the arts.
I was also most interested to read the letter that I received from Anthony Everett, the new secretary general of the Arts Council. He gave me details of the council's plans to set up an independent company to finance arts television programmes, such as mentioned by the noble Lord, Lord BonhamCarter. It was an extremely interesting proposal put forward by the Arts Council and Coopers and Lybrand which concluded that a commercial opportunity existed, given the right level of initial and continuing investment.
Therefore, I was glad to see that the noble Lord, Lord BonhamCarter, had tabled the amendment. I have had correspondence about the matter with my noble friend Lord Ferrers. I was glad that he told me that this was an imaginative and timely initiative. However, I accept the point that he does not believe it appropriate that there should be a statutory provision which would compel ITC licensees to fund such a body. I shall not state all the points that my noble friend made in his letter to me because it is better that he should do so himself.
I am glad that the Government welcome the Arts Council initiative and wish it every success. I was

1059
interested to read an article published in the Evening Standard on 29th June. It discussed the Arts Council's proposals for a £5 million television company and asked the question: where is the 1990s equivalent of Sir Kenneth Clarke's "Civilisation"?
I agree with my noble friend Lord Ferrers that, interesting and pertinent though the amendment is, it need not necessarily be included in the Bill. It would run counter to the deregulatory thrust of the Bill as a whole. Nonetheless, I hope that the Arts Council will succeed in its efforts to obtain voluntary contributions from broadcasters to its new incentive funding initiative. I hope that it will also receive contributions and sponsorship from others. That happens, for example, at the Chichester Festival Theatre, in which I have an interest, and at Glyndebourne opera. Neither are dependent on the taxpayer. I hope that the Arts Council will succeed in obtaining the necessary voluntary contributions to set up its new independent company, Arts Council Television, even if there is no provision in the Bill for that.
Baroness Birk: I am sorry that on this occasion I do not fir d myself in total agreement with the noble Lord, Lord BonhamCarter, and nor with my old friend the noble Earl, Lord Bessborough. We on these Benches agree that there should be more arts programmes on television. I have discussed the matter with members of the Arts Council and have received their letter and memorandum. It appears to be an attractive idea, but while the intentions are excellent the whole project misfires. I do not believe that this is the way to use Arts Council money, which is always in short supply. It is not the job of the Arts Council to set up its own broadcasting company, which is expensive in financial and personnel terms. I am also worried that there would be an adverse effect on the ability to obtain more government funding for the arts.
I believe that there should be many more arts programmes on television and radio than we have at present. However, I do not believe that this amendment is the right way to achieve that. It is a question of method. I believe that the Art Council should be able to commission programmes from independent producers for Channel 3 and Channel 5, if there is one. I prefer the route proposed by Amendment No. 128 in the name of the noble Lord, Lord BonhamCarter, and myself. I believe that that is the best way to approach the matter.
Earl Ferrers: I agree with the noble Baroness, Lady Birk, and that is a somewhat happy and unusual position to be in. This amendment is not quite suitable. I agree with the noble Baroness that this is an interesting initiative and we wish it success but that is completely different from imposing an obligation upon ITC licensees to contribute.
It is an imaginative and timely initiative. However, we do not consider that it is right to have such main statutory provision for it. I expect that the Arts Council will seek voluntary funding and will ask for contributions. Of course, it can seek funding from the broadcasters. However, as there are no specific requirements on any ITC licensee to show arts programmes, it is not right to require the licensees to
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fund a body which is engaged in promoting those sort of programmes which they do not have to show in the first place. No doubt such programmes will be shown and no doubt voluntary contributions will be made to the Arts Council. However, I do not believe that it is right to impose a statutory requirement upon the licensees to do so.
Lord BonhamCarter: For one marvellous moment I thought that the noble Earl, Lord Bessborough, was going to support my amendment. I was rapidly disillusioned and the support disappeared. For another moment I thought that possibly the virus of pessimism might not have entered into the veins of the noble Earl, Lord Ferrers. However, this bright new, interesting, entrepreneurial idea was turned down flat by the noble Earl. The virus of pessimism or scepticism has spread across the Floor of the Committee.
I listened to the words of the noble Earl, Lord Bessborough. He said that he recognised that the spirit of the amendment ran counter to the regulatory thrust of the Bill. I say to him that all the best amendments which have been moved run counter to the regulatory thrust of it. That is why we are grateful to the Government for modifying in so many ways the original Bill which was brought before Parliament.
However, one must accept one premise on which this proposal rests, whether it be practical or impractical; that is, that it is almost certainly the case that today most people's access to the arts is through television. Therefore, to encourage television broadcasters to broadcast arts programmes is highly desirable. As we decided the other day, television brings artistic performances and works of the very highest class and quality to millions of people who would not otherwise have access to them. Without the use of this magical medium, they would be wholly deprived of that.
Although this scheme may be flawed, I do not believe it should be thrust aside as impractical. It has the germ of an idea of great importance and I hope that it will be carried further. I hope that in some shape or form it will find its way on to our screens. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 [Subtitling for the deaf]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 181:
Page 33, line 30, after ("television") insert ("broadcasting").
The noble Viscount said: This is a drafting improvement to Clause 32(8).
On Question, amendment agreed to.
Clause 32, as amended, agreed to.
Viscount Ullswater: I beg to move that the House do now resume and that we return to this business at 8 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Meat and Livestock Commission Levy (Variation) Scheme (Confirmation) Order 1990
6.55 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): rose to move, That the draft Order laid before the House on 21st June be approved.[21st Report from the Joint Committee].
The noble Baroness said: My Lords, this scheme is presented in accordance with the requirements of Section 13 of the Agriculture Act 1967, as amended by the Agriculture Acts of 1970 and 1986. The order replaces the maximum charges set out in the schedule to the Meat and Livestock Commission Levy (Variation) Scheme (Confirmation) Order 1988. In doing this, the order increases the maximum charges payable for cattle, pigs and sheep in respect of general expenses, and increases the maximum levy in respect of species promotion payable on cattle and sheep. For pigs, the maximum species promotion levy remains unchanged. There continues to be no species promotion levy on calves, and the maximum general levy on calves remains unchanged.
The species promotion levy is paid solely by producers, and the general levy is shared equally between producers and slaughterers. The actual amounts within these maxima will continue to be determined by the MLC in consultation with the appropriate representatives of the industry. It usually takes several years for actual rates to reach the permitted maxima. Before submitting its scheme to agriculture Ministers, the commission consulted widely within the meat and livestock industry on its proposals for new levy maxima. Agriculture Ministers have consulted the industry separately. In the light of these consultation exercises, I am satisfied that the proposals have the support of the industry because of the overall benefit to the meat and livestock industry.
I should now like to set out the background to the draft order. Customs and Excise has examined the position of the MLC in respect of VAT. The conclusion was that the MLC's levy fell within the VAT system. In technical terms, it constitutes a financial consideration for a taxable supply of services. This means that as from 1st September this year VAT will be charged on MLC levies. As a consequence, the MLC will be able to recover the VAT it incurs on its purchases (inputs) against the VAT charged on its outputs. Levy payers registered for VAT will also be able to recover from Customs and Excise the VAT charged on the levy to the extent that it is attributable to their own taxable expenses.
The main purpose of the draft order is to allow the MLC to increase its levies to take account of the payment of VAT from 1st September. Otherwise there would be a significant fall in the revenue of MLC after payment of VAT, leading to a cutback in its activity.
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As far as levy payers are concerned, I have already mentioned that the VAT they pay will be recoverable from Customs and Excise.
The maximum rates specified in the draft order would also provide some scope for the MLC over the coming years to increase its levies (in particular the species promotion levies for cattle and sheep) over and above what is required because of the VAT changes. This reflects the views of the relevant species promotion councils, and any actual increase would be put in place in full consultation with industry representatives.
The draft order would exempt from the levy certain livestock brought into the United Kingdom from other member states. This is necessary to meet our Community obligations. I would stress that it is a very limited exemption. It is confined to animals which have been fattened here for relatively short periods. The numbers involved are extremely small, and the effect on MLC income will not be significant.
The raising of the maxima has the support of both the industry and Ministers, and I ask your Lordships to support the Motion. I beg to move.
Moved, That the draft order laid before the House on 21st June be approved. [21st Report from the Joint Commit tee].—(Baroness Trumpington.)
Lord Gallacher: My Lords, we on this side of the House, thank the noble Baroness for breathlessly explaining the order and its purpose. I immediately give her the reassurance that we are in support of it. Indeed, we have very little to say about it.
I was gratified to learn from her introduction that there had been full consultation both by the Ministry and by the Meat and Livestock Commission with the 13 representative bodies who have an interest in these matters, and that there was unanimous agreement in favour of the changes which the levy proposes. Such unanimity in the meat industry is, in my experience, a rare occurrence. We should be grateful that the industry is so wholeheartedly behind the commission in the increases now proposed.
I had a note from the commission which gives me the gratifying additional information that the species promotion levy, which is included in the order, is likely to remain at those rates for the next three years. If that should prove to be the case, it will be a source of gratification for those called upon to pay the species promotion levies.
I note what the noble Baroness said regarding the decision by Customs and Excise to vary the rulings regarding VAT. One must accept the fairness of the variation. Again, the MLC is apparently satisfied with it. In my dealings with Customs and Excise I always believed in an arm's length relationship and the maximum disputation of everything which it proposed. That led on occasion to some very valuable concessions under de minimis and other rules which I never fully understand but which ultimately were beneficial to us. However, I am assured by the Meat and Livestock Commission that what is proposed will be to its advantage rather than to the reverse. To that

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extent is would be wrong of me to criticise unduly the Custom s and Excise based on experience which may be sadly out of date. That said, we support the order.
Baroness Trumpington: I am extremely grateful to the noble Lord, Lord Gallacher, and apologise for my breathlessness. I thank him for his welcome.
On Question, Motion agreed to.

Sea Fish Industry Authority (Levy Powers) Order 1990
7.4 p.m.
Lord Sanderson of Bowden Lord Sanderson of Bowden rose to move, That the draft order laid before the House on 27th June be approved [22nd Report from the Joint Committee].
The noble Lord said: My Lords, the authority was established in 1981 to replace both the Herring Industry Board and the White Fish Authority. Its purpose is to promote the efficiency of the sea fish industry as a whole having regard to the interests of the consumers. It aids the marketing, and encourages consumption, of sea fish and sea fish products; provides training; carries out research and development; gives advice and information; and administers the UK national fishing vessels grants scheme.
For the purposes of financing its activities the authority may, under the Fisheries Act 1981, impose a levy on weight of sea fish or sea fish products landed in, or imported into, the UK or transhipped within British fishery limits. The authority is proposing to increase the levy from 1st April next year. Consultations with the industry are currently taking place arid once these are completed in September or October, a formal proposal for a levy increase will be made to fisheries Ministers.
The current levy is 7p per kilo or £7 per tonne. Under the Fisheries Act 1981, the maximum that can be collected is £8 per tonne. In order to accommodate any proposal to increase the levy above £8 per tonne it is necessary to increase the current ceiling. The purpose of this order is to increase the ceiling now so that the authority will be acting within its powers when the regulation is made in the autumn. The order increases the ceiling to £20 per tonne since it would not be sensible to have orders of this kind regularly. I must emphasise that the order just raises the overall levy ceiling; it does not increase individual levy rates for fish and fish products.
A decision on the actual rate of levy is, in the first instance, a matter for the authority which must prepare a new levy regulation at whatever rate of levy is considered necessary. The industry must then be consulted about the proposal. Finally, after taking account of the industry's reactions, it is for Ministers to consider, and decide upon, the authority's levy regulation and make an order. Raising the levy ceiling today does not therefore commit anyone to an increase in the levy, although it is no secret that the authority is thinking in terms of a 31 per cent. increase it simply provides the statutory basis for the authority to make a formal proposal.
I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 27th June be approved. [22nd Report from the Joint Committee].—(Lord Sanderson of Bowden.)
Lord Gallacher: My Lords, we are grateful to the Minister for introducing the measure to us as clearly as he always does. We note the purpose of the levy and the permissive character of the increases. We also note that the negotiations as to the amount to be used under the powers in the order will be with the industry.
My only query stems from the common fisheries policy and in particular the quota system. Given that the limitation on landings of fish is now so severe, will that of itself result in the Sea Fish Industry Authority having to raise more money by way of the rate of levy than would otherwise be the case? In that context, while not wishing to engage the Minister in a major debate or even a discussion of the matter at this hour of the evening, can he say whether the role of the Sea Fish Industry Authority is being looked at in the light of the fact that for the foreseeable future the restrictions on catches under the common fisheries policy are of such a nature that the promotional aspect of the authority's work is likely to be somewhat reduced? I very much regret that; it is however a fact of life. Perhaps the Minister would care to comment.
Lord Sanderson of Bowden: My Lords, I am grateful to the noble Lord, Lord Gallacher, for welcoming the order. One of the difficulties for the industry at the moment, as he rightly says, is that the weight of fish landed has gone down considerably—particularly haddock in northern waters but also other species. That presents the SFIA with problems regarding the rate. The SFIA is setting its levy on the weight of fish landed. Thereby hangs the problem which it now faces about the size of the increase of the levy.
Having said that, it will not have escaped the noble Lord's attention that the value of fish landed has dramatically increased. Therefore, the catching side of the industry—although the processors have some problems—is quite satisfied with the very high levels of price it is obtaining for what used to be fairly low priced commodities; cod, haddock, whiting, and skate in the main.
The answer to the noble Lord's question regarding the role of the SFIA is no. The promotional aspect has perhaps taken a different turn in so far as, having now established its role as the promotional organisation for fish, the authority finds that it must spend a great deal of time evaluating how it can increase the intake of fish or the attractiveness of fish to the housewife. Although its promotional role has changed, it is still relevant because the fish must compete with other foods.
I hope that, without going into a detailed discussion of the fishing industry, which is not having an easy time at the moment, the noble Lord will understand that the difficulty for the SFIA is increased because it has to do its job and, to do that, it needs a levy. However, with fish landings having gone down and values having gone up, it has a problem.
On Question, Motion agreed to.

Air Navigation (Noise Certification) Order 1990
7.10 pm
Viscount Davidson Viscount Davidson rose to move, That the draft order laid before the House on 27th June be approved [22nd Report from the Joint Committee].
The noble Viscount said: My Lords, this order is intended to replace the Air Navigation (Noise Certification) Order 1987. It is the sixth of its kind. As well as carrying forward the provisions of the previous order, it introduces the terms of a European Community directive on aircraft noise which effectively rules out the addition of further so called chapter 2 aircraft to the fleets of EC member states. As in the case of the previous order, it is considered preferable to have a new comprehensive order rather than have the complexities which would result from an amended order. The noise standards section is largely unchanged and repeats that in the old order.
International noise certification standards for civil subsonic jet aircraft are specified in the International Civil Aviation Organisation's annex 16 to the convention on International Civil Aviation. Chapter 2 is the minimum standard and that is attained by the older types such as the BAC111 and Boeing 727. More modern types, such as the Airbus A320 and BAe 146, are certificated to the more stringent chapter 3 requirements and are appreciably quieter. The order will give force to EC Directive 89/629/EEC and will bar from November this year the addition to the airline fleets of EC member states those aircraft which do not meet chapter 3 noise standards.
The provisions contained in the order represent a first step towards the eventual phasing out of operations by this class of aircraft and follow the undertaking given in the 1985 airports' policy White Paper. The nonaddition proposals are supported not only by the UK, but by the majority of the member states of the European Civil Aviation Conference which are not already members of the European Community.
The banning of chapter 2 aircraft operations altogether will be no simple task when it is remembered that over half of the world jet fleet is comprised of chapter 2 aircraft. However, we are confident that an international agreement will be reached later this year that will allow those aircraft to be phased out over the period 1995 to 2002.
Regrettably, the problem of aircraft noise disturbance in the vicinity of airports will never entirely disappear. However, the provision in the order represents a further, if modest, step in the Government's ongoing campaign to alleviate the nuisance. I commend the draft order to the House.
Moved, That the draft order laid before the House on 27th June be approved.[22nd Report from the Joint Committeer—(Viscount Davidson.)
Lord Gallacher: My Lords, I thank the noble Viscount for explaining the purpose of the order. Those who are instructing me in the matter have told me to say very little, apart from giving the order a generous welcome and saying that we support it.
Viscount Davidson: My Lords, I am most grateful.
On Question, Motion agreed to.
The Earl of Strathmore and Kinghorne: My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.14 to 8 p.m.]

Broadcasting Bill
House again in Committee.
Baroness Darcy (De Knayth)Baroness Darcy (De Knayth) moved Amendment No. 182:
After Clause 32, insert the following new clause: ("Sign language programmes
.The Commission shall ensure that any Channel 3 licence or licence to provide Channel 4 or 5 shall include conditions requiring the licence holder to provide a sufficient amount of time for programmes with sign language in the licensed service.").
The noble Baroness said: The purpose of this amendment is to ensure that Channels 3, 4 and 5 broadcast some programmes with sign language for deaf viewers. It leaves it to the ITC to decide how much after weighing up the needs of deaf viewers against the question whether using sign language for some informative and educational programmes will be imposing too much on hearing viewers who may not wish to see them. It cannot be turned off in the manner of subtitling. This amendment is supported by the Deaf Broadcasting Council, Deaf Accord, and the RNID. The British Deaf Association is part of Deaf Accord. The noble Marquess, Lord Salisbury, is the president and he strongly supports this amendment. He has asked me to give his apologies because he has had to leave.
The organisations for the deaf warmly welcome the amendments to Clause 32 introduced in the other place at Report. They will mean that at least 50 per cent. of the programmes on Channels 3 and 5 are subtitled within five years of the new franchises. That is a great benefit to the 4 million deaf and hearingimpaired people. However, there are 50,000 profoundly deaf people whose only or preferred language is British sign language (BSL). Research shows that the average reading age on leaving school is under nine years for some of these handicapped people. Therefore, they find that rapidly changing subtitles are difficult.
Signing makes sensible use of positive visual abilities rather than of limited hearing abilities. That is a fundamental point. Sign language is visual and, therefore, television is the ideal medium for communication. It is recognised as being important as a means of providing education and information for the public in general. Therefore, it is essential for those

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who do not have access to other media. The Government have already recognised the importance of sign language when they want to get a message across. They have produced a video in BSL on the poll tax.
What does television offer in sign language at present? BBC 1 and Channel 4 each regularly broadcast a halfhour programme with sign language, but basically it is at offpeak hours on issues affecting deaf viewers. The most welcome recent development is Channel 4's news slot at 9 a.m. with sign language. That is the first signed network news in Britain. Of the 15 ITV regions only six provide any sign language and none of these is the large television companies. Two surveys in the regions both showed that more than 80 per cent. of the public agreed that sign language should be on some regular news programmes. There was no adverse public reaction.
Last September a conference held in Sweden on television production for the deaf produced some interesting papers. Sweden reported that their 20minute, weekly signed news programme had figures totalling three times the number of deaf people in the country. The viewing figures for Switzerland were way above the deaf population. Obviously, hearing viewers were looking at and appreciating these programmes as well.
Broadcasters have resisted sign language interpreters on ordinary programmes on the ground that it would distract the hearing viewers. However, they have acknowledged that that is only their personal view and they have no evidence to support it. It has not been possible to carry out network research because of insufficient examples to provide a serious survey. Until sign language is regularly shown on network television at peak hours, how are we to judge? We are in a chickenandegg situation. This amendment would nudge those television companies who do not provide some signing into doing so. As I have said, it can be a minimum amount.
Concern has also been expressed about technical problems, the cost and the small number of viewers who would be involved. I do not think that those are good arguments. The television companies which have provided signing have overcome any technical problems. The cost is low. It is £200 an hour which is half the cost of subtitling. In any case, is it really justifiable to reject sign language because subtitling benefits the majority of deaf viewers? Those who use sign language accept that subtitling should be the key service. They merely want some access to news, information and education.
At the international conference on television and deaf viewers which I mentioned earlier, the Swiss submission stated that they also tried to build a bridge between the world of the deaf and the world of the hearing. This amendment will help to ensure that deaf people are less isolated from events and from the hearing public. I hope that the Minister will reflect whether the positive benefits in communication, integration and understanding do not outweigh the unsubstantiated fears that hearing viewers may be distracted by signing. If at the moment he cannot give
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any positive response, I hope that he will at least agree to discuss the issue further before Report. I beg to move.
Baroness EwartBiggs: I support this amendment. My noble friend Lady David also strongly supports it. Unfortunately, she is not here to speak to the amendment. The supporters of this amendment are not asking for a great deal. They are asking that Channels 4 and 5 should include conditions requiring the licence holders to provide a sufficient amount of time for programmes with sign language in the licensed service. I do not think that this amendment can be seen as one making a very great demand.
The noble Baroness has put forward some very convincing reasons showing the importance of this amendment. She has pointed out the number of deaf people living in Britain. She has indicated that their only and preferred language is the British sign language. BSL is a true language with its own grammar and syntax. I did not know that it is Britain's fourth indigenous language. Public interest in it has grown considerably in recent years. Moreover, in 1988 the European Parliament took an interest in the subject. It passed a resolution calling on member states to recognise their own national sign languages.
I found myself very convinced by the argument that sign language is a visual language which enables deaf people to communicate effectively and fully in a way that they find most comfortable. Therefore, television is the ideal medium for conveying information in sign language. There is the added reason that, for most deaf people, it is difficult to understand English. Television programmes with sign language would give them access to information which they would otherwise be completely denied. According to the research carried out by the IBA in 1984, there is very strong support from the public for sign language to be included. The cost seems remarkably low.
We on this side of the Committee believe that there is very strong support for deaf people to have access to more television with sign language interpretation. This amendment allows the ITC to decide where to strike the balance between the needs of deaf people and the effects on hearing viewers.
Surely we should do everything we can to include deaf people in the life of the community. In so many ways deaf people must feel excluded and, as the noble Baroness said, isolated from normal daytoday life. There is little one can do to help them but this is something that can be done. I strongly support the amendment. It will do something to include deaf people in life. Television is a wonderful medium for that. Therefore I too hope that the Minister will look favourably on this important amendment.
Lord Winstanley: I am delighted to support the amendment to which my name is also attached. Earlier the noble Earl the Minister talked to us about the virus of pessimism. I am bound to say that I feel optimistic about the amendment for a whole number of reasons which I shall now explain.
First, as Members of the Committee will know, the amendment has been moved by a noble Baroness who,

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although she now sits on what might be called a movable Bench, actually belongs to the CrossBenches. The amendment also has attached to it the names of noble Lords of all three parties. Had we been allowed to attach five names to it, I am absolutely certain that we could have had a Bishop as well. What I am saying is that the amendment is supported by Members of the Committee on all sides of the Chamber.
I should also have thought that an amendment designed to enhance the enjoyment of television for people with impaired hearing would by definition appeal to a Chamber such as this which is full of noble Lords whose hearing is impaired. I do not merely mean those who do not wish to hear; I mean the very large number of noble Lords—there are many in my own party as well as in other parties—who have certain hearing difficulties. There is a great understanding of the problems of people with hearing impairments. That is my second reason for feeling optimistic.
My third reason is that a long time ago I moved a similar amendment—or an amendment designed to achieve the same effect—to the Cable and Broadcasting Bill. That was warmly welcomed, as I recollect, by the noble Lord, Lord Elton, who dealt with the Bill on that occasion. Subsequently, the Government incorporated something of this kind into the Cable and Broadcasting Bill.
My other reason is a more personal one. A programme which I presented for Granada Television was the first programme in this country to be regularly and routinely signed for people with hearing impairment. A lady signed the programme. She appeared in the corner of the screen. This was greatly appreciated by all viewers. The lovely balletic movements of the sign language were not a distraction. The lady who signed that programme later signed all three party conferences—Conservative, Labour and my own, which perhaps shows proper consideration for what has come to be regarded as true impartiality.
What I have described was not an impairment of the programme. It enhanced it in many ways. But it did something else. It greatly increased the interest of other people in sign language. We found from our own experience that a large number of viewers of our programme, which went out four times a week, started to learn sign language. Not all those people had hearing impairment. They were people who appreciated that a knowledge of sign language would be very helpful to them in dealing with other people who had impaired hearing. As a result, a number of classes were set up which greatly increased knowledge of sign language not merely among people with hearing impairment but among people whose hearing was acute and unimpaired in any way. That is a public service.
I have two points to make. First, a measure such as this would do a great deal to increase and enhance the enjoyment and appreciation of television of those with hearing impairments in our community. That is a very
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large number of people indeed. Secondly, it would do something to increase understanding in the community as a whole of the problems of those with hearing impairment. Thirdly, it would encourage more and more people to learn sign language. I know that there has been a problem in this respect because there are a number of different systems of sign language. One hopes that in the end there will be just one system. As long as there is a system which people learn and which improves communication between those with full unimpaired hearing and those whose hearing is impaired, that is a social service of immense importance.
There is not a shred of evidence to suggest that the presence of that lady using very attractive and extremely expressive balletic movements to sign the programme did anything to impair the programme's acceptability to other people. I support the amendment. I hope that it is received with the same kind of encouragement as my earlier effort on the Cable and Broadcasting Bill was received some years ago.
8.15 p.m.
Lord Swinfen: I support the amendment. If there had been room on the Marshalled List, my name would have been on it as well—possibly a sixth one following the right reverend Prelate. It may be of interest not only to the Committee but to the noble Lord, Lord Winstanley, in particular, that the British Deaf Association is about to publish a sign language dictionary, which is funded by BP.
In Parliament we change rules where necessary. There is a rule that we cannot have dogs in the Palace of Westminster. In the other place there is a completely blind Member, the Member for Sheffield, Brightside. He needed his guide dog. Rules were changed so that he could bring his guide dog into the building and, I believe, even into the Chamber. There was a time when in this House we did not have a mobile Bench. I am sure the Committee would agree with me that it would be a great shame if we did not have a mobile Bench. All Members of the mobile Bench give the House great service. It is quite possible that a profoundly deaf Member will join this House. That Member would not be able to take part in our proceedings if provision for sign interpretation was not made. I am sure that we would make such provision.
If we are prepared, as I am sure we are, to make provision for an individual who needs this service, why should we not make provision for more than 50,000 who need it on television? They are an unfortunate group in our society in that they have the greatest difficulty in communicating in any way. As other Members of the Committee have said, their language is not English; it is sign. They actually need an interpreter to interpret from their language of sign into English. Yet they are citizens of this country. At least we can provide signing for them in their own language for such programmes as the news, documentaries and discussions. It would be rather difficult to have such provision for some of the films,

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as one might detract from those films. But for the more important programmes on television we ought to have sign language.
There is a great move at the moment to train more sign interpreters and so the problem of producing interpreters will decrease. I can see no reason why the Government should look unfavourably on this amendment. They may wish for it to be reworded in some way to fit in with the Bill but I hope they will give it serious consideration and allow something of this kind to be included in the Bill. We are not asking for every single programme to be signed; just a proportion of them. I heartily support the amendment.
Lord Thomson of Monifieth: I am afraid that I cannot speak with the same experience or knowledge as the noble Baroness, Lady Darcy (de Knayth), and the other speakers who have taken part in the debate. However, I should like to add my voice in support of the amendment. I do so against this background. Ten or 12 years ago there was very little provision on television for those who were hard of hearing. But since that time steady and good progress has been made. The IBA took a leading part both through its technologists and through the research work which it financed at Southampton University.
I know that the Government have shown themselves to be sympathetic in this area by way of the amendments which they have already accepted to Clause 32 of the Bill. Although there are always practical difficulties about such matters, my own experience is that when sign language has been used in television programmes it has proved a great deal less intrusive than people had imagined before the decision to include it was taken. Therefore, I am an optimist about steady and sensible progress being made as regards this sort of provision.
Although it is true that subtitling is the best way to help the great majority of people who suffer from impaired hearing, there are 50,000 deaf people for whom the British sign language is probably the only means of access to television programmes. The amendment is modest. It seeks to ask Parliament to show its commitment to the principle of some sign language provision on television. I hope that the Government will be able to respond sympathetically.
The Lord Bishop of St. Albans: As I entered the Chamber this evening the noble Lord, Lord Winstanley, was volunteering me as someone who would support the amendment. Therefore, I am very happy to put myself on record as doing so. It is an important and valuable amendment and one which I hope the Government will take seriously.
Two particular mental images come to mind in this connection. One occurred when I paid my first visit to a club which was exclusively for the deaf. I was the isolated person. I was unable to communicate with a group of people who were communicating with each other remarkably well, almost exclusively by the use of sign language. I was the intruder, even though I was the bishop who was visiting the community. I was meeting people whom one never normally meets in the
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normal run of conversation and social intercourse. They had their own subculture of relationships, clubs, societies and organisational life which does not normally impinge upon the rest of us. Therefore, we are not talking about the typical minority; we are talking about another world and one which we need, through the main channel of the media, to communicate with. These people need to know that they are accepted as part of the vast wider community from which they are at present isolated.
My second memory is of seeing on television the screening of an American programme. It featured an address being given by an American president or senator. In the corner of the screen one could see the person who was doing the signing for the benefit of that channel. The very fact that this was being done carried powerful weight with me on behalf of the speaker. I felt that sensitivity was being expressed, as well as a desire to embrace all those who were able to see the programme.
Similarly, on the rare occasions that I have been preaching or addressing a meeting where someone has been signing for the benefit of a group of people, there has been something deeply emotive about the way it has been done. Therefore, any company which offers this service will earn for itself rich rewards and, at the same time, gain much credit. If the amendment were to be accepted it would not be seen as an intrusion by an interfering government on behalf of a poor minority. Instead, we would be doing something which seems to be right and which would be acceptable to the viewing public. I commend the amendment to the Committee.
Viscount Ullswater: I am sure that noble Lords will agree that the subtitling provision in Clause 32 represents a significant advance for viewers who are deaf or hard of hearing. The noble Baroness, Lady Darcy (de Knayth), and other speakers paid tribute to the fact that this is recognised in the clause. The advantage of subtitling is that it makes television programmes accessible to all deaf or hard of hearing viewers.
Lord Swinfen: I am sorry to interrupt my noble friend so early in his speech. I trust that he will forgive my intrusion. He is quite wrong in his assertion. Subtitling does not make television available to all those who are deaf or hard of hearing. Indeed, there is a large proportion of people whose only language is signing and who cannot properly read English.
Viscount Ullswater: I take my noble friend's point. The same could be said of those who do not come from our country and who also cannot read English. However, sign language is much more limited. It is generally not learnt by those who are simply hard of hearing and its use is confined essentially to the severely deaf. Sign language is clearly not a satisfactory substitute for subtitling and would add little to a programme which is already subtitled. Moreover, sign language suffers from the additional disadvantage of taking up space on the screen which would be likely to be distracting to nondeaf viewers if it were used with any great frequency. We do not consider that there is a good case for imposing any

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statutory requirements for sign language on Channels 3, 4 and 5. Therefore, I must tell the noble Baroness that Amendment No. 182 is not acceptable.
The noble Baroness, Lady EwartBiggs, said that the proposers of the amendment were not asking for a great deal. That is true. It is accepted by the Government. However, the use of sign language on television is not ruled out. There may well be programmes in which sign language could play a valuable role. The right reverend Prelate the Bishop of St. Albans drew attention to the fact that if companies wanted to provide a sign language service, that would be a good selling point for them. There is nothing in the Bill to prevent or discourage individual programme producers introducing sign language in such contexts.
The noble Lord, Lord Winstanley, said that people gain a great deal of enjoyment from watching programmes which provide a sign language service. I agree. I am sure that it brings great enjoyment to those who possibly cannot read, as my noble friend Lord Swinfen said, thus enabling them to enjoy the programmes. I should like to point out that Section 7(2) (g) of the Cable and Broadcasting Act 1984, provides that the Cable Authority should have regard to the extent to which cable services include matter which promotes "the understanding or enjoyment" of programmes by the deaf. However, that would equally be met by subtitling which is provided for by the Bill under Clause 32.
Lord Winstanley: I thank the noble Viscount for mentioning the earlier Act. I hope that he will forgive me if I remind him that that provision arose from an amendment of mine which the Government graciously accepted. I know that what counts is what is written in the Bill. But our debates at that time covered various aspects to which the noble Viscount has referred, including subtitling and sign language. They were very much in our minds when the Government accepted my amendment. It was a matter of principle and not a compelling matter.
Viscount Ullswater: I appreciate that fact. However, the present Bill goes much further. In Clause 32 it sets out the subtitling arrangements which must be included by the licensee, whereas the other provision was an encouragement to provide services for the deaf.
The Government have consulted the chairman of the BBC to see what approach the corporation will take on signing. He said:
"At present, there are two programmes on BBC2—'See Hear', which is weekly, and 'One in Four', transmitted monthly—which employ signing. We have experimentally provided signing for special events such as the Budget speech and some aspects of party conferences. Our review will certainly look at options for extending signing but there are, I believe, real difficulties here. Signing is undeniably unobtrusive—whether it is provided by a 'box' in the corner of a screen, or by a 'companion' presenter in vision. If the `box' is used about onefifth of the screen is taken up, which creates particular difficulties in, for example, a current affairs programme including sequences of graphics. The advantage to a small number of viewers has to be balanced against the loss of picture information to the rest of the audience. There
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are other problems, too, with signing, especially for network output. The total number of potential beneficiaries—the prelingually deaf—is, I believe, around 50,000. As you know, two varieties of sign language are in common use in this country, so the number benefiting from the chosen language"
BSL, which I should have thought would probably be the most common
"would be yet smaller. Even when the language used is common to both signer and viewer, misunderstandings can easily occur—especially in programmes dealing with complex issues. It seems to me at the moment that it makes sense for the BBC to concentrate on expanding and improving its teletext service, with the aim of making a range of output accessible to the deaf, while experimenting with the provision of signing for some special events".
I believe that the line the BBC is taking is the right one. Of course we want to expand the range of services for people with disabilities, but we cannot do everything at once. It is right initially to move forward in the direction which will bring the greatest benefits in terms of access to people who are deaf or hard of hearing.
8.30 p.m.
Baroness Darcy (de Knayth): I thank all noble Lords who have taken part. As the noble Lord, Lord Winstanley, said, the amendment had allparty support. It was strong and informed support from all sides of the Committee. What the noble Lord, Lord Winstanley, said about the attractiveness of the sign language interpreter is right. It is something that the Government have not taken on board. They look upon the signing interpreter as a little ogre in the corner of the screen. The research available seems to indicate that that is not so. I am grateful for the support of the noble Lord, Lord Thomson of Monifieth, with his great experience, and for the timely entry into the Chamber of the right reverend Prelate the Bishop of St. Albans, and his contribution, and to the noble Lord, Lord Swinfen, for his contribution.
The Minister will not be surprised when I say that I find his argument disappointing. Yet again it is that we must concentrate on subtitling and do the greatest good to the greatest number of people. It is not good enough. We must at least start to do something for those who are most in need of help. The Minister said that the Bill does not rule out sign language—that there is nothing in the Bill to prevent or discourage the use of sign language. There is nothing in the Bill to encourage it. The words "sign language" are not mentioned.
I shall not press the matter tonight. It is an issue about which deaf people feel strongly. I want to get the amendment right before I go further. Is the Minister willing to enter into discussions during the Recess with the organisations concerned with the deaf? It would be helpful if he could indicate that even if his mind is not open there is at least a tiny crack showing.
Viscount Ullswater: The Government are willing to meet the noble Baroness and any of her advisers so as to take these points in hand. Clause 32 talks about subtitling. It provides:
"'Subtitling' means subtitling for the deaf whether provided by means of a teletext service or otherwise".

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That would include signing.
Baroness Darcy (de Knayth): I should be a lot happier if the Bill said "signing". It is only implied.
Viscount Ullswater: That is one of the matters we would discuss.
Baroness Darcy (de Knayth): I thank the Minister for that intervention. I thank him for being willing to discuss the matter. As I said, I shall not press the matter further at the moment, but we need a specific mention in the Bill. We shall see what it will be. As the noble Baroness, Lady EwartBiggs, said, we need something so that we can include deaf people and help them participate in the life of the community. Perhaps we can have discussions and return to the matter in the autumn. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 33 agreed to.
Clause 34 [Announcements of programme schedules]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 183:
Page 34, line 9, after ("4") insert ("and, where any part of the area for which the licensed service is to be provided is in Wales, programme schedules for programmes to be broadcast on S4C").
The noble Viscount said: The amendment fulfils an undertaking given in another place that the Channel 3 licensee covering Wales will be required to give announcements of S4C's programme schedules in the same way as Channel 3 as a whole will give Channel 4's announcements. I beg to move.
On Question, amendment agreed to.
Clause 34, as amended, agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 183A:
After Clause 34, insert the following new clause: ("Promotion of equal opportunities in relation to employment by licence holder
.—(1) Any Channel 3 licence or licence to provide Channel 4 or Channel 5 shall include conditions requiring the licence holder—

(a) to make arrangements for promoting, in relation to employment by him, equality of opportunity between men and women and between persons of different racial groups; and

(b) to review those arrangements from time to time.

(2) In subsection (1) "racial group" has the same meaning as in the Race Relations Act 1976.").
The noble Earl said: I shall speak at the same time to Amendments No. 190A and 297E. The amendments give effect to the undertaking given by my honourable friend Mr. Mellor on Report in another place that the ITC and the Radio Authority would be placed under certain duties in relation to equal opportunities. In preparing the amendments we have taken account of points made in subsequent discussions which my honourable friend held with the honourable Member who moved the original amendments on behalf of the Opposition and with his advisers.
The new clause to be inserted after Clause 34 places the ITC under a duty to attach conditions to Channels 3, 4 arid 5 and domestic satellite service licences requiring the licensees to make arrangements to
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promote equal opportunities in matters of employment as between men and women and people of different racial groups, and to review those arrangements from time to time. The new clause to be inserted after Clause 101 places the Radio Authority under a similar duty in relation to national commercial radio licences.
It may be helpful if I outline how we envisage that those provisions might work in practice. In advertising the licences concerned the ITC and the Radio Authority could indicate that the successful applicants would be subject to an equal opportunities condition under their licences. They could therefore be invited to explain what arrangements they would propose to make on equal opportunities. The ITC and the Radio Authority would then be able to judge whether those arrangements would be adequate. Once licences were in force the equal opportunities condition would be enforceable in the same way as any other licence condition. It would be open to the ITC and the Radio Authority to satisfy themselves that their licensees had proper arrangements in place, and that they reviewed them from time to time.
The ITC and the Radio Authority will not, however, have any locus in monitoring the outcome of the equal opportunities policies. They will not, for instance, have any role in monitoring the composition of the licensees' workforce. That will be a matter for the licensees themselves. It would, however, clearly be useful for some information on licensees' progress on equal opportunities to be published. We understand that the IBA has it in mind that the equal opportunities condition will include a requirement on the licensee to publish such information in their company annual reports. I beg to move.
Baroness EwartBiggs: I thank the Minister for explaining the amendments so clearly. We very much welcome them as they provide new clauses relating to equal opportunities. However, I am not sure that I go much further and agree with the Minister that these amendments reflect the commitment that the Government, in the shape of Mr. David Mellor, made at Report stage in the House of Commons. From my knowledge, the commitment was slightly different.
Perhaps I may ask the Minister about the assurance that I believed had been given. I understood that the Government indicated that the new clause would also cover, first, a specific reference to all aspects of employment such as application, promotion and training; and secondly, that it would cover disability as well as gender and ethnic origin. I wish to know why the disabled have not been included in the clause. After all, there must be many opportunities for the disabled in industry and it is important to include them in the clause. Thirdly, despite the noble Lord's explanation of the commitment by the ITC, I had understood that the clause would cover the obligation to monitor these duties and publish the findings in each licence holder's annual report, which would be lodged with the ITC.
Perhaps the Minister implied that the ITC would impose much stricter monitoring than is provided for in the clause, which is merely to review those

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arrangements from time to time. That is much vaguer. However, we understood that there would be a commitment that monitoring would be carried out annually, which is important, and that it would be published in the annual report, which would be lodged with the ITC.
I add one further comment about the previous debate in your Lordships' House on the amendment. To begin with, we feel that the same requirement should be extended to independent producers who provide programmes for inclusion in the licensed services in exactly the same way as Government Amendment No. 112 does, which we debated during the last Committee stage. That amendment lays down a requirement to promote training. We wonder why equal opportunities should be treated any differently from training. That is another question.
Also at Committee stage we proposed Amendment No. 6 to try to place equal opportunities' obligations on the ITC in relation to its staff, but the Minister was not willing to accept it. He argued that other statutory bodies might also need to be subject to a similar duty if the ITC were placed under this obligation. However, in moving that amendment we believed that all statutory bodies should be placed under a similar duty. The precedent of the ITC would not automatically have a knockon effect on other bodies. The Government felt that it was less important for ITC staff to be subject to equal opportunities' provisions than for the more influential programme makers. Again, that does not seem to be a logical argument.
We are pleased that the Government listened to the arguments put by my honourable friend Mr. Mark Fisher in another place and agreed to include an equal opportunities clause in the Bill. However, we are disappointed that it falls short of our expectations. It is not as specific as we thought it would be and is more wideranging. Perhaps the Minister will say why he excluded the disabled from the clause.
Again, will he kindly explain the reasons for not insisting in the Bill on a requirement to monitor the duties to establish how well companies are succeed-ing? Why should the requirement not be extended to independent producers? Why should equal opportunity regulations not be imposed on the ITC in relation to its staff? After all, no doubt the legislation will have to last a long time and it is important to get such a vital requirement right. Otherwise, who knows, European legislation may be brought in and supersede the equal opportunities clause in the Bill. I should be grateful if the Minister would answer those questions.
8.45 p.m.
Earl Ferrers: I thought that the noble Baroness would be pleased with the amendment, instead of which she poured a bucket of cold water on it. She said that we ought to have gone a great deal further. All employment in large companies is covered under existing equal opportunities legislation. However we took the point and considered that it was important, after representations had been made to us, that it
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would be suitable and appropriate to spell out the provisions more specifically in the Bill. That is what we have sought to do as a result of the observations made by Members of another place. The reference to employment in the clause includes matters such as training, promotion and so on. Therefore it is a fairly wide description.
The noble Baroness was concerned about discrimination against people with disabilities. She asked why it was not included. I understand from the Department of Employment that the whole subject is under review at the moment. The Government have recently issued a consultative document called: Employment and Training for People with Disabilities which addresses the issue. It discusses the present quota system which will require licensees to employ a minimum proportion of registered disabled people. It considers the potential of other legislative and nonlegislative approaches. The period of consulta-tion lasts until 31st December. We felt that this was not the right time to preempt the outcome of that consultation. Nor do we believe that the Broadcasting Bill is the right context in which to tackle a general issue such as disability.
The noble Baroness also referred to monitoring. We did not believe that it was appropriate for the ITC to monitor the composition of the licensees' work forces. It is more a matter for the licensees themselves. The IBA has indicated that it does not wish the ITC to have a monitoring role. I can best put it to the noble Baroness in this way. In the licence there will be conditions for equal opportunities. The licensee will be expected to say what provisions he intends to make for equal opportunities. Part of his licence, which he accepts, will be the requirement to fulfil those conditions.
The noble Baroness asked why the ITC would not monitor it. We do not believe that it is right for the ITC, on its own initiative, to knock on the doors of various licensees and ask, "What are you doing about disability and equal opportunities?" We expect that those licensees will put forward in their annual report exactly what they have done with regard to equal opportunities. That will be the way in which the ITC will monitor what the licensees have done. Indeed if they do not fulfil the requirements of their licences for this matter—that is the case with any matter covered by the licences—their licence will be at risk.
The noble Baroness asked why we did not also apply that requirement to the ITC. The Independent Television Commission will be in the same position as all other employers. It is subject to the general law on discrimination. Licensees will be especially influential in this regard. That is why these specific and general obligations are put on licensees.
I hope that the noble Baroness will understand the reasoning behind the measure. The fundamental position is that licensees will be responsible for what they do and for what they say they will do. The ITC can check whether they are carrying out those intentions by studying the annual report that the licensees will have to produce every year.
Baroness EwartBiggs: I wish to press the Minister once again on the question of disabled people. I did not understand what he meant when he said that this matter was under review and he did not feel this was an appropriate moment to include the disabled. However, if he included the other two groups why could he not also include the disabled? After all, once the research that the noble Earl referred to has been carried out, it will be too late to include them. I hope the Minister can clarify that.
Earl Ferrers: A review is being carried out at the moment. That review will consider the present quota system. If there are any alterations to that, they will be included in the general law and all licensees will be obliged to come into line with the general law. However, as this review is being carried out at the moment, I think it would be a pity to preempt its outcome by trying to write a provision into this Bill when the results of that review will cover far wider areas than merely broadcasting.
Bareness Seear: I hope the Minister can clarify one point a little further. He said that the ITC will check whether companies are fulfilling requirements by asking them to make an annual report. However, it all depends on what they are asked to include in their annual reports. There would be nothing easier than for a company to state in its annual report that it was an equal opportunities employer. Employers up and down the country, starting with the Government, claim to be equal opportunities employers. However, that does not prove anything until one can see figures and movement in some direction. One wants to know what changes have occurred in, say, the numbers of people employed from ethnic minorities. That is the only way in which one can monitor such matters. Bland statements about being an equal opportunities employer are not worth the paper they are written on. Unless an annual report contains more specific information, one will not find out anything.
Earl Ferrers: The ITC will not be numb over this. If an annual report states that a licensee considers himself to be an equal opportunities employer fullstop, the ITC is perfectly entitled to ask such a licensee what he is doing to warrant that status. The ITC could say that a licensee had stated he would do such and such when he applied for a licence, and that it had to check how he was fulfilling those conditions. If a licensee had not fulfilled the conditions that he said he would meet, his licence would be at risk. Licensees are supposed to state what they have achieved in their annual reports. If they were to come out with some bland statement, it would not be unreasonable for the ITC to ask for a more specific explanation.
Baroness Seear: If the ITC required quite specific information to be stated in annual reports and laid down what that specific information should refer to, that would constitute proper monitoring. However, anything less than that does not constitute monitoring.
Earl Ferrers: That is entirely a matter for the ITC. If, in awarding a licence, the ITC stated that it wanted to know exactly what was being done on certain
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matters, it can demand such information. However, one must be careful about writing into legislation individual items on a variety of different matters which every company must report on in its annual report. I would say with the greatest of respect to the noble Baroness that she is being a little sceptical over this matter. Each licensee is obliged to fulfil its obligations and it is up to the ITC to see whether it has fulfilled those obligations. If the ITC is not satisfied that the obligations are being fulfilled, it can ask questions about those obligations.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 183B:
After Clause 34, insert the following new clause: Networking arrangements between holders of regional Channel 3 licences
.—(1) This section has effect with respect to the making of arrangements which—

(a) apply to all the holders of regional Channel 3 licences, and

(b) provide for programmes made, commissioned or acquired by or on behalf of one or more of the holders of such licences to be available for broadcasting in all regional Channel 3 services, being arrangements made for the purpose of enabling regional Channel 3 services (taken as a whole) to be a nationwide system of such services which is able to compete effectively with other television broadcasting services provided (otherwise than by satellite) throughout the United Kingdom; and any such arrangements are referred to in this section as "networking arrangements".

(2) Any application for a regional Channel 3 licence shall, in addition to being accompanied by any such proposals as are mentioned in section 15(3) (b) to (d), be accompanied by the applicant's proposals for participating in networking arrangements made under this section; and—

(a) where a person has duly made such an application, the Commission shall (without prejudice to the operation of section 16(1)) not proceed to consider whether to award him the licence as mentioned in that provision unless it appears to them that any such proposals are satisfactory; and

(b) section (Conditions requiring holder of Channel 3 or 5 licence to deliver promised service) shall apply to any such proposals as it applies to the proposals submitted by the applicant under section 15(3)(c)and (d).

(3) The Commission may publish, in such manner as they consider appropriate, general guidance to applicants for a regional Channel 3 licence as to the kinds of proposals which they would consider satisfactory for the purposes of subsection (2) (a); but before doing so the Commission—

(a) shall consult the Director General of Fair Trading, and

(b) if he requests them to make any change in the guidance, shall incorporate the change in the guidance.

(4) Each regional Channel 3 licence shall include conditions requiring the licence holder to do all that he can to secure—

(a) that, by the relevant date, networking arrangements have been made which—

(i) have been entered into by all the holders of regional Channel 3 licences, and

(ii)have been approved by the Commission; and

(b) that, so long as he provides his licensed service, there are in force networking arrangements which have been so entered into and approved (unless there are for the time being in force any arrangements made by the Commission under subsection (5));

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and any such licence shall, so far as is necessary for giving effect to any such conditions, come into force at the time when it is granted.
(5) If

(a) no such arrangements as are mentioned in subsection (4) (a) are made by the relevant date, or

(b) any such arrangements are so made but cease to be in force at any time before 1st January 1995,

the Commission may themselves draw up such networking arrangements as they consider appropriate; and, if they do so—

(i) they shall notify all the holders of regional Channel 3 services of those arrangements, and

(ii) those arrangements shall (subject to subsection (6)) come into force on a date determined by the Commission.

(6) No arrangements made by the Commission under subsection (5) shall come into force at any time after 31 st December 1994.
(7) Each regional Channel 3 licence shall include conditions requiring the licence holder to give effect to any arrangements made by the Commission under subsection (5).
(8) Where any arrangements have been approved by the Commission under subsection (4) (a), no modification of those arrangements shall be made by the holders of regional Channel 3 licences unless it too has been so approved.
(9) Without prejudice to the generality of their power to refuse to approve any arrangements or modification under subsection (4) or (8), the Commission shall refuse to do so if they are not satisfied that the arrangements in question, or (as the case may be) those arrangements as proposed to be modified, would be appropriate for the purpose mentioned in subsection (1).
(10) In this section—
"regional Channel 3 licence" means a licence to provide a regional Channel 3 service;
"the relevant date" means the date which the Commission determine to be that by which any such arrangements as are mentioned in subsection (4) would need to have been made by the holders of regional Channel 3 licences in order for the arrangements to be fully in operation at the time when those persons begin to provide their licensed services.").
The noble Earl said: In moving Amendment No. 183B I shall speak also to Amendments Nos. 183C to 183H, 183HA, 183HB, and 183J.
The Government's new clause is a new provision requiring Channel 3 licensees to participate in networking arrangements agreed between those licensees to provide programmes for broadcasting in all regional Channel 3 services.
Licensees, on appointment, will be free to seek to conclude whatever networking arrangements they wished. The expectation will be that should voluntary arrangements not materialise within a specified period of the award of the licence, the ITC would be able to impose a scheme of networking on the licensees. Any imposed arrangements would last for a maximum of two years, or for such shorter period as was agreed among the licensees themselves.
Any networking arrangement, whether agreed voluntarily or imposed by the ITC, will need to be based on the principle that all programmes offered to the network should be considered on the basis of value for money. It is particularly important that network arrangements do not continue the current practices
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which involve production quotas for certain contractors, nor should larger companies be able to abuse their dominant position. Subsection (3) of the clause requires the ITC to consult the Director General of Fair Trading before issuing any illustrative guidance on networking. Our intention is that the Director General of Fair Trading should be required to assess the implication for competition of any networking arrangement, whether imposed by the ITC or agreed voluntarily between licensees.
We are still considering with the Office of Fair Trading how this can be most effectively achieved and in particular whether modifications to existing competition legislation are needed. If we conclude that they are, we shall bring forward amendments on Report.
I now turn to the amendments of the noble Baroness, Lady Birk, and the noble Lord, Lord Thomson, to the Government's new clause on networking. Amendment No. 183C inserts a reference to scheduling of programmes. The networking arrangements addressed by the new clause are essentially concerned with the commissioning and acquisition of programmes to be shown on the network. The precise mechanism for the scheduling of those programmes is a matter which we believe should be left entirely to the licensees themselves. We therefore see no need for any such reference to scheduling in the new clause.
Amendments Nos. 183D and 183E seek to relate access to the network to the size of the regional Channel 3 licensees. This would impose a far more rigid quota system for the provision of programmes to the network than that which the ITV companies operate at present. It would mean presumably that a company having a 20 per cent. share of total Channel 3 revenue would be limited to providing no more than 20 per cent. of the networked programmes. This is wholly unacceptable because it would run directly counter to the Government's belief that programmes should be commissioned on the basis of the best value for money. Licensees must certainly have fair and free opportunity for access to the network, but their contribution to the network should be based on the excellence and competitiveness of their programmes rather than on their size.
The other day noble Lords made such a great deal of fuss about quality that one would not expect them to approve this amendment. However, we wish to see that quality is the basis upon which these programmes are made.
Amendments Nos. 183G and 183H would remove the time limit on the power of the ITC to impose networking arrangements, if the licensees had been unable to agree to such a provision among themselves. We want those arrangements to be agreed voluntarily by the Channel 3 licensees if at all possible and for the ITC to intervene only as a last resort. Voluntary agreement would be less likely if the ITC could step in at any stage during the currency of the licence to impose an alternative network. That would mean that a single reluctant licensee could frustrate the whole agreement in the hope that he would get a better deal

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from an ITCimposed system. The Government's intention is for the ITC to use its powers in the early stages of the Channel 3 licence period, if necessary, to prevent a possible breakdown in the provision of the service but thereafter to withdraw and let the licensees negotiate their own arrangements, which will almost certainly evolve throughout the period of the licence.
Amendments Nos. 183F and 183J would bring forward the "relevant date" mentioned in subsection (5) (a) of the new clause on which the ITC could impose an arrangement to the time when the Channel 3 licences were to be advertised. Clearly at this point it would be impossible for potential applicants to reach any network agreement because no one would know who the successful applicants would be. The amendments would therefore effectively give the ITC no option but to impose networking arrangements. I do not believe that that would be right because it is not compatible with our desire to see the networking arrangements concluded on a voluntary basis.
My noble friend Lord Gray has tabled some amendments, but he is not here this evening. The Government are in favour of as much openness as possible in the dealings of the Independent Television Commission with its licensees. Therefore we see merit in Amendment No. 183HA, which would require the ITC to make public its approval of any networking arrangements for Channel 3 and any modifications to them. We shall take that into account and if necessary at Report stage produce a suitable amendment on those lines after we have consulted the IBA about any practical difficulties.
I am afraid, however, that we would find it difficult to accept Amendment No. 183HB, also in the name of my noble friend. It would require the ITC to ensure that networked programmes were provided from a wide range of Channel 3 regions. Given the federal structure of Channel 3 and the Clause 3 requirement on the ITC to ensure fair and effective competition, that is likely to occur in any case. However, in order for the ITC to guarantee it there would have to be some form of quota system for networked programmes. That would be unacceptable. The network arrangements themselves will ensure that all Channel 3 licensees have the opportunity to offer programmes to the network but we believe that networked programmes on Channel 3 should be commissioned on the basis of the best value for money rather than the place of origin of the programme. Our philosophy is that one can guarantee that everyone has a fair opportunity to compete but one cannot guarantee that everyone will be successful. I beg to move.
9 p.m.
Baroness Birk Baroness Birk moved, as an amendment to Amendment No. 183B, Amendment No. 183C:
Line 5, after ("for") insert ("and schedule").
The noble Baroness said: I thank the Minister for his explanation of the new clause put down by the Government. We have all been worried for some time that nothing would come forward on networking. We have inquired of the ITV companies what was to happen and they said that they were working on it. We
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were very conscious that it would create a number of problems if the Bill received Royal Assent and nothing had been agreed on networking.
The main weakness of the new clause is that the relevant date to be determined by the ITC for the conclusion of a networking agreement is linked to the beginning of the provision of the licensed services in January 1993. The clause places the obligation on the new Channel 3 licence holders to reach agreement on networking arrangements between the award of the licences in early to mid1992 and the relevant date by which the arrangements need to be agreed so that they are fully in operation by 1st January 1993.
Applicants cannot seriously bid for regional Channel 3 licences without knowing the full implications and cost of the networking arrangements. General guidance from the ITC will not be sufficient for that purpose. It would therefore seem sensible not to leave the new Channel 3 licence holders to reach agreement and to specify that the relevant date by which networking arrangements must be agreed should be the date of publication of the notice inviting applications for regional Channel 3 licences as required in Clause 15(1).
In Standing Committee in another place on 18th January the Minister, Mr. Mellor, said at col. 200 that if George Russell, the chairman designate of ITC,
"and his colleagues were unable to reach an agreement, he would have difficulty allocating franchises, or considering proposals from various groups to become franchise holders, without a framework against which to assess those proposals".
It seems that we are still in that position. even with the amendment.
In the other place the Government refused to concede proposed new clauses establishing a network agreement because the ITV companies were in the process of deciding upon one and if they did not do so by the target date of summer 1990 the ITC would be given the power to impose networking arrangements. The summer has now been reached—and probably will soon be past after this hot spell—with the ITV companies showing no immediate prospect of resolving their differences in reaching agreement before Channel 3 licences are advertised. It seems to us that the ITC should be given a clear date by which the ITV companies should either have concluded an agreement or an agreement is imposed upon the new Channel 3 companies.
While it is preferable that the ITV companies should agree a network agreement by a specific deadline it should also be remembered that the networking arrangements will only cover future Channel 3 licences. Not all of the ITV companies will retain their franchises, so the ITC must be given a central role in bringing about effective network arrangements. New Channel 3 licence holders cannot be left with that responsibility in the short period of less than six months in which to reach agreement. The IBA has said that,
"we believe the creation of a new network system before next year's licensing round is vital and we believe that the initiative for developing this should be with the companies".
The trouble is that if the companies do not come to some agreement themselves the whole process will be held up even further.
The new clause refers to networking arrangements which provide for programmes enabling a nationwide system, but it does not explicitly require the regional Channel 3 licensees to schedule their programmes collectively. Government and Opposition amendments tabled at Report stage in another place provided not only for the supply of programmes but also for their scheduling, although that was one of the points from among the amendments that I am moving which the Minister did not seem to like.
The debates indicated that there was unanimity on the content of the amendments but not on the timetable for implementation of the networking arrangements. If the government amendment is accepted, will the applicant's proposals for networking arrangements be considered as a matter upon which representations from the public could be made? It seems that we have not got quite so far as we had hoped. We need to know from the Government what will happen. Will there be a stronger requirement on the ITC? Otherwise, as I said much earlier, referring to what the Minister said in another place, if an agreement is not reached there will be great difficulty in allocating franchises because nobody will know what cost is implied for them.
I hope that the Minister will take note of these amendments and perhaps give us a fuller answer when my noble friends (because they are joint amendments) have spoken to them. I beg to move.
Lord Thomson of Monifieth: I should like to associate these Benches with what the noble Baroness, Lady Birk, has just said about the Government's new clause. This is one more case where we welcome the fact that the Government recognised that some new provision was required in the Bill and have moved. But our welcome is a qualified one, as the noble Baroness said. We hope that it may be possible to make further progress either tonight or by Report stage certainly. The positive achievement—it is a notable and major achievement to which I pay due tribute—is that we now have the words "networking arrangements" in the Bill and they will be in statute. That is a notable step forward.
It is important to recognise how vital a network is to a national television service, even though, as in this case, it is a national service which has a very strong regional federal identity. The fact is that, although the viewers in Peterhead or Penzance are not always aware of it, 95 per cent. of what they see comes from the present network. There is no ITV company which shows more than 30 per cent. of its own production.
There has not been any basic difference between the Government and the Opposition on the importance of having a network for the Channel 3 system. Any difference that arose came from the fact that the Government were inclined to feel that such a network would emerge from the hazards of a free market system. I am glad that they appear to have withdrawn
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from that position. It has taken a long time to convince the Government that it is essential to take positive action to sustain what is regarded as the familiar mix of programming, which is what people know as ITV and will know as Channel 3 once the new licensees are appointed.
The birth of the amendment moved by the Minister has, I can well understand, been a difficult one. I saw one version of it on Friday and the final version for the first time on Tuesday. There were some interesting and significant differences between the two. I shall not go into any textual analysis but it is quite clear that they reflected some of the problems between the Home Office and the DTI. But perhaps more particularly and more seriously, they pointed to the very real problem of defining the relationship between the ITC and the OFT.
Having tabled this amendment, the Government are still in a situation in which there is a real risk of confusion and regulatory clash. That happens under a number of the new arrangements under the Bill. It happens in terms of the role of the Broadcasting Standards Council to which we shall come later. However, if there is to be such confusion and clash between the ITC and the OFT, it would be disastrous for the launching of the new system. It is absolutely essential that, having completed the Report stage, at Third Reading it should be clear beyond peradventure that the lead responsibility in this matter is that of the ITC. If that is not clear—and there is still work to be done on that—instead of ending up with a network we might well finish up with a fair degree of anarchy.
I know that the ITV companies have some very serious legal reservations about the present state of development reflected in the Government's amendment. No doubt they will make the Government aware of it. I am not a lawyer. However, they fear that, unless the wording of the Government's amendment is strengthened quite considerably, it will not be clear that the ITC has the responsibility for those arrangements. The Channel 3 system will be sucked in under the aegis of the restrictive practices legislation and the activities of the Restrictive Practices Court. That may be good for the lawyers but it will certainly be damaging to the standards of Channel 3 broadcasting.
The Minister showed a great reluctance to accept the thrust of the amendments. He revealed that the Government are determined to believe that an effective and adequate network system can emerge primarily from the working of the free market system. For instance, he said that they declined to have the word "scheduling" in the Bill because the purpose of the network was to make arrangements for the production of network programmes. But network programmes are only part of the story. It is the time at which they are distributed that matters to the viewer so that there is a national character to the spine of popular network programming. I beg the Minister to reconsider that matter.
We seek to safeguard the regional character of the network productions with the provisions in the other amendments. The Minister said on two separate

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occasions that the Government wished to concentrate on what is best value for money rather than the place at which the programmes are produced. He thought that our amendment—which sought to have network production broadly proportionate to the size of the regions—was wholly contrary to that philosophy.
There is a very serious regional issue here. I regret that the Minister's colleague, the noble Lord, Lord Gray, is not here to argue it. Perhaps I may put the Scottish viewpoint, which I know best. Under the existing system, where the IBA has a fairly positive responsibility, the regional contribution to the network has not been satisfactory. For example, Scottish Television—which is the largest of the two and a half contractors covering Scotland—has a good record for producing network programmes. Some are very well known indeed. In Scottish politics there is the famous Goschen formula which was supposed to set the broad share that Scotland enjoyed of activities within the United Kingdom. If I remember rightly it was eleveneightieths. Scotland produces 1 per cent. of peak time network viewing on the present network.
In terms of independent production, the pull of the metropolis for independent producers is tremendously strong. If that is the policy that the Government wish to pursue, I shall tell them the consequence. If they wish simply to pursue the pure market position of best value for money, without considering the place where the programmes are made, they will end up with a network production system which is almost entirely concentrated in one or two of the great population centres in the Midlands and the South. I cannot believe that that is the Government's serious intention as regards the regional aspect.
Finally, there is the important issue mentioned by my noble friend Lady Birk. Again, with a halfhearted attitude towards sensible network arrangements, the Government wish to put a sharp time limit on the role of the FTC. I beg them to reconsider. No one knows precisely how many of the present ITV companies will be future licensees. Under the new system takeovers will be allowable and licensees will change from time to time. If the matter is left to obtaining agreement in such circumstances amid all the changes, the interests of the viewers of Channel 3 throughout the country will be put seriously at risk. The network could end up in changes. It is important to maintain a residual duty on the ITC so that if necessary it will make adequate network arrangements in the interests of the viewers.
I agree with the Government and hope that it will not become necessary. By far the best method is to have a network system which is not only fair among all participants but is voluntary among licensees. I can tell the Minister that the task of achieving unanimity even among the present ITV companies is more difficult than obtaining unanimity among the member states of the European Community. If one wants Channel 3 to work there will be a vital role for the ITC in maintaining the necessary spine of network programming.
The Earl of Stockton: I wish to speak to Amendment No. 183HA standing in the name of my noble friend Lord Gray of Contin who regrets that he
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is unable to attend today. I shall speak also to Amendment No. 183HD standing in the name of my noble friend who is a director of Grampian Television. I thank my noble friend Lord Ferrers for his undertaking as regards Amendment No. 183HA. It will greatly shorten my remarks.
During the debate on the Bill in another place my right honourable friend the Minister said that in his opinion the consequence of centring the arrangements on the largest five ITV companies was an increasing awareness both within the industry and outside that the big five were operating an unfair cartel. He also said that many of the views expressed in the debates in another place reflected the fettered atmosphere of that cartel which had long outlived its useful purpose.
My right honourable friend has long held that view, as he admitted on 23rd January in Standing Committee F in another place. He confessed that he was outraged four years earlier in a previous incarnation by the way in which the big five managed the networking arrangement. He said that he had not changed his view of the gang of five as an anticompetitive cartel.
It is to support the smaller regional companies against the cartel that I propose the amendments on behalf of my noble friend. If they are agreed by the Committee the ITC will have the power and the duty to ask why so little was being fed into the network from a particular regional company. If it was found that that was due to the operations of the network the ITC could rectify the position. However, if it emerged that a particular regional company was not offering programmes suitable for the network—and that would be part of its duties under the Bill—it could, so to speak, show that company the yellow card. I am disappointed that the Minister appears to have set his face against the amendments.
On a more general point, I share the anxieties expressed both inside and outside this Chamber that the clause gives the Office of Fair Trading a wideranging role while giving no guidelines on the impact of the Restrictive Practices Court Act 1976. Do the Government really intend that networking arrangements should be referred to the Restrictive Practices Court? If so, I believe that the networks will be running very much behind their programme schedules.
I urge the Government to lay down the authority of the ITC in this matter and to avoid confusion between the two regulatory authorities.
Lord Boston of Faversham: I should like to join in welcoming the government amendment introduced by the noble Earl, Lord Ferrers. I should like also to support the amendments proposed by my noble friend Lady Birk and the noble Lord, Lord Thomson of Monifieth. I also support the two amendments proposed by the noble Earl, Lord Stockton, in the name of the noble Lord, Lord Gray of Contin. It is very encouraging that the noble Earl, Lord Ferrers, has already indicated that he is able to accept

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Amendment No. 183HA. That enables me to shorten my remarks. I shall return in a few moments to Amendment No. 183HB.
As regards the Government's main amendment, there is no doubt that it will help to pave the way for the new networking system which is so necessary. My own company has been pressing for a new system for a long time and it is excellent that all the ITV companies—all the existing programme contractors —accept the need for a new system. Although final agreement has yet to be reached, it should not be overlooked that the ITVA has been carrying out very effective and strenuous work on this matter. I should like also to pay tribute to the encouragement given over a considerable period of time by the IBA and by the noble Lord, Lord Thomson of Monifieth. When he was at the IBA he was very much in support of improvements in the networking system and he encouraged those improvements.
I welcome particularly the Government's decision to empower the ITC to intervene to impose a networking system, if necessary. However, I would go further, as would my noble friends. I feel that the ITC should not just have the power to intervene in that way but it should be required to do so if necessary. Indeed—this was one of the points mentioned by the noble Lord, Lord Thomson—it should have a duty imposed upon it in the legislation to do that in the absence of a satisfactory system devised by the companies.
I should like to put that in the form of a question to the noble Earl, Lord Ferrers, and ask him whether he will give further consideration to placing such a duty upon the ITC. If he cannot answer that immediately, will the Government consider bringing forward further proposals at a later stage?
There is another, closely related point. I believe that the Government's principal aim, as has been spelt out, is to see that there are proper networking arrangements to cover the transitional period, as it has been called, and to enable the ITC, if necessary, to impose a system to last for up to two years after the franchises have begun unless the companies agree on a shorter time.
That is most laudable, as far as it goes. But what happens after the two years if the companies or the new franchisees have not been able to agree to introduce a suitable networking arrangement for the years after that? What provision is there for that situation? What thought has been given to that possible problem? Let us face it; a hiatus could arise. We cannot leave it just to chance or to hope. It is an important matter. It amounts to the safeguarding, no less, of one of the nation's two principal terrestrial national network programme systems: the commercial one alongside that of the BBC—BBC1. The Government's aims rest on the provision of such a network.
Some of us feel also that it would be very difficult if not impossible for applicants for ITV Channel 3 licences to frame a bid where there is significant lack
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of certainty regarding the cost and content of the network schedule for eight out of the 10 years of the license period. The matter of cost has already been alluded to this evening by my noble friends, including my noble friend Lord Thomson of Monifieth. It is a serious problem, and I join in asking the Government to give it further consideration.
There is also a great deal of concern that networking arrangements will not, as the amendment is at present drafted, be exempt from the Restrictive Trade Practices Act. I was encouraged by what the noble Earl, Lord Ferrers, said, that minds are not closed on this matter. He stated that further work had to be done regarding this matter and the relationship with the Restrictive Practices Court and the Office of Fair Trading. That is encouraging. However, perhaps I could seek to ensure that that consideration is among those taken into account when the further work is carried out between now and October.
The network arrangements at the moment are exempt. Under that exemption, for example, tariffs for programmes are able to be established. The Committee will be relieved to know that at this time of night I will not go into any detail on the highly technical matter of the costing of network programmes and the system involving tariffs. Perhaps I could say, as many noble Lords will be aware, that tariffs for programmes are part of the basis for payment by the programme companies for programmes which go out on the network. If tariffs were to be eliminated and replaced by, say, negotiated prices, that would result in a significant distortion of the budget for the programmes, contrary to the apparent fairness of negotiated prices. Negotiated prices appear to be the fairest way to deal with these matters, but when one examines the situation more closely, that is not so.
That situation would also result in significant premiums being paid for certain programmes. Resources will not exist for the broad range and quality of programmes now transmitted; in particular, religious, children's and current affairs programmes. A significant rise in the budget could not be sustained without jeopardising the heart of the quality threshold regional productions. That again, as we have seen earlier in the Committee stage on this Bill, is something on which the Government place a high degree of priority.
I should like to emphasise that some of these matters which, on the face of them, are technical, and some matters which appear to go to the intricate machinery—for example, of networking—and to carrying out the practices of the ITV or Channel 3 system, actually have a much wider effect. They endanger part of the principle of a good broadcasting Bill; namely, to produce a good range of good quality programmes. Those are matters Which focus on and are liable to affect, unless they are dealt with properly, the aim that all of us here and all those of us involved in broadcasting seek to achieve; namely, a good range of good quality programmes for the viewer.
For those reasons I welcome the Government's approach to the matter in tabling their networking amendment. However, I join with all other Members

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of the Committee who have spoken in asking the noble Earl, Lord Ferrers, to give thorough consideration to the matters, not least to the relationship with the Restrictive Practices Court and the Office of Fair Trading which goes much wider than simple financial matters. It goes to the heart of the matter.
Earl Ferrers: This is an important part of the Bill, albeit a fairly technical one. The noble Lord, Lord Thomson of Monifieth, is always generous in his appreciation of what the Government have done in this regard. I appreciate that because I realise that the Bill is not exactly close to his heart from the point of view of what he does and does not like. I appreciate it when 1 e says that the Government have helped to meet some of the points. The same applies in the case of the noble Lord, Lord Boston of Faversham.
The noble Lord, Lord Thomson, said that he had seen the previous drafts and that they were not the same as the amendment. I would be the first to accept that this is a difficult matter. It is difficult to get it right. We shall take carefully into account all that Members of the Committee have said today. This is not a total blueprint for success. We cannot guarantee that it is wholly right and that it is the only possible result. The fact that it has been difficult to produce shows the problems that are related to it.
The general principle from which we started is that, on the whole, networking should be the result of the cooperation of the licensees. They should decide on the kind of things that they want networked. They should decide upon the scheduling rather than the ITC imposing it on them. That is the basic philosophy. In the past, that has not happened. They have been told what is to be networked and what the scheduling is to be. When one makes a great change like this, it inevitably throws up difficulties.
I was encouraged to see that the Independent Broadcasting Authority sent out a note dated oddly enough 18th July, which was only yesterday, saying that the 10 ITV companies,
"have proposed a new practical shape for networking. They were asked to do this by the end of July. Their new scheme is a most important step towards identifying how networking should develop in practice under the arrangements, and they deserve every credit for having brought the complex negotiation to the stage they have by this deadline".
I echo that and congratulate them on having done so. It is a great step forward.
The philosophy is that it should be the licensees who agree the networking. It is only if they do not agree that the ITC must come in and impose a network upon them with the idea that that will provide a network for a time. At the end of the twoyear period, with any luck, they will have sorted out their differences and found a more suitable form of networking. If they have not, ipso facto they prefer the one imposed upon them by the ITC and that one will become the adopted system.
The noble Lord, Lord Thomson, said that he hoped that we would make it clear beyond peradventure that the lead should come from the ITC. The noble Lord, Lord Boston, said that a duty should be placed on the
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ITC. I believe he also said that there should be a residual duty on the ITC to provide the networking if there is no other. We intend to place the responsibility not on the ITC but on the licensees. It is only when the licensees fail to agree that the responsibility will fall onto the ITC. The noble Baroness, Lady Birk, asked whether the public can make representations about networking. They can do, but the ITC is not obliged to take account of them. She was worried about the time scale. The newlyappointed licensees will he able to seek to reach agreement as soon as they are appointed, which will be late 1991. It is only if they fail to reach agreement by, say, mid1992, that the ITC will need to step in.
The noble Lord, Lord Thomson, was concerned about the regulatory clash. At present we are looking at the precise role which the Director General of Fair Trading should play. That is a point with which the noble Lord, Lord Boston, was also concerned. We are anxious to avoid any possibility of a confusion of roles. If necessary, we shall bring forward at Report amendments to meet any possible problems in that regard.
It was the IBA itself which proposed that the new arrangements should be limited to the first two years of the new licence. The Government adopted its proposals. The noble Lord, Lord Thomson, referred to Scottish Television. It is precisely because the Scottish Television companies have had such poor access to the network that we want to change the system and give them a fair opportunity to offer programmes to the network. The assumption that, without quotas for programming from each individual region, only material from one or two regions would be selected for network, shows, as the noble Lord, Lord Thomson, said, very little faith in the ability of the regions as a whole to produce programmes which offer good value for money. It would be odd to require through a quota that some programming should be accepted that offers poor value for money or which is very questionable.
Again, the whole principle behind this is that in the past various companies had a certain percentage of the network as of right. If five big companies have a great hunk of the network it leaves the other poor minnows fighting each other. It would be difficult for them to compete. We wish to allow all companies to produce their programmes and whether they come from the large or small programme makers, they will be networked. It gives the smaller companies a much bigger opportunity.
My noble friend Lord Stockton and the noble Lord, Lord Boston of Faversham, were concerned about the Restrictive Trade Practices Act. It is not our intention that the arrangements should be referred to the Restrictive Practices Court. They will be exempt from the Restrictive Trade Practices Act because they will be provided for in the statute. As regards my noble friend's other point, I agree with his concern about the big five cartel. However, a regional quota system would take a straight bat to that system since it would, potentially, give the biggest quotas to the

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biggest companies. Fair opportunities for all, whether the companies are big or small, seem the right way forward.
I have moved this amendment because that is what the Government feel is right. We shall take seriously into account all that has been said this evening on what is a very technical matter. I hope that the Committee will accept the amendment.
Lord Boston of Faversham: I am sorry to intervene again but I shall do so briefly. At the outset of my remarks just now I said that I wished to say something about Amendment No. 183HB proposed by the noble Earl, Lord Stockton. I very much support the observations that he made about it. There is here a not insignificant legal problem which ought to be looked at further. I very much hope that the noble Earl will seek to do that.
9.45 p.m.
Earl Ferrers: As I explained when I moved the amendment, Amendment No. 183HB is not acceptable to us. I do not advise the Committee to accept it but I shall certainly look at the point which the noble Lord raised.
Baroness Birk: A great deal has been said all round and the Minister has been faced with a great many questions. May I take it that he will look into these matters and come back at Report with something different? In the meantime the companies may find some solution among themselves. It is not satisfactory to leave such a complicated matter quite like this tonight.
Earl Ferrers: One of the problems is that it is difficult to be conclusive if one does not know who will be the licensees. The whole point of the provisions is that, when the licenses are granted and people know who the licensees are, at that moment the licensees will be able to get together to decide on the network. At the moment we do not know what that is and therefore there is bound to be, as the noble Baroness said, a vacuum. The reason there is a vacuum is that we do not know who the licensees will be. But the mere fact that the present contractors have got together and worked out a system is most encouraging.
I undertake to consider all that has been said today. The noble Baroness asked whether I will come back at Report with some alterations. I cannot possibly answer her because that will depend on the results of the consideration that we give to what has been said.
Baroness Birk: I understand that completely. By the time we come back at Report perhaps some solution will have come about anyhow. If it has not, we shall want to have another discussion to find out what can be done next. We are concerned that something concrete should be settled. We shall be in an unsatisfactory position unless a firm requirement is put on the ITC to institute a scheme itself.
Earl Ferrers: A firm requirement is put on the ITC to do it if the licensees themselves cannot come to a conclusion. That is fairly clear. If one accepts the principle that it is for the licensees themselves to decide how they will network, then they will have to
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get together to decide how they will do it. Only in the event of their not being able to agree will the ITC step in. One has to be careful about making it possible for the ITC to come in at every juncture because that would allow any one licensee—it could be a small one—deliberately to frustrate agreement in order to get the ITC to impose a system.
Lord Thomson of Monifieth: We all agree with the noble Earl that these are difficult matters on which it is impossible to come to a final conclusion tonight. The noble Earl referred to today's statement from the IBA. I was glad that he quoted the part which showed how far the present companies have gone in producing a scheme for the IBA that could provide an agreed basis for the network. I noticed that in the statement the IBA said that developments have occurred in the past few days. Some are provisional and will need further detailed consideration before the issues are in all cases clear. In the light of that we are in a transitional state. I hope the noble Earl will agree that we should not finalise the amendment and the amendments to the amendment tonight. Will he give an assurance that we will come back to these matters in a more final form at Report stage?
Earl Ferrers: I cannot give a commitment as to what certain noble Lords may wish to do at the next stage of the Bill's proceedings. If they wish to table a further amendment on Report, they are free to do so. Similarly, if the Government believe that it is appropriate to bring forward an amendment, we shall certainly do so. However, I should prefer, if I may, to say that we shall leave the matter here and that we shall give it further consideration. It is only after such consideration that we shall be able to decide what kind of amendment is required, if indeed one is needed.
Baroness Birk: I beg leave to withdraw the amendment.
Amendment No. 183C, as an amendment to Amendment No. 183B, by leave, withdrawn.
[Amendments Nos. 183D to 183J not moved.]
Amendment No. 183B agreed to.
Clause 35 agreed to.
Clause 36 [Power to impose financial penalty or shorten licence period]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 184:
Page 35, line 19, leave out subsection (4).
The noble Viscount said: This amendment was spoken to with Amendment No. 109. I beg to move.
On Question, amendment agreed to.
Clause 36, as amended, agreed to.
Clause 37 [Power to revoke Channel 3 or 5 licence]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 185, 186 and 187:
Page 36, line 14 at end insert:
("(3A) If the Commission are satisfied in the case of any Channel 3 or Channel 5 licence

(a) that the holder of the licence has ceased to provide the licensed service before the end of the period for which the licence is to continue in force, and

(b) that it is appropriate for them to do so,

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they shall (subject to subsection (8)) serve on him a notice revoking his licence.").

Page 36, line 24, after ("(3)") insert (",(3A)").
Page 36, line 30, after ("(3)") insert (",(3A)").
The noble Viscount said: These amendments were spoken to in connection with Amendment No. 135. I beg to move.
On Question, amendments agreed to.
Baroness Birk Baroness Birk moved Amendment No. 188:
Page 36, line 37, after ("determine") insert ("provided it shall be no longer than 18 months").
The noble Baroness said: The amendment limits to 18 months the length of time during which a Channel 3 licence holder may provide a licensed service for another region following revocation. It has the effect, first, of avoiding the uncompetitive extension of media ownership; and, secondly, of ensuring that a speedy replacement contract is established to cover the franchised area. If the amendment is not accepted, there is a risk of merger by default when one licensee is asked to take on the provision of programme services for another for an indefinite period.
The point should also be made that this amendment would help to ensure that no two contiguous licence areas could be owned or controlled by one company. The Government have indicated several times that the Bill would clarify this fault. The Home Secretary confirmed that fact on Second Reading and the Minister of State, Mr. Mellor, reaffirmed it in Committee in another place. It puts a time limit on what would otherwise be called a temporary situation. I beg to move.
Earl Ferrers: Clause 37(7) enables the Independent Television Commission to invite a regional Channel 3 licensee to provide a service in an additional licence area, where the original licence had been revoked, for such period as the ITC may determine. It is certainly intended that this should be a temporary arrangement, until such time as the commission can arrange a new round of competitive tenders and allocate a new licence to the new licensee.
I am most grateful to the noble Baroness for tabling this amendment. We do not think that an arbitrary limit of 18 months should necessarily be set on such an arrangement as there may be circumstances where a longer period would be necessary. Therefore, if she will be good enough to withdraw her amendment tonight, we shall consider the matter further and decide whether to bring forward an amendment at the next stage which makes clear the fact that the arrangements should be of a temporary nature in such circumstances.
Baroness Birk: I thank the Minister for that reply. It has taken nearly four days for us to reach some agreement, but we have reached it. I withdraw the amendment with pleasure.
Amendment, by leave, withdrawn
Clause 37, as amended, agreed to.
Clause 38 agreed to.
Clause 39 [Licensing etc. of domestic satellite services]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 189:
Page 38, line 2, at end insert:
("(1A) Without prejudice to the generality of section 3(2), a licence to provide a domestic satellite service may authorise the provision of a service which to any extent consists in the simultaneous transmission of different programmes on different frequencies.").
The noble Viscount said: It may be for the convenience of the Committee if I speak also to Amendments Nos. 193 and 211A. Amendments Nos. 189 and 193 make it clear that the ITC can award a single licence to cover programming on, for instance, the five BSB channels or the four Sky channels. That reflects the existing position in which the five BSB channels are provided under a single IBA contract. That does not affect the provision made by Amendment No. 51 to which the Committee agreed on 9th July. That amendment made it clear that the unit of currency for the purpose of the ownership rule would be the programme stream rather than the licence.
Amendment No. 211A is tabled in the name of the noble Lord, Lord St. John of Bletso. I should like to hear what he has to say about the matter before making my response. I beg to move.
Lord St. John of Bletso: I shall speak to Amendment No. 211A. I apologise on behalf of the noble Lord, Lord Colwyn, who wanted to speak this evening but who was unfortunately unwell and had to leave early. The amendment would encourage the sharing of satellite dishes by households. It addresses a situation where several different people, all of whom want to watch satellite television, may want to club together to install one dish which is then linked to all their homes. By sharing one dish, the proliferation of dishes is limited, as one dish per household is not needed. They can also share the costs of the shared dish.
My amendment is intended to make such arrangements as simple and nonbureaucratic as possible. Although the amendment relates to satellite television, it should technically be grouped with amendments to Clause 67, which deals with local delivery services. However, since I cannot be here next week the amendment has been grouped with amendments to Clause 40, and I am grateful to the Committee for agreeing to that.
Even those of us who are enthusiastic about the development of satellite television services sometimes find ourselves a little less enthusiastic about the visible proliferation of the dish aerials necessary to watch the new programmes. Most dish aerials are unobtrusive, but a few are becoming something of a blot on the landscape.
I am aware that the satellite industry is concerned to lessen the impact of dish aerials. I understand that the new model dishes are less conspicuous and that new installation techniques are being found to make those aerials less obtrusive. I am advised, however, by Sky and BSB that we can help to lessen still further the impact of aerials. That is the purpose of the amendment.

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It is an amendment which has the support of both Sky and BSB, which may be unusual, and also of the Confederation of Aerial Industries, a trade association representing the companies in the business of installing satellite systems. The amendment should appeal to all those who wish to see the protection of our visual environment. The amendment, as I have said, is intended specifically to promote the possibility of sharing aerials. I suppose one could call it a "sharial" amendment. I make no claim that the wording of the amendment represents technical perfection in legislative drafting. I hope that the Committee will be kind enough to consider the intended objectives. We may persuade the Government in due course to offer us a proper, regulatory approach to achieve our aim.
As some Members of the Committee may be aware, it is difficult today for viewers to share a satellite dish. Under the 1984 Cable and Broadcasting Act, even an informal agreement by two neighbours to share a dish is considered to be a cable television system subject to licensing. The requirements of licensing are burdensome and the result has been that dish sharing has not been a practical proposition. Wisely, however, the Government have recognised the difficulties in the 1984 Act and have offered assurances in the other place that licensing requirements will be significantly liberalised from 1st January 1991. They will permit in as simple a way as possible the sharing of dishes by those who live in single buildings such as blocks of flats, or in two adjacent dwellings such as a pair of semidetached houses, or in two neighbouring terraced homes.
At the same time, the Government suggested that this liberalisation might be extended to include dishes serving up to five terraced houses. It is here that I believe that the Government have not gone far enough. The amendment seeks to extend this liberalised licensing scheme to cover the whole terrace of houses. I can see no reason to limit the concession to just two terraced houses or even five. Surely the objective should be to allow the largest possible number of homes to view satellite television using the smallest possible number of dishes.
I hope that the Committee will agree that the principles underpinning the amendment are straightforward. Perhaps I may offer a brief word on the practicalities. The Government have already identified in the other place that the liberalised licensing scheme I have mentioned will be achieved through the means of a socalled class licence. Issued by the DTI under the Telecommunications Act, this class licence will provide blanket and automatic approval for those dishsharing schemes which come within its ambit. The general requirements of the class licence, as I understand them, are quite straightforward. They require that the system meet basic technical specifications so as not to cause radio interference and that the system carry only programmes approved by the Independent Television Commission.
However, I am concerned about the ambit of the class licence. It should not be limited to single
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buildings or pairs of houses. It should be extended to cover the case of a shared dish serving the whole terrace of houses. I hope that we may learn tonight that the Government are sympathetic to the amendment so that we can allow a greater choice of viewing in Britain without spoiling the view. I commend my amendment to the Committee.
10 p.m.
Viscount Ullswater: I have some sympathy with the underlying idea of the noble Lord's amendment. The Committee may find it helpful if I set out briefly the present regulatory position on the sharing of satellite dishes and the Government's proposals for change. Any cable system serving two or more households requires a licence from the Cable Authority unless it carries only BBC services or channels regulated by the IBA. It also needs a licence under the Telecommunications Act.
The main purpose of the Cable and Broadcasting Act licence is to ensure the maintenance of acceptable standards of taste and decency. That is why a licence is not needed for systems carrying only BBC and IBA services since they are regulated separately. Where an application for a satellite master antenna television system—which is known as SMATV—licence is made within a franchise area, the Cable Authority offers the franchise holder the right of first refusal to provide a service. This applies irrespective of the size of the proposed system. If he takes up the right of first refusal, the franchise holder has six months in which to provide a service.
Turning now to the future, on 27th April 1989 the then Home Secretary announced that it was our intention to relax significantly the regulation of SMATV. Under these proposals, systems covering up to 1,000 homes will not need to be licensed under the Broadcasting Bill, although they will continue to need to be licensed under the Telecommunications Act. Systems covering single buildings, of whatever size, or adjacent semidetached or pairs of houses in a terrace will be covered by a class licence under the Telecommunications Act. I believe that that was the point raised by the noble Lord, Lord St. John of Bletso.
We have indicated that we would be prepared to consider extending this class licence to cover groups of up to, say, five terraced houses if there proved to be a significant demand for such systems from groups of neighbours. Larger SMATV systems would need individual Telecommunications Act licences. Where the proposed system was in a franchise area, the cable or local delivery operator would be given a right of first refusal.
We consider the right of first refusal is necessary in order to underpin cable and local delivery franchises, particularly as the latter are to be allocated by competitive tender. However, we intend that the right of first refusal should operate more briskly than is the case at present. We announced our detailed proposals on 6th June.
These proposals represent a significant, though not total, liberalisation of SMATV and they should allow

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more communal systems to develop. Indeed both Sky and BSB are working with SMATV operators and local authorities, and other large landlords such as housing associations, to provide their services to hundreds of thousands of flat dwellers.
The noble Lord has suggested that the class licence under the Telecommunications Act should be extended to cover complete terraces of houses. As I have said, the Government would be prepared to consider an extension to cover up to five houses in a terrace, but I do not think that we could go quite as far as the noble Lord suggests. We have to strike a careful balance between the interests of those householders who wish to share dishes and the need not to undermine cable and local delivery operators. We believe that our proposals get this difficult balance about right.
I hope that the noble Lord will see from this explanation that the whole thrust of the Government's proposals is towards meeting the objective of his amendment. We are keen to see sharing of satellite dishes where this can be practicably arranged. In the light of that explanation, I hope that the noble Lord will feel able to withdraw his amendment.
Lord McNair: Like many other Members of the Committee, I have noticed the prevalence of dishes in many areas. Any scheme which does away with the need for multiple dishes, while preserving the ability of people to receive satellite television, must be a good idea. I would hope that a satellite dish from each company could be shared so that viewers may have the choice of programmes from both satellite systems.
I believe that the reason for the restriction to one dish per dwelling is purely environmental. If that is the case, this amendment would obviate the need for such a restriction where sharing of dishes takes place. Perhaps the Minister would let me know the Government's thinking on the matter. I support wholeheartedly the amendment of the noble Lord, Lord St. John of Bletso. The scheme which he has proposed could be particularly useful for people who are prevented by planning constraints from installing individual dishes. I suggest that the logic in the suggestion of my noble friend is clear. He mentioned that a shared dish on the top of a tower block, linked to each flat, will be covered by a class licence. However, where homes are laid horizontally rather than vertically, that is in a terrace of houses rather than a block of flats, why should the same class licence not apply if the residents want it?
The potential for this amendment to encourage sharing may not be limited to the suggested and important extension to terraced housing. The regulatory experts may think of other ways to apply it. The important thing is the intention of the amendment. We must encourage sharing. I understand that the principle behind the amendment enjoys wide support. Indeed just this afternoon I learnt that the Association of District Councils has welcomed any moves which would have the effect of lessening the visual impact of dishes, without eroding the public's ability to receive new television services.
Viscount Ullswater: I have listened carefully to the noble Lord. I am sure he will read carefully my reply to the noble Lord, Lord St. John of Bletso. I should inform the noble Lord, Lord McNair, that the Department of the Environment issued a consultation document on llth July which sets out the options for changes in permitted development rights for satellite dishes. This canvasses the possibility of allowing all buildings to have two satellite dishes without planning permission.
In the South and East both dishes could be the maximum 60 centimetres in diameter and in the North and West, where larger dishes are necessary to allow reception of Sky Television, one dish could be 80 centimetres in diameter and the second 60 centimetres. That would facilitate fair competition between the two satellite companies. Should that option be accepted, it is likely to be accompanied by a requirement that dishes should be sited in such a way as to minimise their effect on the buildings' external appearance.
It will be seen from what I have said that the Government are leaning at least some way towards the noble Lord's amendment. However, as I said in my original reply, I believe that we have the balance about right.
Lord Morris: My noble friend Lord Ullswater, in his rebuttal of the case so ably stated by the noble Lord, Lord St. John of Bletso, even if he was not aware of it himself, used the most chilling phrase. He referred to the Government's determination not to undermine cable and local delivery operators. He will be aware that since 1984 and the implementation of the cable Act the performance of the cable companies in laying down local delivery services by cable can only be described as abysmal. If my noble friend really wants to encourage the laying down of cable in this country he should encourage the receipt of signals by satellite. That will be the competitive element which will spur the cable companies to lay cables throughout the country.
I shall have time to consider with greater care his response to the arguments of the noble Lord, Lord St.John of Bletso, between the Committee and Report stages, but I strongly suggest that the Government should encourage the sharing of satellite dishes in order to spur the laying of cable in this country, to the greater benefit of the telecommunications infrastructure within the country as a whole.
Lord Ardwick: I should like to add a word from a personal point of view. This must be a dilemma which strikes many people. I live on a small estate of 20 houses comprising three rows of terraced houses forming a hollow square, with about seven houses in each block. We have a rule that no television aerial is to be erected. Under that rule we are forbidding the use of satellite dishes. Among the residents there are two journalists, two television writers, four or five actors and actresses. We all have a professional need to receive satellite television. However, we see no solution until we can have one or two dishes that can serve all of us without causing any offence to the eyes of our neighbours.
Viscount Ullswater: An application for a licence would not be denied, but the cable franchisee of the noble Lord's area, if his estate falls within a cable franchise area, would need first refusal. If the cable franchisee does not take up that opportunity of providing the cabling and the aerials, then a licence would be granted.
I have to say to my noble friend that there has been a great deal of investment interest in the cabling industry in the past two years and we believe that it would be a pity to disrupt that by liberalising the position too much.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 190:
Page 38, line 4, leave out ("and") and insert:
("(aa) section (Conditions requiring holder of Channel 3 or 5 licence to deliver promised service), and").
The noble Viscount said: The amendment was spoken to with Amendment No. 156. I beg to move.
On Question, amendment agreed to.
10.15 p.m.
Viscount Ullswater Viscount Ullswater moved Amendment No. 190A:
Page 38, line 5, after ("sections") insert ("(Promotion of equal opportunities in relation to employment by licence holder) and").
The noble Viscount said: This amendment was spoken to with Amendment No. 183A. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 191:
Page 38, line 14, leave out ("subsection (6)") and insert ("subsections (6) to (9)").
The noble Viscount said: This amendment was spoken to with Amendment No. 109. I beg to move.
On Question, amendment agreed to.
Clause 39, as amended, agreed to.
Clause 40 [Licensing etc. of nondomestic satellite services]:
Baroness Birk Baroness Birk moved Amendment No. 192:
Page 38, line 27, at end insert ("or 16 (2) (g)").
The noble Baroness said: This is a simple short amendment. It requires nondomestic satellite broadcasters to include a proper proportion of EC originated material if they wish to be licensed to gain access to British audiences. While Britain may have little control over nondomestic satellite services unless they apply for licences, this amendment is an explicit reminder to such companies that what they are expected to offer should reflect the EC preference for EC originated material and that nondomestic satellites should not simply be the easy means by which United States or other nonEuropean material is able to flood the airways.
It also reflects the requirements for a suitable amount of EC material which are built into the EC directive on transnational broadcasting and the Council of Europe convention on the same subject, to each of which the British Government are a signatory. I beg to move.
Lord BonhamCarter: I have nothing to add to the words so eloquently spoken by the noble Baroness, Lady Birk, in support of this totally admirable amendment except to say that I support it.
Viscount Ullswater: I am sorry to disappoint the noble Lord but I cannot accept this amendment, which would apply the European programming requirement to nondomestic satellite service licences. We have made clear that we shall impose the consumer protection requirements on such licences, but that otherwise their development should be left to the market. I believe that it would be heavy handed to apply a positive requirement of that kind to such licences.
The noble Baroness asked how the Government envisage that the UK should meet its obligations under the EC directive in relation to the European content of nondomestic satellite services. The directive provides that states may implement its provisions by law, regulations or administrative means. Implementation is to be achieved by October 1991. We envisage that in the case of nondomestic satellite services implementation of the directive's provisions on European programming will be done administratively. The ordermaking powers in Clause 173 could be used if necessary at some point in the future. We do not see that as an issue which should cause any difficulties. Both the convention and the directive recognise sensibly and realistically that the proportion of European programming may need to be increased progressively over a period of time. They also acknowledge that European content requirements should apply only where practicable.
Lord BonhamCarter: Does what the noble Viscount said mean that there will be no limitation on nondomestic satellite television and the endless series of American programmes?
Viscount Ullswater: I do not believe that that is true. For instance, the news programmes from these satellites have a European content. Many of the sporting programmes have a European content and a lot of the ethnic programmes have a regional characteristic.
Lord BonhamCarter: If the noble Viscount looks at the sports programme sin the morning he will find that it is largely American. If he looks at the films he will find that they are very largely American. Naturally the news programme is not.
Lord Thomson of Monifieth: Perhaps I may pursue this matter for a moment with the noble Viscount. Her Majesty's Government are a signatory to those European conventions. They have a spirit as well as a letter. Are the Government saying that they will use the opportunity to deal with this matter administratively, simply by turning a blind eye to whatever happens?
Lord Morris: Not at all. It is quite clear that the noble Lords opposite have not understood what my noble friend said. In effect he said that this amendment is totally unnecessary. It is quite unnecessary to make

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an amendment in a domestic statute when it can be perfectly capably handled by regulation. That is all that he said.
Lord Thomson of Monifieth: I was not arguing in support of the amendment going into the present Bill. But I was rather shocked by what I thought might be the implication of what the Minister was saying: that nondomestic satellites will be treated extremely leniently, to put it mildly, in terms of the spirit of the European directive which the Government have signed.
Viscount Ullswater: I am grateful to my noble friend for leaping to my defence in some way. I thought that I had stated quite clearly that the directive provides that states may implement its provision by administrative means. I stressed that that is the way we intend to do it. The implementation of the directive is to be achieved by October 1991. I see no reason why that should not be done.
The power in Clause 173 could be used if necessary. We are not in any way trying to avoid the directive. I simply outlined the way in which the directive will be implemented. I drew attention to the fact that the power in Clause 173 could be brought into effect. However, I suggest that we do not need to write it on to the face of the Bill, as the amendment does.
Baroness Birk: It is very late. I had not considered the clause closely. It does not seem at a quick glance that Clause 173 covers this provision. It states:
"This section applies to

(a) the BBC;

(b) the Independent Television Commission;

(c) the Welsh Authority;

(d) the Radio Authority;

(e) The Broadcasting Standards Council".

That is the end of the clause. It says nothing about nondomestic satellites.
Viscount Ullswater: That provision comes under subsection (2) (b) because the body is licensed under the ITC.
Baroness Birk: It is not very clear. It states that it applies to the BBC and the Independent Television Commission. It does not state that it is licensed outside. It is roaming rather far.
Viscount Ullswater: The ITC is not a broadcaster. But the broadcasting requirements are to be implemented by those licensed by the ITC.
Baroness Birk: I shall withdraw the amendment. That will give my noble friends and myself a chance to look into the matter further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Ullswater Viscount Ullswater moved Amendment No.193:
Page 38, line 27, at end insert:
("(2A) Section 39(1A) shall apply to a licence to provide a nondomestic satellite service as it applies to a licence to provide a domestic satellite service.").
The noble Viscount said: I spoke to this amendment with Amendment No. 189. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 194:
Page 38, line 36, leave out ("subsections (2) and (4)") and insert ("subsection (2)").
The noble Viscount said: This amendment was spoken to with Amendment No. 135. I beg to move.
On Question, amendment agreed to.
Clause 40, as amended, agreed to.
Clause 41 agreed to.
Clause 42 [Licensing etc. of licensable programme services]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 195:
Page 40, line 25, leave out ("on religious matters or").
The noble Viscount said: My noble friend Lord Ferrers spoke to this amendment with Amendment No. 9. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 196:
Page 40, line 39, leave out ("subsections (2) and (4)") and insert ("subsection (2)").
The noble Viscount said: I spoke to this amendment with Amendment No. 135. I beg to move.
On Question, amendment agreed to.
Clause 42, as amended, agreed to.
Viscount Ullswater: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Associated British Ports (No. 2) Bill
Returned from the Commons with the amendments agreed to.

Medway Tunnel Bill [H.L.]
Returned from the Commons with amendments; the amendments were considered and agreed to.
House adjourned at twentyfive minutes past ten o'clock.