§ 7.40 p.m.
§ Lord Inglewood rose to move, That the draft order laid before the House on 29th June be approved [25th Report from the Joint Committee].
The noble Lord said: My Lords, I now turn to move the Broadcasting (Independent Productions) Amendment Order 1995. This too forms part of the extensive package of legislative measures proposed by the Government's policy document on media ownership. In accordance with our statutory obligations, it has been the subject of consultation with both the BBC and the ITC. The Broadcasting Act 1990 requires that in each year not less than 25 per cent. of the total amount of time allocated to the broadcasting of qualifying programmes by each regional Channel 3 service, Channel 4, Channel 5 and the BBC is allocated to
a range and diversity of independent productions".
§ The aim of this measure is to stimulate the development of a successful and competitive independent production sector in the UK and extend further the diversity and range of programming available to consumers. It has been successful in these aims, and there are now over 900 independent producers established in the country.
§ The Independent Production Order 1991 defines what constitutes an "independent producer" for the purposes of the 25 per cent. quota. During the widespread consultations that took place as part of the review of the media ownership rules, a number of anxieties were raised by the industry about the content of the current Independent Productions Order and its effect on the future development of the sector. The changes proposed in this amending order reflect the needs and wishes of the broadcasting and production industries, and the advice of the BBC and ITC.
§ The Government propose to make four main changes. All move in the direction of liberalising the system of ownership control so as to encourage the further development of the independent production sector.
§ First, and most significantly, we propose to increase from 15 per cent. to 25 per cent. the stake that broadcasters may have in an independent producer, and vice versa, without the producers losing their independent status. This measure is designed to encourage greater investment and financial stability 81 within the sector without prejudicing the distinctive nature of independent production companies. With the latter point in mind, we propose to retain an aggregate maximum of 50 per cent. for the proportion of equity in an independent producer which broadcasters (as a whole) may earn. Moreover, the existing "connected persons" provisions in the 1991 order will ensure that two or more broadcasting companies cannot, if they are connected in some way, each take stakes of up to 25 per cent. in the same independent production company.
§ Our second proposed change is to allow United Kingdom producers to invest in broadcasters outside the European Economic Area without losing their independent status. This means that a production company would retain its independent status if, for example, it held stakes above 15 per cent. in a broadcaster operating solely in the Caribbean. This arrangement is a one-way street. A broadcaster operating outside the EEA will not be permitted to acquire a producer within the EEA without that producer losing its independent status. This prevents large non-European broadcasters purchasing EEA-based independent production companies in order to take advantage of the favourable market access arrangements resulting from the independent production quota.
§ Thirdly, and in connection with the same control, the Government propose to simplify the nationality restrictions on producers. At present, a producer is defined so as to include all connected persons (in effect, connected companies). This has caused difficulties in determining the country of incorporation or principal place of business of a producer who may have connected persons established in different countries. The proposed amendment simplifies this by stating that the location of any connected persons shall be disregarded in determining the country where the producer is established. Remembering that the proposed liberalisation applies only to the control of non-EU broadcasters, this relaxation in no way weakens the protection that the law gives against non-European control of UK independent producers.
§ Finally, the Government propose to exclude the providers of Teletext and similar services from the definition of a broadcaster. Such services are currently caught by the existing definition. Teletext providers are thus limited to a 15 per cent. stake in independent producers. We see no reason for this, given the marked distinction between broadcast and Teletext services, and the amendment that we propose leaves the Teletext provider completely free to invest in independent producers. I commend the order to the House.
§ Moved, That the draft order laid before the House on 29th June be approved [25th Report from the Joint Committee].—(Lord Inglewood.)
§ 7.44 p.m.
§ Lord Thomson of Monifieth
My Lords, I thank the Minister for that very thorough, clear and detailed description of the order. To show him how reasonable I normally am, in this case I see no particular reason why it should not go through in advance of the more general broadcasting legislation that will come next year. It does not raise the same issues as the previous order did.
§ On Question, Motion agreed to.
§ Baroness Trumpington
My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.
§ Moved accordingly, and, on Question, Motion agreed to.
§ [The Sitting was suspended from 7.45 to 8 p.m.]