Lords Sitting of 7 March 1996

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

War Crimes Act 1991
Lord Campbell of Alloway Lord Campbell of Alloway asked Her Majesty's Government:
How many prosecutions have been instituted under the War Crimes Act 1991, and when decisions will be made in cases remaining under consideration.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, proceedings have been commenced in one case under the War Crimes Act 1991. The Crown Prosecution Service will take decisions as to possible prosecution in other cases once police investigations have been concluded and all relevant evidence has been fully considered and analysed.
Lord Campbell of Alloway: My Lords, I thank my noble and learned friend for that reply. As to the first limb of the Question, regarding Mr. Serafinowicz, aged 85, when is it expected that the committal proceedings, which started as long ago as 4th January, will end; and when is it expected that the substantive trial will start?
As regards the second limb of the Question concerning the remaining cases, six or seven of which have been under investigation since Hethrington in 1988, will my noble and learned friend accept that the purpose of this Question is not to thwart the will of another place, nor to stifle prosecutions, but to seek to contain the delay which affects the prospect of any fair trial?
The Lord Chancellor: My Lords, of course I accept what my noble friend says regarding the purpose of his Question. So far as the committal proceedings to which he referred are concerned, they were commenced on 4th January 1996. They were adjourned until 19th February 1996. Evidence was heard from 19th February to 1st March 1996 inclusive, and the proceedings now stand adjourned until 18th March 1996. The current best estimate is that committal proceedings will be completed by mid-April. I do not have information as to when, if at all, there will be a trial.
Lord Boyd-Carpenter: My Lords, can my noble friend say how much public money has been spent in the attempt to implement this Act?
The Lord Chancellor: My Lords, by the end of January 1996, Metropolitan Police costs were some £5.7 million and the CPS costs, rounded up, were £1.6 million. Those were the costs in this country.
Lord Wyatt of Weeford: My Lords, will the noble and learned Lord agree that it would not matter how
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much money was spent, or how much delay there is, if only one of the perpetrators of the ghastly genocide against the Jews and the torture and murder of many other political dissidents was brought to book?
The Lord Chancellor: My Lords, that is primarily a matter for Parliament. The House of Commons took a decision in relation to the promotion of the Bill, which eventually became an Act as a result of the application of the Parliament Acts.
Lord Hailsham of Saint Marylebone: My Lords, is it not plain that the real question is not whether they are convicted but whether they have a fair trial?
The Lord Chancellor: My Lords, I am sure that the proceedings will be conducted with all the fairness of which our system has every reason to be proud.
Lord Richard: My Lords, is the noble and learned Lord aware that I totally agree with his remark at the end of his intervention? To give those charged under this Act a fair trial we need an open judicial system, which we have; a careful collection of evidence, which we have; and we need that evidence to be analysed in public, which it will be. Is it not time, somebody now having been charged under the Act, that the courts were allowed to get on with their duty?
The Lord Chancellor: My Lords, I have no doubt that the committal proceedings will go forward with all reasonable expedition under the chairmanship of the Chief Metropolitan Magistrate, who is presiding on the occasion.
Baroness Elles: My Lords, is my noble and learned friend aware that the chief prosecutor at the documentation research centre at Ludwigsburg, in Germany, has decided that no more prosecutions of these suspects will take place because of their age and because of probable sickness? Is that a view that my noble and learned friend would share?
The Lord Chancellor: My Lords, that would be a view taken in the circumstances by that particular official. So far as this country is concerned, the responsibility lies with the Director of Public Prosecutions and the Attorney-General. I report their views to the House; but these decisions are personal responsibilities of theirs.
Lord Mayhew: My Lords, does the noble and learned Lord recall that the Hethrington Report argued that the great difficulty in regard to prosecution was the age of the witnesses and the suspects? That was eight years ago. Will he agree that, as the years go by and these proceedings drag on, the whole process becomes increasingly distasteful? Is it not becoming apparent that the other place, and the Government, might be wise to accept the advice of this House on the subject?
Noble Lords: Hear, hear!
The Lord Chancellor: My Lords, the other place gave its view. It would be quite presumptuous of me to express any view of my own in relation to that once the matter has become an Act of Parliament.

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I think I am right in saying that the Hethrington-Chalmers Report indicated that there was a case for prosecution, at least in some cases. I do not profess to give the whole sense of what was quite a long document; the part to which the noble Lord referred was not the whole.
Lord Beloff: My Lords, will my noble and learned friend agree that, at a time when further massacres are being perpetrated against the Jewish people, it is the height of bad taste to try to draw a veil over even greater atrocities in the past?
The Lord Chancellor: My Lords, as I said, my position is that Parliament, having regard to the history I referred to, put this Act on the statute book; and the executive authorities, my right honourable friend the Attorney-General and the Director of Public Prosecutions, are carrying out the duties that fall to them in consequence of that statute.
Lord Stoddart of Swindon: My Lords, can the noble and learned Lord confirm that the alleged crimes took place 53 years ago? Can we be sure that the evidence of identification, particularly if it is taken over television, will be reliable?
The Lord Chancellor: My Lords, that is a matter for the court of trial. Noble Lords would be surprised, if not astonished, were Ito give a view about that at this stage. That is a matter for the court of trial. It would be a tremendous impertinence on my part, not having heard any of the evidence or seen anything on the television about it, to express a view on that matter. The noble Lord may have his own view but I do not think that it would be right for me to express mine.
Lord Mowbray and Stourton: My Lords, does my noble and learned friend agree that with the recommendation of the government of which the noble Lord, Lord Mayhew, was a member—namely, that in the interests of justice further prosecutions would be a mistake—we are looking back with hindsight at a Labour Government which uttered great words of wisdom with that advice?
Lord Shepherd: My Lords, before the noble and learned Lord answers that question, I believe that I follow the wish of the House in asking whether the noble Lord the Leader of the House would move to the next Question.
The Lord Privy Seal (Viscount Cranborne): My Lords, with the leave of the House, perhaps we may split the difference. My noble and learned friend might like to answer the question as briefly as he is able and we can then move on.
The Lord Chancellor: My Lords, I think I have given my answer to that question already.

Oleg Gordievsky
3.10 p.m.
Lord Bethell Lord Bethell asked Her Majesty's Government:
What representations they have made to the Government of the Russian Federation about the death sentence passed against Mr. Oleg Gordievsky by the Soviet authorities in 1985, which remains valid today even though the Soviet Union no longer exists, Mr. Gordievsky is a British citizen, and Russia is a member of the Council of Europe.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, we have made no representations to the Russian Government about the death sentence passed on Oleg Gordievsky, nor has Mr. Gordievsky asked us to do so.
Lord Bethell: My Lords, I am grateful to my noble friend. But does she share my view that the Russian Federation's willingness to cancel the death sentence and indeed to pardon Mr. Gordievsky would be seen as a measure of the new Russia's willingness to live in peace with the western world, with Partnership for Peace, and with the principles of the Council of Europe? Does she think it would be very desirable that the Russians should do away with that death sentence?
Baroness Chalker of Wallasey: My Lords, the whole question of whether the Russians should give it up or not is entirely for them. But we expect Russia to respect the conditions imposed by the Council of Europe Parliamentary Assembly and we expect Russia to meet its obligations as a member of the Council of Europe. We shall work with Russia to help achieve its goals there.
Lord Mayhew: My Lords, does the Minister agree that Mr. Gordievsky served our intelligence services with great courage? Is it not anomalous that the authorities should maintain a sentence of death on him? Will she go further and ask the Russian Government to consider that point?
Baroness Chalker of Wallasey: No, my Lords. The Government take the view that any decision to maintain and implement the death penalty is a matter for each state. We do not believe that there is a problem for Mr. Gordievsky now.
Baroness Rawlings: My Lords, can the Minister say whether there have been any representations regarding other defectors—not connected with the KGB, but soldiers and others who are afraid to go back home—and whether a general amnesty might be considered?
Baroness Chalker of Wallasey: My Lords, to the best of my knowledge there has been no such application for an amnesty. I shall look into the matter and if there is further information I shall let my noble friend know.
Lord Bethell: My Lords, does the Minister agree that the death sentence cannot be a matter for the Russian Government only? Mr. Gordievsky is a British citizen.
Baroness Chalker of Wallasey: My Lords, the Council of Europe Parliamentary Assembly and the member states' governments will monitor progress on Russia's compliance with commitments. But, as I said earlier, I do not believe that this matter is now the problem that it was in 1985 when the situation in Russia was extremely different and indeed when Mr. Gordievsky had not qualified to become a British citizen.
Lord Kennet: My Lords, does the Minister see any parallel with the Rushdie situation?
Baroness Chalker of Wallasey: No, my Lords.
Lord Kirkhill: My Lords, is the Minister aware that, as a consequence of accession to membership of the Council of Europe, Russia will be monitored carefully over an initial three-year period by the Legal Committee of the Council of Europe? Is she further aware that the Russian authorities have said to the relevant authorities in the Council of Europe that on the issue of capital punishment this is to cease forthwith?
Baroness Chalker of Wallasey: My Lords, I am grateful to the noble Lord for the information in the second part of his Question, which I shall not repeat. The situation in Russia has changed dramatically. Long may that change continue and the country continue to modernise. In the same way the situation of which we now speak, some 10 years on, has greatly changed. I am grateful to the noble Lord.
Baroness Hooper: My Lords, the Minister said that Mr. Gordievsky had made no representations for help from the British Government. Can she reveal whether or not there has been any contact between the British ambassador or a member of the embassy with Mr. Gordievsky?
Baroness Chalker of Wallasey: My Lords, there is no reason why that should be so. As my noble friend knows, this is a matter for a British citizen now. If he had any representations to make they would be made here in London.

Gas Fitters: Qualifications
3.16 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What action they are taking to prevent gas appliances being made lethally dangerous by fitters who do not possess the qualifications required to fit them.
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, the Gas Safety (Installation and Use) Regulations 1994 require that anyone who works on a gas fitting must he competent to do so. The regulations also require that gas installation businesses which undertake gas work in domestic or most commercial premises must belong to a body which is approved by the Health and Safety Executive. The Council for Registered Gas Installers (otherwise known as CORGI) has been approved for that purpose. Failure to comply with either of those requirements is an offence.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for his reply. Are the Government concerned over reports that more than 80 supposed engineers were convicted last year for working without having received approval from the Council for Registered Gas Installers and that the law is probably being broken also by others, some of whom pretend to have that approval, which results in lives being put in danger?
Earl Ferrers: My Lords, my noble friend is quite correct. Last year there were some 82 convictions relating to all gas work, of which 39 involved offences for non-registration with CORGI. The law is perfectly clear. Since 1994 there has been a legal requirement that gas work must be competently carried out and installers must belong to a class of persons approved by the Health and Safety Executive. From January 1998, each fitter will need a certificate of competence. I suggest that it is up to everyone who employs such a person to install or mend appliances to ensure that that person is approved before they do so.
Lord Ezra: My Lords, bearing in mind the progressive opening up of the gas market starting this year and to be completed in 1998, is the noble Earl satisfied that gas consumers will be sufficiently safeguarded in the servicing arrangements for their appliance and installations under the open market situation? Is he also satisfied that the provisions of the Gas Act 1995 do in fact safeguard them sufficiently in that respect?
Earl Ferrers: My Lords, I believe that is the case. The Government are committed to ensuring the safety of gas after liberalisation. The new gas safety management regulations come into force on 1st April this year. British Gas Transco also must have an emergency response service over 24 hours, in the same way as British Gas does now. I do not see why that safety should not be secured.
Lord Campbell of Alloway: My Lords, what is this all about? Has any gas fitter or anyone else ever been blown up? Is this a serious matter?
Earl Ferrers: My Lords, the whole idea is to prevent people from being blown up.
Baroness Turner of Camden: My Lords, is the Minister aware that there is concern that although the CORGI arrangements are welcome, there is no

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procedure to enforce registration or to recall registration documents if a fitter is removed from the list? Should not a procedure be in place to require that? Furthermore, is the noble Earl satisfied that the Health and Safety Executive has sufficient inspectors to ensure that procedures are properly enforced? Would it not be a good idea to have some kind of independent body capable of enforcing the rights of consumers in these matters?
Earl Ferrers: My Lords, I do not believe that we need another independent body. The Health and Safety Executive has adequate powers. One must remember that a number of people are involved. There are around 150,000 fitters and 150 inspectors registered through CORGI. It will take time for the system to be properly organised. New arrangements which started on 1st January this year will come into operation in January 1998. At that time each fitter will have to be certified as a fitter and each business must be a member of CORGI.
To return to the earlier question of my noble friend, when people ask for their gas installations to be serviced or installed it is their responsibility to ensure that the fitter concerned is a member of CORGI and, after 1998, that he is a registered fitter.
Lord Campbell of Croy: My Lords, does my noble friend the Minister agree that my noble friend Lord Campbell of Alloway—who seems to doubt whether the Question was necessary—has not been reading some important articles in national broadsheet newspapers? They have recorded the deaths, often overnight, of people sleeping in rooms where gas equipment has been wrongly fitted. I shall send my noble friend Lord Campbell of Alloway copies of extracts of the newspaper articles recording those deplorable incidents.
Earl Ferrers: My Lords, I am more than delighted to be a post box by which my noble friend Lord Campbell of Croy will deliver his rocket to his noble friend behind him.
Lord Monkswell: My Lords, can the Minister say whether or not the regulations apply to a private householder doing work for himself as opposed to buying in the services of somebody else?
Earl Ferrers: My Lords, that is a pertinent question and the answer is that they do not. They apply only to people who service gas fitments for other people or run businesses that do so.

Burlington House
3.23 p.m.
Lord Strabolgi Lord Strabolgi asked Her Majesty's Government:
Why they have decided to sell off the premises of the five learned societies which have been located around the forecourt of Burlington House for over a century and which now face eviction.
Earl Ferrers: My Lords, since about 1877 the learned societies have occupied part of Burlington House free of rent and external repair costs as it was understood to be part of the government estate. The ownership of the building is now in question. Until that matter has been resolved, no permanent arrangements for the future can be made.
Lord Strabolgi: My Lords, I thank the noble Earl for that reply. However, are the Government aware that those learned societies, which are used by scholars from all over the world, are unable to pay the £10 million now being asked by the Government for premises which they have occupied for more than 100 years? It would be a tragedy for scholarship if they had to leave and a tragedy for the ambiance of Burlington House itself.
Earl Ferrers: My Lords, the noble Lord, Lord Strabolgi, may be a little carried away with some of the figures. The Government have not asked for £10 million. They had an individual assessment made for Burlington House as though it were freehold and not tenanted. The rough assessment amounted to £10 million. The point is—and it is important—that the issue arose because there was an efficiency scrutiny undertaken as a result of which it was decided that government departments, rather than the property holdings, should be in charge of the property in which they are housed. It was found that no government department was involved in Burlington House. We want to ensure that there is a long-standing, suitable arrangement for that excellent and beautiful building which houses the learned societies to which the noble Lord refers.
The Earl of Halsbury: My Lords, does the noble Earl remember that after the war there was a plan to build a science centre on the South Bank? It was never implemented. The plans are still available. The societies are not ordinary tenants. They need library space, meeting rooms and so forth. The Government have a responsibility to the intellectual community to see that they are properly housed.
Earl Ferrers: My Lords, I do not disagree in the slightest with the noble Earl, Lord Halsbury. It is not our intention that that should not be so housed. At the moment, we are concerned that property which we thought belonged to, and was the responsibility of, the Government is now disputed. Until the dispute as to who owns the property can be resolved we cannot decide what to do with it. We want to see that the learned societies remain properly housed.
Baroness Robson of Kiddington: My Lords, can the noble Earl confirm that one of the societies is the Linnean Society, which is housed in the forecourt of the Royal Academy? I know that that society does not have any extra money. Will the Government consider returning that botanical collection to the country of its origin, where I am sure it will be housed for nothing?
Earl Ferrers: My Lords, the noble Baroness is quite right to say that the Linnean Society is one of the learned societies in question. I am not sure of the import

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of the latter part of the noble Baroness's question, nor of the meaning, but I shall study it. I was merely trying to point out that the ownership of a house which was always considered to be part of the government estate is now disputed. Once the ownership is resolved we can find the best way forward for the future of that building and those who occupy it.
Lord Elton: My Lords, can my noble friend tell the House with whom the Government have had the dispute as to the ownership of the property?
Earl Ferrers: With the learned societies, my Lords.
Baroness Nicol: My Lords, the noble Earl does not recall, I am sure, that when the learned societies were moved to Burlington House in 1873 Lord Palmerston said that they were being provided with accommodation mainly for the advantage of the country. Is it still the view of the Government that the work of the societies is for the advantage of the country? If so, cannot the Government give a more positive response to the questions being asked and say that, whatever may happen to Burlington House in financial terms, they will ensure that the societies are properly housed?
Earl Ferrers: My Lords, I am grateful to the noble Baroness for the first part of her question. I do not recall what Lord Palmerston said in 1873. However, I am prepared to accept that he said what the noble Baroness suggests. There are three alternatives, possibly more. If the building belongs to the learned societies they may take responsibility for it or it may be possible to set up a trust fund for them to look after it. Alternatively, it may be possible for the Government to look after it. If that is so, we shall need legislation to ensure that taxpayers' money is properly used for that purpose.
Lord Jenkins of Hillhead: My Lords, apart from the fact that Lord Palmerston died in 1865, is the noble Earl aware that his answers this afternoon have lacked the crystal clarity we normally expect of him? Will he give an assurance that it is the firm intention of the Government that the learned societies shall remain in the forecourt of Burlington House at rents they can afford?
Earl Ferrers: My Lords, I am grateful for at least one part of the noble Lord's question; that is, that he corrected me. My noble friend the Leader of the House corrected me but at the same time as about 100 other people were talking on the Front Bench. I was therefore unable to hear that Lord Palmerston died in 1865 as opposed to 1873. However, I am sure that the noble Baroness, Lady Nicol, will take the rebuke from the noble Lord, Lord Jenkins.
The noble Lord, Lord Jenkins, said that my answers were not of the crystal clarity he normally expects. I am deeply grateful for that. The fact is that the position lacks the normal crystal clarity which one would expect. We thought—everyone thought—that the building belonged to the Government. That is now disputed. Until that dispute is resolved one cannot decide what should be done. In his final question, the noble Lord asked whether we would ensure that the learned bodies
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hold those offices—I think he said free of charge, but perhaps he did not. Our desire is that they should remain. But we have to work out the realities, and I cannot give the noble Lord a carte blanche. What we have to do is to try to find out the best way of preserving the building and the best way of ensuring that the learned bodies can stay there.
Lord Williams of Elvel: My Lords, it is a matter of regret that the Government seem to have lost a building which they thought they owned. Given the fact that the Government thought they owned the building and the forecourt, is it not extraordinary that the forecourt itself has been allowed to fall into a state of total disrepair? The Government, whom one must assume accepted responsibility, will have to meet a bill, or the learned societies will have to meet a bill—depending on who actually owns the forecourt—of some £2 million. What are the Government going to do?
Earl Ferrers: My Lords, the first thing we have to do is find out who owns it. The noble Lord, Lord Williams, really cannot laugh in a disparaging way. One does not spend £2 million on something one does not own. So that is the first thing. Having done that, one then has to try to devise the best method of ensuring that the building is looked after. What noble Lords opposite are trying to say is that the Government should give a guarantee that they will foot all the bills. I am saying that I will not give them that guarantee. But we will give a guarantee that we shall do our best to ensure that the learned societies remain there and that the buildings are properly looked after. We cannot do more than that.

Police Bill [H.L.]
3.32 p.m.
Report received.

Broadcasting Bill [H.L.]
The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Inglewood.)
On Question, Motion agreed to.
Clause 66 [Variation of regional Channel 3 licence following change of control]:
Lord Trefgarne Lord Trefgarne moved Amendment No. 139:
Page 56, line 40, at end insert—
("() On being notified of a prospective change of control, the Commission shall investigate the prospective owner (or if a relevant change of control takes place, the new owner) who shall be required to provide such information to the Commission as is requested by the Commission.").
The noble Lord said: My Lords, my noble friend Lord Kinnoull had intended to be here today but for very understandable reasons is unfortunately unable to do so and has asked me to speak to this amendment on his behalf.
The amendment is designed to empower the ITC to investigate potential owners and to ensure that prospective owners are obliged to provide full information to the ITC. The amendment would also ensure that the ITC has similar powers to investigate and require information from any new owner should no notice of control be given. I hope your Lordships agree that this is an appropriate addition to the Bill. I beg to move.
Lord Prys-Davies: My Lords, I support the amendment. In Committee there was a general welcome for Clause 66, as it is now, but it was thought at the same time that the safeguards which are in the clause should be strengthened. The safeguards in subsections (3) and (4) are triggered when it appears to the commission that the relevant change of control is or would be prejudicial. It seems to us that there is no great difficulty when a change of control is prejudicial. The facts should speak for themselves. But what information would have to be before the commission to enable it to form a view as to whether the proposed change of control would be prejudicial? To assist the commission in that situation, we believe that it should be authorised to obtain all relevant information from the proposed new owner. Under the 1990 Act it already has the power to requisition information from the holder of a licence. This amendment would extend the power and enable the commission to obtain the information from a proposed new owner.
Lord Forbes: My Lords, I welcome Clause 66 of the Bill. It will protect regional Channel 3 services in the event of a change of ownership. This clause quite definitely should be strengthened so as to empower the commission to investigate any prospective new owner. I believe that the amendment should give strength to the commission in protecting regional services. It has been demonstrated time and again that it is the regional services that people want. This amendment should ensure that people do not suffer any loss of Channel 3 regional service if there is a change of ownership. I therefore support the amendment.
Lord Thomson of Monifieth: My Lords, we on these Benches support the amendment. This matter was gone into thoroughly at the Committee stage and the Minister was forthcoming in his reply to the discussion. We all welcome the clause which the Government have tabled but feel that the regional character of ITV is of such importance that there are various ways in which the clause can be strengthened beyond peradventure. This amendment is designed for that purpose.
Lord Inglewood: My Lords, while I sympathise with the purpose of the amendment I doubt whether it is necessary or helpful absolutely to require the ITC to investigate the new owner where a change of control is
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proposed. We are, after all, talking about a situation in which the prospective owner may be very well known in great detail to the ITC by virtue of being an existing and longstanding licence holder itself. Moreover, it may for business reasons be of the essence that a change of control which everyone agrees is in the public interest should proceed. So I hesitate over the first part of the amendment.
Nevertheless, I sympathise with the principle that in coming to decisions whether or not to act to use its powers under the clause the ITC should have available to it all relevant information and those concerned should be required to provide that information. I should therefore like to consider further whether the ITC already has sufficient powers, as indeed the noble Lord, Lord Prys-Davies, pointed out, or whether something like the second half of the amendment needs to he added to the Bill. If it does, the Government will introduce an amendment for that purpose. I very much hope that in the light of that assurance my noble friend will feel it is not necessary to press the amendment at this stage.
Lord Trefgarne: My Lords, I think I am right in understanding that my noble friend accepts the principle of the amendment but would like to look at its wording and has undertaken to bring forward an appropriate amendment with the right wording at Third Reading. On that assumption, I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 140:
Page 57, line 12, leave out ("included") and insert ("originating from each regional services area and offered for inclusion").
The noble Lord said: My Lords, I am comforted by my understanding that the commission may consider that there is merit in this amendment. I hope therefore that I can deal with it briefly. If regional broadcasters are to be able to continue to make their contribution to the diversity of British society it is essential that they should be able to continue to offer their productions to the Channel 3 network. Of course, it would be for the network to accept or reject what is being offered. Nevertheless, the commission ought to he satisfied that they can have access to the network. To the best of my recollection, at Cotnmittee stage no Member of the Committee spoke against a similar amendment. Indeed, the noble Lord the Minister promised that the department would consider carefully what had been said. I beg to move.
Lord Inglewood: My Lords, an amendment similar to this one was tabled by my noble friend Lord Crickhowell at Committee. I have discussed the issue with the Independent Television Commission. We believe that the correct formulation is to protect the quality and range of programmes a regional service makes available to the ITV network. This includes the idea of a continuing capacity to provide programming, while still keeping reasonably close to the programmes viewers are actually able to see on the network. We intend to bring forward at Third Reading a government amendment which, while it may not reflect the wording of this amendment exactly, will mirror it closely and protect levels of programming made

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available to the network by Channel 3 companies. I very much hope that this will provide the assurance that the noble Lord seeks.
Lord Prys-Davies: My Lords, I am very grateful to the Minister for his response and, in reliance on it, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kirkhill Lord Kirkhill moved Amendment No. 141:
Page 57, line 21, leave out from ("service") to ("a") in line 22 and insert ("having regard to").
The noble Lord said: My Lords, I believe we now know that, as a result of the Minister's very careful explanation during Committee stage, Clause 66 was introduced into the Bill—the noble Lord accordingly received suitable congratulations—to ensure that the ITC can protect the regional character of the independent television system. This clause enables the ITC to amend regional Channel 3 licences, following a change of control, to ensure that the regional character of the service is not diminished.
Clause 66 also allows the ITC to place additional requirements on a licensee if, for example, it appears to the commission that the merger would be prejudicial to the quality or range of regional programmes or would result in a significant reduction in either the amount of regional programmes, or the use of offices or studios in that particular region. In addition, it safeguards those obligations which were undertaken by Channel 3 licensees at the time that the licences were awarded.
It is vital to the valued regional character of independent television that such obligations should not be diluted by merger or acquisition. However, in my view there are limitations inherent in the clause as it stands. Certain restrictions are placed on the circumstances in which the ITC can act which I believe are prejudicial to viewers' interests.
At the heart of Clause 66 is the concept that any change in control should not be prejudicial to the regional service. However, subsection (4) of that clause limits the actual interpretation of "prejudicial" to represent only "a significant reduction" in the regional service. It is surely the case that the definition of "prejudicial" must be allowed to capture a wider set of circumstances. It is difficult to anticipate what effect future mergers may have. There may well be repercussions which do not fit the label of "significant reduction" but are nonetheless unwelcome. In my view, the regulator ought not to be fettered in such a way, but should be allowed flexibility to apply his reasoned judgment on a case-by-case basis. It is on that basis that I move this amendment. I beg to move.
Lord Thomson of Monifieth: My Lords, I am happy to support the noble Lord, Lord Kirkhill, in this amendment, which is one of the more important amendments seeking to strengthen Clause 66. The noble Lord has rehearsed the arguments pretty thoroughly. My own feeling is that the phrase "significant reduction", which is on the face of the Bill at present, is too high a hurdle for the ITC to perform its responsibilities in this matter. It implies that the change
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of service will need to be a fairly major one before the ITC can act, otherwise it might he vulnerable to legal challenge. Moreover, no such hurdle is applied to the aspects of the service referred to in subsection (3) of the clause. For that reason the elimination of the phrase "significant reduction" and the insertion of the words proposed in the amendment will he a very significant and necessary strengthening of the purposes of this clause.
Lord Prys-Davies: My Lords, this amendment is grouped with Amendment No. 141A, which is in my name, because it is connected with the same subject matter. However, with the leave of the House, I do not propose to move my amendment as the wording of Amendment No. 141 is preferable to my own.
Lord Inglewood: My Lords, in considering these matters I understand that those promoting the amendment are seeking to remove the provision that the ITC must perceive a threat to regionality by foreseeing a significant reduction in regional programming or the use of regional personnel and resources in order to vary the licence conditions to protect them. It is replaced by a provision which will require the commission simply to perceive a threat to regionality, and that is defined in terms of hours of regional programming or the use of regional personnel and resources.
I understand that the noble Lords are seeking to prevent the ITC having to make a judgment which may be challenged about whether and when a new controller may attempt to run down the regional services. However, what concerns me is that I do not believe that the amendment, as proposed, makes its position any less open to challenge. If anything, it makes a challenge more likely because it is less transparent. I do not quite understand how we can see a change as being prejudicial to regionality in terms of these things unless we see grounds for expecting a reduction to occur.
There are concrete, measurable aspects of regionality. It still seems to me appropriate, in spite of the noble Lord's persuasive arguments, to refer to a likely reduction in them as a trigger for the commission to act. Indeed, it seems logical to say that a threatened reduction is the trigger because the protective licence variation which meets the threat is likely to take the form of requirements in terms of the numbers of hours of programming or the percentage of personnel involved. I hope that I have explained the Government's attitude to Amendment No. 141.
I understand that the noble Lord, Lord Prys-Davies, does not propose to move Amendment No. 141 A, which seems to us to be a helpful amendment. We agree with it because, on reflection, a reduction is inherently sufficiently significant if it is such that it prejudices the regional character of the service. I am not entirely clear what the appropriate procedure is in these circumstances.
Lord Kirkhill: My Lords, with the leave of the House, perhaps I may intervene. In the Minister's response to my Amendment No. 141 he restated the

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position that he outlined in Committee so I am not totally surprised. I shall withdraw my amendment at this stage and then leave the matter to the House.
Amendment, by leave, withdrawn.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 141A:
Page 57, line 22, leave out ("significant").
The noble Lord said: My Lords, I was immensely impressed and persuaded by the Minister's speech on Amendment No. 141. As I have already spoken to Amendment No. 141A, I beg to move.
Lord Trefgarne: My Lords, perhaps I may advise my noble friend the Minister that I, too, prefer Amendment No. 141A and hope that the House will agree to it.
Lord Inglewood: My Lords, I understand that it is normal from the Dispatch Box for the Government to explain that they would like to take an amendment away to fine-tune the drafting. However, on this amendment, parliamentary counsel feel that nothing extra could possibly be done with it.
On Question, amendment agreed to.
[Amendment No. 142 not moved.]
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 143:
Page 57, line 35, at end insert (", including those in positions which are designed to exercise editorial and management control of programmes in the areas,").
The noble Lord said: My Lords, it is important that the commission should be satisfied that regional programmes will continue to be made by people who live in that region and who have a thorough knowledge and full understanding of the interests and the views of the people there. It is that combination of knowledge and relationship with viewers which ensures that regional productions identify with, and reflect, the genuine interests of the region.
I believe that the underlying idea was, and is, acceptable to the commission. Indeed, in Committee the Minister said on 13th February, at cols. 590 and 591 of Hansard, that he was also sympathetic to the idea but that it was probably encompassed within the wider concept of "making" a programme in what was then Clause 63(4)(b). However, the Minister promised that he would discuss the matter with the commission to see whether it would welcome clarification. The only question, therefore, is whether the amendment is necessary. In our submission, the amendment provides important clarification. I hope therefore that it will be acceptable to the Minister.
Lord Inglewood: My Lords, in Committee various noble Lords, including the noble Lord, Lord Prys-Davies, proposed adding to subsection (4)(c) of the clause which provides for the protection of levels of use of regional employees and offices as an important facet of the licence holder's regionality. If I understood the provisions correctly, they were aimed at preventing a company following the letter of the provision by using regional employees but avoiding the spirit of the clause
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and damaging regionality by not using those employees in posts where they would have an effect on the content and choice of programming.
As the noble Lord explained, the amendment is similarly intended to close that perceived loophole. I said in Committee that I would consider what might be done to strengthen the protection of regionality in subsection (4) and I have done so. I have also discussed the provision with the commission and found it sympathetic to the noble Lord's point. The Government therefore propose to table an amendment to Clause 66(4) on Third Reading similar in purpose and wording to that put forward by the noble Lord. In the light of that assurance, I hope very much that he will not pursue his amendment.
Lord Prys-Davies: My Lords, in the light of what the Minister has said I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kirkhill Lord Kirkhill moved Amendment No. 144:
Page 57, line 41, at end insert—
("(4A) Without prejudice to the generality of subsections (3) and (4), the Commission may also vary the licence, by a notice served on the licence holder, so as to give effect to any proposals made or assurances given in relation to or in connection with improving the service by the licence holder or by any person having or proposing to acquire control over the licence holder in connection with the relevant change of control.").
The noble Lord said: My Lords, I understand from the grouping and I assume that the Minister agrees—that is, if he has the same grouping, which is not always the case—that we are now considering Amendments Nos. 144 to 152, also taking in Amendment No. 155. It is on that basis—
Lord Inglewood:No.
Lord Kirkhill: My Lords, let us be clear. That is what I have in front of me.
Baroness Trumpington: My Lords, there has been a rearrangement of the groupings. Amendment No. 155 should be grouped with the following group of amendments and not with Amendment No. 144 et cetera.
Lord Trefgarne: My Lords, with the leave of the House, I hope that Amendment No. 155 will be taken separately.
Lord Kirkhill: My Lords, I am always subject to the will of the House and I am delighted to agree with everyone else. My grouping included Amendment No. 155 with Amendment No. 144. But there you are. I am usually incompetent about these matters of fine detail—and about many other matters which are not of fine detail.
I must apologise to your Lordships—or continue to make some apology—because I tabled Amendment No. 148 in error. I was trying to refine Amendment No. 144 and did not mean to include Amendment No. 148 on the list. I apologise to both the Minister and your Lordships.

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The Bill provides for circumstances in which stronger companies could develop within Channel 3 and so benefit the viewer. A consolidated, stronger system might well offer added benefits for regional programming and production as well as for shareholders. Indeed, there is a precedent. In 1993 the merger of Yorkshire Television and Tyne Tees Television resulted in a completely new sub-regional service for viewers broadcast from a new studio near Middlesbrough.
As I read the Bill, it would not be open to the ITC to secure such improvements for the viewer as a result or consequence of a merger similar to that I have just described. Under Clause 66(6) the ITC cannot vary the licence to include any additional requirements. In other words, the ITC can ensure that viewers do not lose an important regional element they already enjoy but it cannot go further whatever the merits of the case.
My amendment would enable viewers to share the benefits brought about by such a merger. The ITC should be given such powers to enable it to secure improvements to the regional service so that viewers, as well as shareholders, share the benefits of greater industrial and commercial strength. I beg to move.
The Chairman of Committees (Lord Boston of Faversham): My Lords, in view of the fact that Amendments Nos. 147 and 148 have been spoken to, I should point out to your Lordships that if Amendment No. 147 is agreed to, I cannot call Amendment No. 149, and that if Amendment No. 148 is agreed to, I cannot call Amendment No. 149 on that account also.
I should also indicate to your Lordships, for the purpose of clarification, that the noble Baroness, Lady Trumpington, is right. A note was circulated recently—it cannot have reached the noble Lord, Lord Kirkhill—saying that Amendment No. 155 is no longer grouped with this series of amendments. It will, in fact, be called separately.
Lord Thomson of Monifieth: My Lords, once again I am happy to support the noble Lord, Lord Kirkhill, in his amendment. As I have before me almost exactly the same brief as the noble Lord, I shall not take up time by repeating his arguments. He put the case clearly and forcefully. Amendment No. 144 is important. It gives the ITC the right to seek improvements when there are changes of control. I am happy to support it.
4 p.m.
Lord Inglewood: My Lords, the Government take the view that these amendments are unnecessary. In our view, Amendment No. 144 undesirably blurs the focus of Clause 66 on the key issue of protecting regional broadcasting which is the purpose of the clause.
If there are other issues relating to programming quality which the ITC wishes to consolidate in the licence, it can always resort to its general powers under Section 3(4) of the 1990 Act to vary the conditions of the licence if it wishes to do so. The new powers in Clause 66 are designed specifically to focus on something which is of particular importance at the time of a prospective takeover; namely, the possibility that
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existing levels of regional programming over and above what is required may be jeopardised. There is specific reason to suppose that greater consolidation within ITV might otherwise lessen its regional character and therefore particular reason to concentrate relatively narrowly on the regional issues within Clause 66 as it is currently formulated.
As to enhanced licence conditions beyond existing performance, they should be possible only if they are entrenched with the new licence holder's consent. We believe that the amendments subtract from, rather than add to, the effectiveness of the clause. For those reasons, we cannot support them.
Lord Kirkhill: My Lords, this was a basic disagreement which existed across the Floor of the House at an earlier stage of the Bill. My view, which I have expressed via my amendment, is that Clause 66, although entirely desirable, as I said earlier—and I welcome its inclusion in the Bill—nevertheless needs to be strengthened because the issue of regionality must be embedded more firmly within the clause. Of course the Minister says that he will not give way on this issue. I do not intend to divide the House. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145 to 148 not moved.]
Lord Trefgarne Lord Trefgarne moved Amendment No. 149:
Page 58, line 5, leave out from second ("the") to end of line 6 and insert ("relevant period").
The noble Lord said: My Lords, I move the amendment on behalf of my noble friend Lord Kinnoull, and I shall speak also to Amendment No. 154. The amendments seek to establish that the existing quality and quantity of programmes, together with the infrastructure which provides for them, are the benchmark for any licence variation imposed by the ITC. If the benchmark is to be the level of existing services rather than a licence minimum, it is crucial that there is a fair definition of existing services.
The underlying principle behind the amendments is to ensure fairness to all parties who may be involved in a potential change of ownership. Hence the 12-month time period rather than a snapshot period; for instance, just before advance notice of a bid or at the time of change of control, which could enable the incumbent licence holder to raise the regional programming to an unrealistic level in the short term to deter a potential takeover. Such an action would be unfair and anti-competitive. I hope therefore that your Lordships will agree to the two amendments. I beg to move.
Lord Thomson of Monifieth: My Lords, this is one of the important amendments being proposed to strengthen the clause. The clause as it stands sets out the benchmark period for setting new licence conditions as the period in subsection (6):
"immediately before the relevant change of control".
That would mean that a regional service could be wound down to the minimum required by the licensee before the change of control takes place. The ITC could then be forced to accept the minimum provision.

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If the Minister had been a little more forthcoming on the previous amendment—I am sorry that he was so negative with regard to the deletion of subsection (6)—that would have solved the problem. The positive step to take is the one proposed in the amendment; that is, that the proper benchmark should not be whatever is the snapshot, as the noble Lord described it, immediately before the change of control but the actual situation over a reasonable period. A reasonable period is a period of 12 months. Twelve months is in fact the usual period over which the ITC assesses programme performance, and so it is sufficiently long to allow for variations in the pattern of scheduling. I hope that we will receive a more positive response from the Minister on this amendment than on the previous one.
Lord Cullen of Ashbourne: My Lords, I support the amendment so ably moved by my noble friend Lord Trefgarne and spoken to by the noble Lord, Lord Thomson of Monifieth. I hope that your Lordships will support it.
Lord Inglewood: My Lords, as your Lordships will know, an amendment similar to this one was tabled in Committee by the noble Lord, Lord Kirkhill, and I was not then sympathetic to it. I believed that there was a danger, in assessing the licence holder's performance over a 12-month period, rather than in the period "immediately before" a change of control, of failing to take account of the current position—the one from which the new controller would have to take the licence holder forward. I thought that if there had recently been a diminution in performance because of some outside factor, it would not be fair to require the new controller to achieve levels no longer achieved. Correspondingly, I thought that if there had recently been improvements to the regional service, assessment of a 12-month period might prevent their being consolidated in the licence.
However, I have given the matter further consideration and have discussed it with the ITC. It is not clear precisely how performance over 12 months would be assessed. Would the commission take as its reference point the peak of performance in the period, or the average, or take into account seasonal variations? In some ways that imprecision is also the strength of such a proposal. It allows the commission to look at performance over a year and judge what standard it would be fair, given all the circumstances, to preserve through varied licence conditions. I am now persuaded that allowing the commission to look at a 12-month period when assessing the performance of the licence holder will give it flexibility to set conditions which best reflect what should be expected of a new controller. I accept, in principle, my noble friend's amendment and the Government will bring forward its own amendment at Third Reading to include this provision.
Lord Trefgarne: My Lords, I am most grateful to my noble friend. On that basis, I am happy to withdraw the amendment.
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Amendment, by leave, withdrawn.
[Amendments Nos. 150 to 152 not moved.]
Lord Trefgarne Lord Trefgarne moved Amendment No. 153:
Page 58, line 20, leave out from ("is") to end of line 22 and insert ("designed to be of particular interest to and to be first broadcast for persons living within the area for which the service is provided (or any part of it), and which complies with and is no less comprehensive than current directives issued by the Commission in accordance with its powers under this Act.").
The noble Lord said: My Lords, circumstances have changed since a regional programme was defined within Section 16 of the 1990 Act. There is a definition contained within the ITC's invitation to apply for a licence upon which the ITC has since expanded. It is my understanding that that may be updated in the near future.
However, I am told that the ITC recognises that an inadequate definition in the Bill is undesirable and believes that Section 4 of the 1990 Act can set down wider definitions as a condition of the licence. However, that has not been tested. Furthermore, I believe that new legislation should be clear and unambiguous. The purpose of the amendment is to encompass in legislation any definition directed by the ITC to ensure that there is no ambiguity or inconsistency. I beg to move.
Lord Prys-Davies: My Lords, I support the amendment. It is really about the definition of regional programmes under subsection (10). It occurs to many of us that the definition is inadequate and possibly defective. It is inadequate because the only criterion which has to be satisfied is that the programme should be:
"of particular interest to persons living within the area".
That pitches it pretty low. It may be defective as it does not address the position where there are well-defined territories within the television region which possess significantly different cultural identities. I am thinking of the HTV area in Wales and Bristol. It provides programmes for two separate and significantly different areas with different cultures and backgrounds. I believe that almost by definition some of the programmes will not be of interest to all the people living in that region. Amendment No. 153 seeks to correct the deficiency by inserting "any part" into the definition.
I am mindful of the fact that the Minister, who has been helpful and constructive throughout the stages of the Bill, has always placed an emphasis on the need to ensure that the commission has flexibility. He is against introducing too much rigidity into the Bill. We have taken full note of that advice. This definition offers the combination of a broad statutory definition while at the same time giving the commission the right to exercise its broad judgment and to define what it means in further directives. We believe that that combination is the best approach to the problem and it gives me great pleasure to support the amendment.
Lord Forbes: My Lords, I believe that the definition is far better than that contained in the Bill. I support the amendment.
Lord Inglewood: My Lords, we have no quarrel with the basic purpose of this amendment. We are happy to consider further with the ITC how the definition of "regional programming" might be improved. We shall briefly set out here what seem to us to be the key considerations in the matter.
Perhaps I may begin by saying that not as much turns as it might on what falls within the definition of a "regional programme". This is because Clause 66(3)(b) also includes within the protection of the new ITC powers other programmes which contribute to the regional character of the service. Nevertheless, particularly as regards measuring the extent to which regional programmes are made within the region, it is important that the definition of "regional programme" is right.
It seems to us that this amendment is probably on the right lines in including both a general statement of the principle of what a regional programme is, which appears on the face of the statute and cannot be tinkered with, and a capacity for the ITC in applying the Act to interpret that general provision in detail. Our two principal reservations about the precise formulation put forward in the amendment are as follows. First, we wonder whether it is necessary to specify that a programme cannot be regional unless it is first broadcast for persons living within the licence area. This does not seem to us to be of the essence in the same way as it is crucial that the programme is designed to be of particular interest to persons living within the licence area. It is an essentially contingent factor which would normally apply to a regional programme but on occasion may not, because the programme is in fact also of particular interest to people in an adjacent region or regions or, exceptionally, is, while being incontestably regional, shown more widely on the network. This seems to us to be the kind of issue which the ITC should be free to interpret in detail. Our second reservation concerns the need to make clear that the ITC's power of interpretation is subordinate to the general terms of the definition in the Act. The amendment as drafted places the ITC on a par with Parliament in determining what is regional and we are not sure that that is quite right.
Nevertheless, as I have said, the Government are happy to consider this further with a view to bringing forward an amendment of their own at the earliest stage. I hope that in view of that assurance my noble friend will agree to withdraw his amendment at this stage.
Lord Trefgarne: My Lords, I am grateful to my noble friend. He confirmed that he intends to bring forward an amendment, perhaps better drafted, at Third Reading in order to deal with this matter. On that assumption, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 154 not moved.]
4.15 p.m.
Lord Kirkhill Lord Kirkhill moved Amendment No. 155:
After Clause 66, insert the following new clause—
CHANNEL 3 LICENCE CONDITIONS
(".—(1) Section 20 of the 1990 Act is amended as follows.
(2) After subsection (6)(b) there is inserted—
"(c) may vary the licence so as to include such conditions relating to the matters specified in subsections (3) and (4) of section 21(A) as they consider appropriate.".
(3) After subsection (8)(b) there is inserted—
"(c) the condition to be included in the licence under subsection (6)(c).".").
The noble Lord said: My Lords, I hope that the amendment is now in its appropriate place in the Marshalled List. I have tabled the amendment because I believe that the ITC should be able to take into account all the factors cited on the clause when a Channel 3 licence is renewed and not merely at the point of change in control. It is again an opportunity to underpin the regional flavour of the ITV system. Such an opportunity will be fulfilled where the regulator is able to make renewal subject to the licence holder accepting conditions to safeguard or, as appropriate, to enhance the regional character of the service. That is an extremely important point. The amendment makes provision for that possibility, and I beg to move.
Lord Trefgarne: My Lords, I am not keen on the amendment. It appears to grant a draconian power to the ITC which, on reflection, your Lordships might not think wholly appropriate. I hope that the noble Lord will not persist with the amendment.
Lord Inglewood: My Lords, as your Lordships will know, Clause 66 of this Bill seeks to introduce a new part, Section 21A, to the Broadcasting Act 1990 which prevents any diminution in the range and quality of regionality in a Channel 3 service where there is a change of control in the licence holder. The noble Lord, Lord Kirkhill, seeks in this amendment to extend that protection where a licence is renewed so that, where the current licence holder is performing in excess of what his licence requires in terms of the amount and quality of regional programmes he provides, it can be made a condition of his licence being renewed that he continues to perform at this higher level. The noble Lord proposed a similar amendment in Committee and I have, as I said I would, reflected on that proposal and discussed the issue with the Independent Television Commission.
The commission would ideally like to have such a power because current licence holders regularly outperform licence requirements in the area of regionality, and it seems prudent, in anticipating the changes which the relaxation of media ownership controls we are proposing generally in the Bill will bring, to preserve such overperformance for the benefit of viewers. However, we must consider not only what is prudent but what is fair. Clause 66 is fair because it seeks to guard against any attempt to run down regional services by a company with no previous track record for that region. But the renewal proposed by the noble Lord seeks rather to penalise the good will of the current

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licence holders by saying, "You have been doing more than you promised, so now you must make a more onerous promise".
The commission agreed licence conditions with the current licence holders of Channel 3, an agreement formed when the licences were bid for and awarded. I do not believe that it would be right for us suddenly to change that agreement to take advantage of the fact that licence holders see it as in their interests to provide a good range of regional services. And as I said in Committee, if we are to agree that we may reasonably ask licence holders to accept more onerous conditions on renewal where their performance has shown that they can achieve them, is it right that regionality should be singled out? Should we not also seek to consolidate performance in children's programmes or in original drama, for example? While I sympathise with the noble Lord's intentions, I believe that in accepting this amendment we would be in danger of discouraging our current licence holders from striving to achieve the best regional service they can in any given period by threatening that they will be required to maintain that level ever afterwards.
The noble Lord will be aware that the Government have looked carefully at which might be done further to strengthen Clause 66 so that a change of control cannot interfere with the high quality of regional programming that viewers of Channel 3 now enjoy. I am sure that the noble Lord will be disappointed by what I have had to say, but I hope that he will accept that we are committed to this issue and, in the light of our considered view that the current licence holders know where their best interests lie on this subject and that it would be unhelpful to meet their good will and commercial common sense with unnecessary post hoc regulation, he will withdraw his amendment.
Lord Kirkhill: My Lords, I shall withdraw the amendment but perhaps, first I may place on record the fact that the Minister and I have been over this ground before. I do not consider that a particularly onerous condition to impose upon the various companies. At present, they are not doing much beyond the minimum. They plead that they are, but if one analyses what they do it is not much more than the minimum. Past experience shows that unless Parliament, in its wisdom, makes a firm regulatory system effective it becomes so flexible that the true intent of Parliament is obstructed. There is every possibility that the good spirit behind Clause 66 may in reality not have the effect for which we hope. That said, I formally beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Thomson of Monifieth Lord Thomson of Monifieth moved Amendment No. 156:
After Clause 66, insert the following new clause—
(" . —(1) Section 45 of the 1990 Act is amended as follows.
(2) After section (9) there is 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
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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: My Lords, this amendment is in exactly the same terms as the one that I moved at Committee stage. I have tabled it again, first, because of the importance of the principle and issue that lie behind it and, secondly, because there was limited time at the Committee stage to discuss it and I wished to give your Lordships the opportunity to examine the issue again.
The purpose behind the amendment is clear from its wording. It is to try to establish a fairer basis of taxation for all those who compete in the commercial broadcasting field; that is, to put the satellite and cable broadcasters on the same footing as the terrestrial commercial broadcasters. In arguing the matter at Committee stage, the Minister based his argument on what I thought was a mistaken premise. He argued that BSkyB, as the principal satellite broadcaster, was outside the fiscal jurisdiction of this country because the frequencies that it used were on an international basis, whereas the terrestrial frequencies are a national asset under the jurisdiction of Her Majesty's Government.
I sought to argue from a different basis—that of the ordinary television viewers. When they watch a BSkyB programme or a programme from any of the other satellite operators, or watch terrestrial programmes, they simply see television as contributing to the general entertainment and instruction of British people. Satellite broadcasters have, through their own enterprise, now had a perhaps justified tax-free holiday. However, I thought that the time had come to put them on the same footing as other commercial competitors. That is what lies behind my amendment.
I do not want to labour the point when we wish to make as much progress as possible. However, I use the occasion to make an additional point which arose out of our discussions on Tuesday. It is the role that BSkyB plays in financing original programming. Speaking as a former regulator of broadcasting, I would be more in favour of funding from BSkyB going to the provision of original programming. If there has to be a choice I would prefer it to go there rather than to the provision of revenue for the Treasury.
I offer the Minister a possible fallback position, if he wishes to take advantage of it. If he refuses to accept the case for fiscal fairness then he should at least accept the case for greater fairness in the promotion of original programmes. The Minister sought to tell us on Tuesday that he believed that the record of original programme-making for BSkyB was creditable. He used language that indicated that it at least matched the original programming of Channel 4. Since Tuesday's debate, therefore, I have taken the opportunity to look at the figures. The figure for original programming for Channel 4 in 1995 was £194 million, 85 per cent. of its total programme budget. The figure for BSkyB's programmes that it provides is £150 million. However, that £150 million consists largely, I am told, of sporting rights. We have argued about them separately. In my definition, that does not count as original creative

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programming at all. The truth is that so far BSkyB has done little, if anything, to provide any original children's programmes, situation comedies or original drama.
If the Government are unwilling to establish a basis of fair taxation, then in the terms about which we argued on Tuesday for a fair proportion of original programming as part of the obligation of being a broadcaster in this country, they ought to use their influence to persuade BSkyB greatly to improve its record. I beg to move.
Lord Donoughue: My Lords, I wish to speak briefly but strongly in favour of what my noble friend Lord Thomson said. When we discussed the matter previously it was striking that what the Minister described was the hypothetical "legalese" position of satellite. What the noble Lord, Lord Thomson described is the reality that this is a major UK television performer. In terms of fair fiscality, it should be treated accordingly.
I was also pleased to hear the figures from the noble Lord, Lord Thomson. Those quoted by the Minister recently immediately created astonishment on this side and incredulity as well as astonishment in the outside broadcasting world. I wish to give the maximum support to my noble friend.
Lord Inglewood: My Lords, the noble Lord, Lord Thomson, set out his reasons for the amendment when it was debated in Committee. I must tell him at the outset that the Government's position has not changed since then. I appreciate that it is not one which the noble Lord accepts, but I am grateful for his helpful comments about programming, on which I shall reflect further.
I wish briefly to reiterate the Government's position. As I made clear in Committee, BSkyB does not operate on a frequency which is allocated by international agreement to United Kingdom control. The Astra satellite on which BSkyB broadcasts uses spectrum allocated to Luxembourg and it is for the Luxembourg authorities to determine the payments for the use of that spectrum. As I made clear, it is our understanding that payments are made to the Luxembourg Government by the owners of the Astra satellite. We are sure that the payments will be reflected in the payments BSkyB makes for the use of the Astra satellite.
The noble Lord, Lord Thomson, explained in Committee and reiterated this afternoon that the ITV companies and BSkyB function—BSkyB not entirely, but principally—in the domestic market place. He argued that therefore they should receive equality of taxation. However, as companies operating in this country they work under identical rules applied by the Inland Revenue and Her Majesty's Customs and Excise. The government amendments, accepted on Tuesday, equalised the level of fines which the ITC can levy on all its licensees for breaching those licences. That will enable the ITC to treat all its licensees, including non-domestic satellite services, on an equal footing.
The sole difference between ITV and non-domestic satellite operators is the simple fact that—I do not believe that it is hypothetical, as the noble Lord, Lord Donoughue, tried to suggest—Channel 3 licensees
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pay moneys to the Exchequer for their franchises which reflect the use they are given of a scarce UK resource; that is, the UK spectrum from which they profit. It is not a tax on their operation; it is a fee for the use of the spectrum. Non-domestic satellite operators, by definition, do not use UK spectrum and so the UK Government are not in a position to charge a fee for the use of that spectrum. I hope that that makes the Government's position on the matter quite clear.
4.30 p.m.
Lord Desai: My Lords, before the Minister sits down, perhaps he will be kind enough to clarify one matter. BSB used to operate on a domestic spectrum but when Sky bought BSB out it sold that domestic spectrum to foreign broadcasters. Therefore, while BSkyB broadcasts from Luxembourg, is it not a fact that it owns property in frequencies which it sells to foreign broadcasters? That means that the difference between domestic and non-domestic is not as sharp as outlined by the Minister.
Lord Inglewood: My Lords, with the leave of the House I shall respond to the noble Lord. The noble Lord is obviously familiar with the detail of the matter hut, on the basis that he described, it seems to me that one of the component elements which formed BSkyB—BSB—had some UK spectrum. If anyone has the rights to UK spectrum and then sells that spectrum, to use the words of the noble Lord, it must follow that he ceases to have any property in that particular spectrum. If you divest yourself of something, you then cease to have any property in the item which you have disposed of. I do not think that the proposition as advanced by the noble Lord takes the argument any further in the direction that he desires.
Lord Thomson of Monifieth: My Lords, I am grateful for the intervention of the noble Lord, Lord Desai, and was much interested in it. When the matter is examined, I believe that it will be discovered that the noble Lord is factually absolutely right. The original BSB operation did not depend on domestic frequencies; it depended on satellite frequencies for a British geo-stationary satellite on the position in the stratosphere that had been allocated to the British Government by international agreement.
In that sense, the loophole that Sky television has been able to take advantage of on the basis of the ingenuity of its predecessors was to go to another bit of the international spectrum, so to speak. That is the reality of the situation. The remarks of the noble Lord, Lord Desai, greatly undermine what the noble Lord, Lord Donoughue, called the hypothetical basis—although I believe that he partly meant theoretical—of the Government's proposition. Indeed, the noble Lord, Lord Desai, has greatly weakened the base of the Government's argument.
I retabled the amendment today as a matter of principle. I did not expect the Government to reveal any change of position on the matter, and I do not wish to take up any more time on the issue. However, I can assure the Minister without any rancour that it will not go away. I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
Clause 67 [Funding of Sianel Pedwar Cymru]:
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 156A:
Page 58, leave out lines 36 to 39 and insert—
("(1) The Secretary of State shall, for the year 1998 and each subsequent year, pay to the Welsh Authority at the beginning of the relevant year an amount representing the prescribed amount as increased by the appropriate percentage.").
The noble Lord said: My Lords, in moving the above amendment I shall, with the leave of the House, speak also to Amendments Nos. 158 to 161. It will take me just a few minutes to try to do justice to these five important amendments which deal with the future funding mechanism of S4C, which is, if I may say so, fundamentally altered by Clause 67. I should point out that in tabling the amendments I rely heavily on advice from the S4C officers and those who advise them. They have also had valuable consultations with the Minister's department. If the Minister cannot agree to the five amendments this evening, I very much hope that he will take them away and consult with his advisers.
There are three main elements in the group. The first is to be found in Amendment No. 156A which would merely remove any doubt that there may be as to the date when the payment is to be made: it is to be made "at the beginning" of the year. Without those words, the payment could be made in instalments during the passage of the year. I am advised that there is a precedent for that wording in Section 61(2) of the 1990 Act. I hope that the department will look graciously at the amendment.
The second element is to be found in Amendment No. 158. It provides that the right starting point is the sum of £73.3 million. That figure is to be found in the published estimates of the department for 1997. Obviously that would be indexed, but the knowledge that that is the starting point would give S4C a reliable basis for planning its future. The officers of S4C have a sound confidence in that figure.
The third element is to be found in Amendment No. 160. Its purpose is to include in the funding during the transitional period the cost to be incurred by S4C of promoting the new digital service. S4C believe that there should be such an additional provision. I shall briefly explain the reasons for it.
The multiplex operator may decide, understandably, not to give the highest priority to promoting a digital service to 500,000 Welsh speakers, three-quarters of whom live outside the heavily populated south-east corner of Wales often in the poorer parts of Wales, and many of whom are elderly. I believe that it is prudent to fear that the needs of that audience may not rank high in the priorities of the multiplex operator.
The second reason for Amendment No. 160 is that S4C, not unnaturally being a Welsh language television service, wants to ensure that the promotion of the digital service to Welsh speakers is undertaken through the medium of the Welsh language. S4C considers that to
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be of paramount importance. I believe that the concerns of S4C which are reflected in Amendment No. 160, and which I have sought to express, are entirely legitimate.
Finally, if Amendment No. 158 were accepted, obviously subsection (3) of the clause would become redundant and Amendment No. 161 would be consequential. I very much hope that the Minister will say that he is prepared, once again, to give careful consideration to the amendments. I beg to move.
Lord Aberdare: My Lords, it gives me great pleasure to support the amendment so clearly moved by the noble Lord, Lord Prys-Davies. I shall try not to go over the ground that the noble Lord covered but, although they are grouped together, the amendments fall fundamentally into two groups. The first three amendments relate to the so-called "prescribed amount" for 1997 upon which the future funding of S4C entirely depends. The Bill provides for that prescribed amount in subsequent years to be increased in line with the retail prices index. Hitherto, S4C's funding has been geared to total terrestrial advertising revenue and past experience suggests that that is likely to rise more rapidly in the future than the RPI. That is the reason for S4C's fear that it will receive less funding in the future than it does under the present system.
The noble Lord clearly explained what lies behind the first three amendments; namely, to insert a figure of £73.3 million as the prescribed amount for 1997. That is the figure that appears in the department's own published spending estimates. That figure would then form the basis of the prescribed amount for 1998. I should emphasise the concern expressed by the noble Lord that it is most important that the department should stick to its present practice and pay the amount due each year on 1st January—that would be 1st January 1998 and subsequent years. That would enable S4C to earn some interest on deposit which would go some way to help it maintain its present analogue service.
Amendments Nos. 160 and 161 relate to the Secretary of State's power under the Bill to increase the prescribed amount if he is satisfied that it is appropriate to do so having regard to the cost of transmitting a new digital service. The amendments would give him power, in addition, to have regard to the cost of promoting the new service to S4C's viewers in Wales and encouraging them to invest in the required equipment. The noble Lord, Lord Prys-Davies, has given two compelling reasons why this is so important, especially for S4C, and I shall not repeat them. I think we must be working from the same Welsh text. My noble friend Lord Inglewood has shown great sympathy towards S4C throughout our discussions. I hope that he will look favourably on these amendments.
Lord Thomson of Monifieth: My Lords, I speak without the expertise of either of the noble Lords, Lord Aberdare and Lord Prys-Davies. However, speaking from the Front Bench of the Liberal Democrats I wish to make it clear that we strongly support the case that has been made so persuasively and so thoroughly by both the noble Lords who have spoken. I speak, of course, on behalf of my noble friend Lord Geraint.

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I have said on earlier occasions that the Welsh fourth channel, S4C, is a remarkable achievement in public broadcasting. It is perhaps even more remarkable in its way than the fourth channel itself, which we shall discuss in a moment or two, because apart from being a great broadcasting achievement S4C was also a great political achievement. It ought to be properly cherished because of the special role of the Welsh language within the Welsh nation. In those circumstances it is rather worrying that the new formula, as proposed, appears to provide a disadvantageous base line for the funding of S4C compared with its previous position. It would result in S4C being less well off—as I understand it—than under the original estimates of the Department of National Heritage.
Given what we know about the broadcasting advertising market, I am not quite sure why the Government felt it would be an advantage to S4C to move from an advertising-based formula to an RPI-based formula. All the experience of commercial broadcasting over recent years—indeed of broadcasting generally—has shown that the RPI of broadcasting tends to be significantly higher than the general RPI for the nation as a whole. S4C is right to be concerned about that aspect of the matter. We await with interest the Minister's remarks on the case that has been put so strongly by both noble Lords who have spoken on this matter.
As regards the other amendments which relate to the future digital provision, here again it is fair to say that Wales is a special case in that there is a political dimension to these issues—over and above the purely broadcasting dimension—which needs to be taken into account by the Government in seeking to ensure that the scattered Welsh-speaking population in the remoter areas of Wales will be able to enjoy the benefits of the diversity of digital broadcasting when that is provided. S4C had political origins rather than broadcasting origins. The Government would be wise to take careful note of those anxieties.
4.45 p.m.
Lord Inglewood: My Lords, the noble Lord, Lord Prys-Davies, and my noble friend Lord Aberdare have most clearly and helpfully set out the rationale for these amendments. I have explained to your Lordships' House on previous occasions the case for moving to an RPI-based formula. I am glad that this approach is implicitly accepted in the noble Lord's remarks in proposing the amendment. The issue which the amendment specifically addresses concerns the precise base figure to be used and the amounts of money involved.
We believe that in changing from one formula to another the fairest approach is that the base figure on which the Bill's provision is indexed is the last payment under the 1990 Act formula. Therefore Clause 67 of the Bill provides that in the amended Sections 61(2) and (3) what is defined as the "prescribed amount"—that is, the base figure for the new formula—should be the amount paid by the Secretary of State to the Welsh Authority for the year 1997 under the 1990 Act.
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We do not believe that S4C's predictions for total national advertising revenues for 1996—we are only some two months into the year—should lead the department now to commit itself to paying the maximum provision we have taken to meet our current statutory obligations. This provision may, of course, be an overestimate—it would be wrong to budget on any other than a prudent basis—and does not necessarily represent the actual amount of meeting the current statutory obligation which must be the proper basis for any future arrangement. Of course I fully recognise S4C's desire to have a firmer basis on which to plan future funding and to achieve as much money as it can. However, the Government do not accept the case for the amendments which have been tabled.
The noble Lord, Lord Prys-Davies, has explained that Amendment No. 156A is intended to retain the current system whereby S4C receives its statutory funding in a single lump sum every January. It will probably not surprise the noble Lord that we are not keen to continue a system which arose from what was, candidly, an error in the 1990 Act. S4C is almost unique in government in receiving Exchequer payments at the beginning of the year rather than being drawn down on the basis of need throughout the year. We therefore intend to restore S4C's funding to the system that was originally envisaged, and that is consistent with prudent financial management of public spending.
Amendment No. 160 would allow the public funding provided for S4C to be increased in respect of expenditure necessary to promote and encourage the acquisition of digital receivers by viewers in Wales. As your Lordships know, multiplex licences will be awarded to applicants whose proposals for investment in the transmission infrastructure and for encouraging the take-up of receivers at least meet the minimum requirements established by the ITC. In this respect, assuming that S4C were to accept the guaranteed place being offered to it on the multiplex carrying Channels 3 and 4, S4C would need to contribute to the costs of meeting each of those requirements.
The funding arrangements in the Bill already allow for some extra provision with regard to the first part—that is, transmission costs. This is in line with the position in the 1990 Act. S4C will also, of course, be able to use its public funding to meet the costs of broadcasting S4C Digital, including measures to promote receiver take-up which will be taken forward in partnership with the other broadcasters on the multiplex. But I cannot see why S4C should be given any extra funding to meet these other costs which other broadcasters, including the BBC, will need to meet from their existing sources of revenue. It seems to me that there is a line to be drawn with regard to what might legitimately be seen as an extra call on taxpayers' money. It is a line which is sensibly drawn with transmission on one side and all the costs of mounting a digital service on the other.
I wish to emphasise that we have had a useful and constructive debate with S4C. I appreciate that the remarks that I have just made may be disappointing

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to S4C. However, I hope that what may be perceived as a disappointing reply will not in any way get in the way of continuing the debate that we have had hitherto.
Lord Prys-Davies: My Lords, I am disappointed with the Minister's reply. Clearly it was a considered reply. His words will be studied carefully by the officials of S4C and their advisers. However, I believe the Minister left the door open to the possibility of S4C having further discussions with the department to see whether it can meet some of the Minister's anxieties. With those few words, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 157 had been withdrawn from the Marshalled List.]
[Amendments Nos. 158 to 161 not moved.]
Clause 69 [Application of excess revenues of Channel Four Television Corporation]:
Lord Thomson of Monifieth Lord Thomson of Monifieth moved Amendment No. 162:
Page 60, line 17, at end insert—
("( ) After subsection (3) there is inserted—
"( ) The percentage stated in subsections (1)(a) and (3)(a) of this section shall be zero for the years 1998, 1999, 2000, 2001 and 2002.".").
The noble Lord said: My Lords, I apologise for rising time after time. The Minister kindly indicated to me that once I had moved this amendment there might be something he would like to say to your Lordships before the rest of the debate takes place. We live in hope and look forward to that. I hope it will meet the convenience of other Members of your Lordships' House that that should take place.
In that spirit I wanted to say before I move this amendment how grateful we are for the decision of the Government, announced at the Committee stage at col. 622 of Hansard, to cap at an appropriate level the statutory reserve fund of Channel 4. This should have the welcome effect of releasing significantly more funds to Channel 4 to spend on programmes. Whatever arguments we have in a moment about other timetables for dealing with Channel 4, I hope the Minister might be able to confirm that this welcome capping and the release of these funds could take place once this Bill has become an Act of Parliament and need not await the end of 1997.
The amendment seeks to take account of the various views that were expressed in the debate at Committee stage. It seeks to offer what I hope will be regarded as a constructive and conciliatory compromise between those of us who felt that the right course was to abolish the existing funding formula for Channel 4 after the end of 1997 and let it stand on its own feet as it wishes to do. The view of the Government and, I am bound to say, of the ITC is that the special remit of Channel 4 in a much more competitive world may still require a statutory safety net.
This amendment seeks to end the subsidy from Channel 4 to the Channel 3 companies, the ITV companies, from the beginning of 1998, the date which is already in the 1990 Act when a change can be made. It also seeks to maintain the position in which neither Channel 4 will subsidise the ITV companies, nor, indeed, will Channel 3 subsidise Channel 4 in any way if circumstances change during these years until the end of the current ITV franchise period in the year 2002. By that time the future of digital television will be at least a little clearer than it is at present. It is always dangerous to forecast the future, but there may very well be proof one way or the other of how robust the rather special Channel 4 remit, with its audience limitations, is in attracting revenue in a multi-channel, multi-competitive broadcasting age.
I recognise that the Government's present Clause 69, and indeed the position of the ITC, would allow the formula I have in my amendment to be implemented by the Government from 1998 onwards, if that was the Government's will. But I think there are great advantages in seeking now to put this formula for the funding on the face of the Bill. It will provide certainty for both Channel 4 and the ITV companies from the moment the amendment is passed and prevent the continuing bad blood that there has been between them over this issue becoming a running sore within the independent television system for the years that lie ahead. That is the main thrust of the arguments behind the amendment that I have moved.
Without going over the ground that we covered in the Committee stage, perhaps I may make one or two additional comments about the background. It is wholly understandable that recipients of subsidy resist giving up that subsidy. That is, of course, the position of the ITV companies. They resist giving up the subsidy as stubbornly as the Treasury has been resisting giving up any possible loss of revenue from a sensible reform of the broadcasting system. However, the figures show conclusively that by the end of 1997 the ITV companies will have received in the first five years of their franchise more than they ever estimated in their bids they would have received over a period of 10 years. If at the end of 1997 the grotesqueries of the bidding system leave any individual company short of its 10-year forecast, then, as those of your Lordships who followed the Committee stage of the Bill know, Channel 4 has undertaken to reimburse them.
I do not think that it can seriously be argued in any sort of equity that an enterprising company like Carlton Television, for example, with profits of £122 million should go on receiving a £22 million subsidy from a minority channel. The concern about these matters, as so often, has been particularly concentrated by the big TV companies on what they profess to believe to be the interests of the smaller regional TV companies. It is, of course, familiar to all in your Lordships' House that hard cases make the best persuasive arguments. It is a pretty fallacious argument.
We have been arguing the interests of the smaller regional companies very vigorously this afternoon and the Government have recognised that in Clause 66. The smaller regional companies for the most part, although

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there may be an occasional exception, receive a comparatively small amount of Channel 4 advertising revenue, and fortunately in the present circumstances most of them are pretty profitable these days.
That quite apart, some of the larger ITV companies have been using the argument to their weaker brethren, and using it to those of us who may be more gullible in your Lordships' House, that if the ITV companies are to be left without this ongoing subsidy from Channel 4, then this will put the present charging in the network system at risk and may prevent the regional companies from having the resources to fulfil their regional obligations. It has been put forward by Granada Television—that well-known hotel company that now has a television company as well—that its regional programming might be somewhat cut back if there had to be all these changes. It is a totally bogus and slightly disreputable argument, because both the network discount arrangements and even more positively the regional programming arrangements are written into the licences of the larger television companies. Neither the network discount nor the regional programming arrangements can be damaged or reduced except with the consent of the ITC. For my part, I am ready to recognise that the ITC is a totally adequate watchdog in these matters provided it gets the reinforcement of a decent Broadcasting Bill.
It is for all these reasons that I put before your Lordships' House this compromise amendment on the future of the financial arrangements between Channel 4 and the ITV companies. I beg to move.
Lord Peyton of Yeovil: My Lords, perhaps I may say a word before my noble friend replies. I am a little confused. When the noble Lord, Lord Thomson, rose I was under the impression that he would move an amendment very briefly and that my noble friend the Minister would reply and give him something. While I hate to disturb the cosy relationship which appears to exist between them, I should like to grab the opportunity—I do not have many—to say that there is a sensible provision in the 1990 Act. That is the one that we now seek to change. I hope that I am wrong, and I hope that my noble friend will not make too great a compromise in the direction of the noble Lord, Lord Thomson.
5 p.m.
Lord Inglewood: My Lords, I am grateful to my noble friend. At this stage in the debate I hope to make a few points which may be for the convenience of the House. I do not wish to curtail the debate, but I should like to make a contribution which may be helpful to those who follow me in the debate. Speaking as I do from the Dispatch Box, I hope that that will be a constructive way of approaching the matter.
The noble Lord, Lord Thomson of Monifieth, explained that his amendments to Clause 69 aim to provide by statute that Channel 4 should make no payments either to the Channel 3 companies or to the statutory reserve for the years from 1998 to 2002; and that no order to alter that regime may be made before the end of the year 2001.
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It is, of course, an implicit element of the noble Lord's amendments that the funding formula would remain in place. That is in line with the Government's approach. We have made clear that we want to retain the formula as a prudential measure, but to operate it with flexibility so that Channel 4 can retain significantly more of its revenue for programmes.
A key word here is "flexibility". We do not think it right to seek to determine at this stage the possible level of Channel 4 payments to Channel 3 companies two years or more from now. Nor is it, in our view, wise to rule out all possibility of further adjustment, either to those payments or to the payment of funds to the reserve, in the years up to and including 2002. Such an approach would be inconsistent with the need for flexibility in response to fast-moving developments in the broadcasting sector. The Government accordingly oppose the specific amendments which the noble Lord, Lord Thomson, has tabled.
As to timing, the noble Lord's amendment proposes changes to Channel 4 payments into the reserve and to the Channel 3 companies to take effect from 1998. I see no need to perpetuate Channel 4's payments into the reserve until 1998. At over £80 million the reserve represents a significant safeguard against a downturn in income. To respond to the noble Lord's particular anxiety, the Government's intention is accordingly to present an order to terminate Channel 4's future payments into the reserve shortly after enactment, to take effect as soon as possible.
The timing of adjustments to Channel 4's payments to Channel 3 is arguably more complicated. The noble Lord, Lord Thomson, proposes that new arrangements should come into effect from the start of 1998. That is the assumption underlying his earlier "gap year" amendment to which I have referred. It is also clear that it is a general expectation of the ITV companies that any new formula would come into effect from early 1998. The Government are not averse in principle to introducing changes from that date.
However, there is an alternative argument that no change should be introduced affecting any payment before the one to be made a year later, at the start of 1999. That is because Section 26(10) of the Broadcasting Act 1990 specifies that no order to amend the specified elements of the funding formula may be made before the end of 1997. Taking account of the lead times inherent in the formula, that would mean that the form of the formula contained in the 1990 Act would continue to apply until the end of 1998. If one follows that logic ruthlessly, the so-called "gap year" ceases to exist. Of course, the amendments which we propose do not apply to the specific elements in the 1990 Act formula to which I have referred, and there is no formal constraint. Nevertheless, the argument can he made that, based on the precise terms of the 1990 Act, any change to the funding formula should not affect payments before the one to be made at the beginning of 1999.
There is a balance to be struck here. On the one hand, the Government accept the concern that Channel 4's payments into the reserve and to Channel 3 have been higher than expected when the 1990 Act went through

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Parliament, and that early action should be taken to correct that. On the other hand, we recognise concerns expressed by the noble Lord, Lord Thomson, and widely echoed in the Chamber, at the prospect of a significant drop in Channel 3 companies' income from Channel 4 in the immediate run-up to digital investment and a year before they are able under the 1990 Act to apply to the ITC to renegotiate their licences. We must also remember that the payments under the formula are paid in the February of the year following the year for which they are calculated. It thus follows that the payment in respect of the year 1997 is paid in early 1998, and if there is a "gap year" in terms of cash flow in a calendar year, it can more accurately be said to be 1993, which was the year in which the Channel 4 arrangements in the Act came into effect, since no payments were made in respect of that year until 1994.
The Government's proposition is that we should proceed by a phased approach, which would seek to meet the interests both of the Channel 3 companies and of Channel 4. As a first step, we should seek to make an order on enactment to end Channel 4 payments into the statutory reserve with immediate effect. To put that into perspective, Channel 4's payment into the reserve for 1995 was £37 million. If our proposed order is agreed, the effect will be that in respect of the payment relating to 1996 and later years Channel 4 will have more revenue to apply to programmes. In effect, the gain as against earlier expectations will be equivalent to two years' payments into the reserve.
As a second step, we propose to introduce reductions to Channel 4 payments to Channel 3 in two phases. The first reduction would take effect from 1998; the second would take effect from 1999. It is too early to say what the new levels would be, but we have indicated that we expect significant adjustment in Channel 4's favour, and we are taking powers which would in principle enable us—if we so judge nearer the time and Parliament agrees—to reduce Channel 4 payments to Channel 3 to zero from 1999. Whatever the final level, there would be a stepped reduction towards it from 1998.
We believe that that phased approach will help to cushion the impact on Channel 3 companies of a reduction in their funding from Channel 4. At the same time, it should prove significantly positive in net terms to Channel 4, not least because uncovenanted gains from early capping of the reserve are likely to outweigh any phased payment to the Channel 3 companies in 1998.
I hope that that fairly full explanation of the Government's thinking has proved helpful. It is intended to find a way forward which is fair to all concerned.
Lord Birkett: My Lords, before the Minister spoke I had intended to say how strongly I support the amendments. How much happier I am to rise and say that what the Minister said is enormously encouraging. I hope that after the very helpful things that he said he will not think it churlish of me to remind him that the ITC view is that the funding should come down to zero from the beginning of 1998, exactly as proposed by the noble Lord, Lord Thomson, in his amendments. I confess that that is what I would have preferred. Since
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it is also what the ITC recommends, and since it is very much up in the air how the phased reduction in payments will work, I urge the Minister to consider very carefully whether he will not take the advice of the ITC and make the amount so small by the end of 1997 and the beginning of 1998 as to make no difference whatever.
When I said that I hoped that the noble Lord would not think me churlish I was simply going to say that the ITC is, after all, the generally acknowledged watchdog in this area of communications. I intended to remind him of the old adage that one should not keep a dog and bark oneself.
Viscount Astor: My Lords, I congratulate my noble friend the Minister on coming up with a very ingenious solution. It seems to me that he has gone a long way to solving the conundrum which was highlighted by the noble Lord, Lord Thomson, in discussion on an earlier amendment in relation to the gap of a year between the Channel 4 funding finishing and the ITV companies renegotiating their licences. My noble friend has come up with an ingenious solution. I think he is entirely right. We cannot tinker with any part of the formula without considering the problem as a whole, which he has done. It is an extremely good solution. I recommend it to your Lordships. I hope that the noble Lord, Lord Thomson, will feel able to withdraw his amendment as a result of my noble friend's announcement.
Lord Burnham: My Lords, the Minister gave an indication earlier that he would surprise the House with something that he might say with regard to the amendment. He has duly done so. However, one point worries me. The Minister may not be able to answer the question at present. What will be the balance as regards release of moneys to Channel 4 between the uncapping of the statutory reserve a year earlier and the moneys which the ITV companies will still receive from Channel 4?
I agree with my noble friend that everything the Minister said seems extremely helpful. We shall have to consider the matter more carefully when we see it in writing. I cannot speak for the noble Lord, Lord Thomson. It may be necessary to return to the issue at Third Reading, although it may not be traditional so to do.
Baroness Birk: My Lords, it is a shock to be suddenly faced with new proposals. They are encouraging in some ways. But they are not the whole story. Channel 4 will still have difficulties to iron out. It will still be paying out £80 million; and the £37 million is in the reserve anyhow. Therefore the position is not quite as good as it may sound. As I am sure the Minister will appreciate, it is difficult to make a snap judgment having just heard the announcement. When we see it in writing, perhaps we shall understand better.
I agree with my noble friend Lord Thomson of Monifieth that as we were unable to achieve the complete abolition that many of us preferred, as was indicated in Committee, this is the next best option. I do not know whether it will be necessary to amend the proposed provisions. I do not believe that we should

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commit ourselves without reading the proposal and considering it further. However, we have gone a little further. As we were unable to achieve the complete abolition which seemed to me and a number of other noble Lords—I do not refer only to my noble friends—the best way forward, we shall have to find a way of dealing with this next option which is fair to Channel 4 and fair all round.
The Earl of Stockton: My Lords, your Lordships may not be surprised to know that even the amendment in the name of the noble Lord, Lord Thomson of Monifieth, does not meet the criteria I sought to establish at an earlier stage of the Bill. To be asked to compromise still further by the Minister at relatively short notice is a surprise.
My back-of-envelope calculations show that the difference for Channel 4 between the payments under what one might call the Thomson regime and those under the Inglewood regime would be in excess of £80 million. It is therefore no cheap compromise in terms of Channel 4's payments.
It is not clear from what my noble friend said exactly where the proposal will appear in the Bill. Does he propose to make an amendment at the next stage so that it will appear on the face of the Bill? Or is it to be assumed to be part of the munificence of his department in making the arrangements subsequently? Before the noble Lord withdraws his amendment, if that is what he is inclined to do, we need an additional reassurance from the Minister. If the noble Lord does not receive it, I would very much urge him to press the amendment.
5.15 p.m.
Lord Inglewood: My Lords, with the leave of the House, I do not wish to add a great deal. I am grateful for what noble Lords said. Obviously I would have preferred the entire House to say with one accord that the Government have got it completely right. However, I could not expect your Lordships to respond in detail to the proposal that I made without reading the particulars.
Perhaps I may respond to two specific points made by my noble friend Lord Stockton. First, we have not put detailed figures to the general approach I have just described. Secondly, I can confirm—as I believe I intimated—that we shall be bringing forward the relevant clauses for doing the kind of things I have described under the general principles of the 1990 Act. I hope that that is helpful.
Lord Thomson of Monifieth: My Lords, I thank the Minister for saying on the narrower but not unimportant point that I raised that he proposes that once the Bill becomes an Act he will immediately, by order, enable the capping of the reserve to take place and those resources to be made available to Channel 4 for programming rather than sterilised in the reserve. That is clear; there is no dubiety. I am grateful for his prompt response.
On the wider proposition, I thought that I had put forward a reasonable compromise. The Minister has now, in a sense, compromised my compromise. Many noble Lords know enough about the realities of these
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matters to appreciate the efforts that the Minister has made to bring about the proposals before us. They are not minor. They constitute a significant change in the Government's position. Although the noble Lord is a deeply respected Minister in this House he is not himself the Secretary of State. And beyond his Secretary of State we all know that there is a Treasury. To have got as far as he has done with the proposition that he put to us is a very considerable achievement. It would be grudging if one did not pay immediate tribute to that. Nevertheless, in many ways he has put forward such a substantial modification to my amendment that we shall all wish to examine it in some detail before Third Reading. We shall want to know from the Minister the answer to the question posed by the noble Earl, Lord Stockton. What will it mean in money terms during the 1998 year? For how much longer, and in what quantity, will the rather grotesque subsidy from Channel 4 to the profitable ITV companies continue? It arises out of the Government's formula as against the formula I put forward in my amendment.
We shall wish to examine the legislative arrangements for enacting the provision. I do not wish to take away from the fact that the Minister has made a substantial concession which it, cannot have been easy for him to win. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 163 not moved.]
Viscount Astor Viscount Astor moved Amendment No. 164:
After Clause 69, 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—

(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;

(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

(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—

(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;

(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

(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 ensure.
(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—

(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;

(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—

(a) on summary conviction to a fine not exceeding the statutory maximum;

(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—
"broadcast" includes transmission by wire or other electromagnetic means;
"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;
"Director" means the Director General of Telecommunications;
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"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.".").
The noble Viscount said: My Lords, we debated this issue twice in Committee and at the Report stage on Tuesday, so I will not repeat the arguments. My amendment on conditional access for analogue satellite television has all-party support. It has the support of the television companies, the cable companies and programme makers; and also of EUTELSAT, the intergovernmental organisation in Europe; and of course the Government support the principle of conditional access for digital satellite television.
My noble friend the Minister was as usual most helpful and allowed me to take my case directly to the DTI, which will be responsible for future regulation in this area. I was unable to persuade the Minister at the DTI. I have to say that I think the DTI has its own agenda for broadcasting. It feels that it is only necessary in the future for digital to have conditional access, and contends that digital is just round the corner.
If the 1990 Act taught us anything, it is that in the broadcasting world it is very difficult to predict the future. Even the industry is not predicting the date when digital transmission will commence. Analogue may be with us for quite a long time. This issue is one of the most important in the Bill. I beg to move.
Lord Donoughue: My Lords, I wish most strongly to support what I consider, apart from the sporting items, to be the most important central issue of the Bill.
As we know, the Government propose to regulate conditional access services for digital, through licence, under the Telecommunications Act 1984 and for them to be regulated under the Act by Oftel. We accept that. As we have said, we are very sympathetic to arguments, which my noble friend Lady Dean and I put at previous stages, that the ITC should be the regulator since the issues are broadcasting ones. The Government have resisted that; and we acknowledge that, because to us what matters is not who regulates but that there should be regulation. We believe that we should apply to analogue what the Government apply to digital.
I follow the noble Viscount, Lord Astor, and shall not repeat all the arguments. The heart of the matter, which should be borne in mind, is that the conditional access system controls who receives broadcast programmes. Conditional access in Britain, under analogue now, is dominated by Videocrypt, which is installed in over 95 per cent. of UK satellite receivers. It is owned by one company, News International, licensed to Sky. Therefore, the leading satellite broadcaster also controls access by its broadcasting competitors to home satellite receivers. That is a position of potential abuse which should be regulated.

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On digital, the Government say openly that there is a future danger that one or two providers of conditional access may come to dominate and restrict choice through the conditional access gateways. That is a future danger. The present reality is there, in one monopoly provider of analogue conditional access systems. So the same concerns and the same solution—the Government's own solution, which we support—should apply.
The Government's main argument seems to be that analogue is a transitional technology. I accept everything that the noble Viscount, Lord Astor, said in questioning that. Analogue will be the majority technology for at least the next decade. That is the gap that should be regulated. Monopoly control by just one provider over that decade will, in broadcasting practice, provide the basis to purchase dominant control of film rights and sports rights, to see it into, in a dominant position, the digital decades after that.
The Government may also say that present competition law offers sufficient remedies against dominant abuse. We do not accept that. Competition law, as we know, operates slowly and unpredictably. Inevitably, there will be a long period of uncertainty which will effectively deter new broadcasters from entering and investing in rights unless they have the confidence that they will have what they do not have under the present analogue system; namely, equal and unfettered access to all pay-television homes. Only this amendment will secure that.
On a final general point, as we said at Second Reading the key question with this whole digital landscape ahead is how to get it off the ground. It needs incentives to broadcasters, viewers and manufacturers. But the refusal to regulate analogue works in a contrary direction.
Leaving one dominant controller in that privileged position on analogue conditional access gives it an incentive to stay with analogue, and with that privilege, and not to move forward to the more regulated digital. For all those reasons I urge support for this amendment.
Lord Colwyn: My Lords, I have listened again to my noble friend's explanation and to that of the noble Lord, Lord Donoughue. In fact, I re-read the argument advanced in Committee. Again, I do not think it is necessary to introduce new licensing requirements for analogue conditional access and subscriber management systems.
My noble friend took me to task during my short speech in Committee, as it was clear to him that I may not have had as much time to study the amendment as I should. However, I have done a little more homework and wish to make some more points.
First, until new European legislation forced the Government to accept licensing for digital conditional access systems, they were opposed to the idea. Rather, they argued that there is no need for the licensing of any conditional access system because current competition policy in the form of MMC, OFT and other safeguards is sufficient. To force additional regulatory obligations onto as yet uncommitted manufacturers or operators of
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digital conditional access systems would be foolhardy, creating strong disincentives for them to invest in the first place.
Secondly—and here I want to answer the question that my noble friend asked me in Committee—it is also the case that, while analogue satellite channels reach only 15 per cent. of all UK homes, those digital channels that replace them will eventually reach virtually all UK households. Furthermore, it can be argued that the analogue market is unlikely to grow much further because virtually no analogue transponder capacity is available on the independent Astra satellite system. If a case is to be made for any further regulation, it should apply much more to the huge potential of digital than to the limited achievements of analogue.
I am treading a little more carefully this time. I am reluctant to disagree with my noble friend Lord Astor, whose knowledge of this issue I respect, but I am informed by Sky that, whatever the number, location and variety of subscriber management systems used by a satellite broadcasting company, consumers will never need to change their black-box decoder. The decoder is part of the conditional access system and it functions on a wholly separate basis to the SMS.
In Committee my noble friend Lord Inglewood touched on the wider implications of these amendments. To change the rules governing a well-established analogue market-place would undermine investment confidence and place a large questionmark over the Government's general commitment to regulatory stability. There is no need for this amendment.
Lord Thomson of Monifieth: My Lords, from these Benches we also strongly support the amendment moved by the noble Viscount, Lord Astor. I do not intend to go over the arguments around this subject that we have had on a number of occasions, but simply add a couple of points. First, the present system is not working well, certainly not from the point of view of many cable operators. The truth is that BSkyB has a vertical integration of all the three processes that go into this form of programming. As I have said repeatedly, that is wrong in principle, but the only way to deal with it is to have an effective regulatory system, an effective licensing system.
Cable operators, for instance, would like to offer a wide range of programming packages which they are prevented from operating because of the dominant control that BSkyB has over those arrangements. They would like to do "mini" basic packages of several channels, rather than having to produce the great packages that suit BSkyB's economic interest. I do not labour the point. I say simply that the present system already calls for an adequate licensing control.
I mention one other argument that has not so far been fully developed. It concerns the future and the Government's hopes of making a success of the digital revolution. The fact is that BSkyB's dominance of analogue conditional access will allow it to build a dominant position in digital pay television. BSkyB has two enormous advantages in the transition to digital broadcasting arising from its existing dominance of the analogue market. It already knows the identity and

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detailed viewing habits of the core audience in this field. A successful service depends on the acquisition of the most attractive pay television rights—largely films and sport. Key rights holders sell pay television rights as a package, including both analogue and digital transmission. Therefore, if BSkyB continues to enjoy a virtual monopoly of high value pay television rights and controls conditional access for the existing network of 3.5 million direct-to-home viewers, it alone will have the benefit of established scale in bidding for new rights and it alone will be able to spread the cost of such rights over both digital and analogue receiver networks. That situation calls for the kind of licensing system for which the noble Viscount argued. As the noble Lord, Lord Donoughue, said, along with sporting issues this is probably the most important issue in the Broadcasting Bill. I hope that the noble Viscount will receive from the Minister as forthcoming a response to his amendment as I recently had to mine.
Lord Annan: My Lords, I hope that the noble Lord will take account of the remarks of the noble Viscount, Lord Astor. He is absolutely right in saying that nothing is more difficult to forecast than the future in television. I thought his case very strong.
Lord Inglewood: My Lords, we return again to this subject, as a number of noble Lords said. I am extremely grateful to all those who have taken part in the debate for, I think, the fourth time. That reflects the importance that noble Lords who have spoken attach to the proper control of conditional access arrangements, which is also the concern of the Government. I shall be brief but that is not to dismiss the views expressed. Rather, I do not wish to detain the House reiterating arguments I have previously expounded at length. Indeed, the opinion of the House on the central issue has already been tested.
As explained, the amendment seeks to establish a common regulatory regime for both analogue and digital conditional access. My noble friend models his approach around that of the Telecommunications Act. I am happy that we agree that this is in principle the right framework and that Oftel is the most appropriate regulator. Indeed, the Government's own proposals cover fully the regulatory effect of the amendments as they apply to conditional access services for digital television. Where we differ is on the judgment of whether it is appropriate to extend this form of regulation to analogue services.
I can only summarise again the Government's judgment, which was supported in the vote on Tuesday. I entirely understand the anxieties of those opposing us on the issue but we believe they are not justified on the facts. We remain of the view therefore that the amendment is not appropriate. We consider it risks doing more harm to UK interests than good.
The background to this judgment is that analogue conditional access is an established part of the market which has strictly limited potential for growth and which is likely to give way relatively quickly to digital markets. At this very moment the OFT is addressing concerns about behaviour in the market. Its
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investigations will conclude during the passage of the Bill. This process provides for any further action which may be necessary if those concerns are substantiated. Further .specific regulation of an established, and limited, market is not appropriate without substantiation of this kind. The potential for damage to investment confidence in UK markets because of concern about regulatory instability is very clear, as can be seen from our experience in the last several years in the cable sector. I referred to that on Tuesday. In the absence of confirmation of the need for specific regulation from the competition authorities, the benefits which might flow from the amendment are unclear. That, in a nutshell, is the Government's position. And it is why I very much hope that my noble friend will agree to withdraw the amendment, which we cannot accept.
Viscount Astor: My Lords, I am grateful to my noble friend the Minister. As always he put his case clearly and with great care. My noble friend Lord Colwyn raised a number of issues. With great respect, I believe that we dealt with them on Tuesday when we addressed the amendment of the noble Baroness, Lady Dean, which was fairly similar. I do not feel that it would be helpful to the House for me to go into those matters today.
I wish to make two main points. I do not believe that my amendment will damage investor confidence. I believe that it will improve competition. It is supported by those in the industry who wish to invest in digital. They want the amendment. If they did not want it, they would say so. I am not one to push it forward. I am very much against damaging any investor confidence.
I am a deregulator. I believe in deregulation and the Government's deregulation initiatives. But I do not believe that we should deregulate monopolies, and that is what we have at the moment. My amendment would benefit the industry and above all the consumer. It pains me to be at odds with my noble friend the Minister, but this is a crucial issue. I must test the opinion of the House.
5.36 p.m.
On Question, Whether the said amendment (No. 164) shall be agreed to?
Their Lordships divided: Contents, 101; Not-Contents, 103.

Division No.1

CONTENTS

Acton, L.

Castle of Blackburn, B.

Annan, L.

Chalfont, L.

Ashley of Stoke, L.

Chandos, V.

Astor,V.[Teller]

Clinton-Davis, L.

Barnett, L.

Cocks of Hartcliffe, L.

Beaumont of Whitley, L.

Craigavon, V.

Birk, B.

Dacre of Glanton, L.

Blackstone, B.

David, B.

Borrie, L.

Dean of Thornton-le-Fylde, B

Broadbridge, L.

Desai, L.

Bruce of Donington, L.

Diamond, L.

Carmichael of Kelvingrove, L.

Donoughue, L. [Teller.]

Carter, L.

Dormand of Easington, L.

453

Dubs, L.

Monkswell, L.

Falkender, B.

Montgomery of Alamein, V.

Falkland, V.

Morris of Castle Morris, L.

Fitt, L.

Nelson, E.

Gallacher, L.

Nicol, B.

Geraint, L.

Norrie, L.

Gibson, L.

Orr-Ewing, L.

Gladwin of Clee, L.

Plant of Highfield, L.

Graham of Edmonton, L.

Prys-Davies, L.

Halsbury, E.

Rea, L.

Harris of Greenwich, L.

Redesdale, L.

Haskel, L.

Renton, L.

Hayhoe, L.

Richard, L.

Hilton of Eggardon, B.

Robson of Kiddington, B.

Hollis of Heigham, B.

Rodgers of Quarry Bank, L.

Holme of Cheltenham, L.

Russell, E.

Howell, L.

St. John of Bletso, L.

Howie of Troon, L.

Saltoun of Abernethy, Ly.

Seear, B.

Hughes, L.

Sewel, L.

Hylton-Foster, B.

Shannon, E

Jay of Paddington, B.

Shepherd, L.

Jeger, B.

Jenkins of Putney, L.

Smith of Gilmorehill, B.

Kilbracken, L.

Stockton, E.

Kirkhill, L

Stoddart of Swindon, L.

Lauderdale, E.

Strabolgi, L.

Lockwood, B.

Strafford, E.

Tenby, V.

Lovell-Davis, L.

Thomson of Monifieth, L.

Macaulay of Bragar, L.

Thurlow, L.

Mackie of Benshie, L.

Tope, L.

McNair, L.

Turner of Camden, B.

McNally, L.

Wallace of Saltaire, L.

Mayhew, L.

Walpole, L.

Merlyn-Rees, L.

White, B.

Mersey, V.

Williams of Crosby, B.

Milner of Leeds, L.

Williams of Mostyn, L.

Mishcon, L.

Winston, L.

not-contents

Addison, V.

Finsberg, L.

Ailesbury, M.

Gisborough, L.

Ailsa, M.

Goold, L.

Archer of Weston-Super-Mare, L.

Goschen, V.

Ashbourne, L.

Greenway, L.

Belhaven and Stenton, L.

Harding of Petherton, L.

Beloff, L.

Harlech, L.

Birdwood, L.

Harrowby, E.

Blake, L.

Hemphill, L.

Blaker, L.

Henley, L.

Boardman, L.

Holderness, L.

Boyd-Carpenter, L.

Hooper, B.

Bridgeman, V.

Howe, E.

Brougham and Vaux, L.

Inglewood, L.

Burnham, L.

Jenkin of Roding, L.

Cadman, L.

Knollys, V.

Campbell of Croy, L.

Lindsey and Abingdon, E.

Carnegy of Lour, B.

Liverpool, E.

Carnock, L.

Long, V.

Chelmsford, V.

Lucas, L.

Chesham, L. [Teller.]

Lucas of Chilworth, L.

Clanwilliam, E.

Lyell, L.

Clark of Kempston, L.

Mackay of Ardbrecknish, L.

Colwyn, L.

Mackay of Clashfern, L.

Courtown, E.

[Lord Chancellor.]

Cranborne, V. [Lord Privy Seal.]

Marlesford, L.

Cumberlege, B.

Massereene and Ferrard, V.

Denham, L.

Merrivale, L.

Denham of Wakefield, B.

Miller of Hendon, B.

Dixon-Smith, L.

Milverton, L.

Dundee, E.

Monteagle of Brandon, L.

Eden of Winton, L.

Mottistone, L.

Elles, B.

Mowbray and Stourton, L.

Elliott of Morpeth, L.

Munster, E.

Elton, L.

Murton of Lindisfarne, L.

454

Norfolk, d.

Stanley of Alderley, L.

Northesk, E.

Stewartby, L.

O'Cathain, B.

Stodart of Leaston, L.

Orkney, E.

Strange, B.

Oxfuird, V:

Strathclyde, L. [Teller.]

Pender, L.

Strathcona and Mount Royal, L

Peyton of Yeovil, L.

Sudeley, L.

Pilkington of Oxenford, L.

Swansea, L.

Rankeillour, L.

Swinfen, L.

Rennell, L.

Teynham, L.

Renwick, L.

Tollemache, L.

St. Davids, V.

Trefgarne, L.

Seccombe, B.

Trumpington, B.

Shaw of Northstead, L.

Vivian, L.

Skelmersdale, L.

Willoughby de Broke, L.

Skidelsky, L.

Wynford, L.

Soulsby of Swaffham Prior, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.45 p.m.
Lord Barnett Lord Barnett moved Amendment No. 165:
After Clause 69, insert the following new clause—
PROVISION OF NEWS ON CHANNELS 3 AND 5
(".—(1) Section 31 of the 1990 Act (provision of news on Channels 3 and 5) is amended as follows.
(2) For subsection (2) there is substituted—
"(2) 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—

(a) be of high quality dealing with national and international matters;

(b) presented live; and

(c) broadcast simultaneously with the broadcasts of news programmes provided by the single nominated news provider which are made by other holders of regional Channel 3 licences in compliance with conditions so imposed.".").

The noble Lord said: My Lords, Amendment No. 165 is tabled in my name and that of the noble Lords, Lord Thomson of Monifieth, Lord Peyton of Yeovil, and Lord Archer of Weston-super-Mare. I was asked to emphasise that they not only added their names, but also strongly agree with the amendment, as do others who unfortunately cannot add their names because no more than four are allowed on the Marshalled List.
It is clear from the words of the amendment that this is not a party political issue. The first part of the amendment substitutes a new subsection (2) to Section 31 of the 1990 Act—specifically subsection 2(c). As I said in Committee, without the new subsection a situation would arise which none of us want to see; that is, a fragmentation of news programmes on ITV presented by a variety of news providers at different hours. I hope your Lordships will agree that that cannot be helpful to providing high quality news.
The noble Lord, Lord Thomson of Monifieth, was upset when I said that I did not watch "Gladiators". I do not have grandchildren who might otherwise drag me in to see it. It seems crazy to me that such programmes, as with comedy programmes, are always seen at the same hour, whereas without the amendment news programmes may be provided at different times.

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Subsection 2(c) is therefore particularly important; that is, that the broadcasting of news should be simultaneous on Channel 3.
There is anxiety in some quarters that the amendment may create difficulties. But it does not necessarily have to apply to all channels. For example, it would not apply to Channel 5, or to other channels if there were any. Even in relation to Channel 3, the Independent Television Commission could nominate more than one news provider, provided they meet its criteria. It is then for the ITV companies to choose one other than ITN. That would certainly be within the rights of the ITC.
I turn to the second part of the amendment. As I said in Committee, it may seem surprising that a recent deputy chairman of the BBC should move an amendment like this. I hope it is not surprising. As I emphasised in Committee—again I know that there is anxiety about the amendment—I do not want to see a monopoly of TV news, whether on the BBC or ITV. I know that the BBC does not want that either. What matters to me, and I hope the House, is the quality of the news programmes on both ITV and BBC, and who should decide on the news provider. That should not be decided by the government of the day; it should be decided by the Independent Television Commission, which is truly independent. It may choose ITN or some other qualified news provider. As the amendment makes clear, that would be decided by the ITC.
I say again: it will not be the ITV companies who decide; it is not a party political matter; and it is not a monopoly matter. We need this proposal or something like it. If the Minister does not want to accept the amendment, although he might, perhaps he will put down his own amendment at Third Reading. Without something like the amendment one could have a news provider who does not have the necessary ability to provide a range and balance of news coverage.
Perhaps it is worth quoting here what we said previously. No, it is not worth quoting because I want to catch a train. It is a long quotation but the Minister knows what I said. As the Bill stands, there is a lack of clarity, as I hope the Minister will agree. The amendment should not be controversial. It seeks to do what most people thought was always intended. I hope the Minister and the House will accept that. On that basis, I beg to move.
Lord Inglewood: My Lords, if it is of assistance to the noble Lord, I willingly say that we would like to take away Amendment No. 165 and allow parliamentary counsel to work on it and table a similar amendment at Third Reading. We have certain objections to the second amendment.
Lord Barnett: My Lords, I do not want to withdraw the amendment at the moment because I know some noble Lords, including the noble Lords, Lord Archer of Weston-Super-Mare and Lord Thomson of Monifieth, want to speak.
Lord Thomson of Monifieth: My Lords, I am always glad to hear the Minister accept something so I
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do not want to interfere too much. I happily support the amendment. Perhaps I may make one point clear from these Benches. Indeed, the noble Lord, Lord Barnett, made the same point. The amendment is neutral as between ITN and any other bidder to provide a nominated news service, including Sky News. So far as I am concerned, ITN has had a good record over many years. Channel Four News produces a very special and distinguished news service. On the other hand, Sky News has enhanced our degree of choice with the country's first British based 24-hour news service which is of good quality. What I am opposed to is what has been canvassed within the ITV system—the possibility of having two competing nominated news providers, which indeed is possible under the 1990 Act. A single nominated news provider for Channel 3 is part of the national cohesion which we all talk about. It is certainly part of the essential national spine of the ITV broadcasting system. I would hate to see that fragmented.
Perhaps the Minister will clarify a point for me when he replies. Our amendment is entitled "Provision of news on Channels 3 and 5". I would not in principle be in favour of the same nominated news provider providing both ITV news and Channel 5 news. As I read the original Section 31 of the 1990 Act, it does not say that the nominated news provider should be the same in both cases. It merely indicates that there should be a nominated news provider and that it should be one of quality. With those qualifications, I strongly support what the noble Lord, Lord Barnett, has said.
Lord Orr-Ewing: My Lords, I always think that BBC news should be sacrosanct but I find it disturbing that it is made by Granada for the BBC. Who controls that if there are imperfections in the standards being set? I am not saying that there are, but does it come under the ITC as it is produced by Granada, which is an independent company? Presumably it comes under the BBC if it has it on its channel. It does not sow quite the same confidence when I see that it is news made for the BBC by Granada. It is a small point. I think purity of the public service is very important, particularly in the news area.
Lord Ashley of Stoke: My Lords, perhaps I may make two brief points. First, the signatories to the amendment are either Cross Benchers or Social Democrats but there is support for the amendment on this side of the House. I tried to add my name to the amendment but, as the noble Lord, Lord Barnett, indicated, other people had jumped in first. I want to emphasise the fact that there is some support for the amendment on this side of the House.
Secondly, I am delighted that the Minister accepts the principle of the amendment.
Baroness Seear: My Lords, I am sure the noble Lord meant Liberal Democrats. He said "Social Democrats".
Lord Ashley of Stoke: My Lords, I never get the names right. The Liberal Democrats are such a wonderful party but I am always confused about the actual name. I did mean the name the noble Baroness mentioned—a very fine name indeed!

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I trust the Minister to accept the spirit of the amendment. But when he gets in cahoots with his officials I hope he will emphasise to them that we do not want a patchwork provision. There must be· one provider; not necessarily ITN, as the noble Lord said, although I hope it will be ITN. I have to declare that one of my daughters works for ITN. There should be one provider. Otherwise we shall have a patchwork provision and we shall have news being shown at different times in different parts of the country. That is the last thing we want. I hope the Minister will bear that point in mind.
Lord Archer of Weston-Super-Mare: My Lords, perhaps I may begin by pointing out to the noble Lord, Lord Ashley, that I am a Conservative and that my name is attached to the amendment. It is very cruel of him not to remember that I am a Conservative as he was my pair when I was in the lower House. Perhaps I may also say how aware I am that the noble Lord, Lord Barnett, hopes to catch a train to Manchester at a particular hour, so I shall not repeat arguments that have already been put forward.
I am bound to say, though, as a man who believes in free enterprise, that it would be natural for me to want to see as much competition as possible. But in this particular case it is a matter of wanting quality rather than anything else. I was moved by the comments of John Birt at the 40th anniversary of ITN—it is not ITN we are actually discussing here; it is anyone who might have this job—that the strength of the BBC as a news agency for the whole world was the strength of ITN. As long as you had outstanding competition for the BBC, the BBC had no choice but to make sure it was as good if not better. That is what we are fighting for in the House today. It is to make sure that the BBC has to stay on its toes for ever. I do not believe that would happen if this task was given out to many people and the standards were lowered. For that reason alone I back this amendment and back the noble Lord, Lord Barnett.
I want to be able to say whenever I travel around the world, and whenever I see anyone else's television, particularly in the United States, that we still have the best news service in the world. The way to keep that best news service in the world is to darn well make sure it is on its toes morning, noon and night. We shall not achieve that by dividing the talents we have among many people. We shall achieve it by making sure that they work together.
I am happy to support the amendment in the name of the noble Lord, Lord Barnett, and I am pleased to have my name to it as well. I am pleased to remind my good and very old friend Lord Ashley that I am a member of the Conservative Party.
Lord McNally: My Lords, I rise with some trepidation because I know that the noble Lord, Lord Barnett, is heading for the six o'clock train. But I have always assumed that the Manchester train would not dare leave without him.
I wish to add something that takes on a political, but not a party political, line. It is extremely important, at a time when more and more people receive their news
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primarily from television, that there is that element of competition in quality to which the noble Lord, Lord Archer, referred. There is no doubt that the impact of ITN over the years has been a major spur towards improving the quality of BBC news coverage as well. I go further and slightly divert from what my noble friend Lord Thomson said. One of the advantages that we have had in recent years—and it is an added bonus—has come from Sky Television in the very high quality of Sky News. I would like Sky News to stay where it is as another competitor to the single provider for Channel 3 and the BBC. I agree with my noble friend Lord Thomson: I would like to see other providers coming in for the fifth channel.
We want diversity and quality in television news, but that does not happen by chance or accident. This Bill has to have in it the amendments which have been put forward by the noble Lord, Lord Barnett—I know what the Minister said—because they are needed. Without them there will be a tendency to go for the cheap and cheerful. As I said in Committee, the bean counters will prevail and news may well be forced to the margin of the third channel without the guarantees of this initiative put forward by the noble Lord, Lord Barnett, and his colleagues. I commend the amendment to the Minister.
6 p.m.
Baroness Dean of Thornton-le-Fylde: My Lords, from these Benches we support this amendment. I am delighted at the enthusiasm of my noble friend Lord Ashley in jumping up and getting in his remarks, but my name was attached to the original amendment. It would have appeared with the amendment today, but as it has only four lines it could not be entered there. We felt that it was far better to have support from right across the House. As a fellow Mancunian, far be it for me to delay my noble friend Lord Barnett any longer. We strongly support this amendment.
Lord Inglewood: My Lords, with the leave of the House, although I thought that it might have been convenient to your Lordships—or one of them—to have indicated my response earlier, I would like to thank the noble Lord and his supporters in the "rainbow coalition" for having so clearly set out the purpose and rationale of the amendments.
When your Lordships debated this issue in Committee I undertook to reflect carefully on what was said about the provision of news on Channel 3 and I promised to make the Government's position clear today. I am pleased to do so.
A powerful case has been made for restricting the provision of news on Channel 3 to one provider. Having carefully considered the arguments, I can inform your Lordships that the Government agree with the purpose of Amendment No. 165. We are persuaded that there are significant benefits in requiring Channel 3 to have a single news provider and in amending the 1990 Act accordingly.
We accept that a single Channel 3 news supplier is an important counterbalance to the BBC and will help to provide competition for audience share and in the production of high quality newscasting. We agree that a

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single news provider can provide continuity in bulletins throughout the day and throughout the country and help define Channel 3 as a national network. Limiting Channel 3 to one news provider will ensure that all regions get the same high quality of news. We accept the concern voiced by the ITC and others that a completely free market might lead to a diminution in the quality of news provision in some ITV regions.
In accepting the case for a single news provider we recognise the valuable role played by the ITC in vetting possible applicants for quality and therefore want to retain the ITC's role as the body which designates nominated news providers as such. We would not want, however, the ITC to take all Channel 3's decisions for them. We therefore propose that the ITC may nominate as many news providers for Channel 3 as it deems fit, but that it is left to the ITV network to choose which single provider best meets their requirements from those deemed fit. Such a framework will have the additional benefit of ensuring proper competition between news providers when the contract to the chosen provider nears the end of its term.
As I made clear in Committee, the Government are opposed to attempting a definition in statute of a quality broadcast news service which has not heretofore been needed. I therefore remain opposed to the revised attempt of the noble Lord in Amendment No. 166 to do so. We have a firm and effective regulator in the ITC and I see no need to tell them how to do their job in defining the quality of news provision which they have managed quite satisfactorily in the past.
With the permission of the noble Lord, Lord Barnett, I should like to take Amendment No. 165 away, permit parliamentary counsel to work on it, and to table a similar Government amendment at Third Reading. I very much hope that the noble Lord accepts my reasons for opposing his second amendment and that, in the light of what I have said, he might consider withdrawing them.
Lord Barnett: My Lords, I again pay tribute to the Minister for the way he has handled this Bill, the BBC Charter and Agreement and the discussions which we had about it. We are very grateful for his knowledge and ability and the way in which he has handled matters.
I am happy to take away Amendments Nos. 165 and 166. I hope that I said that there can be many news providers. I do not object to them at all. If the ITC nominates other news providers who will meet their own criteria it will be for the ITV companies to choose which one they want to use. I have no objection to that because it is absolutely right. With the principle that the Minister set out and the way in which he agrees to Amendment No. 165, I beg leave to withdraw the amendment. We shall look at the proposed amendment which I assume the Government will put down at Third Reading.
Amendment, by leave, withdrawn.
[Amendment No. 166 not moved.]
Lord Inglewood Lord Inglewood moved Amendment No. 167:
After Clause 70, insert the following new clause—
RESTRICTED TELEVISION SERVICES
(". After section 42 of the 1990 Act there is inserted—
"CHAPTER IIA RESTRICTED SERVICES
Restricted services.
42A. In this Part "restricted service" means a service which—

(a) consists in the broadcasting of television programmes for a particular establishment or other defined location, or a particular event, in the United Kingdom, and

(b) is provided on a frequency or frequencies assigned to the Commission under section 65.

Licensing etc. of restricted services.
42B.—(1) An application for a licence to provide a restricted service shall be made in such manner as the Commission may determine, and shall be accompanied by such fee (if any) as the Commission may determine.
(2) Subject to subsections (3) and (4), sections 40 to 42 shall apply in relation to such a licence as they apply in relation to a licence to provide a Channel 3 service.
(3) In its application to a licence to provide a restricted service, section 41 shall have effect with the omission of subsection (2); and the maximum amount which the holder of such a licence may be required to pay by way of a financial penalty imposed in pursuance of subsection (1)(a) of that section shall not exceed whichever is the greater of—

(a) £50,000, and

(b) the amount determined under subsection (4).

(4) The amount referred to in subsection (3)(b) is—

(a) in a case where a penalty under section 41(1)(a) has not previously been imposed on the holder of the licence during any period for which his licence has been in force ("the relevant period"), 3 per cent. of the qualifying revenue for his last complete accounting period (as determined in accordance with section 19(2) to (6)); and

(b) in any other case, 5 per cent. of the qualifying revenue for that accounting period (as so determined);

and in relation to a person whose first complete accounting period falling within the relevant period has not yet ended, paragraphs (a) and (b) above shall be construed as referring to 3, or (as the case may be) 5, per cent. of the amount which the Commission estimate to be the qualifying revenue for that accounting period (as so determined).".").
The noble Lord said: My Lords, as I explained in the debate in Committee on Amendment No. 192, tabled by the noble Baroness, Lady Dean, the Government are keen to see the expansion of smaller scale television operations where there is suitable available spectrum. This amendment follows representations made to us by the Independent Television Commission and mirrors, almost exactly, the provision for radio restricted service licences, and it is our hope that it will be as popular.
I should stress that this amendment applied to the current world of analogue transmission. With the arrival of digital and its more efficient use of spectrum, the multiplex provider will be in a position to include all manner of local television services aimed at special events or particular sections of the community. These will be a matter for contract between broadcasters and the multiplex provider.
Last year the Radio Authority issued over 300 restrictive service licences for 28 days or less and there are over 40 longer term RSLs operating in hospitals, universities and colleges. The economics of establishing a television service are somewhat different in scale than is the case for radio. We therefore envisage that the Independent Television Commission will need to consider carefully how best to encourage the take-up of these licences. However, the Government are keen to give the ITC the maximum possible room for manoeuvre in awarding them and this is why the amendment before your Lordships is drafted in broader terms than that put forward in Committee by the noble Baroness, Lady Dean.
My department and the ITC are aware of the wish of the Silverstone race circuit to broadcast television services during events held there and we would envisage such broadcasts being licensed as restricted services provided there is spectrum available for such use. I am sure that there will be many more demands for such licences for special events and from the likes of university campuses keen to have a student television service.
I should explain that the provisions of new Section 42B merely replicate the enforcement provisions and the level of fines for breaching a licence which apply to all the ITC's other licensees, as amended by the government amendments debated on Tuesday. I beg to move.
On Question, amendment agreed to.
Lord Inglewood Lord Inglewood moved Amendment N0. 168.
After Clause 70, insert the following new clause—
ENFORCEMENT OF LICENCES TO PROVIDE NON-DOMESTIC SATELLITE SERVICES
(".—(1) Section 45 of the 1990 Act (licensing etc. of non-domestic satellite services) is amended as follows.
(2) In subsection (5), for "and" there is substituted "to".
(3) In subsection (6), for "shall instead be £50,000" there is substituted—
"shall not exceed whichever is the greater of—

(a) £50,000, and

(b) the amount determined under subsection (6A).

(6A) The amount referred to in subsection (6)(b) is—

(a) in a case where a penalty under section 41(1)(a) has not previously been imposed on the holder of the licence during any period for which his licence has been in force ("the relevant period"), 3 per cent. of the qualifying revenue for his last complete accounting period (as determined in accordance with section 19(2) to (6)); and

(b) in any other case, 5 per cent. of the qualifying revenue for that accounting period (as so determined);

and in relation to a person whose first complete accounting period falling within the relevant period has not yet ended, paragraphs (a) and (b) above shall be construed as referring to 3, or (as the case may be) 5, per cent. of the amount which the Commission estimate to be the qualifying revenue for that accounting period (as so determined)."
(4) Subsections (8) and (9) are omitted. ").
On Question, amendment agreed to.
Lord Inglewood Lord Inglewood moved Amendment No. 169:
After Clause 70, insert the following new clause—
ENFORCEMENT OF LICENCES TO PROVIDE LICENSABLE PROGRAMME SERVICES
(".—(1) Section 47 of the 1990 Act (licensing etc. of licensable programme services) is amended as follows.
(2) In subsection (8), for "and" there is substituted "to".
(3) In subsection (9), for "shall instead be £50,000" there is substituted—
"shall not exceed whichever is the greater of—

(a) £50,000, and

(b) the amount determined under subsection (9A).

(9A) The amount referred to in subsection (9)(b) is—

(a) in a case where a penalty under section 41(1)(a) has not previously been imposed on the holder of the licence during any period for which his licence has been in force ("the relevant period"), 3 per cent. of the qualifying revenue for his last complete accounting period (as determined in accordance with section 19(2) to (6)); and

(b) in any other case, 5 per cent. of the qualifying revenue for that accounting period (as so determined);

and in relation to a person whose first complete accounting period falling within the relevant period has not yet ended, paragraphs (a) and (b) above shall be construed as referring to 3, or (as the case may be) 5, per cent. of the amount which the Commission estimate to be the qualifying revenue for that accounting period (as so determined)."
(4) Subsections (11) and (12) are omitted.").
On Question, amendment agreed to.
Lord Inglewood Lord Inglewood moved Amendment No. 170:
After Clause 70, insert the following new clause—
RENEWAL OF LICENCES TO PROVIDE NATIONAL RADIO SERVICES
(". After section 103 of the 1990 Act there is inserted—
"Renewal of national licences.
103A.—(1) A national licence may (subject to the following provisions of this section) be renewed on one occasion for a period of eight years beginning with the date of renewal.
(2) An application for the renewal of a national licence under subsection (1) may be made by the licence holder not earlier than three years before the date on which it would otherwise cease to be in force and not later than the relevant date.
(3) Where any such application is made before the relevant date—

(a) if no simulcast radio service provided by the applicant is being broadcast in digital form when the application is made, the Authority shall postpone the consideration of the application until the relevant date or, if earlier, the date on which the broadcasting of such a service in that form begins, and

(b) in any other case, the Authority may postpone the consideration of the application for so long as they think appropriate having regard to subsection (8).

(4) Where an application for the renewal of a national licence has been duly made to the Authority, they shall (subject to subsection (5)) grant the application if, but only if—

(a) the Authority are satisfied that the applicant would, if his licence were renewed, provide a national service which complied with the conditions included in the licence in pursuance of section 106 (whether as originally imposed or as varied under that section),

(b) the applicant has given notice to the Authority under section 35(2)(6) of the Broadcasting Act 1996 of his intention to provide a service for broadcasting in digital form, and

463

(c) a simulcast radio service provided by the applicant is being broadcast in digital form or the Authority are satisfied that by the relevant date the applicant has done all that it would in the circumstances be reasonable to expect him to do by that date to procure the broadcasting of such a service within such time as the Authority consider reasonable.

(5) Section 100(4) to (6) shall apply in relation to an applicant for the renewal of a national licence as those provisions apply in relation to such an applicant as is mentioned in section 100(4), but as if any reference to the awarding of such a licence to the applicant were a reference to the renewal of the applicant's licence under this section.
(6) On the grant of any application under this section the Authority—

(a) may, in a case where a simulcast radio service provided by the applicant is not yet being broadcast in digital form on the relevant date, determine a date by which the broadcasting of such a service in that form must begin;

(b) shall determine an amount which is to be payable to the Authority by the applicant in respect of the first complete calendar year falling within the period for which the licence is to be renewed; and

(c) may specify a different percentage from that specified under section 98(1)(d)(ii) as the percentage of qualifying revenue for each accounting period of his that will be payable by the applicant in pursuance of section 102(1)(c) during the period for which the licence is to be renewed.

(7) The amount determined by the Authority under subsection (6)(b) in connection with the renewal of a licence shall be such amount as would, in their opinion, be payable to them by virtue of section 102(1)(a) if they were granting a fresh licence to provide the national service in question.
(8) Where the Authority have granted a person's application under this section they shall formally renew his licence not later than the relevant date or, if that is not reasonably practicable (whether because subsection (3)(a) precluded the consideration of the application before that date or for any other reason), as soon after that date as is reasonably practicable; and they shall not so renew his licence unless they have notified him of—

(a) any date determined by them under subsection (6)(a),

(b) the amount determined by them under subsection (6)(b), and

(c) any percentage specified by them under subsection (6)(c),

and he has, within such period as is specified in that notification, notified them that he consents to the licence being renewed on those terms.
(9) Where a national licence has been renewed under this section

(a) any conditions included in it in pursuance of section 102 shall have effect during the period for which the licence has been renewed—

(i) as if the amount determined by the Authority under subsection (6)(b) were an amount specified in a cash bid submitted by the licence holder, and

(ii) subject to any determination made under subsection (6)(c);

(b) (subject to paragraph (a)) that section shall have effect in relation to the period for which the licence has been renewed as it has effect in relation to the period for which a national licence is originally in force;

(c) where the Authority have determined a date under subsection (6)(a), they shall include in the licence as renewed a condition requiring a simulcast radio service to be broadcast in digital form throughout the
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period beginning with the date determined under subsection (6)(a) and ending with the date on which the licence (as renewed) is to expire; and

(d) the reference in section 111(4) to the end of the period for which a national licence is to continue in force shall, in relation to the licence, be construed as a reference to the end of the period for which it has been renewed.

(10) Subsections (6)(a) and (9)(c) do not prejudice the generality of section 42(2)(b) of the Broadcasting Act 1996 (power to vary national licence to include conditions relating to digital broadcasting).
(11) In this section—
"simulcast radio service" has the same meaning as in Part III of the Broadcasting Act 1996;
"the relevant date", in relation to a national licence, means the date which the Authority determine to be that by which they would need to publish a notice under section 98(1) if they were to grant, as from the date on which that licence would expire if not renewed, a fresh licence to provide the national service formerly provided under that licence.").
On Question, amendment agreed to.
Lord Inglewood Lord Inglewood moved Amendment No. 171:
After Clause 70, insert the following new clause—
FINANCING OF GAELIC SOUND PROGRAMMES
(".—(1) Section 183 of the 1990 Act (financing of television programmes in Gaelic out of Gaelic Television Fund) is amended as mentioned in subsections (2) to (6).
(2) In subsection (2), for "Gaelic Television Fund" there is substituted "Gaelic Broadcasting Fund".
(3) In subsection (3), for "Comataidh Telebhisein Gaidhlig (the Gaelic Television Committee)" there is substituted "Comataidh Craolaidh Gaidhlig (the Gaelic Broadcasting Committee)".
(4) After subsection (3) there is inserted—
"(3A) Before making any appointment under subsection (3) the Commission shall consult the Radio Authority.".
(5) In subsection (4), in each of paragraphs (a)(i) and (b), after "television" there is inserted "and sound".
(6) In subsection (6)—

(a) after "will" there is inserted "—(a)"; and

(b) for "but" there is substituted—

"(b) widen the range and improve the quality of sound programmes in Gaelic that are broadcast for reception in Scotland;
but".
(7) In Part II of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified) there is inserted at the appropriate place—
"Comataidh Craolaidh Gaidhlig".).
The noble Lord said: My Lords, the 1990 Broadcasting Act established the Gaelic Television Committee and gave it a remit to use the Scottish Office-funded Gaelic Television Fund to finance the making of Gaelic television programmes. Since the committee began its work in 1992, it has financed a wide range of programmes. Indeed, the amount of Gaelic television broadcast has almost tripled and the enhanced service has been warmly received by the Gaelic-speaking audience. It complements other government support for the language and culture. The successful development of Gaelic television production from a very small skills base is a credit not only to the committee but also to the broadcasters and the

465
independent producers in Scotland who have worked hard to deliver a range of high quality programmes for Gaelic viewers.
The rapid expansion in television programme production has not, however, been without its problems. Many people previously working in Gaelic radio have moved into television thereby creating a significant staffing turnover in BBC Radio nan Gaidheal. It has also proved difficult to develop satisfactory programmes in some categories, particularly comedy, where it is felt that radio would be a better medium to develop talent and ideas before embarking on expensive television production.
The amendments seek to address those problems by extending the committee's remit to cover radio and by giving it powers to fund some Gaelic radio production and meet some of the training costs involved for people employed in Gaelic radio. I do not envisage that the new powers will make a significant impact on the committee's budget since radio production is much cheaper than television.
I should stress that in making these amendments we are not seeking to transfer responsibility for meeting the costs of BBC nan Gaidheal to the committee. We expect the BBC to continue to maintain its Gaelic radio service, paid for from the licence fee, and to include a commitment to that effect in the statement of pledges to its audience which it is currently preparing. We recognise the importance of the Gaelic radio service to Gaelic speakers in Scotland. Indeed, recent research has shown that Radio nan Gaidheal is listened to by 66 per cent. of its potential audience of 69,000 Gaelic speakers, which is impressive when compared to the next highest BBC service in the survey, BBC Radio 1, with an audience share of just 27 per cent. The amendments, if enacted, will enable the committee to fund additional Gaelic radio programmes on BBC and commercial radio stations in Scotland which will enhance the range and quality of radio for listeners there.
The amendments have the effect of renaming the Gaelic Television Committee the Gaelic Broadcasting Committee to reflect its enhanced role and to give the Radio Authority a say in the appointment of membership to the committee and in the approval of the committee's expenditure plans in respect of radio. Responsibility for the oversight of the committee and its work remains with the Independent Television Commission. It would be our intention to bring the provisions into effect on 1st April 1997. In speaking to Amendment No. 171, I have also covered Amendments Nos. 220A, 221, 222 and 224. I beg to move.
Lord Kirkhill: My Lords, I hope that the Minister will accept that I am not in any sense trying to get in behind him in the comment that I now make. I genuinely seek information. I assure him of that. However, when the Bill was published the noble Earl, Lord Lindsay, said that the Government might at some stage table amendments to improve the quality of the scheduling of Gaelic television programmes. So far that has not been done. I wonder whether the Minister can tell me the Government's intention.
6.15 p.m.
Lord Thomson of Monifieth: My Lords, perhaps I may say on behalf of these Benches that we welcome the Minister's proposal to extend the remit of the Gaelic Television Fund to make it the more general Gaelic Broadcasting Fund. We agree with everything the Minister said about the record of Gaelic broadcasting since the fund was set up.
I do not want to strike an ungenerous or sour note. However, it is one thing to extend the operations of the Gaelic Television Fund to radio broadcasting and to say that it will have some extra resources. To do so against the background that the present funding is not being increased to cover radio—indeed, the total funding is being severely restricted—is another thing. As I understand it, if the Gaelic Television Fund had been fortunate enough to enjoy the provisions which the Government are now writing into the Bill for the Welsh-language S4C and had index-linked the fund, it would today have about £6 million more. The Gaelic Television Fund is struggling financially and although it welcomes the opportunity to expand into radio, I think it a pity that it is not being given extra funding for the purpose.
I wish to raise another matter with the Minister and gain his reaction to it. The Gaelic Television Fund people are anxious, as the Welsh-language broadcasters were anxious, that they should have their fair share of the opportunities of the new digital age when it comes. I assume that with the many new channels that digital technology will bring through the multiplexes there may be an opportunity for greater concentration of Gaelic programming. I wonder whether the Minister has thought about the possibility of consolidating the Gaelic programmes on the various terrestrial channels that exist at the moment on a designated digital channel—perhaps not on a round-the-clock basis but at least for several hours a day. Encouragement in that direction would he most welcome.
It would offer a further opportunity. I know that those involved feel that they have done well in terms of the programmes they have funded. They have won some creditable awards for their programmes. But they feel frustrated that final commissioning decisions are always left to the terrestrial broadcasters such as Scottish Television or Grampian Television on the ITV side and to BBC Scotland. I have explained to them that I do not think that they can hope for any change because editorial responsibility for the commissioning of programmes must rest with the terrestrial broadcasters. However, multiplex offers a new world—does it not?—and it may well be possible to have a digital Gaelic channel in one of the multiplexes and for the Gaelic Broadcasting Fund to be the commissioner. I hope that that idea can be explored. I should be grateful to know the Minister's thinking.
In general therefore I welcome the extension of the fund's responsibilities but put in a plea that its overall funding might be looked at more generously.
Lord Inglewood: I turn first to the question from the noble Lord, Lord Kirkhill. We recognise that there are difficulties in finding sufficient time during peak

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viewing hours on Channel 3 in Scotland for the scheduling of Gaelic television programmes. My department and the Scottish Office are considering how the present scheduling of programmes might be eased following the introduction of digital television. I hope that that answer indicates to the noble Lord that both my department and the Scottish Office are concerned about the problem.
The noble Lord, Lord Thomson, raised the question of funding. We must be clear that the Gaelic Television Committee is not a broadcaster. It is a statutory body which gives grants for the making of television programmes. We see no reason why its funding should be treated any differently from that of any other grant-awarding body in Scotland, such as the Scottish Arts Council and the Scottish Film Council. That is perhaps a better comparison than that of S4C, suggested by the noble Lord, because S4C is a broadcaster. I am sure that the Secretary of State for Scotland will note the views that have been expressed on the need to provide adequate resources to support Gaelic broadcasting and that he will take them into account when setting the fund's budget in future years.
The noble Lord suggested having a specific digital channel for Gaelic. The basis of the allocation of multiplex licences depends upon inter alia the variety of the programmes offered and—I am now concentrating on later in the story than now—if there were to be local multiplexes, it is clear that there would be a strong case, in meeting that variety criterion, for any potential applicant to include a Gaelic service on that multiplex. On national multiplexes, it is still too early to say how the variety criterion might be met in respect of Gaelic provision, bearing in mind that its 69,000 speakers are only a small part of the total national audience.
It is interesting to focus on that matter but we must remember that once we have digital television the origin of the programme will not necessarily be all that clear to the viewer. It may not even be necessary to have a specific Gaelic channel, because there may be a number of different services, each of which, as part of its general move towards providing a wide variety of programmes, will introduce Gaelic programmes. There is plenty of potential for Gaelic in the digital future.
On Question, amendment agreed to.
Lord Thomson of Monifieth Lord Thomson of Monifieth moved Amendment No. 172:
After Clause 70, insert the following new clause—
ITC: ANNUAL REPORT
(".—(1) The 1990 Act is amended as follows.
(2) In section 197, in subsection (3)(a), at the end there is inserted "in a review included pursuant to paragraph 15(2A) in any report by the Commission under paragraph 15 of Schedule 1 to this Act; or
(3) In Schedule I, there is inserted after paragraph 15(2)—
"(2A) The report shall include a review by the Commission of developments in and the financial performance of the services regulated by the Commission; and in conducting the review the Commission shall have regard to the need to exclude from the review, so far as is practicable, any matter which relates
468
specifically to the affairs of a particular person whose interests would, in the opinion of the Commission, be seriously and prejudicially affected by the publication of that matter.").
The noble Lord said: My Lords, I hope that your Lordships are not becoming as weary of the sound of my voice as I am. As the Minister will be aware, this is an amendment inspired by the ITC, which I believe has been in discussion with the Government about the possibility of statutory backing to enable the ITC to publish more information about the financial structure and performance of the television industry. I am sure that in seeking that the ITC does not wish to place any additional burdens on any class of ITC licence in terms of supplying data to the commission. What is required is a explicit power to publish data it already has, with the necessary safeguards about commercial confidentiality.
In recent months there has been a qualitative change in the nature of the work that the ITC does from the days when it was under the old IBA. Independent television is much more a business than a purely broadcasting service. One has only to look at the financial press to see that it is the financial changes which dominate discussion about the industry's future shape. It would allow much more informed debate about the UK television industry if there were a specific obligation on the ITC to perform this regulatory task, which is carried out in other regulated industries through their own statutory provisions. I hope that the Minister will give a sympathetic response to the request from the ITC. I beg to move.
Lord Inglewood: My Lords, the noble Lord, Lord Thomson, has explained clearly the merits of the Independent Television Commission publishing an annual overview of the broadcasting sector and the reasons why he believes that in order to do so as part of its annual report, it needs statutory provision. As ever, the noble Lord has made his case most persuasively. The Government have taken the view that since the ITC has produced such a review in its 1994 annual report without any legislative provision, we need to be convinced to create such a statutory provision now in order for it to continue to do so. After all, it has explained that it is not seeking additional information beyond that which it currently obtains without statutory support.
Nevertheless, I recognise the force of the arguments. Without any commitment, we should like to consult the ITC's licensees on this matter. The department will also seek the views on the amendment of the ITV Association, the Cable Communications Association and other interested parties. I shall inform your Lordships of the result of our inquiries on Third Reading. I hope that that will reassure the noble Lord.
Lord Thomson of Monifieth: My Lords, I am grateful to the Minister for the positive way in which he has reacted to the suggestion. What he proposes seems to be a sensible approach to the matter. In the light of his assurance that he will go on in the way that he has suggested, I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde moved Amendment No. 173:
After Clause 70, insert the following new clause—
LICENSING OF ADDITIONAL SERVICES
(" . After Section 49(2) of the 1990 Act insert—
("(2A) The Commission shall do all that they can to secure, in relation to the spare capacity for the provision of additional services on frequencies on which Channel 5 is provided, that a single teletext service is provided on that spare capacity; but any such service shall be provided on only so much of that spare capacity as the Secretary of State may approve.".").
The noble Baroness said: My Lords, I shall speak at the same time to Amendments Nos. 174, 175 and 176, all of which are related. This is a new amendment. We did not consider it in Committee. It concerns teletext on the new Channel 5 service, which is not on air at the moment, as noble Lords will be aware.
The 1990 Act provided for the ITC to advertise and then award a licence for a public teletext service on Channels 3 and 4 and on S4C. Under the 1990 Act, the ITC set its quality threshold before applicants' cash bids could be considered. That threshold included the allocation of minimum numbers and main teletext pages to high quality national and international news, regional information, and the diversity of other types of information, including, for instance, travel, sports, arts and leisure, and education.
They were the minimum requirements of that threshold. Additional requirements were included in the winner's application, which was Teletext Limited. The ITC also monitors the service to check on compliance with the contract. For teletext capacity on Channel 5, there are no such provisions as those provided for in the 1990 Act.
The Channel 5 licence was awarded last October. Noble Lords may be aware that there was a legal challenge to the ITC decision on the award of that licence. One of the unsuccessful applicants applied to the courts. That legal challenge was disallowed by the courts in January this year.
The spare capacity on Channel 5 can, and I gather will be, licensed separately by the ITC. However, even though the Channel 5 service itself is part of public service broadcasting, teletext on Channel 5 is not subject to any public service requirement.
We ask whether that was intended when the Bill was drawn up. We have the position where those who provide teletext on Channel 5, under the present provisions—no provisions as I would interpret it—will be able to cherry-pick the most commercially attractive elements of Teletext Limited's service as provided on the other channels, without any kind of quality threshold being applied.
We suggest that the results could well be that public service teletext on Channels 3 and 4 and S4C will be undermined seriously by a competitor who does not have that quality threshold. We believe that the 1990 Act should be amended to provide such a provision. The amendments do provide that. They would introduce for a second public teletext service using the capacity on
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Channel 5 a licensing and regulatory regime similar to the provisions currently applying to the public teletext service on Channels 3 and 4 and S4C.
Channel 5 itself is to be a national service. It probably will not need an appropriate requirement on regional information, but there should be requirements equivalent to those contained in Schedule 5 to the Broadcasting Act 1990 for high quality national and international news and for a range of other information calculated to appeal to a wide variety of tastes and interests.
I hope that the Minister will feel able to accept the amendments, which will provide that dreadful term—a level playing field. I beg to move.
Lord Thomson of Monifieth: My Lords, my name is to the amendment, but the noble Baroness has said it all, and I am content to rest on the case that she has put to the Minister.
Lord Inglewood: My Lords, as the noble Lord, Lord Thomson, said, the noble Baroness, Lady Dean, has set out clearly the case for an additional public service teletext broadcaster on Channel 5. She pointed out that that is what the Independent Television Commission wants. It may help your Lordships in the consideration of these amendments if I explain where the difference of opinion on this matter lies between the Government and the ITC.
The ITC put its views on Channel 5 teletext to my department last year and we gave them serious and careful consideration, during the preparation of the Bill. The Government fully accept that there is a need to regulate the services on our principal broadcast channels, including the teletext services. That is why paragraph 9 of Schedule 7 to the Bill extends the consumer protection aspects of Section 6 of the Broadcasting Act 1990 to include teletext services on Channel 5. It is not the case that the teletext service would be entirely unregulated.
The amendment in the noble Baroness's name goes further than the Bill's provision and lays specific public service requirements on Channel 5 teletext which the Government believe are unnecessary. Quality public service teletext broadcasts are already provided by the BBC and by the single Channel ¾ licensee, Teletext Limited. We remain to be convinced of the need or the benefit to the public of imposing public service broadcasting obligations upon the Channel 5 teletext licensee. We had rather seen this teletext service, with its lesser UK coverage, flourishing with only the lightest of regulatory touches.
We have taken careful note of the ITC's concern that the Channel 5 teletext licensee might cherry-pick the most profitable services from the public service licensee. Our view is that the market is large enough to support both services and the inherent advantages that the Channel ¾ licensee has will ensure that the Channel 5 licensee will not seriously affect its performance, which in turn means it will have different characteristics. The current licensee, Teletext Limited, has a much larger service to offer across its two channels against Channel 5's single channel. Teletext Limited has national coverage against Channel 5's forecast 70 per cent.

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coverage. Finally, Teletext Limited provides a valuable regional service whereas Channel 5 teletext will probably remain a national service. For those reasons, we see no need to impose public service functions on Channel 5 teletext.
Finally, Amendment No. 175 seeks to add restrictions on the ownership of Channel 5 teletext. As I have said, the Government foresee that Channel 5 teletext could be a very different service from that provided currently by Teletext Limited and it follows, therefore, that we do not see any difficulty with co-ownership of the teletext services on all three commercial channels. For those reasons, we do not accept the need for ownership controls on the Channel 5 teletext licence.
Baroness Dean of Thornton-le-Fylde: My Lords, I thank the Minister for giving the background to the department's thinking on the issue. It is the first time that I have heard that explanation. It has left me with a number of questions. Channel 5 is a public service broadcaster. Teletext Limited put in its application for coverage on Channels 3 and 4 services against the background which prevailed at the time. It is now confronted with a new channel going on air next year in respect of which the teletext provision could cherry-pick the services that it provides. That is unfair competition and does not allow the kind of level playing field that one would expect in the commercial field.
I heard what the Minister said and, clearly, I need to think about it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 174 to 176 not moved.]
6.30 p.m.
Baroness Smith of Gilmorehill Baroness Smith of Gilmorehill moved Amendment No. 177:
After Clause 70, insert the following new clause—
AWARD OF NATIONAL SOUND BROADCASTING LICENCES
("After section 100(1) of the 1990 Act insert—
"(1A) For an existing licensee, the Authority shall not proceed to award a licence for a further term to that applicant even if he submitted the highest bid if in the opinion of the Authority it appears to them that any of the following apply—

(a) that the existing service has not proved to be of broad appeal, having failed to provide a diversity of programming calculated to appeal to a variety of tastes and interests: or

(b) that the level and nature of upheld complaints about programming or advertising or both exceeds acceptable levels for the licence currently in force; or

(c) that the character of the licensed service, as proposed by the licence holder when making his application for the licence currently in force has not been maintained throughout the period for which the licence has been in force.

(1B) For an existing or a new licensee, the Authority shall not proceed to award a licence to the applicant who submitted the highest cash bid if in the opinion of the Authority any of the following apply—

(a) that he would not be able to maintain the proposed service to a satisfactory standard throughout the period for which the licence would be in force; or

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(b) that there is not sufficient evidence that the format proposed would continue to be of broad appeal throughout the period for which the new licence would be in force; or

(c) that the applicant's proposals submitted under section 98(3) do not consist of a diversity of programmes calculated to appeal to a variety of tastes and interests".").

The noble Baroness said: My Lords, this remains an important amendment, even though its precise wording may now need changing in view of Amendment No. 170, which was put down after Amendment No. 177.
Our concern is simple and it reflects views expressed in all parts of the House throughout the debates on the Broadcasting Bill. It is the need to introduce a quality-of-performance yardstick in the licensing of national commercial radio stations rather than merely relying upon the highest cash bid and the operation of the market.
Perhaps I may speak first about the general principle which the amendment addresses. I will then deal with its importance for the renewal of analogue licences granted by the earlier amendment to those companies committing to the digital option. At present, commercial radio licences must be awarded by the Radio Authority to the highest cash bidder unless there are exceptional circumstances. That carries great risks, as the early months of Talk Radio UK illustrate only too well. Had it not been for the firm actions taken by the Radio Authority and the response by the changed owners of that radio licence, the effect of the 1990 legislation would have been to give a national licence to an unacceptable radio service.
As things stand now, when national licences come up for rebid the same difficulties could arise. Furthermore, there is no way in which to take into account the past performance of an existing licensee which is seeking to win back its licence. It is possible to imagine a situation in which there is a national commercial radio licensee whose performance is very much less than satisfactory, although not bad enough for a licence to be revoked. Despite its unsatisfactory performance, if it reapplies for its licence and is the highest cash bidder it will get the licence back. I cannot believe that the Government would be content for such a situation to exist without safeguards.
This amendment provides those safeguards. It would establish a performance threshold which the highest bidder would have to cross before the Radio Authority could award a licence to it. The amendment is drawn to allow such a threshold to be applied both to existing bidders reapplying for their licences and to new applicants. It is an eminently sensible safety net and I hope that the Government can see their way to adopting it or an equivalent provision.
We have now seen the Government's plans to allow national commercial radio licensees to enjoy an automatic extension of their licences if they take up the digital option. But the performance issue still remains. Would the Government really think it in the public interest that an existing licensee should enjoy that automatic extension even if its broadcasts are

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unsatisfactory, there is a high level of complaint against it or it fails to broadcast the format for which the licence was originally granted?
Of course, sanctions remain to the Radio Authority to deal with individual aspects of performance, but those are ongoing and do not deal with what could be an obvious injustice at the time of licence renewal. The performance thresholds that we are proposing provide an important safeguard in that respect too. I hope the Minister will see the value of adding such a provision to the new Section 103A. I beg to move.
Lord Inglewood: My Lords, the noble Baroness, Lady Smith, has fairly and clearly explained the purpose of her amendment. We do not accept the need for the amendment, which cuts across both the workings of the 1990 Act and the Government's own provision for the renewal of independent national radio licences contained in the Government's Amendment No. 170, which we have already passed.
In my confusion with my papers I did not speak to that amendment and, trustingly, your Lordships approved it. It is an important amendment and I hope that your Lordships will permit me to explain a little about it in order to put on the record what it deals with.
The Government announced on publication of the Bill that we would be bringing forward an amendment to provide for the existing independent national radio stations to be given the chance to renew their analogue licences, provided that they took up their guaranteed places on digital. I apologise to your Lordships that it was not possible to bring it forward sooner. The new clause in Amendment No. 170 is based upon Section 20 of the 1990 Act, which permits Channel 3 television companies to renew their licences, but there are three important differences to which I would draw your Lordships' attention. Before doing so I should like to remind your Lordships of the rationale for this provision.
Digital broadcasting will be a considerable and risky venture for the three independent national radio stations. We believe that their involvement is important to the overall success of DAB, and it is of course vital that their established services be available on DAB if, in the future, we are to be able to reclaim the analogue spectrum. That is why we have offered the guarantees. But it is clear that the return from investment in DAB will not be realised overnight. Providing a one-off option for renewal will give the INR stations greater security from which to mount their venture into DAB.
I return to the three differences from the arrangements for television which I mentioned earlier. First, the new clause will permit renewal on one occasion only. We have no desire to provide the incumbent operators with licences in perpetuity. There is little frequency spectrum available for such services—even digital techniques will provide an increase only from three to six independent national radio services. So the spectrum is a valuable resource and there is always competition for its use. And new radio stations can begin operation more easily than new television services, where, for example, the start-up costs are considerably higher.
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The second difference is that application for renewal may be made up to three years before the analogue licence is due to expire rather than four years, as provided for Channel 3. This is because radio licences run for eight years and not 10.
Thirdly, the Channel 3 television licensees need to meet performance requirements to qualify for renewal of their licences. This criterion will not apply to the independent national radio stations since the authority is not currently required to monitor performance and it would be inappropriate to add this further layer of regulation in a deregulatory Bill. Also, the licences will roll over only once, whereas Channel 3 licences can he rolled forward in perpetuity. That has a direct bearing on the amendment that we are considering.
I would also like to reassure your Lordships that the requirements in the clause relating to a starting date for digital broadcasting are not an attempt to rush the radio operators into precipitous action or otherwise cause them difficulty. The intention is to avoid any applicants obtaining renewal of their analogue licences by false pretences. But there may be situations beyond their control in which, for instance, the multiplex provider may be experiencing technical difficulty in beginning his service or it simply may not have been possible to finalise all of the arrangements between the broadcaster and the multiplex provider by the time the renewal must be determined. The new clause accordingly requires the radio station to make all reasonable endeavours to begin a digital service and to agree a date with the authority when broadcasting will start.
We want to encourage the independent national radio stations to invest in digital audio broadcasting and believe that they will find the offer of an eight-year extension to their analogue licences, subject to their taking up their guaranteed places on the digital multiplex, to be a real incentive.
Before concluding these remarks about independent national radio licence renewal, I ought to offer an apology to your Lordships that the clauses relating to independent local radio are not yet ready for consideration. However, as I have indicated previously during the passage of the Bill, we will also be making provision for independent local radio renewals. In addition, it is the intention to bring forward an amendment to clarify the circumstances in which the Radio Authority need not re-advertise an expiring independent local radio licence under Section 104(5) of the 1990 Act. That will provide for the authority to invite expressions of interest in an expiring independent local radio licence and for such parties to demonstrate their firm interest with a financial bond. Those amendments will be introduced at Third Reading.
As I have already mentioned, the Radio Authority is not required under the 1990 Act to monitor closely the performance of the independent national radio stations but reacts to complaints and concerns expressed to it by members of the public or other interested parties. Amendment No. 177 seeks to lay a heavier burden on the authority, which, in turn, would also add to the Radio Authority's regulatory costs. Since the authority is funded by its licensees, this would increase the

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financial burden on the independent national stations at a time when we hope they will be investing in digital technology.
I have referred on a number of occasions during the passage of this Bill to the Government's commitment, where appropriate, to a light regulatory touch. The Radio Authority does an excellent job and is a fine example of that light touch in practice. With only 32 staff, it polices the independent sector most effectively, paying proper attention to the needs of the public at both a local and national level.
I understand that the amendment is intended to protect listeners, ensuring the maintenance of the quality and diversity of programme material broadcast by the independent national radio stations through the licensing system. This is a worthy objective and is an aspiration which the Government share. However, this amendment proceeds by introducing additional subjective tests for the Radio Authority to carry out via licensing. Such a process cuts across the well proven competitive tender procedure, which provides a more open and objective means of allocating licences, as part of a system which is committed to delivering a range of programmes of different varieties and which has served the public well.
This amendment could also in the medium term harm the move to digital audio broadcasting by adding a further burden to those very national radio licensees who will have their analogue licences rolled for a further period of eight years only if they take up their guaranteed digital place. The proposals accepted by your Lordships in our amendment earlier this afternoon, which I have just described, will enable the current licensees to continue to provide their services on analogue for which they have a licence while at the same time it offers them the incentive to invest in digital.
I am sure that the noble Baroness supports the movement towards digital broadcasting and would agree that it would be a great mistake at this point to make a provision which might risk slowing down the impetus towards that. I wish also to add that we would regard much of the new subsection (1B) in the amendment as an unnecessary duplication of the provisions already contained in Section 99 of the 1990 Act, whereby the Radio Authority in considering a licence application must have regard to diversity and the ability to maintain a service throughout the period of the licence.
I crave forgiveness for having gone on so long but I hope that I have explained our position on this to your Lordships and the noble Baroness.
Baroness Smith of Gilmorehill: My Lords, I am grateful to the Minister, but am a little disappointed by his reply. There is a strong feeling in the House that quality cannot be left to the market. Nor should it be sacrificed in the interests of giving an artificial stimulus to digital broadcasting. The existing national commercial radio operators raise no objection to the idea of a performance threshold and there is widespread support among listener groups as well as in this House. I am sure that my noble friend Lord Dormand will wish to consider further the Minister's reaction to our
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amendment. We wish to return to the subject at Third Reading. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.45 p.m.
Clause 71 [The Broadcasting Standards Commission]:
Baroness Jay of Paddington Baroness Jay of Paddington moved Amendment No. 178:
Page 61, line 12, at end insert—
("(4) In appointing members of the BSC, the Secretary of State shall so far as is practicable, ensure—

(a) that the members of the BSC include members who, by reason of their familiarity with the special requirements and circumstances of different groups of viewers and listeners and of the different areas of the United Kingdom, are able to represent the interests of viewers of and listeners to television and sound programme services;

(b) that the membership takes into account the diverse interest of society, including women, different racial groups and disabled people,".).

The noble Baroness said: My Lords, I beg to move Amendment No. 178 and speak 'to Amendment No. 179 at the same time. The purpose of the amendments is to ensure that the new Broadcasting Standards Commission includes members who will specifically represent the geographical and cultural diversity of the United Kingdom and the diversity of groups with special interests who are viewers and listeners. The amendments will also give statutory force to the proposals of the report of the noble and learned Lord, Lord Nolan, on Standards in Public Life about appointments to public bodies as they would apply to the new Broadcasting Standards Commission.
The two amendments are amalgamations and syntheses of the issues that we raised and the concerns which we expressed at greater length and greater depth at Committee stage. They are particularly important because at the Committee stage the Government rejected our attempts to extend the broader remit of the Broadcasting Standards Commission in which we had intended to create a more widely based consumer organisation with what one might call a general population base and a general policy mission.
We hope now that by specifying the characteristics of the membership of the new BSC (which is included in Amendment No. 178) and by creating a more open framework for their appointment (in Amendment No. 179) the listening and viewing public will be reassured that the new Broadcasting Standards Commission will be a body which can truly reflect their concerns and interests and not just become another cosy and closed quango.
At Committee stage, I drew your Lordships' attention to the recommendations of the noble and learned Lord, Lord Nolan, on the subject. In his report he said:
"The basis on which members are appointed (to public bodies) and how they are expected to fulfil their role should be explicit. The range of skills and background which are sought should be clearly specified".

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That is the purpose of our Amendment No. 178. Yet, although the Government say that they have accepted the recommendations of the noble and learned Lord, Lord Nolan, they seem content to allow the Secretary of State total discretion about who is to be appointed to the BSC.
At the Committee stage, the noble Lord, Lord Inglewood, spoke of the need for "flexibility" and not,
"fettering the discretion of the Secretary of State".
On Tuesday of this week, in early deliberations at Report stage on the Bill, the Minister gave the same type of response to my noble friend Lady Dean in reply to her Amendment No. 50. In regard to equal opportunities employment in the broadcasting industry he said
"As a matter of course, the Secretary of State already ensures that the best possible appointments are made from the pool of talent available at any one time".—[Official Report, 5/3/96; col. 245.]
It may seem a matter of course to the Minister, and naturally we on these Benches entirely accept the bona fides of the intentions of the present Secretary of State. But would it not be preferable if some of those aims were guaranteed in the future and made statutory and placed on the face of the Bill?
The same applies to Amendment No. 179 on the methods of appointment. The words of the amendment are taken directly from the Nolan recommendations. I remind noble Lords that it was precisely because there was public and parliamentary disquiet about patronage and political "cronyism" in public appointments that Nolan was asked to conduct part of his inquiry. The Government accepted his recommendations on appointments. In other important areas—for example, in the National Health Service—the appointments to the new unitary health authorities which take up office next month, in April, have been made on the basis of the Nolan recommendations.
In Committee, the Minister said that the Government had no need to amend the legislation relating to each public body in order to incorporate their commitment to the Nolan recommendations. But we are not asking the Government to amend existing legislation; we are asking them to demonstrate their explicit commitment to Nolan and all that it means by accepting these proposals in new legislation about the Broadcasting Standards Commission which is, after all, a new and important public body. I beg to move.
Lord Annan: My Lords, I support the remarks made by the noble Baroness. I do not know that the wording of the amendment satisfies me, or, indeed, the Minister. But greater openness in appointments to such bodies is much to be welcomed and is very much in line with what has happened in the honours list where the public is now invited to suggest names of those who deserve recognition for the public service they have given. The spirit of the amendment is not only in line with the Nolan report; it is also in line with something that is happening in public life. I hope that the Minister will be able to give some encouragement along those lines to the noble Baroness.
Lord Burnham: My Lords, I am ashamed to say that I was not listening to the words spoken by the noble Baroness, Lady Dean, because I was sitting here on the Back Benches contemplating, with a certain amount of horror, the constitution of the BSC under this immaculately worded and politically correct amendment. The amendment states that the membership should be representative of,
"the special requirements and circumstances of different groups … of the United Kingdom",
and that it should take,
"into account the diverse interest of society, including women, different racial groups and disabled people".
The Bill says that the BSC will consist of 15 people, including the chairman and two deputy chairmen. If we are to have a representative body which will include all those groups—and indeed every other group that anyone can think of as being suitable at present—it will not be a body of 15: it will be a body of 1,500. We all know that the best committee is the committee of two of which one person is absent. Surely 15 members will be enough.
Amendment No. 179 states that such appointments should be,
"made after advice of a panel or committee which includes an independent element".
But who will appoint that independent element? Will we have to start all over again and include all those people to whom I referred? It seems totally impracticable and unnecessary. It is also unnecessary from the point of view of Nolan. If the Government have accepted the recommendations of the Nolan Report, surely the Secretary of State will take them into account when making the appointments. There is absolutely no need to complicate matters by stating such requirements in the Bill.
Lord Thomson of Monifieth: My Lords, I should, first, declare an interest as a member of the Nolan Committee. I hope that the Minister will respond sympathetically to the remarks made by the noble Baroness rather than listen to the words just spoken by the noble Lord. I am not sure that the noble Lord has really studied the recommendations made by the noble and learned Lord, Lord Nolan. I do not believe that what he said was wholly consistent with them.
I hope that the Government will look positively at Amendment No. 179. The truth is that getting together some kind of representative group of the consumers of broadcasting is a difficult task. No easy solution has been found. In years gone by when I had some part in such matters I am bound to confess that, although we conscientiously tried to recommend appointments reflecting a wider basis as set out in Amendment No. 178, in reality it very easily becomes a rather cosy organisation and one tends to recommend the appointment of the kind of people who one feels might be congenial to one's self. As the noble Lord, Lord Annan, said, a much more open system in which there are outside people—although they may be

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uncomfortable people for those who are running broadcasting organizations—would be a thoroughly healthy development.
Lord Inglewood: My Lords, I understand the wish of the noble Baroness to ensure that the membership of the BSC is able properly to represent the concerns of the range of different groups of television and radio audiences. That is a wish which the Secretary of State would share. However, as I said in Committee, I do not believe that it is desirable to fetter in this way the Secretary of State's discretion to make the best possible appointments to the commission. That means taking account of a wide range of qualities, including ability, experience, skills and background, and having the flexibility to provide the best possible combination of them at a particular time.
Amendment No. 179 relates to recommendations of the Nolan Committee on standards in public life. I said in Committee that the Government have, for the most part, accepted those recommendations, as my noble friend Lord Burnham pointed out. As the recommendations either have been—or are in the process of being—implemented, we see no need for further statutory controls. However, I am able specifically to reassure the noble Baroness and the House that, first, all new appointees to the BSC will be required to complete a declaration of political activity; secondly, all appointments will continue to be made on the basis of merit, and job specifications will be drawn up in each case; thirdly, from July of this year appointments will be subject to scrutiny by an advisory panel with independent members; and, fourthly, the BSC will fall under the jurisdiction of the new Commissioner for Public Appointments (CPA), who has the power to audit an individual appointment and ensure that the correct procedures have been followed.
As regards the advertising of appointments, all government departments have recently been issued with draft guidance from the Commissioner for Public Appointments which includes provisions on that subject. My department is currently considering those proposals and will report back shortly. The noble Baroness said that she hoped that the public would gain reassurance from my response. I hope that I have achieved that. I also hope that the House is reassured.
Baroness Jay of Paddington: My Lords, I am most grateful to the Minister for that reply. It is certainly a great reassurance to know that guidelines are being drawn up by the Minister's department. I hope that it will be possible for them to be available at least before the Bill completes its passage through another place.
As regards representation on the BSC, I am grateful to noble Lords who supported the points I wished to make. I must tell the noble Lord, Lord Burnham, that I am most flattered to be confused with my noble friend Lady Dean. I see that the noble Lord wishes to speak. I give way.
Lord Burnham: My Lords, I thank the noble Baroness for giving way. I should point out that I did in fact mean to refer to the noble Baroness, Lady Dean.
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Indeed, I would not have confused her with anyone over the past 20 years. I was actually referring to the noble Baroness, Lady Dean, in the context of the earlier amendment she moved.
Baroness Jay of Paddington: My Lords, we are grateful for the noble Lord's clarification. Indeed, my noble friend had pointed out to me during the course of the noble Lord's contribution that it was perhaps a scarred experience from earlier days at the Daily Telegraph which had imprinted her so firmly on his mind.
However, as I said, we are most grateful to the Minister for not exactly making concessions but for at least having the inspired idea of taking forward the points we made about the recommendations of the Nolan Committee. I suspect that our anxieties about greater representation on the Broadcasting Standards Commission will be addressed again in another place. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 179 not moved.]
7 p.m.
The Deputy Speaker (Viscount St. Davids): My Lords, before calling Amendment No. 180, I should point out to the House that, if it is agreed to, I shall not be able to call Amendment No. 181.
Lord Dubs Lord Dubs moved Amendment No. 180:
After Clause 71, insert the following new clause—
PARTY POLMCAL ADVERTISEMENTS
(". In section 8(2)(a)(i) and section 92(2)(a)(i) of the 1990 Act, after "wholly or mainly of a" insert "party"").
The noble Lord said: My Lords, I tend to call this amendment, by way of shorthand, the Amnesty International amendment although, if passed, its benefits would range across a wider number of organisations than simply AI. At present Amnesty International suffers from a total ban on any form of radio or television advertising. That means that it cannot advertise a fund-raising concert—indeed, it cannot even advertise its Christmas cards on radio or television—yet any commercial organisation is able to do so. That is a serious disadvantage to an organisation like Amnesty International and to others which are caught in that way. My amendment would prevent such a total ban. It would enable Amnesty to advertise fundraising events and to sell Christmas cards and other items to fund its activities. It would also enable Amnesty to put out messages about its work, provided that was not directed towards any specific political end.
The immediate origin of the present difficulties lies in Sections 8 and 92 of the 1990 Act. These are similar sections but one covers radio and the other television. Section 8(2)(a) and Section 92(2)(a) state:
"a licensed service must not include—

(i) any advertisement which is inserted by or on behalf of any body whose objects are wholly or mainly of a political nature,

(ii) any advertisement which is directed towards any political end, or

(iii) any advertisement which has any relation to any industrial dispute".

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Amnesty is deemed to be a body which is wholly or mainly of a political nature. By inserting the word "party" before the word "political" so that the provision would state,
"mainly of a party political nature",
I am advised that the amendment would enable Amnesty and other organisations to achieve some, but not all, of the things they wish to achieve. There would still be limitations.
Let me illustrate this by way of a few examples. I am advised that if this amendment were passed, Amnesty would be able to advertise its Christmas cards. It would also be able to advertise the fact that the organisation is against the use of torture because that is not a controversial point. It is totally accepted in this country that we as a country are against torture and unlawful killings by governments. Amnesty would be able to make those points in its advertising. However, under my amendment Amnesty would not be able to oppose capital punishment in advertisements because that would come under the heading of something that is intended to achieve a political end. Political ends in advertising are not accepted, and my amendment does not seek to alter that.
It seems to me that although these distinctions have to be clearly understood, my amendment will enable Amnesty and other organisations to achieve some of their aims but would not open the door to organisations seeking to use advertising to achieve specific political ends. It would therefore put Amnesty on an even footing with commercial organisations that wish to advertise their products. I do not intend my next point as a threat, but I understand that if this amendment is not accepted, Amnesty might seek recourse to the European Court of Human Rights. My advice is that, on the narrow point I have illustrated, Amnesty would probably win its case.
It is embarrassing that we as a country lose so many cases in the European Court of Human Rights. I am sure the Government would not wish to lose another one. However, I do not say that as a threat. It is a fact of life that when constraints of this sort exist, they are quite likely to be in breach of the European Convention on Human Rights. Be that as it may, my proposition here is simple. It is clear and it states what organisations such as Amnesty would be allowed to do. It prevents them from trying to pursue political ends through advertising. I commend this amendment to the House. I beg to move.
Lord Inglewood: My Lords, the noble Lord, Lord Dubs, suggested in moving this amendment that the advertising codes of the ITC and the Radio Authority are too restrictive in preventing advertising by bodies which are political campaigners but are not party political. I recognise the intentions behind the proposed amendment. I was grateful to the noble Lord for permitting me yesterday to see the legal opinion about the effect of the amendment.
The provisions restricting political advertising go back to the start of commercial television in 1954 and have remained substantially the same. They have served well for over 30 years. We have avoided broadcast advertising becoming part of the political process in the way it has, for example, in the United States—much to
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the relief, I suspect, of most of the public. There is much to he said for seeking to retain that benefit while removing restrictions on non-political broadcast advertising by humanitarian or philanthropic bodies. It is, however, important to ensure that controversial campaigning, which of course goes much wider than party politics, cannot be unexpectedly and unwelcomely injected into unsuspecting households via broadcasting. In the circumstances therefore we propose to consider the amendment further and consult more widely, in particular with the regulatory authorities responsible for enforcing the prohibitions. However, I must make it clear that I am giving absolutely no commitment to any change.
Lord Burnham: My Lords, before my noble friend sits down, is it not the case that this type of campaigning—it also hit Oxfam—is covered in the Charities Act?
Lord Inglewood: My Lords, with the leave of the House, my noble friend seems to be rather ahead of me on that point.
Lord Dubs: My Lords, I thank the Minister for his helpful comments. I appreciate there is no commitment in what he said but his remarks were helpful. In the light of those assurances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Trumpington: My Lords, I beg to move that consideration of the Report stage of this Bill be adjourned until five minutes past eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.

Department of Social Security
7.6 p.m.
Earl Russell Earl Russell rose to ask Her Majesty's Government whether and, if so, how they can increase the efficiency of the Department of Social Security without diminishing its effectiveness.
The noble Earl said: My Lords, this Unstarred Question is concerned with the proposed cut in the running costs of the Department of Social Security. I have put it down not in order to make an argument but simply to try to find out what the Government are doing. As in A. E. Housman's Fragment of a Greek Tragedy, my purpose in asking is to learn.
The Secretary of State, speaking on the "Today" programme on 8th February, said his intention was to try to improve our efficiency by roughly a quarter over three years; in other words, to cut his costs by a sum approaching £1 billion. It is a considerable sum of money. So far, the only real scrutiny this proposal has received has been from Mr. John Humphrys. Although I do not wish to denigrate Mr. Humphrys' vigour, first of all he is not a social security specialist, and, secondly, it is for the honour of Parliament that scrutiny should not be confined to the media but that we should take our

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share in it. It is also important that the scrutiny should happen now while it is still possible to discuss plans before, as I understand it, most of them are set in stone.
I want to know first—so far as it knows this itself—what is the department actually going to do? Secondly, is this figure of a quarter of the running costs a wish, or is it a hard and fast target? Will it arrive at that figure absolutely regardless of the effects, or will it get there, or as near as it can, while trying to ensure that not too much harm is done in the process? Would the department draw back if it found the effects were proving really harmful? Thirdly, will the department take care not to diminish the effectiveness of the department?
In Whitehall language, in the framework document of the Benefits Agency for example, efficiency means cutting costs. Effectiveness means getting it right. What I would hope to hear is that effectiveness will not be sacrificed to efficiency. At the moment the Minister is presiding over an efficient—I mean efficient in my sense; not in Whitehall's—well running department. I would not wish to see that changed simply for the sake of saving money. If the Minister were to find that the department's effectiveness were being diminished by these proposals, would he back off?
Obviously the first question that comes to mind is that of redundancies. In a Written Answer to my noble friend Lord Addington, the Minister gave assurances that the department is not at present contemplating any redundancies. I am glad to hear that, but I should like to know whether that is a hope or a promise. Does the Minister merely feel that he would like to avoid them, or is he giving an undertaking that he will do so? Further, if, sadly, there were to be redundancies, will the department make sure it calculates the cost of those redundancies to the social security budget before it counts them as a net saving?
The Secretary of State gave some answers on the "Today" programme which I should like to explore further. He said that he was going to go for what the jargon calls "process re-engineering": ensuring that the processes are geared to achieving the outcome. That sounds unexceptionable enough. I should like to know what it means. I should like some examples of what is actually meant by process re-engineering because we cannot judge what the Secretary of State is proposing until we understand what it is.
He also referred to getting:
"the process of getting information from the claimant to ourselves streamlined so you do not have to keep coming back again and again".
That sounds an unexceptionable objective, but I should like to know exactly how he is going to set about it because the circumstances of claimants regularly change. I should like some assurances that it can be done without diminishing the capacity of the department to respond to changing circumstances. That is quite an important part of the benefit system.
I understand that some of it may be done through computerisation. I hope the Minister can assure us that computerisation does not obviate the need for human
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beings. Social security is full of anomalies. Indeed, very often people do not come within the compass of the system except because they are anomalies, so I hope it will remain possible to go and speak to a person where something has gone wrong with the computer system.
The Minister probably will not remember, because it was before he was in the department, an interesting debate initiated by the noble Lord Peston about the introduction of ACT—Automatic Credit Transfer. Very strong views were expressed then that this should not lead to the closure of rural post offices and that it should remain possible to obtain benefit at a post office. I am sure I do not need to tell the Minister, who knows rural areas extremely well, that these post offices can be the lifelines of rural areas. I hope he can assure me that the Government are not going to stop the claiming of benefit at post offices and that this is not going to lead to rural post office closures.
There are other problems in computerisation. The benefit payment card obviously has its attractions but, of course, it is possible for cards to be stolen, especially from people who are sleeping on the street. The Minister must have heard of the phenomenon of "taxing". What is going to happen to somebody who has a benefit payment card stolen by a person who is "taxing" them on the street? Is there is machinery in place to ensure that the thief does not draw an immense amount of benefit before the theft is detected? There are risks here and it is going to need people to avoid those risks. Again, I would like to hear a note of caution being struck in the Minister's reply.
The points I have made about rural post offices also need to be made about rural benefits offices. People on benefit, especially the elderly or the disabled, do not have the very highest degree of mobility. Having to go a long distance to the nearest benefits office may make life very much harder. Again, I hope we can have some assurance that this saving is not going to be achieved through closure of local offices.
I am also concerned, of course, about errors, as is the Comptroller and Auditor-General. He has once again qualified the accounts and pointed out a rate of error in income support claims of 16.1 per cent. I do not intend to be too fierce about that. People on benefit may have very high mobility. You might say of them what my noble friend Lady Seear once said about students, "They hop about like fleas". I am sure the Minister understands that, at the other end, many of these errors may represent very grave personal hardship. I hope I can have an assurance that, as these changes are introduced, the Minister will be watching the rate of errors in handling claims, and that if the rate of errors should show signs of significantly rising he will think again about what he is doing and not go ahead with savings which drive up the rate of errors.
I also want to know whether the target is contingent on the number of people on benefit at any one time, because when the number of people on benefit goes up, the number of people you need to deal with them may go up. I commend to the Minister the speech made by the noble Baroness, Lady Faithfull, on the Second Reading of the Child Support Bill last year. The people

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from the Liable Relative Unit were moved onto the counters because of a rise in unemployment and the costs of that decision are still with us. I hope the Government are not going to make that mistake again.
I hope also that the Minister can tell the House that there is not going to be a cut in the research budget. The department does not always like research by others, so I hope it can keep its own going.
I also want to offer a word of caution about self-assessment. The benefit system is hard enough to understand for us here. For people who unexpectedly go onto benefit it may be quite bewildering. If self-assessment comes in the Minister may find that it takes more staff to help people do their self-assessment than it would to continue as we are now. I should like to hear some assurances on that, too.
I am also anxious about the effects of these cuts on the introduction of JSA. The Minister will remember a debate we had on the first day of Committee when the Bill was before us. The merging of two huge bureaucracies is necessarily a cumbersome business. I hope he can give us assurances that both that and the new computer system will not suffer from these cuts in the running costs of the department. I suggest that he looks at the very wise words of Sir Michael Partridge, giving evidence to the Public Accounts Committee on the Child Support Act, about the conditions for introducing a major new change and whether he should add one more—that a major change should not be introduced in the middle of a budget cut.
I also want to ask him whether he can give us any assurances about privatisation of the delivery of individual services. First, if there is privatisation, whether he can guarantee that the effectiveness of the service will be as great as it is in the hands of the department. Secondly, whether he can give an assurance that costs can be lowered while nevertheless figuring in a profit margin. Those are difficult questions and I should like to know what the Minister has to say about them.
Overall, I hope the Minister will remember that the Department of Social Security is running a lifeboat service. Lifeboats are not always needed at convenient working hours. If the effectiveness of a very good department is diminished by these cuts I would regret it very much. I look forward to hearing what the Minister has to say.
7.18 p.m.
Lord Carter: My Lords, the House will be grateful to the noble Earl for putting down this Question. I have to say in the dinner break on Thursday evening it is hardly standing room only. However, this is a very important subject and I am grateful to him for putting down the Question on the Order Paper.
I start by saying, and I am sure the noble Earl would agree, that on this side of the House we fully support efficient administration and the elimination of fraud. I read with great interest a recent speech by the Secretary of State, Mr. Peter Lilley, entitled Welfare
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State of the Art and I am extremely grateful to the Minister for sending me a copy. I propose to base my remarks on that speech, as did the noble Earl.
There is a significant sentence in the introduction:
"I want if possible to achieve this without cutting basic benefits".
Obviously that is a reference to the target of a 25 per cent. reduction in operating costs. In the ordinary meaning of language, the implication is clear that if the target is not achieved basic benefits will be cut. It would be helpful if the Minister could assure me that I have misunderstood the reference.
In his speech the Secretary of State points out that running costs account for some 4 to 5 per cent. of the total budget of £3 billion to £4 billion per annum. That used to be the case in the National Health Service, when administration accounted for about 5 per cent. of the total costs. Then we had the reforms and the internal market, and now administration costs have doubled to about 11 per cent. of the NHS budget. If the Minister does nothing else this evening he would do a great service if he could assure the House that the proposed change programme in the DSS will not be based on another crackpot notion like the internal market.
Something is missing from the argument. I do not criticise the omission because the speech was about operational matters. However, it is worth reflecting on the fact that much greater savings in the department's budget of £90 billion could be made by reducing unemployment and by tackling poverty than by saving £1 billion on administration. For example, the number of claimants on income support in May 1990 was 4.2 million, and in May 1995 it was 5.7 million. That figure comes from the May 1995 income support quarterly statistical inquiry.
The Secretary of State also points out that the department arranges £300 million per annum in child maintenance. When I read that, I could not help wondering about the administrative costs of interpreting the algebraic formulae in the Child Support Act that we all struggle with.
One of the possible savings in administration costs would result from the department having better methods of estimating the likely take-up of benefits. Two examples spring to mind. For many years I and many others battled in this House to have the old mobility allowance extended to the severely mentally handicapped. The Government's arguments against the change were based on extraordinary estimates of likely take-up. Figures of well in excess of 100,000 possible claimants were produced. We argued continually that the likely take-up was less than 10,000 people. The extension of mobility allowance was eventually introduced by the Government, and their final estimate of the likely take-up was of the order of 10,000 claimants. I do not know how many man-hours were expended in the department on working up the spurious estimates, but there must have been a substantial cost involved. Another example concerns the introduction of the disability living allowance. The Minister will have the figures, but I seem to remember that the take-up was very much greater than the department had estimated. Again, a cost was involved in that error.

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There is a curious complementarity about the estimates of the costs associated with the department's activities. For example, the cost of fraud in income support, unemployment benefit and housing benefit has been estimated at just over £2 billion, which is almost exactly the estimate of the value of unclaimed benefits.
Concern has been expressed about the true meaning of the proposition in the Change Programme that:
"We should pay people not to perform processes but to achieve results".
We all know what happened with the Child Support Agency, with its targets for benefit saving. What are the results which are envisaged? Will there not be a subconscious reluctance to ensure the full take-up of benefits both in terms of entitlement and numbers, since a less than full take-up means savings in the budget?
Another provision states:
"The ethos of public service is essential but state monopoly of provision is not".
Under that heading it is pointed out that headquarters will concentrate on what services will be provided but leave the operational managers to determine how best to provide them. I hope that there will be stringent internal procedures to prevent abuse in the letting of contracts. We all know the horror stories about the purchasing services in the NHS, the fraudulent computer contracts and the rest. It would be helpful if the Minister could say a word about the internal audit procedures and other control measures where contracts are to be let in the private sector to ensure that the savings in costs envisaged are not wiped out by some form of abuse in the letting of the contracts.
So far as I can see, there is nothing in the programme about any attempts to improve the take-up of benefits. I have already referred to the estimate of £2 billion which is unclaimed. Are there programmes aimed at reducing that figure?
On the general question of saving costs, can the Minister elucidate the figures for the estimated savings from the proposed anti-fraud measures? The Budget Red Book stated that by 1988–89, social security anti-fraud measures are expected to save about £2.5 billion a year. In the social security up-rating Statement last November the claim was made that anti-fraud measures would save£2.5 billion over three years. Perhaps the Minister can explain the apparent discrepancy between the Budget Red Book and the social security up-rating statement.
Of course there are a number of major policy decisions which lead directly to increases in administration costs. I say at once that that is a problem for all parties in reviewing their policies on the provision of social security. We all know that the extension of means testing automatically increases administration costs. Means-tested benefits were 17 per cent. of benefit expenditure in 1978–79; they were 35 per cent. of benefit expenditure in 1995–96. They have doubled as a proportion of benefit expenditure.
We all know that complexity means cost. As the noble Earl said, the National Audit Office has refused to pass the department's income support account every
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year since 1988 on the grounds that the error and fraud rates are so high. The Permanent Secretary of the department observed to the Public Accounts Committee last month that:
"We are dealing with something so inherently complicated that it's always going to be difficult to get it right".
Turning to the Social Fund, 61 per cent. of its total budget is spent on administration. Does the Social Fund get the Oscar for the highest proportion of budget spent on administration?
Reducing the number of home visits must add to the possibility of fraud. Some 6.5 million home visits were carried out in 1978–79. The number was down to 0.5 million by 1994–95. Mr. Lilley has said that the number of home visits will be increased by I million, but even the increased figure of 1.5 million has to be compared with 6.5 million 17 years ago. How is that kind of reduction in home visits supposed to lead to reduction in fraud? Indeed, does the department have figures for the trade-off between the cost of home visits and the reduction in fraud?
As I said at the outset, we share the Government's wish for efficient administration and the reduction of fraud. Everybody interested in the proper administration of the public purse wants to see efficiency, but that has to be balanced by equity. I have the feeling that the Government's proposals have a great deal to do with efficiency, however defined, but I am not convinced that equity is equally highly regarded.
7.27 p.m.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, we have had a short but interesting debate on what is a very important issue. I hope that I can manage to answer the majority of the points that have been raised, if not directly as question and answer then in the course of my speech. I want to address not only some of the points made but also try to place the proposals put by my right honourable friend the Secretary of State in their context and explain to the House and the two noble Lords who have taken part in the debate what we intend. In that way I hope that I can answer most of the questions that have been put to me.
We are committed to providing good quality public services while reducing the burden on the taxpayer. Indeed, the Department of Social Security has already delivered, in its administration costs, efficiency savings of £400 million since the financial year 1991–92. We are now seeking more fundamental ways of achieving business and efficiency improvements.
We are committed to delivering the right money to the right people at the right time. On the other hand, because people tend to forget that we have another side—through the Contributions Agency—we are committed to collecting the right money from the right people at the right time, and indeed every time.
That is why my right honourable friend Mr. Lilley recently announced the department's change programme in a speech to senior managers from across the department, including the executive agencies. I have placed a copy of that speech in the Library today.

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This change programme is a key step in our long-term review of the social security system. Under the change programme we aim to deliver the social security programme both more efficiently and more effectively. That will form the basis of the department's business plan over the next three years.
Perhaps I may say this to the noble Lord, Lord Carter. The programme is not about cutting benefits. We seek to cut unnecessary costs in paying benefits. Collecting national insurance, for example, and paying the benefits are what the whole programme is looking at to see how we can improve efficiency and effectiveness.
We are certain that we cannot achieve further significant running cost savings just by more pruning or by asking our staff to work harder. We shall not make the improvements we need in operations by harder work or by racing against the clock. We need to think laterally and creatively about what we do. That is the approach that we are adopting in the change programme.
We are not talking about carrying out the same operations as now with 25 per cent. less money. Cash budgets will increase modestly in the first and most difficult coming year. But over the three-year period we shall have to improve productivity by 25 per cent. in order to absorb inflation and rising workloads. In the longer term the team which has been studying this programme estimates that savings of as much as £1 billion a year are possible.
The noble Earl, Lord Russell, asked me some alternatives: would I reach the savings figure regardless of whether the necessary changes are made? At the very beginning of the scheme the last thing I shall do is to suggest that we shall fail at both. That way leads to a failure to do either. We believe that we can achieve the efficiency savings that we seek through possible changes in the way in which we administer the system. As the changes are developed and come to fruition as proposals, Ministers will consider them all and judge them against a number of criteria. Acceptability will be one. Do we believe that they are feasible? In every case we shall make those judgments as we go along. If I may put it this way, we shall bring a number of factors to bear on all the proposals, as will our officials. As I say, I believe a little lateral thinking is the expression used for this kind of work. We are attempting to get away from the mind-set that we have always done it this way and that is the way we must continue to do it.
The noble Earl is giving me what I trust is a false choice. I believe that we shall be able to deliver both the changes and the savings that I hope we can achieve over the three-year period of the public expenditure round. As your Lordships know, public expenditure is laid out in three-year terms: this coming year, the year after and the third year. We intend to deliver this project over three years. It is not something that we intend to deliver this year or next year, although obviously some aspects will come on stream.
In considering what we do and the customers we serve, I believe that it was the noble Lord, Lord Carter, who asked me about the link with the number of people on benefit. The noble Earl asked me the same: are we undertaking this programme oblivious of whether our
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workload goes up or down? I shall return to this. For a number of reasons we expect our workload to increase in the years to come. It goes back to a question that the noble Earl asked me recently. He was puzzled as to why income support continued to rise when unemployment came down. He stimulated me into having a look at the figures. I shall be replying to him, but the debate gives me the opportunity to say this.
The number of unemployed people on income support is coming down. It depends how one looks at the figures. I believe that they are coming down quite quickly; some noble Lords may say that they are coming down gently. The number of people over 60 is on a slightly gently rising curve; the number of lone parents is on a fairly steep curve; and the number of disabled is on a fairly steep curve. The figure for "others" is coming down from the peak reached in 1993. So there are a number of different factors at work.
The noble Earl put the question to me about the unemployed. If the figure involved only the unemployed, the numbers are coming down as one would expect given the fact that unemployment is coming down. But there are other claimants for income support in addition to the unemployed.
We take account of the trends in the number of people on benefit in deciding how we fund the system. As I develop my argument, I hope the noble Earl will understand that while the numbers are important, they are not that important when we consider what we seek to achieve in the change programme.
The step improvements in efficiency involve three elements. First, we define the services we want to deliver then design new processes to achieve them. Secondly, we draw on the experience of staff at all levels in our organisation to generate radical ideas for change. Thirdly, we put in place systems and incentives to encourage continuous improvements. The change programme, therefore, is based on seven propositions. The first proposition is that too many current procedures are rooted in the past clerical world. Our first priority must be to review our current processes, streamline them where possible, and use developments in information technology not to execute clerical procedures more rapidly but to design new, more effective ways of delivering our business. I think that it is fair to say that in the past when we have moved to computer-based systems, to information technology systems, we have often simply translated the paper-chase that we have been used to following and have asked the computer to do that. We have not asked the question: can we do the job in a different and better way by use of the IT? That is the fundamental question.
The noble Earl asked me what process re-engineering was about. That is what process re-engineering is about. In fact, I can give him another example of process re-engineering. It will enable me to answer one or two of his questions as well.
Traditionally we have paid benefits via books and Giros. I shall not bore your Lordships by highlighting some of the problems that arise in that system. We are fundamentally re-engineering how we do that by moving over to cards and to that system of payment

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through post offices. That allows me to assure the noble Earl that the system we are developing through the Post Office and the Benefits Agency, through the private finance initiative, will continue to allow people to have their benefits paid through the Post Office, and, of course, through their banks and building societies if that is what they wish. That method is more economic for us and has much security about it.
But we believe that the use of cards will increase the security because the card itself, whether stolen or just picked up after being lost, will not convey any information to the person who steals it. It will not say how much the benefit is worth; it will not state the address of the person who is due for benefit; it will not even give the Post Office at which benefit is due to be paid. There are a number of basic safety measures in the card which we believe will cut down the fraud that occurs through the misuse of books and Giros. Therefore the thief will have to do a lot of work before he can use the card; and the opportunist thief, as I believe many thieves are, will not find the card system very good. Immediately a stolen card is reported, we shall be able to close off the system. The Post Office will pay only if the central system tells it to do so. We shall be able to put a stop on a card more quickly than on a book. That is an example of process re-engineering.
The second proposition is that benefit entitlement rules are often outdated. They are inconsistent between benefits and, we believe, more complex than necessary. It is right that the rules on entitlement to benefit should be specified in law. However, benefit entitlement rules are often outdated, they are inconsistent between benefits and we believe they are more complex than is necessary.
While there have been successful attempts at benefit simplification, income support replacing supplementary benefit for example, each benefit has its own rules. They reflect the period the benefit was introduced. Unfortunately benefits often overlap, leading to complexities which staff and claimants find difficult to comprehend. Two benefits can treat the same fact differently. We are examining all social security rules, including benefit entitlement rules, with the prime purpose of seeing whether we can simplify their administration. That is what I believe my right honourable friend referred to when he spoke on the "Today" programme. I find the point on self-assessment quite interesting. I do not think we have any plans for people to "self-assess" in the way I understand it—in other words, to do the calculation, come out at the end with a figure and say, "That is what you owe us". We do not have plans like that at all.
The third proposition we have in mind is this. Laying down procedures in law is a barrier to efficient customer services. The prescription in legislation of procedures as well as rules makes it hard to streamline the administration of decision-making. Fundamental to the change programme will be a review of the legal basis of decision-making and appeals. We need to develop a decision-making process which leads to speedier decisions, generates more accurate assessments, will be simpler to understand, will make it easier to rectify
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mistakes and will provide a less formal and legalistic appeals process, with legal expertise concentrated on more complex cases.
Fourthly, a proposition which I am sure noble Lords will heartily endorse is that it costs less to get things right first time than to check, revise and repeat work done wrong initially. Both noble Lords in various ways raised aspects of that. Up to 60 per cent. of income support claim forms are filled in incorrectly and 30 per cent. of all work on IS claims involves obtaining further information. We need to review the information we give to claimants and require from them, the clarity of our forms and requests for information and whether claimants can be given incentives to provide the necessary information to support their claim at the outset so that we do not have to spend time going back to them and asking for more information or clarifying information that they have already given us.
Of course there will always be those who will need assistance when claiming. We will review our customer services to focus them on those who really need help. I can say to the noble Earl that we are always re-examining our network of benefit offices all around the country. We fully intend to continue the principle of giving people access to an interview at a benefit office.
I cannot tell the noble Earl that we shall ever set in stone the current network. Things change. Sometimes offices simply have to be moved because their lease comes to an end. I cannot give him an assurance that there will be absolutely no change in the structure of benefit offices. What I can say is that we do not propose to remove the face-to-face contact from customers who need that level of support.
Interestingly enough, some surveys that we have done increasingly indicate that our customers prefer contact by telephone. That is a rising part of the way our customers like to deal with the agency.
The fifth proposition is that we need the information just once. The counterpart of requiring claimants to accept some responsibility for providing information about their claim must be that we require only the minimum necessary information from them. So we are aiming to develop a system which will establish a single personal account for each claimant with information relating to all their benefit. We will review reporting requirements. There may also be scope for reducing the obligation to inform the agency about all changes of circumstances. At present some two-thirds of changes of circumstances notified to us result in no change in the value of benefit. So we will review reporting requirements to see how many are absolutely necessary.
Sixthly, we should pay people not to perform processes but to achieve results. We can create incentives for continuous improvements in quality and efficiency. In future we must specify the services we want provided but leave those providing them to find the best way of achieving the desired results. We should fund people to achieve results which are specified in terms of quality. For operations managers and staff we aim to remove the barriers to efficiency created by unnecessary bureaucracy.

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Seventhly, the ethos of public service is essential but state monopoly of provision is not. While our priority has to be to make decisions fairly in accordance with the law, the department should use suppliers who offer the best value for money, irrespective of whether they are in-house or private sector. We will further develop a mixed economy—as we are doing with the Benefits Agency/Post Office Counters Limited project on cards—with services provided by both the public and private sector. We intend to use the private finance initiative whenever possible to develop new projects. The performance of both public and private sector would be assessed on a comparable basis. I assure the noble Lord, Lord Carter, that we are very careful about the financial aspects and financial probity of contracts that we let.
It will be some time before the impact on staff levels can be gauged. As I have tried to explain, we are at the beginning of a process of seeing what tools are available to us to change. But there is no doubt that greater productivity will mean fewer staff posts. However, on anybody's terms, we will remain a very large employer. We must do all we can to accommodate change by natural staff turnover and by voluntary movements. We must equally do all we can to help those who do move on.
The change management team spans all the agencies and department headquarters. They have discussed ideas for change with staff at all levels and they consulted businessmen who have successfully implemented similar changes in their organisations.
The noble Lord, Lord Carter, mentioned his anxiety about how that would bear down on fraud. The elimination of fraud is part of our fundamental objective, not an afterthought. There is no question of sacrificing anti-fraud activity to achieve other change programme objectives. Indeed, the extra funds secured for the security programme and for combating housing benefit fraud are ring-fenced and cannot be diverted to other activities. Steps to simplify entitlement and to improve the accuracy of initial claims, to bring together all the customer information in a single customer account and other components of the change programme will all make fraud more difficult, not easier. And it will enable our staff to be directly involved in the battle against fraud. I hope that assures the noble Lord on that particular point.
Lord Carter: My Lords, I am sorry to intervene. Will the Minister deal, if necessary in writing, with the point on the apparent anomaly between the figure quoted in the Budget Red Book of £2.5 billion a year; in the up-rating the figure was £2.5 billion over three years for successful anti-fraud measures.
Lord Mackay of Ardbrecknish: My Lords, I think I shall have to write to the noble Lord. If I gave the figures I have, which are over different periods, it would cause even more confusion. My figures are over a two-year period when we shall spend something like £300 million extra, and in return for that we expect to achieve something like £2 billion in fraud savings. I will certainly write to the noble Lord to clarify the position and make sure that we are both discussing the same time period.
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I discussed the question of self-assessment. The noble Earl is always keen to ask me if I have "netted off' costs. I can assure him in this case that the running costs of the department do indeed include redundancy costs. Our objective, as I mentioned earlier, will he to reduce those costs to an absolute minimum; and, if we can possibly do so, to avoid them altogether.
I believe I answered the question about benefit cards being stolen once we change to the card system. I hope also that I have assured the noble Earl in regard to benefit offices in rural areas.
I should have guessed that the noble Earl would ask me about the DSS research budget. We make our decisions about research every year on the basis of what we need as research. That position will continue.
I believe that the change programme marks a significant step forward for the delivery of benefits and the collection of contributions and child support. Indeed, the proposals bought forward by my right honourable friend the Secretary of State for Social Security, Mr. Lilley, have had some unlikely backers. I cannot end the evening—the noble Lord, Lord Carter, would not expect me to do so—without making some brief reference to a leaked letter from Mr. Andrew Smith, who is the shadow chief secretary to the Treasury, to Mr. Chris Smith who is my right honourable friend's shadow in the party opposite down the corridor. Mr. Andrew Smith says that he has been making some informal inquiries about the feasibility of the plans. He says that the advice that he is getting, which is necessarily incomplete, nevertheless suggests that savings in running costs of that magnitude are perfectly feasible, given the opportunities for efficiency gains and the scale of investment already undertaken. But the timetable for introducing them is, to say the least, challenging. I read out the last sentence because that is the slight caveat and I did not want the noble Lord to rise and ask me to read out the text.
Lord Carter: My Lords, I thought the noble Lord could not resist doing that. Why do the Government always refuse to comment when a government letter is leaked but are always anxious to comment when an opposition letter is leaked?
Lord Mackay of Ardbrecknish: For the same reason, my Lords, as the Opposition are not very keen to comment on their letters which are leaked. The point that I intend to make, in addition to the slightly teasing one that the shadow chief secretary of the party opposite feels that those things are possible, is that he also says that they are challenging. With that I totally and absolutely agree. So I comment on his leaked letter by agreeing with it in that regard. They are challenging but we believe they are possible.
The change programme, which I have tried to outline this evening, will mix the best elements of the public and private sectors. It will share responsibilities more efficiently between the state and the claimant or contributor. We have not in fact dealt with the other side of the department's business, which is the collection of the national insurance contributions. We believe that by those means we can deliver a service of higher quality,

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designed to use the modern management techniques and also the information technology techniques which are now available, and do so at a lower cost. By using those modern techniques, we can improve hugely on the efficiency of our current system which, as I said at the beginning, is very heavily paper based, has been built up over half a century and has never been scrutinised right across the board in the way in which we intend to examine it over the next three years.
I hope that I have answered all the points. I promise to write to the noble Lord, Lord Carter, about one point that he made which I feel it would be better for me to study and check the figures. I hope that your Lordships are assured that this is a programme that we believe can be delivered, save money for the taxpayer and at the same time improve the service that we give to the people who depend on us.
Earl Russell: My Lords, before the noble Lord sits down, I hope that he will allow me to thank him for a very forthcoming and thoughtful answer. Perhaps I may ask whether, when he comes to the review of conditions of entitlement that he mentioned, he can say whether there will be any possibility of informal all-party consultation before they are set in stone.
Lord Mackay of Ardbrecknish: My Lords, I am grateful to the noble Earl for his kind words about my contribution this evening. It is possible—but I would not go further than that—that we may want to make some changes which will require consultation: consultation with SSAC, for example, and consultation in the wider world. I should not rule out consultation, if we are dealing with issues on which one normally consults. If we are bringing together the different benefit rules and trying to harmonise them, we may require secondary legislation to bring them all into the same line. I do not think I can go further than that in reply to the noble Earl this evening.
Lord Lucas: My Lords, I beg to move that the House do now adjourn during pleasure until five minutes past eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.54 to 8.5 p.m.]

Broadcasting Bill [H.L.]
Consideration of amendments on Report resumed.
Clause 72 [Power to publish guidance relating to avoidance of unjust or unfair treatment or interference with privacy]:
Lord Inglewood Lord Inglewood moved Amendment No. 181:
Page 61, line 14, leave out ("The BSC may draw up") and insert ("It shall be the duty of the BSC to draw up, and from time to time review,").
The noble Lord said: My Lords, in moving Amendment No. 181, I shall speak also to Amendments Nos. 183, 186, 187, 191, 193, 194, 197, 205 and 206. In the interests of saving time, and with your Lordships'
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consent, I should like to speak to all of the government amendments now. I shall, of course, move them as we come to them. Your Lordships will recall that in Committee I undertook to consider further a number of amendments to this part of the Bill. Most of the Government's amendments are a result of that consideration.
Amendments Nos. 181, 183, 186 and 191 seek to address the anxieties expressed by the noble Lord, Lord Chalfont, and the noble and learned Lord, Lord Ackner; namely, whether the drawing up and review of the guidance should be mandatory. On further reflection the Government have come to the view that such guidance should indeed be mandatory. Similarly, the Government studied further the proposal of the noble Lord, Lord Donoughue, that the BSC, in drawing up its guidance on fairness, be required to consult broadcasting and regulatory bodies and any others it considered appropriate. Amendment No. 187 seeks to create such a requirement.
I turn now to Amendments Nos. 193 and 194. A short time ago the Secretary of State met the chairmen of the existing BSC and BCC. One point that emerged from the meeting was the question of whether the ring-fencing of the work of the fairness committee might be excessive. As I indicated in Committee, it was felt that the Bill as drafted might unnecessarily fetter the discretion of the commission in determining the allocation of responsibilities. These amendments, which remove subsections (2) and (3) of Clause 77 and amend subsection (1), are intended to create flexibility in the area.
Amendment No. 197 follows a proposal of the noble Lord, Lord Ashley. It is intended to allow the BSC, at its discretion, to consider complaints submitted in a form other than written thereby facilitating the submission of complaints from the sensory or otherwise impaired.
The noble Baroness, Lady Dean, introduced an amendment in Committee to prevent broadcasters making comment alongside any summary of a BSC finding which they were required to publish or broadcast. The noble Baroness, your Lordships will recall, offered the example of a finding by the Broadcasting Complaints Commission against the programme "The Cook Report" where the broadcaster, in broadcasting a summary of the finding, accompanied it with negative comment by the programme's presenter, Roger Cook. I understand that the ITC subsequently required that the summary be broadcast again, this time without additional comment, and that was done. Nevertheless, the point is a good one. Amendment No. 205 is intended to ensure that broadcasters may not comment alongside any published or broadcast summary of a BSC finding which they are required to make. That would not, of course, restrict the broadcasters' freedom to comment elsewhere on such a finding.
The noble Lord, Lord Chalfont, and my noble friend Lord Caldecote proposed an amendment requiring the BSC to publish reports monthly. As I said at the time, the Government believe that such a requirement would

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fetter the discretion of the BSC to publish its reports more or less often where appropriate. However, the Government accept that reports should, in general, be published monthly. Amendment No. 206 makes the Government's intention clear while allowing the BSC the discretion to deviate from it where appropriate. I beg to move.
Lord Renton: My Lords, I wonder whether the noble Viscount on the Woolsack can give us some guidance. I hope this will not be regarded by your Lordships as my speech but I think we need guidance. If Amendment No. 181 is accepted by the House, does that mean that Amendment No. 182 may still be called or cannot be called?
The Deputy Speaker: My Lords, Amendment No. 182 may still be called.
Baroness Trumpington: My Lords, Amendment No. 182 comes after Amendment No. 181 and therefore we are not dealing with it at this stage.
The Earl of Halsbury: My Lords, before we adjourned, we were advised that, if Amendment No. 181 were passed, Amendment No. 182 could not be moved.
The Deputy Speaker: My Lords, perhaps I may apologise. It is my mistake. If Amendment No. 181 is agreed to, I cannot call Amendment No. 182. I thank noble Lords for calling my attention to that point.
Lord Chalfont: My Lords, I am grateful to the Minister for meeting at least one of the concerns which were expressed in the course of the Committee stage; that is, to make the mandatory "shall" or "has a duty to" take the place of the more permissive sense of "may" in the context of asking the BSC to draw up codes of behaviour—in other words, to make this an obligation on the BSC and not simply an option. I am grateful to the noble Lord for that.
But there was a second element to our concern. It was the anxiety about the somewhat woolly concept of guidelines. We hoped that the Government would agree to substitute for guidelines and guidance a clear requirement for a code, a code which would have to be observed on pain of punitive sanctions if it were broken. It may be worth reminding your Lordships that in the Scott Report we had a prime example of the dangers of giving people guidelines rather than clear and unambiguous rules or codes.
I am aware that the Government take the view that the present wording will achieve the required purpose. I am not convinced. I would have said this in speaking to my amendment, but, in the light of the advice that it cannot be called if Amendment No. 181 is accepted, I must say that we are still not requiring with enough clarity and lack of ambiguity the BSC to draft a code of practice and not just guidelines or guidance. I appreciate that the words in the Bill follow closely the words of the 1990 Act and therefore might be thought to be to some extent engraved in stone. But there is one important difference which may be more important than seems to be the case at first glance.
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The 1990 Act requires the Independent Television Commission and the Radio Authority to draw up a code giving guidance as to the rules to he observed. That might be behind the Government's case that it will achieve what it is we want to achieve. But the present Bill does something different. It provides that the BSC may draw up guidance relating to principles to he observed. Principles are a very different thing from practice. I am not quite sure that the 1990 Act wording, if it were in place, would not meet our concern. But I think that the wording in the present Bill does not.
Although my amendment would have gone further than the wording of the 1990 Act I concede that the wording in the 1990 Act has resulted in the establishment in the long run of mandatory codes drawn up by the Independent Television Commission and the Radio Authority. If the Government would undertake to repeat that wording, that would go some way to meeting our concerns.
In the light of the fact that Amendment No. 181 has been called before my amendment—and to that extent the noble Lord the Minister has shot my fox, or at least severely wounded it—I would need to consider what it is that the new wording implies. It may he necessary to return to this subject at Third Reading unless the Minister can assure me that at least the wording of the 1990 Act will be repeated in this Bill so that we have some chance of a mandatory code being drawn up. Having said that, I am grateful to the noble Lord for meeting our requirements. But whatever code is drawn up should be obligatory on the BSC and not optional.
8.15 p.m.
Lord Renton: My Lords, when my noble friend Lord Caldecote, who cannot be with us tonight, moved the amendments which now stand in the name of the noble Lord, Lord Chalfont—Amendment No. 182 and others grouped with it—my noble friend Lord Inglewood replied in this way. Before I quote what he said perhaps I may say how greatly I admire his handling of the Bill and everything else he has ever done since he reached the Front Bench. He is such a close friend that I am very reluctant indeed to express disagreement with him. But I have to point out that on 15th February he said:
"Before turning to the four amendments, I should like to begin by making quite clear that the Government believe that there must be proper rules"—
I emphasise the word "rules"—
"relating to appropriate standards of broadcasting, and there must be proper enforcement of those rules, supported if necessary by appropriate disciplinary action".—[Official Report, 15/2/96; col. 812.]
At the end of the debate on the amendment, he said:
"I would ask my noble friend not to press this amendment at this stage because I should like to consider it further and the suggested form of words about review and bring the Government's response back at Report stage".—[Official Report, 15/2/96; col. 813.]
All I can say is that, in the light of what he said on that occasion, this is a very disappointing response.
I say that for this reason; first, because the word "guidance" gets us nowhere. It creates no legal obligation. The BBC would not he obliged to follow the

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guidance even if the Broadcasting Standards Commission were obliged to give it, as it will be obliged to give it. On the other hand, a statutory code of practice, as recommended by the noble Lord, Lord Chalfont, and my by noble friend Lord Caldecote, creates an obligation—an obligation that has to be met. The BBC would then have to apply it faithfully and, if it failed to do so, those responsible would be penalised accordingly in order to fulfil what my noble friend Lord Inglewood said at col. 812 about,
"proper enforcement of those rules".
Therefore, it is somewhat regrettable for us that we have to consider the government amendment first and independently and that, if that is carried, the amendment of the noble Lord, Lord Chalfont, cannot be moved. I hope that the noble Lord will come back to it at Third Reading, because it is a vital matter of principle. Although we are already at a late hour, I regard this as one of the most important matters raised in this long Bill.
Lord Cocks of Hartcliffe: My Lords, I think that the Government have this about right. When I was Chief Whip of a minority government—it really was a minority government—in another place—
Lord Donoughue: A very good one.
Lord Cocks of Hartcliffe: My Lords, I am grateful to my noble friend. When I was Chief Whip of a minority government in another place, I was pressed very hard by one of my Whips to introduce a set of rules which could be applied in deciding whether someone should be granted a pair or leave of absence. I said, "You can't have this because you are trying to impose an absolutely rigid structure on a situation where there are a number of variables, including human variables. It is not possible to do this sort of thing". It may seem to be the counsel of perfection, but one is imposing a straitjacket which would stifle all enterprise and produce a worse result than what the Government are now suggesting.
Lord McNally: My Lords, at Committee stage I was reproved by the noble Lord, Lord Renton, for being illogical in my opposition to some of the ideas that he and the noble Lord, Lord Chalfont, were putting forward. As noble Lords can imagine, for a Liberal Democrat to be called illogical is almost as big an insult as saying that to Mr. Spock in "Star Trek". So, I had a sleepless night until I was able to get to Hansard and check the things that I had said, though the result may be more of a tribute to the skills of Hansard than anything else.
What I was trying to say at various stages in Committee is still what I and my party believe at this stage of the Bill; namely, that the Government's approach to matters of regulation has been broadly correct. The Minister has said on a number of occasions that he wants a light rein on regulation. Although I understand his reasons for listening to the experience and wise words of the noble Lord, Lord Chalfont, and his colleagues, I still believe that he is right to resist the
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full logic of what they are pressing because even tonight we have heard of codes, punitive sanctions, disciplinary actions and obligations.
As the noble Lord, Lord Cocks, has just said, this is not the way things work in the real world and it is not the way they will work if we want to get the best out of our broadcasters and broadcasting systems. It seems to me that we have given rights and responsibilities to the governors, the broadcasting authority and to the ITC, which, if they were allowed to operate in a rational way, would give all the protection that any reasonable society would want. What I hear from some of the proponents who urge the Minister further and further on these matters is counsel which would over-regulate. They would not just protect the citizen, but stifle the cultural, artistic and other aspects of broadcasting.
At Committee I felt at some stages like the boy on the burning deck pointing out that there was another point of view. But, to mix my metaphors, the Minister in his summing up, came like Blücher at Waterloo with what I thought was a very rational approach to these matters. I urge him and the Government to resist temptation to proceed more strongly in these matters. We should keep the light regulation and we shall get the best from our broadcasters.
Lord Chalfont: My Lords, with the leave of the House, may I ask the noble Lord whether he is not being extremely illogical in what he has just said? He said that one cannot have codes, punishments or sanctions because they stifle the creative instinct. The Independent Television Commission and the Radio Authority both have such codes, which are in operation and which work. If they are broken by a broadcasting company, sanctions and punishments are available and are used.
If the noble Lord is saying that that is at variance with the creative instincts of broadcasters, then I wonder how the independent television companies and radio stations are doing so well and have been so creative and successful. I believe that we are back to where we were at Committee stage. The noble Lord is going much too far in his clear and perhaps admirable dislike of sanctions, punishment and obligations.
Lord McNally: My Lords, just very briefly, with the leave of the House—I thank the noble Baroness for keeping me on track—I suppose the bottom line is that I would rather be logically liberal than authoritarian right. That is a matter of choice. There is some contradiction in what the noble Lord has just said. If the regulators are doing so well and producing such good results, why do they go on this endless quest for yet another body with more sanctions in order to get the perfect system that they are constantly seeking?
Lord Beloff: My Lords, I do not know what the noble Lord was last time, but he is now totally illogical. The noble Lord, Lord Chalfont, was referring to the success of the regulating bodies with independent television and radio. We are discussing whether the current system, as regards the BBC, is adequate. That is quite a different issue. Many people believe that the governors, who occupy the post of regulating themselves, have not been efficient. When we come, as I hope we shall, at Third

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Reading, to give instances of cases where, in the interests of the political views of individual producers, the BBC has flouted historical truth and other matters, the House may take a very different view.
Lord McNally: My Lords, with permission—
Noble Lords: No!
Viscount Astor: My Lords, perhaps I may make one small comment on my noble friend's amendment. The advantage of the debate that we are having this evening is that it has shown to me with absolute clarity the disadvantages of having a Charter and Agreement for the BBC. When we had the debate in this House we were able to discuss these issues, but we were unable to amend the Charter and Agreement.
I am as guilty as anybody of being a supporter of the BBC having a Charter and Agreement, so I accept any criticism that anyone may make. This debate has shown the weakness of that, because we cannot amend the provisions. My noble friend has listened very carefully to the anxieties of your Lordships expressed at Committee stage and he has come forward with his Amendment No. 181. I accept that my noble friend Lord Renton believes that it may not go as far as he would like but I believe that it goes a very long way, because it ensures that a code, not may, but will, be drawn up, and that is a very important point.
Lord Dixon-Smith: My Lords, if we have a problem with the BBC's Charter and its codes, we should consider what the position is, because they are new. While the House may not have had the opportunity to amend these documents, their content is fairly specific. The Charter states at paragraph 7(f), among other things, that the governors are to:
"ensure that the Corporation and its employees and all programme makers engaged by the Corporation comply with the provisions of any code which the Corporation is required to draw up for the treatment of controversial subjects with due accuracy and impartiality and comply with any other code or guidelines applicable to programme content and standards".
When one considers the Agreement between the Secretary of State for National Heritage and the BBC, there are further paragraphs which are relevant. I quote from paragraph 5.1(c), which states that the corporation shall:
"treat controversial subjects with due accuracy and impartiality, both in the Corporation's news services and in the more general field of programmes dealing with matters of public policy or of political or industrial controversy".
Paragraph 5.1(d) states:
"do not include anything which offends against good taste or decency or is likely to encourage or incite to crime or lead to disorder or to be offensive to public feeling".
Those are very strict instructions and they form part of the BBC's Charter and Agreement with the Government. That happens to be a new Agreement. We may not have been able to amend the provisions—I accept that may have been a weakness—but I am not sure that I understand how those words could have been reinforced. However, there is a case at the very least for saying that the codes should be allowed to work before we try to impose something further upon the situation.
8.30 p.m.
The Earl of Halsbury: My Lords, I tend to approach this as a student of organisational pathology. Last week, in the course of a very long and, for my part, amusing and entertaining debate, we examined the life-cycle of a cock-up from conception through gestation to birth, from childhood through infancy to adolescence, and from maturity through senility and finally to a post-mortem at the hands of the coroner, Sir Richard Scott. At the heart of all that lay the weasel word, "guidelines".
I suppose we are all agreed that you can delegate authority but not responsibility. You cannot make somebody else answerable for that for which you are answerable. However, we live in a hierarchy of delegated responsibility from the nation to its Parliament, from the Parliament to its Government, from the Government to their Civil Service and to such quangos as its buds off from time to time. In the middle level of that hierarchy, people at one level tend to accept as excuses from the lower level the reasons that they hope to employ themselves when excusing themselves to a still higher level. That connivance with one another's shortcomings is what characterises a hierarchical organisation.
I suggest that your Lordships accept the principle that the Ten Commandments are not guidelines to a relation with the Almighty to be interpreted as occasion requires in the light of the circumstances prevailing but are in some sense absolute. We want some kind of absolute direction that there is going to be right trouble if this is breached.
Lord Annan: My Lords, I rise on two points. The first is procedural. The noble Lord, Lord Chalfont, referred to his fox having been shot. I think a better metaphor came from the noble Lord, Lord McNally, when he referred to Blücher at Waterloo. What the Minister has done is to outflank and envelop the noble Lord, Lord Chalfont, so that he is totally encircled and unable to move anything.
Secondly, when I come to address the terribly difficult problem of impartiality and all that it concerns, my mind goes back to the 1970s and the many discussions we had in the Committee on the Future of Broadcasting. Having re-read the committee's report, I find myself much nearer the noble Lord, Lord McNally, than others in the sense that, as with the Scott Report, one can deduce almost anything from it both in favour of impartiality and in favour of really good, sound rules.
In the past 20 years things have moved somewhat further away from impartiality and consideration for the guidelines laid down. How many times have we heard the excuse given, "We have done nothing contrary to the guidelines; they are just guidelines"—in other words, they can be flouted just as much as is liked. That is a common thing for broadcasters to say. And they are bound to say it, because over the past 50 years there has been a great change in the nature of what is said and shown on television and in broadcasting generally. It is almost inconceivable to us now that the rigid rules which Lord Reith—Sir John Reith, as he was then—laid

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down could be applied today. Let us not forget that when, during the General Strike, the then Archbishop of Canterbury wanted to broadcast to the nation his request was refused by Sir John Reith on the advice of the Prime Minister. There have been quite a number of similar examples. I am sure that the House would not want to return to that kind of rigidity.
At the same time, a great change came in the late 1950s and early 1960s when Mr. Greene was the director general. Younger broadcasters argued that the BBC in particular had a duty to represent the whole nation and not merely the governing part of the nation and to represent what younger people were feeling. That greatly changed notions of impartiality. It was no longer necessary for one programme in itself to be impartial. It could be as partial as it liked so long as there was at some time a programme of approximately the same nature which would state, as it were, the other side of the case, not necessarily on that issue but on general political problems. It is the failure—or the perceived failure—of the BBC sometimes to honour that obligation that has led to impasse. As I said, in the end I shall probably abstain from voting on the issue. I believe that it can be solved only by good will between the chairman of the governors and the director general. It is really the director general who is responsible for what goes on at the BBC. The governors have a limited role in their regulatory function.
It has been said that the governors took the extreme sanction of sacking the director general of the BBC some years ago, but they cannot go on doing that and they certainly cannot do it on every occasion a producer undoubtedly infringes the guidelines. What, then, is to be done? It depends on the hierarchy of the BBC—the director general at the top and the leaders of the various divisions in that heavily over-bureaucratised organisation. It depends on them. That alone is the way in which some change of heart can come about.
Baroness Dean of Thornton-le-Fylde: My Lords, I am reluctant to intervene at this stage because I fear that I may confuse matters more than is already the case. However, the position is not clear. And there is a consensus across the Chamber that we should get the matter right in order to protect the viewer and complainant.
The noble Lord, Lord Chalfont, says that the wording of the Broadcasting Act 1990 would, I paraphrase, "do" him. That Act refers to a code under the Broadcasting Standards Council. I refer to Section 152. We are dealing now with Clause 72 of the Bill. The provisions of the 1990 Act which relate to a code deal with practices to be followed in the portrayal of violence, sexual conduct and matters of taste and decency. The BSC was required by duty to draw up a code of practice. The broadcasting complaints section of the 1990 Act shows that there is no requirement to draw up a code of practice.
The amendment relates to Clause 72. I believe—I may have one or two words wrong—that the clause is a direct lift from the 1990 Act, which deals with broadcasting complaints. There was no code of practice
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requirement for the BSC to draw up in the 1990 Act. With the wording that the Minister has proposed, the Bill introduces a requirement to draw up guidelines covering unjust or unfair treatment, or unwarranted infringement of privacy. That protection for the complainant is not in the 1990 Act.
I wonder whether the noble Lord, Lord Chalfont, or the Minister will respond to that point, because it seems to me that the Bill is great step forward from the 1990 Act, if I am reading it correctly. Certainly the BSC did not draw up a code of practice, and it was not required to do so under the 1990 Act. The Bill will require it to draw up guidelines. The Minister might be the person to answer that point. Am I correct in my understanding? If I am, it may be something upon which we should reflect because the Bill is a step forward for the complainant.
Lord Chalfont: My Lords, I realise that I may be looked at fiercely by the Prussian marshals on the Front Bench, but with the leave of the House I should like to enlighten the noble Baroness and the House. The sections to which I was referring are on page 8 of the Broadcasting Act 1990. It states:
"The Commission shall draw up"—
that is, the Independent Television Commission—
"and, from time to time review, a code giving guidance as to the rules to be observed",
and so on. That covers all the issues of standards, taste, decency, violence and so on. Under the section relating to radio broadcasting it states:
"The authority shall draw up and, from time to time review, a code",
and so on. So both authorities set up under the 1990 Act were required to draw up and review a code giving guidance as to the rules to be observed, not the principles.
The difference between the 1990 Act and the Bill is precisely that—one required the two authorities to draw up a code of rules which were to be obeyed on risk of punishment if they were broken. The Bill does not do that. It is that that I am seeking to correct.
Baroness Dean of Thornton-le-Fylde: My Lords, I apologise to the House, but I do not understand the rules as to whether I can come back. That answer did not address the point that I was raising. The commission is the ITC. In the Bill we are talking about the Broadcasting Standards Commission.
Lord Inglewood: My Lords, with the leave of the House, I am advised that the noble Baroness was correct in what she said. I am also not sure that we are not at cross purposes.
Lord Chalfont: My Lords, I think we are at cross purposes. Perhaps I may beg the leave of the House; the noble Baroness was right in what she said. She was referring to the Broadcasting Standards Council and the Broadcasting Complaints Commission. I was referring to the regulatory bodies—the ITC and the Radio Authority. I am trying to find a way of making the ITC and Radio Authority rules applicable to the BBC.

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The only way to do that is through the Broadcasting Standards Commission, and that is what I am seeking to do. I was not for one moment suggesting that the noble Baroness was wrong; she was absolutely right, but it was not the point that I was on.
8.45 p.m.
Lord Inglewood: My Lords, with the leave of the House, first, I think that the noble Lord, Lord Chalfont, has been speaking to his Amendments Nos. 182 and 184 and my Amendment No. 183.
Lord Chalfont: My Lords, no.
Lord Renton: My Lords, I thought that we all were.
Lord Inglewood: My Lords, indeed, that is what I thought was happening. In the end of the debate on my amendment I wanted to address some remarks to the noble Lord, Lord Chalfont, in respect of his Amendments Nos. 182 and 184, because they tie together. I must begin by thanking the noble Lord, Lord Chalfont, for having shared with me some of thinking behind what he has proposed. That has been helpful.
As your Lordships will be aware, we have taken on board the point about making mandatory the drawing up and review of the BSC's guidance on fairness. I have just moved an amendment to that effect. The issue that we have been debating is whether the guidance in question should be renamed "codes". That is what is contained in Amendments Nos. 182 and 184, as I understand it. That is the nub of the issue.
Your Lordships will recall that we had a discussion about this in Committee. I explained that I had doubts about whether such a change would make a substantial difference. I said that it might cause difficulties. However, I agreed, as my noble friend Lord Renton correctly pointed out, to consider the point further. I may be ducking it, but I am not going to treat the noble Lord, Lord Chalfont, in a Prussian manner, because I request your Lordships' leave to bring back a response to that point on Third Reading.
I should like to make a couple of general points. First, we are anxious to ensure that the work of the BSC does not become a substitute for Parliament in creating the law of the land. Our starting point in analysing the matters must be the words of statute and the BBC Charter and Agreement. Further explanatory material, whoever draws it up, can explain the basic legal requirements which apply, but should not purport to define them. That is true even where there is a separate collateral and binding obligation on broadcasters, their employees and programme makers to abide by the provisions in question.
In that context, it is interesting to look at the BBC because in the case of the BBC the governors must ensure that the corporation treats controversial subjects accurately and impartially and does not include anything which offends against good taste and decency. At the same time, the governors are separately obliged to ensure that employees and programme makers comply with provisions relating to proper conduct, which are designed to stop those forms of mischief occurring.
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It is important that we are clear here. In a number of cases where we look at regulatory systems for broadcasters, there are two parallel systems at work. First, there is a basic obligation to ensure that certain ways of broadcasting are carried out. To that effect, various "codes"—as I loosely describe them—are drawn up. Those codes are drawn up to assist the broadcasters to achieve the fundamentals, such as ensuring accuracy and impartiality and that there is no tastelessness or indecency.
At the same time, in parallel, there is, in a number of instances, an obligation on those involved in making the programmes to adhere to the codes. That obligation is entirely separate from the first obligation to which I referred. It is because of that inter-relationship between those two separate obligations that we sometimes get into a muddle with the nomenclature used.
The second point is that whatever form of words is used in that context it is important that there should be consistency and a sensible and coherent read across between the relevant legal provisions that pertain.
Lord Renton: My Lords, before my noble friend sits down, will he be so good as to answer the point I made, by reminding me of what he said in Committee, that there must be proper rules relating to appropriate standards of broadcasting. He says, in effect, that guidance and rules are synonymous. He used the word "codes" in the same way. Of course a statutory code has the force of law, but mere guidance does not. Then he went on to say that there must be proper enforcement of those rules, supported if necessary by appropriate disciplinary action. How is that achieved by his amendment?
Lord Inglewood: My Lords, my noble friend makes a good point. But, if he will forgive me for saying so, he has run ahead of the debate. Without wishing to expand on a point upon which I shall expand later, there are regulators for the broadcasters. It is for the regulators to regulate and impose sanctions where appropriate. The core of this system is the principle that we have regulators. In parallel with those regulators is the new BSC, which is a combination of the old BSC and the BCC. The first organisation benchmarks standards and the second is a "user friendly" means for a private individual to see whether he is being traduced by broadcasters. The old BSC, the old BCC and the new Broadcasting Standards Commission are not regulators.
On Question, amendment agreed to.
[Amendment No. 182 not moved.]
The Deputy Speaker (Lord Burnham): My Lords, if Amendment No. 183 is agreed to, I cannot call Amendment No. 184.
Lord Inglewood Lord Inglewood moved Amendment No. 183:
Page 61, leave out line 21.
On Question, amendment agreed to.
[Amendment No. 184 not moved.]
The Deputy Speaker: My Lords, if Amendment No. 185 is agreed to, I cannot call Amendment No. 186.
Lord Chalfont Lord Chalfont had given notice of his intention to move Amendment No. 185:
Page 61, line 22, leave out subsection (2) and insert—
("(2) The BSC shall publish the codes currently in force, monitor their implementation and report annually on their findings in their report made under section 84.").
The noble Lord said: My Lords, I could say that it is now my turn to do a bit of outflanking and encircling but I do not propose to do anything of the kind. I believe that the whole subject is so interlocked that I would prefer to bring the whole matter back on Third Reading. Obviously, it must be done in a certain form, recognising the fact that the Minister's amendment has been carried. I do not wish to move my amendment.
[Amendment No. 185 not moved.]
Lord Inglewood Lord Inglewood moved Amendment No. 186:
Page 61, line 22, leave out from beginning to ("the").
On Question, amendment agreed to.
Lord Inglewood Lord Inglewood moved Amendment No. 187:
Page 61, line 23, at end insert—
("() Before drawing up or revising the guidance, the BSC shall consult—

(a) each broadcasting or regulatory body, and

(b) such other persons as appear to the BSC to be appropriate.").

On Question, amendment agreed to.
Clause 73 [Preparation by BSC of code relating to broadcasting standards generally]:
[Amendments Nos. 188 and 189 not moved.]
Clause 75 [General functions of BSC in relation to complaints]:
Lord Chalfont Lord Chalfont moved Amendment No. 190:
Page 63, line 5, after ("treatment") insert ("of individuals, of bodies of individuals or of matters of political or industrial controversy or relating to current public policy").
The noble Lord said: My Lords, as the intervention from the flanks prevented me from speaking to my earlier amendments, I hope that the House will bear with me if I develop the arguments for this amendment at some length. They are connected with the amendments that I would have moved, although not relying upon them.
It is a matter of regret that, once again, one is rising to move substantial amendments at this hour of night on what is usually the last sitting day of the week. However, I must do my best. In moving the amendment I wish to speak also to Amendments Nos. 192 and 195, which are closely connected. By implication, I shall speak to a number of consequential amendments, which are Nos. 196, 198, 199, 200, 201, 202, 203 and 204.
When I withdrew the amendments at the end of the Committee stage, I did so, as I said at the time, on the understanding that the Government would look at the problem again and, if they did not like the amendments, try to find some way of meeting my anxieties and those of my colleagues. I am reintroducing the amendments at this stage because that has not happened.
Experience of both the BBC Charter and Agreement passing through this House on a Take Note Motion, and experience of this Bill, has made it clear that in this particular respect the Government are determined to get this legislation through Parliament as far as possible unchanged. One cannot blame them for that but I hope that they will not blame me and my colleagues for returning repeatedly to the charge.
This Bill and the Charter and Agreement of the BBC will set the agenda well into the next century. Therefore, in my view it is important that the regulating broadcasting regime is, as far as possible, robust and effective. In Committee I explained the purpose of the amendments at some length but at this time of night I shall not weary the House by repeating them in full. I simply remind your Lordships that they are designed to correct a clear and persistent anomaly in the regulatory arrangements.
Perhaps I may begin by going back to the Broadcasting Act 1990. That recognised the important principle that broadcasters in both television and radio should be independently regulated in the public interest. In pursuit of that, it replaced the old Independent Broadcasting Authority, which was both a broadcaster and a regulator—I am speaking of the commercial broadcasting sector—with the Independent Television Commission and the Radio Authority, thus clearly and unequivocally separating the functions of the broadcaster and the regulator. However, the Government have not pursued the clear logic of that position in the case of the BBC.
The BBC's new Charter and its accompanying Agreement, which recently passed unchanged through this House and which the Minister has now told us is a closed chapter—in other words, we can do nothing about it until there is a new Charter and Agreement and even then we shall not be able to do much about it—perpetuate the system in which the governors of the BBC, who run the corporation and therefore are the broadcasters, are also supposed to be the regulators. In the country as a whole among viewers and listeners there is a widespread belief that that is an impossible situation. It creates a built-in conflict of interest and in the event of complaints from the public about programmes it makes the governors of the BBC judge and jury in their own case, to use the usual convenient cliché.
Perhaps I may quote from the Voice of the Listener and Viewer, which is an important pressure group. In a communication to me, it stated:
"The Governors will be required to oversee both the BBC's public service activities and its growing range of commercial ventures, an impossible situation which will inevitably lead to conflicts of interest and is likely to penalise both areas".
It may be interesting to note that the patrons of the Voice of the Listener and Viewer include the noble Lords, Lord Eames and Lord Thomson of Monifieth, and the noble Viscount, Lord Whitelaw, which is a powerful and one might also say ecumenical group.
We are now faced with two options. The first is that we can live with that regime in which the BBC governors are both broadcasters and regulators, or are supposed to be. It may be that we shall have to live with

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that for 10 years or more. Certainly on present thinking it will be well into the next millennium. The Government are asking us to give them a chance and to live with it. The noble Lord, Lord Dixon-Smith, has just asked us to do it: "Give them a chance". Yes, but for how long? We can either do that or we can ensure that the Bill gives us a last chance to establish a consistent regulatory regime in which the BBC, like every commercial broadcasting organisation, is independently regulated.
So far throughout the debates both on the Bill and on the Motion concerning the BBC Charter I have not heard a single convincing argument against the option of an independent regulator for the BBC. It might be appropriate to mention that last week I received a letter from the Consumers Association, which represents a substantial body of public opinion. I will read one brief passage:
"We are aware of your support for the BBC to fall under the remit of an independent regulator, and hope that you will continue to argue the case. There are wide-ranging consumer concerns and it is important that these are dealt with now to ensure that the Bill looks to the future rather than requiring legislation at a later stage".
That represents a fairly broad spectrum of opinion. I repeat that I have heard no convincing argument against the concept.
However, perhaps we may consider the objections put forward by the Government and others to what I regard as a logical and practical proposal. One is that it increases the number of regulatory bodies. That buzz has been going round the Chamber for the past few weeks. But it is not so. The Bill wisely reduces the number of regulators by amalgamating the BCC with the BSC to make the new Broadcasting Standards Commission. As I have made clear on a number of occasions, and I shall bore the House with it again, my preferred solution would be a single regulatory authority to cover the entire broadcasting scene. Clearly, that is outside the scope of the Bill.
All my amendments do is to give the new regulatory body, the Broadcasting Standards Commission, teeth to do no more than the Secretary of State for National Heritage is already on record as wishing to do. She has said that she wishes to strengthen the role of the BSC. That is precisely what my amendments seek to do. On the other hand, as the "Today" programme on the BBC sometimes says, there has come into my possession a letter from the Secretary of State for National Heritage, addressing a Member of your Lordships' House. She states:
"As you know, I do not believe that the new BSC should take on a regulatory function".
What is it then? What is the BSC for if it is not to consider complaints, adjudicate on them and ensure that if the complaint is upheld the cause of it is not repeated? What is that if it is not regulation? That is precisely what a regulator does. It is what the ITC does among other things. It is what the Radio Authority does.
Another objection is that the new strengthened role for the BSC implied by the amendments would require substantial extra resources and extra financial investment in the Broadcasting Standards Commission. To that I make three brief observations. First, I do not
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believe that the cost needs to be prohibitive. The ITC and the Radio Authority already carry out the full panoply of regulatory duties with relatively small resources and in the case of the Radio Authority—of which I speak with personal experience—with a staff of 30 people who conduct the whole business of regulating the commercial radio broadcasting scene. Secondly, some of the extra cost might be met from savings in the BBC's internal complaints procedure. It must cost a little money and would not be necessary if we had effective independent regulation. Thirdly, a modest increase—and that is all it would be—in the resources required would be a small price to pay for a sensible, effective and independent regulatory system. I have already mentioned the other argument advanced by the Government that we ought to give them a chance.
I wish to clarify one point in case there should be doubt in the minds of any of my noble colleagues. My quarrel is not with the Chairman of the Governors of the BBC, nor his successor. Both I know as men of ability and integrity. My quarrel is not with the Governors themselves and not even with the powers they have been given in the Charter. My quarrel is with an inherently flawed system which has not worked in the past and is unlikely to work,in the future.
In a recent speech to the Television Society, the Secretary of State for National Heritage acknowledged that and said that it is time for the Governors of the BBC to step back from the management of the corporation and act more as regulators in the public interest. If, as that seems to suggest, it is the Government's policy to separate the broadcaster from the regulator in the BBC, as they have rightly done in the commercial sector, why are they so opposed to the amendments which seek to do precisely that? Since the Charter and the Agreement of the BBC are now to be considered a closed chapter, I can only identify the Broadcasting Standards Commission as the available instrument for doing so.
I conclude by reminding the House that the three amendments are interdependent. They are designed to empower the Broadcasting Standards Commission to adjudicate not only on complaints about standards of taste and decency, but also on complaints about fairness, objectivity and impartiality, including complaints on such matters in BBC programmes. I also seek to remove the curious provision which seems to me to be totally lacking in logic that, while complaints about taste and decency may be made by any listener or viewer, complaints about fairness and objectivity may be made only by people who are directly affected. I totally fail to see the logic of that position. I have been infinitely more offended, and I know others who have felt the same, by a programme which has been inaccurate and biased on a historical or political subject than by all the taste and decency arguments that one can advance.
In that context, noble Lords may have seen an excellent and very persuasive brief recently circulated by the BBC entitled, The BBC: A Responsible Broadcaster, which sets out a summary of the corporation's approach. In a covering note—much to my gratification—the corporation expresses the view that its producers' guidelines would make Lord Chalfont's amendments

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unnecessary. However, I am afraid that that begs the whole central question. The concern of those who think as I do is not with the "Producers' Guidelines for Factual Programmes", to give it its full title. The guidelines are clear; they are comprehensive; and they are unambiguous on subjects of impartiality and taste and decency. They are models of precision, clarity and force. The problem is that no one who studies the guidelines, as I have with great care, could possibly argue that they have been consistently observed; on the contrary, they have been consistently ignored and flouted. If the governors have been unable or unwilling to enforce them in the past, what confidence can we have that they will do so in the future?
Will the Government at least concede that there is a real problem here? That would, I believe, be a start towards finding a solution. Do the Government agree that we have a real problem and one to which they are prepared to give serious attention? It may well be—and I have no pride of authorship—that my proposed solution is not the ideal one. There may be other ways to deal with the problem. The noble Lord, Lord Orr-Ewing, has considered the matter and I believe that he may move an amendment proposing an ombudsman.
Another possibility is one that seems to me to be eminently practical; namely, the establishment of some kind of independent panel separate from and outside the BBC bureaucracy to advise the governors on viewers' and listeners' complaints. At present, part of the problem is that, when a complaint comes to the BBC, the panel which has the remit to consider it and advise the governors consists of BBC officials. That seems to me to be a recipe for the kind of regime that we have now.
If the Minister cannot or does not wish to respond positively tonight to the amendments, I hope that he will undertake to examine the position between now and Third Reading and come back with some serious ideas for dealing with a problem which is—and I ask him to accept this—causing serious concern not only in your Lordships' House but in the broader constituency of the country as a whole.
Before I conclude, perhaps I may first echo what has been said in the House during the whole proceedings on the Bill. I congratulate the Minister on the style with which he has conducted the legislation. My admiration is not simply for the courtesy and the consideration which he has shown to everyone involved, but also for the extraordinary mastery that he has shown with what is an extremely complicated and difficult subject.
Finally, I should like to deal with the objection that the changes which I propose would have two undesirable consequences. The first is that I would be placing programme-makers in some form of double jeopardy; in other words, they would have two regulatory bodies over them. But that already happens in the commercial sector and, indeed, has been so since 1990. I do not see why the BBC should be uniquely protected from it. The second objection is that what I propose would open the floodgates to a torrent of
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frivolous complaints. That has not happened in the commercial sector and, again, I see no reason why it should happen in this case. I beg to move.
Lord Orr-Ewing: My Lords, I want to follow the theme outlined by the noble Lord, Lord Chalfont, as regards the 1990 Act. Many people have praised that legislation but it has also been much abused. Indeed, everyone seems to say, "That ghastly 1990 Act". In fact, it has worked rather well. I remember being told by Liz Forgan in a room upstairs that, if we passed those regulations, we would be absolutely snowed under with court cases and no one would be producing programmes—they would be answering accusations in court that they had transgressed the rules. But none of that has happened. The level of penalties has been raised by the ITC which bite occasionally. In fact, they bit rather hard on Granada in the autumn when the company was fined £600,000. I know that that seems a great deal of money to us, but it is not very much in the television world.
I turn now to the complaints which are listed in the well-laid out complaints bulletin which I read every month. I have one criticism to make. The bulletin has been well summarised but those concerned invariably say, even when awful things have happened which have been described and objected to by complainants, that it is not "upheld". But, who ticks off whom? Are there any transgressions? One complaint in 10 is upheld, but we are never told what happens as a result. I am afraid that too often it is not a case of the first X1 at the BBC, nor the second X1, but the young third X1 who deal with these things. They do not have much idea of what is contained in the producers' guidelines. I agree with what the noble Lord, Lord Chalfont, said about the guidelines; namely, that they are extremely well worded. Every time I read the guidelines I admire the wording. I only wish that the relevant staff read those guidelines, signed a document stating they intended to observe them, and then put them into practice. However, that has never been done. I must confess that I would prefer the guidance to be made compulsory rather than remain voluntary. Then we might get somewhere.
The ITC has a code of conduct. It may be imperfect. I can recall occasions when the most awful material was broadcast. But that also happens with the BBC. Sometimes complaints are not upheld. I recall the famous programme about the last temptation of Jesus. It was considered not to be a religious programme as it did not fulfil the criteria established for religious programmes. Some 8,000 people wrote to complain about the programme. That shows a considerable strength of feeling on the part of the public. Nevertheless, their complaints were not upheld. There have been misdirections under the ITC. The matter should be considered.
The department has attempted to comfort us by stating that the BBC governors can look after their own internal administration and can supervise senior personnel, producers, editors and all other members of staff in the organisation. There are still 20,000 people in the organisation although it has cut its staff by nearly 5,000. I am not convinced that the organisation can

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supervise all those members of staff and also seek to represent the public and make sure that it is in touch with the public. I am talking about supervising staff, maintaining programme standards and keeping in touch with the public. Surely it is wise therefore to have a second string to our bow. I believe that the BSC should have the capability not only to assess programmes but also to ensure that penalties are imposed for inappropriate material.
The whole picture is changing in this area; the technology is developing rapidly. If we leave the matter for 10 years, people may consider that we have misjudged the position, and the morality of our country may suffer as a result. After all, the BBC—God bless it—is fairly keen on attacking the centres of our organisation and the Government. Too often the police have been condemned for over-reacting and the Royal Family's behaviour has been criticised. Various other organisations which have evolved over centuries and which constitute the key to the morality of our country have been criticised.
After our previous discussion at Report stage, I returned home and watched a film on BBC 1 which started at 10.30 in the evening. In the film a young girl of 15 entered a pub and was then gang raped by three men. It was an American film. I have no idea why it was bought. Why do we buy that sort of programme rather than support our own film industry? Why do we spend money importing programmes which show a lack of taste, decency and morality and broadcast them into homes in this country? The programme started at 10.30 in the evening and finished at midnight. I do not take seriously the argument that it is all right to show programmes depicting certain material after a certain time at night. I have 14 grandchildren. I know that they can operate the television and record programmes. Some people suggest that one should not complain about the subject matter of programmes broadcast after nine o'clock at night as children will not see them because they are in bed. The people who say that obviously do not have grandchildren. They are up all sorts of hours and they can record these programmes so I would not take too lightly the excuse that it is all right.
I was rather encouraged on the 18th December last when the Secretary of State for National Heritage was answering questions first on the Order Paper in the Commons. She said:
"I am determined that the BSC' s work will be strengthened. There will be a requirement to keep a note of the steps that programme makers take as a result of complaints that have been upheld".
Well, it is all right to analyse that and be glad we are going to do all that but then surely there must be some bite somewhere. Somebody should be named, if necessary on the television.
In anticipation that the Government would come under pressures from their staff and the BBC, I tabled an amendment to give the Minister the power—not laying down—to set up a broadcasting ombudsman. I am hopeful that we can strengthen the powers of the BSC, which is our first desire, and not allow the corporation to continue to act as judge and jury in its own case. I know the critics will say that the ombudsman process is slow. It is true that complicated cases may last a year.
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But there are 18 ombudsmen already. We have a regulatory authority over almost every facet of our organisation: the banks and goodness knows what else.
On top of those, we have 47 consumer protection quangos, making a total of 58. Surely one more can be a saving—a long stop in cricket jargon. The Government are the wicket keepers.
If we do not strengthen the BSC he or his successor might need to take up the option of appointing a broadcasting ombudsman. We would be following the example of many other countries, particularly Scandinavia. We may gain by having that facility up our sleeve and therefore force the governors to be even firmer in their reactions.
I therefore support my noble friend in his amendments and hope he will decide whether we are going to vote on them tonight or leave it until Third Reading. This is the last chance that I can see anywhere for at least 10 years, well into the next century, so surely we ought to take this opportunity, or the Third Reading opportunity, to vote on this issue.
Lord Cocks of Hartcliffe: My Lords, I do not normally speak on broadcasting matters because of my position as the Vice-Chairman of the BBC but this is an important matter. The noble Lord, Lord Chalfont, said that he had never heard a case put against what he was saying, so I hope my limping efforts will perhaps go some way towards redressing the balance. The Government in their recent White Paper on the BBC recognised that throughout the world its diversity, its programme independence and its accuracy are bywords.
The governors look after the public interest. I never engage in hypothetical discussions about the public interest, but I know the public interest when I see it. Protecting the reputation of the BBC for truth and impartiality to me is a sacred trust. Those of us who were alive during the war know the contribution the BBC made to morale and the war effort and how people in occupied Europe actually risked their lives to listen to the BBC. Even today when parliamentarians travel abroad they hear everywhere of the excellence and reputation of the BBC.
There has been a lot of talk recently about quangos—even tonight it has crept into the discussions—and how unrepresentative and unaccountable they are. But many of the people who say this have fallen into the oldest and easiest political trap of starting to believe their own propaganda. The stereotyped nonsense which is talked about quangos and their personnel bears no resemblance to the governors that I know and work with at the BBC. What sort of people do they really think we are if we are going to crumple under pressure and allow people to bully the finest public broadcasting service in the world? The governors of the BBC are determined that our programmes are fair and accurate and our programme makers behave impartially.
Many years ago I used to train a junior rugby team and I had to referee the home fixtures, if your Lordships can imagine such a thing. My poor boys had to work very much harder to score points than the visitors because I was so keen, so insistent on showing that I was impartial. I probably went too far the other way.

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The governors accept the challenge of the Annan Report that they should be seen to govern. As chairman, Marmaduke Hussey has given very effective leadership to the BBC. Nobody can fairly accuse Mr. Hussey of giving the management an easy ride. In An Accountable BBC we set out a clearly defined role for the governors as regulators in the public interest. The governors have established a Programme Complaints Unit, independent of the programme makers, to investigate and rule on serious complaints. The Head of Programme Complaints' findings are appealable to the governors.
The new agreement, which has only recently been considered by both Houses of Parliament, incorporates the clause in the Broadcasting Act 1990 relating to impartiality. An impartiality and accuracy code is being drawn up and will be enforced by the governors.
As your Lordships know, Sir Christopher Bland has been appointed chairman in succession to Marmaduke Hussey. Sir Christopher has wide experience, including a term as vice-chairman of the former IBA, so he is an experienced regulator. Yet before Sir Christopher had even taken up his appointment, before the new charter and agreement had come into effect and before the impartiality code has been published it is suggested that all those arrangements are swept aside and a second regulator is asked to second guess the governors.
Having two regulators is not doubly effective. It is a recipe for confusion and ineffectiveness. An example of that dichotomy is that recently the governors judged a "One o'clock News" report about a horrific massacre in Burundi to be unsuitable for broadcast before the watershed. Yet the Broadcasting Standards Council later ruled that the report was quite acceptable.
Attempts to mould public opinion are now legion. Your Lordships will know that only recently desperate efforts have been made to identify a common interest between Rupert Murdoch's financial empire and the interests of the ordinary viewing public.
We hear a great deal about broadcasters' inability to maintain political impartiality. However, that tells us less about the broadcasters' failings than about the increasingly desperate tactics of the parties to intimidate news editors into favouring their political cause. It is for the governors to distinguish between alleged complaints of that kind—the vast majority—and legitimate concerns. I hardly think that we can expect an inexperienced body such as the Broadcasting Standards Commission to make those distinctions, particularly in the frenetic atmosphere of the forthcoming general election.
It is common knowledge that party political staff are becoming more and more professional, so much so that they are now referred to as spin doctors. Often aggressive, sometimes abusive, one of the main weapons in their armoury is to allege political bias. Perhaps I may briefly weary the House with my experience as Chief Whip in the other place, not only dealing with complaints from colleagues about broadcasts but also running a simple programme monitoring scheme throughout the country. All that time virtually no bias was ever detected, either in the BBC
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or the commercial channels, and every assistance was given by the broadcasters in investigations. The spin doctors are now so active, not only in attempts to manipulate the presentation of news items, but also in what seems to be intentional time wasting with protracted phone calls at inopportune times, that the BBC has had to recognise the extent of their activities.
We have to strike a balance between getting information and being manipulated. BBC programme editors have been instructed to assert their right to edit, and to put the phone down on the spin doctors if necessary. The Managing Director of News and Current Affairs has had to establish a weekly review of the state of attempts to influence BBC coverage.
Party advisers have had to be banned from the BBC news room at Millbank. It is now standard procedure in the BBC to run through all telephone calls, faxes and letters to see what is fair in the way of complaints and what is unfair, and where there are lessons to be learnt producers and staff are informed. As your Lordships may know, a great deal was learned from the "Brent Spar" episode, which was the first great exposé of pressure group activity.
Complaints have to be considered for patterns and signs of orchestration, because it has to be faced that while many complaints are genuine some are made deliberately in order to try to manipulate or are made with malice. To show a cloven hoof for a moment, I have already confessed to the House on a previous occasion that when I was Chief Whip in another place I would occasionally sit colleagues down with instructions to make repeated telephone calls to telephone poll numbers in order to distort the results. Lest I fall foul of the leadership, I hasten to add that this was very much Old Labour.
Under this Bill and in the new Charter and Agreement, the BBC is being asked to play a key role in the future of British broadcasting: setting programme standards for a growing and changing industry; taking a leading role in the development of digital terrestrial television; becoming a leading world broadcaster in television as well as radio; and developing commercial services. The governors of the BBC, like the Independent Television Commission and the Radio Authority, have a great responsibility to ensure that British broadcasting develops to the highest standards of impartiality, taste, decency and fair trading.
You have asked the governors to undertake a difficult task and you have given us a Charter, Agreement and Impartiality Code which give us the powers to ensure compliance. Please do not trip us up before we have even started to do the job that you have asked us to do.
9.30 p.m.
Lord Renton: My Lords, having known the noble Lord, Lord Cocks of Hartcliffe, for many years in both Houses of Parliament, perhaps I may say that I have always respected him, and tonight I agreed with a great deal of what he said, but not with all of it.
I agree with him that the BBC is excellent in its news and sports programmes, those programmes dealing with the environment, and its World Service. It has great

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qualities. I would say that about 85 per cent. of what the BBC does is splendid but it spoils its record by allowing things to happen, especially on so-called entertainment programmes, which, I hope on reflection, the noble Lord the vice-chairman of the governors would feel should be put right.
As my noble friend Lord On-Ewing pointed out, there is a serious situation with which, I suggest, we must deal in the Bill—and deal with it effectively. The most serious part is the continuing amount of violence and sex on television, not only after the magic hour of 9 o'clock but sometimes before it. As my noble friend pointed out, one has only to study the Broadcasting Standards Commission's present complaints bulletins, where they virtually have no power over the BBC, to realise that this matter is causing concern among the public. It causes concern especially among those families with young children and among all concerned with crime. In various capacities I had a good deal of experience of what happens in our criminal courts. There is no need for those events to be repeated on television.
The present system has failed to deal with the issue. The Independent Television Commission, the standards commission and the complaints commission do not have power to deal with the BBC on this matter. However, according to the noble Lord and to the Government, as well as being responsible for the BBC the governors are regulators of its programmes. I believe that that is a misconception. They are not regulators in law. There is no statute which refers to them as regulators. The BBC Charter does not refer to them as regulators; neither does the Agreement with the Government. Until now, if they are assumed to be regulators in fact, I say with respect to the vice-chairman and the remainder of governors, they have not succeeded in performing their function. That is why there is so much violence and sex on TV.
The noble Lord, Lord Chalfont, has produced an argument, with simple amendments, which I suggest is unanswerable. I shall be interested yet again to hear what my noble friend Lord Inglewood has to say in answer to it. I am rather anxious to have the attention of my noble friend on this matter. My noble friend Lord Chalfont produced an unanswerable case for giving the new British Standards Commission power to deal with this matter in a way that would cause the BBC to bring its entertainment programmes to the high standard that the rest of its programmes generally meet.
Lord Pilkington of Oxenford: My Lords, I want to show part of the foundation on which this great edifice is to be built. I happen to have been the chairman of the Broadcasting Complaints Commission for the past four years. I say humbly that at times in this debate, apart from the noble Baroness, I have felt that many noble Lords do not realise what actually happens on these bodies. Perhaps I may briefly tell the House something of what they do.
The commission is a quasi-judicial body fulfilling an ombudsman type role. That is, it is to provide moderate redress—I accept that its sanctions are limited—to people with legitimate grievances with regard to unfairness and infringement of privacy.
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I point out that the area, the group, the constituency, is limited, because complainants have to have a direct interest in the programme concerned. They must either have appeared in it or it must have been about them. The courts, in a famous judicial review, have limited the right of so-called pressure groups to claim redress from the commission. The investigation takes an enormous amount of time, because the complaints are deeply felt. Last week, and a fortnight ago, there was a hearing that lasted seven hours. The complaints may seem piffling or eccentric at times. But I assure the House they are deeply felt, and justice has to be done—justice subject to the courts.
My Broadcasting Complaints Commission will be one part of the new body. I shall not enter into the ideology of the plans put forward by the noble Lord, Lord Chalfont. I have a certain sympathy; I see the problems that my noble friends face. But I have to say that the combination of my body with the Broadcasting Standards Council would produce a body totally and absolutely incapable as it stands at the moment of doing what is required by these amendments.
The second amendment, which abolishes direct interest, would mean, if we extended impartiality, that it is highly likely that after the "Today" programme, particularly in the months preceding an election, we should have about 1,000 people ringing us. We should need the wisdom of the Almighty in providing a solution to the problems that would come before us. I claim a certain sacramental grace, but I doubt if I should have that! Imagine "The World at One" on Ireland. The whole of Ulster would ring us.
At the moment my organisation has a staff of seven, and I believe the combined body would have a staff of 25. The noble Lord, Lord Chalfont, said that the Radio Authority managed on a staff of 30. I point out that it passes on all its complaints on unfairness and privacy to us, which we deal with very well.
If we are considering what is proposed by the noble Lord, he cannot merely be attached to the combination of these bodies. We are talking about another animal, something different. It may be that we need something different. We may need a national broadcasting commission. But I assure the House that the ideals would not be achieved by simply sticking it on to this combined body. It does not have the resources, or the skill—nor is it the right body to do what is needed.
Lord Renton: My Lords, before my noble friend sits down, perhaps he will allow me to intervene. He realises—does he not?—that the ITC has those very powers in relation to independent television companies which are licensed. Therefore why should not the same powers be used in relation to the British Broadcasting Corporation?
Lord Pilkington of Oxenford: My Lords, I cannot speak with great authority about the Independent Television Commission. The noble Lord opposite could say more. All I can say is that it has used its powers very sparingly. The noble Lord, Lord Chalfont, would say that it has not used them as effectively as he would

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like. But we are assuming powers to be used effectively. I also point out that the ITC is much more heavily resourced than we are.
Baroness Park of Monmouth: My Lords, I was much moved by the powerful intervention of the noble Lord, Lord Pilkington, but I am in a difficulty because nevertheless I feel very strongly that I wish to support the noble Lord, Lord Chalfont, particularly on the question of direct interest. Incidentally, before I go further, I should say that, as a former governor of the BBC who served under "Duke" Hussey, I have the greatest admiration for him and, I hope, some understanding of the difficult problems of governors.
Reverting to the question of direct interest, I am very much concerned not about current events but about the presentation of history and misrepresentation in the presentation of history. I find it difficult to contemplate that if we had, say, a totally biased programme on Churchill, only Churchill returning from the grave would be empowered to protest about it. That does not seem to me to be reasonable. I am very concerned that something should be done—I do not know what or how—that will enable people to complain about such things and have their interests listened to properly.
The BBC itself in its Charter provides for the treatment of controversial subjects with accuracy and impartiality. Misrepresentation and bias in the presentation of history do not square with that. Somehow, something has to be done to enable that situation to be corrected.
Lord Dubs: My Lords, I should declare an interest as I am deputy chairman of the Broadcasting Standards Council. Therefore, I followed the debate this evening with particular interest. It would be quite improper for me to speak for the Broadcasting Standards Council. I can simply give my personal views on some of the issues that have been raised so far. I followed with interest and a great deal of sympathy the comments made by the noble Lord, Lord Pilkington. Perhaps I may apply to the question of dealing with matters of political controversy the kind of experience that I have had on the Broadcasting Standards Council. I hope it will be helpful.
Let me make one point first. Suppose the amendments were agreed and suppose that there was an argument as to whether there had been unfairness towards the Conservative Party or the Labour Party in the "Today" programme or "On the Record" or whatever. Would your Lordships trust me personally to be one of the members of that body which ought to examine whether the Conservative Party or the Labour Party have been fairly treated? I do not think that I would be qualified to do that. Frankly, I do not know where one would find people who would be qualified to do that on a body of that kind.
There is certainly another argument. Noble Lords talked about standards of taste and decency, excessive violence and the portrayal of sex on television. It is that which takes up a great deal of time—almost all the time—on the Broadcasting Standards Council.
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If suddenly we were faced with a hot political issue where there was a bitter argument between one of the political parties and a broadcaster, I suggest that all our work would virtually come to a halt. The sheer pressure of a political party in the run-up to an election campaign would exert such an important influence on the Broadcasting Standards Commission (the new body) that that body could not deal with questions of sex or violence on television or the many complaints that it would receive from ordinary viewers.
So if one simply says that it is important to have a body which looks at taste and decency on television, the work of that body would be negated by throwing upon it the responsibility of dealing with political parties. I believe that it is neither practical nor sensible to impose those particular duties on a body which has not been designed for that purpose and which is very busy doing those other things that your Lordships say are so important that they need to come under scrutiny. I urge your Lordships not to throw such a new responsibility on the Broadcasting Standards Commission.
Let me say a few brief words about direct interest. I do not want to follow the argument about whether an historical figure has been well presented or not. Frankly, I do not see how one could find a body of people who could make a judgment. It would require Oxbridge historians to look into such matters. I do not see how people like me can possibly be qualified—I may have prejudices about Churchill, for or against him—to go into the historical balance of whether or not a programme had been portrayed properly.
One can put the issue into a more contemporary context. Suppose a body of that sort had to deal with the question of Nigeria and the Shell oil company; it is a mind boggling thought as to whether we should give a bunch of 15 people the responsibility for adjudicating on the way in which a specific television programme had been fair or unfair to the Shell oil company in its work in Nigeria. It is a daunting task to put before a body of that sort and would not work happily.
On a further aspect of direct interest, perhaps I can give, from personal experience of the Broadcasting Standards Council, an answer to the question as to why the Broadcasting Standards Council deals with complaints from people who may not have viewed the programme. We do not normally do that, but one obvious example will win support. A mother or father may complain that a programme shown early in the evening is unsuitable for children to watch. The child has been sent out of the room or off to bed so as not to be able to watch the programme. Sensibly, the parents will complain and say that it is not a proper programme to be shown at a time when children can be expected to watch without parental supervision or before the watershed. That is an example of where it is proper for the Broadcasting Standards Council to listen to a complaint made on behalf of somebody else. The mother or father may not have been offended, but they are concerned about the effect the programme could have on a young child. It is a reasonable proposition and we act accordingly.

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It is also difficult for the Broadcasting Standards Council to be sure, when an adult writes a letter of complaint, that the adult actually saw the programme. The adult will say that there was a programme, quote the time and say that there was too much violence or bad language, or whatever. It is difficult for us to vet whether or not that individual actually saw the programme itself.
That is different from the situation of the Broadcasting Complaints Commission which, as the noble Lord, Lord Pilkington, said, deals with individuals whose privacy has been breached or about whom an unfair programme has been made. By dealing with people who have a complaint to make, one can obtain evidence from them and weigh up the extent to which that complaint about breaches of privacy or unfairness is valid. That is a different process and an easy to understand process compared with looking at whether or not a historical figure or a historical event has been portrayed fairly or properly.
Therefore, whereas I understand the feeling or the mood which wants a body independent of the broadcasters—the new Broadcasting Standards Commission will be just that; it will have no interest in industry and be totally independent of it, as are the two component bodies of the BCC and BSC—we should not ask that new body to take on those responsibilities. It would simply not be appropriate for it to do so.
9.45 p.m.
Viscount Astor: My Lords, I was concerned when I heard the speech of the noble Lord, Lord Dubs, and that of my noble friend Lord Pilkington. They seem to suggest that the two bodies—the Broadcasting Standards Council and the Broadcasting Complaints Commission—are not suitable to take on the duties of the amendment. That is not a very good argument. Parliament should decide the law and those bodies should be made to carry it out. That is their purpose. At the moment, it seems to me that the cart is driving the horse.
The important point is that we are putting together two different bodies; one is concerned with complaints and the other with standards. They perform two very different functions. There is bound to be a certain tension when those two bodies are put together. The arguments of the noble Lord, Lord Chalfont, have some merit. However, I am concerned about the word "political" in his amendment, and I have various other worries. But we have an opportunity to get this right, and we must get it right. I have not heard the right answer tonight. I hope that my noble friend the Minister will consider what has been said this evening, because there are certainly anxieties which can be addressed.
Lord Donoughue: My Lords, I do not feel wholly confident in rising to speak partly because, during the previous discussion, I was never quite sure with which amendments we were dealing and partly because I am aware of the conflict between my liberal instincts and the feeling, having listened to the noble Lords, Lord Chalfont, Lord Renton and Lord Orr-Ewing, that they had some valid points.
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On the political side I support what was said about the difficulties by my noble friend Lord Dubs. We on this side of the House are worried ahead of a general election about temptations to intimidate the BBC and to make it a political football on impartiality. We would support the Minister in resisting any attempts to do that.
Having said that, I still have sympathy with one or two points made on the other side of the House. I am worried by the BBC being judge and jury, as I said on Second Reading when discussing the BBC Charter. I note what my noble friend Lord Cocks said, but I believe that there are problems if the regulators are confused with the managers. Nothing has been done on the BBC Charter despite our long and interesting debate. It should be obvious to the House that I am a great supporter of the BBC and of public service broadcasting, but I do not believe that the present situation regarding accountability is perfect.
An interesting letter from the Secretary of State was read out saying that the BSC is not a regulatory body. If it is not, I am puzzled as to what it is and whether there is any point in spending all this money. We believe that it is a regulatory body. I have always sympathised—this is not necessarily my party's position—with the idea of having a single regulatory body because, as the broadcasting media merge and as the BBC gets, as it will, pay television and so on in the digital age, there is a case for a single overarching body. That is my personal view. I accept all of what was said by the noble Lord, Lord Pilkington, and also the nods of my noble friends, with their experience, about the present bodies not being set up to do what we require. But does that mean that no one should do it? As usual, the noble Viscount, Lord Astor, put his hammer on the nail, arguing that it is for us to say what they should do if they say they cannot do it now.
On the fairness and impartiality side, I sympathise with what was said by the noble Lord, Lord Chalfont, about complaints at the moment being made only by the people directly affected. That is quite unsatisfactory. I just do not understand it. That distinction as to who is affected in terms of the accountability of our broadcasting to the public is not adequate. I do not wish to get involved in the argument today about guidelines and codes. Anyone who has ever studied Marxist history will know that there are words where one cannot see the difference but one knows that it makes the difference between Stalin murdering people or bringing heaven on earth. However, I still do not see why we do not have codes. I just put it like that. It would certainly meet some of the concerns expressed.
The underlying problem is trust, and trust of journalists. There is a conflict between the managers and the regulators, whether they are judge and jury, the governors or some commission. In my experience the governors of the BBC agree with our concerns and understand them. The conflict is not between one kind and another or between them and us; it is between them and the modern, new model journalists. I speak as a former journalist. From my observation, not always but often, they have no concept of factuality, fairness or impartiality. That is the basic problem.

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We are dealing with how we solve the problem, whether through codes or whatever. Somehow we have to strengthen the regulators—whether they are governors or old or new model broadcasting commissions of whatever name—to defend our standards. That is a very difficult problem and I sympathise with the Government. Perhaps the Government's proposals will achieve what is required by taking on board a number of very genuine people who are not totally convinced but who want the Government to get it right. I hope so.
I thought that the question of the ombudsman would arise much later; I am very relieved that it has come up now. It seems to me not a bad idea, if I may say that as an off the cuff—
Lord Orr-Ewing: My Lords, perhaps the noble Lord will allow me to point out that there is a misprint on the Marshalled List. It is meant to be the BBC and not the BSC with which the ombudsman is concerned.
Lord Donoughue: My Lords, I thank the noble Lord. Having watched him over the past 50 years, I instinctively assumed that it was a misprint, so we were not misled. I conclude by saying that if the Government can find some way ahead of Third Reading of meeting these genuine concerns without abandoning the basic liberal principles that one cannot put journalists totally into a harness it would be extremely helpful.
Lord Inglewood: My Lords, we have had an interesting and varied debate following the moving of Amendment No. 190 by the noble Lord, Lord Chalfont. As he said, the remainder of the amendments to which he spoke are really consequential. Given the lateness of the hour, I shall focus on what I believe, from listening to the helpful and clear remarks of the noble Lord, Lord Chalfont, to be the central issue he would like us to consider. It is—I hope I am being fair—that the governors of the BBC are insufficiently independent effectively to perform a regulatory function. The Government proposed in the White Paper, then in the draft Charter and Agreement, and Parliament concurred—albeit with some Members disagreeing—that the BBC should continue to be established along its traditional lines under Charter and Agreement. It follows that arrangements for the BBC cannot be exactly the same as those for independent broadcasters. They can, however, be equivalent. That is how we approached the new Charter and Agreement which are different in a number of important respects from the present ones.
The new Charter and Agreement set out how the BBC is to apply its obligations to observe impartiality in exactly the same terms as apply in the 1990 Act to the ITC, the Radio Authority and the Welsh Authority. Further, the governors are given a clear legal responsibility to ensure compliance with the impartiality code by all the BBC's employees and programme makers. All this is spelt out in the new Charter and Agreement which defines clear responsibilities for the governors.
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Against such a background, it is obvious that sanctions cannot be exactly the same for the BBC as for the ITC. However, I believe that the sanctions available to the governors are sufficient for them to be able to meet their obligations. The governors may take disciplinary action against its employees, including severe reprimands, and ultimately dismissal if appropriate; they may issue new guidance to producers in the event of any failure to observe either the guidelines or the BBC's obligations under the Charter or Agreement; and they may terminate their relationship with presenters or freelance producers who have seriously breached the guidelines. The ITC cannot sack a broadcaster's chief executive as the BBC governors can. Those are all sanction which the governors have, I understand, applied in the past.
So we do not believe that the governors are inherently too close to the work of the BBC effectively to perform a regulatory role. They have established a programme complaints unit independent of their programme makers and with a route of appeal to the governors. They have already demonstrated a willingness to take strong action where it is required, and the new Charter and Agreement will, as I have explained, clarify their regulatory role and strengthen their authority to act.
We are most grateful to the noble Lord, Lord Cocks, for his contribution. As a governor in the front line in dealing with complaints, he has explained how the board of governors will implement the new provisions of the Charter and Agreement as they relate to the governors' regulatory functions.
The noble Lord made the important point, to which I shall return, that the new Charter and Agreement have not yet come into effect. I am sure that what he said must offer reassurance to the House on this aspect of the governors' functions.
I would stress that these are real legal obligations placed on the governors. They are equivalent to those set out in the 1990 Act and placed on the ITC and the Radio Authority. If anyone felt that the governors, or indeed any other regulatory body, were failing to fulfil their obligations, it would be open to them to seek leave for judicial review.
In considering the role of those with regulatory responsibility, it is important to make a distinction between their ability to do the work and their proper performance of this duty. We believe that those charged with regulatory responsibility are properly capable of doing it, and that the ITC and the BBC governors, strengthened in substance and in resolve by the new Charter and Agreement, will have no difficulty in carrying out those tasks and applying sanctions as appropriate.
I turn briefly to the new BSC. It has been suggested that that body should be a regulator. As I have explained earlier this evening and on other occasions in your Lordships' House, the new BSC has a role which is a combination of the roles of its two component bodies. It has two functions. The first is as a standard-setting, bench-marking body in respect of the standards which pertain to broadcasting. The second, as I have already explained, is to have what I term in shorthand a

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"user-friendly mechanism" so that individuals can seek redress in respect of particular personal damage which they may have experienced from broadcasters. It is not a regulatory body. It is a complement to the regulatory bodies and it is not antagonistic towards them.
Reference has also been made to the remarks made by the Secretary of State and to her wish to strengthen that body. The Bill as submitted to Parliament contains a number of changes to the existing arrangements, perhaps the most significant of which comes in Clause 84(7)(c) which refers to the obligation newly placed on broadcasters to report to the BSC the actions taken by them in response to the BSC's findings, which in turn will be published in the bulletin. This very evening, for example, a number of changes have been introduced in respect of the BSC which have received general support around the House. We are strengthening the BSC both in form and by backing it by giving it increased political authority. It is not an unusual phenomenon in this country that much of the standing and effect which a body such as the BSC can exercise derives from the authority inherently within it.
Another point on which I should like your Lordships to focus is the consequence of the proposals which the noble Lord, Lord Chalfont, has brought forward for the BSC. As I understand it, he is suggesting that the BSC should become a kind of parallel regulator. In particular what would be the relationship of the new BSC with the ITC were his proposals to become law? How will the two relate in respect of, for example, an adjudication on the same complaint? That was a point made by the noble Lord, Lord Cocks. We shall find that the decisions of one body will be impugned by the decisions made by the other. We have here a recipe for regulatory anarchy, which is in no one's interests.
Lord Chalfont: My Lords, I am grateful to the Minister for so courteously giving way. I am sure he knows that that is the position at the moment: the BCC and the BSC are in a position to second-guess, to make a different adjudication on the same complaint from that of the two regulatory bodies. It exists at the moment. There is second-guessing, as the cliché has it, in existence now. What is new?
Lord Inglewood: My Lords, as I understand the proposal made by the noble Lord, Lord Chalfont, on occasions it can undoubtedly be an unsatisfactory state of affairs for the regulator if the regulator's decision is attacked via the mechanism of judicial review under the circumstances he described. That has occurred. That will be compounded in two regards. First, the scope of the new BSC will be widened, thereby increasing this problem; and, secondly, as I understand it, the aspiration is that the BSC will itself become some kind of regulatory body in respect of the broadcasters. If I have misunderstood him, I crave his forgiveness. But we cannot have two regulators in respect of one broadcaster.
I should like, if I may, to move on. As I said, as I understand it, and as I am sure the House understands it, the noble Lord's case is that the BBC governors have not properly carried out their regulatory job. As I have
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explained, substantial changes have been made to the BBC Charter and Agreement in response to the kind of points that the noble Lord and his friends have raised.
I appreciate that the noble Lord disagrees with the conclusions that the Government and Parliament have so recently reached, but against that background he must explain, by reference to the arrangements in the new Charter and Agreement, why those substantial changes will fail. Much of the evidence that has been brought forward this evening is old. Indeed, it is inevitable. As I have explained on this and other occasions, we accept that in the past things have not gone right, but we have taken steps. We believe that those steps will help put matters right. The Secretary of State, the new Chairman of the BBC and the Government are all emphatic that those abuses of the past shall not continue.
The tools have been given to the chairman and governors to do that in the new Charter and Agreement which, I believe, will come into effect on 1st May this year. If I understand him correctly, the noble Lord says that he doubts their ability to deliver, which of course is a perfectly fair point to make. He points to past events to support that view, but we have made significant changes to deal with t1te deficiencies of the past. If the noble Lord can convince me that the new arrangements will fail, he makes the case for doing something beyond that which we have done already; but, equally, if he does not, surely he makes my case for me.
I apologise for making a rather lengthy speech at this late hour, but I am sure that your Lordships will agree that these are important issues which deserve close consideration. I hope that I have explained the Government's position as clearly as possible.
Lord Chalfont: My Lords, I suppose that I should follow the Minister in apologising for speaking again at this late hour. I shall not, however, do so because it is not by my choice that the debate is taking place at this time. I therefore beg the indulgence of the House to make one or two points on what has been a most interesting and to me enlightening exchange. I thank everyone who has spoken, not just those who spoke in support of my amendment but those who have shown a certain amount of doubt about it.
I shall make just one or two brief comments. The point has come up again and again—the noble Lord, Lord Cocks of Hartcliffe, made it first, but it has constantly come up—and it came up again in the Minister's remarks a moment ago: there seems to be—I am repeating myself, but it seems necessary to do so—that there already exists a situation in which two regulatory bodies (the ITC and the Radio Authority) have over them two other regulatory bodies (the BCC and the BSC). The Minister may say that those are not regulatory bodies, in which case I repeat my rhetorical question: what on earth are they? We ought to have it clear that, when people say that the new BSC would be a second-guessing organisation over and above the existing regulatory authorities, such an institution exists already but not in respect of the BBC. The BBC is the only body that it cannot second-guess and I have been trying in part to put that right.

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The noble Lord, Lord Pilkington, brought out the floodgates argument again, saying that if we did this at election time there would be thousands of frivolous complaints. That has not happened in the past so why should it happen in the future? I do not understand that argument.
There are many other issues that I should like to mention but it is late at night. However, I wish to make a point in reply to the noble Viscount, Lord Astor. He said that he had some doubts about the word "political" appearing in my amendment. My amendment is a direct quotation from the Broadcasting Act 1990, which lays that duty upon the ITC and the Radio Authority. Therefore, why not upon the BSC?
It has been a most interesting and enlightening experience to listen to some of the arguments that have been put forward. I return to what the Minister said. At the beginning of his remarks he said something which appeared to me to go right to the heart of the matter. He said that the Charter means that the governors may do this, may do that and may require this. "May" is the key word. It places no obligation, duty or responsibility, legal or otherwise, upon the governors. It simply means that they may do it. What if they do not choose to do so? That is at the heart of my question.
The Minister spoke about the powers of the ITC and the Radio Authority not being as draconian as those of the governors under the Charter. Perhaps I may remind him that the ITC and the Radio Authority may not be able to sack the chief executive of a radio station but they can close down a station. That is somewhat more drastic than sacking the chief executive.
I was most interested to hear the Minister mention judicial review. It has clarified in my mind an issue that has been puzzling me for some time. I wondered whether the BBC could be taken to judicial review by viewers or listeners, as in the case of the independent authorities, which are subject to statute law and not to a Charter. I was interested to hear him say that that is the case. I suspect that tonight a number of people will be thinking very hard about the exciting possibilities of taking the BBC to judicial review.
I return to a comment that I made in my original remarks. I asked the Government to appreciate that there is a very real problem. It is not an imagined problem nor is it the figment of one person's fevered imagination. It exists and it is shared by a great number of people. I am sorry that the Government apparently do not entirely share that view. I wish they would. I hope that between now and Third Reading they will think of a better way of solving the problem if they do not like my way. This problem will not go away, whether there is judicial review or further legislation. I hope that between now and Third Reading the Government will come forward with a proposal that they believe to be practicable and will meet the anxieties of a great number of people; people who, as the Minister said tonight, are not of the same political persuasion. It is an anxiety that pervades the entire political spectrum and is widespread throughout the country.
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I have a hope, perhaps not a strongly held hope but a faint hope, that the Government will come back with a suggestion as to how to solve the problem. I state my possible intention of returning to the matter on Third Reading if nothing happens. In the meantime, it may be, from what the noble Lord, Lord Donoughue, said, that I need to remind the House that at the moment we are discussing one amendment, Amendment No. 190. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10.15 p.m.
Lord Inglewood Lord Inglewood moved Amendment No. 191:
Page 63, line 17, leave out second ("any") and insert ("the").
On Question, amendment agreed to.
Clause 76 [Complaints of unfair treatment etc.]:
[Amendment No. 192 not moved.]
Clause 77 [Committee to consider fairness complaints]:
Lord Inglewood Lord Inglewood moved Amendment No. 193:
Page 64, line 23, after second ("to") insert ("the consideration of").
On Question, amendment agreed to.
Lord Inglewood Lord Inglewood moved Amendment No. 194:
Page 64, line 25, leave out subsections (2) and (3).
On Question, amendment agreed to.
[Amendment No. 195 not moved.]
Clause 78 [Complaints relating to taste and decency, etc.]:
[Amendment No. 196 not moved.]
Clause 79 [Supplementary provisions as to making of complaints of either kind]:
Lord Inglewood Lord Inglewood moved Amendment No. 197:
Page 65, line 4, leave out ("and") and insert ("or in such other form as the BSC may allow and must").
On Question, amendment agreed to.
[Amendment No. 198 not moved.]
Clause 81 [Consideration of standards complaints]:
[Amendments Nos. 199 to 201 not moved.]
Clause 84 [Publication of BSC's findings]:
[Amendments Nos. 202 to 204 not moved.]
Lord Inglewood Lord Inglewood moved Amendment No. 205:
Page 69, line 2, at end insert—
("( ) References in subsection (2) to the publication of any matter are references to the publication of that matter without its being accompanied by any observations made by a person other than the BSC and relating to the complaint.").
On Question, amendment agreed to.
[Amendment No. 206 not moved.]
Lord Inglewood Lord Inglewood moved in substitution for Amendment No. 206 a manuscript amendment:
Page 69, line 12, leave out ("at such intervals") and insert ("monthly or at such other intervals as they think fit").
On Question, amendment agreed to.
Viscount Astor Viscount Astor moved Amendment No. 207:
Page 69, line 34, leave out ("absolute") and insert ("qualified").
The noble Viscount said: My Lords, due to the lateness of the hour at Committee stage I did not move the amendment but the Minister and I exchanged correspondence on it. However late the hour, I feel that I must move it now.
This is an issue that has been highlighted by a recent court case which, rather than explaining the issue, confused it. I am concerned that under the Bill the BSC would have absolute privilege which would enable it to make possibly libellous statements without risk of being sued. The provision of absolute privilege to the BSC's report would give that body a greater level of protection than that applied to equivalent bodies under the law of defamation.
Traditionally, absolute privilege attaches to Parliament and the courts, those bodies to whom it is afforded by statute, and those bodies which exercise the judicial power of the state. Absolute privilege attaches to fair, accurate and contemporaneous reports of the courts, provided they sit in public, but qualified privilege only attaches to reports of other absolutely privileged bodies. This position is reflected in the Defamation Bill.
The BSC will exercise a complaints function, usually having held a hearing, in private, and not a judicial or state function. Those bodies to which Parliament has afforded absolute privilege usually exercise one or other of those functions; for example, the Monopolies and Mergers Commission. If the BSC were to receive absolute privilege as a complaints body which holds hearings and receives evidence it would follow (on the analogy with the courts of justice) that statements of the parties and witnesses would also enjoy absolute privilege, which is surely unintended.
I fully accept that the new body must have teeth and must reasonably protect its members. This is an important issue on which I should be grateful for clarification from my noble friend. I beg to move.
Lord Donoughue: My Lords, perhaps I may express my support for the noble Viscount's amendment. I endorse the points that he made. I should also say that I object to absolute privilege in the Houses of Parliament; indeed, I should like that to be abolished too because it is abused. Should there ever be any scandals in another place or on Select Committees, I believe that the privilege would be abused. Absolute privilege is a very dangerous licence. It is possible only in a world where there are gentlemen, and we now know that the world is very short of them. I wholly support the views put forward by the noble Viscount. I believe that qualified privilege is quite enough.
Lord Thomson of Monifieth: My Lords, both the Government and the Minister ought to be aware that these Benches also support the amendments. We believe that the case was very clearly put by the noble Viscount, Lord Astor.
Lord Inglewood: My Lords, Parliament has entrusted members of the commission with a particularly difficult task in the case of fairness complaints. It was our intention to protect those members in the exercise of their functions. As a quasi-judicial body, at least in relation to fairness complaints, we believe that its proceedings and reports of its proceedings would attract absolute privilege in any case.
The purpose of granting the Broadcasting Standards Commission absolute privilege in the clause for reports of its proceedings is to define the matter beyond argument and to ensure that the commission may carry out its duties without fear of false allegations of defamation which could embroil its members in lengthy and costly court proceedings. However, I fully understand the anxieties of noble Lords. On reflection, we now believe that it would be more appropriate to remove the entirety of subsection (10).
Viscount Astor: My Lords, I am most grateful to my noble friend the Minister for his response. I believe that I am right in saying that, by stating that they will remove subsection (10), the Government believe they have absolute privilege but they are not entirely sure. Therefore, they do not want to say anything and will leave it to the courts to decide. I must admit that I am not a lawyer and that I am quite lost when it comes to such matters. But, in any event, I am grateful for my noble friend's reply. Of course, I shall have to study it because, as I said, I am not an expert on such matters. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 208 to 210 not moved.]
Lord Colwyn Lord Colwyn moved Amendment No. 211:
After Clause 94, insert the following new clause—
USE OF MUSICAL WORKS IN BROADCAST SOUND RECORDINGS
(".—(1) Sections 135A to 135G of the Copyright, Designs and Patents Act 1988 (copyright licensing) (as inserted by section 175 of the Broadcasting Act 1990) shall each be amended as follows.
(2) After "recordings", in each place it occurs, insert "or musical works".").
The noble Lord said: My Lords, we come now to what is probably the final debate of our deliberations this evening. It is a new amendment which relates to a matter not raised in Committee. It is an amendment which I believe my noble friend the Minister will very easily be able to accept as it is very straightforward. I spoke about the matter at length during the passage of the previous broadcasting Bill.
Some noble Lords will know that I am a semi-professional musician and so the broadcasting of music, especially my own, and the rewards that it brings are close to my heart. Apart from that, I have no interest to declare other than the fact that I was a director at the

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beginning of Jazz FM. I should also like to make it quite clear that I have had no interest in any other part of the Bill.
I am in favour of continual expansion in the a number of radio stations broadcasting music. I also believe that those who compose, perform and record the music which broadcasters use should obtain a fair reward for their work and creativity. Those who make music and those who broadcast share a mutual interest in each other's welfare.
The amendments to the Copyright, Designs and Patents Act 1988 in Section 175 of the Broadcasting Act 1990 have been of benefit to both parties. They introduced the "statutory licence" which has allowed new radio ventures to get to air without being impeded by the collective copyright agency which represents the British recording industry. That has been helpful to new broadcasters. On the other hand, the amendments also clarified the role of the Copyright Tribunal as arbitrator between the record companies' copyright collection agency and the broadcasters, leading to fairness, peace, understanding and proper payment and reward on both sides.
However, under the copyright Act, as amended by Section 175 of the Broadcasting Act 1990, only the copyright collecting agency working on behalf of record manufacturers—that is, Phonographic Performance Limited—is covered. Other important copyright societies also license radio companies to use their members' copyright. The Performing Rights Society represents composers and arrangers, for example.
No major disputes currently exist between the collecting societies and UK commercial radio broadcasters, but the amendment that I propose would ensure the same legal framework for the relationship between all agencies that issue collective copyright licences and the radio broadcasters with whom they negotiate.
Recently the MMC gave its view that a statutory licence with PRS is not necessary because it was not in the society's interests not to issue a licence. I beg to differ. As I see it, the very intention of the amendment to the copyright Act in Section 175 of the Broadcasting Act 1990—to enable broadcasters to begin broadcasting and have copyright disputes dealt with by the arbitration skills of the Copyright Tribunal—would be impaired if there were not a parallel entitlement to a statutory licence in respect of the composers' copyright in the works contained on the gramophone records which are already subject to a statutory licence with PPL.
My amendment is, if you like, insurance for the future to ensure proper reward—arbitrated if necessary—for all involved in the British music industry and a climate of confidence for those who wish to broadcast and increase the popularity of the music industry's wares. This is an amendment which would allow the Government to do something positive for the music industry; something more effective and productive than an appearance at the Brit Awards. I beg to move.
Lord Lyell: My Lords, my noble friend the Minister was more than helpful in his response to a similar type of amendment to which I spoke on Second Reading. I made one or two suggestions on that occasion. My noble friend made helpful comments as regards a statutory licence. I believe that my noble friend's amendment is sympathetic to that issue. I hope that my noble friend the Minister and his department can offer some help on this matter. I thank him for everything he has done to help us in the past. If he could see his way to assist my noble friend on this occasion, I would be grateful.
Lord Birkett: My Lords, I speak briefly to support the noble Lord, Lord Colwyn. I do so for two simple reasons. First, his amendment seems to me to be entirely logical and sensible and, secondly, anything which protects the interests of composers is welcome. They are a body of people who receive little consideration in the world, except the very famous. They are often left out of consideration in matters such as this Broadcasting Bill. If the Government could see their way to accepting the sensible amendment of the noble Lord, Lord Colwyn, they would do well to do so.
Lord Inglewood: My Lords, I am grateful to the noble Lords for having raised this matter. I am grateful to my noble friend Lord Colwyn, whose expertise in the music field is renowned. I am also grateful for the comments of my noble friend Lord Lyell and the noble Lord, Lord Birkett. In moving this amendment, as the noble Lord explained, he is seeking to extend the statutory licence provisions in the Broadcasting Act 1990. One of the reasons for introducing the statutory licence in 1990 was to remove what I understand are known as the needletime constraints which had previously been imposed by the owners of copyright in sound recordings. The needletime constraints had been criticised in 1988 by the Monopolies and Mergers Commission report on the Collective Licensing of Public Performance and Broadcasting Rights in Sound Recordings. That meant that licences offered by the copyright owners for the use of sound recordings in broadcasts limited the number of hours of transmissions which could include sound recordings. The MMC report had additionally recommended that a statutory copyright licence in respect of the broadcasting of collectively licensed sound recordings be introduced. Delays in agreeing satisfactory licences were causing difficulties for some of the new broadcasters wishing to start transmissions at that time. The Government were keen to remove these obstacles which had been identified by the MMC and to this end introduced the statutory licence in 1990.
The statutory licence allows broadcasters and cable programme service providers to start transmissions before copyright royalty rates for the inclusion of sound recordings have been agreed. It also removes the possibility of any needletime constraints, so that licences can no longer specify a maximum amount of needletime. I remember that I indicated during the Committee stage of the Bill, when another possible variation to the statutory licence was under consideration, that the Government still support the

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statutory licence, and I reiterate that support now. The Government are, though, currently considering whether some rather limited restrictions to the availability of the statutory licence may now be justified. Your Lordships may remember that they were then considering what is known as "muzak" and its delivery to supermarkets and that sort of establishment.
However, my noble friend's amendment is different because this seeks to broaden the statutory licence so that it covers musical works as well as sound recordings. It is quite true that broadcasters and cable programme services providers do need to obtain licences from the owners of copyright in any copyright musical works included in transmissions, as well as from the owners of copyright in sound recordings of musical works.
This is not the first time there have been suggestions that the statutory licence should therefore cover musical works as well as sound recordings. I do hope the noble Lords who have spoken to this amendment will not consider me unfair if I say that this is part of what has been an ongoing, long-running story.
The issue has been considered very recently by the Monopolies and Mergers Commission which published a report on 1st February this year on performing rights. This report concluded in relation to the extension of the statutory licence provisions to musical works. I can do no better than quote what is said in the Monopolies and Mergers Commission report:
"We do not see an overriding case for extending the provisions further".
This conclusion of the Monopolies and Mergers Commission is one which is fully supported by the Government. As the MMC report makes absolutely clear, the special reasons relating to needletime constraints do not apply to musical works and the body, the Performing Rights Society, which the noble Lord, Lord Colwyn, referred to in his remarks, which collectively licences the rights relating to the inclusion of a musical work in a broadcast or cable programme service. It has a commercial imperative to reach an agreement on a licence. The Performing Rights Society informed the MMC inquiry that it had never refused to issue a licence given that to do so would obviously jeopardise its members' revenues.
It is, I suppose, possible that broadcasters and cable programme service providers may feel that they have been obliged to take licences from the Performing Rights Society on terms which they believe are unfavourable. However, copyright law already provides an appropriate remedy, if such is the case, in so far as a licensee or prospective licensee can refer the matter to the Copyright Tribunal for a decision. This seems to go some extent towards the mischief which my noble friend Lord Colwyn is concerned about.
The tribunal is an independent body. It is established under the Copyright, Designs and Patents Act 1988 specifically to adjudicate on matters such as this. The Government do not believe, therefore, that dissatisfaction with any licence terms offered by the Performing Rights Society provides the justification for a provision which would allow broadcasters to use musical works before the copyright royalties sought by the Performing Rights Society are paid.
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I appreciate that this will be a disappointing response to my noble friend and the other noble Lords who spoke in support of this amendment. I have to say that it is not one that the Government can support.
The Earl of Stockton: My Lords, can my noble friend say whether the Government have considered the developments that will be taking place over the next few years in the multimedia area? There will be not only conventional recordings of musical works that have been conventionally composed; there will also be a new breed of what one might call computer-generated recordings. The protection given to that is covered by the copyright protection in the computer programme and not in the product of that programme. That was a confusion that arose during the passage of the Copyright and Patents Act. I should like once again to draw to the Government's attention the fact that we need to address this issue. It is an issue that will become more and more important as we go further down the amalgamation of electronic systems.
Lord Inglewood: My Lords, with the leave of the House, perhaps I may say that my noble friend Lord Stockton has drawn to the attention of the House what is clearly an important matter. As he will know probably better than the rest of us, developments in the multi-media world are such that the traditional way in which we as legislators and as citizens have looked at a number of these matters will inevitably he changed by these new technological advances.
The point that my noble friend has raised is of considerable significance to the industry and to Britain, bearing in mind our prowess in this field. I hope that your Lordships will agree with me that the appropriate response is that we should reflect carefully on the point that my noble friend Lord Stockton has drawn to my attention.
Lord Colwyn: My Lords, when my noble friend began his remarks I felt encouraged and thought that he might accept my amendment. As he continued it became obvious that that would not be the case.
British radio has expanded enormously since the passing of the 1990 Act. The statutory licence has worked well for PPL and for the radio industry. More radio means more revenue for PPL, and record sales have increased correspondingly. It is not clear to me why a similar statutory licence cannot be arranged for PRS. That would similarly benefit the composers and publishers.
However, I shall read my noble friend's long and complicated reply and decide whether I should raise the matter again at a later stage.
Lord Inglewood: My Lords, having heard the remarks of my noble friend Lord Colwyn, perhaps the best way forward would be for me to draw his remarks to the attention of my right honourable friend the President of the Board of Trade, who has principal responsibility for these matters.
Lord Colwyn: My Lords, I am very grateful for that additional help, and I thank the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 95 [Power of BBC to make transfer schemes relating to its transmission network]:
Lord Inglewood Lord Inglewood moved Amendment No. 212:
Page 74, line 29, leave out from ("services") to end of line 31.
The noble Lord said: My Lords, the amendment is straightforward. As your Lordships will be aware, Clause 95 of the Bill empowers the BBC to draw up a scheme to transfer certain property, rights and liabilities in order to facilitate the privatisation of its transmission network. The amendment removes the BBC's research and development work from the scope of any such transfer scheme.
The subsection was an enabling provision modelled on the similar provisions in the Broadcasting Act 1990 in relation to the Independent Broadcasting Authority's transmission services, which were successfully privatised in 1991. However, after further discussion with the BBC, we have concluded that it is unnecessary. We have agreed that the BBC needs to retain its research and development function in order to be a properly informed customer for privatised transmission services and to continue its vital contribution to the development of the BBC's services and to the wider broadcasting equipment industry in this country.
I hope that that explanation will give a clear picture of the reasons for bringing the amendment forward. I beg to move.
Lord Thomson of Monifieth: My Lords, will the Minister tell us as regards the amendment whether the reservation of the research and development work of the BBC from the privatisation of the remainder of the transmission network is paralleled by the arrangements made for the IBA following the 1990 Act? If I remember rightly, the main research and development of the IBA engineering division—it was a notable engineering division comparable to that of the BBC—went with the privatisation arrangements. Are the two arrangements in parallel? If not, why not? When the Minister responds, perhaps he can give me some information on that.
In doing so, perhaps he can say what proportion of the BBC's engineering transmission operations is reflected in the separation of the research and development work from the remainder of the transmission. It seems a somewhat odd proposition.
If I remember rightly, in the 1990 Act the IBA—now the Independent Television Commission—was entitled to retain an essential small corps of engineering experts who could look after the engineering transmission interests of the ITV network and deal on equal professional terms with the separately privatised IBA engineering system. If the position is different for the BBC, why is it different?
Lord Donoughue: My Lords, it is getting late. On the issue of transmitters we are in some difficulties. We oppose it but we cannot discover whether the BBC supports it or opposes it.
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The ITV's 600 transmitters have been sold to NTL—an excellent small British technological firm. Can NTL also bid for the BBC's transmitters? If it can, is there any danger of a monopoly emerging in that area?
On the research and development facility, the Minister began to deal with the issue, but it is unclear to me what will occur if the transmitters with which it has been concerned have gone. Has he any views on that?
Does it also mean that the privatised transmitters will have no research and development facility? I do not quite understand. One has transmitters in one place and the research people in another. I am not sure of the logic.
Are there guarantees of employment for those people within the BBC now that the central objective of their work has moved elsewhere? Will their terms and conditions of employment be the same after the transmitters have been sold off?
Lord Inglewood: My Lords, a number of significant questions have been posed about the process of the sale of the BBC transmitters, in particular what will happen to those employed as research and development staff at the BBC.
The noble Lord, Lord Thomson, whose knowledge of these matters is of far longer standing than mine and, I suspect, rather deeper in respect of the 1990 Act, referred to the privatisation of the old IBA engineering division at the time that the IBA transmitters were sold. I understand that a significant number of people had positions transferred to the purchaser of the IBA transmitters at that time.
The clause to which we have been speaking was included in the Bill because it was supposed when the Bill was drafted that there might be a number of BBC staff whom one might describe as naturally belonging to the transmission side and who would appropriately be transferred to any possible acquirer of the transmission division of the BBC as and when it was sold. The power is included in order to make quite clear that that could happen if it were appropriate.
The vast bulk of the BBC's research and development deals with matters which I believe are not so inherently tied up with the transmission division that they would transfer with it. I understand that it is likely that few people from the BBC's research and development side would go with the transmitters and that they are to remain with the BBC. It is possible that a few people may leave from choice, but I do not believe we are likely to see any kind of exodus of personnel.
I hope that answers part of the point raised by the noble Lord, Lord Donoughue. So far as concerns NTL being a possible purchaser of the transmitters, that is a matter for competition policy. If it is deemed to be in breach of competition policy, clearly that company could not. But there is no precondition implicit in the terms of the Bill to stop it at least putting in a bid.
On Question, amendment agreed to.

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Schedule 6 [Amendments of Broadcasting Act 1990 relating to services provided by BBC companies]:
Lord Inglewood Lord Inglewood moved Amendment No. 213:
Page 112, line 45, at end insert—
("(a) by section 42B(2), in relation to a licence to provide a restricted service,").
On Question, amendment agreed to.
Schedule 7 [Minor and consequential amendments]:
[Amendment No. 214 not moved.]
Lord Inglewood Lord Inglewood moved Amendments Nos. 215 and 216:
Page 115, line 15, after ("including") insert ("a restricted service (as defined by section 42A) or").
Page 115, line 19, leave out ("or (c)",") and insert ("(c) or (d)",").
On Question, amendments agreed to.
[Amendment No. 217 not moved.]
Lord Inglewood Lord Inglewood moved Amendments Nos. 218 to 220A:
Page 116, line 9, at end insert—
(". In section 2 of the 1990 Act (regulation by Commission of provision of television services), in subsection (4), in the definition of "television programme service", after paragraph (a) there is insertedߞ
"(aa) a restricted service (as defined by section 42A);").
[Renumbered as Amendment 220A].
Page 116, line 12, at end insert—
(". In section 46 of the 1990 Act (licensable programme services), in subsection (2)(a), after "television broadcasting service" there is inserted ", a restricted service".
In section 71 of the 1990 Act (interpretation of Part I), after the definition of "regional Channel 3 service" there is inserted—
""restricted service" has the meaning given by section 42A;".
In section 72 of the 1990 Act (local delivery services), in subsection (2) after paragraph (a) there is inserted—
"(aa) any restricted service (within the meaning of that Part);".").
Page 116, line 12, at end insert—
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(". In Schedule 19 to the 1990 Act (the Gaelic Broadcasting Committee: supplementary provisions)—

(a) in paragraph 8—

(i) for "Gaelic Television Fund" there is substituted "Gaelic Broadcasting Fund"; and

(ii) in sub-paragraph (c), after "Commission" there is inserted "and (where the expenses relate to the Commission's functions in connection with sound programmes) the Radio Authority"; and

(b) in paragraph 11(4)—

(i) after "Commission" there is inserted "or the Radio Authority"; and

(ii) for "them", where it first occurs, there is substituted "the Commission or, as the case may be, the Authority"."). On Question, amendments agreed to.

On Question, amendments agreed to.
Schedule 8 [Repeals]:
Lord Inglewood Lord Inglewood moved Amendments Nos. 221 to 224:
Page 116, line 19, column 3, leave out ("and").
Page 116, line 21, column 3, at end insert—
("and Comataidh Telebhisein Gaidhlig")
Page 116, line 34, column 3, at end insert—
("Section 45 (8) and (9). Section 47 (11) and (12).")
Page 116, line 45, column 3, at end insert—
("Section 45 (8) and (9). Section 47 (11) and (12).")
("In Schedule 19, paragraph 3.")
On Question, amendments agreed to.
Clause 101 [Commencement and transitional provisions]:
Lord Inglewood Lord Inglewood moved Amendment No. 225:
Page 76, line 7, at end insert—
("( ) section (Renewal of licences to provide national radio services),").
On Question, amendment agreed to.
House adjourned at fourteen minutes before eleven o'clock.