Channel 5 (Hansard, 18 May 1995)

The Parliamentary Under-Secretary of State, Department of National Heritage (Viscount Astor)
My Lords, the award of a Channel 5 licence is a matter for the Independent Television Commission. In considering applications, the ITC will take into account, among other things, the cash bid; programme quality and diversity; the sustainability of the service over the 10-year period of the licence; plans for retuning video and other equipment; and the restrictions on who may hold the licence contained in the Broadcasting Act 1990.

§ Lord Orr-Ewing
My Lords, is my noble friend aware that all noble Lords must sympathise with the ITC because it has been landed with a most difficult problem? The bids that have been received are reported as being £36 million, £22 million, £22 million, and £2 million from BSkyB. Is my noble friend also aware that we hope that the amount of the bid will not be the most dominant and overall factor in the decision? We must take a long-term view and it is difficult for anyone accurately to forecast who will provide more entertainment for those people who watch television.

Viscount Astor
My Lords, my noble friend made an important point. The ITC will have much to consider before reaching a decision. Bids will first need to pass the 664 ITC's quality threshold. Thereafter, the ITC will consider the details of the bidders' business plans, the cash bid and other programme commitments.

§ Lord Thomson of Monifieth
My Lords, is the Minister aware that the wide range of the bids described by the noble Lord, Lord Orr-Ewing, indicates that the present system is ludicrous and farcical? However, two of the bids were almost identical; they were within £2,000. Is that not clear evidence that when the Government introduce legislation relating to the future of the BBC they should introduce a proper broadcasting Bill which will reform and bring into proper order the Financial arrangements for awarding television contracts?

Viscount Astor
My Lords, I do not agree with the noble Lord, Lord Thomson of Monifieth. The five bids ranged from more than £36 million down to £2 million and it is surprising that two of them happened to be of exactly the same amount. The number of bids indicate that several broadcasters are interested in the fifth channel. The size of the bids suggests that it will be a successful commercial channel.
The ITC has made it clear that, if for any reason the highest bid is ruled out and only the two tied bids are deemed to be acceptable, it will invite those who submitted the two tied bids to submit further bids in order to decide the outcome. The licence would then be awarded to the highest bidder.

§ Lord Donoughue
My Lords, is the Minister aware that there is widespread dissatisfaction with the franchise bidding system not only as regards Channel 5 but the recent allocations of ITV Channel 3? Does he agree that we need a reversal of the priorities in the criteria for allocation? Would it not produce better television if, instead of the present situation in which the main consideration is the top price, accompanied by a quality threshold, the main emphasis was on quality once applicants had achieved a basic price threshold? For once can we not have quality put before money?

Viscount Astor
My Lords, I do not believe that the noble Lord, Lord Donoughue, is entirely right. The ITC must consider a number of aspects, which include quality and price, before reaching a decision. It is clear that the level of interest in Channel 5 shows that the Government were right to make the opportunity available so as to extend viewers' choice.

§ Lord Buxton of Alsa
My Lords, do the Government consider that there have been marked improvements, following the highest bid factor, in what was considered to be the best commercial television service in the world? In other words, do they believe that it has produced any improvements?

Viscount Astor
My Lords, my noble friend had a distinguished career in commercial television as chairman of Anglia Television. He would know better than I that it is for the ITC to make decisions about quality and franchising and not the Government. The Government's role is to set up the statutory framework which provides the rules under which the ITC must operate on behalf of the country.