Broadcasting Bill [H.L.]

HL Deb 15 February 1996 vol 569 cc741-86

4.50 p.m.

The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood)

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

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

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (The Viscount of Oxfuird) in the Chair.]

Viscount Astor moved Amendment No. 187: After Clause 66, insert the following new clause—

MATTERS RELATING TO CONDITIONAL ACCESS SYSTEMS AND SUBSCRIBER MANAGEMENT SERVICES AND LICENCES TO RUN SYSTEMS

(". After section 191 of the 1990 Act there shall be inserted the following sections—

"Matters relating to conditional access systems and subscriber management services.

191A.—(1) Any person who runs a conditional access system or a subscriber management service in relation to a television programme service shall be required to obtain from the Director a licence for the running of such system or service.

(2) The Director may after consultation with the Commission and such other persons as appear to the Director to be appropriate grant a licence for the running of a conditional access system or a subscriber management service in relation to a television programme service.

(3) A licence granted under this section shall be in writing and, unless previously revoked in accordance with any term in that behalf contained in the licence, shall continue in force for such period as may be specified in or determined by or under the licence.

(4) A licence granted under this section may be granted to all persons, to persons of a class or to a particular person.

(5) A licence granted under this section may include—

1. (a)such conditions as appear to the Director to be requisite or expedient having regard to the duties imposed on him by subsection (9) below;
2. (b)conditions requiring payment to the Director on the grant of the licence or payments during the currency of the licence or both of such amount or amounts as may be determined by or under the licence; and
3. (c)conditions requiring any person who is authorised by the licence to run a conditional access system or a subscriber management service to furnish to the Director, in such manner and at such times as he may reasonably require, such documents, accounts, estimates, returns or other information as he may reasonably require.

(6) Without prejudice to the generality of paragraph (a) of subsection (5) above, conditions included by virtue of that paragraph in a licence granted under this section to a particular person may require that person—

1. (a)to comply with any direction given by the Director as to such matters as are specified in the licence or are of a description so specified;
2. (b)except in so far as the Director consents to his doing or not doing them, not to do or to do such things as are specified in the licence or are of a description so specified; and

1. (c) to refer for determination by the Director such questions arising under the licence as are specified in the licence or are of a description so specified.

(7) A licence granted under this section otherwise than to a particular person shall be published in such manner as the Director considers appropriate for bringing it to the attention of the persons for whose benefit it will enure.

(8) Any sums received by the Director under this section shall be paid into the Consolidated Fund.

(9) It shall be the duty of the Director to exercise his function in the grant of licences hereunder in the manner which he considers is best calculated—

1. (a)to ensure fair and effective competition between persons engaged in the provision of conditional access systems, subscriber management services and services connected with them in particular television programme services;
2. (b)to promote the interests of consumers, purchasers and other users in the United Kingdom (in particular in respect of the prices charged, the quality and variety of service) of conditional access systems, subscriber management services and services connected with them in particular television programme services.

(10) The holding by any person of a licence authorising the provision of a conditional access system or subscriber management service shall not relieve him of any requirement to hold a licence under section 7 of the Telecommunications Act 1984 in connection with the provision of such a service or system.

Licences to run systems.

191B.—(1) Any person who runs a conditional access system or a subscriber management service within the United Kingdom shall be guilty of an offence unless he is authorised to run such a system or service by licence granted under section 191A above.

(2) A person guilty of an offence under this section shall be liable—

1. (a)on summary conviction to a fine not exceeding the statutory maximum;
2. (b)on conviction on indictment, to a fine.

(3) No proceedings in respect of an offence under this section shall be instituted except by or on behalf of the Director.

(4) Without prejudice to subsection (2) compliance with this section shall be enforceable by civil proceedings for an injunction or interdict or other appropriate relief.

(5) In this section and in section 191A—

"conditional access system" means any system or apparatus designed or adapted for the origination, initial transmission and final reception of signals for the actuation, operation or control from another place of other apparatus by means of which such signals comprising encrypted television programme services (save for such services which are broadcast in digital form) broadcast for general reception may be received and decrypted. "subscriber management service" means a service provided to any person operating a conditional access system or to any other person in connection with television programme services (save for such services which are broadcast in digital form) provided or transmitted by another person whether or not that last person is in the United Kingdom for billing or payment handling in respect of charges for and payments received from viewers of encrypted television programme services broadcast for general reception in the United Kingdom. Broadcast shall include transmission by wire or other electromagnetic means. "Director"meanstheDirectorGeneralof Telecommunications.".").

The noble Viscount said: The amendment enables the Government to extend their own code on conditional access to encryption services from digital satellite services to analogue satellite services. Perhaps the Committee will allow me to explain. The principle is simple, even if the technology is slightly complicated.

At present the only encrypted programmes available in this country are analogue channels broadcast by BSkyB, which are subscription channels. Encryption means that the signal is scrambled and the viewer, to see the broadcast, has to have a black box with a card. The card one pays for when one subscribes; it is the means by which the broadcaster collects his revenue.

The Government have rightly recognised that those who control the delivery systems should not unfairly bar others, subject to reasonable terms and conditions, from access to the system to transmit their programmes. As a result, the Government announced in their new framework for digital television in January this year that it was proposed that the regulation of conditional access would be by way of licence conditions issued by the DTI and enforced by Oftel. That was good news for all except the ITC which, having long called for that safeguard, found that it was not to be the ITC but Oftel which would be the proposed regulator.

I believe that my amendment is important because on closer inspection of the government proposals it became clear that the new rules affect only digital transmissions and not analogue transmissions. Earlier in the Committee stage, speaking to an amendment proposed by the noble Lord, Lord Thomson of Monifieth, my noble friend the Minister said that conditional access to analogue systems was a "transitional and temporary matter". That is why this protection was not included.

Nearly 25 per cent. of the homes in this country currently receive analogue services. As the noble Lord, Lord Donoughue, has said, the analogue system may be used by at least 50 per cent. of those with such systems for the next 15 years. That is also the industry's view. It cannot even suggest a start date for digital transmissions. In relation to an earlier amendment the Government would not give a firm switch-off date for analogue. Digital broadcasting involves a new set-top box. It takes time to change. Therefore, this is hardly a transitional or temporary problem.

My noble friend also said that conditional access was covered by general competition law and any amendment would impose unnecessary burdens. If that is true why do we need a whole new set of regulations for digital broadcasting? Why is that not also covered by existing competition law? It is the same issue and the same problem.

It is a problem now because the Office of Fair Trading, following complaints from some cable operators, announced in December that it was to conduct a review of the issues relating to the supply of programming. It is of particular importance because cable companies provide the access while BSkyB is not only provider of access but also a main provider of programmes. The Office of Fair Trading has said that it expects its review to take up to six months. That means that it could be completed after the Bill has gone through Parliament.

My noble friend also said that any shift in regulating the current market would undoubtedly damage investor confidence in the opportunities for digital terrestrial broadcasting. I do not believe that there is a shift, because the OFT demanded the same safeguards in informal undertakings by BSkyB. It is into those informal undertakings that it is now inquiring. Secondly, any investor in digital broadcasting will be subject to exactly the same conditions announced by the DTI and as proposed in the amendment before being granted a licence by Oftel.

My noble friend's final point was that the Bill was concerned with digital transmission in the future. I have to say to my noble friend that even a cursory glance at the Bill's explanatory and financial memorandum shows that it is also about ownership and the control of current analogue systems. We have heard a great deal about digital transmission both in Committee and at Second Reading. Digital broadcasting is undoubtedly the future. It is also in the future, and will not arrive for some time in the future.

My amendment has one other small advantage. It will encourage the use of a single satellite set-top box. The analogue market is far from being unimportant and transitory: quite the opposite. New channels are launched all the time.

Parliament must act now and put these safeguards in the Bill. If we wait for the outcome of the review it will be too late. My amendment follows and extends the Government's own policy. It protects those in the industry and it protects the consumer. I beg to move.

Lord Thomson of Monifieth

The noble Viscount puts a reasoned and reasonable case to the Minister on the question of conditional access in relation to analogue broadcasts. I await with optimism the Minister's response to the arguments.

I spoke at length on the general arguments in favour of conditional access to both digital and analogue broadcasts earlier in the Committee stage and I shall not repeat those arguments. However, I shall say a word about one matter the noble Viscount mentioned, namely, the position of the Director General of Telecommunications under the amendment as against the position of the ITC.

There is a problem which would still need to be examined if the Minister were prepared to accept the general thrust of the noble Viscount's amendment. It applies in particular to subsection (9)(b) of the proposed Section 191A of the amendment. The subsection includes the phrase, subscriber management services and services connected with them in particular television programme services". There is a real issue of conflicting responsibilities between the ITC, which is the regulator of programme standards in this country, and the Director General of Telecommunications.

The noble Viscount raises the general issue of having a licensing system for analogue broadcasting. In Committee on 8th February, Hansard reports me as having said that I was "battered" by the Minister's refusal to do for analogue what he was ready to do for digital. The Minister would never use the verb "to batter" in his arguments. He is too courteous and reasonable. The word that I used was "baffled". I am bound to say that I shall remain baffled if he does not accede to the persuasive arguments put to him.

I am reinforced by a piece of evidence from the managing director of General Cable, who wrote to my noble friend Lord Ezra. Mr. Philippe Galteau said, and I quote him directly because I believe that it is relevant to the issue: Experience has shown that BSkyB has been able to create a de facto monopoly, which it abuses, by developing a proprietary encryption and conditional access system, called Videocrypt. Some 3 million Videocrypt decoders have been purchased by customers who can receive Direct to Home (DTH) satellite TV. Programmers attracted by the UK market have to deal either with BSkyB on BSkyB's conditions or sell their services to cable operators, who presently gather 1 million TV customers. This enables BSkyB to impose its conditions on both programmers and cable operators, and to customers ultimately. As an example, the price was increased by about 20% in October 1995, and customers have to buy the full basic package before they can access the pay channels of their choice, movies or sports". I put that on the record as evidence that there is a problem to be dealt with.

I note that The Times reports—as the noble Viscount mentioned—that the OFT is investigating industry complaints that BSkyB is abusing its dominance of the pay TV market. I note the point that the noble Viscount made: that that investigation is almost bound to run for a longer period than the processes of the Bill in this House and another place. The argument for doing something about conditional access in relation to analogue is now very strong. The noble Viscount quoted the noble Lord, Lord Donoughue in saying that the system will last for another 10 or 15 years. It will last, I think, well into the next century. There is a real need to regulate now. Having had some opportunity to meditate on these matters since my earlier approach, I hope that the Minister will give us a favourable reply.

5 p.m.

Lord Donoughue

I believe—it is the view of this side in this House and in another place—that this is one of perhaps the three most important issues in the Bill. The issue will not go away for the Government; it will keep coming back unless the Minister feels able to do the sensible thing and move a little closer to our position.

It is absolutely crucial to regulate the control gateway—the black box decoding system. There are two aspects involved. First, the general need to fill what one might call the analogue gap until digital arrives; and, secondly, related to that issue, the more specific problem that Sky is both the black box controller and the programme provider. That gives scope for abuse which needs regulating now. The noble Lord, Lord Thomson, cited one example. We know that there are others.

That is the heart of our concern. It is a serious concern. There is a real problem. However, I am bewildered—I do not say that I am baffled as there are problems with that word—because the Government have provided us with an excellent solution for licensing digital which is attached to the Bill. We are all happy with the solution but it applies to the dim, distant and perhaps murky future. We do not ask the Government to make different provision. We ask them to make the same excellent provision for analogue now, when the real problems exist, that they have suggested for the future.

Having observed what an intelligent and flexible man the Minister is, I cannot believe that he is personally associated with this blind inflexibility to the suggestion of his noble friend his predecessor, who in his years in the job learned a great deal about the situation. That is why on this side we were happy to rally behind the noble Viscount although we did so less often when he was at the Dispatch Box.

I suspect that the Department of Industry is behind this aspect. It has all the "sniffy" waffle and lack of clarity that has characterised that department through history before the present Administration. I should like to give the Minister a little support, and a little nudge to strengthen him if he has to deal with those people. If so, all my sympathy is with him.

I shall not delay the Committee longer because we started the debate late and we have spoken on the matter previously. However, I believe that it is a most critical issue. There is a clear solution. The solution has been devised by the Government. All that is needed is for the Government to apply to analogue what they are doing for digital. I support totally what the noble Viscount, Lord Astor, suggested. As I said, the issue will not go away.

Lord Chalfont

I am sure that the Committee will agree with the description of the Minister. He has virtually acquired angelic status in the House since the Bill began. It is also true to say that we all realise that he is not entirely master in this context. However, the arguments that impressed me in favour of the amendment are those about the uncertainty of the development of a digital regime. Those have been well put. Digital will be expensive. It will suffer from the chicken-and-egg argument about whether the manufacturers will build the sets so that the broadcasters can broadcast to them or whether those people will delay the building of the sets until they see an effective broadcast system. That will lead to delay.

Other issues will lead to delay. We have only to consider what happened when the format of video cassettes changed, or when we moved from tapes to compact discs. Those technical changes take time. I am impressed by the argument that we do not know when the digital regime will be fully implemented. Therefore, as the noble Viscount, Lord Astor, and the noble Lord, Lord Donoughue, said, careful consideration must be given to what happens in the gap, so to speak. I hope very much that the Minister will persuade his right honourable friend and his colleagues that the matter needs to be considered seriously.

Viscount Caldecote

I regret having to speak against the amendment proposed by my noble friend Lord Astor, particularly since he has been extremely helpful and constructive in the discussions that some of us have had on other provisions in Part IV of the Bill.

While there may not be anything very bad or wrong about the amendment, there is no need for it. It is a good principle of legislation that one has the minimum of legislation. If we tried to pass laws that would cover all possible contingencies—all the nasty things that might happen in the future—we would be in an unhappy state.

Videocrypt was developed by BSkyB, which owns it. However, it has never refused any applicant who has asked to be allowed to use the system. Only 10 out of the 30 encrypted channels are owned by BSkyB. There is plenty of room for others. If a monopoly or unfair trading situation arose in the future, it could be dealt with by the legislation under the Monopolies and Mergers Commission and the Office of Fair Trading. There is nothing wrong with the amendment. It is just totally unnecessary and will produce more bureaucracy and red tape. It is also hardly in line with the Government's excellent policy of deregulation.

Lord Donoughue

Before the noble Viscount sits down, perhaps he will help me on one point. If the approach in the amendment is not necessary for the analogue system, why is it necessary for digital, as the Government propose? Will the noble Viscount assure the House that he will oppose the Government introducing it for digital?

Viscount Caldecote

I shall certainly not oppose that because it is in the future. As many noble Lords, including the noble Lord, Lord Chalfont, have said, a big new world has been brought about by digital technology. It is for the future and we need to be careful about it. The clauses dealing with it are fully justified because we are moving into an unknown area, with an enormous number of new channels available. In opposition to the amendment, we have experience of what has happened in the past few years. There has been no abuse and therefore the amendment is unnecessary.

Lord Donoughue

Before the noble Viscount sits clown, will he agree that the black box technology is technology-neutral between analogue and digital? Therefore, logically he should take the same approach to both. Either he opposes a statutory attempt to deal with it or he supports it in both cases. I cannot see the logic of taking one position for one and a different position for the other.

Viscount Caldecote

Perhaps the noble Lord will allow me to take my own view. He will not press me into changing my mind by telling me that it is illogical. I am telling him why I think that it is logical. We must agree to disagree.

5.15 p.m.

Lord Colwyn

I must also apologise to my noble friend Lord Astor for the fact that I shall speak against his amendment. It worries me that when the Government have succeeded in cutting huge swathes from the forests of regulatory red tape which surround our industries, he is seeking now to introduce new ones in their place; that is, restrictive regulatory frameworks which serve no other purpose than to stifle the very incentives needed to attract new risk capital and investment to ensure the success of this young and exciting industry.

The amendment, if accepted, will introduce new, burdensome licensing requirements for analogue conditional access systems when there is absolutely no reason for doing so. Furthermore, it would send a message to other new technology industries that investment and success will be penalised through more restriction and regulation.

It does not stop there either. It would also introduce even more licensing requirements for television subscriber management services. Such a cavalier and ill-conceived approach to new regulation is disturbing, particularly when one examines the levels of free and fair competition that already exist in the markets into which it has been introduced.

Perhaps I could deal with the new licensing requirements for analogue conditional access first. We have heard from the noble Lords, Lord Thomson and Lord Donoughue, that the requirements are necessary because BSkyB has monopoly control over Videocrypt, the dominant analogue conditional access system in the UK. They say that new competitors could be exploited or prevented from entering the market altogether. That is simply not true.

In the six years since BSkyB pioneered its conditional access system, no applicant for its use has ever been turned away. Indeed, we have heard that there are now more non-Sky channels than Sky channels which use Videocrypt in the UK. It is actually in BSkyB's interest to expand the number of UK satellite channels. Quite simply, the more channels there are, the more customers there are and the bigger the audience.

In fact, instead of restricting competition, it is my view that BSkyB has fostered competition. It has created a conditional access system available to all. The UK Gold, the Discovery channel, the Children's channel and TV Asia, to name but a few, have all been able to tap straight into an established market. Ironically, without Sky it is questionable whether those competitor channels would exist at all. Like Sky, they do not enjoy automatic access to every television home, as do the terrestrial TV services, nor guaranteed income from a compulsory TV licence.

BSkyB has had to build its distribution system and audience, home by home, without the terrestrial broadcasters' privileges. Thanks to its original investment and willingness to take risks, new channels are able to gain access to new audiences at low additional cost and at a fraction of the risk. In any case, any abuse that occurred would be adequately dealt with by existing regulators such as the OFT, the MMC and the European Commission Competition Directorate.

Viscount Astor

If that is the case, why do we need conditional access for digital? Why cannot that be done under the same OFT? Neither of my noble friends seems able to answer that question.

Lord Colwyn

We are attempting to answer that question and the reply will come out as we proceed. BSkyB has had to build its distribution system and audience, home by home, without the terrestrial broadcasters' privileges. Thanks to its original investment and willingness to take risks, new channels are available at a fraction of the cost.

So where is the logic of this new regulation? What is the point of introducing licensing controls when there is no market abuse? The noble Viscount, Lord Astor, suggested that there was a potential for abuse. But I fail to see how he has arrived at that conclusion. It is clearly in BSkyB's interest to let as many companies use the Videocrypt system as possible.

There is an equal, if not greater, case against the amendment with regard to the question of licences for television subscriber management systems; that is, the billing, payment and customer service aspects, apart from the encryption and decoding functions of conditional access. What is the reason, I ask the noble Viscount, for introducing new licences for those when there are identical unlicensed systems used by cable companies and other UK industries? Would he intend, for example, to introduce licences for subscriber management systems used by American Express, Lloyds Bank and other financial and credit card operations? Furthermore, there are already at least two other UK-based satellite television services which use subscriber management services separate from that used by BSkyB and numerous other European systems such as those used by the French CanalPlus and Premiere in Germany. In short, anyone can create their own subscriber management service. There is nothing particularly complicated or exclusive about it. Consequently, there can by definition be no gateway control and no need for burdensome regulations.

To sum up, I see no reason for new regulations in either the market for analogue conditional access systems or that for subscriber management services in analogue or digital television. The equitable and balanced status quo should remain.

The Earl of Stockton

I find myself in the happy position of being able to support my noble friend Lord Astor on this occasion. We are talking about ensuring that there is as prompt a transition as possible. His amendment is exactly in line with one that I tabled at an earlier stage in Committee to try to persuade the Government to put a finite date to the end of analogue transmissions. On that basis, I have to support him.

Lord Inglewood

Today, as last week, we have had an extensive and helpful debate on regulating conditional access and subscriber management. Perhaps I may begin by commenting to the noble Lord, Lord Thomson, that it is no part of my purpose either to baffle or batter him. If I had to do one or the other, I would rather baffle him.

I was pleased at the support that your Lordships gave to the proposals which the Government published on 15th January for regulating conditional access services for digital television, transposing the provisions of the EU Television Standards Directive of October last year into United Kingdom law. This amendment concerns the separate question of introducing a new regime for the existing conditional access services for analogue television which already fall within the scope of competition policy. As I said last week, the Government have considered this matter carefully but do not agree that a new system of regulation for analogue conditional access would be justified at this stage in the development of that market. I should like to repeat the case that I made last week and to do so in a concise way, not because I want to give the Committee short measure but because we have covered much of the ground already and I do not want to take up the Committee's time just for the sake of it. We take that view, as a deregulatory government, for three main reasons.

First, the analogue satellite market extends to only about 15 per cent. of UK households. We do not expect this market share to increase substantially because digital satellite is likely to be introduced within a couple of years and to replace analogue satellite equipment relatively quickly thereafter. Digital conditional access, by contrast, is likely to become important for virtually all UK households, and accordingly justifies a specific regulatory regime over and above normal competition law—as is clear from the EU directive, which quite specifically confines itself to digital conditional access. We have, as is only right, let potential investors in digital television know of the future regulatory arrangements in advance, before they commit themselves to substantial investments.

That brings me to my second point, which concerns fairness, investment confidence and regulatory stability. The amendment would change after the event the rules for operating in the time-limited analogue satellite conditional access market. The Government's reputation for promoting regulatory stability should not be jeopardised unless there is exceptional justification. The United Kingdom has been highly successful in attracting international investment precisely because the Government have earned the reputation over the years for not introducing new regulation unnecessarily and for not standing in the way of investors earning a return on successful projects. BSkyB's analogue satellite business has involved it taking very significant commercial risks, and it has continued to invest heavily in the business to promote its successful growth. We see the benefits of that investment around the UK, not least in employment in Scotland. If we move the regulatory goal posts now in the manner proposed, we also specifically risk jeopardising the investment confidence of prospective investors in digital television. They may well fear that if they start to earn profits on a risky investment in a few years' time, the Government will change the regulatory regime to their disadvantage. I therefore ask the Committee to consider most carefully the wider implications of this amendment.

The third reason is that competition policy offers proper safeguards. The Director General of Fair Trading is currently reviewing BSkyB's supply of programming to the analogue market, as mentioned by a number of noble Lords. I invite any noble Lords who are aware of evidence of such behaviour to ensure that it is brought to the attention of the Director General of Fair Trading in the context of his current investigation. The review is highly relevant to our debate. Any impact of BSkyB's conditional access market dominance on others affected by it can be assessed by that review. The Government believe that a proper process of inquiry by the competition authorities is the best way of responding to the concerns expressed today, which are entirely connected with the possible economic effects of an alleged abuse of a dominant position. Also, competition law has both domestic and European aspects. Where the operator of the only product abuses that monopoly position, those affected can make representations to the European Commission or challenge abuse in the courts, using European law.

I recognise the serious concerns which have been expressed during the debates on this subject in Committee. In restating that the Government, with their commitment to deregulation, do not regard the case for specific regulation as having been made, I am not seeking to deny those concerns. I am merely saying that the existing processes are adequate to deal with any mischiefs in the existing analogue market. For those reasons, the Government remain opposed to the amendment.

Viscount Astor

My Lords, I feared earlier that I would be unable to persuade my noble friend the Minister this afternoon. I listened with great care to what he said. I also listened with care to what others have said and I am very grateful for the support of the noble Lords, Lord Thomson of Monifieth, Lord Donoughue and Lord Chalfont. There is support for this amendment from all around the House and I hope that my noble friend recognises that fact.

A couple of points were raised by my noble friend Lord Caldecote who asked why a review was needed if these things were not happening. The simple answer is that there is a review taking place by the OFT. There have been complaints and it is looking at informal assurances made by BSkyB to OFT. That is one of the reasons that the review is needed. There are current complaints.

My noble friend Lord Colwyn said that it was new regulation and spoke of a "cavalier" approach. I am not making any new regulation. I am just taking the Government's own exact regulation and saying that it must cover analogue as well. My noble friend said that no one had been turned away, and that may be true. But if there is any market abuse—I do not say that there is at all—it is not a matter of people being turned away but of the terms and conditions on which they are allowed to join. That is what is important. My noble friend also said that the amendment might affect credit card operators and the like. That was suggested to me by BSkyB and I have to say that it is a little piece of mischief-making by that organisation. My amendment does nothing of the kind.

My noble friend Lord Colwyn said that there were European systems which could be used by anybody wishing to broadcast in this country. Of course there are European systems, but that means that anybody who wanted to see them would have to get a new black box. One of the purposes of the Bill is to look forward so that no one has to have stacks of black boxes on top of or below the television.

The industry and the consumer need protection. My noble friend said that some could make a challenge in the courts. But consumers cannot do that. They do not have the ability. Parliament must protect those people. He also said that digital satellite broadcasting was likely to be introduced in a couple of years. But that is a claim that not even BSkyB makes. It is unable to say when it will start broadcasting satellite digital programmes and certainly it cannot say when it will cease broadcasting satellite analogue programmes.

I accept that I have been unable to persuade my noble friend. But I listened carefully to what he said and felt that there were some points between us that we might take forward between now and Report stage. I realise that this is an area where we transgress onto the DTI's policy. But if the DTI believes that analogue is yesterday's technology and if that is its understanding of broadcasting, perhaps, after all, I should have named the ITC as regulator—I see the noble Lord, Lord Thomson, nods his head—and not Oftel.

I shall not give up now. I shall not press my noble friend. I hope he will agree that between now and Report stage he will let me come and persuade him and his colleagues of the necessity of my amendment. Having said that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 188 and 189 had been withdrawn from the Marshalled List.]

[Amendment No. 190 not moved.]

5.30 p.m.

Lord Donoughue moved Amendment No. 191: After Clause 66, insert the following new clause—

REGULATION OF TELEVISION PROGRAMME SERVICES

(" After section 194 of the 1990 Act there is inserted—

"Regulation of television programme services.

194A.—(1) The Secretary of State shall when it appears appropriate to him review the exercise by the Commission and the Authority of the duties placed on each of them under Parts-I, II and III of this Act with a view to determining the effectiveness of the regulation of television programme services, local delivery services and independent radio services.

(2) In carrying out the review under subsection (1) above the Secretary of State shall consult with such bodies or people as he considers appropriate.

(3) In carrying out the review under subsection (1) above the Secretary of State shall have regard to the duties and functions of the following in relation to the provision of programme services—

1. (a)the BBC;
2. (b)the Welsh Authority;
3. (c)the Director General of Fair Trading;
4. (d)the Director General of Telecommunications,

and shall have regard to technological changes in the methods of delivery of programme services.

(4) In subsection (3) above "programme services" has the same meaning as in section 201 of this Act but includes programme services provided by the BBC and the Welsh Authority.

(5) The Secretary of State shall lay a report on the outcome of the review undertaken under subsection (1) above before both Houses of Parliament.".").

The noble Lord said: This is a probing amendment. Our objective is to elicit the Government's views on the general future of regulation in broadcasting and telecommunications. The amendment would give the Secretary of State a duty to review the regulatory process when he considers it appropriate to do so and to lay a report of that review before both Houses of Parliament.

Perhaps I may tell the Committee the background against which we propose the amendment. There are very many organisations involved in the regulation of broadcasting and telecommunications—organisations such as Oftel, the ITC, the Radio Authority, the Office of Fair Trading and the Monopolies and Mergers Commission. With convergence of technologies—a feature often referred to in our discussions on the Bill—there is likely to arise confusion, contradictory decisions and overlapping responsibilities within the regulatory bodies.

The cable companies are such an example. The scope for confusion in that regard is considerable. The DTI licenses the telecommunications side of their business but Oftel manages the licences. The MMC can intervene if they are unwilling to accept changes to their licences; the ITC awards and regulates their franchises. Those same cable companies could under other hats deal with other regulators such as the Broadcasting Standards Commission, the Broadcasting Complaints Commission, the Advertising Standards Authority and the Independent Committee for Supervision of Telephone Information Services.

At worst it is a jungle, at best a network of regulatory bodies dealing with what is increasingly becoming a unitary technology. The existing regulatory structure was not designed to deal with the convergence of emerging technologies. The Bill does not consider the issue at all. We believe that there should be a review of the existing structure of regulation, and it is that point that the amendment seeks to put forward.

Against that emerges the question of whether there should be a single communications regulator—an issue I floated at Second Reading. I remind the Committee that the All-Party Select Committee on Trade and Industry, when looking at the matter in 1994, concluded and recommended that: the Government review the structure of telecommunications and broadcasting regulation in order to ensure consistent principles and clear responsibilities in all matters relevant to broadband regulation and development … that there may be an independent review of the powers of regulators and how they could be made more accountable".

The amendment seeks the Government's response and their thinking on the issue and provides the opportunity for debate. I beg to move.

Lord McNally

I support the noble Lord, Lord Donoughue, and the spirit in which he moved the amendment. I add a warning, however, which may differ from the emphasis he gave to his argument at the end of his remarks.

There may be too many regulatory bodies in broadcasting, but there is a danger in moving towards a single body that that body will become more obsessed with the technology of broadcasting and less concerned with the content. In reviewing those matters, will the Minister keep in mind that the regulation of broadcasting is not just about the regulation of technologies? There need to be regulators who have sympathy for and understanding of programme-making. If that were lost in any consolidation, it would be a loss to broadcasting in general.

Lord Inglewood

I am grateful to the noble Lord, Lord Donoughue, for explaining the probing nature of this amendment.

In introducing this Broadcasting Bill the Government are presenting it, not as a cure for all the ills of the sector, but as an important interim response to the growing tendency in the market for convergence and to the major technological development which digital represents. We certainly think it is too early to present a fully-formed blueprint for the future regulation of the industry. Moreover, we feel that the new institutional structure introduced by the 1990 Act is working well. Radio has flourished under a separate Radio Authority. The ITC has successfully presided over the revised licensing arrangements for commercial television and operates effectively alongside Oftel in regulating cable services. And as we discussed earlier this week, we in the Government think it is wrong to start absorbing the specific regime of media ownership controls into general competition law.

As I have said, in some ways this Bill can be seen as an interim one. The noble Lord argues that by providing this new clause the Government will be able to undertake the review he urges whenever the time seems right. I think it more than likely that in due course the Government may well conduct a review very much along the lines he suggests—indeed I do not see any need for statutory authority to do that and so the amendment does not take the matter forward in that respect. It is also, of course, true that the debate on the means of regulating a very different future structure of information services has already been started, notably in the past year's Oftel consultation document and in the Government's own document, also published last year, about possible models for long-term media ownership controls.

The Government will continue to listen to the debate, and it is entirely right that the noble Lord should have taken the opportunity of ventilating those issues today. However, I should like to add a couple of points about the terms in which he urged his case. He referred to the need for a single independent regulator for broadcasting and invited the Secretary of State to review the regulation of television programmes by the various existing regulators. I rather wonder whether a single all-powerful regulator for broadcasting, or even one whose powers in a multimedia future range more widely, is what we want in a healthy democracy. I must also enter a caveat that I do not think it would be right for the Government to review the operational detail of the broadcasting regulators' individual decisions on a case-by-case basis, above all as regards programme content. Those are delicate matters which quite deliberately have been put at arm's length from government.

Nevertheless, I entirely accept that the structure of regulation and the regulators' respective responsibilities are very likely to be scrutinised further before too many more years have passed. I hope that that further exposition of the Government's position has served to answer some of the noble Lord's underlying concerns. I hope it has enabled him to achieve his purpose in moving the amendment.

Lord Donoughue

I thank the Minister for that reply which was a helpful response to my probing amendment. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Dean of Thornton-le-Fylde moved Amendment No. 192: After Clause 66, insert the following new clause—

RESTRICTED TELEVISION BROADCASTING SERVICES

(" .—(1) After section 2(1)(b) of the 1990 Act there is inserted— "(c) restricted television broadcasting services within the United Kingdom."

(2) After section 2(4)(c) of the 1990 Act there is inserted— (d) a restricted television broadcasting service as defined by subsection (7)

(3)After section 2(6) of the 1990 Act there is inserted— (7) In this and other Parts "restricted television broadcasting service" means (subject to subsection (6)) a service consisting in the broadcasting of television programmes for general reception in a "restricted area" of the United Kingdom (as defined by section 46(6)) by any person holding a licence issued under the terms of the Wireless Telegraphy Act 1949 for use of "unused broadcast spectrum" (as defined by subsection (8)). (8) In this Part "unused broadcast spectrum" is any analogue or digital radio spectrum assigned to the Commission by the Secretary of State for television broadcasting services which is not in use to provide television broadcasting services for general reception.

(4)For section 46(1) of the 1990 Act there is substituted— (1) In this part "licensable programme service" means (subject to subsection (2)) a service consisting in the provision by any person of relevant programmes with a view to their being conveyed by means of a telecommunication system or as a restricted television broadcasting service where restricted television broadcasting service is defined by section 2(7).

(5)After section 46(5) of the 1990 Act there is inserted— (6) A "restricted area" is—

1. (a)an area of the United Kingdom in which the population is not greater than 800,000 adult residents which includes only one centre of population with more than 350,000 adult residents, or
2. (b)an area of the United Kingdom in which the population is not greater than 500,000 adult residents which includes no individual centres of population with greater than 150,000 adult residents.".").

The noble Baroness said: In moving Amendment No. 192, I shall speak also to Amendments Nos. 193 and 194. This is a probing amendment, though perhaps a long one.

We have had a theme running through our discussions on the Bill in relation to the opportunities that the changes will provide in regard to local and regional services. At Second Reading (at col. 471 of Hansard) the Minister referred to regional and local television programming and the increased demand for that. Not dissimilar words were used by the Minister in another place when the 1990 Broadcasting Act was being debated, particularly in regard to cable. That was to be a whole new vision; it was to provide many and varied local services. As we are all aware, that did not happen.

Our concern is that, although the Bill may lay the ground for local services to take off, that will not happen. We are talking not only about local television services for entertainment. Local services will be useful in the field of education—university and local education courses—and local community activities. Those kinds of services should be developed.

It is possible to make local TV work. Work done by the Institute of Local Television suggests that small-scale television services can take off. They are popular in North America, Europe and Australia. A recent independent study carried out by Scottish Enterprise of Edinburgh City's plans for a local city TV service suggested that there would be an increase in advertising revenue and in the overall media and advertising employment within the city.

The amendments seek to lay down the groundwork which will enable the ITC to make life easier for small TV services to obtain licences. They are probing amendments. We want to hear what the Minister has to say because we cannot find much in the Bill that will encourage local services to get off the ground. I beg to move.

Lord Thomson of Monifieth

I am happy to support the noble Baroness, Lady Dean. It has always seemed rather a paradox that whereas one of the most popular aspects of television is the regional aspect, particularly with the special structure associated with ITV, there has never been the encouragement to move on from regional television to genuinely local television—city television and local voluntary channels of one kind or another, as the noble Baroness has just said. It was generally felt that the advent of cable was a great opportunity for that to develop. The Cable and Broadcasting Act 1984 did not make any of this mandatory, partly in the belief that those who took on cable would want in their own interests to explore this development. Section 7 of the Act deals with community obligation but not in a mandatory way.

What has happened in practice? By 1990 there were 135 cable proposals. All of them made fine promises about local services, especially the kind of community services to which the noble Baroness referred. What is the reality now? We are going backwards. In 1989 there were five distinct local channels on 11 franchises—very nearly half. By 1995 there were 11 out of 88—a fall from a half to one-eighth. It has been very disappointing.

When Channel 5 was originally conceived some imaginary proposals were put forward for city television. Perhaps digital multiplexes will offer new opportunities. In the meantime, as the noble Baroness has said, this is a probing amendment to try to introduce fair and equal access for small-scale broadcasters and community and educational providers to local cable where currently access is determined by the cable companies entirely on their own terms. I hope that we shall have a sympathetic response from the Minister to these ideas.

Lord Inglewood

I, too, shall take these amendments together. The Government agree with the intention of Amendment No. 192. In my opening remarks during the Second Reading debate, I explained that we would be bringing forward government amendments on a number of technical issues relating to the 1990 Act following representations we have received from the regulators. This is one such issue. I apologise to the Committee that the amendment is not yet in a fit state to lay before your Lordships in time for this debate. It is our intention to table a government amendment on this before Report. In the absence of our amendment, the Committee may find it helpful if I briefly outline our thinking on this topic.

The ITC has convincingly made to us, and we have therefore accepted, the case for a licensing system for television similar to the restricted service licences which the Radio Authority issues to great effect for both local community services and special event broadcasts. The amendment which is being prepared achieves the result at which the noble Baroness aims but in what we believe is a more straightforward manner. It is our intention to empower the ITC in almost exactly the same terms as apply to the Radio Authority for its restricted service licences set out in the 1990 Act. Unlike this amendment, we do not propose to set any strict definitions as to the size of the area to be served by a restricted licence but to leave that to the discretion of the ITC.

Your Lordships will be aware, as has often been mentioned during the Committee's consideration of the Bill, how quickly technology develops in the broadcasting sector. The Government do not, therefore, want to be too prescriptive in statute, when an effective regulator such as the ITC will be better placed to judge whether a particular applicant is best suited to be granted a television restricted service licence. The Government are keen to see the development of local television services both on free-to-air and cable and television services at special events. The amendment we shall bring forward will enable such services to develop. I hope, in the light of my assurances that the Government agree with the principles behind the noble Baroness's amendment and that we will bring forward a considered amendment, that she will agree to withdraw the amendment before us today.

I shall now move on to Amendments Nos. 193 and 194. I too shall begin with reference to the Broadcasting Act 1990 when the Government envisaged that the provision of local television services would develop on cable. While I appreciate that some may feel that the opportunities have been slow to materialise, this is a sector which is now growing more rapidly and there are signs that many of the cable operators are interested in providing local television services over their systems. Further opportunities for local programming suppliers will be offered by the advent of digital services and the proposed new class of licence for restricted services which we have just been debating.

Amendments Nos. 193 and 194 would impose financial burdens which are both unnecessary and damaging on the still developing cable companies at a time of expansion. We have already debated the "must carry, must offer" concept which is repeated in these amendments, and I have indicated to the Committee that I shall consider the matter further.

The Government do not believe in subsidising the independent broadcasting sector, which is thriving without our support. Both these amendments offer substantial interference to the broadcasters, who are best placed to judge the wants of the community and promote a subsidy financed in such a manner as to jeopardise the growth of the cable sector. My department is already aware of a number of expressions of interest in establishing local television services under the proposed television restricted service licence which are not seeking subsidy. The ITC may also be aware of some more. I am sure that many more will come forward once the Bill is enacted. The creation of the separate category of local and short-term licence will ensure that local television will blossom without, we believe, the need for either intervention by the ITC or subsidy from the cable sector. It is for those reasons that we oppose the amendments.

Baroness Dean of Thornton-le-Fylde

With regard to Amendment No. 192, the Minister's response was helpful and goes in the right direction. We look forward to seeing the amendment and we shall consider it when it is brought forward. At this point, and with the permission of the Committee, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 193 and 194 not moved.]

5.45 p.m.

Baroness Dean of Thornton-le-Fylde moved Amendment No. 195: After Clause 66, insert the following new clause—

PROMOTION OF EQUAL OPPORTUNITIES

(".—(1) After section 45(3) of the 1990 Act there is inserted— (3A) Section 38 shall apply in relation to any licence to provide a non-domestic satellite service granted after the commencement of this section as it applies in relation to a licence to provide a Channel 3 service.

(2)Any non-domestic satellite service licence granted before the commencement of this section shall, as from that commencement, be taken to include the condition referred to in section 45(3A) of the 1990 Act.

(3)After section 47(8) of the 1990 Act there is inserted— (8A) Section 38 shall apply in relation to any licence to provide a licensable programme service granted after the commencement of this section as it applies in relation to a licence to provide a Channel 3 service.

(4)Any licensable programme service licence granted before the commencement of this section shall, as from that commencement, be taken to include the condition referred to in section 47(8A) of the 1990 Act.

(5)After section 55 of the 1990 Act there is inserted—

"55A. Section 38 shall apply in relation to any licence to provide additional services under Part I of the 1990 Act granted after the commencement of this section as it applies in relation to a licence to provide a Channel 3 service".

(6)Any additional services licence granted before the commencement of this section shall, as from that commencement, be taken to include the condition referred to in section 55(A) of the 1990 Act.

(7)After section 73(7) of the 1990 Act there is inserted— (8) Section 38 shall apply in relation to any licence to provide a local delivery service granted after the commencement of this section as it applies in relation to a licence to provide a Channel 3 service.

(8)Any local delivery service licence granted before the commencement of this section shall, as from that commencement, be taken to include the condition referred to in section 73(8) of the 1990 Act.

(9)After section 104(7) of the 1990 Act there is inserted— (8) Section 38 shall apply in relation to any licence to provide a local or satellite service under Part III of the 1990 Act granted after the commencement of this section as it applies in relation to a licence to provide a Channel 3 service.

(10)Any local or satellite licence granted before the commencement of this section shall, as from that commencement, be taken to include the condition referred to in section 104(8) of the 1990 Act.

(11)After section 113(4) of the 1990 Act there is inserted— (5) Section 38 shall apply in relation to any licence to provide a licensable sound programme service granted after the commencement of this section as it applies in relation to a licence to provide a Channel 3 service.

(12)Any licensable sound programme service licence granted before the commencement of this section shall, as from that commencement, be taken to include the condition referred to in section 113(5) of the 1990 Act.

(13)After section 115(9) of the 1990 Act there is inserted— (10) Section 38 shall apply in relation to any licence to provide additional services under Part III of the 1990 Act granted after the commencement of this section as it applies in relation to a licence to provide a Channel 3 service.

(14)Any additional services licence granted before the commencement of this section shall, as from the commencement, be taken to include the condition referred to in section 115(10) of the 1990 Act.").

The noble Baroness said: In moving this amendment I give an assurance that I shall be briefer than are the words in the amendment on the Marshalled List. I was delighted this morning when I received the Marshalled List that we do not have a practice which existed in an organisation I belong to elsewhere where one is required to read out the amendment before one starts to speak to it.

Although the amendment is long, very legal and detailed what it does is to take the equal opportunities provisions of the 1990 Act and carry them forward into the Bill we have before us. That will enable both Acts to have a level playing field or equal opportunity entry and requirements relating to equal opportunities. Although it is a long amendment, its intention and application are simple. It extends the equal opportunities provisions from the 1990 Act into the Bill. I beg to move.

Lord Inglewood

The noble Baroness has explained clearly the purpose of her amendment and the Government would agree with much of her thinking. Indeed, her concerns are already addressed in the Sex Discrimination Act, the Race Relations Act and equal pay legislation. I therefore question the need to add a further regulatory measure to what we hope is a deregulatory Bill.

Sections 38 and 108 of the 1990 Act require the regulators to encourage the promotion of good practice by the principal broadcasters in the area of equal opportunities. As the Minister taking the 1990 Act through the other place made clear when this issue was debated there in May 1990, while the Government were content for the additional regulation by the ITC and the Radio Authority on this issue in relation to the principal broadcasters who are subject to a fair degree of positive regulation to ensure that they undertake certain functions, including programme content and training of staff, we do not believe now, any more than we did then, that the case is the same for those licensees which are subject to a lighter regulatory touch under the 1990 Act. Those broadcasters operating under licensable programme service licences, non-domestic satellite services and independent local radio licences are policed by having negative consumer protection requirements set out in their licences. This means that if they have misbehaved in that respect, they are appropriately punished for a breach of their licence.

The ITC and the Radio Authority do not monitor their performance to ensure that they are positively undertaking certain actions in the same manner as they do in relation to the principal broadcasters, neither do the regulators produce a detailed annual performance review in which equal opportunity assessments can be published.

We believe that this amendment will add a further costly and unnecessary layer of bureaucracy to the work of the ITC and the Radio Authority, the aim of which will be to ensure that the broadcasters are meeting the requirements of the existing legislation, for a breach of which there are quite separate sanctions. The equal opportunities legislation is working effectively without the need for additional positive promotion by the broadcasting regulators.

Baroness Dean of Thornton-le-Fylde

I thank the Minister for that reply. Disappointing though it is, it makes the Government's position very clear. It lacks logic, because Clause 26 of the Bill states quite specifically, Any multiplex licence [operator] or digital programme licence [holder] shall …make arrangements for promoting, in relation to employment by him, equality of opportunity between men and women and between persons of different racial groups". Although the Minister went on to say that the ITC itself does not monitor, which I consider is regrettable—perhaps its terms of reference did not require it to do so—monitoring is quite common. The BBC itself was one of the first to sign up to Opportunity 2000, which requires an annual monitoring of equal opportunities. The Minister's reply is disappointing, but I do not wish to press the point at this stage in Committee. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lyell moved Amendment No. 195A: After Clause 66, insert the following new clause—

LIMITATION ON AVAILABILITY OF STATUTORY LICENCE TO INCLUDE SOUND RECORDINGS IN BROADCASTS AND CABLE PROGRAMME SERVICES (" . In section 175 of the 1990 Act (Use as of right of sound recordings in broadcasts and cable programme services), at the end of subsection (1) there is inserted—

"Limitations on exercise of right.

135H.—(1) Section 135C shall not apply to the inclusion in a broadcast or cable programme service of any sound recording if and to the extent that the broadcast or cable programme service is—

1. (a)a controlled choice service;
2. (b)provided wholly or mainly for presentation to members of the public at a particular establishment or other defined locality, or a particular event, in the United Kingdom;
3. (c)a simultaneous, unaltered and unabridged retransmission for reception by the public of an initial transmission (whether by means of a broadcast or cable programme service) from another EEA state of television or radio programmes intended for reception by the public."

(1A) For the purposes of sections 135A to 135H— controlled choice service" means a service which consists wholly or mainly in conveying sounds or other information whether by broadcast or by cable programme service for reception by any member of the public and of which it is an essential feature that there will or may be sent from each place of reception information or signals for the control or partial control of the content of the service for reception by the person providing the service.".").

The noble Lord said: This is an entirely new clause. I shall be as brief and clear as I can. This is rather an esoteric point, taking us back two years, five years and six years. Section 175 of the 1990 Act, as Members of the Committee will see from the amendment, refers to Section 135 of the Copyright, Designs and Patents Act 1988, which was printed in fairly large measure in Section 175 of the Broadcasting Act.

Section 175 of the 1990 Act, introduced for the first time in this type of legislation a statutory licence for the benefit of broadcasters. That formed an integral and central part of the overall regulation of the licensing system which was set up under the 1990 Act.

The statutory licence came into being nearly six years ago. It entitles broadcasters to include sound recordings in a cable programme service if some conditions are met, paying what the broadcaster unilaterally considers to be a reasonable royalty for the use of music or other material. The Committee will be aware that it can take a lot of time, money and effort to establish in the copyright tribunal that the statutory licence fees paid by the broadcaster are entirely unreasonable. In the meantime there is a great deal of delay and expense and a substantial loss of revenue to the copyright holders.

As we understand it, the intention of the 1990 Act, when passing through both your Lordships' House and another place, was to provide the new broadcasters—I shall call them traditional broadcasters and radio stations—who we all hoped would be able to provide an increasingly broad range of public information services and local radio, with a head start and fewer problems and administrative difficulties in negotiating rights clearance for the use of material.

In 1990 your Lordships' House and another place were focusing on the so-called "needletime" restrictions. That will take all Members of the Committee back to dropping a needle on a disc when we used to listen to what were called "records". The restrictions then were to ensure that a broadcaster would not be delayed in commencing transmissions while he negotiated licence terms with the copyright owner of the sound recordings in that broadcast. As the Committee has been hearing, since 1990 needletime restrictions have virtually disappeared and we have moved on from that. As a result of measures in the 1990 Act, an entirely new phenomenon has emerged; namely, a new generation of non-traditional broadcasters whom one might call "narrowcasters".

These are service providers. When Members of the Committee go to large warehouse-type emporia where there are do-it-yourself chains or into a hypermarket, they are likely to hear music interspersed with announcements and the like. Apparently, that is a valuable marketing aid. I am not very aware of the background music since I concentrate on other things. I understand that since 1990 the narrowcasters have been able to take advantage of the statutory licence as set out in Section 175, to the disadvantage of the record companies and performers whose copyright they are in danger of infringing.

The particular types of broadcast which are covered in my amendment are commercial services intended for particular sites or retail chains. There are also the on-demand services which are likely to have a direct impact on, and substitute for, record sales—perhaps one might call it "home recording".

The amendment adds to the Act in Section 135H(b), which relates to broadcasts, provided wholly or mainly for presentation to members of the public at a particular establishment or other defined locality".

As I have just spelt out, that may be a retail shop or a large emporium. The service provider is attempting to produce an atmosphere which is conducive towards persuading people like Members of the Committee and myself to part with money. I hope my noble friend will have been able to understand part of what I am seeking to put forward. I beg to move.

Lord Inglewood

I agree with my noble friend that one of the reasons for introducing the statutory licence in 1990 was to enable new broadcasters to start transmissions quickly, where necessary before copyright royalty rates for the inclusion of sound recordings had been agreed. It is quite true that some important developments in broadcasting have emerged since 1990 and the effects of the statutory licence in these new areas would not have been easy to foresee. In some new areas it is possible that a statutory licence is difficult to justify, and limited changes to the provisions should now be considered. However, the Government believe that there is not a convincing case for any major alteration of the statutory licence provisions to exclude, for example, all digital broadcasts. These will, I believe, before long be the only type of broadcast and the previous arguments in favour of a statutory licence remain applicable.

My noble friend's amendment is, though, much more limited, attempting to exclude three distinct categories of broadcaster or cable programme service provider from the statutory licence provisions. In the first category are the providers of on-demand transmissions; that is, transmissions where the person receiving a broadcast can send signals to the broadcaster and so control what is actually received. The DTI's recent response to the Multimedia Industry Advisory Group's report announced a willingness to consider removal of on-demand broadcasts from the statutory licence. I am therefore happy to agree that the Government should consider further the first element of my noble friend's amendment.

The second aspect of my noble friend's amendment seeks to exclude what may be called the providers of "muzak" from the statutory licence provisions. I accept that there are differences between broadcasters or cable programme service operators providing a transmission which members of the public can receive in their own homes and those whose transmission is received only by, say, retail stores to provide the background music played to customers. Although my noble friend did draw my attention to this issue at Second Reading, I must confess that I have not yet reached a firm view on the matter. However, like the first part of the amendment, I am prepared to agree that the Government should give further consideration to the issues raised. Before reaching any decision on either this or the first part of the amendment, though, I know that my colleagues at the DTI are anxious to hear the views of all interested parties.

The final element of my noble friend's amendment is, I understand, put forward as a change that is necessary in order to comply with the Satellite and Cable Directive. The Government are currently in the process of implementing this directive into UK law. Further consideration is being given to the issues raised here and any necessary changes to the statutory licence will be incorporated into the UK implementing regulations.

I am grateful to my noble friend for drawing the issues raised by this amendment to our attention. However, I trust that on the basis of my agreement to consider the first two parts of the amendment, my noble friend will agree to withdraw it. I hope that the Government will be in a position to respond to the issues raised in another place, and bring forward an amendment to the Bill if appropriate.

6 p.m.

Lord Lyell

I am grateful for everything that my noble friend has said, and particularly for the final part of his reply. Indeed, I must advise both my noble friend and the Committee that I am stunned and delighted by his response, particularly in view of the effort, clarity and excellence with which he has presented his case over long days in Committee. I thank my noble friend very much for that. I shall certainly take up his offer to pursue any further discussions in due course with both my noble friend and his officials. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Arran moved Amendment No. 195B: After Clause 66, insert the following new clause

CHANGES 10 THE CONTRIBUTIONS OF REGIONAL ITV COMPANIES TO THE COST OF THE NETWORK BUDGET 10 BE SUBJECT 10 APPROVAL OF THE SECRETARY OF STATE

(".—(1) section 39 of the 1990 Act is amended as follows.

(2) For subsection (8) there is substituted—

"(8) Where any arrangements have been approved by the Commission under subsection (4) or (7)(b)—

1. (a)no modification of those arrangements shall be made by the holders of regional Channel 3 licences unless it too has been so approved; and
2. (b)the Commission shall not approve any such modification to the extent that such modification modifies the arrangements in respect of the contributions made by the holder of each regional Channel 3 licence to the cost of programmes acquired or commissioned pursuant to those arrangements unless such modification has been approved by the Secretary of State."."

The noble Earl said: This amendment is about money, quality and the preservation of real regional television. The objective is simple: to ensure that ITV's smallest regional companies continue to pay a fair price for programmes which they buy from the network. The ITC is already involved in that process. I am simply asking that the Secretary of State should be the final judge. That is hardly a dramatic suggestion, but it could be a vital lifeline for five vulnerable ITV operators.

I make no apology for returning to the importance of regional television, upon which significant matter very many of your Lordships have spoken at frequent intervals during this Committee stage. On Second Reading, I questioned the logic of "big is beautiful". Indeed, that doubt was forcefully voiced by the noble Lord, Lord Thomson, on Tuesday. I wondered how the growth of big companies into world markets could possibly be assisted by swallowing the minnows of ITV like plankton. I have since received an illuminating letter from Carlton Television which bears repetition. It comes from the head of corporate affairs, who puts it this way: You are quite right to say that a large ITV company taking over one of the smallest is not going to lead to global success".

Just as I thought. If a big ITV group ever seeks to buy up a small one, we know now that that will have nothing at all to do with world markets and digital television and everything to do with old-fashioned consolidation and economies of scale. I am indebted to Carlton for its candour.

Lest I be accused of special pleading for the sake of small ITV companies, perhaps I may remind the Committee that they are already considered to have a special case under broadcasting legislation. The 1990 Broadcasting Act recognised their regional responsibility when applications for franchise bids were originally invited.

My new clause addresses one fundamental aspect of that complicated process. I shall spell it out as straightforwardly as I can. The ITC issued invitations to apply for licences. Those invitations contained a sliding scale for the purchase of mainstream network programmes. The structure was designed to ensure that viewers could receive "Coronation Street" or "The Bill" in whichever region they happened to live, no matter how big or how small the ITV company delivering the signal. If necessary, that meant that the small five—Border, Channel, Grampian, Ulster and my own, West Country—would contribute proportionately less than their big brothers in London, Birmingham or Manchester for the same programmes. It was, and is, a thoroughly fair arrangement and of particular benefit to viewers in those oft-forgotten, far-flung corners of the United Kingdom.

It was also assumed to be a lasting arrangement. After all, the small five were obliged to calculate their cash bids partly on the basis of what it would cost to buy network programmes. It is a substantial part of any ITV company's budget. They were embarking on a commercial risk licensed to last into the new millennium—in fact, until the year 2002. I am a great believer in lasting arrangements actually lasting. For that reason I wholeheartedly support the resolve of my noble friend the Minister to adhere to the present arrangements for funding Channel 4. Any premature change on the Channel 4 question would be a breach of trust. Any radical change of network programme prices could be calamitous for the small companies. Their financial viability, not to mention the excellent local programmes in which they invest and which they produce, depend on the very survival of that simple equitable pricing mechanism.

My noble friend the Minister may think that none of this is any of his or the Government's business, but let us dally a while. It is quite true that the mechanism is controlled by ITV. Indeed, the Independent Television Association, to which all such companies belong, governs programme prices. Inevitably, the bigger companies have a bigger say, but at the moment the mechanism works and it works well.

However, we now come to the crunch. The Bill allows the big to get bigger. In the Independent Television Association all that it takes to alter the present pricing agreement is a simple majority vote. Think of it: are not the signs already on the wall? Scottish Television is said to be bracing itself for a takeover by the Daily Mirror and H'TV is reportedly in talks with Carlton. The biggest independent production house in the UK, Select TV, is being broken up and sold in parts to Carlton, Pearson and Meridian. The noble Lord, Lord Hollick, has lately come to the rescue of Beaverbrook's famous crusader. The big are already getting bigger, and we are still only at Committee stage.

It is no wild hypothesis to say that soon there may be just two huge corporate entities controlling over half of the ITV that we know now. Imagine it: two conglomerates with the power to alter programme prices and, in doing so, to drain the lifeblood from regional TV. Just suppose that those giants, acting purely in the interests of their shareholders, fancied a little more consolidation. In my doomsday scenario, the best way to get the small companies on the cheap would be to scrap the pricing mechanism altogether. The Bill could allow that to happen—unintentionally, needless to say, but too late to save some of the best local television in Great Britain.

The amendment should not be interpreted as a criticism of the regulator. It is quite true that the ITC already has the power of veto over changes in programme price. I simply seek to enhance that power. Nor will my amendment set a precedent for directly involving Ministers. My noble friend will be well aware that the Secretary of State is already expected to act as the court of last resort when ITV transmitter costs are proportioned. What I propose merely adds ministerial muscle to the regulatory arm. Why? Because the TV giants of tomorrow may not walk in sufficient dread of the ITC alone. The new clause puts the extra weight of the Secretary of State behind any dispute about programme pricing. It is very little to ask, but it is very important indeed, and for Border, Channel, Grampian, Ulster and West Country, not forgetting their loyal and appreciative audiences, it might mean the difference between a first-class local service and impersonal mogul vision. I know which I would prefer.

During our deliberations on Tuesday, my noble friend displayed some sympathy with the cause which I and many other noble Lords are now arguing. He said: there is need … to ensure that we entrench all the best qualities of regional broadcasting and, where we can, enhance them".—[official Report, 13/2/96; col. 568.]

On this issue my noble friend certainly can, and I most earnestly hope that he will. I beg to move.

Lord Thomson of Monifieth

The noble Earl has raised an important point. There is no doubt, as he has argued, that the present character and success of the smaller regional companies in the ITV system depend crucially upon the discounted price system of the ITV network arrangements. If that were to be changed radically against them, they could not go on providing the services that they do and the popular regional programmes that are in many ways the jewel in their crowns. It is an important matter. It is one of what I called earlier a jigsaw of a number of pieces where the financing arrangements for the ITV and BSkyB system—taking commercial broadcasting as a whole—need a fundamental reappraisal.

There is one point upon which I do not wish to take issue with the noble Earl but merely to put a different gloss on what he has said. Towards the end he said that of course at the moment, although the network payment system is one that is agreed among the ITV companies, to change it requires the consent of the ITC. The ITC has a veto on any changes in the system that are unacceptable to it.

It is fair to say that the present system, which out of the rather bad Broadcasting Act 1990 we managed to rescue as something that retained, above all, regional public service elements of the system, was the creation of the ITC. I speak with a certain amount of interest I suppose, which I shall declare at one remove, in the sense that the ITC is the successor commission, although with different responsibilities and powers, to the IBA of which I was chairman.

Although I am tempted by the noble Earl's proposition that the ITC might feel reassured and reinforced by having the ultimate sanction of a Secretary of State behind it, as happens, as the noble Earl said, in the transmitter system, I pause in my more pessimistic mood to wonder whether the ITC and its power of veto, digging in, and being stubborn in defence of the system which is at the heart of its pride and what ITV does, will face up to what the noble Earl called the big battalions ganging up, rather more stubbornly than the Secretary of State might do. I do not wish to be discourteous, but I have not been over-encouraged by the willingness of the present relatively new Secretary of State to stand up to some of the pressures with which we are dealing in the Bill.

While I agree with the importance of what the noble Earl is suggesting and think that it should be part of a reconstituting, in some ways, of the financial relationship between the big boys and the small boys of ITV and BSkyB and the regulator, I am cautious about whether in this case the Secretary of State would be an added safeguard or perhaps even an added danger.

Baroness Dean of Thornton-le-Fylde

From these Benches we support the amendment. We do not see it as an attack on the large companies and that was not our intention when we put our name to the amendment. We see it rather as a protection for regional television provision. It is one that has existed since the 1950s. It is a pricing mechanism which was taken into account when the small companies put forward their licence bids. It is one that has a profound impact on their financial viability.

The amendment cannot be an attack upon the large companies: the scheme has been successful because the large companies have supported it. The network supply agreement has had their backing. Nevertheless, these heady days of takeovers and concentrations have concentrated the minds of the small companies: "What is our future? Shall we be able to maintain quality?" It is quality that is at the heart of the amendment. We cannot just take regional programming; we have to take the whole programming structure in the round.

We hope that the Minister will be able to respond positively to the amendment. The noble Lord, Lord Thomson of Monifieth, is very experienced in these matters. His counsel is one to which we should listen. He is absolutely right: it is sometimes easier to take an independent view as an independent regulator than perhaps a Secretary of State, who may be subject to political pressures.

This is a key and important amendment if the Bill is to achieve what we are led to understand from the Minister it is designed to achieve: variety, diversity, national programming and regional programming. The excellence of many of our small regional companies is due to the fact that they have had this network supply agreement in place.

It is unfortunate that the ITC has not taken the opportunity, or found it possible—perhaps it does not wish to—to confirm that the pricing mechanism which is in place will remain throughout the period of the regional companies' present licences; that is, until 2002.

It seems a long way away but it is not. It would have helped considerably had the ITC been able to confirm that to the small companies which feel vulnerable at the moment. We support the amendment.

6.15 p.m.

Lord Lyell

I support what my noble friend Lord An-an said. The Committee will see that among the names on the list of those supporting the amendment is that of the noble Lord, Lord Kirkhill, who warned me that he had to get home to my area—which is familiar also to the noble Lord, Lord Thomson—which is served by one of the prime examples of what my noble friend spelled out. I would not call it a small company, and one is reminded that size is no guarantee of strength. Grampian Television provides an enormous service. Lest the Committee forget—the noble Lord, Lord Thomson, will be aware of this—it serves a colossal area of the UK.

Secondly, Grampian provides a special type of service. It is unique in that it provides a great deal of Gaelic. I must confess that when Gaelic programmes come on I sometimes change the channel or turn off the television. Sometimes I press another button and often—it is not the "Magic Roundabout"—it is the young man's "magic roundabout", shown on Grampian at 5.20 p.m. on a Saturday. I see that my noble friend Lord An-an is aware of that programme. Perhaps I may add my tiny weight to my noble friend's powerful remarks in support of reasonable costs for smaller companies which provide a unique service, often to large areas with small populations.

Lord Inglewood

I understand entirely the Committee's concern that greater consolidation within the Channel 3 network might mean that the position of the licence-holders for the smaller regions, and specifically the arrangements for the charges made to them for programming, might be altered in such a way as would threaten their independent viability and regional character.

I do not, however, think that it is at all desirable for the Government, albeit for different reasons from those advanced by the noble Lord, Lord Thomson, to be involved in approving something as detailed and operational as amendments to the Channel 3 networking agreements. That would be an undesirable intervention in any industry, and the more so in an industry where, quite properly, government are traditionally very loath to make any direct intervention. I feel that it would instead be a better way of meeting the concern raised by my noble friend to strengthen the ITC's duty. The ITC must already, by statute, approve the Channel 3 networking arrangements. By virtue of Section 39(10) of the 1990 Act it is forbidden to approve any arrangements which may operate to the detriment of Channel 3 as an effective national network. I suggest that it would be sensible also to prevent it from approving any arrangements which would in its opinion jeopardise the continuing effective fulfilment of regional licence-holders' regional programming obligations. As we have already discussed, Clause 63 seeks already to strengthen the ITC's hand as to specifying those regional programming requirements; such an amendment would mirror that clause.

I hope that in the light of my undertaking to bring forward an alternative government amendment to meet the concerns my noble friend has raised, he will not press his amendment.

The Earl of Arran

I am grateful to the Minister for his understanding and general support of the amendment. He said that he would be prepared to come forward at a later stage with an alternative government amendment. I am also grateful for the support of the Committee. I understand the point made by the noble Lord, Lord Thomson of Monifieth. As was mentioned by the noble Baroness, Lady Dean, this is a key amendment and protection is extremely important. My noble friend Lord Lyell mentioned the specialist expertise—

Lord Thomson of Monifieth

Before the noble Earl withdraws his amendment, perhaps I may congratulate him on obtaining the Minister's assurance. It was most helpful and answers the anxieties which I expressed while giving general support to what lies behind the amendment.

The Earl of Arran

I take the noble Lord's point. I am delighted at the possibility of beefing up the ITC. It is a good and sensible compromise and I hope that it works well in a determined effort to continue to protect the quality of regional television. On that understanding, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Thomson of Monifieth moved Amendment No. 195BA: After Clause 66, insert the following new clause—

LICENCES FOR NON-DOMESTIC SATELLITE DISHES

(" .—(1) Section 45 of the 1990 Act is amended as follows.

(2) After subsection (9) there shall be inserted— (10) A licence to provide a non-domestic satellite service shall include conditions requiring the licence holder to pay to the Commission (in addition to any fees required to be so paid by virtue of section 45(1)(b)) in respect of each accounting period of his falling within the period for which the licence is in force such amount as the Commission may determine representing a percentage of the qualifying revenue for that accounting period.".").

The noble Lord said: The amendment follows closely the previous amendment and is part of the jigsaw about which I spoke. It attempts to deal with fair taxation within the commercial broadcasting system in this country. I hope to persuade the Government that the time has now come when BSkyB in particular should pay its fair share of taxation together with the other commercial television companies.

I do not wish to labour the point as we have covered the ground many times. BSkyB may well have been entitled to a "tax holiday" in order to engage in such a high risk operation. However, it has been a successful operation and appears now to be running extremely well. I believe that the time has come to have a more fair arrangement between the ITV and BSkyB systems. I was trying hard not to use the awful phrase "a level playing field". I beg to move.

Lord Colwyn

If accepted, the amendment will mean that non-domestic satellite services, of which the ITC has licensed about 90, will have to pay a percentage of their qualifying revenue for their licences. I believe that that is unfair. To suggest that non-domestic satellite broadcasters should be brought into line or equalised with other domestic terrestrial broadcasters who already pay a percentage of their qualifying revenue is wholly disingenuous. It is also potentially damaging to the satellite broadcasting industry.

I say that it is disingenuous because it ignores the fundamental distinction between domestic terrestrial broadcasters and non-domestic satellite broadcasters; that is, that the former have guaranteed and exclusive access to the whole of the UK's regional or national populations while the latter do not. I wish to remind the Committee that the regulations on the non-domestic satellite channels are deliberately and rightly different from that in respect of domestic terrestrial broadcasters. Unlike domestic terrestrial operators, non-domestic satellite channels have no guaranteed access to scarce government-controlled domestic frequencies; nor do they have a licence fee income, subsidy or special protection. They have no automatic or monopoly access to regional and national audiences.

The qualifying revenue charge levied on terrestrial domestic licences is a recognition that terrestrial TV frequencies are a scarce yet highly sought after commodity for which the Government's grant of privileged access requires payment. Indeed, I am sure that many satellite broadcasters would welcome the opportunity to have access to such a wide distribution network. However, that option remains out of reach to many. In fact, due to restrictions proposed in this Bill, BSkyB will be the only satellite broadcaster prevented from owning any Channel 3 or Channel 5 licences.

Of course, terrestrial companies are also perfectly free to invest their money in non-domestic satellite broadcasting with no qualifying revenue payments, but no privileged access either. The BBC has stakes in two non-domestic satellite channels—UK Gold and UK Living—and Granada is linking up with BSkyB on several new channels. Beyond those relatively minor involvements, however, terrestrial broadcasters have chosen not to invest in the non-domestic satellite sector.

That is why I believe that talk of a level playing field or fairness on licence payments is disingenuous. The field is already tilted sharply in favour of terrestrial broadcasters which have first refusal on the purchase of licences which guarantee privileged access to the entire UK population.

I am also concerned that the amendment could threaten the existence of many non-domestic satellite companies. As transmission costs fall, the number of specialist, thematic and minority interest non-domestic satellite channels continues to grow rapidly. For such channels, which often work to tight budgets, additional payments will seriously affect their viability and discourage the emergence of new services. Furthermore, the UK is the international uplink base for non-domestic satellite broadcasters. New additional costs will inevitably discourage potential investors from abroad or will encourage those already established here to relocate.

Finally, I wish to point out that the amendment discriminates in favour of the cable operators. While programme services which distribute exclusively on cable do not pay a percentage of their qualifying revenue, those on non-domestic satellite would. In summary, I do not believe that it is right to place these additional financial burdens on to UK non-domestic satellite broadcasting companies. There is no credibility in the argument that they should be taxed in the same way as domestic terrestrial broadcasters for the key reason that they do not operate within the same privileged context.

Lord Donoughue

I wish to speak wholly in favour of the amendment tabled by the noble Lord, Lord Thomson of Monifieth. The basic problem is that the fiscal levy regime is patchy. In my view, it is unfair to the ITV/Channel 3 companies which carry such a huge burden of paying almost £400 million a year.

If the tax problem were resolved the problem of the Channel 4 funding formula and that in respect of Channel 3 would appear much less acute because I suspect that the Channel 3 companies would be more relaxed about losing the Channel 4 subsidy if they felt that the tax burden were more fairly distributed. We support bringing them all fairly into the net and the amendment brings in the non-domestic satellite broadcasters.

It is always helpful to hear the noble Lord, Lord Colwyn, speaking so fully from the Sky brief because it means that I do not have to do so. The issue is complex because there are problems in relation to whose spectra are being used by Astra, for instance. I am sure that the noble Lord, Lord Thomson, in moving the amendment accepts the complexity but we would like the Minister in answering to address the basic problem of the fairness of taxation in this field. A separate fiscal approach may be required.

I wish to point out to the Minister and to the Committee that other countries are finding a similar problem. Canada has the same difficulty of some companies being in the tax net and others not. Its Government are currently proposing what they call a "communications distribution tax" on all broadcasters; that is, on domestic satellite, non-domestic satellite, cable and some telephony services. That would generate considerable revenue and leave no one feeling, as I believe ITV feels, that there is unfair treatment. Therefore, I should very much like to support the amendment.

6.30 p.m.

Lord Inglewood

The noble Lord, Lord Thomson, set out clearly the purpose of his amendment and his reasoning for it. While I understand the arguments behind much of what the noble Lord said, I must respectfully disagree with his approach.

I remind Members of the Committee that this amendment applies to those satellite services which operate on a frequency which is not allocated, by international agreement, to UK control. We have 10 such frequencies none of which is currently used; British Satellite Broadcasting Ltd. being the last such operator, prior to its merger with Sky to form BSkyB.

The 1990 Act's broadcast licensing system recognised that the broadcast spectrum was a scarce resource and that it was of significant commercial value. The Government therefore instituted the bidding system for both domestic terrestrial and satellite licences locked to a levy on successful applicants' television revenues. As my noble friend Lord Colwyn said, all these moneys go to the Exchequer not as taxation but in recognition of the worth of the scarce UK resource that the broadcast spectrum represents and which these broadcasters are using. That argument does not and cannot be extended to a foreign government's spectrum as it is for those countries to decide how they allocate what is allocated to them.

Mention has been made this afternoon of BSkyB. I note the concerns of those members of the Committee who have contrasted the payments made by Channel 3 licensees to the Exchequer with BSkyB's smaller payments to the ITC. As I have already indicated, the Exchequer payments are based on the use of the UK spectrum. Extending such payments to those broadcasters operating on non-UK frequencies would neither be rational nor fair. It should be remembered that those broadcasters operating on frequencies controlled by foreign governments may make payments to the government concerned for the use of that spectrum. I understand that the owners of the Astra satellite pay a significant fee for their franchise to the Luxembourg Government. The scale of BSkyB's payments for the use of the Astra satellite will, no doubt, reflect those franchise fees. The Government do not think it right to impose arbitrary and punitive levies to a broadcaster operating fairly within the rules of international law and the single market. Nor would it be in the UK's interests to take such action against broadcasters who can simply move operations to another European country to circumvent any payments to the Exchequer with the consequent loss of jobs, possibilities for creativity and opportunities for training in the broadcasting industry.

I have tried to explain that the Government are opposed to this amendment for the reasons I have outlined.

Lord Thomson of Monifieth

I cannot say that I am disappointed by the Minister's reply because I would have been surprised had he been more forthcoming. I moved the amendment because I thought it right that the case for it should be raised rather than in the hope that the Government were likely to accept it.

I am bound to say to the Minister that I found his defence of the present situation intellectually more persuasive than the defence put forward by the noble Lord, Lord Colwyn. I do not wish to prolong matters at this stage but the noble Lord used a number of propositions—I know from where they come—which are not very tenable. It is not true to say that the ITV companies have a privileged access in the sense that BSkyB does not. The ITV companies have had to compete very severely for the franchises that they have under the rather ridiculous bidding system to which the Minister referred.

In my view, the real difference now between BSkyB and comparable operators on the one side and ITV on the other is not really the premise on which the Minister has built his intellectual case; that is, the difference between domestic and non-domestic frequencies. That is a very fortunate accident of geography of which BSkyB and the Murdoch interests in particular have taken ingenious advantage; and I do not deny that at all. But I start from the other premise that we now have businesses which are entirely domestic businesses. ITV companies cater entirely for a domestic ITV audience and BSkyB caters entirely for a domestic British television audience. They are competitors in the same domestic economic field of providing a particular product. I believe that they should now be treated on the same basis.

Whether it is called taxation or a royalty from the use of frequencies is a secondary issue. The real distinction between domestic television companies and the non-domestic satellite companies is not to do with frequencies. It is just that one pays taxation and the other does not. That is extremely unfair and should be ended at some time by a government; but that will obviously not happen this evening and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Barnett moved Amendment No. 195BB: After Clause 66, insert the following new clause—

PROVISION OF NEWS PROGRAMMES BY CHANNEL 3 LICENCE HOLDERS (" . For section 31 of the 1990 Act there is substituted—

"31. The Channel 3 licence holders shall appoint a single nominated news provider who shall be responsible for the broadcast on Channel 3 of news programmes which shall—

1. (a)be of high quality dealing with national and international matters; and
2. (b)be presented live at regular intervals; and
3. (c)be broadcast simultaneously in each region comprising the Channel 3 services.".").

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 195BC. I recognise, as I am sure the Minister does, that when he has accepted these amendments, which I am sure he will do as I know he is a reasonable man, consequential amendments will be needed.

I support the Bill's continued commitment to the value of high quality broadcasting. I consider the news to be particularly important and I hope that other Members of the Committee agree with me about that. That philosophy was formalised by the Independent Television Commission in January 1991 when ITN was nominated as the news provider. The importance of ITN's role was highlighted in the Government's own White Paper with the proposal to impose a duty on the ITC to ensure at least one body would be effectively equipped and financed to provide news on its Channel 3 service.

The subsequent 1990 Act included those provisions in respect of news. The Act provides that, first, there shall be a requirement to broadcast news programmes of high quality national and international news; secondly, that each Channel 3 programme presenter in addition shall include conditions requiring news programmes to be provided by a nominated news provider to be presented live and simultaneously; and thirdly, the responsibility for nominating a news provider was conferred on the ITC by Section 32 of the 1990 Act. Under that Act, the ITC was required to conduct regular performance reviews. The first was completed last year and on 21st December it announced its review of the first three years. It concluded that ITN provided a well-resourced, authoritative and attractive news service meeting the requirements of the 1990 Act for high quality. In the review it confirmed ITN as the Channel 3 news provider nominated by the ITC.

ITN has delivered high quality programmes costing nearly £77 million below the levels predicted. That stems from ITN's drive for efficiency and increasingly multi-skilled staff which has enabled it to invest heavily in the latest digital news resources and news-gathering around the world.

The ITC was required to ensure that any further nominated news contractor to Channel 3 would not impair ITN's high quality service. The ITC itself, while welcoming ITN's efficiency and reduced costs to Channel 3 companies, attached great importance to not putting at risk the range and quality of service. That is crucial.

The present Bill may be interpreted as allowing two or more news services to operate within one ITV network. That could mean one part of the country having news services broadcast by one supplier at one time and other parts of the country having news from a different supplier at another time. In such circumstances it is impossible to see how Parliament's requirement for news on Channel 3 could be met. It seems to me that only by pooling the resources that Channel 3 has available for network news and investing them in a single news provider would Channel 3 be able to ensure the high quality that Parliament has always maintained it should have.

It is possible that the Bill as it stands could result in a fragmentation of ITV's national and international news services and that would have highly damaging consequences for quality news on ITV. Two or more Channel 3 news services, based on possible differing editorial standards and inadequate levels of resources, would not help to facilitate national understanding of news events.

It may seem strange that as a former vice-chairman of the BBC I should move such an amendment, but I care about the presentation of news, whether it comes from ITN, the ITV companies or, indeed, from the BBC. That is the important consideration. Apart from the fact that I have been got at by ITN—I should therefore declare an interest—I am also very fond of the people concerned.

As the Bill stands, there could be one united audience for a programme like "Gladiators" which, I hasten to add, I have never seen, but splitting for major news programmes cannot be sensible. I thought for a moment that the Government Whip was nodding her head in agreement with me, but it appears not. That is a pity because the noble Baroness always agrees with me.

Baroness Trumpington

Yes.

Lord Barnett

As I was saying, such a split surely would not meet the wishes of Parliament for high quality news. I cannot believe that that is the Government's intention. It looks like a drafting oversight. I hope that the amendment tabled in my name and the names of the noble Lord, Lord Thomson of Monifieth, and the noble Lord, Lord Peyton of Yeovil, who apologises through me for not being able to be present today, will be considered and that it will be acceptable to the Minister. As I said, he is a very reasonable man and I look forward to hearing his acceptance. I beg to move.

Lord Thomson of Monifieth

I am happy to support the noble Lord, Lord Barnett, in the amendment and to express my admiration of his selfless altruism, as a former vice-chairman of the BBC, in espousing the cause of ITN. I am only disappointed that as someone who has spent most of his life in one of the most gladiatorial situations in this country the noble Lord has actually never seen "Gladiators". He obviously does not have grandchildren; or, if he has, he has not been with them when the programme is transmitted.

I have a closer past link with ITN and the independent broadcasting system than the noble Lord. I must therefore try to be more detached. The issue before us is really one of principle as to whether the independent television system should have a single, nominated news provider. That is the significance of the proposed new Section 31. The origins go back to the rather ideological and doctrinaire way in which the Government in 1989–90 approached the Broadcasting Act. As happens so often, a sensible compromise emerged.

It was generally recognised, I believe, that ITN was a very notable, national news institution that should be preserved. Yet the competitive dogma indicated by Section 31 would allow the possibility, outlined by the noble Lord, Lord Barnett, of a fragmented news system. That would be disastrous. I am not speaking either from an anti-Sky News point of view or, indeed, from a pro-ITN point of view. I am speaking in support of the principle of independent television having a single, nominated high-quality news service.

Sky News has greatly enhanced television news over recent years with a 24-hour service that is not possible on any of the terrestrial channels. I keep saying that; and I shall continue to do so. Equally, ITN is a high-quality national news service. I am aware that a great national news service, whether it is provided by the BBC or UN, is rather a special institution. It rather reminds me of a university or a very good school. It grows organically in terms of quality and is rather a precious commodity which one could destroy or undermine pretty easily. It needs defending and supporting. Certainly, the public interest depends on having a single, nominated national news service of quality. It is on the basis of that principle that I support the amendment.

6.45 p.m.

Lord Donoughue

I express my support for my noble friend Lord Barnett and his amendment. It is certainly not anti-Sky News. At the end of last week when covering the IRA atrocity and the court case of Joan Collins in New York at the same time Sky was quite brilliant. However, that is not the issue. The purpose of the amendment was outlined by the two previous speakers. We support it.

Lord McNally

I do not want to prolong the debate and I would not claim to bring the same expertise to it as the noble Lord, Lord Barnett, or my noble friend Lord Thomson. We discussed a few days ago the triumph of regionalism in ITV. The other triumph is undoubtedly ITN. It is important to recall the impact of ITN on the quality of BBC news, its influence on how politics is covered and, indeed, the whole excitement and relevance it has brought to news gathering. I believe that the Minister should pause for thought when he receives advice from such sources.

If the BBC as a news service remained strong and yet somehow, because of changes, the ITV system became weaker, that would be a retrograde step. I do not have the experience of the noble Lords who have spoken but I do move in circles where I hear television executives talk. It is rather similar to what I said the other day about the regional commitment. The bean counters are within the walls and the talk is always of the pressure.

I am not suggesting that ITN should somehow be protected and therefore profligate. It must be a cost-effective organisation. But it is naïve to suppose that within ITV there are not voices urging that it should get by on a cheap, make-do news service, pushed to either end of the schedules, so that the rest of the time can be packed with popular programme-making. That would be the death-knell of the ITV system. I say that because Sky News gives more to the Sky system than simply the service of news; indeed, it gives a credibility to the whole system. The same applies to ITN within ITV. That has won it immense political loyalty and support.

Again, without giving ITN a guarantee for ever, it is important that the warnings of the noble Lord, Lord Barnett, are heeded. To encourage a weakening of the news service within ITV would have long-term implications for television news in this country, not just on ITV but also on the BBC.

Lord Inglewood

I have listened with interest and care to the explanation of the noble Lord, Lord Barnett, as to the purpose of his amendment—and to the contributions made by other members of the Committee—which draws a point into our debate which, so far as I know, we have not hitherto considered and which has important and possibly far-reaching implications.

The current arrangements set out in the 1990 Act appear to have been working well. The ITC gave ITN—currently the only nominated news provider—a clean bill of health. The noble Lord, Lord Barnett, made his case as persuasively as he always does. I can give him the assurance that I wish to reflect carefully on what he and other Members of the Committee have said in this debate, and to state our position on this matter at Report stage. However, I should say at this stage that we do not see the merit of the provisions in Amendment No. 195BC. We are loath to attempt narrow definitions which the ITC must follow, such as the one in subsection (3)(a) of that amendment. The ITC is capable of assessing, under the broad terms of Sections 31 and 32 of the 1990 Act, what is required of a nominated news provider. Any definition in legislation is likely to have changed with the expanding technology of news gathering. Similarly, subsection (3)(b) of the same amendment does not appear attractive. To my mind, whether a news provider is subsidised by another company is neither here nor there, as the ITC polices the provision in the 1990 Act which requires news to be reported with due accuracy and impartiality. That said, I shall study carefully both these amendments and what the Committee has said about them, as these are important matters.

Lord Barnett

Knowing the Minister, when he tells me that he proposes to reflect carefully on the amendments and on what I have said, I am bound to accept that. He has always been reasonable. He will understand that I too shall reflect carefully on the matter. I propose to return to the amendments, or at least one of them, at Report stage to give ourselves a further opportunity to consider them. I hope that by then the Minister will have been able to take advice and will have recognised that it is sensible to accept my amendments, and we can then take the matter from there. On the basis of what he has said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 195BC not moved.]

Clause 67 [TheBroadcastingStandards Commission]:

Baroness Jay of Paddington moved Amendment No. 195ZC: Page 59, line 17, leave out subsection (1) and insert— ("(1) There shall be a commission to be known as the Broadcasting Standards and Consumers Commission (in this Part referred to as "the BSCC")").

The noble Baroness said: In moving Amendment No. 195ZC, I wish to speak also to Amendments Nos. 195J and 196A, to which the name of my noble friend Lord Donoughue is added. I apologise to the Committee that I am not speaking to the grouping as it appears on the list, but I hope that the logical connection between these amendments will excuse the mechanical disruption of the groupings list.

The purpose of these three amendments is to expand the role and remit of the newly formed body with which this Bill seeks to replace the existing Broadcasting Standards Council and the Broadcasting Complaints Commission. Amendment No. 195ZC proposes to change the name of the newly created organisation to the broadcasting standards and consumers commission. This simple alteration encapsulates the wider and more general role that we should like that organisation to have.

As I said at Second Reading, I believe the Government have missed an opportunity in this legislation to develop the part that viewers and listeners—the consumers—should play in broadcasting policy. After all, as has been said many times during the course of our deliberations on this Bill, broadcasting is a uniquely influential industry but consumer choice—apart from the clichéd operation of using the on/off switch on a radio or television set—is still extremely limited. It is only as regards the subscription services that viewers and listeners can, in an economic sense, correctly be called customers. Although, of course, digital technology, which we are discussing in relation to this Bill, will greatly expand quantity and, we hope, variety, there will still—if the Bill is unamended—be few constraints on overall quality.

As has often been pointed out, the market for broadcasting services is, in qualitative terms, wholly different from, for example, the market for radio or television sets. In the absence of an economic market mechanism for feeding back viewer and listener preferences about quality and price, I argue that there is a need for a surrogate system which goes some way towards achieving a balance of power as between producers and consumers. An expanded broadcasting standards and consumers commission could achieve just that. Standards of accountability and transparency would automatically be improved.

If the title for the new body is accepted—that is the subject of Amendment No. 195ZC—the terms of reference of the new body would continue to include the particular areas already proposed in the Bill, but would also include the expanded terms of reference proposed in Amendment No. 196A. That amendment would extend the remit to include general broadcasting complaints, but the statutory adjudication role would still be limited to those complaints listed in Clause 71. The consideration of general complaints would be part of the more proactive role envisaged in Amendment No. 196A, which would also include additional research capacity and broader policy responsibilities. Provision is made in the amendment for the commission to pass on its findings to the relevant regulatory bodies when that is more appropriate as regards taking action on complaints.

But because, under these proposals, the consumer body would be able to investigate all broad questions of quality, as well as specific complaints, and to publish its own reports, it would become an informed source of advice on general policy topics. Some topics which have been suggested to me as ones which could be discussed and explored under the new research capacity are the implications of living in areas with no cable television or, perhaps, access to Channel 5; the future of the BBC licence; and the effects of subscription services on low income households. In time, if this sort of subject could be contained within its remit, the new broadcasting standards and consumers commission would become the primary source of informed audience opinion for both production companies and regulators. As such, it should be able to play an integral role in the future of broadcasting strategy.

As we have heard throughout the discussion on this Bill, the future of broadcasting is exciting, but it can also be somewhat daunting for those who watch and listen. They—perhaps I can say "we"—feel powerless in the face of bewildering technology and competing commercial interests. I argue that an expanded and totally independent consumers' commission would promote the interests of all of us as viewers and listeners. I beg to move.

Lord Elis-Thomas

I have a little difficulty with this series of amendments and indeed that whole part of the Bill which deals with the Broadcasting Standards Commission, because I am concerned about the over-regulation of cultural policy and the duplication of regulatory functions as between the ITC and the newly constituted body. This is a serious difficulty. I agree with all that has been said in support of the amendment as regards the position of viewers and listeners and the importance of being able to relate directly to media sources. However, I am not sure whether the creation of a further intermediary body—another regulatory quango; indeed an extended regulatory consumer quango—is the way to handle this issue.

The ITC, as established under the 1990 Act, has a broad remit of regulation in terms of its ability to deal with anxieties as they appear to that body, either directly or indirectly, through its monitoring systems, but it also has powers of regulation. It is able to penalise licensees who fail to meet requirements in terms of the maintenance of standards of taste and decency, impartiality and accuracy and all the issues that we shall discuss later this evening. I am worried that the ITC is already handling a wide range of complaints on matters of taste and decency, unfairness, privacy and impartiality; all the issues which are within the remit of the Broadcasting Standards Commission as proposed, and indeed of the broader consumers commission proposed in this amendment. The ITC received over 4,500 complaints about programme matters in 1995 and over 3,400 complaints about advertising. That indicates the extent to which the ITC is already perceived—because it is the regulator—as the body to which complaints are most directly and effectively directed. There are specialist complaints staff and monitoring staff. The ITC also has sanctions which it can use where there is failure to comply.

Compliance in broadcasting is a complicated and difficult field. It is important that it should be structured in terms of legislation and of the bodies involved in as direct a way as possible. In my view we should not create structures which duplicate the regulatory function of broadcasting culture.

I understand the argument about the complication of broadcasting and cultural production put forward by the noble Baroness, Lady Jay, in support of the amendments. However, I do not regard extending the role of the BSC as a means of dealing with that problem. I fail to see a role for the BSC as set out in this part of the Bill.

There is a track record for such bodies in the Broadcasting Standards Council and the Broadcasting Complaints Commission, but we must avoid the danger of overregulation and the creation of excessive bureaucratic structures in this field. In my view we should simplify the relationship between state and broadcasters in order to enable people within the whole area of cultural production to operate in that area of light regulation within broadly agreed moral standards which the ITC already provides. To extend those bodies yet further is an unwarranted interference in the creativity of the media we are discussing.

7 p.m.

Lord Renton

I have an open mind on this question of having some form of representation of consumers in the statute. However, I feel sure that it would be wrong to make arrangements for representation of consumer interests within the same body—the British Standards Commission—which will have a regulatory purpose which will be quite different from the representation of consumer interests.

The regulatory body will be quasi-judicial. If, as I hope, the views of my noble friend Lord Caldecote and the noble Lord, Lord Chalfont, set out in Amendment No. 197 and the amendments grouped with it are accepted, then the proposed complaints procedure and the independent powers given to the British Standards Commission would make it, if anything, even more judicial and inconsistent with the purposes of a consumer association.

I therefore hope that my noble friend Lord Inglewood will indicate with some certainty that what is proposed by the noble Baroness is not what is needed.

Lord Thomson of Monifieth

I apologise to the Committee that I shall have to leave before the proceedings end this evening. That may be a relief to noble Lords. Therefore, I hope that the Committee will forgive me if I say what I wish to say on the issue now and follow what the noble Lord, Lord Renton, said and agree with what the noble Lord, Lord Elis-Thomas, said.

I am sympathetic to those amendments which seek to make the membership of the Broadcasting Complaints Commission more representative. However, I have strong reservations about extending the remit of the Broadcasting Standards Commission for the reasons explained by the noble Lord, Lord Elis-Thomas. The Minister will be happy to know that in what will probably be my last contribution in the Committee stage I can agree with him. He said at Second Reading that the Government see no reason to extend the remit of the Broadcasting Standards Commission which should run parallel with the regulator and not be a substitute for it. I am content with that situation.

The regulation of standards in broadcasting is untidy. The Minister keeps saying that he is a deregulatory Minister. In the past I teased his predecessors that when I started as chairman of the Independent Broadcasting Authority there were only two regulators in broadcasting—the governors of the BBC and the board of the IBA. By the time the IBA was abolished by the present Government there were five or six regulators. That is a fair record for a deregulatory government. I used to complain greatly that the BSC was simply an unnecessary fifth wheel to the coach.

Life has moved on. Perhaps I am getting older, but I am rather in favour of untidiness and I do not wish to be too logical in these matters. As I said at Second Reading, under the experienced direction of Mr. Colin Shaw, who is about to retire, and the chairmanship of Lady Howe, the BSC has done a good job. In the field of research into broadcasting standards in particular there is a role to be played.

When it comes to some of the issues which will be raised later today and the proposals under which the BSC is to be given all kinds of duties in relation to due impartiality, taste and decency in particular programmes and dealing with objections to programmes even though the people concerned may not be directly involved, I am very much opposed to such a development in the role of the Broadcasting Standards Commission. If one wanted to be really tidy and logical—and I see that the noble Lord, Lord Barnett, has left so he will not feel too hurt by my remarks—there might be a case for giving the Broadcasting Standards Commission a regulatory role over the BBC, but not over the ITV companies, because there is a real difference between the ITC and the BBC. The governors of the BBC face the dilemma, which we discussed when we debated its charter, of looking both ways. On the one hand they are public trustees, which is their more important duty, but on the other they are fairly directly involved with those they employ as brilliant and creative programme makers. There is always a conflict when something goes wrong.

Under the present Broadcasting Act the ITC is at arm's length from those it regulates. It holds licences. As the noble Lord, Lord Elis-Thomas, said, the ITC has powerful sanctions. It has yellow cards and red cards, leading to being ordered off the scene entirely and not coming back.

I do not press that point. I press strongly the point that the membership of the Broadcasting Standards Commission should be as representative as possible. However, on these Benches we would be wholly opposed to seeking to increase its powers.

Lord Ashley of Stoke

I disagree with the noble Lords, Lord Elis-Thomas and Lord Thomson. However, I do not want to disagree too strongly with the noble Lord, Lord Elis-Thomas, because I am hoping for his support for the amendments that I shall move shortly in relation to disabled people. After the Second Reading debate I know how sympathetic he is.

It is wrong to speak of the overregulation of cultural policy. My noble friend is not seeking to overregulate cultural policy. She seeks to strengthen the hand of the consumer. There is no doubt that the consumer's hand needs to be strengthened. I have noticed that whenever any attempt is made to try to improve the interests of consumers, the automatic reaction is to speak of overregulation, as the noble Lords, Lord Elis-Thomas and Lord Thomson, did. I am not satisfied with the existing system, but my noble friend referred specifically to the system in the future. We shall see great monoliths developing, and that presents a very strong case in support of my noble friend's argument.

All I can say in response to the point relating to adding this proposal to existing quangos is that, if my noble friend had suggested a different organisation rather than adding this role to that of the BSC, she would have been accused of proposing yet another quango. She cannot win, although I believe that she has won the argument.

Lord McNally

I hesitate to speak now because I fear that I shall be at odds with the noble Lord, Lord Ashley, and the Official Opposition Front Bench. For much of this debate we have marched shoulder to shoulder. However, in introducing the amendment, the noble Baroness, Lady Jay, used much of the language of bureaucracy. That justified the warning by the noble Lord, Lord Elis-Thomas, about freedom of cultural broadcasting. Later today we shall have again to draw a line in the sand about that.

In some ways I believe that the Opposition has ceded too much ground. The bodies of the great and good who are guardians of public morality are a waste of time. As the noble Lord, Lord Thomson, said, we spent a decade inventing body after body which will protect us from this, that and the other. Members of the Committee will later suggest further protections. One cannot have it both ways. One cannot say that we have the best broadcasting system in the world with brilliant new services and wonderful documentary programmes when they are made by producers and programme makers who have to be shackled, bound, watched, guided and advised. It is time to say, "Enough of this nonsense" and to give the regulatory bodies the responsibility for regulating, leaving the producers and makers of programmes to accept proper responsibility for their product.

Lord Chalfont

I hesitate to intervene at this late stage, especially as we seem in part to be debating an amendment which has not yet been moved. I understand the reasons that the noble Lord, Lord Thomson, did that, but he has opened what is sometimes known as a can of worms—and some of them were wriggling furiously a moment ago.

I hope that the noble Lord, Lord McNally, is not suggesting the removal from broadcasting of regulatory bodies. That would indeed be a retrograde step of the worst kind. The noble Lord, Lord Elis-Thomas, spoke, as did many others, about cultural freedom and creativity. I hope that I shall not be accused of being too obscurantist when I say that we have a little too much cultural creativity, especially in the presentation of news, current affairs and factual programmes. For that reason, the consumer needs more protection than the listener and viewer have at present.

I have no quarrel with the amendment proposed by the noble Baroness. I believe that there are other ways of accomplishing it. Indeed other ways will be implicit in the amendments that I hope I shall have time to move later this evening. However, we should return to the question of regulating and be clear in our minds about what the regulators do. They do not stifle creativity. No one has suggested to me that the ITC or Radio Authority are stiflers of cultural creativity. The quality of programmes in many cases is quite high, as the noble Lord, Lord McNally, said. But the consumer has to be protected. In that sense, I believe, as does the noble Baroness, Lady Jay, that the strength of the BSC should be increased. The Secretary of State for National Heritage said that in a debate on this subject in another place.

I hope that we shall not be drawn too far along the libertarian path into believing that the ideal situation would be a totally deregulated and unregulated broadcasting system in this country.

7.15 p.m.

Lord Inglewood

I hope that I may begin on a slightly prosaic note. I believe that I am speaking to Amendments Nos. 195ZC, 195H, 196A and 195J, and no others.

Baroness Jay of Paddington

If the Minister will forgive me, we are not debating Amendment No. 195H. Despite the intervention of the noble Lord, Lord Thomson of Monifieth—we understand that it is his swansong at the Committee stage—I have not yet moved that amendment. It refers to membership of the committee.

Lord Inglewood

I am grateful. I had not much to say about it anyway. In proposing a change in title, the noble Baroness is by implication extending the remit of the new BSC into areas which are properly the concern of the regulators and broadcasters. The Government do not consider it necessary to extend the BSC's remit in the manner that this amendment suggests. The regulators already place considerable emphasis on the interests of consumers through the attention they pay, under the 1990 legislation, to setting licence conditions and promulgating codes. The Independent Television Commission, for example, has significant powers to penalise its licensees if they overstep the mark in maintaining standards of taste and decency, due impartiality, accuracy in programmes and advertising. Monitoring by ITC's own specialist staff and the resources it devotes to responding to complaints about programme matters demonstrate a considerable commitment to protecting the viewers' interests. More widely the ITC puts considerable effort into monitoring the range and quality of programme services of commercial terrestrial channels and undertakes annual reviews of performance in respect of programme output.

The ITC sponsors eleven viewer consultative councils, comprising members with a keen interest in television programmes and broadly representative of the UK population. The work of these councils is integral to ITC's monitoring role. At the same time the ITC undertakes a considerable programme of research. Equally, the BBC, under the provision of paragraphs 11, 12 and 13 of the draft Charter which is being debated in another place as we speak, is equally engaged in similar activities. Bearing in mind this commitment to and work on behalf of the interests of television consumers, the Government see no reason to extend the remit—even if only by implication in a proposed change of title—of the new Broadcasting Standards Commission which, as I have previously said in this Committee, should complement the regulator, not substitute for it.

I turn now to Amendment No. 196A. The amendment extends the remit of the BSC widely. It would give it more or less complete discretion to look into any matter concerned with domestic broadcasting services. The Government believe that this is an undesirable and unhelpful extension of the role of the new body. The intended role of the BSC is to be the sum of the roles performed by the two previously separate bodies—to act as an independent focus of public concern about matters of taste, decency, violence, privacy and unfairness in broadcasting and to provide individuals with a user-friendly easy mechanism to see whether their personal interests, including affronts to their sensibilities, may have been affected deleteriously. The two predecessor bodies built up considerable experience and expertise in these important fields and that is where their focus should continue to lie.

To extend the remit of the BSC after merger to investigate almost anything at all connected with broadcasting which the BSC might choose to investigate is more or less completely open ended, with all that that entails for its energy and resources. It must be almost certain that it will so dissipate its activities that it fails to perform effectively in those areas that we consider to be important, unless it is permitted vast amounts of staff and resources which are quite simply not justified by the noble Baroness in the context of the current calls on public expenditure. The amendment also places a duty on the BSC to ascertain the opinions and experiences of viewers and listeners and to offer advice to regulators, broadcasters, the Government and anyone else in very broad terms.

There is a further difficulty with all this. Much of the expertise of the two predecessor bodies has been built on their statutory functions of considering complaints. That process, which is inevitably reactive and deliberative, has been the basis of their more proactive work, which is extended by the powers contained in the Bill. I am, of course, referring to drawing up guidance, monitoring programmes and undertaking research. The Government believe that the priority attached to responding to complaints should not be diluted and that the amendment would in fact mean that the BSC would become a research body, with significant advisory functions. This would demote dealing with individual complaints to second place.

The Government believe that the extension of the BSC's powers proposed in the amendment is unnecessary because the broadcasting regulatory bodies—the BBC Governors, ITC, the Radio Authority and the Welsh Authority (a point made by a number of contributors to the debate)—all have powers, or will he given powers under the Bill, to deal with the full range of broadcasting matters. The amendment duplicates what can be done already and does not add value to the existing regulatory process. Indeed, it would be an extra financial burden on broadcasters, without achieving any materially wider benefit.

Finally, I wish briefly to speak to Amendment No. 195J. In it the BSC is to be entitled to consult broadcasting and regulatory bodies in the process of drawing up or reviewing its guidance on privacy and fair treatment and to take into account any views arising out of that consultation. I am aware that the BSC is already required to consult broadcasting and regulatory bodies for the purpose of drawing up or reviewing its guidance on standards. It was our intention, in omitting a similar requirement for its fairness guidance, that such guidance be built'upon the commission's jurisprudence, and it should therefore be structured according to the experience of the commission rather than that of broadcasters, regulators or other relevant bodies. However, I should like to take this opportunity, with your Lordships' indulgence, to think about the amendment further.

Baroness Jay of Paddington

I am grateful to the Minister for that reply, particularly for his encouraging words about the final amendment and the extension of the consultation remit. I am also grateful to other noble Lords who took part in the encouragingly vigorous debate, which has extended into the dinner hour, so I shall limit my remarks in reply.

I understand the points which were made about the possible extension of the role of the standards commission in the sense that the noble Lord, Lord Renton, suggested. However, I was specific in my remarks to ensure that the statutory role would be concerned only with complaints which occur already under Clause 71 of the proposed legislation and not with the broader tasks which I was suggesting.

In a sense, there is not so much a misunderstanding as a difference of theoretical principle about the role of the body which I suggested and which I noted in the course of the discussion. I do not see it as either extending the constraints on producers or improving the protection for consumers, but much more positively as extending the consumers' influence. Since tonight we are all precise in our declaration of interests, as a current producer and professional contributor to documentary programmes on many channels in this country, I have no wish to restrain my own or any other colleagues' creativity, as the noble Lord, Lord McNally, suggested I was trying to do. All I wish to achieve through the amendment is to ensure that in my more popular role, on which I spend more time at this point in my career—that is, being a viewer and listener—I and the millions of other people in the country who are viewers and listeners and who feel that they have no positive influence on broadcasting strategy as consumers should have that role extended.

However, in view of the encouraging response which the Minister gave to one part of the amendment and the general disagreement about the broader principle of consumer interest, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Trumpington

My Lords, I beg to move that the House be now resumed. In moving the Motion, I suggest that the Committee stage should begin again not before 8.30 p.m.

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

House resumed.