Lords Sitting of 25 July 1990

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Liverpool.

Message From The Queen
The Earl of Airlie: My Lords, I have the honour to present to your Lordships a Message from Her Majesty the Queen, signed by her own hand. The Message is as follows:
"I thank you most sincerely for your loyal and dutiful Address on the occasion of the ninetieth birthday of Her Majesty Queen Elizabeth the Queen Mother".
"I am deeply moved by your wish to be associated with the congratulations offered to Her Majesty Queen Elizabeth the Queen Mother on this happy occasion and by the warmth of your tributes to her".

Scotland: Community Charge Administration
2.36 p.m.
Lord Stodart of Leaston Lord Stodart of Leaston asked Her Majesty's Government:
Whether they are satisfied that local authorities in Scotland are able to administer the community charge with reasonable efficiency.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, I recognise that some difficulties remain in certain areas but most initial problems have been largely overcome and overall local authorities now appear to be administering the system both effectively and efficiently.
Lord Stodart of Leaston: My Lords, I thank my noble friend for that Answer. Perhaps I may express my relief that despite various rather gloomy forecasts in the Scottish press he still occupies his position.
Is my noble friend aware that the principle of the community charge is being undermined by the complexity of its operation? This is confirmed by the reported evidence given in Glasgow Sheriff Court by Strathclyde Regional Council that there was a pile-up of never less than 20,000 letters about the community charge on any one day. Will my noble friend urge upon his right honourable friend that in any amendments which may be made to the community charge, simplification is of vital importance?
Lord Sanderson of Bowden: My Lords, I thank my noble friend for his opening remarks. It just proves that one should not believe everything one reads in the Scottish press!
The fact that some local authorities still encounter basic administration problems is for them to resolve. They have been adequately resourced. It is not a
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symptom of a wider problem with the community charge, which in the great majority of cases for the great majority of people is working well. I accept, however, as I did in my opening Answer, that we have problems in some areas which must be overcome.
Lord Dormand of Easington: My Lords, are the Government unable to say how many extra staff have been appointed in Scotland to deal with the poll tax, as stated to me in a Written Answer last week?
Lord Sanderson of Bowden: My Lords, that is an entirely different question. I know that in Lothian there was a request for 48 extra staff to deal with the community charge. That brought about a court case because the local authority did not wish to appoint them. However, I am glad to know that the court case has now been satisfactorily resolved.
Lord Molloy: My Lords, can the Minister say what would be the policy if, as it appears, thousands of people in Scotland feel that the poll tax is so unjust that they ought to have the courage—and some probably will—to resist it? What would happen then?
Lord Sanderson of Bowden: My Lords, I know that some people in Scotland can pay and will not pay: that is perfectly true. It just means that those who pay have to carry more of a burden. I have to say to the noble Lord that I am not particularly impressed with the replacement of the community charge by the roof tax, as proposed for Scotland.
Lord Campbell of Croy: My Lords, my noble friend will recall that I raised various points at Question Time concerning the standard charge and the interpretation of the second homes legislation for Scotland. Does he agree that the solutions which were found after a year of the poll tax, the community charge, in Scotland have led to a great improvement in the situation since 1st April for England and Wales?
Lord Sanderson of Bowden: Yes, my Lords. I thank my noble friend for that. We made some changes during the course of last year. Only last week my right honourable friend announced further changes. A number of improvements have been made to the community charge relief scheme, including the extension of the scheme by two years and a reduction in the threshold for relief from £3 to £2. There are a number of additions to the prescribed classes for standard community charge purposes which I know my noble friend will welcome. Most important of all to me, as the Minister with responsibility for tourism, bed and breakfast accommodation for up to six people is to be exempt from non-domestic rates.
Lord Mellish: My Lords, as a Londoner, although it is impertinent of me to interfere in Scottish affairs, nevertheless my common sense tells me that those who do not pay the community charge would not have paid rates either.
Lord Sanderson of Bowden: My Lords, the noble Lord may well have a point. Nevertheless a considerable number of people have not yet paid the community charge. I hope they realise what they are doing to those who have paid it.
Viscount St. Davids: My Lords, following on from the previous question, can the noble Lord tell us how

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the rates of collection of the community charge compare with the former collection of rates? That may be a great help to the House.
Lord Sanderson of Bowden: My Lords, I cannot give the noble Viscount details. All I can say is that to date I do not think that the allowances which some authorities have made for bad debt provision—I hope I may put it that way—have been sufficient to meet the differential between what has been collected and what was expected to be collected. At the moment the estimated shortfall is £135 million. However, that should be compared with a budgeted charge income of £1,020 million for that year. I shall see whether I can find any further information for the noble Viscount and I shall write to him.
Baroness Carnegy of Lour: My Lords, it has been put to me that some councils in Scotland are making much more determined efforts than others to collect a high proportion of the community charge. Can my noble friend tell me whether the figures bear this out?
Lord Sanderson of Bowden: Yes, my Lords. There is no doubt at all that in Grampian region, for example, the rate of collection has been good. As it happens, Grampian region had allowed for a bigger bad debt provision than some other authorities. However, it would be invidious of me to refer to any other authorities. I believe we may be able to learn some lessons from the experience in England as regards the follow-up period after the time of collection. In England the first bill can be followed up with action after one month, whereas in Scotland it is followed up after three months.
Lord Carmichael of Kelvingrove: My Lords, the Minister will perhaps be aware of the letter sent to the Secretary of State by the convenor of CoSLA, Mrs. Jean McFadden. CoSLA realises that it has a duty to collect this charge and it realises that if local government is to continue, the money must be collected. However, the officials of CoSLA have certainly reached the conclusion that the community charge constitutes a much greater administrative burden than even they predicted. They have made a number of helpful suggestions which the Minister may know about: for example, the need for publicity to encourage early notification of a change on the part of citizens who move house. One of the biggest difficulties that arises when citizens move house, even within the same district, is that a totally new file has to be opened on them.
CoSLA has suggested that the forms should be re-examined. As the Minister will no doubt be aware, some of the forms are extremely complicated. CoSLA has further suggested that the definitions of exemptions should be simplified. It is difficult to assess where merchant seamen and people working on oil rigs stand as regards the community charge. It is also difficult to assess the standing of elderly people who may stay with relatives for an extended period but who still have their own home. All these problems are real. I hope that the Minister will read the letter from CoSLA and perhaps place the reply in the Library.
Lord Sanderson of Bowden: My Lords, we are well aware of the difficulties that can arise with some local authorities. There are ongoing discussions on how to improve the system. Cash provisions for making the necessary changes to the community charge have been well covered by the Government.
Lord Glenamara: My Lords, how can the Government defend the justice—
Lord Denham: My Lords, I hope that the noble Lord, Lord Glenamara, will forgive me for pointing out that we have spent eight minutes on the first Question. We have three more Questions to discuss and your Lordships have already decided that 20 minutes should be the average length of time allowed for Question Time. It would be helpful to the House if we could pass on to the next Question.
Lord Glenamara: My Lords, how can the Government defend the justice—
Lord Denham: My Lords, I hope that the noble Lord, Lord Glenamara, will give way. When we have spent a certain amount of time on a Starred Question—we have now spent nine minutes on this Question—it is normal to pass to the next Starred Question. I hope that the noble Lord opposite will feel that he can leave the matter there on this occasion.
Lord Glenamara: My Lords, this is not the first time that the Government Chief Whip has done this to me. How can the Government defend—
Lord Denham: My Lords, I hope that the noble Lord will not continue. I am trying to relay the feelings of the House. We have now spent 10 minutes on the first Question. I hope that we can pass on to the next Question.
Lord Cledwyn of Penrhos: My Lords, we are rather wasting time unnecessarily. As I understand it, the Procedure Committee recommended that there should be a certain elasticity and that a desirable amount of time to spend on any Question is seven minutes. In those circumstances I feel that my noble and distinguished friend should be allowed to ask his question.
Lord Glenamara: My Lords, how can the Government defend the justice of a tax where a highly paid company chairman—there are a lot of them about—pays exactly the same amount as a bus conductor or a farm labourer? Does not the inherent injustice of this tax have a great deal to do with the non-payment of it?
Lord Sanderson of Bowden: No, my Lords.

The Coal Industry
2.48 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What plans they have for the future of the coal industry.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the future of the coal industry is very much in the hands of the management and mineworkers

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themselves, and in particular on their ability to reduce costs to competitive levels through improving productivity which is up by 75 per cent. from pre-strike levels. Further cost reductions and productivity gains are essential. I believe that the industry has the technology, the investment and the skills to secure its own future. The Government remain committed to transferring British Coal's mining activities to the private sector, but no decisions will be taken on the future structure of the industry until after the next general election.
Lord Dormand of Easington: My Lords, how much importance do the Government place on the security of supply of coal, given that our present reserves are sufficient for some 200 years at the present rate of extraction? As all forecasts predict that the price of imported coal will increase in the medium and long term, and as the British coal industry continues to improve its efficiency, ought not the Government to look again at the policy of pit closures? I stress that I am referring to the medium and long-term position, especially as the Secretary of State in another place this week said that there was a great need for long-term contracts. One cannot mothball a pit.
Viscount Ullswater: My Lords, the contracts with the generators provide British Coal with a large market opportunity to aim for. They are three-year agreements, as the noble Lord indicates with his hand, and will provide a guaranteed stream of income over the next three years and time in which to adjust to new market conditions. That guarantee of production will give British Coal the incentive it needs to reduce its prices with an eye on the world price of coal. I am certain that coal will be burned by the electricity generators for many years to come.
Lord Mason of Barnsley: My Lords, with the introduction of gas-fired power stations and the closure of some coal-fired stations, with up to 15 million tonnes of cheap imported coal coming into this country—remembering that 1 million tonnes equals 1,000 miners' jobs—and with the Government's coal Bill necessitating the vast expansion of open-cast coal mining, what size of deep coal mining industry will we have left by the year 2,000?
Viscount Ullswater: My Lords, it would be wrong to ignore the fact that the Government have approved over £7 billion worth of new investment in the coal mining industry and provided more than £10 billion of restructuring grant since 1979. That is no mean figure. The noble Lord asked me about the 15 million tonnes of imports. My figures do not show that we import 15 million tonnes but nearer 11 or 12 million tonnes. Part of that is special coal required by the steel industry which cannot be found and mined economically in this country.
Lord Ezra: My Lords, as he intimated in his Answer that the coal industry has achieved a remarkable amount in improving its productivity in recent years, does the noble Viscount agree that it is to be commended on the efforts that it is now making to develop clean burning processes for coal which are of great importance in view of environmental considerations?
Viscount Ullswater: Yes, my Lords. I agree with everything that the noble Lord has said. However, the improved productivity still leaves the coal mining industry at odds with deep mining productivity in Australia and the United States. Research projects are under way so that the clean coal-burning technique can be improved and used in the future, especially to protect the environment.
Lord Williams of Elvel: My Lords, will the noble Viscount accept that my noble friends are right in saying that the future of the coal industry is a long-term problem? Does he not agree that the privatisation process means that generators will look to gas rather than to coal in the short term, partly for cost reasons and partly because that will meet the Government's environmental targets which they refuse to meet by other means? What will then happen when the gas runs out and all the pits are shut down?
Viscount Ullswater: My Lords, I am not sure that that is a correct scenario. The problems with the coal mining industry have been long-term problems for a great many years, as I am sure the noble Lord will know. Over the past 30 or 40 years pits have been closed at the same rate. Environmental considerations will mean that we have to clean up coal burning. However, I am quite certain that the fitting of FGD to power stations will assist with the environmental problems. I cannot agree that privatisation will hinder the process of looking to the future of the industry.
Lord Marsh: My Lords, does the noble Viscount consider that the Government could take a more objective view of the problem and recognise the fact that Mr. Arthur Scargill has done far more to rationalise the industry than any government department or Minister?
Viscount Ullswater: My Lords, all I can say is that Mr. Arthur Scargill has made an interesting contribution.
Lord Stoddart of Swindon: My Lords, is the noble Viscount aware that the coal industry is under a twin threat from the EC: first, from restrictions on government assistance to the coal industry; and, secondly, from its insistence that there should be no import controls on coal? Are not those two matters likely to do great damage to the coal industry in the future?
Viscount Ullswater: My Lords, the noble Lord suggested that government assistance has been restricted. All I can say is that in the past government assistance has not been restricted. I quoted some interesting figures to the House. The noble Lord shakes his head and says that that is not the question. The figures indicate that the Government have not shrunk from assisting the coal industry. As I indicated earlier, to date most of the imports of coal have been of special coals. I agree that the Government have no policy to restrict imports of coal. It must be up to the generators to decide where to purchase their coal. I do not believe that the taxpayer can go on subsidising British Coal at everybody's expense indefinitely.
Lord Dormand of Easington: My Lords, if the Government are not concerned about the security of

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supply, which was the purport of my Question, what lessons have they learnt from the fact that there is now not a single pit in the country producing coking coal, that all of the low-sulphur pits have been closed, and that there is one pit left producing anthracite?
Viscount Ullswater: My Lords, I have dealt with the fact that some of the coking coal cannot be produced economically in this country. We cannot just go on producing coal at the pithead for the industry at any price. It leaves us uncompetitive. I have dealt with the security of supply: that is one of the reasons that we are concentrating on building a nuclear power station.

Common Land
2.52 p.m.
Baroness Nicol Baroness Nicol asked Her Majesty's Government:
Whether any recent progress has been made towards a solution of the problems preventing the introduction of legislation to protect common land.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, further progress has been made and we hope to make a Statement before the Recess.
Baroness Nicol: My Lords, before I acknowledge that Answer perhaps I may welcome the noble Lord on his first appearance with his new brief. I look forward to a long and harmonious relationship.
I thank the noble Lord for his Answer and in view of that Answer I shall not ask any supplementary questions.
Lord McIntosh of Haringey: My Lords, can the Minister give an assurance that all his answers to my noble friend or to any questions from these Benches will be as helpful as the one he has just given?
Lord Strathclyde: My Lords, of course, if the question is as helpful.

Youth Organisations: Amalgamation
3.53 p.m.
Lord Peston Lord Peston asked Her Majesty's Government:
What is the reason for the proposed creation of a new body, the National Youth Agency, to amalgamate the National Youth Bureau, the National Council of Voluntary Youth Services, the British Youth Council, the Council for Education and Training in Youth and Community Work and the National Association of Young People's Advisory Councils.
Baroness Blatch: My Lords, my right honourable friend the Secretary of State seeks to help the whole of the youth service to develop a secure educational foundation and clear framework for meeting the challenges of the 1990s. The development of a single, strong, comprehensive body through which government funding can be channelled to provide support at national level is central to achieving that.
Lord Peston: My Lords, I thank the noble Baroness for her Answer. On reflection, I wonder whether she is
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entirely happy with it. I understand that essentially her right honourable friend the Secretary of State has set up a highly centralised new quango in place of the very successful decentralised structure that we had before. Is it now the Government's new policy to set up such quangos and to centralise in that way? Perhaps I may also draw her eye to the wording of the Question. I asked what the reason was. I did not ask what the policy was.
Baroness Blatch: My Lords, first, I do not agree that it would necessarily decentralise. We were talking about replacing centralised bodies—many of them—with one agency. The reasons for that include: better use of resources; better co-ordination of support services; strengthening of the partnership between the voluntary and the private sectors as well as the local authority sector; strengthening support services to the youth movement generally throughout the country and to community education; improving the quality, range and effectiveness of services and making the responses to government priorities even better.
The Lord Bishop of Manchester: My Lords, is the Minister aware that the right reverend Prelate the Bishop of Bath and Wells, George Carey, whose appointment as Archbishop of Canterbury was announced this morning, has a long-standing interest in youth matters? Is she further aware that when he comes to this House he will have much to contribute on that subject, among others?
Baroness Blatch: My Lords, I shall have the privilege to be the first to welcome him from the Dispatch Box. I look forward very much to his involvement in this debate.
Lord Tordoff: My Lords, I must declare an interest which I am sure will surprise some noble Lords. I am a president of the British Youth Council. I shall explain at a later date to my noble friend the Deputy Leader, who asked from a sedentary position about my qualifications for that post.
Is the noble Baroness aware that there is great concern in the British Youth Council that its 40 years' democratic running of an organisation which has provided tremendous experience for young people is being eroded by the Government? Already it has had its core funding taken away and is only able to carry out projects which have government approval, not just the approval of its members. What is the intention of the Government in relation to the activity of the British Youth Council in international matters, which has been in a compartment separate from the funding by the Department of Education and Science?
Baroness Blatch: My Lords, as the noble Lord will know, the funding has changed for all youth bodies operating nationally and will continue for the agency. The funding will be based on work submitted to the Government and approved by them. The organisation with which the noble Lord has an involvement has chosen to remain separate under the new arrangements and will continue to be separate. Therefore the way in which the British Youth Council operates outside the national agency will be very much a matter for it.
Lord Harmar-Nicholls: My Lords, will my noble friend say whether the appointment of a national youth agency necessarily means that all the other organisations involved in such work have to cease to exist? Is it not possible that in their separate forms they can exist and make a contribution towards strengthening the National Youth Agency which is now being set up?
Baroness Blatch: My Lords, I am very pleased to be able to assure my noble friend that the decision to exist alongside the national agency as an independent body is very much a matter of choice. The agency will be based on the National Youth Bureau and on the Council for Education and Training in Youth and Community Work. Those two bodies will be subsumed under the new agency. However, the National Council for Voluntary Youth Services and the National Association of Young People's Counselling and Advisory Services have opted to remain separate but nevertheless to work constructively with the agency. The British Youth Council has also opted to remain separate outside the agency. They all wish to work constructively with the agency. I believe that it will be a very profitable arrangement.
Lord Denham: My Lords, we have now spent 25 minutes on four Questions. Perhaps I may suggest that the noble Lord, Lord Molloy, asks his question and that my noble friend answers it. Then may be the time to move on.
Lord Peston: My Lords, I protest strongly against this curtailment. I asked my Question in a perfectly bona fide way and I expect to get a decent amount of your Lordships' time on an issue which I regard as of great importance to the youth of this country. I resent it very strongly because I know that, at least until this moment, several noble Lords wished to intervene. I appreciate the noble Lord's problems but I do not see why I should bear the cost of them.
Lord Denham: My Lords, the difficulty is that by the express wish of your Lordships' House we are meant to take 20 minutes on Questions. We took an inordinate length of time on the first two Questions. We got through the third one very expeditiously. We have now been on this Question well over six or seven minutes. I am in the hands of the House, but if the House wishes Questions to take a reasonable length of time it must support whoever rises at this Dispatch Box to cut to noble Lords the feelings of the House.
Lord Molloy: My Lords, will the Minister say whether there have been any discussions with the existing seven youth organisations? If not, will there be such discussions, and when they have taken place will those discussions be brought to Parliament for further examination?
Baroness Blatch: My Lords, there have been discussions with the five organisations. All of them have responded. All the local authority associations have also been consulted. The proposals are being brought forward on the basis of all those consultations.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Arran will, with the leave of the House, repeat a Statement that is to be made in another place on Defence: Options for Change.
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 an hour and that during that adjournment the Companies (Fees) (Amendment No. 2) Regulations 1990, the Weights and Measures (Various Foods) (Amendment) Order 1990, the EEC Merger Control (Consequential Provisions) Regulations 1990 and the European Bank for Reconstruction and Development (Immunities and Privileges) Order 1990 will be taken.

Consolidated Fund (Appropriation) Bill
The Earl of Strathmore and Kinghorne: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time. —(The Earl of Strathmore and Kinghorne.)
On Question, Bill read a second time.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution of 18th July), Committee negatived; Bill read a third time, and passed.

Enterprise and New Towns (Scotland) Bill
3.7 p.m.
Lord Denham: My Lords, I have it in command from Her Majesty the Queen that Her Majesty, having been informed of the purport of the Enterprise and New Towns (Scotland) Bill, has consented to place her prerogative and interest so far as they are affected by the Bill at the disposal of Parliament for the purposes of the Bill.
Lord Sanderson of Bowden: My Lords, I beg to move that this Bill be now read a third time.
The Enterprise and New Towns (Scotland) Bill will create Scottish Enterprise and Highlands and Islands Enterprise and enable them to delegate appropriate functions and powers to a network of local enterprise companies. It sets out a broad framework within which the new bodies and the local enterprise companies will have as much flexibility as possible to tackle the challenges and opportunities of building up a stronger Scottish economy.
There is no doubt as to the widespread enthusiasm for these proposals across the spectrum of Scottish opinion. As I said at Second Reading, we have been delighted by the calibre of those who have come forward to form the 22 prospective local enterprise companies throughout Scotland. These consortia are all now drawing up their business plans. I am confident that 1991 will prove to be an important marker in the development of the Scottish economy as

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Scottish Enterprise, Highlands and Islands Enterprise and the local enterprise companies set about their tasks.
Noble Lords have given this Bill careful consideration at Second Reading, in Committee and at Report stage. I am grateful to all those who have taken part and particularly to the noble Lord, Lord Carmichael of Kelvingrove, for his constructive approach in raising some key issues. I am glad to have the opportunity to restate our commitment to give Scottish Enterprise and Highlands and Islands Enterprise a strong strategic role and to reaffirm the importance of both new bodies and the local enterprise companies working in partnership with local authorities and other bodies.
The integration of training and economic development functions is central to the Scottish Enterprise concept. I was grateful to my noble friend Lady Carnegy of Lour for her contributions on the importance of training. The wide-ranging powers in the Bill will enable Scottish Enterprise and Highlands and Islands Enterprise to tackle, through the local enterprise companies, the particular needs of each local labour market.
I was glad also to have the opportunity, in response to speeches from my noble friend Lord Selkirk, the noble Lord, Lord Mackie of Benshie, the noble Earl, Lord Perth, and others, to put on record our commitment to a rural dimension for Scottish Enterprise and the local enterprise companies. We shall expect them to tackle the problems and opportunities in rural as well as urban areas.
My noble friend Lord Gray of Contin highlighted the needs of the Highlands and Islands. In creating Highlands and Islands Enterprise we recognise the distinctive nature of the differences that exist in that part of Scotland.
The Bill also prepares for the winding up of the Scottish new town development corporations. I pay tribute to the past work of the noble Lord, Lord Hughes, and his work on the Bill. He has special interests in the new towns. We certainly heard from him during the passage of the Bill. We now look forward to achieving a smooth transition to new arrangements while maintaining the economic momentum of the new towns.
The Bill is a landmark in the evolution of the Scottish economy. Scottish Enterprise and Highlands and Islands Enterprise will help, I am sure, to stimulate both existing and new businesses and act as a catalyst in reskilling our workforce. I beg to move.
Moved, That the Bill be now read a third time.—(Lord Sanderson of Bowden.)
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the Minister for going through the Bill and for the nice words that he said about all those who took part in the debates on it. If, as he suggested, I raised key issues he will also be aware that they did not seem to unlock any real response from the Government.
He is well aware that we were disappointed that the
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Enterprise and New Towns (Scotland) Bill had no social remit. There was a reference to the rural areas but no provision on the face of the Bill. The reference came from the Minister. That added some weight because the Minister has sympathy with those issues. However, we would have preferred such provision to be on the face of the Bill.
We are not happy with the training function of the new enterprises. As many Members of the House said, there could be a tendency for short-term training to meet short-term shortages whereas we hope that training will be more fundamental. We can only hope that the reorganisation of the Scottish Development Agency will be profitable and worthwhile to Scotland. However, as I said at an earlier stage, I do not see why we need to shake up those aspects that were going rather well.
On the new towns, we did not resolve one of the main concerns. The Government have spoken about giving greater choice to people, but during discussions on the Bill there was almost a growing dislike of local government. Tenants were not given a real choice when they changed their tenancy from the new towns corporations. The Minister will be well aware, as we are, that all the surveys indicated that there was a very strong feeling among the tenants that they would like to choose the local authorities.
However, the Minister showed great charm and helpfulness during the Committee. Unfortunately he also showed his usual firmness with his remit, which after all is his job. I believe that we gained as much as we could by way of promises from the Minister, and probably more than we would have done from most other Ministers. I am disappointed that such promises are not on the face of the Bill. However, we shall look forward to seeing whether this measure becomes a landmark in Scottish economic and training development, as we all hope that it will be. We have grave doubts whether it will meet the challenge. I wish God-speed to the Bill.
Lord Hughes: My Lords, I do not need to add much to what the noble Lord, Lord Carmichael, has said other than that I agree with everything he said.
I should perhaps refer to two successes of the Minister. I congratulate him on the first: that he has survived the trauma of Monday and is still with us as the Minister of State for Scotland. The second success is one that I predicted but on which I cannot congratulate him: that he has successfully carried out the brief that he was given to carry the Bill through this House with no change whatever. It is his success and our regret.
Lord Sanderson of Bowden: My Lords, perhaps I may briefly thank both noble Lords for their comments. I am rather surprised that the noble Lord, Lord Carmichael, thinks that training is going in the wrong direction. The fact that training functions come to Scotland proves that we are trying to devolve powers in the proper way. I believe that the combination of training and enterprise which the new bodies will have will be helpful for Scotland.

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I am grateful to the noble Lord, Lord Hughes, for what he has said. I know that he would have wished for more "give", in particular on the new towns issue. However, we debated the matter very thoroughly. I am most grateful to him for bringing to the debates his knowledge of the new towns scene and for giving us the benefit of his advice. I commend the Bill.
On Question, Bill read a third time, and passed.

Broadcasting Bill
3.15 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.]
Clause 93 [Applications for national licences]:
Baroness Young Baroness Young moved Amendment No. 265A:
Page 75, line 34, after ("service") insert ("having taken into account evidence of demand,").
The noble Baroness said: I have not so far taken part in this important Bill. However, the amendment that I have tabled is important and its purpose needs to be aired. As I am sure are many Members of this Chamber, I am a great listener to the radio. One of the facts that one notices about the Bill, and from reading about it, is that the part relating to television seems to be much greater than that relating to sound radio. Yet sound radio is of immense service to millions of people in this country.
This is a probing amendment. I am seeking to find out the Government's intentions in this field. The effect of the amendment is to require the Radio Authority to take into account the evidence of demand when it advertises the three new national radio services. The nature of two of those services is specified in Clause 80(2)(a). As I understand it, one is:
"a service the greater part of which consists in the broadcasting of spoken material".
The second is a service:
"which consists, wholly or mainly, in the broadcasting of music other than pop music".
The nature of the third service is left unspecified. However, there is a clear inference that it might be a channel for some kind of popular music.
As I understand the preamble to Clause 80(2)(a) it would still be required to be different from existing popular music services and thus be required to meet the Government's external diversity requirements for independent national radio. However, as drafted, the Bill seems to place some duty on the Radio Authority to advertise the two specified services of speech and light/classical music before any other. My right honourable friend in another place, Mr. Mellor, and the noble Lord, Lord Chalfont, have both spoken as
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though the Government intend to make sure that the services are of spoken material and music other than pop, and that those are the first to be advertised.
The purpose of the amendment is to ask the questions: what is the reason for that? Is that what we believe the public want? Have we attempted to find out whether that is the case? Indeed, is it what the market wants? Is there any evidence that there would be significant advertising support for such radio services? I understand that United Kingdom radio companies are undertaking research on those issues. Their views and findings will be expressed in letters of intent for the ILR by 14th August 1990, as requested by the Radio Authority. The purpose of my amendment is to place a duty on the Radio Authority to pay heed to those and other significant indications of the demand for a new national radio service in the UK media market-place.
I understand that it is the intention to allocate one of the two services specified in Clause 80 to the single available stereo FM channel while the other services will be on AM, which is not currently available in stereo. Therefore, it is less suited to the broadcasting of music. Can my noble friend confirm that?
It would also be helpful if my noble friend could indicate the Government's intentions. That would go some way towards ensuring that, while properly meeting the Government's requirements for diversity, the new national radio services in the United Kingdom will meet the expressed intentions of public demand. It would have the effect of increasing competition for national radio licences. The present basis on which they are to be set up leaves many radio companies uncertain about whether they are worth applying for. Therefore, a second important point is involved and I shall be interested to hear my noble friend's reply. I beg to move.
Earl Ferrers: It is a pleasure to hear my noble friend Lady Young take part in the debate on the Bill. It was interesting to hear her views and the reasons why she tabled this probing amendment. There will be three new national services. One will be non-pop, another will be speech-based and the third will be open to offers. The chances are that it will be pop because often that is the most lucrative category. However, the Bill deliberately leaves open the third option.
My noble friend's amendment puts an obligation upon the Radio Authority to delay an advertising licence while it seeks the evidence of demand. I understand the reasoning behind it, but the Bill deals with this aspect in the audience research provisions in Clause 91. The clause puts the authority under a duty to arrange to ascertain the types of programmes which members of the public would like to be included in licensed services, including national services.
Recently the authority demonstrated that it is thinking along the same lines. It has invited those who may wish to apply for a national licence to send it a letter of intent by 14th August. That will enable the authority to assess the extent and nature of the likely demand to run the national services. Naturally, no commitment is involved at this stage. Those

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expressing an interest now will not be obliged to apply in due course; nor will anyone be excluded from applying if they do not register their interest at this point. The invitation is for people to set out, confidentially if they wish, the format and broad content of the service which they are contemplating. They should also state any preferences over the waveband and size of population to be served, together with brief details of the potential applicant group's background and resources. From the applications and their content will be determined the likely demand not only as regards the provider but also the listener.
Baroness Young: I thank my noble friend for that response. I fully appreciate the point that he makes about Clause 91 and the audience research. However, can he confirm that it has been decided to establish two channels before the audience research has taken place? Can he further say whether he is satisfied that, before the research is carried out, companies will bid for the licence in the belief that they will be able to make it pay?
Earl Ferrers: My noble friend is right in saying that two categories of broadcasting have been allowed for. One is a speech-based service and the other is non-pop. That is because we did not want all three national radio services to be allocated to the category where the profitability is likely to be greatest; that is non-stop pop, or pop as a whole. Therefore, it was decided that one broadcasting category should be non-pop and another speech-based. We hope that the full range will be covered by the three systems.
Baroness Young: I shall read carefully my noble friend's reply. I am not absolutely sure that he has answered my point. I accept the importance of diversity as regards radio and I have no reason to think that others do not, because it is a valid point. Clearly, the question is how that will be determined. I do not wish to pursue the matter further this afternoon and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bonham-Carter Lord Bonham-Carter moved Amendment No. 266:
Page 76, line 40, after ("provided") insert ("which shall be the same as an equivalent national service provided by the BBC").
The noble Lord said: I do not understand why the amendment is grouped with Amendment No. 267, which relates to a different topic. I shall speak to my amendment and I have no doubt that my noble friend Lord Thomson and the noble Baroness, Lady Birk, will speak to Amendment No. 267.
Amendment No. 266 contains a relatively simple but important point. It seeks to provide that the authority has a duty to ensure that national services are what they claim to be; that is to say, national. We have raised the issue because in another place the then Minister of State indicated that under this Bill the national services would not be expected to cover more than 70 per cent. of the country. That is not a satisfactory state of affairs. The fact that 30 per cent. of the country would not be covered by services which
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claim to be national is deeply unsatisfactory. That is what happens if one allocates on a purely financial auctioning basis services that have been regarded as public. In that process the nation becomes smaller and 30 per cent. of it will be left out because it is not lucrative.
The Minister indicated that the transmission costs will be too high. I suppose that the noble Earl will reply that they will be looked after by the BBC. Therefore, we shall return to the position that we had yesterday and on Monday. We shall be told that when any person is neglected and any service is not provided the BBC, so beloved by the noble Lord, Lord Wyatt, and others, will pick up the tabs and do the job which the commercial companies are not prepared to undertake. That is deplorable.
Unless the amendment is accepted the Government will allow a company to run a service in competition with local radio and with much greater rewards at its disposal. It will not have to pay the costs nor will it have to carry out the obligations involved in running what we on these Benches would call a national service.
I hope very much that the noble Earl will feel able to consider this point in the same way that yesterday he kindly said that he would consider the point brought to his attention by my noble friend Lord Thomson of Monifieth in connection with the pricing policy for rural local stations in difficult terrain. This is the same kind of point. Either the cost paid by the successful bidder must be reduced or some assistance must be given so that a national radio station covers, broadly speaking, the nation; and certainly an omission of 30 per cent. seems to me to be too high. I beg to move.
3.30 p.m.
Lord Ardwick: I wish to support Amendment No. 266. Like the noble Lord, Lord Bonham-Carter, I do not see what connection that amendment has with Amendment No. 267 except its geographical contiguity. That seems to me to be a rather odd method of grouping amendments.
This amendment ensures that the new national radio services have the same universal transmission coverage as the equivalent BBC national services. Without this amendment it is possible that, like Channel 5, the independent national radio channels could have a limited coverage because of the heavy transmission costs of providing a truly national service.
If the national radio services are expected to compete directly with BBC services, they should not be allowed to escape from the public service obligation of universal coverage. If they do not have to provide a national coverage, then the outlying areas in Wales and Scotland, particularly the south west, would not be able to receive the new services. For reasons of geography and terrain, in rural Highland and Island areas, transmission is costly and listeners are fewer and more scattered. Such areas are more vulnerable.
We believe that national commercial services should be equally available to all and that no one

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should be disadvantaged purely by reasons of geography. Therefore, the amendment ensures that such services are specifically required to match the universal or near universal coverage of equivalent BBC services. That would ensure that real choice in radio is available to all citizens of the United Kingdom.
Earl Ferrers: I thought I detected a minor flutter of irritation from the noble Lord, Lord Bonham-Carter, and the noble Lord, Lord Ardwick, because Amendments Nos. 266 and 267 are grouped together. As they have spoken only to Amendment No. 266, I am content to do the same. Nothing pleases me more than to make them happy.
I thought that the noble Lord, Lord Bonham-Carter, was rather hard on commercial radio. He said that commercial radio would not be prepared to go to the trouble of broadcasting to 100 per cent. of the population. Clause 93(2) aims to strike a balance between securing sufficient coverage to justify the use of a scarce national resource and limiting the demands which this coverage would make so that the operators have a reasonable chance of running a viable service.
We must remember that the BBC has been building a number of new transmitters each year for many years, as a result of which a near universal coverage has been achieved. It would not be remotely feasible for a new operation to match that coverage from day one and it would certainly delay arrival on the air while the network was being built. That is why Clause 100 recognises that coverage might reasonably be expected to grow over a period. It allows the authority to require such growth where it considers it reasonably practicable.
The main point is that if we were to impose what is commonly known as a universality requirement on independent national radio stations comparable to that for the BBC, the likelihood is that we would kill them off at birth. In the case of the new FM service, in particular, universality would not be economically viable and would use up a large number of allocations within the national network which could otherwise be used for community radio. The position is not quite the same in the case of the two AM networks because those are being taken from the BBC. However, there may well be options for using some of the frequency allocations which are designed to improve the night-time reception of the services or for community radio. It does not follow that the new operators should necessarily be burdened with the full transmission obligations borne by the BBC.
The Radio Authority is now turning to the complex question of possible coverage planning for the new national networks. It is likely to be reasonable to expect each of the three new services to attain at least 80 per cent. coverage. However, at this stage we should not seek to anticipate the authority's judgment as to whether a higher minimum would be compatible with Clause 93(2).
The position is that 70 or 80 per cent. would be covered from about 15 different sites. To attain 100 per cent., large numbers of relay transmitters would
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have to be installed and some might reach only a very few people. Once one is in the area of 90 per cent. coverage, the cost of ensuring that the last small percentage of people are covered becomes quite over-burdening. If the noble Lord seeks to pursue his argument, that would make commercial radio inoperable and non-viable from the start.
Lord Bonham-Carter: I thank the noble Earl for agreeing to treat this amendment separately from the subsequent amendment. That makes sense. I am grateful that he has said that although coverage will not be any higher than is suggested on day one—and I agree with the noble Earl that you cannot expect to have 100 per cent. coverage on day one—it is hoped that in the course of time it will be the aim of the so-called national services to achieve national percentages which are higher than 80 per cent. I imagine that with the advances in technology that will be made easier and cheaper. However, it is important that that should not be left entirely to the commercial judgment of the Radio Authority and that that objective of maximum coverage should be made clear to those bidding as the objective for which they should aim.
Having said that, I do not propose to press this amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Thomson of Monifieth Lord Thomson of Monifieth moved Amendment No. 267:
Page 77, line 6, at end insert:
("( ) a programme schedule which shall act as an illustrative guideline, and which shall include an indication of the range of programmes which the Authority expect applicants to include in their programme services; and").
The noble Lord said: This amendment is similar to that moved at an earlier stage in our proceedings in relation to television contracts. It seeks to make a provision in relation to the new national radio contracts similar to that provided for television.
There is quite an important difference between the three new national television contracts and the various regional television contracts; namely, that the new national commercial television channels are a very important and major innovative development in British broadcasting. However, that is rather taking place on a blank sheet of paper.
We all welcomed the fact that the Government agreed that there should be broad specifications to distinguish one national broadcasting channel from another. One is to be predominantly speech and one of a non-pop kind, and presumably the third will be open to music of a more popular kind. So far, so good. However, it would be an advantage if the Radio Authority were to spell out matters in rather greater detail by asking those who apply for the ownership of the channels to provide a programme schedule and an illustration of the kind of programmes which they would provide. It is for the Radio Authority to set the broad parameters in order to ensure that in the public interest there is a reasonable diversity of subject matter between the three channels, and that therefore they genuinely broaden and enhance the range of taste available in this form of sound broadcasting.
I do not suggest anything very detailed; I do not suggest that the Radio Authority should seek to lay down in any great detail particular types of programmes. But in a broad way it should sketch out the character that each channel should have and the kind of programming one would expect from it. For example, it would be comparatively easy to have a speech channel that consisted largely of phone-ins, which is one of the cheapest forms of radio entertainment. There is a proper place for phone-ins, but one does not want an endless stream of them.
Presumably the formula for the speech channel would include a reasonable mix of quality news and current affairs together with phone-ins. It should also include a wide range of speech-based programming. It is that general distinctive character for each channel that we seek by this amendment. I beg to move.
Baroness Birk: I rise to support the amendment from these Benches. Although not explicitly on the face of the Bill, the ITC should be required to issue similar guidelines to applicants as is now the case with Channel 3. No doubt the Minister will argue that with regard to Channel 3 applicants the requirement is not on the face of the Bill; the difference is that with Channel 3 applicants there is a quality duty written in that is not written in here. Perhaps noble Lords who were here as late as some of us last night will remember that we divided the Committee on the question of quality. Unfortunately we lost the Division. Therefore quality is not defined in the Bill; it is not in this part of the Bill at all. It makes one think that the Government have something against the word "quality" which they are prolonging.
The amendment also implies that each service should offer a range or diversity of programmes, as the noble Lord, Lord Thomson, pointed out, in order to guarantee that the service is not exclusively popular music, news or current affairs. The idea is that the three national services will be speech: news and discussions; classical music with a light touch (that is the best way I can describe it)—it is not meant to be heavy classical music; and there will also be some kind of pop station.
Without clear guidelines it is likely that commercial pressures in the form of competition for audiences and revenue may force licence holders in the direction of lowest common denominator programming produced at minimum cost. Any kind of programming which is seen as potentially more expensive or less attractive to a mass audience is likely to be given a low priority. I do not say that that has to happen, and I hope that it does not happen. But in legislating for the future of broadcasting in this country it is our job to ensure that we make every effort to prevent those things which we all agree would be bad for broadcasting; in this case bad for radio.
That is why there should be at least a duty to provide an illustrative guideline. It is a mild and sensible amendment which we on these Benches heartily support.
3.45 p.m.
Lord Jenkins of Putney: If I may I should like to give a little Back Bench support to the amendment. It may generally be argued that a radio programme supported by advertising is necessarily and inevitably inferior to public service broadcasting. However, I suggest that that is not necessarily so. It has certainly been so in this country so far, but I should like to see the Bill make some attempt to raise the level of commercial broadcasting. On the whole it has been abysmally low.
For example, commercial radio in this country has not made the slightest attempt to match the BBC in any serious way. There has been no attempt to match the output of the BBC radio drama department. The department is remarkable and produces more plays than anybody else in this country; some are of good quality. The programmes have an audience of around 1 million. That figure is not to be despised. I am sure that many Members of the Committee and their families enjoy the BBC's output of radio drama. Is there any inherent reason why radio, because it is broadcasting at the expense of advertising, should not have such a programme? I venture to suggest not. Television manages it, and some pretty good material is produced from time to time.
I hope in answering the amendment that the noble Earl will say that more detailed information will be required from people putting forward programmes. We might wish them to state in greater detail what it is they intend to do before giving them a licence. I hope that that will be borne in mind, and that the authority responsible for giving a licence will not assume, "This is commercial so we do not have to bother about it. It is supported by advertising and will necessarily aim at a massive audience"; and that is the end of it. If that is said it will be a condemnation of the system as a whole.
If Members of the Committee think it is possible for broadcasting supported by advertising to produce good quality radio, a wide range of programmes and the kind of programmes I have mentioned, this is the time and the place to achieve it. I therefore support the amendment.
Earl Ferrers: We are speaking essentially of licences for national radio. Amendments were made in another place to the procedure for licensing the national services. That means that applicants will now have to offer some variety and be different from each other. I do not believe that the case for a statutory requirement to publish illustrative guidelines is the same as for Channel 3, as the noble Lord, Lord Thomson of Monifieth, agreed. The statutory requirement for Channel 3 is that it must cater for a wide variety of tastes and interests. The requirement for national radio in this part of the Bill is that there should be a variety of tastes and interests.
I have no doubt that the Radio Authority, when it advertises its licences, will indicate the minimum variety of programming elements which will be needed to satisfy the internal diversity test. In the case of two out of the three advertisements, it will state what is

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needed in order to satisfy the statutory programming categories; in other words, the non-pop and the speech-based categories, and to achieve sufficient difference from an existing service.
There is nothing in the Bill to preclude such guidance. There is no need to go further by referring, as the amendment does, to the provision of illustrative programming schedules. It would be difficult if we prescribed that.
The problem with the amendment is that there would be little for the guidelines to illustrate. The duty of the Radio Authority is simply to ensure that there is some variety—not a wide variety, but some variety—with a small number of extra ingredients. For instance, some news and current affairs, perhaps, on a predominantly non-pop music service. The authority cannot stipulate what the extra ingredients must be. But it can and must stipulate that there should be some extra ingredients. Therefore, I do not see how the guidelines would fit in.
In Clause 93(3)(a) (ii) the obligation is that any application must be accompanied by,
"the applicant's proposals for providing a service that would consist of a diversity of programmes calculated to appeal to a variety of tastes and interests".
In other words, if you wanted to put on a speech-based programme you could not have all speech because you have to accommodate a variety of interests. Equally, if it is to be all classical music with a light touch, as suggested by the noble Baroness, Lady Birk—that may be her interpretation and assuming that is correct—it does not mean that all the material has to be classical with a light touch; it must appeal to a wide variety of tastes and interests.
It will be part of the applicant's application to say what he intends to do. The noble Lord, Lord Jenkins, was rightly concerned about that. When an applicant makes his application he will say what he intends to do if he is granted a licence. If he is granted a licence the intentions outlined in his application will form part of the licence. In other words, he will be held to transmitting the intentions contained in his application.
Therefore, I believe that it is better to leave it to the Radio Authority to make the judgment. It would be difficult for the authority to say, "In this licence, or another licence, we shall stipulate the variety of programmes that are to be made". It is up to the applicant to propose what the variety should be, and, if his application is successful, that will form part of his licence.
Baroness Birk: Before the noble Earl sits down, perhaps I may put this point to him, because there is one aspect that I do not understand. He twice asked what could be put in the illustrative guidelines. All we are saying is that they should indicate the range of programmes that the authority feels should be transmitted. It is all very well starting with an open mind but the authority cannot start with a completely blank mind.
Earl Ferrers: It is all a matter of approach. The noble Baroness believes that the Radio Authority
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should state what is expected should be transmitted. We are saying that the Radio Authority must ensure that there is a range of interests. It is up to each applicant to say how he proposes to interpret that. It would be wrong for the Radio Authority to indicate in advance what is expected—how many hours of a certain type of programming should be broadcast. The authority wants to find out how the various applicants intend to interpret this part of the Bill and will then choose the most suitable. Once that has been done, what the applicant puts forward on his application form will be part of his licence.
Lord Thomson of Monifieth: It is a matter of degree as to how far the Radio Authority should be expected to go in setting out the formula for the various channels. Clearly, we differ across the Floor of the Committee on how far one should go. Nevertheless, we are grateful to the noble Earl for giving such a closely argued response to our proposals. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Ferrers Earl Ferrers moved Amendment No. 268:
Page 77, line 10, leave out from beginning to ("and") in line 12.
The noble Earl said: I spoke to this amendment with Amendment No. 109. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 269 to 271 not moved.]
On Question, Whether Clause 93, as amended, shall stand part of the Bill?
Lord Winstanley: Perhaps I may use this opportunity to ask the noble Earl a simple and straightforward question. Am I right in my reading of Clause 93, and subsequent clauses which relate to it, that there is nothing in the clause that requires all three national stations to be based in London? I take the view that if we are to have three national radio stations at least one of them should be somewhere in the provinces or regions and not in London. Am I right in my understanding that the clause permits that?
Earl Ferrers: The noble Lord, Lord Winstanley, is perfectly right. It does not matter where the headquarters of any of the licensed operators exist because they will be connected to a network and therefore their position is relatively irrelevant.
Clause 93, as amended, agreed to.
Lord Reay: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Defence: "Options for Change"
3.55 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, I shall now repeat a Statement being made in another

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place this afternoon by my right honourable friend the Secretary of State for Defence. The Statement is as follows:
"In the defence debate last month, I set out the basis on which we have been considering options for change in defence. I should now like to advise the House of the broad proposals that we are considering and on which we will now be consulting with the NATO authorities and our allies, with the defence industries and, most importantly, with all those directly affected in the Armed Forces and the MoD's civilian staff. My Statement today follows the publication this morning of a valuable report from the Select Committee on Defence on the defence implications of recent events in Eastern Europe and the Soviet Union.
"The Declaration issued at the NATO Summit meeting here in London earlier this month said:
'Europe has entered a new, promising era … This alliance must and will adapt'.
"The Options for Change have identified the ways in which our forces might be restructured by the mid-1990s in the light of these developments. The pace of change will depend upon the signature and implementation of a CFE agreement, and on how quickly Soviet troops leave Eastern Europe and other Soviet forces are run down. The precise shape of our contributions to NATO must reflect discussions yet to come with the NATO authorities and with our allies.
"In the options for change studies, we have sought to devise a structure for our regular forces appropriate to the new security situation and meeting our essential peacetime operational needs. The framework we have provided would be reinforced in a period of tension by drawing on volunteer reserves and reservists, who will have an important role to play. We have also allowed for the possible need to build back up our forces over a longer period should international circumstances ever require us to do so.
"There clearly are opportunities but also risks in Europe; and elsewhere some worrying trends—not least the proliferation of sophisticated weapons systems. We shall therefore continue to need a robust defence capability as our insurance against the unexpected. Our Armed Forces, albeit at lower levels, will be as important a safeguard for our country in the future as they have been in the past.
"Our proposals will bring savings and a reduction in the share of GDP taken by defence. We need force levels which we can afford and which can realistically be manned, given demographic pressures in the 1990s. The aim is smaller forces, better equipped, properly trained and housed, and well motivated. They will need to be flexible and mobile and able to contribute both in NATO and, if necessary, elsewhere.
"What I now have to put before this House are some proposals for change and some elements that will not change. We shall retain our strategic
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deterrent with a four-boat Trident force. In accordance with NATO policy for an appropriate mix of nuclear and conventional forces, based in Europe, we shall also need a substrategic force of dual-capable Tornados with a stand-off missile.
"We must also continue to ensure the effective defence of the United Kingdom itself. A comprehensive air defence capability will still be essential, although with a smaller fighter force than had been planned. The UK fighter force would be held at seven squadrons of air-defence Tornados, supplemented by armed Hawks, and the remaining two Phantom squadrons would be withdrawn. We plan to retain at about present levels our home defence forces and our capability to deal with hostile mine-laying in home waters. We shall sustain our contribution in support of the police in Northern Ireland. For as long as they are needed, we will provide forces for our dependent territories and other overseas responsibilities in the Falklands, Cyprus, Gibraltar, Belize and—until 1997—Hong Kong.
"We will continue to play our full part in the defence of Europe. We will continue to deploy forces in Germany alongside our German and other allies, a contribution which is, I know, warmly welcomed by the German Government. We envisage that, in the changed circumstances of the mid-1990s, our stationed forces could be roughly half their present strength. When reinforced from the United Kingdom our army contribution could comprise of the order of two divisions, rather than four as at present. Our contribution will need to be shaped with that of our allies to fit the new force structures which we expect to see in the central region.
"We expect to reduce the RAF presence in Germany from four bases to two. We envisage retaining Harrier and helicopter forces there. As Germany takes on the air-policing responsibility for its territory, we would envisage phasing out our air defence contribution. We envisage maintaining six squadrons of Tornado aircraft in Germany and the UK with nuclear and conventional roles in Europe. The two variants of Tornado will provide the backbone of the future Royal Air Force. Aircraft not deployed in peacetime will be retained for use should we need to build back up our capability.
"In view of Chancellor Kohl's request that troops of the three Western powers should stay in Berlin as long as Soviet forces are in the present GDR, we envisage continuing to contribute to an allied presence, including an RAF contingent, for this period in Berlin.
"We intend to retain an amphibious capability in the longer term, whose roles include reinforcement of NATO's northern region. We shall also maintain an air contribution to the defence of the northern region; but we are looking again at the future requirement for the United Kingdom mobile force.

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"Elsewhere in our maritime contribution, we need to take account of the decline in the size of the Soviet navy but also of its continuing modernisation, especially with new classes of submarine. We propose to maintain three carriers, update their Sea Harrier aircraft, and, subject to satisfactory progress, proceed with the EH101 helicopter programme. I would envisage a future destroyer-frigate force of around 40 ships. The reduction would be achieved by paying off older, less capable ships. In addition to Trident, we envisage a future submarine force of about 16 boats of which three-quarters would be nuclear powered. We see the Buccaneer force in the anti-ship role being replaced by dual-capable Tornados redeployed from Germany and re-equipped with Sea Eagle missiles. There would be a small reduction in Nimrod numbers.
"A capability for other contingencies would be provided by establishing a strategic reserve division bringing together amphibious, parachute, air-mobile and armoured formations with roles also in Europe or in national defence.
"Mr. Speaker, I have described how we now see the Armed Forces evolving in the period to 1995. These proposals are now for further study and consultation with NATO and our Brussels treaty partners. When we are able to take final decisions will depend on many factors, not least progress in the autumn on CFE, a successful outcome to the two plus four talks, a clear timetable for Soviet withdrawals from Europe, and the pace of discussions with our allies on the evolution of NATO strategy and operational concepts. We shall want in particular fully to consult the German Government over changes in our deployments there. We shall aim to move in an orderly and properly planned way to our new force structure, after the consultations I have described and when the necessary conditions have been met. We shall at the same time be conducting a detailed scrutiny of our equipment plans, including our research and development effort, to ensure that they would be in keeping with our changed requirements.
"Work remains to be done on detailed force structures and on changes in the support area, where we will be looking for substantial savings, before we can clarify the implications for individual units. We envisage in broad terms by the mid-1990s a regular Army of around 120,000, Royal Navy-Royal Marines of around 60,000 and a Royal Air Force of around 75,000. On this basis the overall reduction in regular service manpower would be around 18 per cent. We expect our civilian numbers to be similarly reduced. The volunteer reserves will continue to play a key role, and we wish Lo consider the appropriate numbers for the future, having regard to our needs and realistic levels of recruitment and retention.
"There will now be further work on the detailed implications of these broad proposals. Their cost will of course be within the expenditure plans published in the last public expenditure White
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Paper. Revised figures for defence expenditure will be announced as part of the Government's decisions on the total public expenditure programme in the Chancellor of the Exchequer's Autumn Statement. In respect of the current year the House is aware that I am taking steps to constrain spending within the agreed provision. Announcements have been made on aircraft. Consistent with our longer-terms plans we shall be easing back on army recruiting and retiring early several ships and submarines, and making some other short-term changes to the programme which will be announced shortly.
"This country has owed a great debt to its armed services throughout its history. Their abilities and professionalism are not something that can be lightly discarded and then easily recalled when they may suddenly be needed. We have a duty to tell them what we believe the future is likely to hold for them at a time when the pace and scale of events in Europe offer real opportunities for change.
"We believe that the new force structures we envisage can give us strong and reliable defences, in changing circumstances, and at an affordable cost. Our proposals provide for us to continue to make a major contribution to the North Atlantic alliance as it adapts to the changes that its resolution and cohesion have done so much to make possible.
"It is a time of opportunity and hope for change yet without putting at risk the safe protection of our country nor neglecting fair consideration of those whose task that is. Our aim is an orderly and planned transition to the new world now unfolding and I commend it to the House".
My Lords, that concludes the Statement.
4.8 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Earl the Minister for repeating the Statement made in another place. It is a very long Statement. I hope that your Lordships will forgive me if I make only one or two points; obviously, we need to read and digest its contents.
Generally, we welcome the Statement. It is much more detailed than we expected and it contains some important information. I refer to our recent debate. The Statement amounts to a defence review, in other words, a radical reshaping of Britain's defence posture, possibly for the first time since the Second World War.
We are glad that the Statement is not dominated by exclusively financial considerations. There has been a worry that, with mounting inflation and cuts in public expenditure, the Ministry of Defence would be compelled to put our security at risk for that reason. The Statement recognises the fact—we must call it the fact—of the withdrawal of Soviet forces from Eastern Germany. For the first time, so far as I am aware, there is recognition of the fact that Soviet naval strength is falling. We welcome that recognition by the Government.

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As a general comment, the Statement has to be judged by its effect on the morale of the Armed Forces. We wholly support the Statement where it says—I shall repeat it because it is important—that,
"this country has owed a great debt to its Armed Services throughout its history. Their abilities and professionalism are not something that can be lightly discarded and then easily recalled when they may suddenly be needed".
We wholly support that part of the Statement.
How does the Statement contribute to the maintenance of the Armed Forces' morale? That is the vital point as we go into a transitional period: we all know that it is a transitional period. How do we avoid damage to the Armed Forces' morale when we know that those forces are to be reduced? Nothing is worse than for an officer cadet at Sandhurst or even a corporal in training to know that in five years' time he will not have a job. We should like the Government to be more specific. I hope that the noble Earl will be able to give an assurance that the next instalment of what is a fundamental defence review will be in the form of a Green Paper or a White Paper in the autumn so that noble Lords will have a chance to debate fully what needs to be debated.
In coming to its conclusions on the costings, has the Ministry of Defence adopted a rate of inflation that would be considered reasonable in the light of the Chancellor of the Exchequer's remarks yesterday? Your Lordships will be aware that in the defence budget of £21 billion, somewhere between 40 per cent. and 45 per cent.—I do not have the exact figure but no doubt the noble Earl will be able to provide it—is spent on personnel. If inflation is rising at 10 per cent. per annum, which may well be so at the moment, and if it continues to rise, this will mean a quite inordinate increase in the defence budget over the years. That is rather difficult to reconcile with the idea of a peace dividend, a subject to which I shall return later.
What arrangements do the Government envisage—I recognise that these are early days—in the way of retraining those in the Armed Forces who will inevitably be made, in the classic sense of the word, redundant? Recruitment freezes and natural wastage are the worst ways of developing the kind of armed forces that this country requires because the best people go first. We have to make sure that the good people stay, that good people are recruited and that other people who are perhaps not so good or perhaps have skills which are not required are made satisfactorily redundant and are retrained to face their future in civilian life.
What is the future of the European fighter aircraft? That is not mentioned in the Statement. I should be grateful if the noble Earl could give us his views. That links in to a much more important and general question. What is to be the future of our defence industries? Let us assume that the CFE-1 negotiations are completed successfully and that the CFE-2 negotiations go forward as the NATO summit wished. What the noble Earl is saying is that our defence industries will have to adapt to a new life and that procurement will be much lower. There is even talk of
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the defence budget being halved in real terms by 1995. Do the Government accept that there is a governmental responsibility to ensure that that rundown and that adaptation to civilian manufacturing are properly planned? What measures do the Government envisage to ensure that?
Will the noble Earl confirm that there is no intention of expanding out of area capability and that we have ceased to be the policemen of the world? We cannot afford to be the policemen of the world. I should like confirmation that it is not intended to expand that capability.
There has been a great deal of talk about the peace dividend. That dividend will largely be absorbed over the next few years by the reorganisation of the armed forces into smaller and better equipped units. However, with good fortune, and assuming that the CFE-2 talks are successful, there should be a substantial peace dividend in the late 1990s. It is important that the dividend should be applied to ensuring the proper conversion of our defence industries to civilian purposes, the retraining of our Armed Forces personnel who have to face civilian life, and the general reconstruction of our manufacturing base. On no account should it be frittered away, as North Sea oil has been frittered away, on inflationary consumer booms. We look to the Government to give us an assurance that this great section of our manufacturing industry, which at the moment is involved in defence, will be properly converted to civilian purposes and that the Armed Forces which have served us so well, as the noble Earl said, will not be let down when they are asked, as many of them will be, to enter civilian life.
Lord Mayhew: My Lords, on these Benches we thank the Minister for repeating the Statement, and associate ourselves with the warm and well deserved tribute that he paid to the Armed Services. I wish that I could be as complimentary about the Statement as the Opposition Front Bench. Possibly because on these Benches we do not have to live down a long record of lunacy on defence matters, we feel freer to criticise what is now put before us. The fact is that, in the light of the extraordinary changes in Europe, of the collapse of the Warsaw Pact, of the withdrawal of Soviet troops, of the announcement of very great reductions in the German armed forces and of American forces in Europe, a reduction of 18 per cent. in overall manpower over five years is extremely modest. It is too modest. Why have the Government turned down proposals for a faster run-down—for example, the proposals made by the Minister of State for Defence Procurement? Was it because of the practical difficulties of the run-down, or was it because of worries about the remaining threats in Europe? I should be grateful to the noble Earl if he could answer that specific question.
My noble friends and I accept the need set out in the Statement to retain a four-boat strategic deterrent, though we are disappointed that there appears to be no effort to discuss with the French the possibility of Anglo-French nuclear co-operation. We see no defence requirement for the tactical air-to-surface

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missile outlined in the Statement. We see no requirement for it, nor do we think any other European NATO government think other than we do.
I should like to ask the Minister about paragraph 15 of the Statement. It refers to a capability for other contingencies, a capability—quite a substantial one: a strategic reserve—distinct from the role in Europe, or in national defence or our well known, familiar, specific British commitments. What are these contingencies? Will the noble Earl tell us what they are? Why should we now take on apparently new tasks and new responsibilities? What has happened in Europe to make any out-of-area responsibilities more necessary than they were before? I should be grateful for some reassurance on that point.
I turn now to the naval paragraphs in the Statement. We are all aware that although the Soviet fleet is becoming smaller, it is nevertheless becoming more modern. On these Benches we see no reason why naval forces should not be introduced into the disarmament process. The only people to oppose it are those in NATO. The Russians want it, but NATO refuses it under the particular leadership of the Prime Minister. That certainly was the case at the recent NATO summit. Perhaps the noble Earl will explain why we refused to allow naval arms to be included in the disarmament process.
Finally, I come to a point upon which I agree with the noble Lord, Lord Williams of Elvel. In my view we must have a proper audit debate on these proposals. The Government must not take decisions on such matters independently of Parliament. In this connection, I am not reassured by paragraph 1 in which the Government promise to consult the NATO authorities and our allies, the defence industries and all those affected in the Armed Forces and the MoD's civilian staff. There is no mention of future consultation with Parliament and no mention of a White Paper or a Green Paper. However, these are important matters. I believe that a debate on the subject would show that the announcements in the Government's Statement today, and such decisions as they have taken, are too limited and are likely to be overtaken very soon by events.
The Earl of Arran: My Lords, I thank both noble Lords for their comments and for the questions which they raised on the Statement. The noble Lord, Lord Williams of Elvel, was somewhat more generous than the noble Lord, Lord Mayhew. Perhaps I may deal first with the questions raised by the noble Lord, Lord Williams of Elvel, upon which I think I can be helpful. He said that he was glad about the Statement and welcomed overall some of its aspects. He said that it was a long Statement. It is indeed a long Statement. However, there has been much to announce and there will be much more to announce at a later date. He went on to say he was delighted that the Soviet's navy strength was falling. That may be true, but whereas the numbers may be falling the quality is certainly improving.
The noble Lord, Lord Williams of Elvel, made a most important point about the morale of the Armed Forces. That is one of the most important reasons why
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we decided to make the Statement this afternoon before the Summer Recess. We realised that there was a certain amount of uncertainty as to the direction in which we were moving.
I have visited many units during the past year and I have found that morale and spirits are very high among members of our Armed Forces. I think that the release of the Statement will come as a great relief to them. As I have already said, a great deal of further work remains to be carried out during the summer and autumn, but further final decisions will depend upon progress in CFE and the outcome of the two plus four discussions with allies on military strategy. Further announcements will follow when all that is complete. The announcements made today show the direction in which we are moving and, if I may say so, scotch the wild rumours which we have seen recently in newspaper reports. They indicate a much clearer future for our excellent Armed Forces.
The next point mentioned by the noble Lord, Lord Williams of Elvel, concerned retraining for those who may be made redundant in the future. I must stress that we hope there will be as few redundancies as possible. As regards retraining, that aspect of the matter will be under consideration in the future. The noble Lord also asked about the EFA, the European fighter aircraft. I should tell him that we see a continuing need for the aircraft.
The noble Lord, Lord Williams, asked also about the defence industries. I can say again, as I have said many times in this House and as the Statement also says, that we aim to inform, consult and make proposals to the defence industries. Therefore, it will be a matter of ongoing discussions. However, as regards the future—what they wish to do and what their direction will be—that must be a matter for them to decide, in conjunction with their workforce, while at the same time considering the best way forward for their shareholders.
The noble Lord also mentioned the out of area capability. I must forcefully say again that the world in which we live is an uncertain place. Therefore, we want to organise four brigades with NATO or home defence roles so as to provide, if required, a self-contained division-size force either for use in Europe or for tasks outside NATO.
I shall deal now with the points raised by the noble Lord, Lord Williams of Elvel, concerning the reasonable rate of inflation. We have made sensible and adequate provision for the effect of general inflation on the defence programme. He also mentioned, as perhaps will other noble Lords, the peace dividend. We cannot answer that question until the further work and consultation referred to in the Statement has been completed. We need to cost the proposals in detail and then consider the defence programme as a whole.
As I said, the noble Lord, Lord Mayhew, was not quite as generous about the Government's Statement. He asked particularly why it was that we had not taken a more radical step. I can tell him that we have most certainly taken a radical look at the matter, but

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not an irresponsible one. Some capabilities remain central to our security and cannot be eliminated. We decided on balance that the international situation justifies retention of a wide range of capable forces and that we should continue to contribute to all our current NATO roles, albeit at lower levels in some cases. We aim to retain all capabilities in militarily significant quantities and to make genuine contributions to the common defence commensurate with those of our allies.
The noble Lord, Lord Mayhew, also asked the same question about the out of area capabilities and responsibilities to which I replied in my answer to the noble Lord, Lord Williams of Elvel.
Lord Mayhew: My Lords, I trust that the noble Earl will forgive my intervention, but can he explain whether this is an increase in our provision for out of area capability?
The Earl of Arran: No, my Lords; it is not an increase in our out of area provision. However, it is something which will be constantly examined, as and when circumstances demand that this should be done.
The noble Lord also asked about maritime arms control. He asked why the West would not agree to include naval forces in negotiations. The answer is that the Soviets have agreed to the exclusion of naval forces from the CFE mandate because the huge imbalance in land forces in Europe is the main priority.
I trust that I have been able to answer most of the questions put to me by both noble Lords.
4.28 p.m.
Lord Boyd-Carpenter: My Lords, I hope my noble friend is aware that the House will be grateful to him for repeating this immensely important Statement. I should like to ask him one or two questions which arise from it. First, can he say whether the reduction in the army will involve the closing down or the abolition of any individual regiments and, if so, whether any decision has been taken as to which regiments will be involved? Further, is he aware that there is considerable anxiety in the army on this subject, especially in view of past history?
Secondly, my noble friend referred to some reduction in the numbers, although not in the strength, of the USSR's navy. Can he say why a country which consists of a large land mass with hardly any dependence on sea communications needs to maintain the very large navy which the USSR maintains, except for possible aggression?
Thirdly, will my noble friend say whether the Russian army, air force and chemical warfare establishment has been in any sense reduced as a result of the events of the past year, or whether it is continuing on the same scale? Is there any sign of reductions in the Soviet forces comparable in proportion to those that he has announced in respect of our own?
Finally, will my noble friend reassure the House that the Government will not forget the fact that twice
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in the lifetime of some of us the running down of our Armed Forces has brought this country to the edge of defeat?
The Earl of Arran: My Lords, I thank my noble friend for those remarks, particularly the last point to which I know that all noble Lords will pay particular attention.
My noble friend asked, first, a most important question concerning redundancies and the future of individual units. We intend to retain a spectrum of existing capabilities, but a good deal of detailed work must now be done on both concepts and organisation. It is too soon to comment on the implications for individual units, although there will necessarily be some reductions. However, as my honourable friend said in another place during a recent debate, although some reductions will be required, we remain totally committed to the regimental system, thereby combining the traditional, historic and essential esprit de corps that has served us so proudly over so many years.
As regards the possibility of the threat having gone away, we do not believe that the Soviet Union currently has any hostile intentions. However, it retains formidable military capabilities and will do so even after the implementation of the CFE. It is important to bear that point in mind.
Lord Mason of Barnsley: My Lords, as one who has carried out possibly the largest defence review ever held in peacetime, having negotiated the withdrawals from Mauritius, Singapore and Gan and negotiated the beginning of the withdrawals from Malta, let me say quite frankly to the House that there is no easy, quick peace dividend. That is tabloid sloganising.
Is the Minister aware that withdrawals and reductions must be a graduated process? The arms industries also need time for change. The services want to avoid turbulence and massive retirements. That is most important.
Is the Minister aware that there is still a need for substantial professional Armed Forces and that, although a major threat to our democracy has been mainly removed by the crumbling of the Communist empire, it is still unsettled in Eastern Europe and there is unease in other parts of the world where, within our own alliances and defence agreements, we may well be involved? There is obviously also a recognition that our Territorial Army Volunteer Reserve and auxiliary forces will become increasingly more important.
Is the Minister aware that we have reason to believe that our faith in NATO has been proved? We now hope that in its broadest sense—militarily, defensively and with a new political dimension in keeping with recent events—it may also give us a guarantee of peace in Europe for many years to come. However, is he also aware that it will have to remain vigilant? The Soviet Union still has a massive nuclear and conventional military capability and consequently we must remain on our guard.
Finally, is the Minister aware that reappraisals and armed force reductions take time? The options for change and defence savings are clearly there. The

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Minister referred to a possible 18 per cent. cut in service manpower and civilians, but I hope that it is done sensitively, cautiously and carefully. Is he aware that our Armed Forces must not be brutalised in that euphoria of a rush for a so-called peace dividend? In doing so, we might seriously impair the defence of the realm.
Noble Lords: Hear, hear!
The Earl of Arran: My Lords, that was a most magnificent contribution to the debate. I agree with absolutely every word that the noble Lord said.
Perhaps I may pick out some particular points. The noble Lord said that there is no easy, quick dividend, as I have told noble Lords. He said that withdrawals and reductions must be a graduated process. That will happen. He said that there is still a need for substantial professional Armed Forces. That is most certainly the case and will continue to be the case. He laid particular emphasis on the continuing need for the Territorial Army and reservists in the vital role that lies ahead of them. Finally, he said that it is at all times the responsibility and duty of this country to remain on its guard. I agree with the noble Lord and thank him for his comments.
Viscount Slim: My Lords, I take on board, like the noble Lord, Lord Mason, the figure of an 18 per cent. cut, in both military and civilian personnel. However, perhaps I may remind the noble Earl that it has been traditional, whichever government have been in power, that, when the axe comes down, it is the teeth arms within all three services that catch it. Perhaps the noble Earl has looked at the figure in the last White Paper regarding the size of the Ministry of Defence. Does he agree that, when planning the reconstruction, the same percentage, if not more, should also hold for the Ministry of Defence? That is a large establishment. Does he, agree that, if we are to have fewer forces, we can certainly cut the commands and the staff?
The Earl of Arran: My Lords, the noble Viscount, Lord Slim, is interesting to hear on that point. As regards the teeth versus tail plans for the support area, we are determined to reduce support at least in proportion to reduction in front line units. I make that point perfectly clear. Reductions in the Ministry of Defence and in the general support areas will also be commensurate with the front-line reductions. However, I should point out to the noble Viscount that many such reductions were carried out in the early 1980s.
Lord Ironside: My Lords, speaking as one with an industrial interest to declare, I think that industry will certainly want to give much more study to the Statement that has been made. Nothing precise can be said at the moment.
However, I am glad that my noble friend was able to say what he said about the long-term future of the Navy and the aim to keep it as modern and as well equipped as possible. If it is to be a 40-frigate Navy, I hope that it will not slip into a 39-frigate Navy, as the present frigate size has slipped from 50 to fewer than 50.
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I welcome the reductions being achieved through natural wastage and scrapping of ships after completing their life. However, will my noble friend confirm whether orders and start dates for warships, which are in place at the moment, will stay in place? On the question of naval forces reduction, is he aware that there are long lead times on ship design and that the Russians are perhaps not ready to give up the high quality of warship design that they have achieved? Is that not probably one of the reasons why they do not wish to enter into a naval forces reduction?
The Earl of Arran: My Lords, the last point made by my noble friend is probably not quite right. Both the super-powers—Russia and America—agreed that they would not enter into maritime talks. My noble friend asked about the approximately 40 frigates and destroyers. As I said at the beginning of the Statement, all these proposals are up for consultation and general information. That also goes for my noble friend's points about orders staying in place for frigates and destroyers. I take his point about naval force reductions.
4.40 p.m.
Lord Elton: My Lords, in the promised consideration of the numbers of the volunteer reserve forces which my right honourable friend has proposed, will my noble friend ask him to bear three points in mind? The first is that the wind-down in regular forces will provide automatically a source of vehicles and equipment suitable for equipping and training the reserves. Secondly, the wind-down in personnel in the regular teeth arms will provide a highly professional source of cadre and permanent staff for territorial and other reserve formations.
Finally, and perhaps rather more originally, will my right honourable friend bear in mind that the training of young people in the volunteer reserve forces is an admirable means of character formation for our young people? At present, that is in very short supply. We should welcome an expansion of it for social as well as military reasons.
The Earl of Arran: My Lords, I certainly agree with the last point that my noble friend made. I can tell him out of interest that yesterday I visited some members of the ACS at Crowborough. I found them a most impressive unit of young men and women aged between 13 and 18. Not only did some of them wish to play a part in the Armed Forces later, but as my noble friend said, they make a most admirable contribution to the local community. That is a point that we shall bear in mind.
I also take my noble friend's points about the TA, and training and equipment. I assure him that we shall look closely at it in the months that lie ahead. I am glad to see that your Lordships are already starting to make proposals for the future. I know that my right honourable friend the Secretary of State will find that most helpful.
Lord Kennet: My Lords, I have two questions to put to the noble Earl, concerning the future of nuclear weapons in the British forces. That is, the future of American-made nuclear weapons in the hands of

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British forces. The first question concerns TASM. The Statement mentioned the Tornados and other RAF formations whizzing about the globe with considerable speed, coming back from Germany and going to Germany. It was rather hard to follow. I note that in the report of the House of Commons Defence Committee, published this morning, the committee has this to say in paragraph 68 about TASM:
"The deployment of a new sub-strategic nuclear weapon system, even if replacing an existing one, could be interpreted as a hostile gesture in the current climate of arms control and the relaxation of military tensions … There is no evident urgency to deploy a nuclear-armed TASM: rather the opposite".
Can the noble Earl make clear whether the Statement he has just read alters the hitherto declared intention of the Government to acquire an American-built nuclear system for that purpose?
My second question is about the future of the strategic deterrent, the four boats. Paragraph 86 of the same report from the House of Commons Defence Committee states:
"the prospect of speedy progress in START negotiations, and of a second round of START, again raises the possibility of the UK nuclear deterrent being affected by future negotiations, either now, or as a result of Soviet attempts to curb future transfer by the US to the UK of strategic weapon systems".
To my knowledge, that is the first statement ever to have come from a responsible body controlled by the Government party, admitting the existence of such a possibility. Nevertheless, in the Statement this afternoon the Government stated boldly that they would maintain the four-boat strategic deterrent, as always. Have the Government now taken into account the possibility outlined by the House of Commons Defence Committee in the paragraph that I have just read?
The Earl of Arran: My Lords, we have not had time to consider this aspect in the report of the House of Commons Defence Committee. It was published today, I think I am right in saying, and we have not had time to look at it carefully. However the policy of the four-boat system will continue.
Regarding tactical air to surface missiles, TASM, which the noble Lord mentioned, there is no change to the United Kingdom position on it. NATO has identified the requirement for TASM. The replacement of the United Kingdom's WE-177 free-fall nuclear bomb will allow penetration of improved Soviet air defences. The WE-177 is likely to reach the end of service life towards the end of the century. The United Kingdom continues to study options for replacement.
Regarding the United States and French options under consideration for the United Kingdom TASM, the Government are not prepared to comment on individual options under consideration. That makes some points in rejoinder to the noble Lord's question.
Lord Cledwyn of Penrhos: My Lords, I am sure that the whole House agrees that this important Statement deserves a full debate in the House in due course. There is no hope that we shall have a debate this side
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of the Recess and it may well be that the Government will choose the opportunity of the debate on the Address for that purpose. However, we cannot expect that until November. The subject should be discussed between the usual channels between now and 8th October.
However, my noble friend Lord Williams suggested a Green Paper or a White Paper might be published. That would be extremely helpful in advance of a debate. We might then have a full government Statement in a suitable paper, especially as the Statement said that further discussions are to take place between the Government and our NATO partners on this. Perhaps the noble Lord can tell the House whether there is a possibility that such a paper will be available in due course, certainly before a debate.
The Earl of Arran: My Lords, I can say to the noble Lord the Leader of the Opposition that the way ahead for further discussion on defence has not yet been determined by my right honourable friend the Secretary of State. At the moment we are about to enter into discussions with our NATO allies. We shall consult far and wide. For the future, the exact way in which more information will be divulged is not entirely known. I understand and will pass on the comments of the noble Lord the Leader of the Opposition to my right honourable friend the Secretary of State.

Broadcasting Bill
4.47 p.m.
House again in Committee.
Clause 94 [Procedure to be followed by Authority in connection with consideration of application for national licences]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 272 and 273:
Page 78, line 29, at end insert ("and").
Page 78, line 33, leave out from ("force") to end of line 35.
The noble Viscount said: Amendments Nos. 272 and 273 were spoken to with Amendment No. 109. I beg to move them both en bloc.
On Question, amendments agreed to.
Baroness Birk Baroness Birk moved Amendment No. 274:
Page 78, line 35, at end insert:
("(cc) where the proposed service consists wholly or mainly in the broadcasting of music, that a sufficient amount of time is given to the broadcasting of live music.").
The noble Baroness said: The amendment concerns the amount of live music which is to be broadcast on the radio. When the independent local radio system was first introduced in the early 1970s, the then Conservative Government were persuaded that the new stations should have an obligation to provide employment in music, since it was recognised that gramophone recordings of music would be a substantial proportion of the output. There was little likelihood that the commercial radio stations would provide much in the way of specially produced music.

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This obligation was therefore incorporated into franchise applications and radio stations that were given franchises entered into a commitment to spend not less than 3 per cent. of their net advertising revenue on the employment or engagement of musicians. This obligation has evidently worked well for both radio stations and musicians. On numerous occasions when radio stations have used the 3 per cent. obligation to sponsor live musical engagements, they have made a profit over and above the amount originally spent under the 3 per cent. obligation. Capital Radio, for instance, used the 3 per cent. allocation to sponsor the Wren Orchestra and its hugely acclaimed Capital Radio Jazz Festival. Even before the advent of the Broadcasting Bill, the lighter regulatory touch on radio has been apparent as the 3 per cent. commitment has not been enforced for the new radio stations such as Melody FM, Jazz FM and Kiss FM.
With the only restriction on the use of gramophone recordings being the cost of a Phonographic Performance Limited licence—PPL is the licensing arm of the British record industry—the new London-based 24 hours a day music stations such as Melody FM, and from September Kiss FM, rely totally on gramophone records for their music output. There is an exception with Jazz FM at present which broadcasts some live jazz performances. The three new national radio networks proposed under the Broadcasting Bill are likely to consist of two music-based channels. We discussed that matter earlier. Without any restrictions being imposed, they will almost certainly rely totally on recorded music for their output. That position is unfair to musicians. Further, the commercial pressures on the BBC as the public service broadcaster which at present provides proper employment for musicians and produces specially recorded music programmes will intensify as the commercial operators can be seen to obtain their music more cheaply. I believe that will have an unfortunate knock-on effect.
The commercial broadcasters are now making determined efforts to obtain records even more cheaply by continuing to press PPL for a reduction in its licence fee structure. The ordinary session musicians who perform on these records receive no further payment for their continued use on radio. They, not unnaturally, consider it grossly unfair that records made primarily for sale and supply to the public are now used 24 hours a day for supplying music on radio. They also consider it unjust that corporate businesses, for example the Hanson Trust which owns Melody FM, should seemingly exploit the musical performances of musicians without investing in their future. The Musicians' Union contends that a broad-based musical profession can only exist when musicians are given regular opportunities to perform. Broadcasting has always been such an outlet.
We must not forget the listeners. They also highly value and appreciate the original quality of live performances, whether of classical or popular music.
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This rich stream of music could be lost if economic considerations take priority over the choice of material used by the new services. I beg to move.
Lord Bonham-Carter: I wish to support the amendment which touches on an important problem. The other day we discussed the position of London as a centre of live musical performance. These radio stations are living off the skills and the work of musicians. In my view, they are gaining a short-term advantage if they do not consider that it is in their interests to employ the musicians in live performances. It is not a question of killing but rather of starving the goose that lays golden eggs for them in the shape of the substantial profits which the music stations make. Given the fact that the levy system which operated in the past has produced such admirable bodies as the Wren Orchestra, I consider it was an experiment that proved itself to be valuable and added to the cultural life of the nation. I hope therefore that the Government will look favourably upon the amendment.
Earl Ferrers: I can understand the anxiety of the noble Baroness and of the noble Lord, Lord Bonham-Carter, to try to help musical performers by their amendment. However, it would be too onerous a requirement to stipulate that a minimum amount of live music should be broadcast by music-based services. That could greatly increase their costs. Even in the case of the national services, this would be a prime example of jeopardising the development of new services by placing substantial and in some ways unnecessary burdens on them from the outset.
In the case of local music-based services, the requirement that is envisaged in the amendment would put pressure on applicants to make financially unviable proposals. I believe it was only yesterday that the Committee was concerned about the viability of local radio stations and commercial radio stations. If we try to place this kind of imposition upon them, it will give even more substance to the worries that have been expressed.
I believe the noble Lord, Lord Bonham-Carter, said that by using tapes or records, radio stations were exploiting musical performers. However, every time the music of an orchestra or individual is heard on the radio, that person or orchestra is publicised. Therefore there is a two-way traffic here. If we start to place these kinds of burden on commercial radio stations, which constitute a new enterprise, their costs will be increased enormously and they may become unviable.
Lord Jenkins of Putney: I should like to add a few words in support of the amendment that we are discussing. I believe it is the case that broadcasting or any reproduction of performance can be either an extremely good thing or completely destructive. I should give the example of the BBC whose contribution to music in this country has been tremendous. I do not think anyone would dispute the fact that the pre-eminence which this country now enjoys in the musical field is in no small degree due to the work of the BBC over the years, particularly in sound radio but also to some extent in television. The BBC has always recognised that it is not sufficient to

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broadcast performances which are recorded, and that the organisation that benefits from those performances has a duty to sustain the source of those performances. The BBC has fulfilled that obligation.
In this amendment we are suggesting that that obligation should equally be recognised in this new sphere. I should have thought that was a reasonable request. I do not believe that anything unreasonable has been suggested. The amendment does not stipulate how long a "sufficient amount of time" should be. However, it at least places some obligation upon an organisation. One of the reasons for the enormous hostility shown towards pirate radio stations is that they did not pay anything for the music that they pumped out. Pirate radio stations were entirely destructive regarding live music. Live music was the source of what those stations were transmitting.
I hope that the Minister will have another look at this matter. I hope he will consider that what the amendment proposes is not unreasonable, dogmatic or doctrinal. The amendment merely tries to ensure that the source of the material that is transmitted should not be ignored. Commercial radio is moving into a sphere of considerable importance and it ought to accept some of the obligations which its great competitor the BBC has always recognised.
5 p.m.
Lord Colwyn: Perhaps I may say a few words in support of my noble friend the Minister. The noble Baroness, Lady Birk, mentioned Jazz FM. I am a director of that company. It is our policy to use live music wherever possible. However, it is expensive. It is not cheap to record at live venues. It is more expensive than playing records.
The main debate on PPL and needle time will take place tomorrow but, by way of example, I remind the House that this country represents about 7 per cent. or 8 per cent. of the world record market, and the international record industry has been able to extract from the UK what could be in excess of 30 per cent. of all world broadcast royalties. That is something that we should like to put right at a later stage of the Bill.
Lord Airedale: It may be that one radio station cannot afford to employ live musicians just as one local newspaper cannot afford its own foreign correspondent in China. However, in the same way as newspapers share foreign correspondents, surely radio stations can share live musicians and overcome the problem in that way.
Earl Ferrers: That is an ingenious device. I do not understand how a local radio station operating in the South West can share a musician with a radio station operating in the North East.
Lord Airedale: They would share the cost of putting on a concert. That concert would be available to all of them, as recorded, to be broadcast. The fact that it was recorded when they broadcast it would not affect the position. They would have employed live musicians to provide the recording.
Earl Ferrers: The debate is becoming more convoluted. The noble Lord, Lord Airedale, said that it is perfectly acceptable to play music that is recorded provided that one has employed the musicians who recorded it in the first place.
The noble Lord, Lord Jenkins, said that there was nothing doctrinal about the requirement. I believe that it is doctrinal. One would be telling all new local, commercial and community radio stations that they must employ a certain number of live musicians. The noble Lord compared the situation with the BBC and said that the BBC had done an enormous amount for musicians. That is true, but for years the BBC had a monopoly of broadcasting and a licence fee to fall back on. With that licence fee it could afford to employ live musicians and orchestras. In this case we are talking about a multitude of new services—possibly 300 or so—all operating on different wavebands in small communities. Some may operate within a radius of five to 10 miles and others over longer distances. If this type of requirement is placed upon them, as my noble friend Lord Colwyn said, it will increase their costs enormously.
There was no point in noble Lords saying yesterday that they were very worried about how the radio stations would be viable if in the next breath they say that they have to employ live musicians, which would put up their costs.
Lord Winstanley: I believe that I am right in saying that the clause deals with national commercial radio and not with local commercial radio.
Earl Ferrers: That may well be so, but these new enterprises have to be allowed to get off the ground without being inhibited too greatly.
Lord Ardwick: The noble Lord has talked of the employment of musicians as if they were to be on the staff. The amendment does not say that; it refers to the broadcasting of live music. That is quite different from having an expensive resident orchestra.
Earl Ferrers: I quite see that. However, if the noble Lord, Lord Ardwick, were the licensee of a radio station and employed the London Symphony Orchestra he would find it very much more expensive than providing a tape.
Lord Ardwick: There is no need to go to such lengths. To employ four or five musicians occasionally would be sufficient. That would be live music. All my life, since the advent of the "talkies" when musicians lost their jobs in the cinemas, musicians have had a hard life. There are no rank-and-file musicians driving six-cylinder cars along Whitehall. It is a life that is fraught with difficulties. Musicians fall prey to physical difficulties which affect their limbs, and so on. One always has to have sympathy for them.
Earl Ferrers: I have enormous sympathy for them. The noble Lord, Lord Ardwick, is quite right to pursue their lobby on their behalf. However, there are two sides to the story. The introduction of such a requirement would be very expensive for the new organisations.
I come back to the point that every time music is played some form of royalty should be paid. I should

1479
be very surprised if there is no advantage to the players of the music because every time their music is played it is to their advantage.
Baroness Birk: It was unfair of the Minister to say in reply to my noble friend Lord Ardwick that he was quite right to pursue their lobby. It is not just a case of pursuing a lobby. It is true that the Musicians' Union is concerned about the situation, and with good reason. However, the objective is to protect live music so that we do not reach a situation in this country in which everything is recorded and there is no live music.
As has been pointed out, the amendment does not require that a specific amount of time should be devoted to live music. If the Minister was prepared to say that he would look at the matter again, I should be happy even to change the phrase "a sufficient amount of time" so that we keep the important element of live music in radio broadcasting. This is the time to do it—in this Bill. Otherwise are we to enter decades in which children will not have the opportunity to listen to live music and there will be no incentive for people to take up music as a profession? That would he a very bleak outlook.
If the Minister is not prepared to take the matter any further, then I shall have to ask leave to withdraw the amendment. I do not know whether he intends to stand up.
Earl Ferrers: As the noble Baroness was about to withdraw the amendment if I did not stand up, that gave me a very great incentive not to do so. Of course I shall take note of what the noble Baroness said. However, I really cannot give her any indication that I am likely to change my mind, even though I understand her philosophy. In a way this is similar to the time when television came along and people said that all the cinemas would close. However, actors still find other work, on television and elsewhere.
I believe that it was the noble Lord, Lord Bonham-Carter, or his noble friend who said that the clause deals with national radio. Amendment No. 274 deals with national radio but Amendment No. 297C, which we are also debating, deals with local radio.
I do not believe that I shall be able to help the noble Baroness because when one is trying to encourage small organisations to start up, placing such a liability on them would weigh the balance against their viability. I do not see how one can suggest to a local community radio station, which might be set up to put forward the views of certain ethnic minorities, that it should broadcast a certain amount of live music. That would be an intolerable imposition.
Baroness Birk: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Ullswater Viscount Ullswater moved Amendment No. 275:
Page 73, line 38, leave out ("to (c)") and insert ("and (b)").
The noble Viscount said: I spoke to this amendment together with Amendment No. 109. I beg to move.
On Question, amendment agreed to.
Clause 94, as amended, agreed to.
Clause 95 [Award of national licence to person submitting highest cash bid]:
Earl Ferrers Earl Ferrers moved Amendment No. 275A:
Page 79, line 9, at end insert ("; and where it appears to the Authority, in the context of the licence, that any circumstances are to be regarded as exceptional circumstances for the purposes of this subsection, those circumstances may be so regarded by them despite the fact that similar circumstances have been so regarded by them in the context of any other licence or licences.").
The noble Earl said: This amendment was spoken to with Amendment No. 109—I apologise, in the desire to get along quickly, I went a little too fast. This amendment is a technical but important amendment. It follows Clause 17(4) and makes clear that the authority may address the question of whether exceptional circumstances apply in relation to each national franchise application individually. I beg to move.
Baroness Birk: I apologise to the Committee for not having realised that the amendment would come up for discussion so soon. This is a very unfortunate amendment. It gives different definitions of "exceptional circumstances" for radio without explaining them. It weakens the situation for radio compared with television and the ITC. It gives the authority no direction when defining exceptional circumstances, allowing it to interpret them in different ways for different licences. It could mean that the speech-based channel is awarded to a higher quality bidder while the popular music channel is awarded to a bidder who could target a higher proportion of listeners in, say, social classes A, B and C.
It is not an equitable and transparent way of awarding licences. If the ITC is required to apply a single and defined interpretation of exceptional circumstances, there is no reason why the Radio Authority should not be in the same situation. We return to the point that the Government refuse to accept quality requirements for anything in the Bill if they can possibly avoid it. It is therefore even more important that the Bill should not be weakened further in this way.
Baroness Ewart-Biggs: I apologise to the Committee for rising straight after my noble friend. I should like to say a few brief words in support of her remarks. We feel rather worried that already the Radio Authority does not have to apply any quality requirements to the applicants for the three commercial services. This amendment further weakens the Bill by not giving the authority any direction in defining exceptional circumstances and allowing it to interpret exceptional circumstances in different ways for different licences.
It is a fact that in relation to television the viewers' preferences were extensively discussed, but we have said very little about listeners' views in relation to sound broadcasting. It would seem unwise to neglect those views. After all, at the end of the day it is the listeners who count. Even the most superficial research among radio listeners shows that they have definite quality requirements. They have priorities about what

1481
they wish to hear on radio which should be taken into consideration when deciding the make-up of the three new national radio services.
When discussing radio with people, one recognises that there is a thread running through all age groups which marks a preference for more speech-oriented programmes, plays and discussions. There is also a desire for more live music. Those preferences are expressed both in the older age group and among people in their 20s and 30s. Many listen to their car radios. One could say that for them radio has a very powerful opinion-forming influence. Even among young people there is a very distinct group which wants what the young people describe as a more "with it" Radio 4-type programme. Again, they would like to have something of substance. It is important to remember that a wish for quality and substance has been expressed by all the age groups. There is also great loyalty and devotion to radio, which has not been much discussed in this Bill.
The Government have made out that radio is of less importance than television. One often feels that to many people it is of more importance than television. But that is not reflected in the provisions of the Bill. I believe that there should be greater protection for listeners when the three commercial services are chosen. It is a pity that this government amendment further weakens the Bill in that regard. I look forward to hearing the Minister's comments in response to what my noble friend and I have said.
5.15 p.m.
Lord Thomson of Monifieth: I am genuinely puzzled by the purpose of this amendment. As we keep repeating, the heart of the Bill is a bidding system. We sought to modify that bidding system with a reference to exceptional circumstances and the Government went along with that desire in the case of television contracts. We were very happy about that, even though they did not go so far as we wished.
I think I am right in saying that this amendment applies to the national radio contracts. Both the noble Baronesses said that it seems to give the Radio Authority a blank cheque in defining exceptional circumstances. As I am critical of a bidding system, I am basically in favour of the authority having the right to give the contract to someone other than the highest bidder where there are exceptional circumstances. However, this provision seems to be a blank cheque. I simply do not understand what lies behind it.
Earl Ferrers: There is a certain amount of confusion. I shall do my best to try to straighten the matter out. It is not a question of giving a blank cheque. Contrary to what was said by the noble Baronesses, we are simply trying to introduce uniformity. The amendment follows exactly the wording of Clause 17(4). It makes clear that the same set of exceptional circumstances may occur more than once. In other words, it means that exceptional circumstances would not cease to apply in relation to applications for the third national service simply because the authority had invoked the exceptional
1482
circumstances provision in the case of the two preceding national radio competitions. It does not give a different definition of exceptional circumstances. It offers the same clarification as for television in Clause 17(4).
The amendment is being used to reopen the quality debate which is not affected by it at all. The purpose is a narrow one. The amendment simply repeats the words which apply to television in Clause 17 and applies them to radio in this clause.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 276:
Page 79, line 41, leave out ("(subject to section 96)").
The noble Viscount said: I spoke to this amendment with Amendment No. 109. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 277:
Page 80, line 5, at end insert:
("(10) In a case where the licence has been awarded to any person by virtue of the operation of this section, in accordance with any provision of this Part, on the revocation of an earlier grant of the licence, subsection (9) shall have effect as if—

(a) paragraph (b) were omitted; and

(b) the matters specified in that subsection included an indication of the circumstances in which the licence has been awarded to that person.").

The noble Viscount said: I spoke to this amendment with Amendment No. 135. I beg to move.
On Question, amendment agreed to.
Clause 95, as amended, agreed to.
[Amendment No. 278 not moved.]
Clause 96 [Holder of national licence to give security against failure to maintain proposed service]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 279:
Page 80, line 6, leave out subsections (1) to (3).
The noble Viscount said: I spoke to this amendment with Amendment No. 109. I beg to move.
The Deputy Chairman of Committees (Lord Alport): I have to advise the Committee that if the amendment is agreed to I cannot call Amendment No. 280.
On Question, amendment agreed to.
[Amendment No. 280 not moved.]
Viscount Ullswater Viscount Ullswater moved Amendment No. 281:
Page 80, line 30, leave out ("revoke the licence,") and insert ("serve on him a notice revoking the licence as from the time the notice is served on him,").
The noble Viscount said: I spoke to this amendment with Amendment No. 135. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 282 and 283:
Page 80, line 31, leave out from beginning to ("and") in line 33.
Page 80, line 43, leave out subsections (6) to (10) and insert:
("(6) Where the Authority revoke a national licence under this section or under section 104, they shall serve on the licence holder a notice requiring him to pay to them, within a specified period, a financial penalty of the prescribed amount.
(7) In subsection (6) "the prescribed amount" means—

1483

(a) 7 per cent. of the qualifying revenue for the last complete accounting period of the licence holder (as determined in accordance with section 97(2) to (6)); or

(b) where his first complete accounting period has not yet ended, 7 per cent. of the amount which the Authority estimate would have been the qualifying revenue for that accounting period (as so determined).

(8) Any financial penalty payable by any body by virtue of subsection (6) shall, in addition to being recoverable from that body as provided by section 115(4), be recoverable by the Authority as a debt due to them from any person who controls that body.").
The noble Viscount said: I spoke to Amendments Nos. 282 and 283 with Amendment No. 109. I beg to move them en bloc.
On Question, amendments agreed to.
Clause 96, as amended, agreed to.
Clause 97 [Additional payments to be made in respect of national licences]:
[Amendment No. 284 not moved.]
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 285 to 292:
Page 81, line 36, after ("him") insert ("or by any connected person").
Page 81, line 39, leave out ("by him").
Page 81, line 43, after ("holder") insert ("or any connected person").
Page 81, line 44, leave out ("him") and insert ("the licence holder").
Page 82, line 2, leave out ("the licence holder and") and insert:

("(a) the licence holder or any connected person, and

(b) ").

Page 2, line 3, after ("holder") insert ("or any connected person").
Page 82, line 12, leave out ("the licence holder, in any accounting period of his,") and insert (", in any accounting period of the licence holder, the licence holder or any connected person").
Page 82, line 19, leave out ("him") and insert ("the licence holder or the connected person, as the case may be").
The noble Viscount said: I spoke to Amendments Nos. 285 to 292 with Amendment No. 145. I beg to move them en bloc.
On Question, amendments agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment no. 293:
Page 82, line 44, leave out subsection (10).
The noble Viscount said: I spoke to this amendment with Amendment No. 109. I beg to move.
On Question, amendment agreed to.
Clause 97, as amended, agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 293A:
After Clause 97, insert the following new clause: ("Restriction on changes in control over holder of national licence
.—(1) Where—
(a) any change in the persons having control over—

(i) a body to which a national 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 Authority,
then (subject to subsection (5)) the Authority 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 Authority 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 national 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 national licence has been awarded but not yet granted were the holder of such a licence.
(3) The Authority shall refuse to approve for the purposes of this section such a change as is mentioned in subsection (1) (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 93(3)(a) by that body (or, as the case may be, by the body to which the licence was originally awarded).
(4) The Authority may refuse so to approve any such change if, in any circumstances not falling within subsection (3), they consider it appropriate to do so.
(5) The Authority 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.
(6) Where under subsection (1) the Authority refuse to grant a licence to any body, section 95 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 revoking its licence, subsections (5) and (6) of section 104 shall apply in relation to that notice as they apply in relation to a notice served under subsection (3) of that section.").
The noble Earl said: I spoke to this amendment with Amendment No. 163A. I beg to move.
[Amendments Nos. 293AA to 293AE, as amendments to Amendment No. 293A, not moved.]
On Question, Amendment No. 293A agreed to.
Clause 98 [Applications for other licences]:
[Amendments Nos. 293B and 294 not moved.]
Lord Ardwick Lord Ardwick moved Amendment No. 295:
Page 83, line 18, after ("provided") insert ("including news").
The noble Lord said: The amendment proposes that applicants' proposals for local radio licences must include news programmes. We do not suggest what those news programmes should be. We are not thinking in elaborate terms, but we believe that there should be some news programmes. It should be an absolute and explicit requirement on all local radio stations to provide some local news programmes.
At present the Bill requires only a diverse and broad range of local programmes with no guarantee for specific programmes. While it may be right that in the Bill local services are not required to carry sports, children's or religious programmes, and so on, the importance of local news in every area should surely

1485
make it a prerequisite for all services. It would not be possible to cater for local tastes without news programming. I beg to move.
Earl Ferrers: The noble Lord, Lord Ardwick, says that it should be absolute and explicit that local broadcasters should carry news. Part III deliberately avoids imposing any requirement on the Radio Authority licensees to carry news and current affairs. I see no reason why, say, a jazz or country and western station should have to do so. The indications are that many services will wish to carry news, and some listeners like it. But I do not believe that there is any reason to require the Radio Authority's licensees to have to mirror the public service obligations of the BBC radio stations. It is far preferable to base the Radio Authority licensing on what listeners want and on the extension of listener choice.
In addressing questions such as this it is important not to be misled by false parallels with television. In British terrestrial television at present we have a genuine duopoly. ITV and Channel 4 broadly match BBC1 and BBC2 in terms of both coverage and programming obligations. There is no equivalent for radio. For many people the most familiar radio services are the BBC national networks, Radios 1 to 4 (and soon 5). For these there is as yet no independent equivalent. The Bill provides scope for up to three independent national services; but they must establish themselves, and that will take time.
There are of course a number of excellent independent local radio services. But they do not have universal coverage, and any networked or syndicated programming which they take has to fit in with their local character. For radio it is a mistake to imagine that, if the BBC has a programming obligation, the independent sector should necessarily have it too. It is far better to take the BBC networks (and the BBC local services, which also have public service obligations) as a bedrock, which enables independent services to be more lightly regulated and to concentrate on adding something different for listeners. That approach will ensure both that there will be more independent services than under heavier regulation and that they will expand in a way which genuinely adds to listener choice. The Government's approach to news on independent radio is entirely consistent with this philosophy.
It may well be that the desire of the noble Lord, Lord Ardwick, will bear fruit and that local radio will find it prudent and proper to carry news. However, I do not think that it should be obliged to do so.
Lord Ardwick: It would probably be prudent. However, when we talk of radio news in a local station we do not refer to any vast enterprise. We are not talking of anything expensive. We refer to an arrangement with a local paper to supply spot news, if a disaster or some such event occurs. There might be some arrangement with ITN to have the national news headlines. Those are the terms in which we are thinking.
Lord Bonham-Carter: One cannot help but support the noble Lord on this matter. The noble Earl said that he is adding to consumer choice by local radio stations not broadcasting something. It is a very odd way of adding to consumer choice by not doing something. One cannot choose what is not available.
As usual we fall back on the public service obligation of the BBC. Whenever anything is missing from commercial radio we are told that it will be picked up by the BBC. It will walk behind commercial television and radio picking up ill-considered items which the commercial companies do not believe will pay.
That is a formula for lower quality across the board and that is our objection to the whole Bill. I do not suspect that these amendments will cure it of that intrinsic disqualification. However, this is a classic example of the Government saying, "We shall not ask them to do anything unless it pays in hard cash and if that item is necessary for the public the BBC will do it"
5.30p.m.
Lord Airedale: Let us suppose that a local road is blocked by an overturned vehicle and that the police inform the local radio station of the fact. Is that an item of news and, if so, ought not the local radio station be required to broadcast it?
Earl Ferrers: It might well be an item of news but whether or not to broadcast it would be a matter for the local radio station. The noble Lord, Lord Airedale, wishes to place an imposition on the stations to broadcast all such news. That is not right because there are many other avenues where such news will be broadcast. It may be that the local radio station will wish to do so, but we are discussing the proposal to impose an obligation.
I find the argument put forward by the noble Lord, Lord Bonham-Carter, to be quite extraordinary, and not for the first time. He asked the question: how do you add to consumer choice by omitting something? Of course, by omitting something you allow something else. If the noble Lord, Lord Bonham-Carter, were to have dinner and to take the last helping of chicken it would mean that someone else would be denied it. However, if in his generosity he decided to take the fish the chicken would be available for someone else. To say that if one omits something one is denying freedom of choice is an extraordinarily narrow point of view. One is not doing so—
Lord Bonham-Carter: One would not be adding anything.
Earl Ferrers: One would be adding to the consumer choice of the person following, but I do not wish to go too far with that analogy. The noble Lord, Lord Airedale, expressed anxiety about whether the local radio station should transmit the fact that the road is blocked. A commercial radio station might do so, but the BBC would do so because it must provide news.
Lord Thomson of Monifieth: I am provoked to speak because the answers that the Minister has given remind me of a gentleman whom I knew in the independent local radio sector. He complained bitterly

1487
about the regulatory system which sought to impose public service standards on the holders of independent local radio stations. He had once run a local radio station in the United States. He said that it was marvellous and all that he did was to send a chap out to the airport to pick up tapes for the programmes. He took them back to the station, put them on and all he had to do all day was insert local advertisements. That was his blissful idea of local radio and the Government appear to be bringing local radio down to that level.
Earl Ferrers: The noble Lord, Lord Thomson, is mistaken. An applicant might go to the Radio Authority and say, "I want to have a radio licence. I shall be transmitting all the records and tapes that I shall receive from Heathrow airport. I shall collect them and bung them on". However, they would not be covering the variety of interests for which they must cater. If that proposal were contained in the application but another application did not contain such a mundane attitude, that other applicant would be awarded the licence.
Lord Moyne: I am inclined to sympathise with the Opposition. It appears to be a mild obligation to impose on broadcasters. It is a small item of public service which they should have in mind and be obliged to have in mind.
Earl Ferrers: I do not wish to interrupt the vibes which appear to be crossing between the two Opposition Front Benches. I thought that I heard the noble Lord, Lord Thomson, cajoling the noble Baroness to take immediate action. Perhaps I may interrupt while they are making up their minds in order to refer to the point made by my noble friend Lord Moyne. In agreeing with the noble Baroness, he is saying that every single radio station, even if it were serving a small community within a radius of five miles, should be obliged by law to carry news items. That is going too far.
Baroness Birk: It was never my intention to take the matter to a vote. However, it appears that support is greater for news on local radio stations than for the Minister's response. He is in the minority as regards Members who have spoken. I realise that that does not necessarily mean anything when the Division bells ring. The cohorts who have not heard a word of our debate will stream in. Nevertheless, I wish to test the opinion of the Committee.
Earl Ferrers: Before the noble Baroness does so, perhaps I may explain that the silence from the Benches behind me probably shows a generous desire not again to keep the noble Baroness here until 1.15 a.m.
Baroness Birk: Members from all sides of the Committee have spoken in support and heads were nodding like mad behind the Minister.
5.36 p.m.
On Question, Whether the said amendment (No. 295) shall be agreed to?
Their Lordships divided: Contents, 67; Not-Contents, 107.

Division No. 1

CONTENTS

Addington, L.

Jenkins of Putney, L.

Airedale, L.

Lockwood, B.

Ardwick, L.

Longford, E.

Aylestone, L.

Lovell-Davis, L.

Banks, L.

McGregor of Durris, L.

Birk, B.

McNair, L.

Blackstone, B.

Masham of Ilton, B.

Blease, L.

Mason of Barnsley, L.

Bonham-Carter, L. [Teller.]

Molloy, L.

Carmichael of Kelvingrove, L.

Morris of Castle Morris, L.

Carter, L.

Moyne, L.

Castle, B.

Mulley, L.

Cledwyn of Penrhos, L.

Nicol, B.

Clinton-Davis, L.

Ogmore, L.

Croham, L.

Oram, L.

David, B.

Peston, L.

Davies of Penrhys, L.

Phillips, B.

Dean of Beswick, L.

Pitt of Hampstead, L.

Dormand of Easington, L.

Rea, L.

Ewart-Biggs, B.

Ritchie of Dundee, L.

Foot, L.

Robson of Kiddington, B.

Galpern, L.

Seear, B.

Gladwyn, L.

Serota, B.

Glasgow, E.

Strabolgi, L.

Glenamara, L.

Swann, L.

Graham of Edmonton, L. [Teller.]

Thomson of Monifieth, L.

Tordoff, L.

Hampton, L.

Underhill, L.

Hatch of Lusby, L.

Walston, L.

Hirshfield, L.

White, B.

Hollis of Heigham, B.

Williams of Elvel, L.

Howie of Troon, L.

Willis, L.

Jeger, B.

Winchester, Bp.

Jenkins of Hillhead, L.

Winstanley, L.

NOT-CONTENTS

Aldington, L.

Flather, B.

Alport, L.

Fraser of Carmyllie, L.

Annan, L.

Gisborough, L.

Ashbourne, L.

Grimthorpe, L.

Auckland, L.

Haddington, E.

Balfour, E.

Hardinge of Penshurst, L.

Beaverbrook, L.

Harmar-Nicholls, L.

Belhaven and Stenton, L.

Havers, L.

Beloff, L.

Henley, L.

Belstead, L.

Hesketh, L.

Bessborough, E.

Hives, L.

Blake, L.

Howe, E.

Blyth, L.

Hylton-Foster, B.

Boardman, L.

Ironside, L.

Borthwick, L.

Jenkin of Roding, L.

Boyd-Carpenter, L.

Joseph, L.

Brabazon of Tara, L.

Killearn, L.

Brookeborough, V.

King of Wartnaby, L.

Brougham and Vaux, L.

Long, V.

Butterfield, L.

Lonsdale, E.

Buxton of Alsa, L.

Lothian, M.

Caccia, L.

Lucas of Chilworth, L.

Caithness, E.

Lurgan, L.

Campbell of Gray, L.

Mackay of Clashfern, L.

Carnegy of Lour, B.

Macleod of Borve, B.

Carnock, L.

Mancroft, L.

Carr of Hadley, L.

Margadale, L.

Cavendish of Furness, L.

Marsh, L.

Clitheroe, L.

Merrivale, L.

Colnbrook, L.

Mersey, V.

Colwyn, L.

Milverton, L.

Cork and Orrery, E.

Montague of Beaulieu, L.

Cullen of Ashbourne, L.

Morris, L.

Davidson, V. [Teller.]

Mottistone, L.

Dilhorne, V.

Mountevans, L.

Downshire, M.

Munster, E.

Elliot of Harwood, B.

Murton of Lindisfarne, L.

Elliott of Morpeth, L.

Napier and Ettrick, L.

Elton, L.

Orkney, E.

Faithfull, B.

Orr-Ewing, L.

Ferrers, E.

Pearson of Rannoch, L.

1489

Pender, L.

Swinfen, L.

Quinton, L.

Swinton, E.

Reay, L. [Teller.]

Thomas of Gwydir, L.

Renwick, L.

Tollemache, L.

Rodney, L.

Tryon, L.

St. John of Fawsley, L.

Ullswater, V.

Sanderson of Bowden, L.

Vaux of Harrowden, L.

Selkirk, E.

Wade of Chorlton, L.

Sharples, B.

Walpole, L.

Stockton, E.

Wedgwood, L.

Stodart of Leaston, L.

Westbury, L.

Strathclyde, L.

Wharton, B.

Sudeley, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.44 p.m.
[Amendment No. 296 not moved.]
Lord Colwyn Lord Colwyn had given notice of his intention to move Amendment No. 296A:
Page 83, line 42, leave out from ("unless") to end of line 45.
The noble Lord said: I was under the impression that I had spoken to this amendment last night. However, as the grouping is rather complicated, if I find that I have made an error and I have not spoken to it, then perhaps I can return to the matter at a later stage.
[Amendment No. 296A not moved.]
Viscount Ullswater Viscount Ullswater moved Amendment No. 297:
Page 83, line 47, leave out ("under subsection (5)") and insert ("in a case where, in accordance with subsection (5), no notice is to be published under subsection (1)").
On Question, amendment agreed to.
[Amendment No. 297A not moved.]
Lord Bonham-Carter Lord Bonham-Carter moved Amendment No. 297AA:
Page 84, line 6, at end insert:
("(8) The Authority shall publish its decision on which applicant has been successful or its decision not to award a licence, and the detailed reasons for its decision, in such form as it sees fit.").
The noble Lord said: The purpose of this amendment is to require the Radio Authority to publish decisions and reasons for decisions on applications for a licence. That will ensure that all information, financial and otherwise, will be made available to the public on request. That has been the established practice of ILR and continued with the incremental contract initiative. It would seem a great pity if such a useful practice was abandoned by the new Radio Authority under the Bill.
It seems desirable that bodies with regulatory functions assigned to them by Acts of Parliament should, unless there are very strong reasons to the contrary, conduct their business as openly as possible and make known as widely as possible their decisions and the reasons for them. As I understand it, that would not necessarily take place under Clause 98 as it stands.
The normal objection to providing such information is commercial confidentiality. That has never been a problem in the past and I do not see why it should be a problem in the future. Information and decisions made available to the public provide an invaluable guide as to how the Act is working for both
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the public and prospective applicants for licences. A series of precedents is established which tells people how licences are awarded.
Publication of reasons for decisions helps and improves the quality of decisions. It has an additional advantage which should not be neglected. People whose applications fail often feel resentment. They often explain the failure by various rationalisations to the detriment of the body responsible for that failure. If the reason is explained openly, it assists in preventing bitterness, although it will not always do so. I believe that it is legitimate for unsuccessful applicants to know both why they were unsuccessful and why the successful applicant was successful.
On the basis of past practice and open government, and as a means of providing a guide to the way the Act works and mollifying the feelings of those who have failed, I urge the Government to accept the amendment. I beg to move.
Baroness Ewart-Biggs: I support the amendment. It seems right, for the reasons given by the noble Lord, Lord Bonham-Carter, that the Radio Authority should publish in detail its reasons for deciding to award a local licence. The Bill requires the Radio Authority to publish its reasons for awarding a national licence to an applicant. Therefore, it is logical that the same should apply to local radio services.
A very important point raised by the noble Lord, Lord Bonham-Carter, was that the provision brings the whole process into public view; it makes the public feel more knowledgable and part of the system. It means that the authority will have to take care to be as honest and open as it should be. I cannot see any reason why the amendment should be rejected. I look forward to hearing what the Minister has to say.
Earl Ferrers: I readily concede that there is a certain attractiveness to the amendment. As the noble Lord, Lord Bonham-Carter, and the noble Baroness, Lady Ewart-Biggs, said, it should be open for all to know what the position is. The amendment is concerned with the reasons for the decision, and not with the disclosure of the applicant's business or financial plans. Those would remain confidential under the Bill.
If the amendment were incorporated in the Bill it would place a great burden upon the authority. It would require the authority to explain in detail the reasons for its licensing decision in each and every case on which it had to make one, both to those who were successful and to those who were unsuccessful. In due course we expect the Radio Authority to issue several hundred radio licences. That means that there will be many more applicants for those several hundred licences, as well as many other forms of radio licence—such as satellite radio, special event radio and university radio services—to which the amendment would also extend.
To have to explain its decision on each and every occasion would greatly add to the task and the cost of the authority. The overall effect would extend the time it took to grant a licence, which inevitably would increase licence fees. For some kinds of Radio Authority licence, such as satellite radio services and

1491
licensable sound programme services, the licensing process will not be competitive; it will be more in the nature of a certification process. In those cases a detailed statement of the reasons for the licensing decision would not necessarily be illuminating.
If the unsuccessful applicants wish to write to the radio authority to inquire why they were unsuccessful, there is no reason that those explanations should not be given. However, if the amendment was agreed to,—for the very good reasons explained by the noble Lord, Lord Bonham-Carter—it would add considerably to the burden on the authority.
Lord Bonham-Carter: That is a very unsatisfactory reply. Perhaps I may make a suggestion to the noble Earl. Would it be within the capacity of the licensing authority to explain the reasons it gave the licence to the successful applicant? That would not be a severe burden. If one has considered a lot of applications and come to the conclusion that one should be successful, there must be a reason for that decision. It is not a severe burden simply to put those reasons in writing and communicate them to anyone who requests them. That would go a considerable way to providing a kind of guide to the way in which the Act was being administered, and some way towards mollifying those who had failed if they knew why someone else had succeeded.
The noble Earl's suggestion that it would create a burden on the authority if the Bill was modified in the way I suggested, does not apply. Perhaps the Minister will consider my suggestion?
Earl Ferrers: My immediate response is that it would be more helpful if the Radio Authority told those who had not succeeded why they had not succeeded rather than telling those who had succeeded why they had succeeded. The trouble with the second course is that one would have to reply to more people than would if one took the course suggested by the noble Lord, Lord Bonham-Carter.
I shall certainly consider his point. There is a genuine issue of openness. I can only say—I hope the noble Lord will not regard this as de minimis—that there is the other side to the coin; we do not want to oblige the Radio Authority to have to write to hundreds of people explaining why they did not receive the licence. The basic reason is that somebody else produced better programme suggestions.
Lord Bonham-Carter: I am grateful to the noble Earl for agreeing to think about the matter, and I look forward to seeing the results. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 98, as amended, agreed to.
Clause 99 [Special requirements relating to grant of local licences]:
[Amendments Nos. 297B and 297C not moved.]
Clause 99 agreed to.
Clause 100 [Requirements as to quality and coverage of national and local services]:
Lord Bonham-Carter Lord Bonham-Carter moved Amendment No. 297D:
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Page 84, line 45, leave out subsection (4) and insert—
("(4) Where the Authority is considering whether to authorise the holder of a licence, by means of a variation of his licence to that effect, to provide the licensed service for any additional area or locality falling outside the area for which that service has previously been licensed to provide, they shall first carry out their duties under section 98(1) (a) and (b) and section 98(2) (a)—(d).").
The noble Lord said: The purpose of Amendment No. 297D is to prevent existing or future stations being able to increase their broadcast area without first going through an open and fair application process. The concern is that Clause 104, if unamended, would allow the Radio Authority to continue the practice of the IBA of extending licence areas of existing operators even though there is evident interest from community groups in a specific region within that area.
For example, I am told that over the past two years GWR extended its transmission areas into Marlborough and Bath; Plymouth Sound extended to Tavistock, and Downtown Radio extended in its area. Such developments are unwelcome; they pre-empt possible future opportunities. In addition, the clause as it stands does not limit expansion to contiguous areas. It allows the building up of a radio empire by erosion of other areas without going through a formal licensing application.
Finally, if unamended, the clause would enable an operator to cover new communities to which a new frequency would usually have to be allocated. That is not dissimilar to the provisions of Amendment No. 234A in the name of the noble Lord, Lord Colwyn. It raises a genuine point of concern to people in the field of local radio. I look forward to hearing what the Minister has to say in response. I beg to move.
Baroness Ewart-Biggs: I wish briefly to support the amendment. As the noble Lord, Lord Bonham-Carter, said, the authority should be required to advertise the additional licence rather than just to award it. It makes the process more open and fair, and in many ways less arbitrary. The noble Lord, Lord Bonham-Carter, has put a strong case for making this small but important change, and I hope that the Minister will listen to it.
Earl Ferrers: I am grateful to the noble Lord, Lord Bonham-Carter, for explaining the intention behind the amendment. As I perused it beforehand I was not totally clear what the aim was, given that the amendment appears to suffer from some technical deficiencies. I acknowledge that there may be a case for saying that Clause 100(4) should be more restrictively framed. It was put into the Bill to solve an awkward problem which regularly arose under the Broadcasting Act 1981.
The Act had the effect that where an independent local radio station wished to seek approval to instal a relay transmitter with the aim of improving the coverage for a significant group of listeners within the contract area, it could be thwarted from so doing if the effect of its proposals was that listeners outside the contract area might be able to receive the service from the proposed new relay transmitter. That was because if any significant extension of the contract area was

1493
possibly affected by these arrangements the IBA would have been under an obligation under the 1981 Act to readvertise the whole of the franchise area. In those circumstances a number of local radio stations naturally preferred not to go ahead with the reception improvements for listeners within their areas if the alternative was to have to face readvertisement.
Clause 104 was intended to do no more than cure that problem. However, I accept that in principle if not in practice it could open the way for the authorisation of large extensions of coverage area, though the better course would be for the second new service to be advertised separately. I do not think that the Radio Authority would operate the provision in such a way, especially in view of its general duty to secure a range and diversity of local services and to ensure fair and effective competition in the provision of such services. Nevertheless, I realise that there is a problem and I will be happy to consider the matter further to see whether there is a case for tightening up the drafting. Perhaps the noble Lord will be content with that assurance.
6 p.m.
Lord Bonham-Carter: I am most grateful to the noble Earl for his response to my amendment. In the light of what he said I am happy to withdraw it, and I look forward to his thoughts at a later stage.
Amendment, by leave, withdrawn.
Clause 100 agreed to.
Clause 101 agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 297E:
After Clause 101, insert the following new clause:
("Promotion of equal opportunities in relation to employment by holder of national licence
.—(1) A national licence 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 Lord said: This amendment was spoken to with Amendment No. 193A. I beg to move.
On Question, amendment agreed to.
Clause 102 [Power to require scripts etc. or broadcasting of correction or apology]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 298:
Page 85, line 44, after ("apology") insert ("(or both)").
The noble Lord said: I speak also to Amendments Nos. 299 and 306A. These are minor drafting amendments. Amendments Nos. 298 and 299 ensure that the authority can direct its licensees to include both a correction and an apology if this appears appropriate when a licence holder has failed to comply with a condition of his licence. Amendment No. 306A, to Clause 119, is a consequential amendment to those
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made in another place where references to a range of frequencies were removed from Clause 79. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 299:
Page 85, line 47, after ("apology") insert ("(or both)").
On Question, amendment agreed to.
Clause 102, as amended, agreed to.
Clause 103 [Power to impose financial penalty or suspend or shorten licence period]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 300:
Page 86, line 40, leave out subsection (5).
The noble Lord said: I refer also to Amendments Nos. 301 and 302. These amendments were spoken to with Amendment No. 135. I beg to move.
On Question, amendment agreed to.
Clause 103, as amended, agreed to.
Clause 104 [Power to revoke licences]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 301 and 302:
Page 87, line 34, at end insert:
("(3A) If the Authority are satisfied in the case of any national 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,

they shall (subject to subsection (7)) serve on him a notice revoking his licence.").
Page 87, line 44, after ("(3)") insert (", (3A)").
On Question, amendments agreed to.
Clause 104, as amended, agreed to.
Clauses 105 to 107 agreed to.
Clause 108 [Licensing of additional services]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 302A:
Page 90, line 23, leave out ("other person") and insert ("person to whom this subsection applies").
The noble Lord said: I spoke to this amendment with Amendment No. 196B. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 302B:
Page 90, line 24, at end insert:
("(3A) Subsection (3) applies to any person who is not a disqualified person in relation to an additional services licence by virtue of Part II of Schedule 2 to this Act.").
The noble Lord said: I spoke to this amendment with Amendment No. 196B. I beg to move.
On Question, amendment agreed to.
Clause 108, as amended, agreed to.
Clause 109 agreed to.
Clause 110 [Procedure to be followed by Authority in connection with consideration of applications for, and awarding of, licences]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 303 and 304:
Page 92, line 34, leave out from beginning to ("subsection") in line 36.
Page 92, line 38, leave out ("requirements of section 94(1) (a) and (b)") and insert ("requirement specified in section 94(1) (a)").
The noble Lord said: Both these amendments were spoken to with Amendment No. 109. I beg to move.
On Question, amendments agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 304A and 304B:
Page 92, line 42, leave out from second ("that") to ("or") in line 43 and insert ("none of the services in question will be provided once the licence has come into force,").
Page 92, line 45, leave out from first ("that") to end of line 46 and insert ("none of those services will be so provided,").
The noble Lord said: These amendments were spoken to with Amendment No. 196B. I beg to move.
On Question, amendments agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 305:
Page 92, line 48, leave out ("revoke the licence,") and insert ("serve on him a notice revoking the licence as from the time the notice is served on him,").
The noble Lord said: This amendment was spoken to with Amendment No. 135. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 305A:
Page 93, line 5, leave out ("he will not provide the services in question") and insert ("none of the services in question will be provided").
The noble Lord said: This amendment was spoken to with Amendment No. 196B. I beg to move.
On Question, amendment agreed to.
Clause 110, as amended, agreed to.
Clauses 111 and 112 agreed to.
Clause 113 [Enforcement of additional services licences]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 305B:
Page 94, line 18, after ("pay") insert (", within a specified period,").
The noble Lord said: This amendment was spoken to with Amendment No. 196B. I beg to move.
On Question, amendment agreed to.
Clause 113, as amended, agreed to.
Clause 114 agreed to.
Clause 115 [Certain receipts of Authority to be paid into Consolidated Fund]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 306:
Page 95, line 16, leave out ("or forfeited to them under section 96") and insert ("to them by virtue of section 96(6)").
The noble Lord said: This amendment was spoken to with Amendment No. 109. I beg to move.
On Question, amendment agreed to.
Clause 115, as amended, agreed to.
Clauses 116 to 118 agreed to.
Clause 119 [Interpretation of Part III]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 306A:
Page 96, line 15, leave out from ("79(3)") to end of line 16.
The noble Lord said: I spoke to this amendment with Amendment No. 298. I beg to move.
On Question, amendment agreed to.
Clause 119, as amended, agreed to.
Clause 120 agreed to.
Schedule 7 [Scheme Providing for Division of Assets of IBA]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 306B:
Page 170, line 38, leave out from ("(7)") to ("any") in line 39 and insert ("Any power to modify a transfer scheme which is conferred on the Secretary of State by this paragraph may be so exercised as to make").
The noble Viscount said: In moving this amendment I shall speak also to Amendment No. 306C. These are two purely drafting amendments. They are intended to make it plain that the Secretary of State's powers to modify the transfer scheme by order in Schedule 7 paragraph 2 include the power to provide for such modifications to take effect as from the coming into force of the scheme. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 306C:
Page 170, line 40, at end insert (", and an order under sub-paragraph (6) above may provide for any of its provisions to have effect as from the coming into force of the scheme to which it relates.").
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 307:
Page 171, line 10, after ("equipment") insert ("or other asset").
The noble Viscount said: In moving this amendment I believe that it will be for the convenience of the Committee if I also speak to Amendments Nos. 308 to 309, 309ZA(1) to 309ZA(39), 309ZB, 309ZBA and 309ZC to 309ZJ. This complicated group of amendments and new clauses all relate to the transitional arrangements for independent radio and television. The main transitional provisions which are to be found in Schedule 9 were added to the Bill at the Committee stage in another place. These amendments make a number of changes to those provisions, which are mainly technical. There are, however, three additions of substance. It may be helpful to the Committee if I were to explain them briefly.
First, these new provisions make transitional arrangements for direct broadcasting by satellite (DBS). As the law stands, the IBA is responsible for broadcasting the services of its DBS contractor, BSB, just as it is responsible for broadcasting ITV and Channel 4. As the ITC will not be a broadcasting authority like the IBA, this arrangement needs to be modified. We have therefore decided that BSB should continue as DBS contractors until the end of 1992, with the ITC standing in the shoes of the IBA, but then become domestic satellite service licensees under Clause 39 of the Bill. The changeover at the end of

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1992 will coincide neatly with the end of the ITC's responsibility, which it will inherit from the IBA in relation to the existing ITV contracts. This change will entail BSB losing certain regulatory obligations and privileges such as the benefits of the must-carry rule. Broadly speaking, it will put them on the same regulatory footing as non-domestic satellite service licensees such as Sky. We believe that this will be helpful in the interests of ensuring that the various satellite operators are competing on a fair and even basis.
As part of the present DBS arrangements, the IBA owns and operates the uplink for BSB services. The uplink is the transmission equipment which transmits the signals from the earth to BSB's satellite. As the ITC will not take over the IBA's terrestrial transmission system, which is to be privatised, it would not be appropriate for it to take over the uplink. An operational engineering function of this sort would not sit easily with the ITC's main responsibilities as a regulatory body. As BSB has met the costs—amounting to around £8 million—of constructing the uplink we have decided that it would be reasonable to transfer that uplink to it for a nominal sum.
My noble friend Lord Morris has tabled an amendment to this part of the transitional provisions. If I have understood that amendment correctly, it means that the IBA would be able to transfer the uplink to anybody other than BSB. In the light of the explanation I have given, he may agree that this would be rather odd, and I hope he will feel able to withdraw his amendment.
The second main addition to the transitional provisions is to take account of the privatisation of the IBA's terrestrial transmission system. The ITC will inherit the IBA's responsibilities in relation to ITV and the fourth channel in 1991 and 1992. Those responsibilities include transmission. However, the ITC will not own a transmission system with which to discharge those responsibilities itself. The new provisions therefore oblige the ITC to discharge them by requiring the ITV contractors to enter into a transmission contract with the new private transmission company during 1991 and 1992. There will be a similar arrangement for Channel 4 and S4C. The Radio Authority will be given a similar duty in relation to any independent local radio stations which remain as contractors, though we expect that they will in fact all opt to become new-style licensees.
Finally, the new provisions make transitional arrangements for the Broadcasting Standards Council and the Broadcasting Complaints Commission. They ensure that the remit of the two bodies will extend to the services provided by the ITC during 1991 and 1992 under the responsibilities it will inherit from the IBA. I beg to move.
6.15 p.m.
Lord Morris: My noble friend suggested that it was for the convenience of the Committee that he spoke to this massive number of amendments. I do not find it
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in the least convenient. He may possess the mental agility necessary to deal with the amendments together; I certainly do not. I did not table lightly my amendment to the government Amendment No. 309. We are talking about BSB. I do not think that my noble friend quite understands because he referred to the BSB satellite. BSB does not own the satellite; it is simply leasing capacity on it.
Similarly, the uplink can be used not only for broadcasting purposes but for a myriad of other services and data links. There is absolutely no reason at all why the broadcasting company, which in effect is a retailing company, should own, manage, maintain and control the means of transmission. It is my very strongly held view that a separate body should own the means of transmission as a common carrier to allow other entrants to the market, should there be available capacity, to share the links. That is the only point I am making.
As I see it, there are very serious implications for Her Majesty's Government in selling these assets to one particular party at nil cost or at little value. The amendment says,
"whether or not any such consideration represents the market value of the assets".
A preferential price could be deemed to be a hidden government subsidy to an entrant into the market. I am not sure whether that would be seen to be fair or indeed whether it would contravene European competition laws. That is my reason for tabling my amendment to Amendment No. 309.
Lord Thomson of Monifieth: It may be convenient if I ask my questions at the same time so that the noble Viscount can then reply. I am grateful to him for his explanations of these complicated matters. Although they are technical, there are behind the technicalities some significant issues of policy. The noble Viscount referred to the disposal of the uplink to BSB as part of these changes. I think I am probably right in saying that, as part of the original contractual arrangements under which BSB was given the DBS contract by the IBA, it was BSB that paid for the uplink. That must be taken into account and is perhaps the background to the nominal figure which the Minister mentioned.
I should like clarification on two other points. The noble Viscount said that one of the purposes of these changes in relation to the DBS operation is to put the DBS contractor on a fair and even base with the other non-domestic satellite competitor, which is of course the Sky channel. No fair and even base will be provided by the Act for the competition as between Sky and BSB. Under the Broadcasting Act, BSB will continue to have various regulatory commitments of a public service character. It is not the same extensive public service range of obligations that apply to Channel 3 but they are quite significant and they do not apply to Sky. They produce a distorted and unfair situation between the two. There is also the significant difference with regard to the law relating to ownership, a matter which we have already debated. I could not allow to pass without that comment the

1499
Minister's statement that he is creating by these amendments a fair and even base between the two satellite operators.
The Committee is owed some explanation of the privatisation of the IBA transmission system. As the noble Viscount said, it was introduced in another place very late in the Committee stage proceedings. It is a significant piece of government privatisation and has important policy implications. It would be helpful to have more explanation. I do not know whether this is the correct time for it, or exactly how it is to be done. The schedule refers to a nominated company. The nominated company is apparently to be formed by the transfer of the transmission assets of the IBA to this nominated company at the beginning of 1991, which is very soon. How is it then to be disposed of to a private owner? Is it to be put out to competitive tender? Is there to be a proper public bidding system, or is it to be done by the kind of private deal to which the Government seem rather disposed in other fields? The Committee is entitled to a much fuller explanation of the major change lying behind these technical amendments.
Viscount Ullswater: Perhaps I may reply first to my noble friend Lord Morris. I did not want him to think that I had misled him or the Committee into thinking that BSB owns its own satellite. I was referring to the transmission of signals to the satellite that BSB uses rather than to BSB's satellite.
The noble Lord, Lord Thomson, assisted me in his remarks because it is true that BSB has met the costs of constructing the uplink from this country. I mentioned a figure for what BSB had spent. It won on a competitive tender the right to use the channels. It could use the uplink for further purposes, but as it has won it and paid for it it would still be right to go down the route that I suggested in my remarks.
The noble Lord, Lord Thomson, said that he could not agree that it was a fair and even base. I have to accept that BSB has regulatory requirements greater than those for Sky. However, we have already dealt with this area in some way. What I have said indicates the transitional arrangements between now and the end of 1992 for BSB and the transmission arrangements in regard to that.
The noble Lord is correct in saying that the transmission system will be vested in a new company at the end of 1990. He referred to the beginning of 1991. That company will be wholly owned by the Crown until its sale to the private sector. The noble Lord asked how it would be sold. All I can tell them at the moment is that the method of sale has not finally been decided. Whatever the exact method, the process will be fair, open and competitive.
Lord Morris: I am grateful to my noble friend for that explanation. I must apologise to him and to the Committee for wasting the Committee's time. I did not realise that DBS has contributed substantially to the cost of the uplink. My amendment was therefore quite unnecessary and I apologise.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 308:
1500
Page 171, line 11, at end insert ("or (Disposal by IBA of DBS transmitting equipment etc)(1) of this Act").
The noble Viscount said: This amendment is consequential on Amendment No. 307. I beg to move.
On Question, amendment agreed to.
On Question, Whether Schedule 7, as amended, shall be agreed to?
Baroness Birk: I want to ask some questions about IBA staff. The debate on whether Schedule 7 shall stand part seems the appropriate point to do so. Some of the former IBA staff who have been offered employment with the new privatised transmission company have been offered an option of equity participation in the company. Can the Minister confirm that all former IBA staff will be consulted and given the option of employee participation in the running and ownership of shares in the privatised transmission company? What is the Government's view of possible employee participation? What does the future hold for them in the privatisation?
6.30 p.m.
Earl Ferrers: The position is that it will not be the IBA's staff, it will only be the transmission staff. At present, the exact arrangements have not been made.
Baroness Birk: I am sorry, but I thought that the Minister was going to give a fuller explanation. I understand that some of the former IBA staff have been offered either employment with the new privatised transmission company or an option of equity participation in the company. I am talking about all former IBA staff. I should like to know whether they have been consulted and will be given the same sort of option. I ask this because they will no longer be employed by the IBA once the Bill becomes enacted and the ITC takes over. Will they be given the option of employer participation or the option of ownership of shares in the privatised transmission company? The position is not very clear under the provisions of the Bill. Can the Minister help us in this respect?
Earl Ferrers: I shall certainly do the best I can. The noble Baroness asks a question of detail. In the circumstances, I think that it would be best if I were to write to her on the matter. It is quite an important issue and I would not like to mislead her.
Schedule 7, as amended, agreed to.
Clause 121 agreed to.
Schedule 8 agreed to.
Clause 122 [Transitional provisions relating to IBA's broadcasting services and to existing cable services]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 308A to 308C:
Page 98, line 13, leave out ("and") and insert:
("(aa) for the purpose of the regulation by the Commission after the end of that period of services provided in succession to the DBS services provided by them during that period; and").
Page 98, leave out line 15 and insert ("provided by the IBA down to the transfer date-").
Page 98, line 21, leave out subsection (2) and insert:
("(2) The programmes provided by a programme contractor under his contract for inclusion in any

1501
broadcasting service provided by the Commission or the Radio Authority in accordance with Part II or III of Schedule 9 shall not he transmitted by, or under arrangements made by, the Commission or the Radio Authority (as the case may be) but shall be transmitted—

(a) by the nominated company in pursuance of a contract made between that company and the programme contractor in accordance with section (Variation of programme contracts to take account of new transmission arrangements), or

(b) under arrangements made in accordance with subsection (3)(a) of that section in a case where any such contract made between a DBS programme contractor and that company is terminated by the contractor as mentioned in that provision.

(3) The programmes broadcast on Channel 4 during the interim period in accordance with Part II of Schedule 9 shall not be transmitted by, or under arrangements made by, the Commission but shall be transmitted by the nominated company in pursuance of such a contract made between that company and the Channel 4 company as is mentioned in subsection (4).
(4) The contract referred to in subsection (3) is a contract which makes provision for and in connection with the transmission by the nominated company during the interim period of the programmes to be broadcast on Channel 4 during that period, and in particular makes provision—

(a) for specified standards relating to technical quality, coverage and reliability to be attained in connection with the transmission of those programmes by that company; and

(b) for the transmission of those programmes to be suspended, if the Commission so direct in circumstances falling within subsection (5), for such period, or in the case of such programme or programmes, as they may specify.

(5) The circumstances referred to in subsection (4)(b) are circumstances where the Commission consider it necessary to require the transmission of the programmes in question to be suspended in order for them to comply, or secure compliance, with the provisions of the Broadcasting Act 1981 (as it has effect in accordance with Part II of Schedule 9 to this Act) or with any restriction or requirement imposed thereunder.
(6) In the following provisions, namely—

(a) Parts II and III of Schedule 9 to this Act, and

(b) any provision of the Broadcasting Act 1981 which is to be construed as referring to the Commission or to the Radio Authority by virtue of either of those Parts of that Schedule,

any reference (however expressed) to the broadcasting of programmes, or to programmes broadcast, by the Commission or the Radio Authority shall, in consequence of subsections (2) and (3) above, be read as a reference to the broadcasting of programmes, or to programmes broadcast, by that body whether the transmission of the programmes is undertaken (according to the circumstances of the case)—

(i) by, or under arrangements made by, that body, or

(ii) by the nominated company in pursuance of any such contract as is referred to in either of those subsections, or

(iii) under any such arrangements as are referred to in subsection (2)(b);

and those Parts of that Schedule contain other modifications of provisions of that Act which are consequential on those subsections.
(7) This section and section (Variation of programme contracts to take account of new transmission arrangements) shall have effect in relation to any teletext service provided by the Commission in accordance with Part II of Schedule 9 as if—

(a) any reference to a programme or television programme were a reference to a teletext transmission; and

1502

(b) any reference to a programme contractor were a reference to a teletext contractor.

(8) This section and section (Variation of programme contracts to take account of new transmission arrangements) shall, in so far as they apply to the transmission of the programmes provided by a DBS programme contractor under his contract for inclusion in any DBS service provided by the Commission in accordance with Part II of Schedule 9, be construed as applying only to the carrying on of such activities in connection with the transmission of those programmes as were being so carried on by the IBA immediately before the transfer date.
(9) In this section—
"the Channel 4 company" means the body corporate referred to in section 12(2) of the Broadcasting Act 1981, and "on Channel 4" means in the additional broadcasting service referred to in section 10(1) of that Act;
"the interim period" means the period specified in subsection (1) (a) above.
(10) The reference in subsection (4) to specified standards is a reference to such standards as the IBA shall specify for the purposes of that subsection before the transfer date.").
The noble Viscount said: I spoke to these amendments when moving Amendment No. 307. I beg to move en bloc.
On Question, amendments agreed to.
Clause 122, as amended, agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 308D:
After Clause 122, insert the following new clause:
("Variation of programme contracts to take account of new transmission arrangements.—(1) Subject to subsections (2) and (4), it shall be the duty of the IBA to make before the transfer date such variations of each contract between them and a programme contractor ("the programme contract")
as appear to them to be appropriate—
(a) for requiring the programme contractor to enter into a contract with the nominated company which makes provision for and in connection with the transmission by that company during the interim period of the programmes which the programme contractor has the right and the duty to provide under the programme contract, and in particular makes provision—

(i) for specified standards relating to technical quality, coverage and reliability to be attained in connection with the transmission of those programmes by that company,

(ii) for the transmission of those programmes to be suspended, if the relevant authority so direct in circumstances falling within subsection (5), for such period, or in the case of such programme or programmes, as they may specify, and

(iii) where the programme contractor is a TV programme contractor, for the consideration payable in respect of the transmission of those programmes to be payable in accordance with subsection (6); and

(b) for securing that the right and the duty of the programme contractor under the programme contract to provide those programmes is accordingly (so long as any such contract with the nominated company remains in force) a right and a duty to provide them for transmission by that company.
(2) Subsection (1) shall apply to a contract for the provision of television programmes for broadcasting in a DBS service ("a DBS programme contract") as if—

(a) the reference to coverage in paragraph (a) (i) were omitted; and

(b) for paragraph (a) (iii) there were substituted—

"(iii) for the programme contractor to be entitled to terminate the contract if he is notified by the Commission that they are satisfied that the

1503
standards referred to in sub-paragraph (i) are not being attained as mentioned in that sub-paragraph;".
(3) The IBA shall, in the case of any DBS programme contract, make before the transfer date such variations of the contract as appear to them to be appropriate—
(a) for requiring the DBS programme contractor, if he terminates his contract with the nominated company under any provision included in the contract in consequence of subsection (2) (b), to make such arrangements as the Commission may approve for and in connection with the transmission during the interim period of the programmes which he has the right and the duty to provide under the DBS programme contract, being arrangements under which—

(i) specified standards relating to technical quality and reliability are to be attained in connection with the transmission of those programmes under the arrangements, and

(ii) the transmission of those programmes is to be suspended, if the Commission so direct in circumstances falling within subsection (5), for such period, or in the case of such programme or programmes, as they may specify; and

(b) for securing that the right and the duty of the programme contractor under the DBS programme contract to provide those programmes is accordingly (so long as any such arrangements remain in force) a right and a duty to provide them for transmission under the arrangements.
(4) Subsection (1) shall apply to a contract for the provision of local sound broadcasts as if the reference to the interim period were a reference to the remainder of the period for which the contract continues in force by virtue of paragraph 2(1) in Part III of Schedule 9; and that subsection accordingly does not apply to any such contract if—

(a) the programme contractor notifies the IBA, before such date as they shall determine, that he proposes to request the Radio Authority to determine the contract as from the transfer date in accordance with paragraph 1(1) in Part IV of that Schedule; or

(b) the contract is one to which paragraph 2(1) in that Part of that Schedule would apply on the transfer date.

(5) The circumstances referred to in paragraph (a) (ii) of subsection (1) or (3) are circumstances where the relevant authority or (as the case may be) the Commission consider it necessary to require the transmission of the programmes in question to be suspended—

(a) in order for them to comply, or secure compliance, with the provisions of the Broadcasting Act 1981 (as it has effect in accordance with Schedule 9 to this Act) or with any restriction or requirement imposed thereunder, or

(b) in view of any matter which they consider constitutes or would constitute a breach of the programme contractor's contract.

(6) The IBA shall make before the transfer date such variations of each contract between them and a TV programme contractor as appear to them to be appropriate for requiring the programme contractor to enter into an agreement with all of the other TV programme contractors which—

(a) relates to the payment by those contractors to the nominated company of the consideration payable by them in respect of the transmission by that company of the programmes provided by them; and

(b) provides for the amounts payable by each of the contractors to be such proportion of the total consideration so payable as corresponds to the proportion of the relevant amount which he was liable to pay by virtue of section 32(1) (a) of the 1981 Act (rental payments) in respect of the period beginning with 1st April 1990 and ending with the transfer date;

1504
and in paragraph (b) "the relevant amount" means the aggregate amount of all payments falling to be made by TV programme contractors by virtue of section 32(1) (a) of that Act in respect of that period (excluding any payments falling to be so made in consequence of section 13(2) of that Act (advertisements on Channel 4)).
(7) The IBA shall, in the case of each such contract as is mentioned in subsection (6), also make before the transfer date such variations of the contract as appear to them to be appropriate in consequence of section 122(3).
(8) In this section—
"the interim period" means the period specified in section 122(1) (a);
"the relevant authority"—

(a) in relation to any such contract as is mentioned in subsection (1) (a) which relates to the transmission of television programmes, means the Commission, and

(b) in relation to any such contract which relates to the transmission of local sound broadcasts, means the Radio Authority;

and section 122(7) and (8) apply for the purposes of this section.
(9) Any reference in subsection (1) or (3) to specified standards is a reference to such standards as the IBA shall specify for the purposes of that subsection before the transfer date; and different standards may be so specified for the purposes of subsection (1) in relation to programme contractors of different descriptions.").
The noble Viscount said: I spoke to this amendment when moving Amendment No. 307. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 308E and 309:
After Clause 122, insert the following new clause:
("Supplementary provisions relating to variation of programme contracts
.—(1) Where the IBA make any variation of a programme contract in pursuance of section (Variation of programme contracts to take account of new transmission arrangements)(1) to (4) or (6), they may make such variations of that contract of a supplemental, incidental, consequential or transitional nature as they consider appropriate.
(2) The relevant authority may on or after the transfer date make any variation of a programme contract which could have been made before that date by the IBA—

(a) in pursuance of section (Variation of programme contracts to take account of new transmission arrangements) (1) to (4), or

(b) in pursuance of subsection (1) above in connection with any variation made in pursuance of section (Variation of programme contracts to take account of new transmission arrangements)(1) to (4).

(3) Before making any variation of a programme contract in pursuance of any provision of section (Variation of programme contracts to take account of new transmission arrangements), this section or Schedule 9, the IBA or (as the case may be) the relevant authority shall consult the programme contractor concerned.
(4) Any such variation shall be made by means of a notice served on that programme contractor.
(5) In this section—
"programme contract" means a contract between the IBA and a programme contractor;
"programme contractor" includes a teletext contractor;
"the relevant authority"—

(a) in relation to a programme contract for the provision of television programmes or teletext transmissions, means the Commission; and

1505

(b) in relation to a programme contract for the provision of local sound broadcasts, means the Radio Authority.").

After Clause 122, insert the following new clause: ("Disposal by IBA of DBS transmitting equipment etc.
.—(1) The IBA shall have power, with the approval of the Secretary of State—
4

(a) to dispose of any relevant assets to a DBS contractor; and

(b) to do so on such terms and for such consideration as they may determine (whether or not any such consideration represents the market value of the assets).

(2) Any disposal under subsection (1) shall take effect on the transfer date.
(3) In this section—

(a) "relevant asset" means any equipment or other asset (of whatever description) which has been used or held by the IBA in connection with the transmission of DBS services; and

(b) "DBS programme contractor" and "DBS service" have the meaning given by section 37(3) of the Cable and Broadcasting Act 1984.").

The noble Viscount said: I spoke to these amendments in connection with Amendment No. 307. I beg to move en bloc.
On Question, amendments agreed to.
[Amendment No. 309ZA not moved.]
Schedule 9 [Transitional Provisions Relating to IBA's Broadcasting Services]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309ZA(1) to 309ZA(39), 309ZB and 309ZBA:
Page 177, line 34, leave out ("and").
Page 177, line 35, at end insert (", and
(d) any DBS services so provided,").
Page 177, line 39, after ("quality") insert ("both as to the transmission and").
Page 177, line 45, at end insert—
("(ba) sections 14(3) and 15;").
Page 177, line 46, leave out ("section") and insert ("sections 28 and").
Page 178, line 2, leave out ("relation to the Commission and") and insert ("connection with").
Page 178, line 4, leave out ("relation to the IBA and") and insert ("connection with").
Page 178, line 5, at end insert—
("(3A) The provisions specified in sub-paragraph (3) above shall have effect in accordance with that sub-paragraph with the following general modifications, namely—

(a) any reference to the IBA shall (subject to paragraph (b) and sub-paragraph (6) below) be construed as a reference to the Commission; and

(b) any reference to any of the broadcasting stations used by the IBA shall be construed as a reference to any of the broadcasting stations used in the provision of any of the services provided by the Commission as mentioned in sub-paragraph (1) above.").

Page 178, line 10, at end insert—
("(5) Section 8 of the 1981 Act shall have effect in accordance with sub-paragraph (3) above with the omission of subsections (6) to (9) of that section; but (except in the case of any programme to which the Commission determine that the following prohibition is not to apply) none of the broadcasting services provided by the Commission as mentioned in sub-paragraph (1) above shall include a
1506
programme which is sponsored by any person whose business consists, wholly or mainly—

(a) in the manufacture or supply of a product, or

(b) in the provision of a service,

the advertising of which in any such broadcasting service is prohibited by virtue of any provision of that Act (as applied by this paragraph) or of the code under section 9 of that Act (as so applied).
(6) Section 29(5) of the 1981 Act shall have effect in accordance with sub-paragraph (3) above as if the reference to requiring the IBA by notice in writing to do, or not to do, anything mentioned in that provision were a reference to requiring the Commission by notice in writing to direct any programme contractor specified in the notice—

(a) to do, or not to do, that thing, or

(b) (if the context so requires) to secure that that thing is or is not done.

(7) Without prejudice to the generality of sub-paragraph (4) of paragraph 2 below, the Commission may make such variations of a contract to which sub-paragraph (1) of that paragraph applies as appear to them to be appropriate for facilitating or ensuring compliance with any direction or notice given to or served on them under section 28 or 29 of the 1981 Act (as applied by this paragraph).").
Page 178, line 12 leave out from ("(1)") to ("contractor") in line 16 and insert ("Sections 2(3) and 14(2) of the 1981 Act shall have effect in relation to the Commission and the programmes and teletext transmissions broadcast by them in the services provided by them as mentioned in paragraph 1(1) above as they had effect immediately before the transfer date in relation to the IBA and the programmes and teletext transmissions broadcast by them in the services mentioned in paragraph 1(1); and where a contract between the IBA and a programme contractor or a teletext").
Page 178, line 19, after ("contractor") insert ("and any other party to it").
Page 178, line 30, after ("contractor") insert ("or teletext contractor").
Page 178, line 31, at end insert ("and subject also to paragraphs 4 and 4A below.").
Page 178, line 34, after ("shall") insert ("(subject to paragraphs (aa) and (ab) below)").
Page 178, line 35, leave out ("and") and insert—

("(aa) sections 21 and 23 shall have effect as if any reference to the IBA's obligation to transmit the programmes supplied by a programme contractor were a reference to the right and the duty of the programme contractor under his contract to provide programmes for broadcasting in one of the services provided by the Commission as mentioned in paragraph 1(1) above;

(ab) section 22 shall have effect as if any reference to the programmes, or television programmes, supplied to the IBA were a reference to the programmes, or television programmes, supplied for broadcasting in one of those services; and").

Page 178, line 43, after ("this") insert ("Part of this").
Page 179, line 14, leave out ("and").
Page 179, line 18, at end insert ("; and

(d) in section 13, subsection (4) shall (in consequence of paragraph 1(5) above) have effect with the omission of paragraph (c).").

Page 179, line 20, leave out paragraph 4 and insert—
("4.—(1) For the purposes of—

(a) this Part of this Schedule, and

(b) the provisions of the 1981 Act which have effect in accordance with this Part of this Schedule,

teletext transmissions shall not be treated as programmes; but this is subject to sub-paragraph (2) and to any of those

1507
provisions of the 1981 Act which expressly requires such transmissions to be so treated for the purposes of any particular provision.
(2) In paragraphs 1(6) and 2(3) (aa) above and 8 below and in the provisions specified in Part I of Schedule 3 to the 1981 Act (as they have effect in accordance with this Part of this Schedule)—

(a) references to programmes or to television programmes shall be read as including references to teletext transmissions; and

(b) references to programme contractors shall be read as including references to teletext contractors;

and section 14(5) of the 1981 Act shall have effect during the interim period only in so far as it applies to the provisions specified in Part II of that Schedule.
(3) In section 3(2) of the 1981 Act, in its application to teletext transmissions or teletext contractors by virtue of sub-paragraph (2), the reference to section 2(3) of that Act shall be read as a reference to section 14(2) of that Act (as it has effect by virtue of paragraph 2(1) above).
(4) The following provisions of the 1981 Act, namely—

(a) section 20(2) (b) and (3), and

(b) section 22,

shall not have effect by virtue of paragraph 2(2) above in relation to teletext contractors or their contracts.").
Page 179, line 39, at end insert—
("Provisions relating to DBS services
4A.—(1) The following provisions of the 1981 Act, namely—

(a) in section 2(2), paragraph (c) and in paragraph (b) the words "and a proper balance and wide range in their subject matter",

(b) in section 4(1), paragraph (d) and so much of paragraph (b) as relates to the giving of a sufficient amount of time in the programmes to news and news features,

(c) section 20(2) (b) and (3),

(d) section 22, and

(e) section 24,

shall not have effect by virtue of paragraph 1(3) or 2(2) above in connection with the provision of DBS services by the Commission or (as the case may be) in relation to DBS contractors or their contracts.
(2) Every contract between the Commission and a DBS programme contractor shall contain all such provisions as the Commission think necessary or expedient to ensure that the financial and other arrangements for the provision of the satellite transponder are made by the contractor.
(3) For the purpose of enabling a DBS programme or teletext contractor to make charges for the reception of programmes provided by him or transmissions containing material so provided, the Commission may, notwithstanding anything in the 1981 Act as it has effect in accordance with this Part of this Schedule, broadcast the programmes or transmissions in such a form (whether scrambled, encoded or otherwise) as will prevent persons from receiving them unless they obtain from the contractor the means of doing so.
(4) Where under the power conferred by sub-paragraph (3) the Commission broadcast programmes or transmissions in such a form as is mentioned in that sub-paragraph, nothing in the 1981 Act (as it so has effect) shall be taken as requiring the Commission to permit advertisements to be included in the programmes or transmissions.").
Page 179, line 45, leave out ("the reference in section 52(3) or 53(3)") and insert ("any reference in section 52(3) or 53(2) or (4)").
Page 180, line 41, leave out ("to (8)").
Page 180, line 42, leave out ("those provisions apply") and insert ("that provision applies").
Page 180, line 51, leave out ("and").
Page 181, line 2, at end insert ("and
(d) (except in the case of any programme to which the Welsh Authority determine that this paragraph is not to apply) S4C shall not contain any programme which is sponsored by any person whose business consists, wholly or mainly—

(i) in the manufacture or supply of a product, or

(ii) in the provision of a service,

the advertising of which on ITV is prohibited by virtue of any provision of that Act or of the code under section 9 of that Act.").
Page 181, line 35, leave out paragraph 8 and insert—("8.—(1) Part V of this Act shall have effect as if—
(a) section 131(3) of this Act included a reference to any television programme broadcast by the Commission during the interim period;
(b) (subject to sub-paragraph (2)) the Commission were—

(i) in relation to the provision by them of television broadcasting services in accordance with this Part of this Schedule, and

(ii) in relation to the broadcasting of advertisements on S4C during the interim period,

a broadcasting body within the meaning of that Part of this Act; and
(c) the Welsh Authority accordingly were not a broadcasting body within the meaning of that Part of this Act in relation to any such broadcasting of advertisements on S4C.
(2) Sub-paragraph (1) (b) shall not have effect for the purposes of section 133(5) of this Act; and the Commission shall make such variations of any contract to which paragraph 2(1) above applies as appear to them to be appropriate—
(a) for requiring the programme contractor under that contract—

(i) to make a recording of every programme provided by him which is broadcast by the Commission during the interim period, and to retain that recording for the period of 90 days beginning with the broadcast,

(ii) if requested to do so by the Commission for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4), 143(3) or 155(1) of this Act, to produce any such recording to them, and

(iii) if requested to do so by the Commission for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4) or 143(3) of this Act, to produce to them any transcript of any such programme which he is able to produce to them; and

(b) for ensuring compliance by the programme contractor with any request to which section 133(7) of this Act applies which may be made to him by the BCC.
(3) For the financial year which includes the commencement of section 137 of this Act, and each subsequent financial year falling wholly or partly within the interim period, the Secretary of State shall notify to the Commission the sum which he considers to be the appropriate contribution by that body, in respect of the programme contractors under contracts to which paragraph 2(1) above applies, towards the expenses of the BCC; and the Commission shall pay to the Secretary of State any sum notified to them under this sub-paragraph.
(4) Paragraph 2(1) (g) (i) of Schedule 11 to this Act shall have effect during the interim period as if the reference to the BBC or the Welsh Authority included a reference to the Commission.
(5) In this paragraph "the BCC" means the Broadcasting Complaints Commission.").
Page 181, line 45, at end insert—
("Provisions relating to Broadcasting Standards Council
8A. Part VI of this Act shall have effect during the interim period as if—
(a) section 140(2) of this Act included a reference to any television programme broadcast by the Commission during that period;
(b) the Commission were—

(i) in relation to the provision by them of television broadcasting services in accordance with this Part of this Schedule, and

(ii) in relation to the broadcasting of advertisements on S4C during the interim period,

a broadcasting body within the meaning of that Part of this Act; and
(c) the Welsh Authority accordingly were not a broadcasting body within the meaning of that Part of this Act in relation to any such broadcasting of advertisements on S4C.").
Page 182, line 14, at end insert—
("PART IIA
REPLACEMENT OF DBS CONTRACTS BY
LICENCES UNDER PART I
Replacement of DBS programme contract by domestic satellite licence
1.—(1) Where any contract which, by virtue of paragraph 2(1) in Part II of this Schedule, has effect as a contract between the Commission and a DBS programme contractor is effective immediately before the relevant date—

(a) the contract shall cease to have effect on that date; but

(b) the contractor shall be granted by the Commission as from that date a licence under Part I of this Act to provide a domestic satellite service which, in accordance with section 39(1A) of this Act, authorises the provision of a multichannel service on the frequencies on which any DBS services consisting of programmes provided by him under the contract were being provided by the Commission down to that date.

(2) In sub-paragraph (1) "multichannel service" means a service which to any extent consists in the simultaneous transmission of different programmes on different frequencies.
(3) Any licence granted in pursuance of sub-paragraph (1) shall be so granted notwithstanding anything in sections 15 to 17 of this Act (as applied by section 39 of this Act); and nothing in section 19 of this Act (as so applied) shall apply to any such licence until such time (if any) as it is renewed in accordance with sub-paragraph (4).
(4) Section 20 of this Act (as so applied) shall apply to any such licence as if—

(a) in subsection (1), the first reference to a period of fifteen years were a reference to the period beginning with the relevant date and ending with the date on which the contract referred to in sub-paragraph (1) would have expired apart from that sub-paragraph;

(b) in subsection (7) (b), the words from "a different" to "as" were omitted; and

(c) in subsection (10) (a), the reference to any conditions included in the licence in pursuance of section 19 were a reference to any conditions so included in accordance with sub-paragraph (5) below.

(5) Where any such licence is to be renewed in accordance with sub-paragraph (4), the Commission shall (notwithstanding section 3(4) of this Act) by notice served on the licence holder vary the licence, as from the date of its renewal, by including in it such conditions as appear to them to be necessary or expedient in consequence of sub-paragraph (4).
(6) Section 3(3) shall, in its application in relation to any such licence, have effect—

(a) with the omission of paragraph (a), and

1510

(b) as if the reference to Part I of this Act included a reference to this Part of this Schedule.

(7) Section 36 shall have effect in relation to any such licence with the omission of subsection (2); and the maximum amount which the holder of any such licence may be required to pay by way of a financial penalty imposed in pursuance of subsection (1) (a) of that section shall instead be the sum for the time being specified in section 40(5).
(8) Except as provided in the preceding provisions of this paragraph, Part I of this Act applies to a licence granted in pursuance of this paragraph as it applies to any other licence to provide a domestic satellite service.
(9) In this Part of this Schedule "the relevant date" means the day immediately following the end of the interim period.
Power to require licence holder to make additional payments under 1981 Act
2.—(1) The Secretary of State may by order provide for such of the provisions of sections 32 to 35 of, and Schedule 4 to, the 1981 Act as are specified in the order to have effect (subject to such modifications as are so specified)—

(a) in relation to the holder of any licence granted in pursuance of paragraph 1 above, or

(b) in relation to any such licence,

with a view to making provision for and in connection with the making by the holder of any such licence to the Commission of payments determined in accordance with section 32 of that Act in respect of profits or advertising revenue (or both) within the meaning of that section.
(2) Any such order shall be so framed as to secure that, subject to such modifications as the Secretary of State considers appropriate and to sub-paragraph (4), the provisions of the 1981 Act applied by the order as mentioned in sub-paragraph (1) (a) and (b) so apply in a similar way to that in which they applied immediately before the relevant date in relation to a DBS programme contractor or (as the case may be) in relation to the contract of any such contractor.
(3) Without prejudice to the generality of sub-paragraph (2), any such order shall provide for any excess of a DBS programme contractor's relevant expenditure over his relevant income to be carried forward and treated as relevant expenditure for the purpose of computing his profits as the holder of a licence granted in pursuance of paragraph I above.
Expressions used in this sub-paragraph which are also used in Schedule 4 to the 1981 Act have the same meaning as in that Schedule.
(4) The power of the Secretary of State to make an order under subsection (8) of section 32 of the 1981 Act shall include power to make an order amending any of the provisions of subsections (4) and (5) of that section in so far as they have effect, by virtue of sub-paragraph (1), in relation to the holder of a licence granted in pursuance of paragraph 1 above.
(5) Where an order under sub-paragraph (1) comes into force at any time after the relevant date, the Commission shall (notwithstanding section 3(4) of this Act) by notice served on the licence holder vary any licence granted in pursuance of paragraph 1 above by including in it such conditions as appear to them to be necessary or expedient in consequence of the order.
(6) Nothing in any such order shall impose on the holder of any such licence any liability to make any payment in respect of any time when any conditions included in the licence in accordance with paragraph 1(5) above are in force.
(7) An order shall not be made by the Secretary of State under sub-paragraph (1) unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
Replacement of DBS teletext contract by additional services licence
3.—(1) Where any contract which, by virtue of paragraph 2(1) in Part II of this Schedule, has effect as a contract between the Commission and a DBS teletext contractor is effective immediately before the relevant date—

1511

(a) the contract shall cease to have effect on that date; but

(b) the contractor shall be granted by the Commission as from that date an additional services licence under Part I of this Act which allocates for use under the licence all of the spare capacity within the frequencies on which any DBS services consisting of programmes provided by him as a DBS programme contractor were provided by the Commission down to that date.

(2) Any such licence shall be so granted notwithstanding anything in sections 45 and 46 of this Act; and nothing in section 47 of this Act shall apply to any such licence until such time (if any) as it is renewed in accordance with sub-paragraph (3).
(3) Section 48 of this Act shall apply to any such licence as if—

(a) in subsection (1) (a), the reference to a period of ten years were a reference to the period beginning with the relevant date and ending with the date on which any contract to which paragraph 1(1) above applies and to which the DBS teletext contractor was a party immediately before the relevant date would have expired apart from that provision;

(b) subsection (3) were omitted;

(c) in subsection (6), paragraph (a) were omitted;

(d) in subsection (7) (b), the words from "a different" to "as" were omitted; and

(e) in subsection (10), the reference to any conditions included in the licence in pursuance of section 47 were a reference to any conditions so included in accordance with sub-paragraph (4) below.

(4) Where any such licence is to be renewed in accordance with sub-paragraph (3), the Commission shall (notwithstanding section 3(4) of this Act) by notice served on the licence holder vary the licence, as from the date of its renewal, by including in it such conditions as appear to them to be necessary or expedient in consequence of sub-paragraph (3).
(5) Section 3(3) shall, in its application in relation to any such licence, have effect—

(a) with the omission of paragraph (a), and

(b) as if the reference to Part I of this Act included a reference to this Part of this Schedule.

(6) Section 50 shall have effect in relation to any such licence with the omission of subsection (2); and the maximum amount which the holder of any such licence may be required to pay by way of a financial penalty imposed in pursuance of subsection (1) of that section shall instead be the sum for the time being specified in section 40(5).
(7) Except as provided in the preceding provisions of this paragraph, Part I of this Act applies to a licence granted in pursuance of this paragraph as it applies to any other additional services licence.").
Page 182, line 25, after ("quality") insert ("both as to the transmission and").
Page 182, line 32, leave out ("section") and insert ("sections 28 and").
Page 182, line 34, leave out ("relation to the Authority and") and insert ("connection with").
Page 182, line 36, leave out ("relation to the IBA and") and insert ("connection with").
Page 182, line 37, at end insert—
("(3A) The provisions specified in sub-paragraph (3) above shall have effect in accordance with that sub-paragraph with the following general modifications, namely—

(a) any reference to the IBA shall (subject to paragraph (b) and sub-paragraph (6) below) be construed as a reference to the Authority; and

(b) any reference to any of the broadcasting stations used by the IBA shall be construed as a reference to any of the broadcasting stations used in the provision of any of the services provided by the Authority as mentioned in sub-paragraph (1) above.").

Page 182, line 42, at end insert—
("(5) Section 8 of the 1981 Act shall have effect in accordance with sub-paragraph (3) above with the omission of subsections (6) to (9) of that section; but (except in the case of any programme to which the Authority determine that the following prohibition is not to apply) none of the broadcasting services provided by the Authority as mentioned in sub-paragraph (1) above shall include a programme which is sponsored by any person whose business consists, wholly or mainly—

(a) in the manufacture or supply of a product, or

(b) in the provision of a service,

the advertising of which in any such broadcasting service is prohibited by virtue of any provision of that Act (as applied by this paragraph) or of the code under section 9 of that Act (as so applied).
(6) Section 29(5) of the 1981 Act shall have effect in accordance with sub-paragraph (3) above as if the reference to requiring the IBA by notice in writing to do, or not to do, anything mentioned in that provision were a reference to requiring the Authority by notice in writing to direct any programme contractor specified in the notice—

(a) to do, or not to do, that thing, or

(b) (if the context so requires) to secure that that thing is or is not done.

(7) Without prejudice to the generality of sub-paragraph (5) of paragraph 2 below, the Authority may make such variations of a contract to which sub-paragraph (1) of that paragraph applies as appear to them to be appropriate for facilitating or ensuring compliance with any direction or notice given to or served on them under section 28 or 29 of the 1981 Act (as applied by this paragraph).").
Page 183, line 6, after ("contractor") insert ("and any other party to it").
Page 183, line 29, after ("shall") insert ("(subject to paragraphs (aa) and (ab) below)").
Page 183, line 30, leave out ("and") and insert—

("(aa) sections 21 and 23 shall have effect as if any reference to the IBA's obligation to transmit the programmes supplied by a programme contractor were a reference to the right and the duty of the programme contractor under his contract to provide programmes for broadcasting in one of the services provided by the Authority as mentioned in paragraph 1(1) above;

(ab) section 22 shall have effect as if any reference to the programmes supplied to the IBA were a reference to the programmes supplied for broadcasting in one of those services; and").

Page 183, line 38, leave out ("sub-paragraph (4) (b)") and insert ("any of the provisions of this Part of this Schedule").
Page 183, line 40, leave out paragraph 3 and insert—
("3.—(1) Part V of this Act shall have effect as if—

(a) section 131(3) of this Act included a reference to any sound programme broadcast by the Authority in accordance with this Part of this Schedule; and

(b) (subject to sub-paragraph (2)) the Authority were, in relation to the provision by them of local sound broadcasting services in accordance with this Part of this Schedule, a broadcasting body within the meaning of that Part of this Act.

(2) Sub-paragraph (1) (b) shall not have effect for the purposes of section 133(5) of this Act; and the Authority shall make such variations of any contract which continues in force by virtue of paragraph 2(1) above as appear to them to be appropriate—
(a) for requiring the programme contractor under that contract—

(i) to make a recording of every programme provided by him which is broadcast by the Authority in accordance with this Part of this Schedule and to retain that recording for the period of 42 days beginning with the broadcast,

1513

(ii) if requested to do so by the Authority for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4), 143(3) or 155(1) of this Act, to produce any such recording to them, and

(iii) if requested to do so by the Authority for the purpose of enabling them to comply with any requirement imposed on them in pursuance of section 133(4) or 143(3) of this Act, to produce to them any transcript of any such programme which he is able to produce to them; and

(b) for ensuring compliance by the programme contractor with any request to which section 133(7) of this Act applies which may be made to him by the BCC.
(3) For the financial year which includes the commencement of section 137 of this Act, and each subsequent financial year falling wholly or partly within the period during which the Authority provide local sound broadcasting services in accordance with this Part of this Schedule, the Secretary of State shall notify to the Authority the sum which he considers to be the appropriate contribution by that body, in respect of the programme contractors under contracts which continue in force by virtue of paragraph 2(1) above, towards the expenses of the BCC; and the Authority shall pay to the Secretary of State any sum notified to them under this sub-paragraph.
(4) Paragraph 2(1) (g) (i) of Schedule 11 to this Act shall have effect during the period referred to in sub-paragraph (3) above as if the reference to the BBC or the Welsh Authority included a reference to the Authority.
(5) In this paragraph "the BCC" means the Broadcasting Complaints Commission.").
Page 183, line 47, at end insert—
("Provisions relating 'o Broadcasting Standards Council
3A. Part VI of this Act shall have effect as if—

(a) section 140(2) of this Act included a reference to any sound programme broadcast by the Authority in accordance with this Part of this Schedule; and

(b) the Authority were, in relation to the provision by them of local sound broadcasting services in accordance with this Part of this Schedule, a broadcasting body within the meaning of that Part of this Act.").

Page 184, leave out lines 37 and 38.
Page 185, line 6, leave out from ("locality") to end of line 7 and insert ("comprised in the locality in which such broadcasts were for the time being to be provided by another programme contractor under a contract entered into before that time,").
The noble Viscount said: I spoke to these amendments when dealing with Amendment No. 307. I beg to move en bloc.
On Question, amendments agreed to.
Schedule 9, as amended, agreed to.
Clause 123 [Functions exercisable by IBA before transfer date in connection with local sound broadcasting]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309ZC to 309ZJ:
Page 99, line 30, leave out ("any relevant transmitting equipment") and insert (", or of an interest in, any relevant assets").
Page 99, line 32, after ("so") insert ("on such terms and").
Page 99, line 33, leave out ("it") and insert ("any such consideration").
Page 99, line 33, leave out ("equipment") and insert ("assets").
Page 99, line 39, at end insert:
(" "relevant asset" means any equipment or other asset (of whatever description) which has been used or held by the IBA in connection with the transmission of local sound broadcasts;").
Page 99, leave out lines 44 to 46.
Page 99, leave out lines 47 and 48.
The noble Viscount said: I spoke to these amendments when moving Amendment No. 307. I beg to move en bloc.
On Question, amendments agreed to.
Clause 123, as amended, agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 309ZK:
After Clause 123, insert the following new clause:
("Transitional arrangements relating to existing cable services
Schedule 10 to this Act shall have effect—
(a) for the purpose of the regulation by the Commission on and after the transfer date of—

(i) diffusion services (within the meaning of Part I of the Cable and Broadcasting Act 1984) which, immediately before that date, were authorised to be provided under that Part of that Act, and

(ii) services provided in succession to such services; and

(b) for the purpose of the regulation by the Commission or the Radio Authority on and after the transfer date of services provided in succession to restricted services (within the meaning of that Part of that Act) which, immediately before that date, were authorised to be provided under that Part of that Act.").
On Question, amendment agreed to.
Schedule 10 [Transitional Provisions Relating to Existing Cable Services]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309ZL to 309ZZH:
Page 186, line 12, leave out (""relevant licence" means a licence") and insert ("and in Part III of this Schedule "relevant licence" means a licence to provide a prescribed or other diffusion service").
Page 186, line 13, leave out ("(3)").
Page 186, line 38, leave out from ("to") to ("as") in line 40 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above").
Page 187, line 6, after ("is") insert ("authorised").
Page 187, line 11, leave out sub-paragraph (3) and insert:
("(3) A local delivery licence granted in pursuance of this paragraph may authorise the licensed service to be provided by wireless telegraphy to such extent as is specified in the licence.").
Page 187, line 17, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen").
Page 187, line 28, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,").
Page 187, line 43, after ("be") insert ("authorised to be").
Page 187, line 44, at end insert ("authorised to be").
Page 188, line 30, at end insert:
("(6) No person shall, in connection with a particular licence to which paragraph 1(1) above applies, be granted both a licence granted in pursuance of this paragraph and a licence granted in pursuance of paragraph 3A below; and that paragraph shall have effect subject to this sub-paragraph.").
Page 188, line 30, at end insert:
(" Prescribed diffusion services: cable licences to be succeeded on their expiry by local delivery licences
3A.—(1) Subject to the following provisions of this paragraph, a person who is the holder of a licence to provide a prescribed diffusion service, being a licence to which paragraph 1(1) above applies ("the existing licence"), may apply to the Commission for the grant, as from the date on which the existing licence is due to expire ("the expiry date"), of a licence under Part II of this Act to provide a local delivery service for the area in which the prescribed diffusion service is authorised to be provided under the existing licence.
(2) An application under sub-paragraph (1)—
(a) may be made by the holder of the existing licence not earlier than five years before the expiry date and not later than the relevant date; and
(b) must be in writing and specify—

(i) the area which would be covered by the applicant's proposed local delivery service, and

(ii) the technical means by which that service would be provided.

(3) Where any such application is made before the relevant date, the Commission may postpone the consideration of it by them for as long as they think appropriate but not beyond that date.
(4) In sub-paragraphs (2) and (3) "the relevant date" means the date which the Commission determine to be that by which they would need to publish a notice under section 69 of this Act if they were to grant, as from the expiry date, such a licence under Part II of this Act as is mentioned in sub-paragraph (1).
(5) Notwithstanding anything in sections 69 to 71 of this Act, where an application under sub-paragraph (1) has been duly made to the Commission, they may only refuse the application if—

(a) they propose to grant, as a replacement for the existing licence, a local delivery licence authorising the provision of a local delivery service for an area which would be different from that in which the applicant's service is authorised to be provided under the existing licence ("the franchise area"); or

(b) the applicant is not, at the time when he makes his application, providing a prescribed diffusion service throughout the whole of the franchise area; or

(c) it appears to them that the applicant's proposed local delivery service would not cover the whole of the franchise area; or

(d) it appears to them that any telecommunication system proposed to be used by the applicant in the provision of that service would not be acceptable to the relevant licensing authorities.

(6) A local delivery licence granted in pursuance of this paragraph shall come into force on the expiry date.
(7) Subject to sub-paragraph (8), subsections (6) to (9) of section 73 of this Act shall apply in connection with the grant of an application for a local delivery licence under sub-paragraph (1) above as they apply in connection with the grant of an application for the renewal of a local delivery licence under subsection (1) of that section.
(8) In the application of those subsections in accordance with sub-paragraph (7)—

(a) any reference to the renewal of a local delivery licence stall be construed as a reference to the grant of such a licence in pursuance of this paragraph (and related expressions shall be construed accordingly);

(b) in subsection (6) (b), the words from "a different" to "as" shall be omitted; and

(c) in subsection (7), the words ", in accordance with sections 69 to 71, a licence" shall be substituted for "a fresh licence".

(9) Sub-paragraphs (3) and (7) to (9) of paragraph 2 above shall have effect in relation to a local delivery licence granted in pursuance of this paragraph as they have effect in relation to such a licence granted in pursuance of that paragraph.
(10) In this paragraph "the relevant licensing authorities" has the same meaning as in section 70 of this Act.").
Page 188, line 37, after ("being") insert ("authorised to be").
Page 188, line 49, leave out sub-paragraph (3).
Page 189, line 12, leave out from ("to") to ("as") in line 14 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above").
Page 189, line 15, at end insert:
("(5) Where—
(a) a licence to which sub-paragraph (1) applies ("the relevant licence") is due to expire on a particular date in accordance with that sub-paragraph (being a date falling within the period specified in sub-paragraph (6)), and
(b) it appears to the Commission that on that date there would be in force either—

(i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (1) (b), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided,
the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (6)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b) (i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above.
(6) A licence to which sub-paragraph (1) applies shall not continue in force in accordance with that sub-paragraph or sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date.
(7) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (8) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date.
(8) The conditions referred to in sub-paragraph (7) are—
(a) that neither of the following is in force, namely—

(i) any such licence to provide a prescribed diffusion service as is referred to in subparagraph (1) (b), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a) (i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date.
(9) Subject to sub-paragraph (10), the following provisions, namely—

(a) sub-paragraphs (7) to (9) of paragraph 2 above, and

(b) sub-paragraphs (2) to (5) of paragraph 5 below,

shall have effect in relation to a local delivery licence granted in pursuance of sub-paragraph (7) above as they have effect in relation to such a licence granted in pursuance of paragraph 2 above or (as the case may be) paragraph 5 below.
(10) In its application in relation to a licence granted in pursuance of sub-paragraph (7), paragraph 5(4) (a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date.").
Page 189, line 25, leave out ("being") and insert ("authorised to be").
Page 189, line 32, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen").
Page 189, line 33, at end insert (", and the second reference to a period of fifteen years were a reference to a period of five years").
Page 189, line 44, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,").
Page 190, line 21, after ("date") insert ("either—
(i) ").
Page 190, line 22, at end insert (", or
(ii) is specified in an order made by the Secretary of State.").
Page 190, line 25, after ("being") insert ("authorised to be").
On Question, amendments agreed to.
[Amendment No. 309A not moved.]
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309B to 309S:
Page 190, line 36, leave out sub-paragraph (5) and insert:
("(5) Where—
(a) a licence granted under sub-paragraph (2) ("the relevant licence") is due to expire on a particular date in accordance with sub-paragraph (3), and
(b) it appears to the Commission that on that date there would be in force either—

(i) any such licence to provide a prescribed diffusion service as is referred to in subparagraph (2), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided,
the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (5A)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b)(i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above.
(5A) A licence granted under subsection (2) shall not continue in force in accordance with sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date.
(5B) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (5C) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date.
(5C) The conditions referred to in sub-paragraph (5B) are—
(a) that neither of the following is in force, namely—

(i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (2), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a)(i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date.").
Page 191, line 7, after ("(7)") insert ("Subject to sub-paragraph (8)").
Page 191, line 10, after ("sub-paragraph") insert ("(5B) or").
Page 191, line 12, at end insert:
("(8) In its application in relation to a licence granted in pursuance of sub-paragraph (5B) above, paragraph 5(4)(a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date.").
Page 191, line 12, at end insert:
("(9) In the case of a local delivery licence granted in pursuance of sub-paragraph (6) above, nothing in paragraph 1(1) in Part II of Schedule 2 to this Act shall have the effect of rendering—

(a) a local authority, or

(b) a body which is controlled by such an authority,

a disqualified person in relation to the licence during the period of five years beginning with the date of its coming into force; and in this sub-paragraph "local authority" has the same meaning as in that Schedule.").
Page 191, line 12, at end insert:
("Other diffusion services: services falling partly within and partly outside franchise areas
7A.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a diffusion service which—

(a) is not a prescribed diffusion service, but

(b) is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) applies ("the franchise area"),

then (subject to paragraph 6 above)—

(i) paragraph 4 above shall apply to the licence to the extent that it authorises the provision of a diffusion service in so much of the relevant area as is comprised in the franchise area, and

(ii) paragraph 5(1) above shall apply to the licence to the extent that it authorises the provision of such a service in so much of the relevant area as is not so comprised.

(2) The reference in paragraph 5(1) to the area in which a diffusion service was authorised to be provided immediately before the transfer date shall accordingly be construed, in relation to a licence to which sub-paragraph (1) above applies,

1519
as a reference to so much of that area as is not comprised in the franchise area.
(3) The reference in paragraph 6(1) above to a licence to provide a diffusion service shall be construed, in relation to a licence to which sub-paragraph (1) above applies—

(a) in connection with the application of paragraph 4(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(i) above; and

(b) in connection with the application of paragraph 5(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(ii) above.

(4) Where immediately before the transfer date any such diffusion service as is mentioned in paragraph 7(1) above is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) above applies ("the franchise area"), then (subject to sub-paragraph (5) below)—

(a) paragraph 7(2) above shall apply to the service to the extent that it is, immediately before that date, being provided in so much of the relevant area as is comprised in the franchise area, and

(b) paragraph 7(6) above shall apply to the service to the extent that it is then being provided in so much of the relevant area as is not so comprised.

(5) Neither paragraph 7(2) nor paragraph 7(6) shall apply to a diffusion service in accordance with sub-paragraph (4) if the part of the service to which it would otherwise so apply would serve only—

(a) a single building, or

(b) an area in which there are not more than the prescribed number of dwelling-houses;

and in paragraph (b) "the prescribed number" has the same meaning as in paragraph 6(1) above.").
Page 191, line 12, at end insert:
("Restricted services: replacement of existing licences
7B.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a restricted service ("the restricted service licence"), the licence shall cease to have effect on the transfer date; but if he makes the appropriate request before that date the holder of the licence shall—

(a) where the restricted service consists in the provision of television programmes, be granted by the Commission as from that date a licence under Part I of this Act to provide a licensable programme service, or

(b) where the restricted service consists in the provision of sound programmes, be granted by the Radio Authority as from that date a licence under Part III of this Act to provide a licensable sound programme service,

being a service of such a description as will, in the opinion of the Commission or (as the case may be) the Radio Authority, enable the service to be provided under the licence mentioned in paragraph (a) or (b) to correspond as nearly as possible to the service provided under the restricted service licence.
(2) In sub-paragraph (1) "the appropriate request"—

(a) in a case to which paragraph (a) of that sub-paragraph applies, means a request to the Commission; and

(b) in a case to which paragraph (b) of that sub-paragraph applies, means a request to the Radio Authority.

(3) Nothing in section 42(1) to (3) or (as the case may be) section 81(3)(b) or 106(1) or (2) of this Act shall apply in relation to a licence granted in pursuance of sub-paragraph (1); and any such licence shall (subject to the provisions of Part I or, as the case may be, Part III of this Act) continue in
1520
force for the remainder of the period specified in the restricted service licence.
(4) Section 3(3) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(a), have effect as if the reference to Part I of this Act included a reference to this Part of this Schedule; and section 81(4) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(b), have effect as if the reference to Part III of this Act included a reference to this Part of this Schedule.
(5) Except as provided in sub-paragraphs (3) and (4)—

(a) Part I of this Act applies to a licence granted in pursuance of sub-paragraph (1)(a) as it applies to any other licence granted under that Part to provide a licensable programme service; and

(b) Part III of this Act applies to a licence granted in pursuance of sub-paragraph (1)(b) as it applies to any other licence granted under that Part to provide a licensable sound programme service.

(6) In this paragraph—
"licensable programme service" has the same meaning as in Part I of this Act;
"licensable sound programme service" has the same meaning as in Part III of this Act;
"restricted service" has the same meaning as in Part I of the 1984 Act.").
Page 192, line 23, after ("(3)") insert: ("(aa)").
Page 192, line 28, at end insert (", or
(bb) vary the period for which—

(i) a licence to which paragraph 4(1) in Part II of this Schedule applies, or

(ii) a licence granted in pursuance of paragraph 7(2) in that Part,

is to continue in force.").
Page 192, line 30, leave out ("4(3)") and insert ("4(5)").
Page 192, line 30, at end insert ("; but any such variation shall be effected by means of a notice served by the Commission on the holder of the licence in question.").
Page 192, line 30, at end insert:
("(6) Section 3(6) and (7) of this Act shall apply to a relevant licence as they apply to a licence granted under Part II of this Act.").
Page 193, line 46, leave out (""control",").
Page 194, line 3, at end insert:
("(aa) any reference to a national or local newspaper is a reference to a newspaper which is, or is to be treated as, a national or local newspaper for the purposes of Part IV of that Schedule;").
Page 195, line 11, leave out ("corporate").
Page 195, leave out line 27.
The noble Viscount said: This group of amendments makes technical amendments to Schedule 10 to the Bill.
Baroness Birk: Can the noble Viscount say whether the grouping includes Amendment No. 309T?
Viscount Ullswater: No, it does not. It stopped one amendment short in that headlong rush.
These amendments all relate to the transitional arrangements for existing cable systems. The new clause gives effect to Schedule 10. It replaces a similar provision which was previously in Clause 122. The clause now deals only with Schedule 9. The other amendments, which are mainly technical, make a

1521
number of changes to Schedule 10. There are, however, four additions of substance. It may be helpful to the Committee if I explain them briefly.
First, they give effect to the undertaking made by my honourable friend, the Minister of State in another place, that similar renewal provisions to those in Clause 73 should apply to broadband franchise holders who by virtue of this schedule retain their status under the 1984 Act. Provided they meet the necessary criteria, such operators would be granted a local delivery licence on renewal. Secondly, provision is made to cover the specific transitional problem of SMATV systems under construction in half-built housing developments which, when complete, would cover more than 1,000 households. Thirdly, the amendments make transitional provisions for the licensing of SMATV systems partly within and partly outside cable franchise areas.
Finally, provision is made for restricted services. Any restricted services licence granted under the 1984 Act will cease to have effect on the transfer date; but holders of such licences will be entitled to be granted by the ITC (or Radio Authority) a licensable programme service licence (or a licensable sound programme service licence) in respect of their services. The amendments are of a technical nature. I beg to move.
On Question, amendments agreed to.
Schedule 10 [Transitional provisions relating to existing cable services]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309ZL to 309ZZH:
Page 186, line 12, leave out (""relevant licence" means a licence") and insert ("and in Part III of this Schedule "relevant licence" means a licence to provide a prescribed or other diffusion service").
Page 186, line 13, leave out ("(3)").
Page 186, line 38, leave out from ("to") to ("as") in line 40 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above").
Page 187, line 6, after ("is") insert ("authorised").
Page 187, line 11, leave out sub-paragraph (3) and insert:
("(3) A local delivery licence granted in pursuance of this paragraph may authorise the licensed service to be provided by wireless telegraphy to such extent as is specified in the licence.").
Page 187, line 17, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen").
Page 187, line 28, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,").
Page 187, line 43, after ("be") insert ("authorised to be").
Page 187, line 44, at end insert ("authorised to be").
Page 188, line 30, at end insert:
("(6) No person shall, in connection with a particular licence to which paragraph 1(1) above applies, be granted both a licence granted in pursuance of this paragraph and a licence granted in pursuance of paragraph 3A below; and that paragraph shall have effect subject to this sub-paragraph.").
Page 188, line 30, at end insert:
(" Prescribed diffusion services: cable licences to be succeeded on their expiry by local delivery licences
3A.—(1) Subject to the following provisions of this paragraph, a person who is the holder of a licence to provide a prescribed diffusion service, being a licence to which paragraph 1(1) above applies ("the existing licence"), may apply to the Commission for the grant, as from the date on which the existing licence is due to expire ("the expiry date"), of a licence under Part II of this Act to provide a local delivery service for the area in which the prescribed diffusion service is authorised to be provided under the existing licence.
(2) An application under sub-paragraph (1)—
(a) may be made by the holder of the existing licence not earlier than five years before the expiry date and not later than the relevant date; and
(b) must be in writing and specify—

(i) the area which would be covered by the applicant's proposed local delivery service, and

(ii) the technical means by which that service would be provided.

(3) Where any such application is made before the relevant date, the Commission may postpone the consideration of it by them for as long as they think appropriate but not beyond that date.
(4) In sub-paragraphs (2) and (3) "the relevant date" means the date which the Commission determine to be that by which they would need to publish a notice under section 69 of this Act if they were to grant, as from the expiry date, such a licence under Part II of this Act as is mentioned in sub-paragraph (1).
(5) Notwithstanding anything in sections 69 to 71 of this Act, where an application under sub-paragraph (1) has been duly made to the Commission, they may only refuse the application if—

(a) they propose to grant, as a replacement for the existing licence, a local delivery licence authorising the provision of a local delivery service for an area which would be different from that in which the applicant's service is authorised to be provided under the existing licence ("the franchise area"); or

(b) the applicant is not, at the time when he makes his application, providing a prescribed diffusion service throughout the whole of the franchise area; or

(c) it appears to them that the applicant's proposed local delivery service would not cover the whole of the franchise area; or

(d) it appears to them that any telecommunication system proposed to be used by the applicant in the provision of that service would not be acceptable to the relevant licensing authorities.

(6) A local delivery licence granted in pursuance of this paragraph shall come into force on the expiry date.
(7) Subject to sub-paragraph (8), subsections (6) to (9) of section 73 of this Act shall apply in connection with the grant of an application for a local delivery licence under sub-paragraph (1) above as they apply in connection with the grant of an application for the renewal of a local delivery licence under subsection (1) of that section.
(8) In the application of those subsections in accordance with sub-paragraph (7)—

(a) any reference to the renewal of a local delivery licence shall be construed as a reference to the grant of such a licence in pursuance of this paragraph (and related expressions shall be construed accordingly);

(b) in subsection (6)(b), the words from "a different" to "as" shall be omitted; and

(c) in subsection (7), the words ", in accordance with sections 69 to 71, a licence" shall be substituted for "a fresh licence".

(9) Sub-paragraphs (3) and (7) to (9) of paragraph 2 above shall have effect in relation to a local delivery licence granted in pursuance of this paragraph as they have effect in relation to such a licence granted in pursuance of that paragraph.
(10) In this paragraph "the relevant licensing authorities" has the same meaning as in section 70 of this Act.").
Page 188, line 37, after ("being") insert ("authorised to be").
Page 188, line 49, leave out sub-paragraph (3).
Page 189, line 12, leave out from ("to") to ("as") in line 14 and insert ("the generality of paragraph 2(3) in Part III of this Schedule, the Commission may, in accordance with that provision, make such variations of a licence which continues in force by virtue of sub-paragraph (1) above").
Page 189, line 15, at end insert:
("(5) Where—
(a) a licence to which sub-paragraph (1) applies ("the relevant licence") is due to expire on a particular date in accordance with that sub-paragraph (being a date falling within the period specified in sub-paragraph (6)), and
(b) it appears to the Commission that on that date there would be in force either—

(i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (1)(b), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided,
the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (6)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b)(i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above.
(6) A licence to which sub-paragraph (1) applies shall not continue in force in accordance with that sub-paragraph or sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date.
(7) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (8) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date.
(8) The conditions referred to in sub-paragraph (7) are—
(a) that neither of the following is in force, namely—

(i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (1)(b), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a)(i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date.
(9) Subject to sub-paragraph (10), the following provisions, namely—

(a) sub-paragraphs (7) to (9) of paragraph 2 above, and

1524

(b) sub-paragraphs (2) to (5) of paragraph 5 below,

shall have effect in relation to a local delivery licence granted in pursuance of sub-paragraph (7) above as they have effect in relation to such a licence granted in pursuance of paragraph 2 above or (as the case may be) paragraph 5 below.
(10) In its application in relation to a licence granted in pursuance of sub-paragraph (7), paragraph 5(4)(a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date.").
Page 189, line 25, leave out ("being") and insert ("authorised to be").
Page 189, line 32, leave out ("reference to fifteen") and insert ("first reference to a period of fifteen").
Page 189, line 33, at end insert (", and the second reference to a period of fifteen years were a reference to a period of five years").
Page 189, line 44, leave out ("vary the licence") and insert ("by notice served on the licence holder vary the licence, as from the date of its renewal,").
Page 190, line 21, after ("date") insert ("either—
(i) ").
Page 190, line 22, at end insert (", or
(ii) is specified in an order made by the Secretary of State.").
Page 190, line 25, after ("being") insert ("authorised to be").
The noble Viscount said: I have spoken to these amendments with Amendment No. 309ZK. I beg to move.
On Question, amendments agreed to.
Lord Morris Lord Morris moved Amendment No. 309A:
Page 190, line 31, leave out ("five years") and insert ("one year").
The noble Lord said: As noble Lords will be aware, the Bill clearly reflects in these technologically volatile times the need for flexibility of technology in the broadcasting market-place and thus enhances consumer choice in broadcasting received in the home. In that, the Government deserve our support and admiration.
I am moving the amendment because there is one aspect of customer choice, and flexibility of the use of technology, that the Government have not properly addressed. That is the shift from narrowband technology to broadband cable technology. As the Bill stands, where a broadband cable operator offering a fully interactive service is franchised by the ITC, or has been franchised previously by the Cable Authority, to provide a service where a narrowband operator is already in situ, the broadband operator will find himself competing on a completely inequitable footing.
The Committee will be aware that narrowband cable operators can provide only a limited service to the customers that they serve. Their obsolescent technology has a capacity of, in most cases, only four to six channels. A few carry more. Unlike broadband operators, they cannot provide interactive services such as home shopping, banking, security services, switching and a myriad of other services which will shortly be on the market.
It was that lack of flexibility of the use of modern technology, thus leading to lack of consumer choice,

1525
that the Bill was intended to address. The Government have accepted the principle that, because of its benefits over narrowband, broadband should be encouraged. Only that can explain why the Bill provides that the ITC shall not renew a narrowband operator's licence if, at the licence renewal date, a broadband operator has started to provide a service in the same locality. That is quite reasonable. It promotes investment in new technology, giving the consumer a better service and greater choice.
It is important that the playing field in that regard be set as level as possible. The new technology broadband operators, offering comprehensive interactive services, will be squeezed out if the Bill remains as it is, giving the narrowband operators a five-year period before they need to renew a licence.
My amendment also seeks to dispel the fear that broadband cable will never displace the old narrowband technology because the commercial odds will be stacked against it. I do not believe that that is the Government's intention. The amendment would help in that regard. I beg to move.
6.45 p.m.
Viscount Ullswater: My noble friend's amendment touches on a complex area of the Bill, and it may be helpful if I were to sketch in the background.
As the law stands, cable systems carrying only BBC and IBA services (including DBS) do not need to be licensed by the Cable Authority. That is because the main purpose of licensing is to regulate programme content. Since BBC and IBA services are separately regulated, licensing by the Cable Authority would be otiose. However, under the Bill, all systems serving more than 1,000 homes will need to be licensed by the ITC, unless they carry only the four terrestrial channels. So systems serving more than 1,000 homes which carry BSB as well as the terrestrial channels will for the first time need to be licensed under the Bill. That should be welcomed by cable operators, as they have expressed concern in the past about the non-licensability of systems carrying BSB.
However, that change gives rise to a need for transitional arrangements to ensure that the presently unlicensed systems can continue in operation. The Bill therefore provides that they should be given five-year licences. My noble friend's amendment would reduce that to one year in those cases where the system fell within a franchise area. A balance must be struck between the legitimate expectations of the operators of the presently unlicensed systems and the interests of the cable franchise holder. As things stand, the former can look forward to an indefinite regulatory life. There is no mechanism to bring those systems to an end, even where there is a cable franchise holder ready and willing to provide an alternative service. The Bill will reduce that expectation to a five-year life. That reduction is balanced by the fact that the operator will be able to start carrying satellite channels other than BSB, but reducing the licence length to one year, as my noble friend suggests, would be rather unfair. The
1526
operator would find that, as a result of an Act of Parliament, he would have to shut down or sell his business within a year.
I recognise that my noble friend is trying to protect the interests of cable operators, but the proposals in the Bill take proper account of their interests by limiting the licence length to five years. I think that my noble friend is seeking to tilt the balance too far in favour of the cable operator. In the light of those arguments, I hope that my noble friend will feel able to withdraw his amendment.
Lord Morris: I have listened with care to what my noble friend has said. Obviously, I shall need time to consider what he has said in print because I do not have the wit to pick up all that he said on this complicated subject. I may write to him if there is any misunderstanding or a need for clarification on my part. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309B to 309S:
Page 190, line 36, leave out sub-paragraph (5) and insert:
("(5) Where—
(a) a licence granted under sub-paragraph (2) ("the relevant licence") is due to expire on a particular date in accordance with sub-paragraph (3), and
(b) it appears to the Commission that on that date there would be in force either—

(i) any such licence to provide a prescribed diffusion service as is referred to in sub-paragraph (2), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service is for the time being provided under the relevant licence ("the relevant service"), but

(c) it also appears to them that on that date the holder of any such licence would not be in a position to provide his licensed service for all of the dwelling-houses for which the relevant service is for the time being provided,
the Commission shall so vary the relevant licence as to secure that (subject to sub-paragraph (5A)) the licence continues in force until such time subsequent to that date as they may specify in a notice given to the holder of the licence; and the Commission shall not specify a time for the purposes of this sub-paragraph unless they have reasonable grounds for believing that, at that time, the holder of any such licence as is mentioned in paragraph (b)(i) or (ii) above would be in a position to provide his licensed service for all of the dwelling-houses referred to in paragraph (c) above.
(5A) A licence granted under subsection (2) shall not continue in force in accordance with sub-paragraph (5) beyond the end of the period of eight years beginning with the transfer date.
(5B) If on the date when such a licence ceases to be in force ("the expiry date") either of the conditions specified in sub-paragraph (5C) is satisfied, the holder of that licence ("the relevant licence") shall be granted by the Commission, as from the expiry date, a licence under Part II of this Act to provide a local delivery service for the area in which a diffusion service was being provided under the relevant licence immediately before that date.
(5C) The conditions referred to in sub-paragraph (5B) are—
(a) that neither of the following is in force, namely—

1527

(i) any such licence to provide a prescribed diffusion service as is referred to in subparagraph (2), or

(ii) a local delivery licence authorising the provision of a local delivery service for an area consisting of or including the area in which a diffusion service was being provided under the relevant licence immediately before the expiry date;

(b) that any such licence as is mentioned in paragraph (a)(i) or (ii) above is in force but it appears to the Commission that the holder of the licence is not in a position to provide his licensed service for all of the dwelling-houses for which a diffusion service was being provided under the relevant licence immediately before the expiry date.").
Page 191, line 7, after ("(7)") insert ("Subject to sub-para graph (8)").
Page 191, line 10, after ("sub-paragraph") insert ("(5B) or").
Page 191, line 12, at end insert:
("(8) In its application in relation to a licence granted in pursuance of sub-paragraph (5B) above, paragraph 5(4)(a) shall have effect with the substitution of a reference to the date as from which the licence is granted for the reference to the transfer date.").
Page 191, line 12, at end insert:
("(9) In the case of a local delivery licence granted in pursuance of sub-paragraph (6) above, nothing in paragraph 1(1) in Part II of Schedule 2 to this Act shall have the effect of rendering—

(a) a local authority, or

(b) a body which is controlled by such an authority,

a disqualified person in relation to the licence during the period of five years beginning with the date of its coming into force; and in this sub-paragraph "local authority" has the same meaning as in that Schedule.").
Page 191, line 12, at end insert:
("Other diffusion services: services falling partly within and partly outside franchise areas
7A.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a diffusion service which—

(a) is not a prescribed diffusion service, but

(b) is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) applies ("the franchise area"),

then (subject to paragraph 6 above)—

(i) Paragraph 4 above shall apply to the licence to the extent that it authorises the provision of a diffusion service in so much of the relevant area as is comprised in the franchise area, and

(ii) paragraph 5(1) above shall apply to the licence to the extent that it authorises the provision of such a service it so much of the relevant area as is not so comprised.

(2) The reference in paragraph 5(1) to the area in which a diffusion service was authorised to be provided immediately before the transfer date shall accordingly be construed, in relation to a licence to which sub-paragraph (1) above applies, as a reference to so much of that area as is not comprised in the franchise area.
(3) The reference in paragraph 6(1) above to a licence to provide a diffusion service shall be construed, in relation to a licence to which sub-paragraph (1) above applies—

(a) in connection with the application of paragraph 4(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(i) above; and

1528

(b) in connection with the application of paragraph 5(1) above, as a reference to the licence to the extent that it authorises the provision of such a service as is mentioned in sub-paragraph (1)(ii) above.

(4) Where immediately before the transfer date any such diffusion service as is mentioned in paragraph 7(1) above is provided in an area ("the relevant area") only part of which is comprised in the area in which a prescribed diffusion service is for the time being authorised to be provided under a licence to which paragraph 1(1) above applies ("the franchise area"), then (subject to sub-paragraph (5) below)—

(a) paragraph 7(2) above shall apply to the service to the extent that it is, immediately before that date, being provided in so much of the relevant area as is comprised in the franchise area, and

(b) paragraph 7(6) above shall apply to the service to the extent that it is then being provided in so much of the relevant area as is not so comprised.

(5) Neither paragraph 7(2) nor paragraph 7(6) shall apply to a diffusion service in accordance with sub-paragraph (4) if the part of the service to which it would otherwise so apply would serve only—

(a) a single building, or

(b) an area in which there are not more than the prescribed number of dwelling-houses;

and in paragraph (b) "the prescribed number" has the same meaning as in paragraph 6(1) above.").
Page 191, line 12, at end insert:
("Restricted services: replacement of existing licences
7B.—(1) Where immediately before the transfer date there is in force under Part I of the 1984 Act a licence to provide a restricted service ("the restricted service licence"), the licence shall cease to have effect on the transfer date; but if he makes the appropriate request before that date the holder of the licence shall—

(a) where the restricted service consists in the provision of television programmes, be granted by the Commission as from that date a licence under Part I of this Act to provide a licensable programme service, or

(b) where the restricted service consists in the provision of sound programmes, be granted by the Radio Authority as from that date a licence under Part III of this Act to provide a licensable sound programme service,

being a service of such a description as will, in the opinion of the Commission or (as the case may be) the Radio Authority, enable the service to be provided under the licence mentioned in paragraph (a) or (b) to correspond as nearly as possible to the service provided under the restricted service licence.
(2) In sub-paragraph (1) "the appropriate request"—

(a) in a case to which paragraph (a) of that sub-paragraph applies, means a request to the Commission; and

(b) in a case to which paragraph (b) of that sub-paragraph applies, means a request to the Radio Authority.

(3) Nothing in section 42(1) to (3) or (as the case may be) section 81(3)(b) or 106(1) or (2) of this Act shall apply in relation to a licence granted in pursuance of sub-paragraph (1); and any such licence shall (subject to the provisions of Part I or, as the case may be, Part III of this Act) continue in force for the remainder of the period specified in the restricted service licence.
(4) Section 3(3) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(a), have effect as if the reference to Part I of this Act included a reference to this Part of this Schedule; and section 81(4) of this Act shall, in its application to a licence granted in pursuance of sub-paragraph (1)(b), have effect as if the reference to Part III of this Act included a reference to this Part of this Schedule.
(5) Except as provided in sub-paragraphs (3) and (4)—

1529

(a) Part I of this Act applies to a licence granted in pursuance of sub-paragraph (1)(a) as it applies to any other licence granted under that Part to provide a licensable programme service; and

(b) Part III of this Act applies to a licence granted in pursuance of sub-paragraph (1)(b) as it applies to any other licence granted under that Part to provide a licensable sound programme service.

(6) In this paragraph—
"licensable programme service" has the same meaning as in Part I of this Act;
"licensable sound programme service" has the same meaning as in Part III of this Act;
"restricted service" has the same meaning as in Part I of the 1984 Act.").
Page 192, line 23, after ("(3)") insert: ("(aa)").
Page 192, line 28, at end insert (", or
(bb) vary the period for which—

(i) a licence to which paragraph 4(1) in Part II of this Schedule applies, or

(ii) a licence granted in pursuance of paragraph 7(2) in that Part,

is to continue in force.").
Page 192, line 30, leave out ("4(3)") and insert ("4(5)").
Page 192, line 30, at end insert ("; but any such variation shall be effected by means of a notice served by the Commission on the holder of the licence in question.").
Page 192, line 30, at end insert:
("(6) Section 3(6) and (7) of this Act shall apply to a relevant licence as they apply to a licence granted under Part II of this Act.").
Page 193, line 46, leave out (""control",").
Page 194, line 3, at end insert:
("(aa) any reference to a national or local newspaper is a reference to a newspaper which is, or is to be treated as, a national or local newspaper for the purposes of Part IV of that Schedule;").
Page 195, line 11, leave out ("corporate").
Page 195, leave out line 27.
The noble Viscount said: I have spoken to these amendments with Amendment No. 309ZK. I beg to move.
On Question, amendments agreed to.
Schedule 10, as amended, agreed to.
Clauses 124 to 127 agreed to.
Viscount Ullswater Viscount Ullswater moved Amendment No. 309T:
After Clause 127, insert the following new clause: ("Loans by Secretary of State to nominated company
.—(1) As from the transfer date the Secretary of State may, with the consent of the Treasury, make loans to the nominated company out of money provided by Parliament; but no loan shall be made by him under this section at a time when the company has ceased to be wholly owned by the Crown.
(2) The aggregate amount outstanding in respect of the principal of loans made by the Secretary of State under this section shall not exceed the limit specified in subsection (3).
(3) That limit is £20 million or such greater sum, not exceeding £100 million, as the Secretary of State may from time to time specify by order made with the consent of the Treasury.
(4) Any loan made by the Secretary of State under this section shall be repaid to him at such times and by such methods, and interest on the loan shall be paid to him at such times and at such rates, as he may from time to time direct with the consent of the Treasury.
(5) An order shall not be made by the Secretary of State under this section unless a draft of it has been laid before and approved by a resolution of the House of Commons.").
The noble Viscount said: In moving this amendment I shall speak also to Amendments Nos. 309U to 309Z. These are technical provisions which seek to regulate the transmission company's borrowing for the period which we intend should be kept as short as possible during which it remains wholly owned by the Crown. I believe that I answered the noble Lord, Lord Thomson of Monifieth, about that transfer at the end of 1990. They are a common feature in privatisation statutes.
The new clause will limit the total funds which may be lent to the company from the Exchequer. We do not expect to need to make significant loans; but it is clearly important that we have the facility, should the need for government loan-funding arise before the company is privatised. Advances will be made only from money voted by Parliament and will be subject to statutory maxima. In the unlikely event of the company needing advances of more than £20 million, an affirmative order would need to be made before the limit could be increased. Advances of more than £100 million would be excluded in any event.
The third amendment, Amendment No. 309W to Clause 28, read with Clause 124(1), makes it possible for the Secretary of State to inject debt into the transmission company before it is sold. Enabling the company to be sold in this way might have technical advantages in managing the proceeds of the privatisation. A final decision on this, and the exact method of sale, has not yet been taken. I believe that I also indicated that on the last amendment. We think that it would be wrong to close off this option. The other amendments are simply drafting matters. I commend the provisions to the Committee.
Baroness Birk: Perhaps I may ask some questions about the amendments. Probably it is my lack of understanding that necessitates them. The loan will be used to set up the company to start with, as I understand it. The Government have received a great many offers—about 20—to take the company over. How will they decide? Once again, may we know what the employee participation will be in all this? I believe that I am right in saying that the ITV companies and the BBC are excluded from these sales. Can the Minister say specifically what the money will be spent on? Is it general infrastructure? Some £20 million, rising to £100 million, is a lot of money, and I hope that it does not somehow manage to disappear.
What are the likely terms of repayment and at what interest rates? If that is too involved, perhaps the Minister can say how it ties up with interest rates generally. How soon will the loan be repaid? In what segments, and how? I am sorry to ask these complicated questions but I have only just read the amendment, and it is difficult to understand.
A point arises with all these amendments—and I gather that many were tabled the other evening. We are trying to understand them—some of us less well than others. If when we go through them again, reading in Hansard how the Minister explained them

1531
—he has explained them as well as he possibly can at this stage—if we are unhappy about some of the points or if questions arise, I take it that they will not be unwelcome at the next stage of proceedings. I find it difficult to take matters in at this rate and density.
The amendments may be transitional or technical, as the Minister said; but a number are more than what I would call technical. I am rather worried, I feel they are whooshing past us without our saying, "Hey, wait a moment, we're not quite sure about that".
Viscount Ullswater: I must agree with the noble Baroness that the amendments have been put down at a late stage. They are complicated and need a certain amount of consideration. I have been advised that it would be perfectly in order to examine them in some detail and read the replies I have given the noble Baroness. Then if need be, she may come back at another stage with probing amendments in order to elicit more information.
The noble Baroness asked one or two questions and I shall try to answer as many as I can. First, the loans will not be used for the purpose of setting up the company. It is unlikely that there will be any requirement for them at all. However, it is a matter of safeguarding the provision that if loans are required, the Bill (and then the Act) will allow for them to be made. We dealt with the method of sale, and I said on a previous occasion that it had not been finally decided. Whatever the exact method, the process will be fair, open and competitive.
Baroness Birk: Perhaps the noble Viscount will allow me to put a further question. Will the method of sale be decided during the progress of the Bill or afterwards, once it has become law?
Viscount Ullswater; I fancy that it will be done after the Bill becomes an Act.
Baroness Birk: If the Minister cannot tell me now, perhaps he can tell me definitely at the next stage. I do not fancy his "I fancy".
Viscount Ullswater: I confirm that the process I am talking about is, as I indicated, that the company would reach the private sector, it would be vested in a company wholly-owned by the Crown at the end of 1990. By that time the Broadcasting Bill will be an Act.
The loans will be subject to interest at normal base rates. The terms would be negotiated when the loans are required. It is important to stress that at the moment no loans are planned so it would be wrong to leave the impression that loans will be made.
Lord Thomson of Monifieth: The method of privatising one half of the public broadcasting transmission system of this country is something about which Parliament is entitled to know a good deal more before the Bill finally becomes an Act.
I feel some sympathy for the Minister who is wrestling with these late amendments. I suspect they came from a department other than the Home Office at this late stage. We need a good deal more information about the Government's intentions at a later stage in the proceedings. For example, can the Minister say something now or perhaps write to me
1532
later about how the privatisation of the IBA side of the transmission system will be performed in relation to the BBC? The United Kingdom has a single broadcasting transmission system. It is shared 50–50 by the BBC and IBA at present. The BBC owns half the sites and, in rough terms, the IBA owns half the sites. I have visited a number of sites where part of the ground belongs to the BBC, and part to the IBA. Unscrambling that omelette must present some problems. We should like to know a little more about it.
7 p.m.
Viscount Ullswater: I agree that these are complicated matters. I believe the right course to follow at the moment is that I should write to the noble Lord and send a copy of that letter to the noble Baroness, Lady Birk. These matters need to be considered in some detail. The noble Lord realises that these amendments have only just been tabled and that no decision has been taken on the method of sale. It is more likely to be a trade sale than a public flotation, but I have no further details on that. However, I shall write to the noble Lord.
Lord Airedale: Perhaps a copy of the letter can be placed in the Library so that the rest of us may be made aware of the position.
Viscount Ullswater: I apologise if I did not make that point clear. I shall of course place a copy of the letter in the Library.
Baroness Birk: Am I right in assuming that a Price Waterhouse report will be issued on the method of sale? Will the Government publish that report?
Viscount Ullswater: My information is that it will not be published.
Baroness Birk: Why should such a report not be made public once a company has been nominated? We are talking about public money.
Viscount Ullswater: It is a question of the Government taking advice on the matter of privatisation. In other cases, the Government do not necessarily publish all the details of reports on methods of privatisation.
Baroness Birk: That is a pity. The Government might not get into such a mess if they published such details.
On Question, amendment agreed to.
Clause 128 [Temporary restriction on borrowings of nominated company]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309U to 309W:
Page 102, line 7, after ("means") insert: ("(a) ")
Page 102, line 8, after ("than") insert:
("(i) ")
Page 102, line 9, at end insert (", and
(ii) loans made to that company by the Secretary of State under section (Loans by Secretary of State to nominated company); and
(b) loans which are to be treated as having been made to that company, including loans which are to be treated as having been so made by virtue of the issue of debentures in pursuance of section 124.").
The noble Viscount said: I beg to move Amendments Nos. 309U to 309W en bloc. I have already spoken to these amendments with Amendment No. 309T.
On Question, amendments agreed to.
Clause 128, as amended, agreed to.
Clause 129 [Interpretation of Part IV]:
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 309X to 309Z:
Page 102, line 12, at end insert:
(""debentures" includes debenture stock;").
Page 102, line 18, leave out from ("company") to end of line 19.
Page 102, line 23, at end insert:
("(1A) Other expressions used in this Part which are also used in the Broadcasting Act 1981 have the same meaning as in that Act.").
The noble Viscount said: I beg to move Amendments Nos. 309X to 309Z en bloc. I have already spoken to these amendments with Amendment No. 309T.
On Question, amendments agreed to.
Clause 129, as amended, agreed to.
Clause 130 agreed to.
Viscount Ullswater: This may be a convenient time to break for dinner. I suggest that we should not return to the Committee stage before 8 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Companies (Fees) (Amendment No. 2) Regulations 1990
7.4 p.m.
Lord Strathclyde Lord Strathclyde rose to move, That the regulations laid before the House on 6th July be approved [23rd Report from the Joint Committee].
The noble Lord said: My Lords, these regulations set out amendments to certain of the fees for the statutory activities of Companies House Executive Agency. They replace a similar order which expired at midnight on 4th July, before it had been considered by this House.
The main changes set out in the regulations are to the fee for a company search, which is increased from £2·50 to £2·75, and to the fee for registering an annual return, which is increased from £20 to £25. In addition, the fees for re-registering a company, for example from a public to a private company, have been standardised at £50.
I am pleased to say that there are no changes to the other statutory fees of Companies House. This includes the fees for incorporation and change of
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name, which will remain at £50 and £40 respectively, the levels set in 1973. Companies House has a duty to recover, taking one year with another, all the costs involved in running the system of regulating companies and of developing company law. In addition from this year the annual return fee will be used to provide a contribution to financing the new framework for setting accounting standards. While Companies House is firmly committed to providing its many customers with a better quality service which represents good value for money, it is now necessary to increase these fees in order to achieve a broad balance between income and the relevant costs. In moving these regulations, I wish to say what a pleasure it is to be dealing again with the noble Lord, Lord Bruce of Donington. I beg to move.
Moved, That the regulations laid before the House on 6th July be approved. [23rd Report from the Joint Committee.]—(Lord Strathclyde.)
Lord Bruce of Donington: My Lords, the House will be grateful to the noble Lord for having made some brief observations on these regulations, No. 1368.
Although the noble Lord introduced the regulations in his usual urbane style, we on this side rather expected to hear an expression of contrition from Her Majesty's Government on this matter. The original regulations, No. 1197, which introduced this same measure, were laid before Parliament on 8th June, to come into force on 1st July. Unhappily, owing to an error for which the Opposition were in no way responsible, they lapsed because they were not approved in time. This is a unique event. If it had not been for the vigilance of my noble friend Lord Williams of Elvel, the original regulations, No. 1197, would have been assumed, wrongly, to be valid. That error would have passed unnoticed, until perhaps some enterprising chappie in about three or four years' time suddenly decided to look at the original regulations No. 1197, and lighted upon the fact that, as they had lapsed at midnight on 4th July, they were not valid at all.
One could envisage circumstances where companies or directors of companies suddenly became apprised through their legal advisers that the sums of money that they had paid, possibly on incorporation but certainly thereafter by way of filing annual returns, had been illegally paid and that the regulations had no validity. The Government could have been exposed to a whole series of actions for the return of moneys. I believe we are entitled, as I have said, to some little show of contrition from the Government. We are also entitled to hear some appreciation for the work of the Opposition on this matter. If it had not been for the vigilance of the Opposition, the regulations numbered 1197 would have been void because they lapsed at midnight on 4th July.
The Opposition do not have the clerical and secretarial resources that are available to the Government. The Government have a vast Civil Service machine behind them of highly paid and skilled individuals whose business it is to ensure that mistakes do not occur. An expression of contrition

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would have done no harm, and neither would an expression of thanks to the Opposition for having drawn this matter to the attention of the Government. The regulations have now been reintroduced as regulations No. 1368 made on 5th July instead of 7th June. They were laid before Parliament on 6th July instead of 8th June and came into force on 6th July instead of 1st July.
The regulations are unexceptional. I say in parenthesis that all the small businesses that are coming into being as a result of what is termed the "whoosh" enterprise of the DTI, may find the sums of money a little more onerous than the ones that were previously enforced. Generally speaking, and bearing in mind the general inflationary tendencies under Her Majesty's Government, we have to accept them.
In the meantime I should like to ask the noble Lord two questions of which I have already given him notice because I wish to deal with the matter as expeditiously as possible. First, what happens in the case of those people who have already paid fees on the basis of regulation number 1197 which they need not have paid until 6th July? I do not know how many people are affected. But do the Government anticipate repaying the difference between the old fees and the new fees to those people who have paid fees they need not haw paid?
There is a short interregnum between midnight on 4th July and the afternoon of 6th July. The Government may conceivably have lost revenue by reason of applications being submitted during that period with cheques which were incorrectly made out. Have the Government taken those small matters into account? I willingly concede that they are small matters, but we have found over the years—and the noble Lord will find in due course—that attention to such matters of detail and correctness are very often the sign of good government whereas to ignore them and try to ride over them may be out of place and a sign of taking things too much for granted. I hope that the noble Lord will be able to reply.
Lord Strathclyde: My Lords, it gives me great pleasure to reply to the noble Lord, Lord Bruce of Donington. I take it that he welcomes the regulations. Of course we apologise to the House. Perhaps I can direct the noble Lord to col. 2330 of Hansard of 5th July when my noble friend Lord Ullswater made a proper and full apology to the House.
The noble Lord, Lord Bruce, asked me what was being done about those people who had been overcharged. We have already agreed that it is a matter that we all regret. I can confirm that Companies House has written to all companies whose annual returns were registered on that day. It has also written to all of its major search customers as well as putting up notices in its search rooms. Companies House will consider all claims for reimbursement from those who believe that they were charged incorrectly. That is precisely how it should be.
On Question, Motion agreed to.

Weights and Measures (Various Foods) (Amendment) Order 1990
7.13 p.m.
Lord Strathclyde Lord Strathclyde rose to move, That the draft order laid before the House on 2nd July be approved [24th Report from the Joint Committee].
The noble Lord said: My Lords, the draft order would amend two 1988 orders—the Weights and Measures (Intoxicating Liquor) Order and the Weights and Measures (Miscellaneous Foods) Order. Those orders approved by your Lordships' House in November 1988 contain detailed provisions for the sale of food and drink.
There are three amendments to the intoxicating liquor order. First, we are proposing to add 25 millilitres to the existing imperial range of quantities of ¼ and gill in which gin, rum, vodka and whisky may be sold for consumption on the premises. Sales in the imperial quantities would be prohibited after the end of 1994. In response to representations on those proposals, the Government intend to consult interested parties about the possibility at a later stage of extending the requirements to sell in prescribed quantities to other spirits and of permitting a further round metric quantity of 35 millilitres.
Secondly, from the beginning of 1995, still table wines sold by the glass for consumption on the premises may be dispensed only in quantities of 125 millilitres and 175 millilitres. Thirdly, to implement a recent amendment to the EC directive on pre-packed liquids, some minor changes are proposed to the range of prescribed quantities for pre-packed still table wines.
The draft order before your Lordships' House also includes four minor amendments to the miscellaneous foods order. The draft order was sent to over 200 organisations representing United Kingdom manufacturers, importers, retailers, consumers and enforcement authorities. The comments we received have been taken into account in drawing up the current text.
I beg to move.
Moved, That the draft order laid before the House on 2nd July be approved [24th Report from the Joint Committee].—(Lord Strathclyde.)
Lord Bruce of Donington: My Lords, I dissent very little from what the noble Lord has said. The order covers a most agreeable subject. Most of us from time to time have spent pleasurable minutes, sometimes hours, imbibing the liquids concerned, whether or not in the quantities prescribed and whether in gills or millilitres.
It would not be entirely out of order if I were to refer, in parenthesis, to the grossly extortionate charges for non-alcoholic refreshment. I hope that as part of the noble Lord's duties at the DTI some attention may be given to that undesirable factor which afflicts the harmless and alcohol-free enjoyment of so many of our citizens.

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The noble Lord may consider giving some thanks to my noble friend Lord Mason who can claim some paternity of this regulation. My noble friend, who is zealous on all matters affecting consumers and in particular those who enjoy consuming tobacco or imbibing alcohol, has always paid close attention to the matter. He has fought for some time to have the sale of wine by the glass put on a proper footing. Some measure of thanks should be accorded my noble friend who has fought on these matters and whose proposals have largely been incorporated in the regulations. He deserves some credit. We have no objection to the order.
Lord Mason of Barnsley: My Lords, I welcome the measure. It is the culmination of a campaign that I have waged for years to introduce legislation in place of a code of conduct which has largely been ignored by all who sell wine by the glass. The objective has been to obtain a fair deal for the wine consumer who should be aware of the quantity of wine he is to receive and the price per measure.
All of the bodies and societies in the trade agreed a code of conduct based on those facts. The code came into effect in May 1984. Since then it has been ignored by the majority of those who sell wine by the glass. Indeed, they still ignore it on a large scale.
I have raised the matter in parliamentary Questions on 22 occasions. We have debated the issue in this House and I introduced a Bill to make the code compulsory. I am pleased to say that the Government eventually respected my view and, by agreement, took over the Bill—hence the order. I am grateful to the noble Lord and to the Department of Trade and Industry for being so helpful.
The measure introduces prescribed quantities of 125 millilitres and 175 millilitres and multiples thereof. This I welcome. Most wine is sold in those measures. In particular the order deals with still table wines. It also requires that a statement in writing showing quantities in which still table wines are sold shall be prominently displayed. Therefore, the code is to be changed into a legislative requirement. Customers buying wine by the glass will be able to make an informed choice as the measure and price must be displayed where still table wines are sold in the prescribed measures. All that is to the good.
However, I should like consideration to be given to the introduction by legislation of lined wine glasses, especially in the prescribed sizes. That is being introduced in the beer trade. There is no reason why this consumer protection measure should not be established for wine drinkers.
I am also concerned about the date for the introduction of this measure, which is on or after 1st January 1995. The date is not even specific. Moreover, it is nearly five years hence. I realise that it has been chosen to coincide with the implementation date of 31st December 1994 when sales of spirits on licensed premises will change from being served in gills to a
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single metric quantity of 25 millilitres. However, I believe that the timing of this legislation for the sale of wine by the glass should be reconsidered.
I have explained in previous debates that every survey carried out by trading standards officers—by LACOTS (the Local Authority Committee on Trading Standards)—found that well over 70 per cent. of wine traders or wine sellers ignored the code of conduct and often fleeced the wine consumer. This has already gone on for five and a half years. I therefore ask: are the wine consumers not to be protected for another four and a half years? It is ludicrous. There is substantial evidence that the code has not worked and that legislation is urgently needed. Yet this order is not to be implemented legislatively for another four and a half years.
The latest survey by trading standards officers found in seven counties, after visiting 110 premises with 189 separate bars—this is an indication of the size and seriousness of the problem which ignores codes and ignores the law in the beer and wine trades—that 71 per cent. of the beer and 74 per cent. of the lager served were short measures. In some cases there were deficiencies as high as 15 per cent. for beer and 10 per cent. for lager. In the same survey, with regard to wines served by the glass 80 per cent. of premises did not fully comply with the code of practice. So the situation still goes on. If licensed premises had abided by the code, legislation would not have been necessary. But easy gains have been too good to be ignored.
If the Government took the view that licensed premises were abiding by the present code, they should not need nearly five years to prepare for the introduction of this order. I hope that LACOTS will continue its surveys and give us the opportunity to raise periodically in this House the results of its proceedings before legislation is implemented. It would be interesting to learn the burdens that would be placed on the trade if a more immediate date of operation were to be introduced.
I welcome this measure but I earnestly hope that Her Majesty's Government will speed up its introduction and take the earliest opportunity to give the wine consumer a fair and honest deal.
Lord Renton: My Lords, I cannot speak with any authority from the ministerial point of view and I am not much of a consumer. But I should like to say that in our primary legislation we go into far too much detail. When such detail is found to be necessary, as the noble Lord, Lord Mason, pointed out—and we should pay tribute to him, as did the noble Lord, Lord Bruce, for the initiatives that he has shown—it is gratifying to find that a statutory instrument, secondary legislation, can bring forward such detail and that it is acceptable to noble Lords on both sides of the House. It is a lesson to us all that, although we must have detail in some (but not all) matters on which we legislate, it is better to have as much as possible put into secondary legislation, as happens on this occasion, rather than take up time with endless amendments trying to get the detail right in primary legislation.

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For that reason alone, and without going into the merits, I too welcome this measure.
Lord Strathclyde: My Lords, I very much welcome the words of all noble Lords who have spoken, and in particular those of my noble friend Lord Renton. I agree with him that in this case it makes good sense to bring in these changes in regulations rather than through primary legislation. I am also grateful to the noble Lord, Lord Bruce of Donington, for giving a warm welcome to the regulations. I hope that he will not take it the wrong way when I say to him that no doubt he will change his attitude toward the Department of Trade and Industry and, in this instance, regard it as having done a very good job.
I join him in congratulating the noble Lord, Lord Mason of Barnsley. I was the unfortunate Minister responsible at the time of one of the debates a couple of years ago when I was generally harangued from around the House about sales of wine by the glass. I was obstructive then, so it is a delight to come to the House with this order.
The noble Lord, Lord Mason, is not entirely satisfied and would like to see the regulation brought in considerably faster. We have to consider the needs of the consumer and also the needs of the licensee. We have come to the conclusion that the best way to bring in this order is to do it over a period of years so as to allow licensees, especially those who do not sell very much wine, to adjust to the new regulations and to replace their glasses.
A point was raised about using a lined container. Such a container is not usual when dealing with the sale of spirits. I am not entirely convinced by the argument that it should be used for wine.
Having said that, I hope that the noble Lord, Lord Mason, is extremely pleased with the work that he has done over a number of years and that he will recognise that a Conservative Government have brought in this measure and have shown themselves to be caring about the needs of the noble Lord and have listened to them.
On Question, Motion agreed to.

EEC Merger Control (Consequential Provisions) Regulations 1990
7.27 p.m.
Lord Strathclyde Lord Strathclyde rose to move, That the draft regulations laid before the House on 5th July be approved [23rd Report from the Joint Committee].
The noble Lord said: My Lords, these regulations make technical changes only to the competition legislation of the United Kingdom, consequential upon the adoption last year of a European Community merger regulation. They do not reflect any change in the Government's mergers policy.
Under the regulation adopted by the Council of the European Communities last December, mergers with a Community dimension—those with a combined world-wide turnover of more than 5 billion ecu (around £3·7 billion) and where at least two of the
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undertakings concerned have a Community turnover in excess of 250 million ecu (around £185 million)—will be subject to examination by the European Commission. Mergers which primarily concern one member state, in that more than two-thirds of the turnover of each company concerned is in the same member state, remain subject to national controls.
However, it is possible that from time to time a merger thought initially to fall within the Commission's jurisdiction is later—possibly some months later and after examination by the European Court—found not to be one for the Commission but for the Secretary of State for Trade and Industry to deal with under United Kingdom law. Under UK law, the Secretary of State's ability to act is lost when certain time periods have elapsed; hence the need for these technical amendments merely to restore the status quo. I beg to move.
Moved, That the draft regulations laid before the House on 5th July be approved (23rd Report from the Joint Committee).—(Lord Strathclyde.)
Lord Bruce of Donington: My Lords, we are obliged to the noble Lord for having brought forward these regulations. As he said, the new regulations are designed to give effect to Council Regulation No. 4064/89 of 21st December 1989. In examining the regulations that are now before us, we in the Opposition have carefully examined the Council regulation. It would appear that the two are somewhat in conflict.
I should like to refer the noble Lord to Article 4 of the regulation referred to. It is in the Official Journal of the European Communities, No. L 395/1. It states:
"Concentrations with a Community dimension as referred to by this Regulation shall"
—and I underline the word "shall"—
"be notified to the Commission not more than one week after the conclusion of the agreement, or the announcement of the public bid, or the acquisition of a controlling interest. That week shall begin when the first of those events occurs".
This regulation which, under Section 2(1) of the European Communities Act 1970, automatically becomes part of British law, would seem to be in conflict with the provisions of the Companies Act 1989. I refer in particular to Sections 75A and 75B which amend the Fair Trading Act covering these points. So far in this country all notification in regard to mergers has been on the basis of a code of practice. The operative words in Sections 75A and 75B are in support of that. They are a voluntary code.
I refer to Section 75A which is headed:
"General rule where notice given by acquirer and no reference made within period for considering notice".
Subsection (1) states:
"Notice may be given to the Director by a person authorised by regulations".
The regulation of the Commission states "shall". Which is to prevail? Paragraph 2 of the regulation amends Section 75B of the Fair Trading Act 1973. A new paragraph (d) is added which states:
"[if] it appears to him that the notified arrangements are, or if carried into effect would result in, a concentration with a

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Community dimension within the meaning of Council Regulation (EEC) No. 4064/89 of 21st December 1989 on the control of concentrations between undertakings".
Subsection (7) once again becomes governed by the words:
"The Director may, at any time before the period for considering any merger notice expires, reject the notice if",
and then there are paragraphs (a), (b), (c) and the new (d).
On the one hand, the Council regulation says "shall" but we are apparently still saying "may". Which is right? Which is to prevail? I am sure that it is a matter which the noble Lord's department will have considered.
I immediately concede, having had only a very limited time to study both the Council regulation and the appropriate sections of the Fair Trading Act, that my conception may be entirely wrong. If that is the case, I shall be obliged to the noble Lord for having corrected me because I always like to have matters of detail absolutely correct.
Am I right or wrong? If I am wrong, I shall accept the noble Lord's rebuke for having wasted his time in drawing his attention to it. If I am right, I should like to know how he proposes to bring English law into conformity with Community law bearing in mind that the Fair Trading Act cannot of itself be amended by regulation. It would need the Government to bring forward a new Act to amend the Fair Trading Act and in particular Sections 75A and 75B. I am very hopeful that that may not be necessary and that the noble Lord may be able to elucidate the problem that I regret to have laid before him. However, it is a matter upon which the House should be informed and which ought to be cleared up.
Lord Strathclyde: My Lords, I am sure that the whole House joins me in congratulating the noble Lord, Lord Bruce of Donington, on the assiduous way in which he has tackled this subject, and quite obviously the enormous amount of work that he has put into trying to work it out.
I can see where the confusion lies. I too find comparing these regulations with various pieces of legislation at UK or Community level extremely complicated. However, I hope that I can allay the fears of the noble Lord. Perhaps I may also say how grateful I am that he raised this issue with me a few moments before we came into the Chamber. I have therefore been able to do a certain amount of investigation.
The Community system requires notification of mergers falling within the regulation. Under our system the Secretary of State may refer a merger for investigation by the MMC. That instrument ensures that the Secretary of State retains his discretionary power to make a reference in the event that a merger notified to the EC proves to be within the UK's jurisdiction. That could take some time to resolve and the UK system involves time limits which may meanwhile have expired. The UK's voluntary notification system is based upon our belief that the market should be free to operate. A mandatory system
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for the much larger number of cases covered by our legislation would be considerably more burdensome for companies and consume greater public resources. We therefore prefer to intervene only when it is essential to protect the public interest.
Article 4 requires notification. It is a mandatory requirement. Sections 75A and 75B are voluntary. We therefore do not feel that there is any conflict because the Community regulation establishes exclusive jurisdiction above a certain threshold. Cases which come below the threshold—which will include cases which have therefore slipped through the net which this regulation picks up—remain within the United Kingdom's jurisdiction. Therefore we are free to deal with those on our own voluntary or mandatory basis—and we of course choose the former.
I hope that that that has allayed the noble Lord's fears. I can understand from where his concerns arise. However, I hope that that explanation will suffice.
Lord Bruce of Donington: I am grateful to the noble Lord. However, he does not quite satisfy me. The existing Sections 75A and 75B cover not only the small mergers and concentrations that escape the Commission net, as the noble Lord says, but also those which are within the Commission net. I agree that the numbers will, we hope, be comparatively small. We are becoming a little sick of mammoth mergers which do not add to the country's products in the slightest. But even on the assumption that there are a few which come within the Commission net, and therefore there is the mandatory element, as the noble Lord says, those same larger mergers within the Community net still remain within the voluntary net which is created by Sections 75A and 75B.
Therefore, to be logical, the Act should be amended to conform with the Community regulations in respect of those companies and directors who fall within the Community net; otherwise there will still be the conflict of laws. I do not know whether the noble Lord has given thought to that aspect. I believe that the essence of what I said in my introductory remarks still holds good.
It is common knowledge that I am not in favour of the Commission taking away powers from the United Kingdom Parliament, other than the barest possible necessities. However, once again it is a question of having everything legally correct. One may dissent from the principle but at least what is done should be legally intelligible and capable of proper legal application. On reflection, does not the Minister believe that the directors of companies which fall within the Commission net should be covered by a corresponding provision introduced by an appropriate amendment to Sections 75A and 75B?
Lord Strathclyde: My Lords, the noble Lord, Lord Bruce, made a telling statement when discussing the role of the European Community. It was slightly at odds with that of his Front Bench and the rest of the leadership of the Labour Party. As we all know, it has wholeheartedly taken on board the Commission's proposals as regards almost every single issue. I

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welcome the noble Lord's comments. They provided tremendous enlightenment and I hope that he will stick to them in the months and years to come.
I turn to the more substantive points that he raised. I forgot to reply to the remarks that he made in opening about the possibility of amending the Companies Act 1989. The prenotification procedures in Section 75B can be amended by secondary legislation. As regards European Community mergers policy, mergers falling within Community limits automatically fall within the Commission's jurisdiction and therefore Community law prevails. The obligation in the Community regulations is simply notification to the Commission. The overlap between our prenotification cases and the Community cases would be small. Copies of Community notification are sent under Council Regulation (EEC) No. 4064/89 to the UK authorities.
I have looked at the problem raised by the noble Lord. However, I believe that there is no problem because in the instances where Community jurisdiction clearly applies Community law will apply. Here we are merely dealing with cases which were first thought to apply to Community law but which then trickled down to UK law. As a result of the time-limit, we are merely extending the provision so that it might apply in the normal way under United Kingdom law. I hope that as a result of that explanation the noble Lord, Lord Bruce, will agree to approve the regulations.
Lord Bruce of Donington: My Lords, I am obliged to the Minister for that reply. It still does not completely clarify the legal situation. As ignorance of the law is no excuse in the United Kingdom, in order to comply with the law it will now be necessary for a library of Commission regulations to be kept in case, for some unspecified reason, British law does not comply with Community law which is alleged to affect it. Complications may arise.
I willingly concede that I may be in error because I have had only a matter of hours to study the regulations. However, the Minister's department has been studying them for a month or more. They will have been regurgitated over a number of expert committees possessed of far better professional qualifications than I have. Perhaps I am wrong but I remain uneasy.
As regards the Minister's more political point about my attitude towards the European Community, I am a British citizen first and a Member of the British Houses of Parliament. It has always been my objective here to ensure that the interests of my country are fully protected in all eventualities within the bounds of the treaties that it has signed and the undertakings that it has given. That remains my position and in no way am I at odds with my party on this issue.
On Question, Motion agreed to.

European Bank for Reconstruction and Development (Immunities and Privileges) Order 1990
7.45 p.m.
Lord Reay Lord Reay rose to move, That the draft order laid before the House on 13th July be approved [24th Report from the Joint Committee].
The noble Lord said: My Lords, the order, when made, will give effect to the immunities and privileges set out in chapter VIII of the articles of agreement and attested to by all signatories as necessary to enable the bank to fulfil its purposes and functions. All signatories are required to give effect to these basic immunities and privileges.
Your Lordships will acknowledge the extraordinary changes in eastern Europe which provide new opportunities and allow the disciplines of the free market to operate. The free world must react quickly to this process if it is to help and influence events. A clear example of quick reaction and long-term commitment is this new European Bank for Reconstruction and Development (EBRD).
In December last year, when meeting in Strasbourg, the European Council decided to establish as soon as possible a new European bank to further the implementation in central and eastern European countries of democracy and economic reform. The discussions, begun in Paris in January this year, culminated in the signing on 29th May by representatives of its 42 prospective members of the articles of agreement establishing the bank. Signatories include the world's leading economic powers—all members of the Organisation for Economic Co-operation and Development (OECD), including of course all member states of the European Community. All members of Comecon have signed and are potential recipients. Other states have also signed—Egypt, Israel, the Republic of Korea, Mexico and Morocco. It is truly an international effort and we must ensure that the impetus of this effort is maintained.
The purpose of the EBRD, as set out in the articles of agreement, will be to foster the transition towards open market-orientated economies. Equally, it is to promote private and entrepreneurial initiative in the central and eastern European countries committed to and applying the principles of multiparty democracy, pluralism and market economics.
The functions of the EBRD include, among others, the implementation of structural and sectoral economic reforms, including demonopolisation, decentralisation and privatisation; the promotion of the improvement and expansion of productive, competitive and private sector activities; the mobilisation of domestic and foreign capital and experienced management; fostering productive investment; providing technical assistance for the preparation, financing and implementation of relevant projects; and encouragement for the development of capital markets.
The articles of agreement, signed by the Chancellor of the Exchequer on 29th May, were presented to the House as Command Paper 1116 on 28th June. These articles will come into force only when ratified by signatories representing two-thirds of the total voting power, including at least two countries from central and eastern Europe. It is imperative that ratification be completed quickly. As host nation, the United Kingdom plans to be among the first to ratify. The president-designate, M. Attali, expects the agreement to enter into force early next year. Such is the pace of development in Europe, however, that we must hope the necessary processes are completed as soon as possible to enable the bank to start operating at the earliest opportunity. Your Lordships will, I am sure, agree. Thus, it is important that the draft order be approved now so that we can ratify the agreement to establish the bank.
The principal privileges and immunities to be conferred on the bank by this order, under the provisions of the International Organisations Act 1968, as amended, are legal capacity, certain immunities from seizure of its property and assets, inviolability of its archives, exemptions from taxes on income, capital gains and other direct taxes, certain exceptions from Customs and Excise duties and restrictions on goods imported for official use, and relief from VAT. Officers and employees of the bank will be exempted from taxation on salaries paid to them by the bank, although there will be an internal tax for the benefit of the bank, as well as immunity from suit and legal process in respect of their official acts.
Your Lordships will be aware that the new bank is to have its headquarters in London. It will be the first multilateral development bank to have its head-quarters here. I am delighted that the advantages of London as the location of the bank's base were clearly acknowledged when the final choice was made.
Accordingly, a headquarters agreement is to be negotiated with the bank which will set out in detail the immunities and privileges of the bank and its employees within the limits imposed by the International Organisations Act 1968, as amended. Approval by your Lordships of a further order will be sought later when negotiations are completed. This process must be finalised before the bank is ready to commence full operations here.
The reform process in central and eastern Europe poses one of the great political challenges of our time. Political courage and fortitude from within and firmness of purpose from without have combined to end the political impasse of the cold war. The European Bank for Reconstruction and Development can now help to provide the economic prosperity necessary to underpin political freedom. I commend the order to your Lordships.
Moved, That the draft order laid before the House on 13th July be approved [24th Report from the Joint Committee].—(Lord Reay.)
Lord Bruce of Donington: My Lords, we are happy to associate ourselves with the general sentiments expressed by the noble Lord. As the noble Lord says, recent developments have presented all western nations with an opportunity to assist in the considerable reconstruction which must take place in the wake of the abolition of the old dictatorial and centrally planned states of eastern Europe. Of course it is to be hoped that their courage is matched by our imagination and that we concentrate, possibly rather more altruistically than we may have done in the past, on bringing constructive assistance rather than on the making of a quick buck—our principal preoccupation. However, we welcome the instrument, which is in standard form.
We welcome the fact that the bank will be in London. We commend the Chancellor of the Exchequer and his fellow Ministers for their initiative in this matter.
There are one or two points in the order on which I should like illumination. I do not raise the matters in any querulous spirit; I do not intend to make an issue of them. Paragraph 8 states that the bank shall have,
"relief from rates on its official premises".
I do not know to which kind of rate it would otherwise be subject. Would it be the business rate at the standard rate or the rate which is being levied following the institution of the poll tax? I am not sure what relief is afforded to the bank.
In paragraph 9, in regard to the importation of goods and services, the order states that the bank is exempt from taxes subject to such conditions as the Commissioners of Customs and Excise may prescribe. What kind of conditions will be prescribed? It will be useful to know that because the bank's directors must know in due course.
Paragraph 10 states:
"The Bank shall be exempt from prohibitions and restrictions on importation or exportation in the case of goods and publications imported or exported by the Bank and necessary for the exercise of its official activities".
Do the authorities or does the bank itself determine what is necessary?
At paragraph 14 one sees the reference to which the noble Lord referred:
"As from the date on which an internal effective tax for the benefit of the Bank on the emoluments paid to him by the Bank is applied".
Employees and directors are exempt from taxation in this country as the noble Lord described. I am fascinated by the term "internal tax". It is rather novel for an institution to levy a tax upon its employees for its own benefit. I know that that is done in the European Commission. British employees of the Commission do not pay any income tax in the United Kingdom. They pay considerably reduced income tax in the EC which is then applied to a reduction of the Commission's own vote for expenditure. That is rather a novel way of going about it. Is the noble Lord quite sure that that is the best way to proceed? I note that the emoluments can be taken into account for the purposes of determining total income for other purposes. Perhaps the noble Lord will expand on that.

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These are small matters. I raise them only to enable the noble Lord to provide a little more information. On this side of the House we are more than willing to expedite the progress of the order through the House in the hope that it will achieve the objectives which the Government have so ably set out.
Lord Reay: My Lords, I am grateful to the noble Lord for the general welcome which he has given to the order. He has quite properly raised one or two points which he described as being small matters. He was kind enough to give me advance notice of them; so I hope I shall be able to throw some light upon them.
The noble Lord asked about the exemption of rates of the bank's premises. My understanding is that the bank's premises will be subject to exemption from all but the beneficial portion of the non-domestic rate. The beneficial portion is 20 per cent. of the rate operative in the borough in which the premises are situated. That is my understanding.
With respect to paragraph 9, the noble Lord asked if I could explain the conditions which the Customs and Excise might prescribe for the protection of the revenue. I believe that those are yet to be determined in respect of this organisation but they will be for the protection of the revenue.
With regard to paragraphs 9 and 10, the noble Lord asked who was to decide what is necessary for the exercise of the official activities of the bank. In any dispute that would be for initial discussion between the bank and the relevant United Kingdom authorities; for example, Customs and Excise. Guidance is available from Customs and Excise, and ultimately in any dispute it would be a matter for interpretation by the United Kingdom courts.
The noble Lord asked a number of questions regarding internal tax. An internal tax is one levied by the international organisation for its own benefit. The revenue generated serves to reduce the contributions payable by member states. I understand that in international practice that is the treatment normally accorded to emoluments paid by an international organisation.
I hope that that deals with most of the queries raised by the noble Lord. Once again, I thank him for his general reception of an order which it is hoped marks an important step forward in the welcoming back of eastern and central Europe into the fold of the western world.
On Question, Motion agreed to.

Broadcasting Bill
8 p.m.
House again in Committee.
Schedule 11 [The Broadcasting Complaints Commission: Supplementary Provisions]:
[Amendment No. 311ZA not moved.]
Earl Ferrers Earl Ferrers moved Amendment No. 311ZB:
Page 197, line 11, after ("made") insert:
("(a) ").
The noble Earl said: The following amendments are mainly technical. They are intended to bring the provisions regarding the interests of members of the Broadcasting Complaints Commission and the Broadcasting Standards Council into line with the schedules for other public bodies contained in the Bill. That would enable the Broadcasting Complaints Commission and the Broadcasting Standards Council to have the discretion to resolve that a member's interest may be disregarded to enable a member to take part in the work of the bodies. Other public bodies have this same discretion in their schedules. I refer not only to Amendment No. 311ZB, but also to Amendments Nos. 311A, 311ZC, 311ZD, 311CA, 311CB, and 311CC. I beg to move.
On Question, amendment agreed to.
Earl Ferrers Earl Ferrers moved Amendment Nos. 311ZC to 311A:
Page 197, line 12, after ("and") insert:
("(b) (subject to sub-paragraph (1A))").
Page 197, line 14, at end insert:
("(1A) Sub-paragraph (1)(b) shall not apply in relation to any meeting of the BCC at which all of the other members present resolve that the member's interest should be disregarded for the purposes of that provision.").
Page 197, leave out lines 24 to 37.
On Question, amendments agreed to.
On Question, Schedule 11, as amended, agreed to.
Clause 131 [Function of BCC]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 311AA:
Page 103, line 6, leave out ("actually").
The noble Viscount said: While speaking to Amendment No. 311AA, for the convenience of the Committee, I shall speak also to Amendments Nos. 311AB and 311AC. These are purely drafting amendments. The reference to "actually" is superfluous. I beg to move.
On Question, amendment agreed to.
Viscount Ullswater Viscount Ullswater moved Amendments Nos. 311AB and 311AC:
Page 103, line 9, leave out ("actually").
Page 103, line 11, leave out ("actually").
On Question, amendments agreed to.
Clause 131, as amended, agreed to.
Clause 132 agreed to.
Clause 133 [Consideration of complaints]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 311B:
Page 105, line 22, leave out ("body corporate") and insert ("broadcasting body").
The noble Lord said: While speaking to Amendment No. 311B, I shall speak also to Amendment No. 311C. These are primarily technical amendments to ensure that the Broadcasting Complaints Commission is able to receive assistance when considering a complaint from either a broadcasting body, a body other than a broadcasting body or an individual. I beg to move.
On Question, amendment agreed to.
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendment No. 311C:
Page 105, line 25, at end insert:
("(aa) where the relevant person is a body other than a broadcasting body, to arrange for one or more of the following, namely—

(i) the persons who take part in the management or control of the body, or

(ii) the employees of the body,

to attend the BCC and assist them in their consideration of the complaint, or").
On Question, amendment agreed to.
Clause 133, as amended, agreed to.
Clauses 134 to 138 agreed to.
Clause 139 [The Broadcasting Standards Council]:
On Question, Whether Clause 139 shall stand part of the Bill?
Lord Thomson of Monifieth: Clause 139 is the first of the clauses dealing with the Broadcasting Standards Council. We have given notice of our intention to oppose the Question that Clause 139 shall stand part of the Bill. This may be a convenient moment, at the beginning of this group of clauses, to state our anxieties regarding the Broadcasting Standards Council.
In moving that the clause should not stand part of the Bill, we are stating that the Broadcasting Standards Council should not continue with the statutory basis provided for it by the Bill. In opposing the clause, I wish to make clear that it is in no way a reflection on those who serve on the Broadcasting Standards Council—the noble Lord, Lord William Rees-Mogg, who is with us in Committee this evening, or his colleagues. Our case, which I hope to develop, is that the council is unnecessary in terms of the regulatory arrangements for broadcasting standards inside British broadcasting.
Proceeding on a personal note for a moment, perhaps I may say that the Broadcasting Standards Council is served by Mr. Colin Shaw, who is one of the most experienced professional people in the regulating of broadcasting standards in this country. He recently wrote to me putting forward the position of the Broadcasting Standards Council and very properly saying that we should be aware that its members are no less committed to the public interest than the governors of the BBC or the members of the IBA.
I totally accept that, as all members of the Committee will. Colin Shaw went on to indicate some of the very useful work that the council has done since its inception; for instance, breaking new ground with small scale public meetings, and in particular seeking to deal with anxieties about violence on television and the treatment by the broadcasting media of disaster victims. That I totally accept. That is good work. Indeed, if the Broadcasting Standards Council were to be limited in its operations to what I would call background work in relation to the maintenance of broadcasting standards in this country, that might be useful. There is certainly a need for independent
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bodies doing serious research work about the general impact of television on behaviour and the general climate of our society.
However, the reason why we believe that the Broadcasting Standards Council in its statutory form is unnecessary is that, in an unacceptable way, it duplicates the responsibilities already laid on the shoulders of the members of the IBA—soon to become the ITC—and on the governors of the BBC and members of the Radio Authority. I think it is a general principle of good public administration that when one lays responsibilities on people one makes those responsibilities clear-cut and does not confuse people by having them overlapping and shared with other groups.
It is true that there are differences in the structures of the BBC and independent broadcasting as it exists at present. There will be further differences when the new ITC structure is established. Nevertheless, the fact is that the governors of the BBC, although they head what is perhaps one of the world's greatest broadcasting organisations and feel a sense of loyalty and pride in the work that the professional broadcasters do, are there as the trustees of the public interest. I know that they take that trusteeship extremely seriously. They have the responsibility under the BBC's royal charter for exactly the same programme standards which are now being made part of the terms of reference of the BSC.
In the case of the IBA the structure was again different. Members of the IBA stood at arm's length from those who made the programmes and the companies that held contracts under the IBA. They will be even more at arm's length under the new arrangements where they will become more of a licensing body, though still with a heavy responsibility not only for setting the standards in the first place but ensuring that those standards are fulfilled once the licences are issued.
To seek to duplicate that responsibility for broadcasting standards in the areas that are referred to the BSC is a recipe for confusion. It is a fifth wheel to a British broadcasting coach that has worked well in the past, and there is no reason to believe that it will not work equally well in the future.
There are some other matters of concern about the way that the BSC is approaching its duties under this Bill. I am bound to say that one has caused particular concern. I quote from the brief kindly supplied to Members of the Committee by the council:
"The Council believes it to be essential to its task of monitoring and reporting on programmes to be able to initiate complaints with the broadcasters on its own account".
That is a very dangerous position with great risks involved for the way in which the Broadcasting Standards Council will find itself fulfilling its responsibilities.
Another matter of interest—again I refer to the briefing we have received—is that the council is seeking to regard itself as apparently the proper voice of British broadcasting on these matters of programme standards in regard to our relations with Europe. I cannot speak definitely on this matter but I

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think the Broadcasting Standards Council is a unique body within the European broadcasting scene. Generally speaking, the familiar pattern is to lay the responsibility for standards on the broadcasting authorities themselves. Again, I believe there will be confusion if we have both the BBC and, presumably, the ITC represented on the European Broadcasting Union and taking the normal path in the development of European broadcasting affairs, and a separate body also engaged in work on that territory. I know that there is a certain amount of confusion on the mainland of Europe in that respect.
Those are some of the reasons why we are opposed in principle to the setting up of the Broadcasting Standards Council on a statutory basis. We oppose the clause.
8.15 p.m.
Baroness Birk: The noble Lord, Lord Thomson, referred to the council as being unnecessary and said that its functions would be carried out by other people. It is extremely important to get this matter straight before we go into some of the other reasons why the council should not be given statutory status. In the first place, it is responsible for drawing up a code in consultation with the broadcasting authorities and others. That is on page seven of the latest annual report. The duty to do that is found in Clauses 6, 7 and 9. That duplicates the responsibilities of the ITC.
The report also refers to the monitoring of programmes and the subsequent reporting of standards in domestic services or services reaching this country from elsewhere. That can be found in Clauses 11 and 12, which cover research into such matters as nature and the effects on attitudes and behaviour, the portrayal of sex and violence in programmes, and on commercials. Therefore, those subjects are already handled sufficiently and, we are sure, efficiently by the bodies already existing. Again, the handling of complaints is a function of the ITC and the BBC. Liaising with Europe—the fifth of the functions described in the report—can be found in Clause 65, where the ITC has the power to do that.
In regard to research, I note that the Broadcasting Standards Council is anxious to fulfil that function. We already have an excellent broadcasting research unit which for many years has produced invaluable independent research, much of which has found its way into academic circles. It covers the whole spectrum of the popular press as well, and it is highly respected. It has produced useful background material for members of all parties concerned with the Broadcasting Bill and other broadcasting matters. I understand that it is likely to continue with that function on behalf of the ITC.
It is only fair to say that the Broadcasting Standards Council has become something of a joke. It is an unnecessary carbuncle on the face of a Bill which is packed with regulatory bodies whose functions more than adequately cover its role. The Government have created a great new quango. Its preoccupation partly with sex has already given rise to some polite amusement at the findings of one of its earlier studies
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that the great British public are far less concerned than some would have us believe about nudity or the depiction of sexual images.
In the report commissioned by the Government on the financing of broadcasting by the BBC, Professor Peacock recommended the phasing out of all these regulations for broadcasting other than the normal laws of the land. The Broadcasting Standards Council is a waste of time and money. Over £1 million a year is spent on what many of us feel may be a well meaning but futile exercise. Its function is best described as that of a gloomy gremlin crouched in the corner of every television screen in the land waiting to cast a shadow of doubt over the creative activities of the broadcasting industry.
On the face of it, the BSC is not a censorship body with previewing powers. In effect, it certainly has the capacity to inhibit unduly broadcasters and programme makers who know that even the most mischievous complaint could result in the publication of a ruling that some small part of a television schedule has upset a vociferous minority. Let us look for one moment at what the Bill already requires of broadcasters in terms of taste and decency. We now trot out phrases such as taste and decency in the same way as cream and coffee or sugar and honey. They are words that run together. They are not always so meaningful in our society as the right reverend Prelate would like them to be. That is because we are using old-fashioned phrases and not bringing them up to date in ways in which they can be communicated, particularly to young people.
Both the ITC and the Radio Authority are required to ensure that high standards are maintained not only by means of the judgment made in awarding licences but also by means of the old codes of practice. They are extremely thorough and lengthy enough to cover all the matters that the Broadcasting Standards Council is attempting to deal with. The BBC's royal charter ensures that the corporation operates on precisely similar lines. Yet the BSC must take the BBC under its own censorious wing. It makes no sense. The Obscene Publications Act has been extended to cover broadcasting as a backstop, according to the Minister.
In Committee in another place the Minister said that there should be no need for it ever to be applied to broadcast programmes since there are sufficient safeguards on the face of the Bill to ensure that no programme maker ever falls foul of its provisions. Mr. Mellor said in Committee that the Obscene Publications Act will be used because the mechanisms that control the acceptability of materials have been deliberately drawn much more closely than the Obscene Publications Act by successive governments. Clause 6 sets far more rigorous standards than anything in the Obscene Publications Act, which therefore takes up its position as the backstop in matters relating to the mainstream licensed broadcasters in this country. He went on to say that the Act is a rusty blunderbuss that goes off in the face of the person trying to fire it. I do not think that the Opposition could have put it any better than that, or more forcefully.

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The ITC and the Radio Authority are required to ensure that nothing is broadcast that is likely to offend against taste and decency. They have brought in these words which are recognisable by most people. Whether one likes them or not, they are there and to be obeyed. They have also to ensure that nothing is broadcast that is likely to encourage or incite to crime. There are specific clauses referring to programmes broadcast at a time when children are likely to be watching; there are powers to influence the issue of scheduling; and there are codes relating to the content of advertising which mirror those given to the BSC. In addition, there is the Advertising Standards Authority. So where is the real need for the Broadcasting Standards Council? Complainants can go direct to the broadcasters, the regulatory bodies and the Broadcasting Complaints Commission. They may even have recourse to law if they feel that the law has been breached.
Despite public protestations that there has been an increase in the number of complaints from members of the public about offensive items on television, the IBA research shows that there has been no increase in complaints since 1983. Of those complaints, bad language seems to upset people far more than sexual matters. IBA research suggests that the large majority of ITV and Channel 4 viewers feel that standards have improved over recent years.
The BSC exists at present simply because the Government thought it was a good idea at the time and was rather pushed into creating it because of a wave of panic on the part of a very vociferous minority of people. The Government were forced to set up a body that was completely unnecessary though the people concerned with it, like the noble Lord, Lord Rees-Mogg, and the director, Mr. Colin Shaw, believe in it deeply. However, that is not enough to justify its creation or to pacify the most vociferous critics of broadcasting.
As I have said, it is costing £1 million a year to convince people that standards will not fall as a result of the changes being introduced in this Bill. We have good reason to believe that standards will fall where profits are the consuming interest of broadcasters in a free market environment. If there are concerns about the standard of the material pumped into the living rooms of the nation—that is one of the justifications which the noble Lord, Lord Rees-Mogg, gave for the existence of the BSC at last year's Edinburgh television festival—then such concerns can and should be dealt with by the ITC. The Bill allows that that should be so.
The BSC is not the way to halt plummeting standards. It is the function of such bodies to create unnecessary anxiety among broadcasters—in other words, to act as discreet censors. To be fair, they are put in that position where, in order to justify themselves, they have to stir up complaints themselves. As the noble Lord, Lord Thomson of Monifieth, pointed out, the right that they have to
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initiate complaints is a very dangerous power. It is an example of Parkinson's Law with moral overtones which we certainly do not need.
We would much rather that the Government had the courage of their convictions and relied on the considerable apparatus of regulations that has been built into the Bill. The Broadcasting Standards Council does not provide the way forward but the way backward. This Bill is supposed to be about the future. Perhaps the most serious consequence of the creation of the BSC will be when—not if—conflicts of judgment arise between the BBC, the ITC and even the Advertising Standards Authority. Disagreement between the BSC and other regulatory bodies will serve only to undermine its authority and cause confusion among viewers, complainants, programme makers and broadcasting companies. This body is a silly whim and it should be recognised for what it is. It should be consigned to the dustbin of expediency from which it was so hastily plucked.
8.30 p.m.
Lord Annan: Much of what has been said in the last two speeches is familiar to me. We had this kind of debate in the committee on the future of broadcasting when it sat between 1974 and 1977. In those days we were adamant against any broadcasting council being set up. We said that the authorities and the governors of the BBC and the IBA were there to safeguard all standards and to deal with the problems in regard to impartiality. They were the people who were given that duty. To put any kind of council above them was a great mistake.
We had in mind something rather different from the Broadcasting Standards Council. We were being urged at that time to set up a broadcasting council which would have, in the great phrase of the people who advocated it, an overarching responsibility for the whole of broadcasting. We said that there was a great danger of this council developing its own programmes. At best we thought it would be a perpetual fidget; and at worst, an incubus hovering over the broadcasters. We then said that what mattered was to get the public to express views. That was why we recommended public discussions and hearings by the authorities about whether the public was satisfied with the services it was receiving.
What has changed? Our report fell into two parts. There were the recommendations about the structure of broadcasting, which were voluminous and, many people thought, enormously over-bureaucratic. Those were severely criticised. On the other hand, Chapter 16, on standards in broadcasting relating to violence, sex, bad language and other matters, and Chapter 17, on news and current affairs and the responsibility of broadcasters to be impartial in this field, were widely praised. The noble Lord, Lord Swann, who was then chairman of the governors of the BBC, told me that he sent photostats of those chapters to every single producer in the BBC. The irony was that practically all the recommendations about structure have over the years been accepted by different governments, including even the recommendation that there should be an authority for local radio broadcasting, whereas

1555
the chapters which were so widely praised were neglected by the broadcasters themselves. That is why the Government have set up this body.
There is a lack of confidence in the ability certainly of the governors of the BBC to do two tasks. We spent much time worrying about this as we saw the governors as a kind of Janus figure—it faced both ways. Part of the duties of the governors of the BBC is to govern the corporation, to appoint the senior people in the corporation and to be a real board of the corporation. The other part of the governors' duties is to act in the public's interest and to interpret whether the BBC is giving the public the service that it should have. It has proved very difficult ever since the 1960s for these two sets of duties to be reconciled. The IBA has done a better job over the years than the governors of the BBC in this respect. There is no doubt that one of the reasons that we have the Broadcasting Standards Council is the lack of confidence in these matters
I very much agreed with the noble Baroness, Lady Birk, that there is packed into the Bill an over-kill in these matters. There is reference to the Obscene Publications Act operating upon the broadcasters. In this respect I commend to the Government a report which came out some years ago on the whole question of obscenity. The body which produced the report was chaired by Professor Bernard Williams. I well remember the noble Earl, Lord Lauderdale, making one of the most self-confident remarks I have ever heard in this Chamber. He awarded Professor Williams, who was Knightbridge professor of moral philosophy at Cambridge, a double alpha for casuistry and a double delta minus for the conclusions in his report.
The conclusions in the report were very interesting. The report concluded that while it was no use trying any longer to operate laws on obscenity on the written word—in a books—a very different standard should obtain in broadcasting. In that respect things are beamed into family living rooms in a way in which they are certainly not in terms of books. I remember Professor Williams saying that acts such as sexual intercourse between a husband and wife, while undoubtedly legal and highly admirable, would be intolerable if they were shown on the screen regularly, night after night. Those are the matters which the Broadcasting Standards Council is bound to have to take into account. I believe that some of its pronouncements on this matter have been wise.
I rather agree with the noble Baroness that obscenity is not one of the matters about which the great British public is particularly worried. However, it has bean very much worried about violence. It has also been worried about a kind of violence which expresses itself in language and which produces simply by virtue of the language used—I do not necessarily mean four-letter words—a coarse and intolerable standard of behaviour which can have, and I think does have, an effect on viewers.
We are bound to have this council. It is going to come. What worries me is that one matter has not been part of the remit of the Broadcasting Standards
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Council. I refer to the whole question of impartiality in news, current affairs and documentary programmes. I have listened time and again to people like the noble Lord, Lord Orr-Ewing, and the noble Baroness, Lady Cox, who some may think eccentric but who I believe represent a very strong body of opinion. If we do not look out, what will come into the remit of the council—this is the danger of the council—is the oversight of impartiality in news and current affairs.
I will end by quoting from a Session in 1601 of another place. The other place was debating the monopolies and patents which had been granted in great numbers to various individuals in the reign of Queen Elizabeth I. The Commons were extremely angry about this. In the buzz of debate Mr. Hakewill rose and said, "Is not bread there amongst them?" "Bread'?", quoth one, "Bread?", quoth another, "This voice seems strange", quoth a third. "Nay", said Mr. Hakewill, "if order be not taken in this matter, bread will be there before the next Session". I say this to the broadcasters. If order be not taken, impartiality in news and current affairs will be within the remit of the Broadcasting Standards Council within the next decade.
Earl Ferrers: I am grateful to the noble Lord, Lord Annan, for what he said. I do not agree with his last sentence although I understand why he said it. I thought that the noble Lord breathed a sense of fresh air and realism into this debate on the Broadcasting Standards Council.
The speech of the noble Baroness, Lady Birk, left me breathless. If I may say so within the bounds of courtesy, her speech consisted of appalling humbug. All the way through our debates on the Bill the Opposition have asked for quality. All the way through the proceedings on the Bill they have accused the Government of lowering standards. One of the things we do here is to set up a Broadcasting Standards Council to look into and determine the standards which ought to be reasonable for violence and sex and standards of taste and decency.
If the noble Baroness does not realise that the council was set up because of a genuine public concern about the standards of such programmes, I honestly wonder where she has been for the past five or 10 years. I say that because, without question, there has been general concern about sex and violence in television programmes. The reason for the concern, as the noble Lord, Lord Annan, correctly said, is that programmes are beamed directly into the family living room. People are worried about sex, violence and bad language because they can and do inculcate coarse and intolerable standards of behaviour.
Baroness Birk: I did not for one moment expect the Minister to agree with me. If he had, I should have been absolutely shell-shocked. However, he must not spread what is merely a subjective view on quality. I do not know how he can say that quality is measured by the Broadcasting Standards Council. Of course, he believes in it; I do not. Moreover, I have a right not to do so.

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Perhaps I may also put the noble Earl right on a question of fact. It is not true to say that sex and violence are the concerns of most people. Responsible research into the subject shows that that is not the case. The biggest concern of many people is first bad language, followed by violence and then sex. The concern to which he referred involves a small number of people. With respect, I believe that the Minister is quite wrong to give the impression that hordes of people were demanding a Broadcasting Standards Council.
Earl Ferrers: The noble Baroness is entitled to her opinion. It is all very well for her and her colleagues throughout the proceedings on the Bill to say that the legislation will result in the lowering of standards and quality. When the Government introduce an organisation which will home in on standards but not set them—it will advise upon them—the noble Baroness says that it is a waste of time and money; that the members of the council are gloomy gremlins; and that it is a carbuncle on the broadcasting system. In my view, that is really going over the top. However, I am glad that the noble Lord, Lord Thomson, said that that view is no criticism of those who serve on the Broadcasting Standards Council. The body has existed in a brief statutory form for over two years. During that period its record justifies its establishment on a statutory basis. I do not believe, as the noble Baroness said, that it has shown itself to be a joke.
The noble Lord, Lord Thomson, suggested that the council might try to override the responsibilities of the broadcasters. He said that it would add to the confusion. It was never the intention to override the duties of the broadcasters. The council deserves credit for the way in which it has responded sensibly to concerns. I accept that they are serious concerns. The BBC and its governors have a remit as regards the quality of the programmes which are broadcast, as indeed have the other broadcasting authorities. However, through effective and patient communication, the Broadcasting Standards Council has assured both the public and the broadcasters that it is there to assist in the development of what should be acceptable standards and that it is not there to dictate terms. Similarly, the constitutional independence of the broadcasters will not he disturbed.
It would be wrong to pretend that the broadcasters' record on standards of taste and decency is entirely without blemish. The public interest in this area needs to be defended. We cannot always rely upon the broadcasters to ensure that this is so. It is essential that we look after the interests of the young. We need to consider the effect which too heavy an emphasis on violence in some programmes might have on impressionable young minds. There may be no conclusive evidence of a direct link between violence in broadcasting and violence in society. However, there is no doubt that the depiction of violence can have a deep and lasting impression on those who are most vulnerable.
It is not intended that the Broadcasting Standards Council will take over the role of the ITC and that of
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the BBC. It will reinforce the work which has been carried out in the past. In particular, it will take a lead in the establishment of standards on issues which have been of concern to many people and in relation to issues upon which it is difficult to pontificate and draw a line. In short, it is there to help. The BBC and the ITC will be required to reflect the general effect of the Broadcasting Standards Council's code. That will leave room for the corporations to do their jobs.
It would be wrong to think of the Broadcasting Standards Council as in any way a censor; it will have no power. It will have no power to preview nor any right to remove offending material from television screens or radio sets. However, it will be able to provide advice and reflect public opinion in what is a very difficult and elusive task of deciding what should or should not be shown on our broadcasting services. Moreover, as soon as it has carried out its investigations, it will be able to publish its findings in the annual report—and there is not much wrong with that. It will also be able to require those findings to be broadcast by the broadcasters.
If I may say so, I think that it is a pity that the noble Baroness weighed in so heftily against the Broadcasting Standards Council. It does not override the duties of the governors of the BBC or those of the broadcasters; indeed, it tries with them to set standards.
8.45 p.m.
Lord Bonham-Carter: I must apologise to Members of the Committee for having arrived a little late, thereby missing the beginning of the debate. However, I arrived in time to hear the admirable words of my noble friend Lord Thomson of Monifieth and also one of the most effective speeches of the noble Baroness, Lady Birk, to which I have ever listened. In my view, she made a devastating case. To pretend that it was purely as described by the noble Earl, Lord Ferrers, seems to me a travesty; it was in fact an expression of opinion that many of us share.
I listened to the remarks made by the noble Lord, Lord Annan, with my usual sense of surprise. He seems to have a kind of schizoid relationship towards the BBC: it is not exactly as he would have it be. However, to raise the Janus figure argument once more is a mistake. He said that the BBC cannot carry out its duties both as regards the running of the corporation and as guardians of the public interest. He said that those two functions are in contradiction to each other. However, those functions are carried out by every Minister of the Crown every day of the week. Indeed, the noble Earl, Lord Ferrers, is the protector of public interest and, at the same time, he runs the Home Office. He also runs the police. This division between administration and the representation of public interest lies at the heart of British constitutional arrangements. I believe that the noble Lord, Lord Annan, knows that to be true in his heart of hearts.
The noble Lord, Lord Annan, also said that there is a great lack of confidence in the governor of the BBC and in the IBA. I do not know upon what

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evidence he bases that conclusion. Of course, it may be the evidence of Mrs. Whitehouse, but that is not evidence which entirely convinces me. He also said that the public are deeply disturbed or shocked by programmes which are screened in terms of sex and violence. I do not know which of the programmes portraying sex screened by the BBC and the IBA he finds to be totally unacceptable.
Anyone who has looked into the nature of complaints against television or broadcasting will know that the main complaint—I am sure that the noble Lord, Lord Barnett, will agree with me—is bad language. That is what the public really object to. You cannot switch off bad language, because you do not know when it will occur. Indeed, it comes into the home in odd ways. People who use bad language outside the home do not necessarily use it inside the home. It is for this reason that people object to it so strongly. I simply do not know why he reaches the conclusion that the Broadcasting Standards Council was bound to come about or why he is so worried about impartiality.
Lord Annan: One of the reasons is that the governors of the BBC were for many years hardly ever known to accept any complaint that was made. They always justified it through thick and thin and never gave an inch.
Lord Bonham-Carter: If I were a Minister I would say, "I shall write to the noble Lord about that". The number of complaints that I have known the BBC to accept and to apologise for is substantial. The noble Lord is simply repeating the tittle-tattle of the campaign against the BBC which, we know, has been mounted over the past five years by a number of people who could be said to be interested in the result.
As for impartiality, I honestly think that the noble Lord should have listened to the speech of the noble Lord, Lord Barnett, on that subject earlier in the debate. If he was here, he did not listen to it; if he was not here he could not have listened to it. He should accept that the basis of the cases for impartiality produced by the noble Lord, Lord Orr-Ewing, who I am sorry is not here, is the Media Monitoring Unit. That consisted of one man with a tape recorder—a man whose application to join the BBC had been turned down. His findings have been agreed by almost everyone to be extremely dubious and bad evidence. That is the basis of many of the accusations against impartiality.
However, let that be. The noble Earl, Lord Ferrers, said that we on these Benches had throughout the debate complained that the Government would jeopardise the quality of broadcasting in this country. That is profoundly true. It was admitted by his honourable friend, Mr. David Mellor, in the other place. It was admitted that that was likely to lead to a lower quality. There is no doubt about that. Why should there be if our criterion is financial reward and if we abandon public service? He has told us again and again that that was the criterion and we shall see the result.
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However, the noble Earl also said that we cannot define quality. He spent a great deal of time last night telling me that we could not define quality, but are standards easier to define than quality? Is the portrayal of good taste and decency easier to define than quality? Is the acceptable portrayal of sex and violence easy to define? That matter will be left in the hands of the noble Lord, Lord Rees-Mogg, who knows my opinion on the subject, and of an absolutely classic quango composed of the statutory bishop, the statutory Scot, the statutory woman, the statutory black and the statutory ex-Labour MP. Those people will decide those matters. I ask you!
Earl Ferrers: I noticed that the noble Lord deliberately omitted the ex-statutory Liberal.
Lord Bonham-Carter: I should be delighted to see an ex-statutory Liberal. Is he ex-statutory or ex-Liberal? In any case, I find the idea that those people will reflect public opinion—
Lord Annan: Is the noble Lord not prejudging a little what the noble Lord, Lord Rees-Mogg, may or may not do? It may well be that the Broadcasting Standards Council will hold public hearings in order to achieve a cross-section of what the public hears. The idea that the body will simply sit and brood by itself is surely a little far-fetched.
Lord Bonham-Carter: The noble Lord does not appear to have read the council's annual report. I happen to have read it. It tells me exactly how it tests public opinion with 750 people, 35 monitors and expeditions all over the country asking people questions which were vividly described to us by the right reverend Prelate the Bishop of St. Albans who is on the council. We know how it does that. On the whole, I am sceptical—that may be a mistake—of its ability to reflect public opinion.
Finally, the noble Earl said that the public interest cannot be left to broadcasters, but no one ever supposed that it was to be left to broadcasters. There are two bodies called the IBA and the governors of the BBC who are strictly enjoined to protect the public interest. Perhaps it was a Freudian slip. Was the noble Earl really saying that he did not trust the governors of the BBC and the IBA to look after the public interest? That is the implication of the arrangement.
I and my noble friends have felt quite unable to table an amendment to the clause because nothing in the world can rescue it from its own folly. The Government are setting up an organisation—a classic quango—which will simply take in its own washing and which is perfectly clearly in search of a role. Whether it will succeed in finding one is another matter, but in so doing it will no doubt tread on the toes of my noble friend and of the Advertising Standards Authority.
Earl Ferrers: I was trying to follow the noble Lord down his path. He said that the Broadcasting Standards. Council would simply take in its own washing. How do you take in washing that you have not produced?
Lord Bonham-Carter: You have to produce washing to take it in. That is just the trouble. The

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council is in search of a role and it will try to find grounds for work. It will try to build an empire. That is exactly what happens. How else can it justify its existence? That seems perfectly clear to me from what it is doing.
The council's conduct of research is a classic example. The amount of research that has been undertaken into sex and violence would fill the whole of that wall. The Broadcasting Standards Council not only undertakes research; it undertakes research into research. The first research that it undertook into research stated that the research had found out nothing.
I argue that the council is unnecessary. In addition to being unnecessary, it is confusing. It is confusing because, as I have said before, it is necessary to assign responsibility unambiguously if that responsibility is to be fulfilled. If, as the noble Baroness pointed out in her admirable speech, there are, as there now are, in the broadcasting world the governors of the BBC and of the IBA, the Broadcasting Standards Council, the Home Secretary, the ITC, the Broadcasting Complaints Commission and the Advertising Standards Authority—an array of regulatory institutions—it will produce confusion. It will lead the broadcasters to say, "How far can we push them?" That would be an administrative mistake.
The noble Earl has revealed the two faces of Thatcherism. There is greedy Thatcherism, which is the face that we have been attacking most of the time and which relies on the market in all respects. Then, suddenly, there is Granny Thatcherism, which is the one that interferes with our behaviour and starts telling us what to do. That one frightens me because it is deeply anti-libertarian.
The latest example of that is the Broadcasting Standards Council which has still to make up its mind about those difficult matters. In a famous interview, the noble Lord, Lord Rees-Mogg, indicated the difficulties when he was asked what he thought was sexually acceptable and okay to put on television. He said—and it shows the extreme complexity of the problem facing us—that there were three kinds of sex in his view. There was romantic sex which he described as Romeo and Juliet sex, neglecting the fact that Juliet was under age. In Romeo and Juliet, sex and violence are more intimately interlocked than in any other of Shakespeare's plays. He then said that there was pornographic sex which he rightly did not define; that was unacceptable. Finally, he said that there was a grey area which he described in memorable terms as "groping sex". That is the problem that has faced the council. It has to decide whether this is groping sex, Romeo and Juliet sex, or pornographic sex. It should be left in the hands of those who to date have handled it perfectly well. This provision has undermined their authority; it undermines their authority now; it produces confusion, it is an invasion of liberty. Say what the noble Earl may, it is a form of censorship, hence we oppose this clause.
9 p.m.
Lord Ardwick: I cannot possibly follow that degree of passion and eloquence from the noble Lord, Lord Bonham-Carter. I rise to make one or two simple points. When all this BSC business began, I said a kind word about it because I wanted to express my confidence in the noble Lord, Lord Rees-Mogg, who was then Sir William Rees-Mogg. I had known him for many years as a splendid, liberally minded editor of great quality. However, the Broadcasting Standards Council has turned out to have a very narrow brief. I quote from its annual report:
"The Council's remit concerns the portrayal in television and radio programmes and advertisements of violence, sexual conduct and matters of taste and decency".
This is not looking at the changing standards of a society in transition, a society searching for a new set of values which it can accept. The council has a special role: to consider violence, sexual conduct and matters of taste and decency. After all the publicity it has been given, it is natural that the council should have received complaints from members of the public over the past nine months. I regret that the brief prescribes that it is to deal with complaints. Perhaps the noble Earl or a spokesman on the Government Front Bench could tell us more about the way in which it will deal with complaints.
We are told in the annual report that the initial framework for handling complaints will continue to be modified and to reflect parliamentary decisions on the Bill. How is it being modified? The report says that in the meantime complaints should be made in writing or by telephone with a written confirmation to follow; and all complaints will be considered initially by a complaints committee.
If a body set up to deal with sex, violence and so forth issues a public invitation to people to complain to it, it will be overwhelmed with complaints. Every Mrs Grundy in Britain will write to the council once the invitation has been publicised. The noble Lord, Lord Annan, suggested that we might even find it being concerned with the terrible subject of impartiality. I do not wish to re-open the debate we had the other day. It is a debate that I have been hearing for the past 20 or 25 years with exactly the same evidence and exactly the same lack of evidence. For example, there was a complaint about a broadcast in which a comment was made about defence. An outrageous opinion about defence had been expressed on television or radio. It was one little broadcast, out of all the thousands of orthodox broadcasts on NATO and Britain's defence policy. Yet one little breach on the other side is regarded as a flight from impartiality. That is the kind of situation we might easily get into. I hope that impartiality is dead, at least until the Report stage.
On Question, Whether Clause 139 shall stand part of the Bill?
Their Lordships divided: Contents, 58; Not-Contents, 29,

Division No. 2

CONTENTS

Arran E.

Fraser of Carmyllie, L.

Auckland, L.

Gisborough, L.

Balfour, E.

Glenarthur, L.

Belstead, L.

Greenway, L.

Blatch, B.

Havers, L.

Blyth, L.

Hives, L.

Boardman, L.

Joseph, L.

Borthwick, L.

Killearn, L.

Boyd-Carpenter, L.

Long, V. [Teller.]

Brabazon of Tara, L.

McColl of Dulwich, L.

Brightman, L.

Macleod of Borve, B.

Broadbridge, L.

Merrivale, L.

Brougham and Vaux, L.

Morris, L.

Butterworth, L.

Mottistone, L.

Caithness, E.

Moyne, L.

Caldecote, V.

Murton of Lindisfarne, L.

Carnegy of Lour, B.

Pearson of Rannoch, L.

Colnbrook, L.

Reay, L.

Cork and Orrery, E.

Renton, L.

Crathorne, L.

Robertson of Oakridge, L.

Crickhowell, L.

Sanderson of Bowden, L.

Cullen of Ashbourne, L.

Stockton, E.

Davidson, V. [Teller.]

Strathmore and Kinghorne, E.

Downshire, M.

Swinton, E.

Eccles, V.

Thomas of Gwydir, L.

Elliot of Harwood, B.

Trumpington, B.

Elliott of Morpeth, L.

Ullswater, V.

Faithfull, B.

Wade of Chorlton, L.

Ferrers, E.

Winchester, Bp.

NOT-CONTENTS

Addington, L.

Hollis of Heigham, B.

Airedale, L.

Jenkins of Hillhead, L.

Ardwick, L.

Lockwood, B.

Birk, B.

McGregor of Durris, L.

Blease, L.

McIntosh of Haringey, L.

Bonham-Carter, L.

McNair, L.

Boston of Faversham, L.

Mason of Barnsley, L.

Carmichael of Kelvingrove, L.

Monson, L.

Carter, L.

Pitt of Hampstead, L.

Darcy (de Knayth), B.

Seear, B.

David, B.

Strabolgi, L.

Dormand of Easington, L.

Thomson of Monifieth, L.

Glasgow, E.

White, B.

Glenamara, L.

Winstanley, L. [Teller.]

Graham of Edmonton, L. [Teller.]

Resolved in the affirmative, and Clause 139 agreed to accordingly.
9.14 p.m.
Schedule 12 [The Broadcasting Standards Council: Supplementary Provisions]:
Lord Sanderson of Bowden Lord Sanderson of Bowden moved Amendments Nos. 311CA to 311CC:
Page 200, line 33, after ("made") insert:
("(a) ").
Page 200, line 33, after ("and") insert:
("(b) (subject to sub-paragraph (1A)").
Page 200, line 35, at end insert:
("(1A) Sub-paragraph (1)(b) shall not apply in relation to any meeting of the Council at which all of the other members present resolve that the member's interest should be disregarded for the purposes of that provision.").
The noble Lord said: I beg to move Amendments Nos. 311CA, 311CB and 311CC en bloc. They were spoken to with Amendment No. 311ZB.
On Quostion, amendments agreed to.
Earl Ferrers Earl Ferrers moved Amendment No. 311D:
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Page 200, line 45, leave out from beginning to end of line 9 on page 201.
The noble Earl said: The amendment was spoken to with Amendment No. 311ZB. I beg to move.
On Question, amendment agreed to.
Schedule 12, as amended, agreed to.
Clause 140 [Preparation by Council of code relating to broadcasting standards]:
[Amendment No. 312 not moved.]
Clause 140 agreed to.
Clause 141 agreed to.
Clause 142 [Consideration by council of complaints relating to broadcasting standards]:
[Amendment No. 313 not moved.]
Clause 142 agreed to.
Clauses 143 and 144 agreed to.
9.30 p.m.
Clause 145 [Power of Council to commission research]:
The Lord Bishop of Winchester The Lord Bishop of Winchester moved Amendment No. 314:
Page 112, line 31, after ("research") insert ("and consultations with the public and others").
The right reverend Prelate said: The purpose of Amendments Nos. 314 and 315 is to widen the terms of reference of the Broadcasting Standards Council. We have just debated very fully the role of the council. The purpose of the amendment is to accept the work of the council and to give it greater significance. I believe that it could prove to have a more valuable role.
I am one of those who welcomed the Government's initiative in establishing the council and I want to applaud the work of the council in the last two years since it came into being. It has already published a code of practice covering the portrayal of violence, sex, sexuality, taste and decency after a full process of consultation with those in broadcasting, with numerous public organisations which have been listed in one of its annual reports and also with the general public, through the means of its road show, in different parts of the United Kingdom. I believe that the fact that the code, after going through two drafts and being so fully discussed, has been so well received is in large measure due to the quality and thoroughness with which the council has conducted its consultations as well as owing a great deal to the discrimination and wise judgment of its authors. It is also significant that the code has aroused considerable interest in European countries where the BSC is involved in discussion of standards of trans-frontier broadcasting.
Secondly, the council has undertaken what I believe, despite some of the critical comments made earlier this evening, has been a significant piece of research work which is described in its two annual reports. Recently we received Dr. David Docherty's study on violence in television fiction. That is the first in a series of publications on public opinion and

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broadcasting standards. I look forward to receiving the subsequent issues in the series. Further research projects are in hand.
The Committee will remember that when the White Paper was published two years ago it cited the House of Commons Home Affairs Committee's welcome to the inclusion of research in the BSC's remit. The committee recommended that the council should base its role in a changing broadcasting environment on properly researched findings.
We all know that we are on the threshold of enormous changes in the broadcasting environment. The number of companies and service providers in this country and in Europe will increase immensely as the new technologies become available. There will be a great proliferation of radio services and television channels. Those changes will properly be the subject of public discussion and debate.
The purpose of Amendment No. 315 is to broaden the council's brief so that its concerns will extend beyond the portrayal of sex and violence and matters of taste and decency, important and sensitive though those are, to the wider issue of standards and quality in programmes generally. At the moment we simply do not know what the effect will be of the many new television and radio services as they come into operation. They may, as the Government hope, extend the range and quality of programmes for the benefit of the listener and viewer. Alternatively, the effects of increased competition could well make quality programme-making more difficult to sustain and the costs prohibitive, and we could possibly see and hear an immense amount of trivialisation. We simply do not know what will happen.
But with an extended research remit, the evidence for the new developments as they take place can be properly obtained by the BSC and made available to the public to show what is happening as the changes take place. The BSC is well placed to undertake that responsibility. It seems likely that neither the ITC nor the Radio Authority will have such a significant research organisation as the IBA currently possesses.
In any case, with the greatly increased number of radio and television outlets, it is clear that the BBC, the ITC and the Radio Authority could not possibly research into the services laid on by other radio and television providers, of which there will be an enormous number. They would only be able to research into the effects of their own output. But the BSC, with complete neutrality and dispassionately, could mount research into different aspects of the output of the whole range of the new services and what they provide. That could be very valuable.
Good research can provide a basis for a continuing and well-informed debate as the broadcasting scene in our country changes very considerably. It would be a debate between the broadcasters, the interested public and many cultural bodies and institutions on the standards and quality of broadcasting and the social and cultural needs of the system.
The BSC has already had experience of mounting public forums for discussion. One recalls the lively debate a year ago at the National Film Theatre on whether there should be different standards operating in subscription and non-subscription television services. This year the council is collaborating with British Action for Children's Television in mounting a conference on the needs of children between the ages of 7 and 14. It will shortly be joining the Scottish Film Council in hosting a conference on the responsibility for children's viewing.
As programmes multiply, and in a much less tightly regulated broadcasting industry, the need for a general public discussion about choices, trends and developments in viewing and listening will become more important. The BSC not only has the experience and competence to mount such consultations but also is uniquely placed to do so. It enjoys a statutory basis; it is not self-appointed; it is involved with the broadcasting organisations but is independent from them; it has no particular bias or animus to conduct research or mount conferences, which are essentially in-house conferences. In fact, it can provide a much more objective kind of public forum.
We know that there are pressures in this debate to curtail the work of the BSC. One proposal has been to merge its functions with the Broadcasting Complaints Council. Another set of amendments has the intention of eliminating the BSC altogether. A further amendment would cut out advertisements from the council's terms of reference.
I should like to see the council not only remain intact but have its role enhanced. I believe in the Government's action in establishing the council. The council does valuable work and I applaud what the Government have done. I hope that the Government will take the opportunity to widen the council's remit in the way suggested by my amendment.
By definition, broadcasting is the most public of all human activities. The way in which the system in this country alters and develops and the kinds of programme provided by the multiplying number of new suppliers and companies are of legitimate public interest. Broadcasting is a proper subject for public debate. The BSC is strategically placed to provide both the necessary research and the right kind of forum for an informed yet vital kind of discussion.
I very much hope that the Government will not only have the conviction to keep the council in its proper, present role but will also have the imagination to see that with an enlarged remit as the broadcasting scene in this country changes and develops it could provide research and a forum for a vigorous public debate. Public bodies and the general public could take part in that debate to ensure that we as viewers, listeners and citizens can have a share in responding to what is happening and help to determine the shape of the future.
Earl Ferrers: I am grateful to the right reverend Prelate for having been kind enough to welcome the Government's initiative in setting up the Broadcasting Standards Council and for having applauded its work.

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He was quite justified in applauding the work because it has done a considerable amount in a relatively short period of time. The right reverend Prelate hoped that the Government would hold to their conviction to keep the council in its present role. I can assure him that that is our intention.
His amendments would, as he wished, add to and broaden the research function of the Broadcasting Standards Council. Amendment No. 314 would require the council, in addition to commissioning research, to undertake consultation exercises with the public and interested bodies. I doubt the need for a statutory obligation in that context.
As a matter of good practice, the council will want to consult the public about their views on the portrayal of violence and sex, and standards of taste and decency in programmes. The reason for establishing the council was to act as a focus for public concern on these issues. That is reflected in some of its statutory functions. In drawing up or revising its code of practice the council is already under a statutory obligation to consult the broadcasting and regulatory bodies and such other persons as appear to the council to be appropriate. The council is also under a statutory obligation to monitor and make reports on the attitudes of the public at large towards the portrayal of violence or sex or standards of taste and decency in programmes. We therefore doubt the need for an additional statutory obligation to consult the public and others in connection with this clause.
The right reverend Prelate hoped that the Government would have the imagination to increase the remit of the council. Amendment No. 315 seeks to do exactly that. However, I am bound to tell the right reverend Prelate that that would be highly controversial. In the Government's view it would be unacceptable, although I understand the desire of the right reverend Prelate. It never was the intention that the Broadcasting Standards Council should concern itself with the quality of broadcasting generally. The council was established specifically as a response to, and to act as a focus for, the public concern about the portrayal of sex and violence in all forms of broadcasting. Its effectiveness would inevitably be diminished if its remit were widened into more general areas.
It is the role of the Independent Television Commission and the governors of the BBC—as some noble Lords were only too keen to point out fairly vociferously on the discussion on clause stand part—to set and monitor acceptable standards of quality broadcasting. In establishing the Independent Television Commission we have sought to introduce a light-touch regulatory regime. A Broadcasting Standards Council which researched into, and consulted the public about, broadcasting quality generally would undermine both the role of the Independent Television Commission and the Government's purpose in establishing it. We should be going down a very slippery and controversial slope if we were to accept that idea, and I think that it would be undesirable.
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Clause 16(2) sets out the criteria for the quality threshold. It will be for the Independent Television Commission to determine whether applicants for licences meet those criteria and whether, thereafter, the standards are met. The Independent Television Commission will also have a statutory duty to make arrangements for ascertaining the state of public opinion as regards programmes included in licensed services.
In those circumstances it is difficult to see what purpose will be served by the Broadcasting Standards Council conducting research into broadcasting quality. While I understand the reasons the right reverend Prelate wishes to extend the remit of the council, I hope that in the light of my explanation he will feel able to withdraw the amendment.
Viscount Caldecote: Has my noble friend observed that Clause 145(1) provides that the council "may"? He spoke about statutory requirements, but the clause is only permissive. I thought that there was a lot to be said for the argument put forward by the right reverend Prelate. The provision is only "may"; it is not "must".
Earl Ferrers: It is true that the council may make arrangements and it has a statutory responsibility in that respect. However, if it wished not to do so I suppose that it could not be made to do so. As the provision is written into the statute, the chances are that the Broadcasting Standards Council would do so.
The Lord Bishop of Winchester: I thank the Minister for his reply. While I am disappointed that the Government do not see the possibility of using the Broadcasting Standards Council to provide a forum for a general and ongoing debate about the way the system develops and the quality of programmes in the coming year, I realise that they have taken that view. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 315 not moved.]
Clause 145 agreed to.
Clause 146 agreed to.
Clause 147 [Duty to publicise Council]:
Earl Ferrers Earl Ferrers moved Amendment No. 315A:
Page 113, line 6, leave out ("publish (by means of broadcasts or otherwise)") and insert ("arrange for the publication (by means of broadcasts or otherwise) of").
The noble Earl said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Clause 147, as amended, agreed to.
Clause 148 agreed to.
Clause 149 [Interpretation of Part VI]:
Lord McGregor of Durris Lord McGregor of Durris moved Amendment No. 316:
Page 113, line 43, at end insert (""programme" does not include an advertisement;".).
The noble Lord said: The purpose of the amendment is to redefine the word "programme" as used in the Bill in such a way that it will no longer include advertisements. Therefore, the power of the

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Broadcasting Standards Council to intervene in television and radio advertisements would be removed. The noble Lord, Lord Plowden, has asked me to say that illness prevents his being present to support the amendment.
The present system of regulating advertisements will not be altered substantially by the Bill. In Clauses 8 and 9 it provides for effective control by the ITC and in Clauses 87 and 88 by the Radio Authority. As drafted, the established arrangements work admirably. They will be deranged by the addition of the Broadcasting Standards Council to the bodies responsible for regulating advertisements. Last year the IBA employed some 40 people to pre-vet around 15,000 scripts and 5,000 completed commercials, thus providing advertisers with security for expenditures ranging from £40,000 to £1 million for each commercial. They provided viewers with the assurance that advertisements conform to a code far stricter than that applying to programmes.
There are hardly any complaints about sex or violence in television advertisements and there are no complaints about bad language because that has never been permitted. Unless the Bill is amended the Broadcasting Standards Council is required by Clause 142 to consider complaints about advertising and could not decide whether such complaints are inappropriate without examining the advertisements complained about.
Moreover, in practice, a regulatory body cannot tell a complainant that it would be inappropriate to deal with his complaint without giving a good reason. Accordingly, if the Broadcasting Standards Council possesses the power, it will be compelled to use it.
Therefore, we shall have an extra regulatory body either with its own code, although I have not yet seen one, or it must apply the ITC's code. The Broadcasting Standards Council has neither the personnel nor the machinery for pre-vetting advertisements and the advertiser will be exposed to the risk of considerable commercial loss because advertisements are often part of wider promotional strategies for mass consumption products. Unlike most other programmes on television, advertisements are repeated many times.
Under the Bill the unlimited authority of the council to require broadcast publication of its opinion about advertisements could certainly result in the disruption of marketing arrangements at great cost to advertisers. That is not a power which, in my view, can or should be entrusted to a body which lacks the means to give advance clearance to advertisements.
Nothing is contained in the Bill, nor has anything been said during its passage, to give any reassurance about that confusion of authorities and muddle of procedures which will mystify the public and harass advertisers and licensees. The existing and excellent regulatory system will be weakened to the disadvantage of consumers and advertisers. The result will be a general weakening of our present system of
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advertising control, not only over television but also over print advertising which works very closely with the IBA in that field.
What makes the situation so ridiculous is that there is no need whatever for it. The ability to intervene in advertisements adds nothing to the power of the Broadcasting Standards Council to discharge the duties for which it was set up and which we have just debated. There are no complaints that television advertising contains violence, sex or obscenities or needs additional control.
Unhappily, one manifestation of sex in advertisements has attracted the attention of the Broadcasting Standards Council. It observed in its annual report for 1988–89 that broadcasting still reflects the unthinking stereotypes of both male and female behaviour, and this is particularly true of many commercials.
I have searched without success in the council's publications for the evidence on which the latter generalisation rests. I note in the current annual report a list of research projects that the council initiated. These include "Women's perception of domestic and sexual violence on television"; "Children: television and moral development"; "Teenagers' perception of media stereotypes and morality"; "Media-based fantasy", though that was only a preliminary study. Another project was: "Advertising: sex role stereotyping".
I tried to conduct social research over an academic lifetime, and developed a prejudice that worthwhile work begins only by asking clearly defined and answerable questions. That has not been the habit of those engaged in what is portentously described as the sociology of mass communications.
Ten years ago I was a member of a panel set up by the former Social Science Research Council to report on the desirability of large investment in research on mass communications in British universities. The panel was under the chairmanship of Professor Aubrey Diamond, the then director of the Institute of Advanced Legal Studies in the University of London. It had among its members Sir Edmund Leach and Professor Hilde Himmelweit, who published one of the few superb studies on the effects of television written in this country since the war. She was a member of the committee chaired by the noble Lord, Lord Annan.
The SSRC panel reported its principal conclusion which reflects an opinion widely voiced to the panel that what is being done includes some work of high quality, but in general is fragmented, conceptually weak and often of no great disciplinary weight. The panel declined to recommend special funds for such research.
In my opinion, nothing has changed in the past 10 years. I am sad that the Broadcasting Standards Council is funding such trivial work rather than devoting its resources to proper basic research. I take fright when I read of the Broadcasting Standards Council's interest in what it calls the unthinking stereotypes of male and female behaviour which it finds in many television commercials.
Stereotyping is a fashionable concept of a not very reputable pop sociology. I am horrified that it may be used by the council in the exercise of its powers over television commercials. It is precisely in that sort of area, and as a result of reading the research projects which are under way, that I am sceptical when I am told that the council will rarely if ever intervene in advertisements. I can see only too clearly the lines of intervention which will stem from research projects of the order that I have described.
I hope very much that the Government and the council will give further thought to the difficulties which will stem from this wholly unnecessary power of the council to intervene in advertisements. I beg to move.
9.45 p.m.
Lord Boston of Faversham: I support the amendment proposed by the noble Lord, Lord McGregor of Durris. The noble Lord, Lord Colwyn, also wanted to be here tonight and to speak in support of the amendment. He told me that he has no objection to that being mentioned. Indeed, he intended to have his name added to the amendment but for some unknown reason that did not happen. As we know, the noble Lord, Lord Colwyn, has been playing a thorough part in the Committee's proceedings, including earlier today.
It seems almost an impertinence to speak in support of the amendment instead of simply silently supporting it because the noble Lord, Lord McGregor of Durris, tonight and in his Second Reading speech has spoken so fully, persuasively and authoritatively. He speaks also with the background of being chairman of the Advertising Standards Authority. However, I want to add to what he said, if only to put forward some additional thoughts from someone who is in a different part of the industry from himself.
I share the view of the noble Lord, Lord McGregor, that adequate machinery already exists. Indeed, it has shown itself over the years to be very much more than adequate in the regulation and control of advertisements on television. The system has proved itself to be effective over the years. As a corollary to the basic proposition put forward by the noble Lord, Lord McGregor, he makes the point that it would be confusing for all concerned—the viewer, the public generally, the complainant, the advertiser and the broadcasting industry—to add another body to which complaints can be made. One had hoped that we were now in an age where we were moving away from excessive bureaucracy, but this adds another quite unnecessary layer.
I emphasise that this is not to say anything against the members and staff of the Broadcasting Standards Council, and certainly not against its chairman, the noble Lord, Lord Rees-Mogg, who can always be relied upon, if I may say so with respect, to handle any responsibility laid upon him with competence, skill and judgment. It is the principle and practicality with which we are concerned. Not only would there be an extra layer of bureaucracy but it would also be a costly layer.
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The noble Lord, Lord McGregor, has already pointed out, tonight and on Second Reading, that the system for examining complaints, including the pre-vetting procedures which are so essential—the procedures for examining advertisements for television before they get anywhere near to being shown on the screen—is handled, and needs to be handled, by a sizeable number of people.
There is the staff at the IBA. The ITC will need a similar team. There is also the team employed by the ITVA—the Independent Television Association. These teams of people include the copy-clearance secretariat who help to scrutinise the material. In addition to those staffs there are also people within the programme companies themselves who are part of their sales and marketing departments. They scrutinise proposed advertisements. Thus they are also part of the process seeking to ensure that advertisements comply with the proper requirements.
The ITVA team is in frequent touch with the IBA and refers cases to the authority. I understand the intention is that the essence of that relationship and those contacts between the two bodies will continue when the ITC replaces the IBA. I also gather that the ITC is likely to make it a licence condition that licensees will need pre-vetting facilities so that the careful pre-vetting procedures that go on now will be continued when it takes over.
To do its job as effectively, no doubt the Broadcasting Standards Council will need to build up its own team. It could hardly use the same teams for that would surely concede the case against its own involvement in these matters. We do not know because we have not been told about the precise details of the procedures that it is intended should be followed, but it might well be that the Broadcasting Standards Council will not undertake any pre-vetting of advertisements. However, it would still need significantly more staff than it has at present to deal with complaints effectively.
At Second Reading the noble Lord, Lord Rees-Mogg, indicated that his council would not take a dominant role in the matter. As the noble Lord, Lord McGregor of Durris, has, I believe, pointed out, under Clause 142 the council will have a duty to consider all complaints made to it on matters within its remit. There is no escape from that. I understand that the number of complaints about advertisements considered by the IBA amounts to about 3,000 a year. Those are generally within the two categories of advertisements that are alleged to give offence and those which are claimed to be misleading.
I support what the noble Lord, Lord McGregor, said. I understand that virtually no complaints are alleged that relate to offence given on grounds of sex or violence. I gather that well over half of all the complaints about advertisements—that is to say, about 3,000 per year received by the IBA—are quite capable of reaching the Broadcasting Standards Council. Of that category alone, we are talking about 1,500 complaints a year.

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The Broadcasting Standards Council might have imagined that this aspect of its proposed work would be small involving very little intervention. That is likely to be a forlorn hope, not only for the reasons already given, but also because some people might see it as an easier channel through which to make complaints. In addition, once the council is in the business, as it were, of dealing with complaints, that is likely to generate them still further whether they are justified or not.
The amendment proposed would not in any way threaten or jeopardise the basic role planned for the Broadcasting Standards Council. Indeed, it is fair to point out that an active role in relation to advertising was never part of the original design for the council. The Government may feel that advertising slipped into the council's remit more on grounds of drafting for tidiness than for any clear reasons of need. Perhaps they will welcome the chance to reconsider the matter. I very much hope that the noble Earl the Minister will be prepared to do so. I join my noble friend Lord McGregor of Durris in supporting the amendment.
Lord Annan: I support the amendment. It is in a different category from those we have discussed before. We already have a very effective regulatory body. It was set up by the advertisers themselves and is under the auspices of the IBA. I know it is often said that we have the best broadcasting in the world. I am quite sure that we have the best advertising among television companies all over the world. Advertisements are nearly always in good taste and are clever and amusing. Indeed so clever and amusing are they that I sometimes do not know what the devil is the product being advertised.
Lord Thomson of Monifieth: I support the amendment moved by my noble friend Lord McGregor. I have had considerable experience over a number of years of the workings of advertising control in this country. I deliberately did not raise this matter when I spoke earlier on the general role of the BSC. That has been determined by the Committee. I echo the words of my noble friend Lord Boston of Faversham. With the BSC now in the Bill, to accept the arguments put so persuasively by my noble friends would be a practical improvement to the Bill.
I understand the desire of the Broadcasting Standards Council to get into these wider issues relating to advertising matters. However, I agree with what has been said. If it sets its foot on that road there will be no stopping it getting into the business of dealing elaborately with complaints and duplicating the work already done so effectively by the various advertising control mechanisms. The kind of duplication that would then take place would be financially and bureaucratically very wasteful. It would be infinitely confusing and a thoroughly good system would be undermined. I hope that the Government will feel disposed to accepting the amendment.
10 p.m.
Earl Ferrers: Members of the Committee have been very persuasive about their concerns on this matter. Perhaps I may try to allay the Committee's fears about the role of the Broadcasting Standards Council. The noble Lords, Lord McGregor and Lord Boston, and to a certain extent the noble Lord, Lord Thomson, portrayed anxieties about the role of the Broadcasting Standards Council which are out of proportion to what I think will be the fact. The noble Lord, Lord Annan, said that this is a different point from what we were discussing earlier. I do not think that it is. The Broadcasting Standards Council was set up specifically to act as a focus for concern about the portrayal of sex and violence and standards of taste and decency in all forms of broadcasting. It stands to reason that this necessarily and obviously includes advertisements, which are just as much a part of broadcasting and just as much a potential cause of offence as ordinary programmes.
The noble Lords, Lord McGregor and Lord Thomson, were concerned that, if the council's remit continues to cover advertisements, this will conflict with the role of the Independent Television Commission as the regulator of television advertising. I do not think that that is so.
I want to make it quite clear that there is no question of the council taking over the responsibility of the Independent Television Commission in this area. During the various debates which have taken place on the Broadcasting Standards Council since its establishment in May 1988, we have always sought to emphasise that its function is not to dictate terms to the broadcasters or to the regulatory bodies, or to cut across their regulatory responsibilities. It is there to assist them in determining what are, and what are not, acceptable standards in what everyone recognises is a sensitive and important area.
The main basis for the regulation of television advertising will be the ITC and its code of practice. In drawing up the code the ITC will have a duty to consult, among others, such bodies or persons who are concerned with standards of conduct in advertising, as it sees fit. We assume that this will include the BSC. We hope this will enable taste and decency standards on television advertising to be agreed upon, taking into account the advertisers' point of view. As a result, the code will make it clear to advertisers and to broadcasters what is expected of them. The code will act as a filter, which should ensure that very few advertisements are likely to slip through and cause such a degree of offence that they would be brought to the attention of the BSC.
It is not the intention of the BSC to work in isolation from the regulatory bodies, nor in contradiction to them. The council has already consulted those bodies on the practices and procedures which it plans to follow in handling complaints. If it receives complaints, we understand it envisages regular exchanges with the regulatory bodies and other interested parties so that its procedures may be modified in the light of experience.

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If the Broadcasting Standards Council entertains a complaint or complaints about programmes or advertisements, it will be required to send a copy of each complaint to the broadcaster and to the broadcasting regulatory body. This means that the regulatory bodies, as well as the licensees, will therefore have an opportunity to comment on a complaint. I also understand from the BSC that any action which the regulatory body or the licensee had taken, or proposed to take, over the matter would be taken carefully into account by the council in determining its findings, should that be necessary.
The noble Lord, Lord McGregor, was worried about advance clearance for advertisements. The noble Lord, Lord Boston, said he hoped we were moving away from excessive bureaucracy. I believe that is the case. The Independent Television Commission, unlike the Independent Broadcasting Authority, will not preview advertisements. The only previewing to take place will be carried out by the broadcasters themselves under a system of self-regulation. It is not right to argue that previewing is a necessary condition for adequate regulation.
Some concern has been expressed that the publication of an unfavourable BSC finding could lead to the abandonment of an expensive advertising campaign. The council has made it clear that it does not believe it will be necessary to investigate and publish a finding on every complaint made to it. In any event, the publication of findings will take different forms. The council envisages publishing its own regular summaries of findings. It may require publication of its findings in the press, or it may proceed by way of a broadcast announcement of its finding. The council has made it quite clear that it will use broadcast announcements only for the most serious of complaints—that is those invoking major principles about which there has been great public controversy. It seems unlikely, therefore, in the light of information that a licensee or regulatory body is publicly taking action about an advertisement which has been the subject of a complaint, that the council would wish to exercise this particular option for publicising its own findings.
I hope that these comments will reassure the Committee that there should be no overlap or conflict of duties between the BSC and the broadcasting regulatory bodies. I only wish to re-emphasise the point which I stated at the beginning. The noble Lord, Lord Annan, who has now regrettably left his place, referred to this point. If you were to set up a broadcasting standards council—as the noble Lord, Lord Thomson, said, the committee has agreed to that—in order to try to find appropriate standards for broadcasting, those standards should apply equally to advertisements as to programmes.
Lord Thomson of Monifieth: Before the noble Earl sits down, has he considered Clause 142, which states
"it shall be the duty of the Council to consider complaints which are made to them … and to make findings on such complaints"?
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Once it is involved in advertising and members of the public complain, it will have that duty and it will be in it up to its neck.
Earl Ferrers: Perhaps it will, but that should come about only if the advertisements are of such a nature as to cause complaint. If there are to be complaints and they are sent to the Broadcasting Standards Council, it must investigate them.
Lord Thomson of Monifieth: With respect, that is exactly the point that we are seeking to make to the noble Earl. He knows as well as anyone else in public life knows that, once you provide a facility for making complaints, people make complaints. They are often not very wise or well-founded complaints, but the people do not believe that. Under Clause 142, however ill-founded a complaint may be, it shall be the statutory duty of the Broadcasting Standards Council to investigate it and to make findings. That will cut right across the work of the well-established, extremely efficient advertising control in this country.
Earl Ferrers: We are almost coming back to basic principles here. If there is to be a broadcasting standards council, it should have the right and option to criticise programmes. The whole philosophy behind that is that, if programmes are of a sufficiently controversial nature as to require the matter to be drawn to the public's attention, that can be done either, as I have said, by press release or press comment or eventually, if necessary, by asking the broadcasters to make it clear by broadcasting the findings of the Broadcasting Standards Council. That is inevitably part of the council's philosophy. However, if the council is to do that, I do not understand how it can do so if it cannot receive complaints from people. The right reverend Prelate said earlier that he wanted there to be discussion to enable people to give their views. That is the only basis on which the Broadcasting Standards Council is enabled to come to a conclusion.
Lord Thomson of Monifieth: I am sorry to persist, but until now there has always been an easy distinction drawn in commercial television between programmes and broadcasting. I am not arguing against the Broadcasting Standards Council dealing with complaints against programmes. It is totally unnecessary for it to get into the business of dealing with complaints about advertising. It is an easy matter to set clear in the statute. I do not understand the Government's stubbornness on the matter.
Earl Ferrers: I am not trying to be stubborn. Clause 142(5)(c) provides that the Broadcasting Standards Council is not obliged to pursue frivolous complaints. However, if the complaint is not frivolous and if there is some fearful programme that apparently contravenes various standards, it is inevitably right that people should be able to write to the council and that it should look into the matter.
Lord Boston of Faversham: I should like to support the comments of the noble Lord, Lord Thomson of Monifieth. There should be no question of his feeling a need to apologise to the Committee for intervening several times on this vital matter.

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The noble Earl, Lord Ferrers, has done his best to utter reassuring words. However, those reassuring words are not compatible with the terms of Clause 142 which will become a statutory requirement and duty if that part of the Bill becomes law. One appreciates the Minister's attempt to reassure us with the words that he used. But they are simply not compatible with the terms of Clause 142. That duty will inevitably require the council to act in the way which has been suggested by all those Members of the Committee who have spoken in support of the amendment. If the noble Earl were to adhere to his reassuring words, then the clause could not continue in the Bill because of that incompatibility. For that reason alone, I submit to the noble Earl that there is a very good case indeed for the noble Earl and his fellow Ministers to have a further look at the matter at the very least, if he cannot accept the amendment tonight.
Lord Rees-Mogg: I had not intended to intervene in the debate for obvious reasons. I believe that there is a misapprehension here. Clause 142(5)(d) could give considerable comfort to those Members of the Committee who are anxious. Subsection (5) states:
"The Council shall not entertain, or proceed with … a complaint … if …
(c) the complaint is frivolous"—
that is obviously right; not all complaints would be frivolous, or—
"(d) that for any other reason it is inappropriate for them to entertain, or proceed with the consideration of, the complaint".
If we accept Clause 142(5)(d), we are not laying a statutory burden on the council which would be incompatible with the reasonable treatment of these advertising matters.
Lord McGregor of Durris: The difficulty with what the noble Lord, Lord Rees-Mogg, has just said is that the council will certainly be able to say that that is inappropriate for it. However no regulatory body can face complainants with the mere statement that the complaint is inappropriate. Reasons will have to be given. Reasons cannot be given unless an inquiry is made into the complaint.
Lord Boston of Faversham: To add to that, the basic point which the noble Lord, Lord Rees-Mogg, makes is a fair point. But the difficulty is that the Committee has no idea whatever what will be considered to be appropriate. Therefore that particular ground, I am afraid, falls on that basis.
Earl Ferrers: I wonder whether we are making unduly heavy weather of this. So far as I can see—noble Lords shake their heads, but I have not even been able to get out what I was going to say. If Members of the Committee would be good enough to postpone the shaking of their heads a little longer, I should be grateful.
The amendment which the noble Lord, Lord McGregor of Durris, has put down makes only one proposal. It says that the Broadcasting Standards Council should apply to all programmes but not to advertisements. For the past quarter of an hour we have been arguing about how terrible it will be when
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all the complaints flood in to the Broadcasting Standards Council which has to deal with them. That is an argument for not allowing complaints about anything, whether programmes or advertisements, to come to the Broadcasting Standards Council. It is not an argument on this amendment. Even if the amendment were accepted, the Broadcasting Standards Council would still be able to receive complaints about programmes. Therefore the argument would go that it would have so many complaints that it would not be able to deal with them.
If the Broadcasting Standards Council is set up for a purpose, the point is should it apply to advertisements as well as to programmes? I honestly think that if the purpose of the Broadcasting Standards Council is to help to set levels of acceptability for those matters, if that is necessary and appropriate, that must surely apply to advertisements as well as to programmes. Advertisements are just as much part of what comes into the viewer's sitting room. Therefore I cannot see that we can say with any logic that it is right for one but not the other.
Lord McGregor of Durris: In my search for reassurance, I have listened with great care to what the Minister said. However, surely there is a fundamental difference between programmes and advertisements. It is that before the advertisements appear on the screen they have been subjected to precisely those standards, although not only those standards, which it is the purpose of the council to apply to ordinary programmes. The standards to which the existing regulatory machinery applies are also so tight that there are and have been no complaints about advertisements on the grounds of their sexual, violent or obscene content or their use of bad language. Therefore, there surely is a fundamental difference. I cannot see that it is part of the same concept.
I do not fear that the council will take over all the regulatory functions that are already discharged. My point is that it is not equipped in its personnel, in its machinery or, for that matter, in its finance to discharge any of those functions. What was missing from the noble Earl's reply was a recognition of the fact that a body like this council could cause considerable expense to advertisers—in some cases formidable expense—by commenting upon advertisements. It ought not to do so in justice to an advertiser, unless it has the means to prevent the screening of the advertisement. It ought not to expose an advertiser to such financial risks through its intervention. It seems to me to be a fundamental point.
10.15 p.m.
Earl Ferrers: Perhaps I may help the noble Lord, Lord McGregor of Durris, on this point. I think that he may be under a slight misapprehension, if I may put it that way. I agree with him that at present advertisers have to put their proposed advertisements before the IBA, which determines whether or not they will be acceptable. That is what happens now. However, that will not happen in the future. Advertisers will not have to put their advertisements to the ITC. Moreover, they will not be previewed. The only previewing will be

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carried out by the broadcasters. When the advertisements are screened, it will be the broadcasters who will be responsible for what goes out. The way in which they will be responsible for this will be outlined in the guidelines which the ITC will set up in conjunction with the Broadcasting Standards Council. That is the only previewing which will take place and those will be the standards to which the advertisers will be expected to keep.
Lord Boston of Faversham: There is a further point in this connection—one which has not as yet been mentioned. I refer Members of the Committee to Clause 142(7), which reads:
"If it appears to the Council to be appropriate to do so, they may of their own motion issue complaints relating to matters falling within subsection (1)(a) or (b)".
Therefore we have the additional difficulty that the council may initiate complaints on such matters, as it may on programme matters. One would also look for some reassurance in this respect. In my view, it is a further complication.
Earl Ferrers: If I may say so, that is a different matter. However, it still comes under the same consideration; namely, that if the Broadcasting Standards Council is to have the right to initiate its own findings on programmes it is not unreasonable that it should initiate its own findings on the advertising which is shown between the programmes. I do not wish to be obstinate on the matter. Members of the Committee have expressed much concern. I should like to consider what has been said, without commitment.
My fundamental feeling is that if the Broadcasting Standards Council is to operate it must be responsible both for the programmes and the advertisements that slot between the programmes. I can understand that some noble Lords do not like the Broadcasting Standard s Council. That is a tenable argument. However, my view is that logically if the council exists it should cover advertisements as well as programmes. However, I shall consider what Members of the Committee have said, without commitment.
Lord McGregor of Durris: I am grateful to the noble Earl for saying that he will consider what has been said. On that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 149 agreed to.
Clause 150 agreed to.
Schedule 13 agreed to.
Clause 151 agreed to.
Clause 152 [Inclusion in programme services in Great Britain of racially inflammatory material]:
Lord Havers Lord Havers moved Amendment No. 316AZA:
Page 115, line 22, at end insert:
("(b) after "thereby" in subsection (1) insert, "provided that no person shall be guilty of an offence if the programme deals in good faith with public affairs or other matters of general public concern and the risk of stirring up racial hatred is merely incidental to the purpose of the programme".").
The noble and learned Lord said: I can get through my speech on this amendment and those being discussed with it, Amendments Nos. 316BZA, 316CZA and 316DZA without once mentioning the Broadcasting Standards Council. That will be a relief at least to the noble Lord, Lord Rees-Mogg.
This series of amendments deals with two separate but related issues concerning the application of the Public Order Act 1986 to broadcasting. I say at the outset that as I understand it the broadcasters do not object to their programmes being subject to the provisions of that Act. However, the way it is applied by Clauses 152 and 153 fails in my view to recognise the practicalities of broadcasting.
The first amendment deals with broadcasting programmes which address racially inflammatory issues in a responsible way. Serious programmes should be able to tackle sensitive subjects because public understanding and awareness depend on them. As it stands, Clause 152 could well prevent sensible and responsible programmes from being made. Broadcasters need a defence to permit programmes which discuss public affairs.
There is a well-established precedent in Section 5 of the Contempt of Court Act 1981. I know that well because as Attorney-General I took the Bill through the other place. Section 5 of that Act provides that a publication made as or as part of a discussion in good faith in public affairs or other matters of general public interest is not to be treated as a contempt of court under the strict liability rule if the risk of impediment or prejudice to particular legal proceedings is merely incidental to the discussion. The first amendment, which is modelled closely on that section, will enable sensible programmes to be made without the people responsible running the risk of committing criminal offences.
The second amendment concerns the possession of racially inflammatory material. My concern is that the Bill has created a new strict liability offence for broadcasters. Section 23(1) of the Public Order Act, which is applied by Clause 152 to broadcasters, makes it an offence to hold racially inflammatory material with a view to its being included in a broadcast programme. Broadcasters obviously hold a large amount of material for programme-making purposes. All their material is held with a view to its being included in broadcasts. That is why they hold it. However, not all such material is used in programmes. If it is used it might well be edited to avoid inflammatory effect. If it is recorded at a time of racial tension it may be used in a calmer period.
As the Bill stands a person is guilty of an offence for holding material which may not be used and which if it is used may not be inflammatory because of the way it is treated and edited. That is the creation of a brand new criminal offence against responsible broadcasting authorities. Even if used in a raw form, it might well be justified because the material informs people on an important matter.
I am sure that we are all against the creation of new strict liability offences. That is something at which we

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ought to look very carefully indeed. The second amendment will ensure that individuals are not punished for possessing material which might never get into the public domain or which ought not to be exposed to public gaze.
Let us go back for a while to Glasgow. A raid by the police on a broadcasting studio might disclose video tapes taken by a reporter employed by that company who had been operating with various tapes perhaps over the whole day. Included somewhere in that material might be something which could be inflammatory and which then makes the broadcasters guilty under strict liability of a criminal offence. So although it is rather technical, this is in fact a very serious amendment. They are both very serious amendments.
The two remaining amendments, amendments to Clause 153, are designed to ensure that there is consistency between the Public Order Act and the equivalent Northern Ireland provisions. I ask the Minister to look very seriously indeed at these amendments which sound so technical. This concerns the creation of new criminal offences, one of them by means of strict liability, which not only lawyers but practically every Member of this House will find he is very much against and very distasteful. I beg to move.
Baroness Birk: I support the amendments tabled by the noble and learned Lord, Lord Havers, who explained them clearly for the non-lawyers in the House. It is interesting that in the Standing Committee in the other place the Minister agreed that the defence should be amended to take account of the particular needs and duties of broadcasting. It is that point to which the noble and learned Lord addressed himself in his amendments.
In this context to leave the question of public good, as the Minister suggested earlier this year, to be covered by the Attorney General's discretion in assisting the attention of the broadcasters is—I believe this to be shared legal opinion—not sufficient.
I recognise the existence of a need for legal decisions. But this approach fails to provide the Attorney General with a basis on which to make such decisions. I believe, like the noble and learned Lord, Lord Havers, that in this case damaging uncertainty will result. With his amendments the noble and learned Lord has attempted to remove that danger.
Lord Havers: Perhaps the noble Baroness will give way for one moment. That was the alternative method of proceeding: the public good. But the position with the Attorney General was such that it convinced me that it was a way which was not satisfactory. That is why I used Section 5 of the Criminal Contempt Act.
Baroness Birk: I thank the noble and learned Lord. I was trying to explain that that was the alternative and why the noble and learned Lord found that not satisfactory and therefore tabled the amendments that he has just moved. The examples he gave explained very clearly—the amendments themselves are selfexplanatory—the position in which a person quite innocently could find himself. It is a great risk. It
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seems a pity and quite wrong in a new piece of legislation that this matter should not be put right at this stage.
10.30 p.m.
Lord Monson: The noble and learned Lord made a very convincing case for these amendments. There is practically no element of news or current affairs which is not capable of stirring up a certain amount of hatred of one group by another group or an individual. If one were to to repeat the showing of the well-known film on Belsen in 1945, showing piles of emaciated corpses, it would be bound to start hatred of Germans among part of the population in this country. If one were to show the aftermath of a massacre of Singhalese and Moslem villagers by Tamil Tigers, that might well start hatred against Tamils. If one were to show in detail the bloody aftermath of an IRA car bomb, it is bound to stir up a certain amount of hatred of the Republican Irish among a segment of the population of this country. But that is a risk that one has to run if one is not to emasculate totally news, current affairs and history programmes.
Earl Ferrers: My noble and learned friend has introduced an important subject. He said that it sounds technical. Indeed it is fairly technical, but it is nevertheless important for that.
Perhaps I may reassure my noble and learned friend that it is no part of the Government's intention that a responsible programme which tackles or refers to racially sensitive matters should be adversely affected by the Bill. Racial issues are certainly a legitimate and important area for public debate. However, I am bound to tell him that I consider that these amendments would cause us a number of difficulties. I shall explain why.
The Government's intention is to bring the broadcasters within the scope of the legislation covering incitement to racial hatred. I am sure that all noble Lords would agree that this is essential. We have always said that in doing so we do not intend to disturb any of the substance of that legislation. There is no public good defence in the legislation at the moment. We question whether one is needed and we do not think we could justify introducing such a defence in respect of broadcasting alone in this Bill. We fully recognise that the BBC and IBA have always accepted higher programme standards than those required under the criminal law, making it unlikely that the broadcasters would fall foul of the legislation. But that is no justification for not bringing them within its scope.
But perhaps I may reassure my noble and learned friend about the effect of Clause 152. First, as he is no doubt aware, newspapers and cable programmes are caught by the legislation, and there has been no suggestion that this additional defence is needed. Responsible reporting of racially sensitive issues has not diminished as a result of this legislation.
Furthermore, it is important to remember that under the 1986 Act, an offence is committed under Section 22 of the Public Order Act 1986 only if there is intent to stir up racial hatred or if, given all the

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circumstances, racial hatred is likely to be stirred up. Under Section 23, an offence is committed only if racially inflammatory material is held with a view to broadcasting it and with the intention thereby of stirring up racial hatred, or in the likelihood that racial hatred will be stirred up having regard to all the circumstances.
In other words, I believe that I can comfort my noble and learned friend that considerably more than the mere gathering of material for possible inclusion in a programme is needed. Any question of an offence will arise not by holding the material, which might or might not be used in a programme, but when the first edited version has emerged. I hope that my noble and learned friend will feel content with that.
My noble and learned friend mentioned Section 5 of the Contempt of Court Act. I question whether that is a close parallel. As he said, the context is that of strict liability which does not apply in the case of the relevant offences of incitement to racial hatred. I have outlined the intent requirement in relation to incitement offences. These do not apply under the Contempt of Court Act.
Furthermore, the statutory defences in Sections 22 and 23 would be retained. These would provide a range of safeguards against the possibility of broadcasters falling foul of the legislation. For instance, in the case of live programmes it is a defence if it is not reasonably practical to secure the removal of the material. It is also a defence if a producer or director has no reason to suspect that the circumstances in which the programme will be broadcast will be such that racial hatred is likely to be stirred up.
There is of course one other major safeguard. My noble and learned friend Lord Havers does not need me to remind him that prosecutions under the Public Order Act 1986 for incitement to racial hatred can be instituted only by, or with the consent of, the Attorney-General. Consequently, personal consideration of the case by the Attorney-General, or, in circumstances covered by the Law Officers' Act 1944, the Solicitor-General is a prerequisite to any proceedings. My noble and learned friend will correct me if I am wrong, but I am advised that the Attorney-General does not give his consent unless he is satisfied that the evidence is such as to afford a realistic prospect of convictions. Furthermore, he would want to be satisfied that the circumstances of the particular case are such as to require the institution of criminal proceedings in the public interest. I suggest that if the programme's general approach is responsible there should be no reason to suppose any offence ad been committed. As my noble and learned friend will appreciate, this is subject to the inevitable caveat that no one could commit the Attorney-General of the day as to how his powers would be used in a particular case.
My noble and learned friend's amendment covers the Public Order (Northern Ireland) Order 1987. This order covers incitement to hatred generally to cover the special circumstances in Northern Ireland. The specific defences that I have mentioned in respect of
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the mainland apply equally to Northern Ireland. hope this provides some reassurance about the intended effect of the proposals.
Lord Havers: I am grateful to the Minister. I am disappointed that he has not accepted either of the amendments. I should like time to consider his reply and to discuss it with members of the BBC whom I have consulted. I may wish to return to the matter, but meanwhile I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 316BZA not moved.]
Clause 152 agreed to.
Clause 153 [Inclusion in programme services in Northern Ireland of material likely to stir up hatred etc.]:
[Amendments Nos. 316CZA and 316DZA not moved.]
Clause 153 agreed to.
Clause 154 [Defamatory material]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 316ZA:
Page 117, line 11, leave out from ("service") to end of line 12.
The noble Viscount said: This is a drafting amendment. As programme service is defined in Clause 180 it is not necessary to define it again in this clause. The amendment removes the unnecessary words. I beg to move.
On Question, amendment agreed to.
Clause 154, as amended, agreed to.
Clauses 155 to 158 agreed to.
Clause 159 [Amendments of the Marine, &c., Broadcasting (Offences) Act 1967]:
On Question, Whether Clause 159 shall stand part of the Bill?
Lord Monson: Clause 159 and its associated schedule, Schedule 14, were introduced into the Bill at a late stage in the other place. Honourable Members had little time to absorb or debate its full and alarming implications. It is an open secret that the purpose of Clause 159 is to smash Radio Caroline. This is a so-called pirate radio station which has been harmlessly operating for 26 years. The material it broadcasts may not be my cup of tea nor that of most Members of the Committee. However, it is perfectly innocuous and gives enormous pleasure to a large number of people in London and south-east England. They are mainly respectable, middle-aged people who tend to have listened to the station since it opened in the mid 1960s.
Clause 159 has alarming implications both for international law—in particular, maritime law—and for civil liberties. The powers which Her Majesty's Government are seeking against Radio Caroline, astonishingly, are very much greater than the powers which they have, in the past, sought and obtained against hijackers, smugglers and drug traffickers. I am not qualified to talk about the implications for maritime law or the extra-territorial implications. However, my noble and learned friend Lord

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Wilberforce, with his enormous legal experience, is extremely unhappy about the clause and about Schedule 14. He would have been here this evening to support a number of these amendments were it not for a long-standing prior engagement.
Apart from the legal international implications, the practical international implications are also extremely alarming. For example, let us suppose that an Albanian ship were to be boarded by elements of our armed forces or police. Albania has ruined already the medium-wave reception of what I still think of as the Third Programme, but that is perhaps incidental. More realistically, let us suppose that a Chinese, Iranian or Iraqi ship were to be boarded. The consequences do not bear thinking about.
Therefore, this is a worrying clause and the implications of the schedule are equally worrying when examined in detail. I look forward to hearing the comments of other Members of the Committee on this clause.
Lord Annan: These proposals which are brought forward for deliberation are so extraordinary that learned counsel said about them:
"the proposed new powers are draconian and unprecedented in their extra-territorial effect … they offend against international comity in particular by their generalised assault on the principle of territoriality and create a most dangerous precedent for interference by foreign states with the legitimate rights of British shipping".
The conventional way of dealing with an unauthorised broadcast from a foreign registered ship on the high seas would be for the British Government to make the appropriate representation through diplomatic channels to the flag state of the vessel. In the past it is noteworthy that Parliament has stopped short of giving extra-territorial effect to statutes designed to prevent offences committed on foreign flag ships and which must, on any view, be categorised as far more serious; for example, smuggling or drug trafficking.
Section 7A goes far beyond any other statute such as the Drug Trafficking Offences Act 1986 in infringing the principle of extra-territoriality. However, there is much more to it than that. Section 7A empowers servants of the Crown to seize property and detain persons, to require the crew to produce documents and—this is most extraordinary and reprehensible—to grant officials immunity who are engaged in search and seizure.
What is so surprising about the proposed powers of search and seizure is that in contrast to other statutes conferring similar powers, they are given to such a wide category of persons. There must be some question as to whether it is necessary to extend the powers beyond police and customs officers. It is certainly unclear why there is any necessity for the catch-all Section 7A(1)(a) which states:
"persons authorised by the Secretary of State to exercise the powers conferred"
by subsection (5). That could mean anyone at all. It could mean the enforcement agencies of other foreign states being pressed into service.
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The immunity clause is iniquitous. If I come home, find a burglar in the house, pick up a poker and bash his brains in, I shall be guilty of manslaughter. The noble Earl will remember the recent case of an assault on the Tube in London, where a wretched victim who was assaulted by a gang of thugs was badly beaten about the head and body; nevertheless, in self-defence he drew a swordstick and managed to pink one of the thugs. He was arrested for carrying a weapon illegally, although that weapon may have saved his life. He was found guilty of a criminal offence. I do not know what happened to the thugs and perhaps the noble Earl can tell us.
I want to apply that case to what could happen on a vessel boarded in the way now to be permitted under this section. A member of the crew resists and is knocked overboard into the water and drowns. His family will have no case in damages; there will be no case of manslaughter brought against the officer who did this. It is a licence for official thuggery.
The noble Earl will be aware that I am not soft on terrorism. I applauded the storming of the Iranian Embassy by the SAS and what the SAS did to those terrorists who occupied that Embassy. I rejoiced when I heard that the terrorists in Gibraltar were shot dead like rats. But broadcasters are not terrorists. What is Radio Caroline but a lot of crickets chirping in the grate?
I do not pretend to be an expert on international law. However I did look up O'Connell, Vol. I, page 654. There it states:
"No State may assume, without the consent of the offender's State or the flag state, jurisdiction over aliens with respect to criminal acts on board foreign ships on the high seas".
As I understand it, the 1958 Geneva Convention is still in force. It gives no legal justification for boarding private radio ships and arresting their crews.
When I raised this point at Second Reading the noble Earl said:
"The provisions in the Bill are in accordance with international law. The United Nations Law of the Sea Convention allows states to act against ships on the high seas of any nationality, or none, if broadcasts from them can be received on their territory or cause interference".—[Official Report, 5/6/90; col. 1355.]
I wonder whether the noble Lord was then referring to the 1982 United Nations Convention on the Law of the Sea. He may have had in mind Articles 109 and 110 of that convention, but those provisions are not yet law. Indeed the United Kingdom is not one of the 41 states which have ratified that convention. On what grounds therefore do the Government assert that this schedule is already in accordance with international law?
I shall not bore the Committee with the five cases since the Geneva convention on boarding illegal broadcasting ships. I shall certainly spare the Committee those details. But it is clear that nowhere in the 1958 Geneva convention, on which international law is based, is the power given or measures included which would entitle states to board such vessels on the high seas.

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The noble Lord, Lord Monson, referred to the noble and learned Lord, Lord Wilberforce. In Germany in 1945 General Horrocks, who was commanding 30 Corps, gave an order, which appeared in corps orders, that if any German youths were found mocking, interfering or sneering at any members of the British Army, they were to be taken summarily to the guard room and there given six of the best. Mr. Wilberforce, as he then was, and who was head of the legal division in Berlin in the British Control Commission, thereupon sent a rasping order down to 30 Corps, instructing the corps commander to withdraw the order at once. We had come to Germany to imbue that country with respect for the rule of law and that was no way to do it.
The noble Earl knows well that I am not much given to indignation or impassioned denunciations of Government policy. "Mr. Milquetoast" is really my middle name! I know that Radio Caroline is an irritant. I know that it is illegal; but is it not beneath the dignity of Her Majesty's Government to make such a proposal? That is high-handed and bullying. It reminds one of other instances in which the Government use power when those it is used against have no power to resist it. Homosexuals and disc jockeys are not likely to make much of a comeback.
What was the result of Clause 28, which was a totally unnecessary and ham-handed measure? I well remember the noble Lord, Lord Boyd-Carpenter, in his most assured manner telling the Chamber that, of course, it would never be employed against genuine artistic products such as "The Importance of Being Earnest". What happened? Kent County Council banned Benjamin Brittan's opera "Death in Venice".
I have a feeling that the Government will regret passing a measure of this kind. They are trying to bring down a mosquito with artillery fire. I know also that they are trying to bring it down by illegal means. There is no point in asking the noble Earl to reconsider this matter but I ask him to believe that I am not pleading for an illegal radio station. Like the noble Lord, Lord Monson, from the voluminous mail I receive I am in no doubt that there are many people who listen to and enjoy that radio station. No doubt it is popular, but that is not my purpose. My purpose is to bring home to the Government and to the public that the Government are about to pass a clause which is illegal in international law and an affront to those who care about the principles of justice.
I only hope that if this clause becomes law the crew of Radio Caroline will seek to obtain a craft under the flag of the United States. If they do that and the Government board and sequester that vessel, the Government will find themselves faced with the prospect of war, as in 1812, and later having to pay an indemnity, just as they did in the case of the "Alabama" in the American civil war.
Lord McIntosh of Haringey: The noble Lord, Lord Monson, is right to raise this serious question by seeking to cast in doubt the whole of Clause 159; not that Clause 159 says anything; it is all said in Schedule 14.
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The law about the control of radio stations of this kind is already comprehensive. The 1967 Act, which is to be amended by Schedule 14, prohibits any unauthorised broadcasts in UK external waters. It prohibits broadcasts by UK registered ships. It prohibits broadcasts by UK nationals. It prohibits acts facilitating broadcasts. It prohibits advertising or the supply of records for the purpose of broadcasting. It provides penalties against anybody who infringes any of those provisions. Indeed, it provides for search by police officers, although certainly not with the use of force or the use of officers authorised by the Secretary of State. That Act is perfectly in accordance with international convention.
The European convention on broadcasts of this kind is satisfied by the 1967 Act. In order to fulfil our international obligations there is no need for us to go any further. What is now proposed goes very much further, as Members of the Committee have already said. It breaches the fundamental principle of territoriality. It breaches the principle that no state can pass a law which creates an offence carried on outside its own jurisdiction—in other words, on the high seas and even outside its external waters—by citizens other than its own.
There are exceptions to the principle of territoriality. The Hijacking Act 1971 and the Suppression of Terrorism Act 1978 both provide for breaches of the rule on territoriality. There have been international agreements that have recognised that, in certain extreme circumstances such as hijacking and the prevention of terrorism, it is necessary to breach the rule of territoriality. With other offences such as drug trafficking where we have the Drug Trafficking Offences Act 1986, we have not thought to breach territoriality. Why are we seeking to breach it now in the case of Radio Caroline?
We are proposing that not just our police but any person authorised by the Secretary of State shall have the right to go outside our own territory, board, and if necessary, use force against the crew of a vessel flying a foreign flag in order to prevent not merely interference by a broadcasting station but the reception of that station by the citizens of this country. I suggest to the Minister that if he insists on keeping Clause 159 in the Bill—I do not think that the noble Lord, Lord Monson, would be wise to pursue his Motion against clause stand part—at the very least he should pay serious attention to the first amendment in the name of the noble Lord, Lord Monson, and replace it with one which provides that an offence shall only be created if there is interference with airwaves rather than simply with reception. The arguments have been very well put and we are coming close to the time when we should not be considering these matters any further. However, it is necessary to complete the argument and to give the Minister a chance to reply.
Viscount Caldecote: I have no wish to discomfit my noble friend on the Front Bench, but this is really taking a steam-hammer to crack a nut. Radio Caroline may be annoying, but this issue is not of such moment as to require the draconian measures that are being proposed. When a steam-hammer is used

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irresponsibly it can do a lot of damage by mistake. This is a very good example. This clause sets a very bad example to others on the high seas. For example, someone like Colonel Gadaffi might well find passing near but outside his territorial waters a ship which he does not approve of for some reason. He could use this as an excuse to board it and commit piracy on the high seas, which this measure is legalising.
In the past, piracy on the high seas has always been a heinous crime against which the masters of ships have been protected by the strongest laws. It is very bad to give this example which others might take advantage of for piracy on the high seas. Other reasons have been given, such as the view that broadcasting from Radio Caroline interferes with distress signals on the high seas. The fact is that the frequency used is well away from any of the distress frequencies used on the high seas and that argument cannot be sustained.
I understand that Spectrum Radio in the United Kingdom was allocated the same frequency as Radio Caroline. There was interference and very soon another frequency was found. The fact that there are not enough frequencies available appears to be a somewhat spurious argument. That is not to say that we condone illegal broadcasting and pirate broadcasting of this kind. Therefore, I shall not support the Motion put forward by the noble Lord, Lord Monson, to delete Clause 159. That would indicate that we do not want to take any action against pirate radio. I urge and implore Her Majesty's Government to withdraw this clause and to look at it again very carefully. I hope that they will give an undertaking to look at it and to bring back some better way of dealing with Radio Caroline than this draconian measure.
11 p.m.
Earl Ferrers: We are talking here about pirate radio stations. Offshore broadcasters have a colourful and romantic image. They are popularly known as pirates, conjuring up images of swashbuckling characters wearing black hats and scarves, out to tweak the tail of the authorities. They are seen by their supporters, as we have heard this evening, as harmless providers of a type of broadcasting which is not available elsewhere. On that view, the authorities who try to enforce the law against them are seen, as my noble friend Lord Caldecote said, as the sledgehammer to crack a nut, or, as the noble Lord, Lord Annan, said earlier on, bureaucratic killjoys out to break butterflies on wheels.
The noble Lord, Lord Monson, said that what pirate stations do is innocuous. I totally disagree. I do not think that it is innocuous. The reality is quite different. The radio spectrum is a valuable natural resource. Its use has to be carefully planned and regulated, especially with the explosive growth in the use of radio for communications and for broadcasting. The noble Lord, Lord Annan, said that this provision will offend against international comity. I say to the noble Lord that pirate radio stations offend against and infringe the law of the country. Why do
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they position themselves just outside territorial waters and use British frequencies if it is not to avoid British law?
Unauthorised transmissions, because of their unplanned nature, are damaging to authorised broadcasters and other radio users. Even the safety-of-life services can be affected. That is not fanciful. Offshore broadcasters have used a frequency very close to, and capable of interfering with, a channel used for ship-to-shore communications and have threatened aeronautical radio navigation beacons upon which helicopters rely. The consequences in such cases are potentially extremely serious. Interference in a complicated phenomenon and radio use needs careful planning in order to minimise the risks while making maximum effective use of the spectrum available. For example, two transmissions can combine to interfere with a third even though neither of the first two individually causes interference.
There is no longer any justification for the pirates to claim that they have been driven offshore because they are being excluded by the "establishment" and have no alternative. Our policy is to cater for the widest possible range of tastes, and this is already being put into effect through the licensing of the first batch of community radio stations. It is open to anyone to apply for a broadcasting franchise and licence under the new system; and, as long as he has not been convicted of an unauthorised broadcasting offence since 1st January 1989, he stands an excellent chance. Some erstwhile pirates have taken this path. The circumstances that gave rise to pirate radio in the 1960s no longer exist.
I am not too good at remembering songs, stories and sea shanties but I do remember one. It was about Captain Kidd. It went something like this:
"My name is Captain Kidd, as I sail, as I sail".
It ended:
"To the execution block, I must go, I must go".
I wonder whether pirate radio stations might not feel the same. By grabbing frequencies and interfering with legitimate broadcasts, pirate stations restrict choice. They do not extend it. They also have an unfair commercial advantage since they do not pay licence or performance fees. I find it astonishing that a good many Members of the Committee seek to defend the operation of some broadcasters who, however popular they may be, are broadcasting against the law, against the interests of other broadcasters and sometimes at the risk of safety-of-life services.
The noble Lord, Lord Annan, and others complained about Schedule 14 being incompatible with the law and being excessive. All states have a duty to co-operate in the suppression of unauthorised broadcasting from the high seas. Such broadcasting contravenes worldwide independent telecommunication union radio regulations. The Government are satisfied that the exercise of the powers provided for in the Bill relating to ships on the high seas will be in accordance with international law.

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As the noble Lord, Lord Annan, rightly said, the powers we are taking are modelled on Articles 109 and 110 of the United Nations Convention on the Law of Sea. These provide for a state to take action against broadcasters on ships of any nationality or of none which are on the high seas, if their broadcasts, which are contrary to international regulations, can either be received in that state's territory or cause interference there. We do not anticipate objection from other states, although we will normally consult the flag state.
The noble Lord, Lord Annan, said that that convention had not been ratified. It is true that Her Majesty's Government have not yet acceded to the Convention on the Law of the Sea. I have explained the justification for the schedule in international law. Our view is that the exercise of the powers will be in accordance with international law. That is not dependent on the convention. The convention is a model for the provision. This is the basis in international law for paragraph 2 of the schedule. Paragraph 1, which deals with broadcasts from structures on the UK's area of the continental shelf, is based on states' well-established jurisdiction over their adjacent continental shelf.
The noble Lord, Lord Monson, said that the powers were excessive in comparison with those used against drug smuggling and other serious crimes. This is an important matter. Comparisons with the enforcement powers used against drug smuggling and other serious offences are oversimplified. The powers given to fight an offence are not a good reflection of its seriousness. The severity of the sentence is a far better indicator of the view taken by society of a crime. The penalties for drug smuggling far outweigh those for offshore broadcasting, and rightly so.
Lord McIntosh of Haringey: I hesitate to interrupt at this hour. Surely the point about drug smuggling is that greater powers are needed in order to catch drug smugglers, whereas pirate radio ships are just sitting there waiting to be caught if the law is extended to penalise them.
Earl Ferrers: The noble Lord is always a little hasty in getting to his feet. If he had waited a little longer, I could have told him that the powers against drug traffickers onshore are far greater than those which we propose to use against pirate stations outside territorial waters. Enforcement powers have to reflect other factors. They have to be sufficient to enable the authorities to prevent the criminal activity in question, to obtain the evidence for a conviction and to bring offenders to book. A law which cannot be enforced will not be effective. The powers against offshore broadcasting reflect these practical points. It will be necessary to board vessels, search them and to bring them into port and arrest persons from time to time.
Viscount Caldecote: Before the noble Earl sits down, will he comment on the point I made about the bad example that this provision will set to governments who are less responsible than Her Majesty's Government?
Earl Ferrers: I do not see that there is any connection. This measure permits a state to take action against people on the high seas whose frequencies affect the frequencies of that state, when an action is being taken against the international convention.
Lord Annan: Before the noble Earl sits down, I hope that he will deal with one further point which concerns immunity. I referred to immunity, but I do not think that the noble Earl has dealt with it. I wish to emphasise that I am not holding a brief for Radio Caroline.
Earl Ferrers: I am conscious of the fact that it is after the witching hour of 11 o'clock. I hope that I may write to the noble Lord on that point.
Lord Monson: I wish to reply, if I may. I am grateful to the noble Viscount, Lord Caldecote, for his powerful support and to the noble Lord, Lord McIntosh. I am particularly grateful to the noble Lord, Lord Annan, for his powerful and detailed support. He made only one error, but it was a significant one. Radio Caroline is not illegal, because it is operated from a foreign vessel with a foreign crew in international waters. Her Majesty's Government have at present no jurisdiction over it. It would take more time than we are allowed to reply in detail to the noble Earl, Lord Ferrers, but he mentioned that the penalties against drug smugglers are greater than the penalties that are likely to be imposed on radio disc jockeys. I suppose that we must be thankful for small mercies. We are talking about overkill and about a wholly disproportionate reaction to a minor irritance, rather like sentencing someone to 14 years' imprisonment for parking on a double yellow line.
I suspect that, if I were to persist in my original intention of opposing the inclusion of Clause 159 in the Bill, I would inconvenience the Committee and, furthermore, would be accused of jumping the gun and not giving the Committee a chance to examine the full implications of Schedule 14, some of which have been touched upon by my noble friend in all their alarming detail. I do not intend to divide the Committee on whether the clause should stand part of the Bill, but my noble friend and I will reserve all our fire for Schedule 14 which, I trust, will be dealt with tomorrow. I withdraw my opposition.
Clause 159 agreed to.
The Chairman of Committees (Lord Aberdare): I call Amendment No. 316A in Schedule 14.
Lord Monson: I understood that we were running out of time.
Earl Ferrers: Perhaps I may interrupt to help the Committee. On these occasions we stop at 11 o'clock. It is already 10 minutes past. If the noble Lord wishes to move his amendments quickly, that might be acceptable. On the other hand, if he wishes to have a more lengthy debate, we should have to take them tomorrow.
Lord Monson: I am afraid that it will have to be a more lengthy debate because these matters cannot be rushed.
Viscount Ullswater: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Contracts (Applicable Law) Bill [H.L.]
Returned from the Commons agreed to.
British Railways Bill
Returned from the Commons with the amendments agreed to.
Penzance South Pier Extension Bill
Returned from the Commons with the amendments agreed to.

Great Yarmouth Port Authority Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments consdiered and agreed to.
House adjourned at twelve minutes past 11 o'clock.