HL Deb 19 March 1996 vol 570 cc1155-226

3.10 p.m.

Read a third time.

Clause 1 [Certain events not to be shown solely on pay-per-view or subscription terms]:

The Parliamentary Under-Secretary of State, Department of National Heritage (Lord Inglewood) moved Amendment No. 1:

Leave out Clause 1.

The noble Lord said: My Lords, I indicated at Report stage that the Government proposed to introduce amendments to guarantee the availability of live coverage of listed events to terrestrial free-to-air television and to provide for a number of associated measures to secure the best deal for sports bodies, broadcasters and the public. The amendments which I am now presenting aim to do that.

The Government's amendments go fully with the grain of the amendment passed by your Lordships' House which now stands as Clause 1 of the Bill. They build on the thinking underlying the amendment and seek to put right some specific deficiencies to which I drew attention in Committee.

In place of Clause 1, the Government propose a series of clauses to protect television coverage of listed events. Our intention is that a terrestrial free-to-air service of universal coverage should be able to broadcast a listed event live, subject only to rights being available to a non-universal broadcaster, and vice versa. Inevitably the clauses are somewhat complex. That is, I fear, inevitable if one takes action in this area. It may be helpful to the House if I briefly summarise the purpose of each amendment in turn.

Amendment No. 1 leaves out Clause 1, to be replaced by a series of clauses designed to put its general intentions into effect. We propose that these amendments constitute a new Part IVA of the Bill to follow that part which comprises amendments to the Broadcasting Act 1990.

Amendment No. 20 rolls over the provision in the 1990 Act to draw up the list of listed events as a prerequisite to the protection of television coverage. Amendment No. 21 establishes two categories of television services. The first effectively comprises terrestrial free-to-air broadcasters with universal reach. The second covers all other broadcasters. There is a power to vary the composition of each category by order, for example, to reflect the development of digital broadcasting.

Amendment No. 23 sets an absolute prohibition on any broadcaster in either category acquiring exclusive rights to show a listed event live. Amendment No. 24 provides that a contract between broadcaster and a sports rights holder must specify the category of service on which a listed event is to be televised. Both these amendments are designed to ensure compliance with the main provisions.

Amendment No. 25 is the key clause. It obliges a non-universal broadcaster not to broadcast live coverage of a listed event unless the same rights have been acquired by a universal broadcaster, and vice versa. There is a provision for the Independent Television Commission to pre-clear broadcasts which do not comply with the terms of this provision—for example, if no non-universal broadcaster is interested in acquiring relevant rights.

Amendments Nos. 26 and 27 allow the ITC to impose penalties on their licensees who act in breach of the provisions, with maximum fine levels set by the Secretary of State by order, and to report any breaches by the BBC or S4C to the Secretary of State. In practice the ITC pre-clearance procedure makes any such action extremely unlikely.

Amendment No. 28 provides for the ITC to draw up a code to specify the criteria which it will apply in exercising its functions in this area and to cover definitional issues. Other amendments with which these are grouped are consequential.

These amendments safeguard listed events for terrestrial television. They help in various ways to safeguard the position of broadcasters, sports bodies and viewers. As indicated at Report stage, the Government will keep the operation of the controls under review to reflect the need for flexibility in the fast-moving broadcasting sector. We believe that the amendments strike a fair balance between the reasonable interests of all concerned, and I hope that they will commend themselves to your Lordships' House. I beg to move.

Lord Howell

My Lords, the House will recall that at the start of our deliberations on these matters a significant majority was in favour of maintaining the listed events. With his normal helpfulness and courtesy, the Minister indicated that the Government would seek to honour that decision and produce a suitable amendment. That is what they have done today. I express my appreciation and that not only of colleagues but of the millions of people outside this Chamber who are grateful for what the House has done to protect their interest.

The new part is five pages long. I calculate that it contains more than 3,500 words. It replaces some 50 words in the 1990 Act and the provision of about equal length that we put into the Bill at an earlier stage. I do not know what conclusion to draw from this extraordinary verbosity. I can only assume that every dot and comma, nook and cranny, has been explored and that the new part is therefore totally waterproof. No doubt the Minister will tell us why we have such a lengthy amendment.

I express appreciation that the excellence of British sport is to be retained in the shop window of British sport—terrestrial television broadcasting. In view of that, we shall, of course, support the amendment moved by the Minister.

Viscount Astor

My Lords, my noble friend's amendment goes slightly further than the amendment moved at an earlier stage by the noble Lord, Lord Howell. My noble friend's amendment also refers to the list, and the revised list, and the power which the Secretary of State will have to include or omit various sporting events from that list.

When the Minister replies, will he state the Government's thinking as regards the list? How often will it be reviewed? Once a year? Or every five years? To what decisions have the Government come? It is important that we establish what the Government are providing in their amendment. It will certainly affect opinion as regards the later amendment in the name of the noble Lord, Lord Howell.

Lord Thomson of Monifieth

My Lords, the noble Viscount, Lord Astor, asks a pertinent question. We await with interest the answer from the Minister. In the meantime, from these Benches I join with the noble Lord, Lord Howell, in expressing our thanks to the Minister for accepting the will of your Lordships' House when we voted on the matter by ensuring that your Lordships' House and not another place put the consequences of that vote into proper statutory form.

Like the noble Lord and the noble Viscount, I have not mastered all the small print of the rather long series of new clauses, but I am sure that it is necessary. It is, however, the principle which matters. We are grateful to the Minister for enabling the House to come to a conclusion on the issue before Third Reading is completed.

Lord Peyton of Yeovil

My Lords, having had some part in the amendment moved in Committee, I should like to say more than a word of conventional thanks to my noble friend. I express genuine admiration and regard for the way in which the Minister listens to what is said here and produces something sensible to carry it forward.

I regarded the original amendment as not very good but as a useful way of nudging the Government into action. That is exactly how my noble friend has responded. For that I am most grateful.

The noble Lord, Lord Howell, is a little unkind, I think, in referring to the verbosity of the amendment. For once, I accept willingly that the step the Government have now taken demands a quite complicated series of arrangements in order to make it work. I willingly forgive my noble friend for the volume of the provision.

I should like to say how much I welcome the role that is given to the ITC under the amendment, so far as I understand it. In the rapidly changing technology of the industry, there is a great need for constant oversight by people who are detached and neutral but well informed on what is going on. My noble friend deserves the full thanks of the House and he certainly gets mine.

Lord Orr-Ewing

My Lords,I support the Government's new amendments. It is good that we have reached such an understanding. I was in favour of the first amendment of the noble Lord, Lord Howell, but the more I examined it the more I came to the conclusion that in both Houses flexibility is badly needed. Everything is changing in technology, in habits and in sport. Amateur sports are becoming professional, altering the amount of money that is available. The money available from the promoters of sport is important for the training of the new and young people both in our schools and in our classes.

I support the amendment, but I wonder whether we can keep the flexibility long enough to find that voluntary agreement which the various sporting authorities are now considering. It is important to have a voluntary agreement about how many highlights can be promoted. I also wonder whether primary legislation will be necessary if we need to change whatever agreement is reached, supposing the voluntary agreement does not work. If we need to change it, would it mean legislation on the highlights starting in another place? I note that the other place has changed the date of the Second Reading debate from just before Easter, on 2nd April, to 16th April. I hope that that will give them a fortnight in which to come to a voluntary agreement which we can all support.

Lord Donoughue

My Lords, we wish to join in the thanks and congratulations to the Minister for providing such a positive response. The whole process has shown the House at its best, with an excellent debate, a good vote and a positive ministerial response. I look forward to another place having to read the Bill. I wonder whether the reason for the delay is that they must read five pages of new clauses which might need a little more time.

Lord Butterfield

My Lords, perhaps I may interject a few remarks about my personal support and that of many people in the educational world for the Government's decision. I admit to an interest in the British Universities Sports Association, of which I have the privilege and honour to be chairman. Our patron is Her Royal Highness the Princess Royal. We are most anxious that at no time should television squeeze sport and similar activities off the screen. It is important that young people are given encouragement, not only to carry on their intellectual work, but also to keep fit and pursue the lions, the heroes who lead them.

At the moment the association has a remarkable hero in Jonathan Edwards who last year snatched the world triple jump record during sporting events organised by students. It is important to bear in mind that not only must the young be kept interested in their intellectual life and physical development, but also that their spiritual development is encouraged. In that respect, in Jonathan Edwards we have a modest young man who proclaimed his Christianity and on one occasion made it clear that he was not prepared to compete on the Lord's Day. If we can encourage that kind of hero through the proper use of television, it will be for the general good.

I wish to make one other remark. A gentleman in the University of Pittsburg in America, Digby Baltzell, may be known indirectly to noble Lords. He is a social philosopher in America and in his thesis he invented the great word "WASP", white Anglo-Saxon Protestant. He visited the United Kingdom while I was Vice-Chancellor of Cambridge University. I know him; he asked to talk to me and we had a chat. I was rather alarmed by the main theme that he wanted to put to me. He said that he was concerned because, returning to Britain, he found that the students were short of explicit role models. The role model that can come through the programmes that we can now see on sports and in other spheres will help British youth.

Lord Inglewood

My Lords, I begin by saying how pleased we are that the clauses that I have just proposed have met with your Lordships' approval. As the noble Lord, Lord Donoughue, said, we have had a good debate on the subject. Noble Lords were ahead of the Government in that respect, but we can now see a congruence in our thinking and I trust that it reflects well on both sides of the equation.

We have been asked why what we propose is so wordy. The simple answer is that when the problem was looked at in detail, the technical complications entailed in bringing about what, on the face of it, is quite a simple concept mean that in order to draft a nearly watertight, rather than "waterproof', solution, which is what the noble Lord, Lord Howell, sought, requires a great deal of text. That is why we have come forward with proposals which are so long. I dare say that if it had not been for the skill of parliamentary counsel, they would have been longer still.

Finally, I was asked about our thinking on what is included in the list. I wish to emphasise at this stage that what we have focused on is establishing an appropriate framework for dealing with listed events. Getting that satisfactorily in place must logically precede consideration of what the content of the list should be. After all, we must not forget that any consideration of the contents of the list must involve a process of consultation, as set out in the 1990 Act, which is a precondition of any change which can be made administratively at any one time. It is the case that the contents of the list have been both expanded and contracted in the course of its history.

One point that has been raised is that we should establish criteria to act as a reference point for future decisions. I have made it clear that it is a useful suggestion and we shall consider it further. Clearly, that has a bearing on what might or might not be included in the list.

The Government's position on the matter is quite straightforward. We believe that it would be inappropriate to consider any proposals to add to or subtract from the list until one has finalised the framework within which the list should be drawn up.

On Question, amendment agreed to.

Lord Howell had given notice of his intention to move Amendment No. 2: After Clause 1, insert the following new clause— "UNBUNDLING" OF SPORTS BROADCASTING RIGHTS (".—(1) This section applies where a person acquires the exclusive rights for the live television broadcast of any sporting event to be included in any service provided by—

  1. (a) any holder of a licence under Part I of the Broadcasting Act 1990;
  2. (b) any holder of a digital programme licence under Part II of this Act;
  3. (c) the BBC; or
  4. (d) the Welsh Authority.
(2) The Independent Television Commission ("the Commission") shall ensure that no broadcast to which subsection (1) applies shall be included in any service to which subsection (1)(a) or (b) applies unless—
  1. (a) in the case of a subscription or pay-per-view service, the right to broadcast television highlights of that event, at a reasonable time after the conclusion of the event on the same day as the event taking place, has been offered on reasonable terms to a universal broadcaster (whether or not the same person as the provider of the subscription or pay-per-view service), or
  2. (b) in the case of a universal broadcasting service, the right to broadcast television highlights of that event, at a reasonable time after the conclusion of the event on the 1161 same day as the event taking place, has been offered on reasonable terms to a person offering a pay-per-view or subscription service (whether or not the same person as the universal broadcaster).
(3) The BBC and the Welsh Authority shall ensure that no broadcast to which subsection (1) refers shall be included in any television service broadcast by them unless—
  1. (a) in the case of a subscription or pay-per-view service, the right to broadcast television highlights of that event, at a reasonable time after the conclusion of the event on the same day as the event taking place, has been offered on reasonable terms to a universal broadcaster (whether or not the same person as the provider of the subscription or pay-per-view service), or
  2. (b) in the case of a universal broadcast service, the right to broadcast television highlights of that event, at a reasonable time after the conclusion of the event on the same day as the event taking place, has been offered on reasonable terms to a person offering a pay-per-view or subscription service (whether or not the same person as the universal broadcaster).
(4) If the provisions of subsections (2) and (3) are not complied with any person referred to in subsection (1)(a) to (d) may refer the matter to the Director General of Fair Trading who shall determine the terms on which the rights referred to in subsection (1) or any of them are to be licensed. (5) The Commission, the BBC and the Welsh Authority, as the case may be, shall ensure that no person referred to in subsection (1)(a) to (d)—
  1. (a) acquires rights to sporting events which he cannot exercise, or
  2. (b) retains rights to such events which he does not intend to exercise.
(6) In this section— television highlights" means recorded extracts of the coverage of a whole sporting event, such selection to be by the universal broadcaster for the purposes of subsection (2)(a) and (3)(a) and by the person offering a subscription or a pay-per-view service for the purposes of subsection (2)(b) and (3)(b); universal broadcasting service" means a service received or delivered to more than 90 per cent. in aggregate of all households in the area appropriate to the sporting event, and "universal broadcaster" shall be construed accordingly.").

The noble Lord said: My Lords, for the reasons which I shall give in moving Amendment No. 3, I shall not move Amendment No. 2.

[Amendment No. 2 not moved.]

Lord Howell moved Amendment No. 3: After Clause 1, insert the following new clause— BROADCASTING SPORTS RIGHTS: SPORTS COUNCIL CODE (" .—(1) It shall be the duty of the Sports Council to draw up and keep under review a code giving guidance to the Commission, the BBC and the Welsh Authority as to the carrying out of their duties under section ("Unbundling" of sports broadcasting rights). (2) In carrying out their duties under section ("Unbundling" of sports broadcasting rights) the Commission, the BBC and the Welsh Authority shall have regard to the code mentioned in subsection (1). (3) The Sports Council shall lay before both Houses of Parliament an annual report on the extent to which the code has been complied with.").

The noble Lord said: My Lords, Amendment No. 3 deals with the difficult subject of whatever is left, the other sports not included on the list of events. Those sports are important. They include such events as the Rugby Union Five Nations Championship, motor racing, open golf, Ryder Cup golf, Royal Ascot, Cheltenham racing and so on. We have to consider the rights of the public to see those events should the governing bodies of those sports wish to dispose of them exclusively to one television channel, which might not, as is the case with Sky, be happy to provide highlights to other channels.

No doubt, like me, noble Lords are a little weary with the constant cross-communications we have all received in recent times, from the sports bodies on the one hand and the television authorities on the other. They show the importance of the subject. This amendment is an alternative means of tackling the problem, as distinct from the purely statutory manner in which we have dealt with listed events.

Subsection (1) of the amendment states that it will be the duty of the Sports Council to draw up a voluntary code of conduct on the question of highlights. Secondly, the amendment requires the relevant regulating bodies to have regard to that code when performing their duties under the Act. Thirdly, it requires the Sports Council to report annually on how far the code has been complied with.

I have had the advantage of seeing the proposals which I believe the Sports Council has delivered to the Government by way of a first draft of its code. It seems to me that they go a long way—if it is possible to bring them off—towards meeting some of our fears. The draft does not go the whole way, for reasons I shall return to in a moment, but it certainly goes a long way.

I am told that the television companies have indicated to the Sports Council the likelihood that they will support such a code. I know that some sports—including, as I particularly appreciate, my own sport, football—have tried to be extremely helpful. The Sports Council is confident that it can, in a reasonable time, get all the major sports we refer to to sign up to the code.

The noble Lord, Lord Orr-Ewing, made a point a moment ago with which I entirely agree. We cannot have a voluntary code of conduct if we believe it might be undermined in any way. That is one of the reasons we seek to have statutory backup in this amendment: to say, for example, that the Sports Council has to report annually to Parliament, in case anyone wishes to break the code having once entered into it, be it sport or television, and also to call upon the regulatory bodies to have regard to the code when issuing licences.

The noble Lord, Lord Orr-Ewing, is quite right. There are effectively four to six weeks, perhaps more, before the Committee stage of this Bill is taken in another place. My judgment is that the Sports Council ought to be able to produce a code by then. We have to take that on trust. I take it on trust. I know that the council will do its utmost. The chairman and director of the Sports Council and their senior officers have worked ceaselessly, especially in the past seven days, to try to bring us to this situation and avoid further confrontation. The House may therefore feel that they should he supported and be allowed to produce a voluntary code if they can do so. That is certainly the view to which I am inclined.

However, there are difficulties in this area. Hardly a day goes by when I am not told one thing by some of those parties which is contradicted the next. That makes it very difficult to reach agreement with anybody. For example, last week I was told that the copyright provision which would allow access to highlights from the Bruno/Tyson fight had all been settled and solved and there would be no difficulty at all; they would all appear. But the very day after I was told that by the appropriate television company, it issued another statement saying that it would not allow the BBC to show the actual knock-out if one occurred. That seemed odd to me, since in my judgment there almost certainly would be a knock-out. There are difficulties. People say one thing one day, no doubt in good faith, and then are under all sorts of pressures to change their stance the next. I concede that that makes it very difficult for the Government, as well as for us and for the Sports Council.

I am glad that the Minister mentioned in his earlier remarks the question of extended listed events. There is not the slightest doubt that, unless we can get some sensible agreement about highlights and the right of the public to see them, there will be a great demand to extend the number of listed events. We cannot have a situation in which 33 million households, or even more, may suddenly be deprived of any sight of the major sporting events in this country outside the listed events. That would cause enormous difficulties and problems throughout the land. So one of the reasons for supporting our approach today is to prevent the need to add to the listed events. There would certainly be a movement towards that in another place if the code of conduct has not come into operation. I hope that the voluntary sports bodies will remember that.

I shall deal with two of the objections with which we have all been flooded. The major spectator sports division of the Central Council for Physical Recreation—spectator sports are the great sports of our nation—wrote to me, and I suspect to other noble Lords, in terms which suggest to me that its intellectual capacity seems to be withering. It says, for example, that we have to have regard to the effect of our measures on husky racing, sheepdog trials and darts—none of which I regard as sports, and so far as I know they are not affiliated to the Central Council for Physical Recreation.

Mr. David Elstein, of Sky, has gone even further. He says, that we have to have regard to topless darts. I do not think that sport is affiliated to the CCPR, but if it does become affiliated, since I attend all the conferences, I look forward to exhibitions of what is involved in that activity. The mind boggles. When representatives of major sports and Sky Television tell us that we have to have regard to husky racing, sheepdog trials and topless darts, I wonder where on earth we are, and whether these protagonists are all quite right in the mind.

I turn to the competition argument, which is important. It has to be met and dealt with in just a moment or two. The major spectator sports tell us that sport has a right to sell its wares to the highest bidder. So it does, and we have protected that right in our amendments and in our legislation. We are not trying to undermine the right of sport to sell what it can.

Perhaps I may illustrate the position by reference to one sport. If it wants to sell its products to Sky Television for exclusive use, under these proposals it must separate the negotiations for the highlights. That means in practice that if the rights are sold to Sky the governing bodies of important spectator sports will then have to negotiate the highlights with the BBC, Independent Television or Channel 5. If that is opposed, it seems to me that what the spectator sports are saying is, "We don't have any confidence in our ability as negotiators in the marketplace to get a fair deal, even though there are three television companies with which to negotiate".

Let me illustrate the effect. The House will recall, when we discussed earlier the world cricket championships (we congratulate Sri Lanka on its astonishing victory in that competition), at the start, no highlights were to be made available to the BBC. After discussion in this House, highlights were made available and the BBC paid £1 million for them. It is quite ludicrous that the BBC should pay £1 million for the highlights of world cricket when it could have paid £1 million to the cricket authorities themselves. As suggested in the amendment, the cricket authorities could negotiate directly with the BBC and the other two companies. I wish that the marketing men would have confidence in their ability to negotiate properly.

I say again to the governing bodies of sport that not once in any of the letters that I have received this week have they answered the point that we repeatedly made; namely, that they should face up to their social responsibilities as sports bodies. As well as earning as much money as they can for the sport, quite rightly, they have a duty to millions of sports lovers who cannot afford to watch Sky, especially those in infirmity or old age. They should be allowed to watch excellence in their living rooms, as indeed should the young. The sports bodies will undermine their own future if they acquiesce in taking out of the living rooms of most houses in this country excellence in sport through the terrestrial broadcasting which is currently available to them.

There is another financial argument to consider. At the moment the Test and County Cricket Board feels aggrieved because it has 30 days of test cricket. It feels that it can get more money from Mr. Murdoch, if it negotiates with him, than out of the BBC. I myself heard the chairman of the Institute of Sports Sponsorship say, "Don't think that if you go to the minority audience on Sky you will take our sponsorship with you. The value of our sponsorship and the value of all the perimeter boards around the grounds when seen on BBC for 30 days is something that money cannot buy". That is the other part of the economic and financial argument and it is often left out of the equation by the sporting bodies. It is our duty to remind them of that.

I regret their repeated silence in not answering the question: how do you intend to fulfil your social responsibilities? How do you intend to look after those who cannot receive the television programmes in their home? There is great silence on those matters.

There is silence in other quarters. We rightly pay tribute to the Minister in this House, the noble Lord, Lord Inglewood. Perhaps noble Lords, like me, have felt it extraordinary that over the months of argument about this matter, which is probably the most important matter concerning sport that is before Parliament or the nation, not one word has been heard from the Minister for Sport, Mr. Iain Sproat. There has not been one word from him during all the months that we have been conducting the negotiations. Where is that mystery Minister? Is he about anywhere? Will he emerge at any time to give us the benefit of his leadership? He should have been doing that a long time ago.

I am prepared to take the Sports Council's voluntary code on trust, if the Minister intends to give us reasonable news, as I hope he might do; namely, the assurances that the Sports Council will be given every encouragement to produce such a code. I hope we can be assured that the sports bodies will play their part, as will the television companies. It is now time for the Sports Council to produce such a voluntary code. This amendment is designed to allow the Minister to encourage it and tell us in detail how it will work. It also takes regard of the fact that, when we have a voluntary code, should any of the participants wish to withdraw after Parliament has given the code its blessing, then the other place, having taken careful note of that, might have no alternative but recourse to further statutory measures. That ought not to be necessary with the good will of the major voluntary sports bodies in this country, supported by the Government and by the Sports Council. I hope so.

I look forward to the Minister's response. I beg to move.

3.45 p.m.

Lord Thomson of Monifieth

My Lords, I find myself in some difficulty in speaking to the amendment. The noble Lord, Lord Howell, is a doughty champion of the interests of the general public in British sport. I have always been content to defer to his judgment. At his request, mine is the second name on his two amendments on the Marshalled List. I did not learn from the noble Lord, Lord Howell, that he proposed not to move the first amendment. I knew that he had reservations as to whether it was wise to ask your Lordships' House to come to a view on it. I feel that there should have been rather more adequate consultation on these matters.

We are now asked by the noble Lord to abandon any idea of having some statutory back-up for so-called "unbundling", enabling the general public to have the right to see the highlights of sporting events when the exclusive live rights have been bought for subscription. He prefers to go for a voluntary code. At this moment I do not quite know what the noble Lord means by a voluntary code. I have glanced at a piece of paper that I found just now on this Bench. It seems a rather vapid arid general document. For my part, I prefer to stick to the views on which the amendments were formed; namely, the need for some kind of statutory underpinning and then, no doubt, the advantage of an effective voluntary code.

There is here a matter of procedure which I do not quite understand. Amendment No. 3 on the Marshalled List asks the Sports Council: to … keep under review a code giving guidance to the Commission, the BBC and the Welsh Authority as to the carrying out of their duties under section (`Unbundling' of sports broadcasting rights)". There is no such section now. The amendment goes on to say: In carrying out their duties under [this] section … the Commission, the BBC and the Welsh Authority shall have regard to the code". The amendment is meaningless as argued by the noble Lord. I do not know what the Opposition generally or the Labour Front Bench will do, but I propose to argue our considered case on this matter. We remain of the view that there should be some statutory underpinning, even though it may be reinforced by a voluntary code of conduct. If duties are to be placed on the Independent Television Commission and the BBC, they ought to be spelt out in legislation and not put forward in this rather curious way in terms of a proposed voluntary code that none of us have had the opportunity to study.

Behind the amendments as they stand is an underlying situation of legitimate conflicting interests in the sporting field. Those interests are in many ways locked in a conflict as dramatic as the Bruno-Tyson fight. Mr. David Elstein of Sky Sport and Will Wyatt of the BBC are more evenly matched than Bruno and Tyson; but they are in conflict with each other.

I do not take sides one way or the other. The reason we on these Benches feel that a statutory power is required is that our interests—they should also be the Government's interests—are those of the ordinary viewer and listener. I fully recognise that even the interests Of the ordinary viewer and listener in regard to sporting events beyond the listed events are not straightforward. There is an important minority of viewers—of whom I am one—who want much more sport than is practical on the four terrestrial channels and are prepared to pay for it, even at 3 o'clock in the morning, although my sporting enthusiasm does not extend that far. There is probably a bigger minority of viewers who feel that there is too much sport on public service channels and believe that more should be shunted onto subscription.

However, we are concerned with what I believe to be the middle mass of viewers, some of whom are not able to pay a subscription and who feel that they should have a fair share of the most interesting sporting events; that they should be able to enjoy live coverage of the special national occasions which come under the listed events—we welcome the Government's decision in that respect—but who feel also that they should enjoy a decent view on the day of the highlights of other important events. That seems to us to be a public interest that the Government should try to secure. What the debate in your Lordships' House has done is to provide evidence that the market place is not enough. I remain to be convinced that a code of conduct of the kind described in the amendment will be enough.

There has been the rather farcical wrangle over whether ordinary terrestrial viewers should he allowed by Sky Television, which was in total control, to see the final punch of the Bruno-Tyson fight; and at what time they should see it, the next morning or 48 hours later. An operator like Sky has a powerful financial incentive right up to the last minute to persuade viewers that the only way they can obtain even a glimpse of the great sporting event is to sign up and pay for it. Some holders of sporting rights are tempted to take the short-term view that more money and fewer viewers is in their best interests. There seems therefore to be a need for some degree of public control in the interests of viewers and, although I am a strong supporter in general of self-regulation, there are cases where it needs to be reinforced by some statutory backing.

We have talked mainly about viewers. What about listeners? They tend to be overlooked. There is not and cannot be—thank goodness! —subscription radio. Nobody can operate a "pay-per-listen" service on the old steam radio. But a satellite operator like Sky, without radio facilities of its own, can and does buy up the exclusive radio rights as part of a total package. It is then in a position to hold the public service radio channels to ransom for the live radio rights. BBC's Radio 5 Live, which does so well in providing live radio commentary of sporting events, finds itself from time to time in that situation. For instance, with only three months to go to the start of the cricket World Cup, the BBC discovered that the full broadcast rights, including radio rights, were held by Sky. It had been in negotiations with the original holders of the rights in India for over a year and it was not until the deal was closed with Sky that the BBC was informed that the whole package, radio as well as television rights, was being sold to Sky. Over the three months of negotiations with Sky, the rights holders did not volunteer the knowledge that they were in negotiation with Sky and the price was going up and up. It was only the extreme pressure of the debate in your Lordships' House and impending legislative change that finally forced Sky to agree a deal just one week in advance of commencement and at a price double that paid for the last cricket World Cup.

There is a question looming over Rugby Union. I understand that the BBC is currently negotiating with the RFU for the radio rights for the 1997–98 tour. But there is a possibility that Sky will again go for full broadcast rights, including radio that it does not itself operate, so making radio suffer in terms of obtaining the rights agreed. That is extremely unsatisfactory from the public interest point of view. A satellite broadcaster like Sky can delay a deal until the last minute to prevent the radio channel giving advance publicity and thereby create the impression to the rest of us that if we are anxious to partake of the live broadcast in one form or another of a specific sporting event the only way we can do so will be on subscription TV. That is an abuse of a dominating situation. Until this afternoon, on the basis of the amendments tabled on the Marshalled List, I assumed that that was the general view of the Opposition. We felt that it was necessary, along with a code of conduct, to have reinforcement of statutory rights. I am sorry to have to say to the noble Lord, Lord Howell, to whose judgment in these matters I normally defer, that I remain unconvinced by what he said; that is, that a code of conduct by itself is adequate.

Viscount Astor

My Lords, the noble Lord, Lord Thomson, made a powerful speech in favour of statutory regulation. But that is not what the amendment is about. The noble Lord's speech related to the previous amendment; we must be clear on that.

Lord Thomson of Monifieth

My Lords, I am not sure what the rules of order are in this situation, but perhaps the noble Viscount will allow me to interrupt. If I had dreamt for one moment that the first amendment was being withdrawn without consultation, I would have objected.

Viscount Astor

My Lords, I understand what the noble Lord says. All I am seeking to do is to put the argument in context. It is important that we look at the amendment as it stands. I agree with the noble Lord, Lord Thomson, that it does not stand on its own.

The amendment talks about the Sports Council drawing up and keeping a code for the, 'Unbundling' of sports broadcasting rights". That is what the amendment says. The problem with the amendment, very simply, is that the Sports Council does not represent all sports. After all, we can all discuss what is sport. To me, racing is sport and I regard most of the rest as games. Of course, I accept that not all of your Lordships might agree with that scenario, but what is entirely clear is that the Sports Council does not represent racing and it does not represent motor racing. Those are both sports and they would be affected. The amendment cannot be right because it will bring the Sports Council into areas of which it has absolutely no experience and with which it has had absolutely nothing to do. That must be wrong.

There has been, I understand, a voluntary code which is either agreed or is about to be agreed. I am sure that my noble friend the Minister will have something to say on that. We should listen very carefully. I agree with much of what the noble Lord, Lord Thomson of Monifieth, said. In particular, I agree that the amendment cannot stand on its own. I believe that the amendment would be damaging to sport.

4 p.m.

Lord Shepherd

My Lords, perhaps I may ask the Minister whether he can help many of us who have a great interest in this particular subject. The noble Viscount, Lord Astor, believes that the amendment is imperfect, but so was the very important amendment which we all agreed in Committee. Because the Government have responded, in the end the House has obtained what it had been looking for, despite the imperfections of the amendment.

I understand in this respect that there is a question of whether there is a statutory code of practice or a voluntary code of practice. My noble friend has moved an amendment proposing a statutory code of practice, but I gather that there were rumours floating around the House during the morning that the Government were able to make a statement which may be helpful to those who have anxieties. Therefore, I wonder whether the Minister—since he has a right to speak, and also, if necessary at the conclusion of our debate, to wind up—can tell us what, in fact, the Government have in mind. I see no point in having a great debate only to find that what we are talking about has already been considered and acceded to by the Government. I suggest to the Minister, if that is the wish of the House, that he should tell us what offering, big or small, the Government are willing to make in regard to the issue raised by my noble friend. It is far better to have a debate on a subject we know something about, rather than having a debate that could be largely airy-fairy. So, if the noble Lord is willing to take my words as the spirit of the House, perhaps he will enlighten us as to what is the Government's position.

Lord Inglewood

My Lords, with the leave of the House, I shall willingly respond to the noble Lord, Lord Shepherd. Without wishing to give the entire remarks that I had intended to deliver at the conclusion of this part of the debate, it may be helpful to spell out where I believe we are on this subject now.

The Sports Council has advocated a voluntary code of conduct for governing bodies on unbundling and is discussing this with sports' governing bodies. The Government, along with other noble Lords, have welcomed that idea in principle, because we believe that a voluntary code offers to provide greater access to sport for the public on television and is the best way forward in this particular area.

As the noble Lord, Lord Howell, intimated in his remarks, good progress is being made in preparing the voluntary code which the Sports Council has proposed and which has already been referred to. A draft for discussion has been issued and I understand that the main governing bodies of sport are already discussing what it might say with the Sports Council. My honourable friend the Minister for Sport, to whom the noble Lord, Lord Howell, referred rather by his absence earlier in this afternoon's proceedings, has had a meeting about it with the Central Council for Physical Recreation and with the major sports' governing bodies.

The Government's view is that a voluntary code is the right way to proceed with this matter. We are encouraging the various parties involved to draw up such a code, and meetings are currently taking place to that end although at the moment no conclusion has been reached. However, that process is still under way and I am advised that there is no reason to suppose that a successful outcome will not be achieved.

Lord Renton

My Lords, before my noble friend sits down, I wonder if he would care to mention to your Lordships the purely technical point that Amendment No. 3 cannot possibly be accepted. It makes a nonsense without Amendment No. 2 having been moved, because subsection (1) of Amendment No. 3 refers, in effect, to Amendment No. 2.

Lord Barnett

My Lords, perhaps I may make this one point. It was suggested that this is a voluntary code but, as I read the amendment, if it is accepted by the Minister, it would be a statutory duty written into the Act, would it not? It is a statutory duty of the Sports Council to draw up and keep under review a code. That must be, in the legislation, a statutory duty. Perhaps he will correct me if I am wrong.

Lord Inglewood

My Lords, with the leave of the House perhaps I may respond to those two points. First, with respect to the remarks of my noble friend Lord Renton, of course, my noble friend is right. On the other hand, I was anxious that we discuss the substance behind the amendment because that is a matter of wide interest to your Lordships.

The noble Lord, Lord Barnett, is absolutely correct that the amendment which is being discussed refers to a code which is enshrined in statute. That is a proposition which the Government do not consider to be the right way forward, because we believe that the right way is to have a voluntary code agreed by the various parties concerned. I hope that that clarifies the position.

Baroness Rawlings

My Lords, perhaps I may return to the substance of the debate. I, like many of your Lordships, have received an enormous amount of briefings at every stage of this Bill, but more on this one amendment than on any other aspect. I have read them with great care, as it is an extremely complicated subject, especially for the layman.

I have no declaration of interest to make, and hold no brief for either side of the debate. My nearest interest would be my great admiration for many years for the BBC World Service, but I feel that sports—or, as my noble friend Lord Astor, calls them, sport and games—play an important role in many people's lives.

The amendment, on the face of it, looks very attractive, yet it has many anomalies. It would be wrong to take into account only the viewers and listeners and not all the people who are involved in sport. We have a fine tradition of the highest class in all sports and in sportsmanship in Britain. Alas, today, we are no longer the major winners, but merely showing more sport on television is not instantly going to produce gold medallists or cup winners. We all know that there is much more to world class winners than that.

I have always believed that sport is vital for youth. It encourages a good, healthy, competitive spirit and, more often than not, keeps the mind and the body out of trouble. I would encourage more sport in schools as part of the curriculum, with more funds made available for facilities.

In Raising the Game, my right honourable friend the Prime Minister said that sport enriches the lives of thousands and millions of people of all ages around the world, who know and enjoy it. It cannot be true that if we continue to have some major events on satellite or cable the vast majority of viewers could soon be unable to see any coverage of sporting events that are able to inspire and unite the nation.

The amendment, as it stands, is muddled and will, as a result, only bring unhappiness. Differences between sports are not provided for. Surely, there would be very few people who would pay extra for highlights when they could see the live broadcast for only the annual TV licence. After all, if you cannot watch it live you can always video it.

The current situation where broadcasters are freely able to bid for rights of both live coverage and highlights is in the best interests of both viewers and sports bodies. There are many programmes covering sport on both terrestrial and satellite, but let us get this into the right perspective. Perhaps I may quote a few figures. The top three television programmes last week were: "Coronation Street", "Coronation Street" and "Coronation Street". The viewing figures were 19.57 million, 18.55 million and 18.44 million. The top sporting programme, "The Match Live", came 36th on the list with 9.11 million.

Many of us would ideally like sport to be all amateur again with the great gamesmanship that was shown in the past and broadcast regularly on our BBC. This might even attract those 19 million viewers. We were perhaps the last to have the great amateur sportsmen in the Olympics with those outstanding skiers like the Palmer-Tomkinsons and Gina Hawthorne. Those days are over. We must face reality. Today a great amount of money is involved. The amendment has potentially disastrous financial consequences for all sport in Britain. What right do we have as legislators to deny people the right to sell a legitimate product? I congratulate my noble friend the Minister on his broadminded approach to this highly complex Bill. The system that we have at the moment, which is freely negotiated, with a voluntary code of practice and with no statutory interference, is surely right. I would urge your Lordships not to support the amendment.

Viscount Caldecote

My Lords, before the Minister replies, this issue of unbundling is of importance, as I am sure the whole House agrees. Can he say what will happen if the voluntary code of practice—in general, I am in favour of voluntary codes—seems to be unsatisfactory and is not working? Will it then be possible, without more primary legislation, to come to a statutory code? What is the position on that?

Lord Campbell of Alloway

My Lords, much the same thought has been worrying me. Under Amendment No. 3 there is no code having legal efficacy. It is a code of guidance. The only statutory duty is on the Sports Council to draw it up. As my noble friend Lord Astor has pointed out, the Sports Council does not have a remit over many things which my noble friend and I consider sport. But I shall leave that aside for a moment. If this code is a code of guidance—this amendment says that it is—it will have no legal efficacy at all. That was the point being made by my noble friend Lord Caldecote. If it does not work, what will happen? This is an experiment and all that can happen is that one will have to come back to primary legislation.

Lord McNally

My Lords, there is an old saying that sometimes you can be so sharp that you will cut yourself. I have the feeling that having got one part right—the protected list—by a full debate of this House and considered thoughts by the Minister and then amendments to the Bill, we have not done very well with the unbundled list. There is a great danger, as the noble Lord has just said, that the unbundling of television rights will be botched as the House has not had proper time to consider the full implications of what has been put before it in this last minute way.

As a number of noble Lords have pointed out, one does not get that many bites at legislation. If we take this pig in a poke of a voluntary scheme and it does not work, what will be the protection for sports and viewers? Who is putting this together for us? —sports bodies, which, as the noble Lord, Lord Howell, said, have shown themselves to be failures in accepting their social responsibilities in guarding their sport and negotiating on television rights, and the television companies. If one reads Mr. Elstein in the Guardian and elsewhere one sees that he is still bent on all-out war with the rest of television so far as concerns sporting rights. Who will bring these bodies together with the wisdom of Solomon? —none other than Mr. Iain Sproat, the Minister of whom the noble Lord, Lord Howell, spoke so warmly. It does not fill me with the same confidence as the procedure we followed when we had that magnificent debate on the protected list. The Minister went away and came back with considered amendments and wrote protection into the statute. This House would he well advised to go no further with this because we are heading for a botch-up.

4.15 p.m.

Lord Dixon-Smith

My Lords, I find myself becoming a trifle confused about where we are. The House has certainly had the opportunity to have a full debate on this issue and I do not think we can run away with the excuse that we have not. There was certainly no objection when the noble Lord, Lord Howell, decided not to move his amendment. Therefore, it seems to me that the speech we have just heard and the one that we had from the noble Lord, Lord Thomson of Monifieth—I hope he will forgive me for saying this—are what I would call the equivalent of the highlights of rounds four to 12 of the Bruno-Tyson fight, because they are after the event and are therefore best left.

Perhaps I may come back to the amendment proposed by the noble Lord, Lord Howell. During the course of his remarks he said that he was prepared to leave the matter to voluntary agreement. If he is prepared so to do, it seems to me that we do not need the amendment anyway. We have heard from the Minister that he is well disposed to the issue of voluntary agreement and that this is in fact the proper way to decide it. I would rather like to hear what the Minister has to say in winding up and I hope very much that after that the noble Lord, Lord Howell, will find it possible to withdraw his amendment.

Lord Donoughue

My Lords, we find ourselves in a slight procedural pickle because it is clear that Amendment No. 3 depends on Amendment No. 2 and Amendment No. 2 is not moved. So perhaps I may at the beginning apologise—I know that my noble friend Lord Howell would like to apologise—to the noble Lord, Lord Thomson, and in a way to the House. However, we can clear things up. We on this side shall not be voting on this amendment because that would add confusion to wherever we are. But I should point out to those opposite who are smiling that this is not the end of the story.

The Bill now goes to another place and today there is still an opportunity for this House, as the noble Lord, Lord Thomson, has done and as my noble friend did, to make the arguments to the Minister as we move towards the conclusion of this story. The case for protecting highlights, as has already been put and as is secured in the amendments on paper, remains overwhelming. It is a logical extension of Clause 1 which was based on the overwhelming view of this House. The Government have commendably accepted that clause and so logically should accept the spirit and thrust of what is being said on the highlights.

What we have before us, although it is of a rather ill-defined shape, is the Government's compromise proposal—the voluntary code. That is fine. The amendment on paper supports that principle. However, there are problems. Will it actually happen? Will it stick? We know that the problem with voluntary codes is that participants can voluntarily leave them.

This code, so far as I have studied it, involves some sports bodies who are clearly reluctant to be part of it; they prefer the short-term money, as they see it. It involves at least one broadcaster who is not enthusiastic about it. So this is not a secure vessel. At this stage we have to—if we do—take it on trust. I am not sure we can do that. My noble friend Lord Howell, who is always a much more trusting man than I am, inclines to that.

Perhaps I may tell the House what our fear is. It is that those who are part of this voluntary code and who do not really want it will use it as a device to divert us from today's vote—although they do not need to do so because we have our own devices—and to delay it until the threat of statutory backing is past and then, when what they see as the parliamentary danger is over, pull out.

The code is based on the Sports Council. As an ex-member I am very sympathetic towards that body. But we must bear in mind that it is a fragile one. As the noble Viscount, Lord Astor, said, it does not represent all sports and has little power over many, and none over television. I suspect that knowing that it is a fragile vessel the Sports Council, or some of its more responsible members, will welcome the kind of statutory backing suggested in Amendment No. 3 because it gives them clout over the constituent members. That is our thinking on the amendment. It is not an amendment of government interference but leaves the negotiations and the detail to the sports industry and gives the Sports Council statutory backing.

The Government have been a main engine of the voluntary compromise. The Minister has said and, I am sure, will say again, that as far as he and the Government are concerned the voluntary code is going to happen. I hope that that is true. If it falls apart responsibility will lie with the Government as well as with the Sports Council and the sporting bodies because it would have been perfectly possible for us to sit down with the Government and agree a clause of the kind set out in Amendment No. 3, based on a voluntary code but with statutory backing. I believe that we could have achieved that together and that the House would have accepted it and been happy with it.

Amendment No. 3 would have secured that statutory backing and I believe that a majority of the House would have supported it. Now we shall not have it. I say to the Government and to the sporting bodies that they must make sure that the voluntary code happens and sticks before the Committee stage in the other place because I believe that Parliament will not tolerate it not happening. The public want the highlights protected. I believe that a majority of this House also want that and indeed the majority of Parliament. If anyone disrupts the voluntary code and treats it cynically as a way of bypassing Parliament, there is one logical conclusion to be drawn.

If we do not have highlights we must have a longer protected list. That is the reality which the sports bodies have to face. And it is why they really must work as enthusiastically as possible to get it in place. The alternative in due course will not be that choice but a longer protected list. We sincerely hope that the sports bodies and the Government will produce a voluntary code that sticks. It is on that basis that I shall listen very seriously to what the Minister has to say about how this whole business goes forward.

Lord Inglewood

My Lords, perhaps I may preface my remarks by saying that we believe that television should provide widespread access to different sports. It is an aspiration of policy that we have. But we differ from those on the Benches opposite over whether that aspiration should be given effect by statutory or voluntary means.

I explained where the Government stand on the issue and the position I believe the negotiations have reached. In that context I pick up a point made by my noble friend Lord Caldecote and echoed by the noble Lords, Lord McNally and Lord Donoughue. In bringing forward a voluntary code we cannot wait indefinitely. It is important that what is agreed is available for Parliament to look at.

The approach that we have adopted I wish to explain in some detail. We believe that our approach is consistent with the basic policy which is wanted on all sides of your Lordships' House. There is an issue about highlights of major national and other events, which are not listed and quite properly so. It is desirable that coverage should be made available but it should he done in a sensible and practical way which works with the market and does not cut across it. It should be done in a way which recognises that there is only a limited amount of time available for sports programmes on terrestrial television. It should be done in a way which recognises that there are limits to the public interest argument, perhaps even to the public wish to watch sports which would be covered by the amendment we are considering. Above all, it must be done in a way which allows a balance to be struck between revenue, coverage and investment in the future of the game in question.

We believe—and I think many noble Lords share this view—that the sports should be given the opportunity to show, through a voluntary code, how they will strike a balance and how they will invest television revenues in improved performance and greater spectator safety and comfort.

We believe that the approach which lies behind the amendment is likely to hinder rather than assist the Sports Council in its present efforts. The strength of the voluntary approach is that it is freely and willingly entered into and does not require the sort of unparalleled and novel intrusion into property rights which we believe is unjustified in the present circumstances. This is an important point when considering how everybody must work together to give effect to the ideas that we are debating. It is the Government's belief that to oblige the Sports Council through statute to draw up a statutory code is unhelpful. We also believe that the approach inherent in the amendment is likely to confuse rather than clarify responsibilities. That point was touched on by my noble friend Lord Astor. Essentially, we are being asked to agree that one public body should have no choice but to draw up guidance for another public body on how to regulate the broadcasting industry on unbundling sports rights. The rights holders themselves seem to be left somewhere outside all this advice and guidance although, after all, at the end of the day it is their rights which are under consideration.

The Sports Council was never intended or equipped by its charter, or at any subsequent stage in its history, to be a body responsible for giving guidance to broadcasting regulators. The Sports Council undertakes a central role in promoting sport in this country. We believe that it can effectively, sympathetically and appropriately encourage and guide co-operation among sports governing bodies. But having a quite different duty of this kind imposed on it would entirely change its nature which would only weaken its ability to carry out its core remit and its relationship with government.

Furthermore, it seems to us that the approach suggested by the noble Lord, Lord Howell, in his amendment perhaps paradoxically risks the perverse effect of actually prejudicing the prospect of securing a voluntary code which, as I have explained, is the approach that we believe to be right. It would inevitably lead to sports bodies focusing their energies on campaigning against those draconian provisions rather than working constructively with the Sports Council and the broadcasters on an agreement to secure their mutual interests and to provide benefits for viewers. I accept the remarks that have been made about the need for clarity in this respect and that there must be no potential for obfuscation and brinkmanship in the arrangements that emerge.

I think that all concerned have taken careful note of the interests of Parliament in this issue, not least in the comments made in your Lordships' House today. Indeed, they echo some remarks made by my noble friend Lord Harrowby at Report stage which I sense conveyed the sentiments of the whole House. No doubt the other place will keep the progress of negotiations under close scrutiny. I can assure your Lordships that I shall. We believe that we should let those concerned now proceed with the process and, for the reasons which I have given, I am glad that those opposite have explained that they will not now pursue proposals for a statutory code.

4.30 p.m.

Lord Howell

My Lords, with the leave of the House perhaps I may make just a few short points. First, I must express my profuse apologies to my old colleague the noble Lord, Lord Thomson. I must accept full responsibility for what has happened, and I do. In my defence I can say only that the news about the negotiations between the Minister and the Sports Council did not reach me until mid-morning with the result that I did not have the required time to consult that I would have wished for. In addition, I had been told—I had expected—that Amendments Nos. 2 and 3 would be taken together. Obviously, I was not quick enough on my feet to be able to object to their being considered separately—nor was anyone else—but that was the situation.

The noble Lord, Lord Barnett, is right. There was an attempt on my part to give statutory backing to what we are seeking to do in terms of a voluntary code of conduct, and for the very good reasons which my noble friend Lord Donoughue outlined. For the remainder of this debate I can do no better than adopt all the arguments advanced by my noble friend who put them extremely well.

This matter is now passed over to the Commons. I hope that my sporting colleagues there, some of whom are listening to this debate, will take note of the mood of this House. If I withdraw the amendment, as I intend to do, we shall be trusting to a voluntary code of conduct. We expect that trust to be honoured. We expect the spirit of this debate to be honoured. If that does not happen in the four or five weeks now available, we expect that the matter will be more firmly dealt with in another place. However, in the belief that the voluntary code of conduct will work and can be backed up by the constant vigil of the Sports Council and the Government, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness O'Cathain moved Amendment No. 4: After Clause 5, insert the following new clause— LOCAL DELIVERY SERVICE: CONDITIONS FOR GRANTING FUTURE LICENCES (" .—(1) The Commission shall ensure that any licence granted after the coming into force of this section to a person for the provision of a local delivery service under section 73 of the 1990 Act contains conditions which require that person to include, by the reception and immediate re-transmission of the broadcasts, each of the relevant television broadcasting services for reception in the area for which the local delivery service licence is granted or for reception within the United Kingdom as a whole. (2) For the purposes of this section "relevant television broadcasting services" means

  1. (a) the television broadcasting services provided by the BBC which are funded from the licence fee; and
  2. (b) the Channel 3 service, the Channel 4 service and, in Wales, the S4C service.
(3) The Secretary of State may, after consultation with the appropriate regulatory authority, by order make such transitional arrangements for existing local delivery services in respect of the requirement in subsection (1) above as he considers appropriate. (4) In exercising the power in subsection (3) the Secretary of State shall have regard to whether or not the local delivery service is delivered by analogue or digital means. (5) The copyright in any broadcast is not infringed by reason only of the compliance by any person providing a local delivery service with the requirements of this section or any regulations made under it and it shall not be an infringement of copyright for any other person who is statutorily obliged to provide a relevant television broadcasting service as described in subsection (2) to broadcast those services whether encrypted or not.").

The noble Baroness said: My Lords, in this amendment I return again to an issue of great significance for our public service broadcasters as we enter the new age of digital broadcasting. My noble friend the Minister has progressively recognised, as the weeks have passed, that protecting quality public service broadcasting is fundamental to guaranteeing that the digital opportunities created by the Bill are not frittered away on disappointing and low-level programming which could dominate a multi-channel future.

As we know, in Britain we have a uniquely successful broadcasting system. Viewers have the option to see programmes such as "Pride and Prejudice", "People's Century", "The House", "Inspector Morse" and "Correspondent" on BBC2, bringing exceptional current affairs to TV as well as radio and an endless host of other entertainments, arts and educational programmes which the public relish and which, by and large, reflect our greatly valued culture.

Just last week the nation was united in common grief following the horrific events in Dunblane. We rely on our public service broadcasters to express our common anguish as much as our common joy. Our commemorations of VE Day and VJ Day are still very much in our minds. But all that comes with a price: the availability of quality public service broadcasting to all—I stress "to all"—supported by a licence fee which allows unique investment in programmes of outstanding quality. That investment depends on universal reach and availability. That is the nub of the amendment.

The amendment relates to "must carry". "Must carry" regulations are essential to protect viewers who pay a licence fee for television services and so that they can continue to receive those services which they value and want. Increasingly, viewers may choose to access their television services from cable providers. Indeed, industry predictions suggest that something like 40 per cent. of all homes will be linked to cable by 2005. The cable companies currently carry mainstream terrestrial public service broadcasting services; namely, BBC1, BBC2, ITV, Channel 4 and S4C, where relevant. It is a good deal. Cable subscribers want those services and the cable providers know that viewers' access to mainstream services is an essential component for securing subscriptions—the carrot, in effect, to encourage investment in what the cable providers are offering.

However, there is no requirement for that situation to continue and with an increased number of digital cable services, each pressing providers for priority space on the cable networks, commercial considerations could and will increasingly threaten the position of existing mainstream services once a significant number of the population have selected cable as their sole means of receiving television.

Let us face it: people do not like roof-top aerials. I always call them an "aesthetic nightmare". Increasingly, not just in flats but on new housing estates, cable is seen as the delivery system not only for television and radio, but also for phone calls, with interactive shopping potential, and games. If there is no requirement to carry any public service broadcasting, the public could find that the services for which they pay through the licence fee are not easily available to them. Amendment No. 4 seeks to correct that anomaly.

It is a commonsense amendment, which takes account of the realities of how commercial pressures could threaten public service channels. The regulatory authorities could, of course, challenge the cable operators if there were complaints from viewers denied access to the mainstream services of BBC1, BBC2, ITV, Channel 4 and S4C, but viewers are unlikely to be happy with either the hassle or the delay that such a challenge would involve. Resolving the situation now secures viewer access well into the digital future.

The Government's response to date has not been wholly satisfactory, despite the fact that my noble friend the Minister has been more than willing to listen to my advocacy. However, the Government have not given the cable industry the guarantee that it will be able to carry new public service channels without charge, nor have they given the viewers the guarantee that they will always be able to receive public service channels on cable systems.

Consumers cannot rely on the Government's argument on Report that: any such case of a monopoly franchisee abusing its dominant position to deprive customers of services they want to receive … having attracted custom on the basis that it would offer those services, would swiftly attract the attention of the fair trading authorities".— [Official Report, 5/3/96; col. 203.]

Although welcome in principle, that statement is not correct in practice. The terms of a typical cable contract state that the cable company is able to change the services it offers to the consumer. Indeed, on two occasions a satellite company changed the terms of my contract, reducing the service but not the price.

It is possible that a large number of viewers might sign on to cable knowing that the BBC is available. Eventually that analogue terrestrial will be switched off and if the BBC, ITV, Channel 4 or S4C are withdrawn viewers will have no other way of obtaining those services.

I believe that viewers will always want to watch public service channels. The question is whether cable companies will always want their viewers to be able to do so. The greater popularity of a public service channel could be seen by some cable service operators as a threat to the greater profitability of pay channels, particularly if those cable operators are in turn owned by pay-TV companies.

Nor is it true that the amendment would be unnecessary regulation. At present in negotiations between public service broadcasters and cable companies one party's right to contract is regulated but the other's is not. I stress that the BBC cannot refuse to provide its service to cable companies but cable companies can refuse to carry the BBC services. There is already regulation on carriage of public service channels on cable. All the amendment will do is to ensure that that regulation is fair and even-handed.

Perhaps I may explain briefly what the amendment does. The aim of the amendment is to guarantee viewers access to public service channels in the digital age by ensuring that cable companies must carry public service channels. There are at present two types of cable licence; those granted under the Cable and Broadcasting Act 1984 and those granted under the Broadcasting Act 1990. As I stated previously, holders of 1984 licences had to carry the BBC's publicly funded services and the ITV and Channel 4 services, but the 1990 Act removed that obligation. Eventually, all cable franchisees will have to apply for a 1990 Act licence; in other words, all cable franchisees could stop distributing the public service channels, even those which currently have a licence under the 1984 Act.

The amendment would extend the "must carry" obligation to the 1990 Act licences, ensuring that all cable companies carry the publicly funded services and public service broadcasting. Of course, there is a difference. In return for that "must carry" obligation, the cable companies get "free carry". The Copyright, Design and Patents Act 1988 gives the cable companies an exemption from copyright law when retransmitting public service channels which are neither encrypted nor broadcast by satellite. With digital broadcasting, encryption would be more common.

The amendment as worded would ensure that the exemption would not apply to many future public service channels, thereby eliminating the fear that, if the amendment were accepted, public service broadcasting could overload the systems. The response of the Cable Communications Association to the White Paper on digital broadcasting specifically requested that the Copyright, Design and Patents Act should be amended to allow the free carriage of new digital public service channels whether or not they are encrypted. Subsection (5) of the amendment grants the cable companies an exemption from copyright when carrying out their "must carry" obligations.

Your Lordships will have noticed that although the amendment deals with local delivery services, which would encompass both cable and satellite, I have in the main referred to cable. Under conditional access it seems that satellite would be covered; but if it is not, I would wish it to be covered. I must also ask why, if satellite is covered, cable is not covered.

In conclusion, the provisions in the amendment, which carry support from all sides of the House, are fair and just and are a simple guarantee that, in the uncertain future of digital broadcasting, we can be sure that our quality public service channels are available to all without discrimination. Failure to bring this measure into the Bill could undermine the entire concept of a universal licence fee and cut away the benchmark of quality that we have become used to as the standard-bearer in world broadcasting. I beg to move.

4.45 p.m.

Lord Thomson of Monifieth

My Lords, we on these Benches strongly support the amendment so clearly moved by the noble Baroness. She has dealt fully with the arguments and I have nothing to add beyond emphasising the fact that probably this is the last major broadcasting Bill before the turn of the century. It will take us into the digital age, as it is meant to. While it is now possible to rely on the self-interest of cable operators to carry the public service channels, once we get into pay-to-view television there may well be situations in which the companies decide that it is in their financial interest to go for those rather than carrying the public service channels. It is important to return to the provision of the 1984 Act in order to create certainty that the cable operators have an obligation to carry the public service channels.

Lord Ashley of Stoke

My Lords, I too support the amendment most strongly. The "must carry" provisions are an essential component in guaranteeing viewers access to public service broadcasting. Unfortunately, the Minister appears to believe that viewers have that access guaranteed for a long time. He gave that impression during the Committee and Report stages. However, I believe that he is deceived by appearances.

I am sure that some people who will be using cable television in the digital age will not wish to have additional aerials. They are unsightly, they can be expensive and they must be erected. There is a great deal of trouble and bother to which some people—not all and not even the majority—will not attend. As regards aerials, there is a risk that public service broadcasting will be lost to some people.

The problem which may arise does not stem from the decisions of the viewers but from the decisions of the cable companies. As has been indicated, they are willing to transmit public service broadcasting because it is in their interests to do so. They are trying to attract viewers. However, it would be unwise to assume that that will always be the case. In fact, the reverse may be the case and they will not want such viewers in the future. There is an increasing risk that as competition grows cable companies will be tempted to exclude public service broadcasters. Therefore, viewers who falsely assumed that they had perpetual access to the BBC and ITV channels could find themselves deprived. If that is the case, and I believe that it will be the case, the consequences for viewers will be regrettable. However, the consequences for the BBC and ITV companies will be catastrophic. Therefore, I must decide whether to accept the Minister's assurance that the fair trading authorities can deal with such a manoeuvre if it happens or after it has happened, or whether we should prevent it by legislation. Obviously, prevention is better than cure. Therefore, I hope that the principle of prevention can be accepted by the House and the Minister.

I have no doubt that it is a tribute to the Minister's good nature that he regards me as cynical. In fact, on Report he called me cynical for suggesting that cable companies could act in that way by excluding the BBC and ITV. I believe that I am being realistic and that that is how the cable companies will operate. If the Minister cannot accept the detail of the amendment, I hope that he will accept the fundamental principle behind it and take steps to ensure that the BBC and ITV have guaranteed access on those wavelengths.

Viscount Caldecote

My Lords, I support the amendment moved so ably by my noble friend Lady O'Cathain. I wish to emphasise one point. Everyone who owns a television set must pay a licence fee to finance public service broadcasting. It would be extremely inequitable and it would be resented if people who had paid that licence fee could not receive public service broadcast programmes. Therefore, I strongly support the amendment for the reasons which my noble friend gave, but I wished to emphasise that point in particular.

Lord Barnett

My Lords, without wishing to make the noble Baroness too big-headed, I must say that I agree with almost everything that she said at the beginning of this debate and I shall not add very much to that. The case that she made was overwhelming. Knowing the good nature of the Minister and his willingness to accept sensible amendments, I am sure that he will accept this one because the idea of this "must carry" amendment is so overwhelmingly sensible that it could only have been put forward by the noble Baroness.

I hope that in his customary manner, the Minister will agree that that is the case. The noble Baroness said so much that seemed to me to be so strongly in favour of the amendment that I have nothing more to add except to say that I hope the Minister will accept it.

Lord Hayhoe

My Lords, first, I endorse all the compliments which have been paid to my noble friend. But I wish to introduce another reason as to why the use of roof aerials is not always appropriate. When I served in another place, my constituency was very close to Heathrow. However good the aerial on the roof, when aircraft passed over, if they were passing on the sightline between the roof aerial and the transmitting aerial, there were wild fluctuations in the pictures. Therefore, to people in that area cable has brought the enormous benefit of the reception of steady, high-quality pictures.

Indeed, I live in a geographical dip where, however high the aerial was placed, one tended to encounter difficulties. If the wind began to blow or pigeons decided to alight on one's tall aerial, that had devastating effects. Therefore, when cable television came to my area, for the first time in 20 years or more we enjoyed clear pictures on all four channels. Therefore, I believe that the arguments which my noble friend has adduced are extremely powerful and I hope that the Minister will respond in a constructive and positive manner.

Lord Monson

My Lords, I hold no brief for the cable companies. Apart from anything else, like most people who live in London, I have been infuriated by the traffic and parking chaos caused by their cable-laying activities.

Against that, I recently received a circular letter from the BBC urging me to support this amendment. It contained no fewer than three glaring spelling mistakes and any number of grammatical errors. That does not make me feel very well disposed to the BBC either. However, when the noble Baroness responds, perhaps she will explain how Channels 3 and 4, as distinct from the BBC, can possibly be described as public service broadcasters in view of the fact that they are financed through advertising and not the licence fee.

Lord Inglewood

My Lords, we have already covered in detail in Committee and on Report the issue of introducing a requirement on cable operators to carry the channels provided by public service broadcasters. I have also had extensive and very constructive discussions with my noble friend Lady O'Cathain.

The Government have made it clear throughout that they are reluctant to move the regulatory goalposts by rescinding provisions made in the 1990 Act regarding the conditions of local delivery licences. As I have said both in this context and particularly during our debates on conditional access, we must give a message to industry that the regulatory environment will be stable.

However, as my noble friend and other noble Lords have made clear, their concern is with the digital future rather than with the analogue present. We have said throughout that we are in full agreement with aspirations behind the amendment. We want the services of existing public service broadcasters and, when it comes on stream, Channel 5 to continue to be available throughout the United Kingdom. That is why we are offering them guaranteed places on digital terrestrial television. We continue to believe that that is likely to be sufficient to ensure universal availability in the digital future, given that over 99 per cent. of the population has access to terrestrial television. It seems very unlikely that they will abandon terrestrially transmitted television for that exclusively delivered by cable unless they are sure that they will continue to receive the public service channels. That will give cable companies an enormous incentive, regardless of any regulation, to carry the channels concerned.

Nevertheless, as I have said myself many times during the passage of this Bill, it is very difficult to be absolutely sure of the way in which digital technology will develop, and the effect that will have on the market. The Government are, therefore, prepared to look again at how they might provide safeguards on the face of the Bill which would meet the principal concerns so lucidly explained by my noble friend and other noble Lords who have taken an interest in this matter.

I should stress that that will not mean reimposing requirements on cable operators using analogue technology. Neither will it mean allowing the public service broadcasters an unfair competitive advantage by requiring cable operators to carry any new commercial services which they may provide on digital terrestrial television. And naturally, cable operators would not he required to pay to carry existing services. Finally, I make it clear that none of that signals any weakening of the Government's commitment to ensuring that digital terrestrial television is given the best possible chance in the market. Of course, the offer of guaranteed places to existing broadcasters is an important part of that.

Within those parameters, the Secretary of State and I shall be discussing further with our colleagues in government the details of how we might move forward to a solution satisfactory to all concerned. I promise to keep my noble friend Lady O'Cathain closely in touch with our thinking. Given that assurance, I hope that she will be satisfied by that explanation and will agree not to press this amendment.

Baroness O'Cathain

My Lords, first, I thank all noble Lords who supported the principle of the amendment, because we are talking about a principle.

Just as an aside, perhaps I may explain to the noble Lord, Lord Monson, that there is a difference between publicly-funded broadcasting—that is, BBC 1 and BBC 2—and public service broadcasting which is BBC 1, BBC 2, ITV, Channel 4 and S4C. That is the distinction. The word "funded" is in one and "service" is in the other.

I am most grateful to the Minister. We have had a great deal of discussion about this matter. He has been 100 per cent. courteous and has been a listening and understanding Minister. It has been a delight to deal with him. I am grateful to him for the trouble that he has taken to meet me on this amendment. I am delighted that the Secretary of State and the Minister have decided to work out details regarding how it may be possible to move forward. I presume that the Government will bring forward in the other place a concrete way of ensuring that the concerns expressed so eloquently by Members of this House will be met.

Of course I can give my noble friend the Minister the assurance that the amendment does not deal with analogue; it is only for digital. We would certainly not expect public service broadcasting to have an unfair advantage. If at any time in the future—and, as we all know, the future is extremely uncertain in this area—public service broadcasting actually produced a commercial service, there would he absolutely no requirement under the amendment for the cable companies or satellite companies to carry such services. Again, I should like to thank all those who have taken part in the debate, and particularly my noble friend the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5 p.m.

Clause 19 [Duration and conditions of digital programme licence]:

Lord Ashley of Stoke moved Amendment No. 5: Page 19, line 7, at end insert— ("( ) that by the eighth anniversary of the commencement date of the digital programme licence not less than 95 per cent. of the programmes to be broadcast in the service are subtitled to such technical standard as is specified by the Commission, ( ) that by the eighth anniversary of the commencement date of the digital programme licence not less than 10 per cent. of the programmes to be broadcast in the service are presented or interpreted into sign language, and ( ) that by the tenth anniversary of the commencement date of the digital programme licence not less than 50 per cent. of the programme hours to be broadcast are audio-described.").

The noble Lord said: My Lords, I shall refer briefly to the amendment once again for three reasons. First, as the Minister said in a recent letter to me, there was insufficient time to discuss the matter on Report. Secondly, I do so because it is a matter of profound importance to those who are deaf and hard of hearing and people who are sight impaired; and, thirdly, because I believe that the Minister has genuinely misunderstood the situation. In his letter to me he said that a code would have a greater impact than specifying targets for subtitling, signing and audio-description. After all the discussion that we have had this afternoon on the effect of a code, I cannot believe that the Minister still holds that belief.

The Minister has given the impression that he believes that the levels of targets required in the amendment could be achieved by the code which has already been mentioned. In his letter to me the Minister said that the code would allow, for the amount of subtitling to be increased as the market takes off and broadcasters move into profit [and that it] could make clear that those entering the market in a strong position might be expected to provide subtitles ֵ from the start".

The point about subtitles on television is that they enable totally deaf people to follow television programmes. When I lost my hearing completely about 28 years ago I could not watch television because there were no subtitles. That meant, apart from just watching sport and perhaps activities like snooker, I could not follow the dialogue on television. It is incredible, but television did not exist for me 20 or so years ago; indeed, it did not exist for me for 25 years until I had my cochlea implant.

Many deaf people today are reliant upon the subtitles on television and those who use sign language are similarly dependent upon that. If they do not have those services, television in 1996 does not exist. It is a staggering fact but it is true. Blind people or those who are very heavily sight impaired cannot follow television programmes. However, if they have access to audio-description where someone explains to them what, say, the criminal is doing racing down the street in a car being followed by a policeman, they can then understand the dialogue. Indeed, with audio-description, those blind people or those whose sight is impaired can follow such programmes. That is why the amendment is so profoundly important.

I support the plaudits offered to the Minister. I believe that his conduct has been great on the proceedings of the Bill. I endorse all the tributes that have been paid to him. I know that he cannot accept my amendment on this occasion, but I hope that he will accept the principle behind it. If he does not do so, it means that those very severely handicapped people, those sight-impaired people who cannot regain their sight and those without the implant to which I referred—andthere are many thousands of people without such implants—will be seriously deprived of digital television. When that comes it will be a great shame to leave those people without access to it.

Finally, I should like to turn to the code, to which my noble friend Lord Donoughue spoke with great eloquence on the last amendment. He spoke about the impact and effect of a code. It does nothing compared with legislation. If the Minister does not accept that, all I can say is that he will be letting down all those people who are relying upon him. At the end of the day, I hope that the Minister will be able to do something for the people to whom I referred. I beg to move.

Lord Inglewood

My Lords, as the noble Lord, Lord Ashley, said, I have already written to him setting out in detail the Government's position on the provision for disabled people by digital terrestrial broadcasters. Therefore, I shall attempt to be as brief as possible. However, at the same time, I believe it is important for the whole House to have the opportunity to hear the arguments involved.

It may appear at first sight unreasonable to object to the proposition that virtually all digital terrestrial programmes should be subtitled and that a large proportion should be available with sign-language interpretation and audio-description. I accept that, without those services, television is inaccessible to significant numbers of people and that where it is practicable they should be provided. I think it is fair to say that the Government have, with the full co-operation of existing broadcasters, demonstrated their commitment in the area, and a large proportion of programmes shown now has subtitles. That was achieved gradually and further progress is being made under the provisions in the 1990 Act. The advent of digital technology may well facilitate the provision of subtitles by allowing them to be provided as separate streams of information on the same frequency channel as well as via text services. It may also facilitate both audio-description and sign-language interpretation, as it will be possible to make them available to those who wish to access them without their being received by all viewers indiscriminately. I hope that full advantage will be taken of those possibilities. But let us be clear that none of those services can be provided without a great deal of effort and without the involvement of a large number of skilled people.

I shall concentrate here on subtitling. On Report, the noble Lord referred to the, seemingly miraculous simultaneous presentation of words on a screen as they are spoken".—[Official Report, 5/3/96; col. 222.] There is no miracle involved, merely a great deal of hard work. Even subtitling for pre-recorded programmes, the easiest and cheapest sort to provide, involves a great deal of work by highly trained staff using sophisticated and expensive video and computer equipment. The text of most programmes has to he edited down by about 40 per cent. The captions must be synchronised with changes of camera shot. It takes a year to train a subtitler to operate at what is regarded as a good speed, about 30 minutes of screen time subtitled per working day. The skills required are very much akin to those of a modern newspaper sub-editor in terms of both linguistic and technical skill.

As the noble Lord said on Report, that might cost about £600 per programme hour. If a broadcaster is spending £600,000 on an hour of high quality original drama, I agree with the noble Lord that he should be able to afford an extra 0.1 per cent. for the subtitling. Equally, if someone is providing a movie channel, spending large sums on film rights, attracting large numbers of subscription viewers and repeating films on several occasions, he, too, should be able to afford to subtitle a high percentage of output. I am sure that the ITC's code, which we have provided for in the Bill, would reflect that. The government amendment that I shall shortly move reinforces the ability of that code to respond flexibly to the practical needs of disabled people by requiring the ITC to consult them before drawing up the code.

However, let me be very clear. In 1990 we were dealing with a situation which is very different from that which we have now in that analogue terrestrial braadcasting was an extremely stable market dominated by very large and established organisations which have very large programme budgets. But most new digital terrestrial broadcasters will not have £600,000 to spend on one hour of programming. Nor are they going to have large numbers of viewers; indeed, every broadcaster will start off with an audience of nil and some will be providing specialised services that will only ever attract a minority. Many new services could be working to budgets of as little as £2,000 per hour, as I understand some satellite and cable stations already do. What is more, some of those are likely to be live services. Subtitling live programmes is considerably more difficult and requires more expensive equipment and the efforts of very fast stenographers with levels of skill similar to those of the people who serve us so well in this House. It also requires substantial extra studio space. It is quite possible that for some new broadcasters subtitling could represent as much as a 50 per cent. increase in programme budgets. That clearly would be enough to endanger their survival in the market. If they do not survive, there will be no programmes for anyone, including disabled people.

In these circumstances we believe it would in the long run help no one to impose on new digital broadcasters, within eight years of launching their services, requirements considerably more onerous than those asked of existing broadcasters who have been established for decades and have almost every citizen of the United Kingdom as customers. As I explained on Report, each existing terrestrial broadcaster, unlike many new digital ones, also provides a heterogeneous service, some parts of which are easy to subtitle and some more difficult and costly, leading to an overall balance. But even then, the provisions in the 1990 Act do not, as this amendment would, remove the scope for account to be taken of differing circumstances between broadcasters. Once the proportion of programmes subtitled by existing broadcasters exceeds 50 per cent., as it is scheduled to do by 1998, the Act allows the ITC to require broadcasters, through licence conditions, to subtitle, the greatest number of hours in a week that appears to the Commission to be reasonably practicable". The noble Lord said in Committee that it would be quite unfair for some television businesses to bear the cost of subtitling and others to evade it. I suggest that it would not be fair to treat the whale the same as the minnow. Given that there are not unlimited numbers of subtitlers, it seems to me important to ensure that efforts are concentrated on programmes with the widest appeal. The Government therefore remain in favour of a code. The use of a code will allow for distinctions to be made between different types of broadcasters; for example, those spending £600,000 an hour on programmes and those spending a tiny fraction of that. It will also allow for the amount of subtitling to be increased as the market takes off and broadcasters move into profit.

If digital terrestrial television takes off in the way we hope and believe it will, and becomes the primary mode of transmission, the medium-term outcome might be that subtitles are provided for a similar proportion of new digital programmes as for programmes transmitted on existing analogue channels. Simulcasts, of course, will be subject to the same requirements as analogue services. In absolute terms that would mean a vast increase in the number of programmes accessible to deaf viewers, although the percentage might be higher on profitable digital services with wide audiences—in other words, the ones that most people want to watch—than on more specialist channels. I should stress also that the code could make clear that those entering the market in a strong position might be expected to provide subtitles and the other services referred to in the noble Lord's amendment at an earlier stage rather than after eight years.

I have already made clear to the noble Lord that I am concerned to ensure that we do the best we reasonably can in this Bill for people who would benefit from subtitling, signing and audio description and that I am prepared to discuss this issue further. That consideration might, of course, now feed through into deliberations in another place. However, I believe the arguments I have just set out are strong. The Government remain convinced that a code is the right approach, as opposed to the inflexibility of setting percentages on the face of the Bill. As I have already made clear in previous debates, the House has already accepted, by giving its approval to the Disability Discrimination Act, that this approach should apply to other industries and services. Under that Act, what it is reasonable to expect service providers to do to make their services accessible is to be determined by detailed regulations allowing for different circumstances and drawn up after due consultation and reflection, including with disabled people. We believe that we should be consistent with that. I fully understand that the noble Lord may feel disappointed at my remarks but at least I hope that he will understand the basis of my thinking.

Lord Ashley of Stoke

My Lords, with the leave of the House, I genuinely thank the Minister for the few concessions that he has been able to make. He referred to the whale and the minnow not being treated alike. That is a colourful phrase but I hope that he will be careful about encouraging companies into the market and absolving them from the costs of providing services for deaf and blind people, because if those companies cannot afford to pay those legitimate costs they should not enter the market. They have a clear duty to provide those services. The Minister has been helpful and I am grateful for his comments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 [Code relating to provision for deaf and visually impaired]:

5.15 p.m.

Lord Inglewood moved Amendment No. 6: Page 20, line 20, at end insert— ("( ) Before drawing up the code or reviewing it in pursuance of subsection (1) the Commission shall consult such bodies or persons appearing to them to represent the interests of the persons referred to in subsection (1)(a) as the Commission think fit.").

The noble Lord said: My Lords, in moving Amendment No. 6 I wish to speak also to Amendment No. 7. I have tabled these amendments in response to an amendment put down by the noble Lord, Lord Ashley, during the Committee stage. As your Lordships will recall, the Bill as drafted provides that the ITC should draw up, and from time to time review, a code giving guidance on the extent to which digital programme services should promote the understanding and enjoyment of programmes by persons who are deaf, hard of hearing, blind or partially sighted and on the means to be used for that purpose.

The first of these two amendments provides that the ITC should consult bodies representing the deaf, hard of hearing, blind and partially sighted before drawing up this code: the second provides that the ITC should publish the code in forms that are accessible to the blind or partially sighted and deaf or hard of hearing. I beg to move.

Lord Ashley of Stoke

My Lords, those provisions will be warmly welcomed by the people concerned. I am grateful for them.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 7: Page 20, line 24, at end insert ("and in determining the manner of publication, the Commission shall have regard to the need to make the code or revision accessible to persons who are blind or partially sighted and persons who are deaf or hard of hearing").

On Question, amendment agreed to.

Clause 29 [Promotion of equal opportunities]:

Lord Inglewood moved Amendment No. 8: Page 26, line 3, after ("groups,") insert— ("( ) to make arrangements for promoting, in relation to employment by him, the fair treatment of disabled persons,").

The noble Lord said: My Lords, in moving Amendment No. 8 I wish to speak also to Amendments Nos. 9, 10 and 11. These amendments take on hoard an issue raised during the Committee stage by the noble Baroness, Lady Dean of Thornton-le-Fylde, and the noble Lord, Lord Ashley of Stoke. The amendments extend the existing clauses on promotion of equal opportunities in relation to employment to require that holders of television multiplex and digital programme licences, national radio multiplex and national sound programme licences should make arrangements for promoting, in relation to employment by them, the fair treatment of disabled persons. These amendments also bring our provisions in line with the Disability Discrimination Act 1995, giving "disabled person" the same meaning as in that legislation. I beg to move.

Lord Ashley of Stoke

My Lords, these provisions again will be warmly welcomed. I am grateful to the Minister.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 9: Page 26, line 6, at end insert ("and "disabled person" has the same meaning as in the Disability Discrimination Act 1995.").

On Question, amendment agreed to.

Clause 62 [Promotion of equal opportunities]:

Lord Inglewood moved Amendments Nos. 10 and 11: Page 56, line 3, after ("groups,") insert— ("( ) to make arrangements for promoting, in relation to employment by him, the fair treatment of disabled persons,"). Page 56, line 6, at end insert ("and "disabled person" has the same meaning as in the Disability Discrimination Act 1995.").

On Question, amendments agreed to.

Lord Dixon-Smith moved Amendment No. 12: Before Clause 67, insert the following new clause— AMENDMENT OF THE BROADCASTING (RESTRICTIONS ON THE HOLDING OF LICENCES) ORDER 1991 (".—(1) The Broadcasting (Restrictions on the Holding of Licences) Order 1991 is amended as follows— (2) In article 12(3) for "two" there is substituted "three". (3) In article 13(1)—

  1. (a) for "hold a licence" there is substituted" hold more than one other licence"; and
  2. (b) for "holder of a licence" there is substituted "holder of more than one other licence".
(4) In article 13(2)(a) for "for which the service" there is substituted "for which a service". (5) In article 13(2)(b) there is inserted "and (c) provided as a local radio service falling into category A or B". (6) After article 13 there is inserted— "Radio services licences. 13A—(1) Subject to paragraph (5), a person who holds a licence to provide a local radio service shall not at any time hold a licence to provide a local radio service to which this article applies; and, subject to paragraphs (3) and (4), such a person shall not be a participant with more than 20 per cent. interest in a body corporate which is the holder of a licence to provide a local radio service to which this article applies. (2) This article applies to a local radio service which is—
  1. (a) provided for an area which is substantially the same as that for which the service provided by the person mentioned in paragraph (1) is provided; and
  2. 1190
  3. (b) provided on the same frequency band as that service; and
  4. (c) provided as a local radio service falling into category C or D.
(3) A person who holds a licence to provide a local radio service may be a participant with more than a 20 per cent. interest in a body corporate which is the holder of a licence to provide such a local radio service as is described in paragraph (2) if the number of persons over the age of 15 resident in the smaller area does not exceed 10 per cent. of the number of such persons resident in the larger area. (4) Where such a person as is described in paragraph (3) is a participant with more than a 20 per cent. interest in a body corporate which is the holder of a licence to provide such a local radio service as is described in that paragraph he may not be a participant with more than a 20 per cent. interest in any other such body corporate. (5) Nothing in this article shall prevent a person from holding licences to provide local radio services if—
  1. (a) that person was, immediately before the grant of the licences, a local radio contractor for an area which was substantially the same as the area in respect of which those licensed services are provided; and
  2. (b) he provided two or more different programme services on different frequencies pursuant to his contract.
(6) For the purposes of this article two areas are to be regarded as substantially the same if at least 50 per cent. of the persons over the age of 15 resident in the smaller area are also resident in the larger area.".").

The noble Lord said: My Lords, I hope it will not be necessary to occupy the time of the House for too long on this rather wordy amendment which deals with the small matter of making it possible for an independent local radio station to operate a second FM channel in areas where there is likely to be a strongly competitive market. There seems to be no problem about the BBC operating four FM channels in the same location. If I understand its new Charter correctly, it may even have the possibility of operating a commercial transmission channel, which may well give it a fifth FM frequency, again in the same area. However, the regulations as at present constructed prevent an independent local radio station from operating a second channel. I hope that we might be able to move a little further forward on this matter. At Report stage my noble friend the Minister was what I would call damply encouraging—if I may use such a euphemism—on this matter. I hope that the additional time that has passed since then will enable him to be rather more encouraging today. I beg to move.

Lord Inglewood

My Lords, as my noble friend Lord Dixon-Smith said, at the end of the debate in Committee I indicated that the Government have not a firmly closed mind on this issue. That remains the case. However, rather than rehearsing all the arguments again tonight, it may be helpful if I highlight the paradox which lies at the heart of our discussions.

The aim of our Bill is to allow greater concentrations within the media while at the same time seeking to preserve plurality and diversity. All of the restrictions in Schedule 2 should be viewed in that light. When considering radio ownership, we are essentially dealing with two quite different states of affairs. First there are urban areas offering a wide choice to the listener, and, secondly, there are rural areas where a single local radio station may be dominant. The amendment tabled by my noble friend seeks to relax the two licence limit in urban areas while retaining it elsewhere.

It has been argued that where there is already choice we should not constrain successful companies from further growth. Yet it is in just these areas that fears of excessive concentration of power are greatest because, conversely, it has been argued that allowing a dominant, established broadcaster to have a second licence in a shire area would be more likely to lead to a lasting new service, because of the economies of scale which would be unavailable to, and thus discourage, any other potential bidders. Any detrimental effect on plurality of the same ownership would be more than offset by the wider range of services provided.

My noble friend's amendment allows greater concentration of ownership where there is already a multiplicity of choice, while ignoring the possibly greater benefits from a wider variety of services to listeners in shire areas that a relaxation in ownership might bring. The Government's view is that any relaxation should apply generally, but should incorporate safeguards both for plurality of ownership and for diversity of output.

Let us he under no illusions. This is a difficult area. I undertook at Report to consult the Radio Authority to see whether the current arrangements can be improved. I met Sir Peter Gibbings last week for a preliminary discussion. I believe that there may be some scope for movement, but we have not yet defined possible improvements. I assure the House that in our further considerations the interests of the listener will be to the fore. But the Government will also bear in mind that the continued development of strong and successful companies within the radio market can be of great benefit to the industry and the public alike.

I hope that the further assurances I have given this evening will convince my noble friend that the Government have taken on board the concerns that he expressed. We are looking carefully at the problem and hope to arrive at a satisfactory solution for implementation in the Bill. I know my noble friend shares my view that if the current restriction to one FM and one AM licence is to be relaxed the specific approach in this amendment may well not be the right one. In view of what I have said I hope that he will not seek to press the amendment this evening.

Lord Dixon-Smith

My Lords, I am grateful to the Minister for the trouble that he has taken on the issue. I have no doubt that I also owe thanks to others outside this Chamber. My noble friend states that he seeks a solution. I entirely accept that the wording of the amendment may not he in perfect form for legislation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 69 [Funding of Sianel Pedwar Cymru]:

Lord Cledwyn of Penrhos moved Amendment No. 13: Page 60, line 27, leave out ("transmitting") and insert ("providing").

The noble Lord said: My Lords, the purpose of the amendment is to widen the power of the Secretary of State to take all the costs of providing a full digital service into account as well as the cost of transmitting the service. The effect would be to provide a fairer base for the new arrangement than the 1997 amount. It encompasses all the costs which will be incurred by the S4C digital service.

This short amendment follows the debate about the proposed new funding arrangements for S4C and, more precisely and importantly, the question of the fairness of the settlement. That lies at the centre of my argument. I am sure that the Secretary of State will recognise that.

During the passage of the Bill through the House, I noted that some noble Lords referred to the proposed funding arrangements for S4C. The matter was referred to at Second Reading and at Report stage. Let us look at the reality of the position. The fact is that at present S4C's funding formula is one based on 3.2 per cent. of total advertising revenues. The Bill proposes to change the formula from 1998 to one based on the 1997 funding plus RPI. Noble Lords have pointed out to the Minister that total advertising revenues have consistently risen at a higher rate than RPI and that this pattern is projected to continue.

What does this mean? It means that the proposed funding formula will give S4C a lower level of funding support in the future. Let us be clear about this. It will weaken the current analogue service; and, furthermore, S4C will be unable to take advantage of the opportunities presented by digital broadcasting. The cost of implementing a digital service must be reflected in the future funding arrangements. The opportunity to do more is there, but the means are not, and the availability of a Channel 4 digital service in Wales will have an effect on S4C's advertising revenue.

I know that S4C welcomes the reassurances given by the Government that commercial flexibility will be awarded in order to maximise other funding schemes. This is similar to the provision granted to the BBC. But there are marked differences between the BBC and S4C. They are at opposite ends of the spectrum in terms of scale. In terms of income, the licence fee provides the BBC with income 20 times greater than S4C. Commercially the BBC has a global market to exploit. S4C's market is more limited as it seeks to serve a minority audience, and S4C has a less established international brand.

Despite the noble Lord's assurance on 13th February at col. 602 of the Official Report, that, The Government are committed to ensuring that proper arrangements are in place for S4C to continue to thrive. That includes the adequate provision of resources",

the Government have not accepted any arguments which have sought to address the obvious conflict between a lower level of funding and the opportunity to provide an enhanced S4C service using digital technology.

This conflict is at the very heart of the concerns voiced by noble Lords and by S4C. Despite the opportunity and the will to exploit new commercial opportunities, S4C must always be heavily dependent on public funding—a fact accepted by the Government at the time of S4C's foundation. I am glad that the noble 'Viscount, Lord Whitelaw, is present this evening because 15 years ago he played a major role in the foundation of S4C, and Wales will always be grateful to him for that. He knows that what I say now is accurate. That fact is an undeniable reality for a minority channel. S4C's funding has to be protected and stagnation for S4C at a time when all other broadcasters in the UK develop their services is not an option and is patently unfair.

With the support of the Government and opposition parties, and with its own drive and imagination, S4C has developed into a major Welsh organisation in the space of 15 years. It has a central role in supporting and nurturing the Welsh language and culture. The fortunes of the Welsh language are on the upturn. I am glad to have the understanding and support of my noble friend Lord. Elis-Thomas, the chairman of the Welsh Language Board. At least 25 per cent. of the population of Wales have a reasonable understanding of Welsh, and 19 per cent. are fluent in the language. The total number of Welsh speakers is stabilising after decades of decline and an increase is evident within the critical younger age group. In a recent survey conducted by NOP, 20 per cent. of those interviewed who had spoken a little Welsh at one time in their lives had been inspired to try to use the language by the existence of S4C. Twenty per cent. of those with no knowledge of Welsh also watched some Welsh programmes by availing themselves of the sub-titling service. S4C is central to the television viewing patterns of Welsh speakers today. Sixty one per cent. of fluent Welsh speakers watch S4C for at least half their total television viewing time.

Given S4C's influence on the improved state of the language, and given that its establishment has resulted in a remarkable level of social cohesion in Wales, it is surely vital that S4C's funding remains at a realistic and practical level. Government funding is given to S4C in order to produce television programmes. But it would be naïve to think that the benefits are limited to the channel's output. The effect of the Government's financial support on the language, culture and social harmony in Wales is immeasurable, but it is there for all to see. S4C is the major commissioner of work from independent producers in Wales. The security of thousands of jobs is inextricably linked with the financial well-being of S4C. These jobs have brought economic benefits to areas where other employment opportunities are limited. Any diminution of funding would have a negative impact on all those related issues. It would be a serious blow to Wales and one which would hurt the Welsh community from Anglesey to Gwent.

Sixteen years ago, we had a long and difficult debate about the future of television in Wales in which I was closely involved, as was the noble Viscount, Lord Whitelaw, to whom we owe a great deal. The issues are fundamental in Wales today. I feel that the House and the Government should respond to the call and the plea of Welsh people at this time. I beg to move.

5.30 p.m.

Baroness Dean of Thornton-le-Fylde

My Lords, from these Benches I support the amendment, although I am probably the only person whose name is attached to it who does not speak a word of Welsh. However, the other three signatories do.

It is regrettable that the Government have chosen to make no moves in this important area for a small but nevertheless important television service to people in Wales. We feel that the Government have walked away from the advanced step that was taken when S4C was set up. It is a small company, covering 25 per cent. of Welsh speaking people in Wales. We have to be careful. It will be crushed in what will become an international big boys' game if the funding of S4C is affected in the way we believe it will be. A reduction of funding would weaken the analogue service. We would have a Broadcasting Bill which provided the means for S4C to go digital but did not provide the financial underpinning which is necessary. The channel would be kept in a competitive box unable to develop.

At the same time as digital services become available, Channel 4 in Wales will take a major part in the competition for advertising revenue in Wales. Noble Lords have been trying to find a means through discussion with the department and through amendments at Committee and Report stages, as well as now at Third Reading, to give S4C hope that it will not be allowed to shrink on the vine as it feels will happen. The channel will not be able to compete in a system which makes the competitive requirements fair to it. I hope that the Minister will be able to give S4C better news at this Third Reading than at the Committee and Report stages.

Lord Aberdare

My Lords, I wish warmly to support the amendment so well moved by the noble Lord, Lord Cledwyn. There are serious worries in Wales about the future of S4C. It has been universally acknowledged by Welsh and English speaking people in the Principality that S4C has been a great success. None of us wants to return to the unhappy period of social unrest that preceded its existence. It has been a significant factor in supporting and nurturing the Welsh language and culture. A whole network of supporting jobs has grown up around it. However, as has been said, its future depends on its funding arrangements. Efforts have been made at every stage of the Bill by many of us to ensure that it will be fairly treated.

At the Committee stage, my noble friend Lord Inglewood said: The Government are committed to ensuring that proper arrangements are in place for S4C to continue to thrive. That includes the adequate provision of resources".—[Official Report, 13/2/96: col. 602.] Fair words butter no parsnips—or should they be leeks? The facts are these. First, funding in future is to be linked to the retail prices index and is therefore likely to grow less than the proportion of advertising revenue did before. Secondly, as a minority channel S4C is and always will be dependent on public funding. It will do its best to increase its commercial resources, but its task will be that much harder when a Channel 4 digital service is available and in competition with S4C for advertising revenue.

We tried to persuade the Government to continue to pay the grant on 1st January. That was refused. We put forward an amendment for a slight widening of the Secretary of State's power so that the transmission costs of a digital service should include the cost of promotion. That too was turned down. This is our last effort to try to obtain help from the Government.

Throughout the passage of the Bill, S4C has been encouraged to continue talks with officials of the Department of National Heritage but so far without any satisfactory conclusion. As noble Lords have said, on this side of the House we can take pride in, and are especially proud of, my noble friend Lord Whitelaw's part in instituting S4C. We would be wise to ensure that it continues to flourish. We have a good record of economic success in Wales. We should not allow any failure in the broadcasting field to overshadow that achievement. I conclude by asking my noble friend on the Front Bench to give a positive response.

Lord McNally

My Lords, perhaps it is appropriate for another English voice to support the amendment, although eagle eyes may see that my noble friend Lord Geraint is sitting behind to ensure that I keep close to the party line. I have another interest since I am married to a Swansea girl whose sister lives in north Wales, so I have a fully balanced view of the issues concerned.

The crux of the answer we wish to hear from the Minister was mentioned by the noble Lord, Lord Aberdare. The Minister referred to the Government's commitment at earlier stages of the Bill. At this point we ask whether the means will be available for the desired end. If not, all the good will in the world is of no use.

Broader issues are at stake than simply a Welsh interest. Some noble Lords have pointed out that when the noble Viscount, Lord Whitelaw, championed S4C he was cementing the Welsh nation into the British nation. We discuss Europe and the capacity of nations and regions to prosper and retain their identity. The willingness of the broader British state to commit itself to such an imaginative experiment as S4C was a sign of what can be done. I do not want to tempt other Members into a broadly European debate. However, I do think it is important in terms of regions and nations of Britain that the larger shows imagination and generosity in respect of the smaller.

In setting up S4C, the noble Viscount, Lord Whitelaw, showed that vision and breadth of imagination. What we need to see now from the Minister is a recognition that that confidence was not misplaced. As a number of noble Lords with great experience of Welsh culture, language and society affirmed, the television channel has been a cementer, strengthener and improver of all those things in the Welsh nation. We are looking now for a recognition of that success and of the dangers of underfunding, and for the Minister to give this House the commitment in spirit that he gave at an earlier stage.

Viscount Whitelaw

My Lords, as I believe the House knows well, I have been very much in favour of this development. I was persuaded completely by the noble Lord, Lord Cledwyn, long, long ago that I must do this. I did it; and I was right. I did exactly what the noble Lord told me to do, and it was not wrong on that occasion. I can only say to the Minister that he is a great friend of mine and he can do a great many things in this respect. I hope he will be able to think very carefully of something that has been a very considerable success in Wales.

Lord Elis-Thomas

My Lords, I am very grateful to the noble Viscount for contributing to this debate. He will remember the heated debate at the time he was making his various decisions on these matters. So too will his noble friend, the noble Lord, Lord Crickhowell, who will also remember our conversations in those days when my honourable friend in another place, Mr. Gwynfor Evans, decided to make a public stand on this issue. The noble Viscount will recollect that the issue had all-party support in Wales. I pay tribute yet again to the involvement of the noble Lord, Lord Cledwyn, in today's debate, as he was involved then.

It will not have escaped the Minister that the amendments we have moved on issues relating to S4C in Committee, on Report and now at Third Reading also have all-party support in this House. That mirrors the situation when the channel was established. I shall not repeat to the Minister what I said during the technical debates in Committee about the nature of the funding formula. What I will ask him to do is look to this consensus and to not breaking it. I ask him to ensure that the decision on that channel, established by his noble friend Lord Whitelaw on the principle that it should be adequately funded in order for it to compete successfully along with all the other broadcasters, will be upheld and that the momentum established by the channel will be maintained.

The Minister in particular, and his officials, have been prepared to discuss this whole issue with the authority. It is obviously up to the authority to justify its arguments in terms of the level of funding it requires. We are in difficulty here in that, short of having some independent arbiter (I do not suggest that, but it might be one way of proceeding) funding is very difficult to quantify in this area of broadcasting as we move through analogue into the world of digital. (I must say, the Welsh word digidol is much easier to say than the word "digital". I shall say digidol rather than digital.) The point is this. As we move into a multi-media situation in new technology, it is essential that the authority should be able to compete. To measure the real costs of that revolution requires very careful, objective analysis of what the costs are likely to be.

For those reasons I ask the Minister to assure the House that he stands by the statement he made at earlier stages of the debate. He committed himself and the Government to ensure "adequate provision of resources". If it becomes clear to the Minister and his department, through the submissions of S4C, that the present level of the formula set out on the face of the Bill is not adequate, on the objective evidence presented to his department, I hope that he will either take the route of seeking further independent advice or will ensure that resources are provided according to the clear views expressed by the authority and its officials.

I should have declared an interest as chair of Screen Wales, and also on behalf of the rest of my household. My son is employed as a post-production sound person in that excellent facilities company, Barcud. My wife's translation agency, Cymen, also benefits from contracts from S4C, including subtitling.

5.45 p.m.

Lord Prys-Davies

My Lords, at every stage in the passage of the Bill, as the noble Lord, Lord Aberdare, pointed out, we have been at pains to try to mitigate the funding formula which is in the Bill and at Clause 69, as we understand that the terms of that formula will inflict injury on S4C. But, depressingly, the Government have not accepted any of our amendments. However, I assure the Minister that we have not surrendered to the arguments he has advanced.

Initially, I remind noble Lords, the Government maintained that the reason for changing the formula was to provide S4C with a "more predictable and reliable formula". That argument has been demolished. It is inconsequential, because S4C has never experienced any difficulty with the formula and never asked for it to be adjusted.

Perhaps I may also remind the House that in Committee, the noble Lord, Lord Inglewood, threw a different explanation at us. The new terms, so we are told, will put S4C funding on a similar basis to that of the BBC. I took careful note of that comparison, because it appeared to me to be somewhat persuasive. However, I have reflected on that formula, and it is totally unfair.

There are at least four major defects in the comparison. First, it lacks integrity because it is used selectively. The comparison is resorted to when it is helpful to the Government for one purpose and one purpose only; namely, to reduce the funding of S4C. But it is entirely ignored when it comes to other purposes, such as giving S4C the same digital capacity as the BBC Secondly, as my noble friend Lord Cledwyn clearly pointed out, and I shall not elaborate, it is plain common sense that the BBC and S4C are at opposite ends of the spectrum, and one cannot draw a comparison.

Thirdly, it was not contemplated 12 or 13 years ago when S4C was established that its funding should be on a basis of comparability with that of the BBC. It was accepted, as I believe the noble Lord, Lord Aberdare, mentioned, that S4C would always he more heavily dependent on public funding than was the case with the BBC. But on that matter the Government have experienced a spasm and changed their mind.

The fourth and last defect is that the new funding formula will lead the Government's Welsh language policy into a farcical situation. I very much hope that the noble Lord will convey that argument to his noble friend the Secretary of State for Wales. Diminish or reduce S4C funding and S4C may become less effective than hitherto, with the inevitable result that the painstaking efforts of schools and teachers throughout Wales and the public and voluntary bodies will be greatly diluted or weakened, if not thwarted.

I should like to make one final point. No new measure will be taken to compensate for that loss because there is none that can be taken. To my mind, on that basis alone the funding formula embedded in Clause 69 needs to be amended and mitigated in favour of S4C. I very much hope that the Minister will give: very careful consideration to this amendment, which has been ably moved by my noble friend Lord Cledwyn.

Lord Inglewood

My Lords, I am most grateful to the noble Lord, Lord Cledwyn, for setting out the rationale for this amendment, which aims to meet, as he himself said, similar concerns to those raised by the noble Lord, Lord Prys-Davies, in the amendments that he tabled on Report. I am also grateful to all noble Lords who have contributed to our discussion this evening.

Since the debate on Report, I again met very recently the chairman and chief executive of S4C. I listened carefully to their concerns for the future of S4C and what they see as the implications of the proposed arrangements for funding the channel for the way in which it 'carries out its activities and fulfils its remit. I shall elaborate in further detail on certain points relating to that. We shall also reflect carefully on your Lordships' remarks this evening.

The funding arrangements in the Bill already allow for extra provision for S4C's transmission costs. That is in line with the provisions of the 1990 Act. I have also indicated that we shall be making provision for S4C to increase its commercial activities and therefore enhance its self-funding capabilities, though I am afraid that time has not allowed us to bring forward the necessary amendments to your Lordships' House. We believe that these are sensible measures to ensure the continued success of S4C, while keeping the running of the channel, and in particular editorial control, sufficiently distant from government interference.

As I made clear on Report, S4C will 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. S4C is unique among broadcasters in being given the possibility of additional funding to meet its transmission costs, both analogue and digital, and I cannot see why S4C should be given any extra funding to meet other costs which other broadcasters, including the BBC—although it is much bigger than S4C it is very similar inasmuch as it is publicly funded and is self-regulating—should meet from their existing sources of revenue. As I stated on Report, it seems that there is a line to be drawn with regard to what might legitimately be seen as an extra call on taxpayers' money. I believe that the line is sensibly drawn behind transmission costs.

This amendment would extend significantly S4C's ability to call on the Government for additional funding beyond that derived from the core funding formula. Following earlier representations from S4C and arguments made in our own debates, Clause 69 as drafted is careful to maintain and not to disturb the traditional arm's length relationship with the Government which all broadcasters have come to expect and, quite apart from the other considerations, I am convinced that what is proposed might prejudice that. Moreover, in its implication of generalised bids for additional funding, the amendment raises obvious questions of public expenditure control. I remain to be convinced that additional funding for S4C is necessary and also that, if it were, we should seek to provide for it in this way.

In conclusion, I have always found it advantageous to follow the advice given to me by my noble friend Lord Whitelaw on a whole variety of matters. I end by emphasising that we shall continue to take your Lordships' remarks very seriously in our continuing discussions with the channel.

Lord Cledwyn of Penrhos

My Lords, I cannot say that I am full of delight in responding to what the noble Lord said in his winding-up remarks. He could have been rather more constructive in his response, not only to what we said but to the feelings of the Welsh people at the present time. Nevertheless, he made one or two remarks which caused me to pause. He said—twice—that he would reflect on this debate and what has been said by noble Lords throughout the House. Secondly, he said that measures were being prepared but were not yet ready to be published or made known to Parliament. Let us hope that those measures will give us some measure of satisfaction.

Against that background, we realise that the Bill proceeds to another place. So there is ample opportunity for the noble Lord and his right honourable friend to consider very carefully the feelings on the Bill of noble Lords from the Principality in this House and at this time. I hope that he will do so. With those remarks, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 71 [Application of excess revenues of Channel Four Television Corporation]:

Lord Thomson of Monifieth moved Amendment No. 14: Page 61, leave out lines 34 and 35 and insert— ("(a) for paragraph (a) there is substituted— (a) subject to subsection (1A) of this section, pay 50 per cent. of the excess to the Commission; and", and").

The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 15, 16 and 17. This series of amendments deals with the anomalies that lie in the financial relationships between Channel 4 and the ITV companies and the fact that what is meant to be a safety net for Channel 4 has become a rather large subsidy from ITV to Channel 4. The amendment also deals with the wider background, in a sense, of the financial relations between one ITV company and another. The two issues are linked and that affects the timetable that is proposed.

We have covered this ground a number of times during our proceedings on the Bill. It is fair to say that those on conflicting sides of the argument have both moved. On this side, we put forward our compromises. The latest is in the series of amendments that I now move. The Minister has also shown willingness to move and put forward his compromises. Those compromises are now set out on the consolidated list. The difference now left between us is not big but it is very important and not to be shrugged away.

On our side, we have conceded a timetable that moves a good way from the original desire for immediate abolition of the subsidy from Channel 4. It is a timetable which would reach zero by 1st January 1998 and during 1997 would reduce more gradually. The Minister at Report stage, characteristically ready to listen to the arguments of the House, moved very significantly indeed. We welcomed that at the time. He said that the Government were now ready to move and that the first reduction should take effect from 1998 and the second reduction would take effect from 1999. He then added these characteristically cautious ministerial words: "It is too early to say what the new levels will be". However, the Minister has shown himself ready in principle to make 1st January 1999 "zero date", if I may call it that. He is proposing in his amendments to provide the necessary legislative power for that possibility.

However, as I understand it, the Government are still unwilling to make a final commitment. I am making a last ditch stand tonight to seek to persuade the Minister to abandon his amendment and accept the arguments that I put forward for mine. Leaving uncertainty in the matter will continue to have a destabilising effect within the independent television system for the next couple of years while the final figures are haggled over. Other noble Lords no doubt received, as I did, representations from the Independent Television Association, which supports the Government's proposals rather than mine. I want to face that argument. I recognise the reasons for the Independent Television Association taking that view; but it is profoundly mistaken, even in its own interests.

Under the 1990 Act, 1998 is the year in which the contracts for the ITV companies are open for review. I am reinforced in my position by words from the well-known figure in the ITV world, Mr. Ward Thomas of Yorkshire Tyne Tees Television. He says that the view that I have been expressing, linking the problems of Channel 4 funding and ITV licence fees, is the way to resolve the issue. He said, This can be the only practical way of eliminating the continuing tad blood' within the system that you have referred to in the House".

Linked with the Channel 4 subsidy are the grotesque arrangements for the ITV companies paying their licence fees that emerged from the 1990 bidding process. To take a single example of those distortions, Midlands licensee, serving 4.5 million homes, by a magnificent piece of risk-taking, managed to end up paying £2,000 per annum for the privilege of serving the great Midlands area of this country, whereas Tyne Tees, serving 1.4 million homes, pays £15.1 million per annum. Those anomalies are as unsustainable as the anomaly of the subsidy from Channel 4 to the ITV companies.

Over the whole period of ITV until the totally mistaken and disastrous 1990 Act, there was an even-handed arrangement between all the regions in regard to the proper contributions that they should make to the Treasury. It was in fact only the 1990 Act which, for the first time, reduced that to a system of blind options and enormous disparities. I mention that because, if there was certainty that during 1998 the commitment from Channel 4 to the ITV companies was going to reduce and that from 1st January 1999 there would no longer be any subsidy, it would clear the air for negotiations between the ITC and those ITV companies which are seeking a review of the arrangements. The matter must be seen as a whole. From the point of view of the ITV companies, if the Government get away with the timetable that they are proposing, the water will be muddied in that negotiation and the ITV companies' ability to obtain a fresh start will be obscured by the fact that there is still a possibility of some element of subsidy from Channel 4.

It is for those reasons that I argue the merits of this series of amendments. Before I sit down I should perhaps explain what the amendments do. Amendment No. 14 is a consequential amendment and I need not waste time on it. Amendment No. 15 represents a substantial concession from the position that I have argued for so far in these proceedings. It has the effect of reducing to zero the thresholds at which Channel 4's revenues over the 14 per cent. of total national advertising revenue would be paid from 1999 onwards. It makes a transitional provision for the year 1998.

Amendment No. 16 has the effect of placing in legislation the intention that the Minister announced and which we welcomed at Report stage; that is, that the Channel 4 reserve fund should be capped following the enactment of the Bill and that no further payments into it would be required from Channel 4. Amendment No. 17 has the effect of permitting the Secretary of State the opportunity to vary the thresholds once more after the year 2002 when the present cycle of ITV contracts comes to an end and when the government of the day can properly take stock of the impact that the digital revolution is having on the broadcasting scene. At that time it will be amply proved that Channel 4 can stand on its own feet. I hope that I may be there to see it happen; who knows? I beg to move.

6 p.m.

Lord Birkett

My Lords, in rising to support Amendments Nos. 14 to 17, I am conscious that the Minister's Amendment No. 19 comes shortly after. It is a little like coming round the corner and finding oneself face to face with the sphinx. I hope the Minister will not mind if I describe his amendments as a little "enigmatic" as I should like to join in the tributes paid to him today for the sheer intelligence, courtesy and capability with which he has handled the Bill. I am full of admiration for him. I say the amendments are enigmatic. I wish I were prescient enough to read between the lines. However, your Lordships may agree that the words "may be nil but", do not give a lot of space for reading between the lines.

It is clear from everything said by the noble Lord, Lord Thomson, that the intention behind the amendments is to clear away the anomaly of Channel 4 having to pay out anything to ITV once the date of 1997—it is generally agreed that that is the right one—has passed. I am well aware that at Report stage the Minister indicated—if I get him wrong perhaps he will tell me immediately—that in 1999 that may be the case, but 1998 he thought would be the transitional year. It was at that time that he announced the concession of Channel 4 not having to pay into the reserve fund. I am sure that that will be welcome to Channel 4. However, there is a big difference between being obliged to put one's earnings into one's savings account and being obliged to pay them out via a thumping great bill to somebody else.

I can see no justification, after the end of 1997, for any payments to go forth either way. It has often been said in the course of these debates that we cannot foretell the future, particularly in the world of television. I have two comments to make in that regard. First, we can tell a jolly sight better now than we ever did in 1990 when this formula was invented. It was invented, of necessity, on guesswork and we now know that that guesswork proved wrong. Justice and common sense suggest that we put it right as fast as possible.

Secondly, who knows what will happen in the future to Channel 5? I cannot find an informed television commentator who thinks, however successful Channel 5 may be, that there is the smallest remaining danger of Channel 4 foundering, and therefore this formula having to be invoked. I cannot see any justification for thinking that Channel 4 may still be in danger. It seems to me therefore that if 1998 is to be a transitional year, the amount paid in that year ought to be absolutely tiny. As I said at Report stage if indeed it could be nil, as the Minister's amendment would make possible, that would be the best of all solutions. I hope that when the Minister replies he will give some indication of what 1998 will bring. If he gives any indication that it would be less than 15 per cent., I should be exceedingly happy and immediately cease to support this amendment. However, if he does not, I recommend to your Lordships that the figure of 15 per cent. is quite enough. I hope it is unnecessary.

Baroness Birk

My Lords, I rise to support these amendments which, but for some unfortunate error, should have had my name attached to them. It seems to me that it is virtually impossible to add to the steady stream of arguments in favour of freeing Channel 4 from the malfunctions of the 1990 funding formula which your Lordships have heard since Second Reading as we have gone through this in Committee, on Report and now at Third Reading.

There was no way in 1990 of knowing how unfairly the funding formula would work out. Indeed, there are few, if any, who can argue that it has worked as Parliament originally intended. Had we known in 1990 how much effort it would take six years later to right an unintentioned wrong, I am sure things would now be very different. However, these amendments would provide the much needed clarity and certainty from which all sides would benefit and, as was explained by my noble friend Lord Thomson, they would also preserve the flexibility of a safety net which many of us would wish to see, and that safety net is not going to disappear by adopting these new amendments.

The ITC has said that payments from Channel 4 to ITV should cease after the end of 1997. It would seem sensible, therefore, to take steps to adopt that position as soon as possible. These amendments provide for just one more payment to ITV and then settle the matter at nil after 1998.

The latest briefing document I have seen from the ITV association states that it will need a "cushion" as the subsidy from Channel 4 is phased out. Cushions are usually reserved for the slothful couch-potato or for the brittle and unathletic and sometimes for those falling from a great height. ITV may tell us which is more applicable. Channel 4 estimates that this particular cushion will be worth about £25 million. This should be more than adequate, given the huge amounts it has already received from Channel 4.

As a direct consequence of the statements made by the Minister at Report stage, it is clear that the ITV companies can entertain no expectation of further revenues from Channel 4 after 1999. It was good that the Minister made that clear at that stage. But unless this conclusion is written into the Bill there will be a great danger that conflict between ITV and Channel 4 will continue. It would give certainty on this issue, although it is far from the ideal option of abolition which many of us were hoping would be accepted when we argued the matter in Committee. That was our first target, but we now seek to achieve an improvement with these amendments. Writing these provisions into the Bill is important. It is more important even than accepting the good word of the Minister. There is no doubt about what he said, but it does need to be on the face of the Bill.

It would seem that the amendments tabled by the Government will have little real effect. I hope to hear from the Minister, as the noble Lord, Lord Birkett, said, what extra they bring to the Bill. I too find that rather difficult to work out. They are certainly less than could have been expected from the Minister's comments at Report stage, when, as he is well aware, we were not able to see anything in writing. With that in mind, I am pleased to support these amendments, as they incorporate the Minister's express intention to cap the Channel 4 reserve fund. I hope the Government will support this proposal, as it will make a welcome change. It will ensure that these particular changes will be made to the Bill in this House before it goes to another place.

6.15 p.m.

The Earl of Stockton

My Lords, as at Report stage, I rise to support the noble Lord, Lord Thomson of Monifieth. However, I would like to preface my remarks on his amendments by reiterating my strong belief that there are no grounds of principle or public policy for continuing with this formula. There is, frankly, no reason why Channel 4 should continue to subsidise the ITV companies beyond the end of next year.

My noble friend's Amendments Nos. 18 and 19 are disappointing as well as being impenetrable in that they fail to deliver the expectation which he raised with us at Report stage. His statement then led us to expect a reduction of the payments in two stages, with the latter set at zero. Pending consideration of this, an amendment to end the payments at the end of 1997 was withdrawn. But what he now proposes offers nothing that will guarantee a reduction in two phases; it merely sets the powers to do so at a later stage.

At Report stage we were led to believe that, in line with the ITC position, the second stage would be a reduction of the payments to zero. Now that promise is simply a "maybe". My noble friend's amendments say that these payments "may be nil". That means that the payments may vary anywhere from 50 per cent.—that is £80 million—to nil. It means that they may be altered any, or, indeed, every, year. It means that they may be altered in any way. It means that they may rise as well as fall. That must be a recipe for continuing conflict and for endless lobbying by ITV and Channel 4 at a time when they should be co-operating to introduce digital television. I would have preferred simply to alter "may" to "shall".

The amendment of the noble Lord, Lord Thomson, is itself a compromise. The board of Channel 4 has quite reasonably asked to be relieved from the end of 1997 of a formula which was designed to help it but which everybody now accepts is draining substantial funds from programme making. The amendment asks for an additional—in my view unjustified—payment for 1998. What it offers, however, is that element of certainty which is so badly needed. Without certainty, Channel 4 will find it extremely difficult to plan its film, programme and digital investment budgets for the years following 1997, and without certainty the debilitating wrangling will continue.

This compromise must surely answer all the Government's concerns. The safety net will remain in place, even though Channel 4 does not want it or need it. The Secretary of State will still have power to vary the percentage of qualifying revenue on which the formula is based and so manage any dramatic fluctuation in later years. Nothing more is now needed other than certain figures by which the formula is to be phased out.

I shall be most interested to hear what my noble kinsman Lord Arran, the noble Viscount, Lord Astor, or the noble Lord, Lord Howell, speaking as they do with great affection and support severally and collectively for the independent television companies, have to say in answer to this. By the by, I would also like to ask my noble friend the Minister, who has considerable experience at a European level, how he believes that any continuing subsidy payments to ITV after 1997 can pass scrutiny by the commission, since the funding formula was registered as state aid with the sole purpose of supporting Channel 4.

My noble friend the Minister has himself conceded that early action needs to be taken to stop the payments from Channel 4 to ITV. Those words, "early action", are his in col. 443 of the Official Report of 7th March. So action—and action on the face of the Bill—is what we need. Intentions, statements, promises and maybe's are not enough. They cannot bind this Government or any future government and they do not in my view respond to the widespread agreement among many of your Lordships that we ought to put right in this Bill what has clearly gone wrong in the last one.

Lord Crickhowell

My Lords, there is a certain familiarity about this debate. There have been a number of previous rounds, although unavoidably I missed the last one. However, I have carefully read what was said on 7th March. On this occasion, as on previous occasions, I must declare an interest as a director of an ITV company, HTV.

I was glad that the noble Lord, Lord Thomson of Monifieth, brought us back to the gap year. I had looked at his amendment with a certain amount of surprise, noting as I did the absence from the Marshalled List of another amendment from him on the gap year. I well recall him saying when we debated the gap year that he would be looking closely again at the issue and might well return to it. At that time I said that I would support him. But the impact of his amendment is in a sense to bring that issue right back to the fore again. My noble friend the Minister argued on 7th March that effectively the compromise he advanced had gone a long way to close the gap. That was acknowledged at the time by the noble Lord, Lord Thomson of Monifieth. But, by now accelerating the process, the issue is inevitably reopened.

The noble Lord, Lord Birkett, said that we can foresee better than we could in 1990. But back in 1990 the television companies which were bidding—those that did not get their licences had the same problem—had to bid into a very deep fog indeed. The noble Lord, Lord Thomson of Monifieth, is right in saying that the two points need to be looked at together. If a violent change is to happen at the end of 1997 there has to be a re-examination of the total position and not just a part of it The noble Lord is proposing a fairly sharp change—a reduction in one year of two-thirds of the money at present going to Channel 4 companies. I am not arguing for a moment that there does not need to be a phasing out of these arrangements but it seems to me that the Government are right in saying that it is sensible to leave flexibility and to set the rate of phasing in the light of circumstances as they are in 1997. Only then will we be able to gauge the impact of Channel 5, measure the impact of the proposed digital or satellite channels—there could he a large number of them▀×and take account of the economic climate and the impact on the Channel 3 companies in the light of the advertising revenue for those companies at that time.

The Government put forward a particularly sensible compromise on the last occasion, in that it allowed for some adjustment at the time in the light of circumstances. I find myself in perhaps the rather unusual position in debates in this House, in which I have sometimes been a little difficult with my noble friend, of being the first person to speak in favour of the Minister's solution as advanced on Report. I believe that he got it right then and I hope he will stick to that solution.

I have only one other thought to put to him. He said that, as the payment for 1997 is made in 1998, that in effect eliminates the gap year and is a factor to be taken into account. He referred to the fact that that was a cash flow impact. But in terms of the way in which companies do business and prepare their accounts—this is the almost universal practice—they account for those funds in the year to which they refer. Therefore, in planning their expenditure and their income, they relate to the year to which they refer and not to the fact that the cash comes in a month or two later. That is a cash flow impact. It is not an accounting impact; it is not the basis on which companies can plan their business. My noble friend must consider that matter but stick to his guns and retain the flexibility that he has given himself. I hope that he will reject the amendment.

Viscount Astor

My Lords, I support the argument put forward by my noble friend Lord Crickhowell. As he said, we are now in the third round of this debate. If that proves anything, it proves that my noble friend the Minister, by giving two substantial concessions to Channel 4, instead of making it absolutely satisfied, aroused in Channel 4 an appetite for more and more. To give more would be a mistake. The amendment of the noble Lord, Lord Thomson, seeks further to amend the Government's compromise amendment. I believe that the Government's compromise has balanced the interests between ITV and Channel 4. Peace has broken out. There is no conflict any more.

It is right that we should not seek to prescribe precisely what the levels of the payment should be from January 1998, therefore allowing discussions to take place before the end of 1997. I share the Government's view that a review should be conducted at that time, when judgments can be made about the impact of competition. The noble Lord, Lord Birkett, said that he can see into the future more clearly than we could in 1990. He may be right. He may have a better crystal ball than us. But I have to say to the noble Lord that Channel 5 will come before us and the experts in the industry say that by the year 2000 it could be taking 7 per cent. of the revenue. We know that satellite and cable will expand rapidly and the Government say that digital and satellite will come before us very quickly. It is important that the Government should maintain flexibility. The Government made substantial concessions to Channel 4. We do not know what will happen. No one will lose anything by retaining this flexibility. I therefore urge your Lordships to reject the amendment.

Baroness O'Cathain

My Lords, as the noble Lord, Lord Thomson, said, we had full and frank debates on the Channel 4 funding formula during the Committee and Report stages and as a result the amendments tabled on that issue were withdrawn. At the same time the Government announced that they would cap Channel 4's reserve fund, thereby increasing its programming budget by at least £30 million or by 10 per cent., and that they would review the formula in 1997 with the intention of reducing the money received by ITV. In the light of that it seems to me that Channel 4 has already done very well out of the contribution to the debate in your Lordships' House and I would therefore urge your Lordships to hold back from giving Channel 4 any further concessions.

My main reason for this seemingly hard line is that, as the Broadcasting Bill reaffirms, the present formula was designed to remain in place until 1998, when it could be amended following a review in 1997. It should really be at that point and not before that the exact levels at which the formula should be set for the future are debated. We really will, as many noble Lords have said, have a clearer idea by the end of 1997 of the impact of Channel 5 and of the growing importance of cable and satellite.

The amendment tabled by the noble Lord, Lord Thomson, obviously pre-empts the end of 1997 review by specifying the precise amount of money to be received by ITV. It has been clear from the outset of this debate on the funding formula that it is only one part of a very complicated web of funding arrangements which sustain both Channel 4 and ITV. Any change to any part of the arrangements could therefore have a serious and damaging impact on the UK's commercial television sector. I honestly do not believe that it is good practice to fiddle with one part of a contract, if one likes, while leaving the other untouched.

The intention of the amendment is effectively to bring forward the 1997 review without giving due consideration to the many factors at play. That could result in a decision being made in this House that would damage the quality of service provided to viewers. Noble Lords will remember that in Committee I pointed out the apparent disinterest of Channel 4 to spend its increased programme budgets on UK material, preferring instead to invest in cheap US programmes. Since that date I have had a letter from the chief executive of Channel 4, Mr. Michael Grade. He says, You may not know that the Board of Channel 4 has committed publicly to spending every penny of its revenues released by abolition"— that is abolition of the funding formula— on British film and television production (and training). The whole purpose of redressing the funding formula iniquity is to substitute home grown for imports". Despite that, like my noble friend Lord Crickhowell, I support the amendment produced by my noble friend the Minister. Channel 4 has the assurance that the review will take place at the end of 1997 and we should wait until then. Therefore, I urge your Lordships to reject the amendment.

6.30 p.m.

Lord Inglewood

My Lords, the noble Lord, Lord Thomson of Monifieth, explained that his amendment to Clause 71 aims to provide on the face of the Bill that Channel 4 should make no further payments to its reserve and that the payment from Channel 4 to Channel 3 companies for 1998 should be set at 15 per cent. of Channel 4's income above the statutory threshold; and that no payments should be made for the four years thereafter. With your Lordships' permission, in my comments on this amendment, I shall also speak to government Amendments Nos. 18 and 19, which have been referred to and which cover related issues.

As I have explained on previous occasions, the Government want to retain the Channel 4 funding formula as a prudential measure but to operate it flexibly so that Channel 4 can retain more of its income for programming. I have indicated our intention to take early action to cap Channel 4's payments into the reserve, and Amendment No. 19 duly makes this possible. As to Channel 4's payments to Channel 3—in effect, an insurance premium against the guarantee of minimum income payable by Channel 3, which will remain in force—I explained that the Government intend to proceed by a phased approach, with the first reduction taking effect from 1998 and the second from 1999. Our overall expectation is a significant adjustment in Channel 4's favour. Amendment No. 18, which I have tabled, will in principle allow a reduction in Channel 4 payments to Channel 3 to zero from 1999. This general approach is intended to establish a way forward which is fair to all concerned.

The amendment of the noble Lord, Lord Thomson, reflects the Government's thinking on continuation of the funding formula, on immediate termination of payments into the reserve and on the phasing of reductions of Channel 4 payments to Channel 3. I very much welcome this growing consensus on the way forward. But there is a significant difference as against the Government's approach in the proposal to set the precise level of Channel 4 payments to Channel 3 for each year from 1998 to 2002 on the face of legislation. The Government's view is that this approach is a mistake, for reasons both of principle and of practicality.

As far as the proposal to set a 15 per cent. payment for 1998 is concerned, it has been argued that it is necessary to establish certainty for Channel 4 now. I do not find this argument convincing. Even were we to establish a figure now, there would remain uncertainty for Channel 4 as to the actual amount of their payment for 1998. After all, that will depend on two variables which cannot yet be established. The first is the level of the total television revenues for the relevant year, which forms the basis for the threshold above which the formula comes into effect; and the second is the level of Channel 4's own revenues for 1998. For those reasons I believe that the arguments based on certainty are perhaps overdone.

In response to the point made by the noble Lord, Lord Birkett, I am not persuaded that 15 per cent. is necessarily the right figure. That will need to be established against updated estimates of television revenue, market and sectoral developments and other relevant matters nearer the time. That point was made by my noble friend Lady O'Cathain. For those reasons the Government are opposed to the proposition that Channel 4's 1998 payments should now be set at 15 per cent. on the face of the statute.

The second limb of the proposal put forward by the noble Lord, Lord Thomson, is that Channel 4's payments for the four subsequent years from 1999 to 2002 should be established by statute at zero. As I indicated, the Government's own amendment would in principle allow zero payments from that year. But here also it is simply too early to take a final and definitive view of payment levels up to six years from now. Moreover, establishing the figures in primary legislation, as the amendment proposes, would rule out all prospect of subsequent adjustment in the years up to 2003 were that to be deemed sensible subsequently. Such an approach would be inconsistent with the need for flexibility to respond to fast-moving developments in the broadcasting sector. For those reasons the Government oppose this element of the amendment of the noble Lord, Lord Thomson, as well.

The Government recognise that it must be for Parliament to decide on the precise levels of funding to be established within the revised formula. That is why we have proposed that they should be set by order subject to affirmative resolution. Such an approach is wholly in line with the approach which Parliament adopted in relation to variations to the formula in the 1990 Act. It allows well-informed judgments about appropriate levels after proper consideration and consultation at the appropriate time. It is consistent with the need for flexibility, which is a key principle underlying the formula itself.

My noble friend Lord Stockton expressed some concern about the Government's policy. I can do no better than other noble Lords have done and refer to the second day of the Report stage of the Bill. With the leave of your Lordships, perhaps I may quote: As a second step, we propose to introduce reductions to Channel 4 payments to Channel 3 in two phases. The first reduction will take effect from 1998; the second will 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—lto 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".— [Official Report, 7/3/96; col. 443.] The importance of that passage is that it is clear what our policy is. I appreciate that some noble Lords may not agree with it and might wish that it were something different. However, bearing in mind the appropriateness of Parliament taking a final decision, it is a perfectly proper way to proceed. It also indicates to the world generally what our policy is now. As I explained, we take the view that this is not the right time to decide a final figure for what might be a significant amount of money at some considerable time in the future.

There is one final point I wish to touch on. It has been argued that we must finalise the amounts of funding now in order completely to clarify matters. I believe it is clear that the amendment of the noble Lord, Lord Thomson, would not achieve that because of the very nature of the formula we are talking about which contains a number of variables that interrelate. As my noble friend Lady O'Cathain said, that in turn is part of a wider matrix of the funding arrangements for Channels 3 and 4 broadcasters.

As regards Channel 4 funding arrangements, we have put forward a proposal, supplemented by the amendments I have now tabled, which, we believe, as my noble friend Lord Crickhowell, acknowledged, attempts to strike a balance between all the relevant interests and retain sufficient flexibility to establish fair figures. It is for those reasons that I hope the amendments will commend themselves to your Lordships.

Lord Thomson of Monifieth

My Lords, I do not want to detain the House, but perhaps I should explain to the noble Lord, Lord Crickhowell, that I did not table a separate amendment about the gap year because I was trying to be as economical as possible with my amendments at this late stage in our consideration of the Bill and I thought that I might deal with the matter by putting it in a wider context in my remarks.

I thought that the Minister made a curious remark—perhaps I did not pick it up correctly—when he said that even my amendment did not create certainty. I cannot think of anything more certain from Channel 4's point of view than to know that from 1st January 1999 its payments would cease; that its payments would be zero. I cannot think of anything more certain than zero.

The usual remark that one would make to the Minister—we have had many opportunities to say it because, as far as was possible within the limits of government policy, he has been a most accommodating and helpful Minister—is that one wants to read and study carefully what he has said and perhaps return to it later. Suddenly and sadly, I remember that we shall not be able to return to this later. However, other people further along the corridor and in another place will have the opportunity to consider these matters later.

I was greatly encouraged by what the Minister said on Report. Incidentally, I have subsequently examined his remarks carefully. In my innocence I had thought that my amendment was such an olive branch and was so reasonable—I wrote to the Minister to tell him about it in advance—that I fully hoped that he would say that he did not want to waste your Lordships' time and was happy to accept it. However, when I saw the Minister's amendment I knew that I was sunk. Against that background, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 15 to 17 not moved.]

Lord Inglewood moved Amendment No. 18: Page 62, line 4, after ("which") insert ("may be nil but").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 19: Page 62, line 7, at end insert ("which may be nil").

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 20: After Clause 77, insert the following new clause— ("PART IVA SPORTING AND OTHER EVENTS OF NATIONAL INTEREST LISTED EVENTS .—(1) For the purposes of this Part, a listed event is a sporting or other event of national interest which is for the time being included in a list drawn up by the Secretary of State for the purposes of this Part. (2) The Secretary of State shall not at any time draw up, revise or cease to maintain such a list as is mentioned in subsection (1) unless he has first consulted—

  1. (a) the BBC,
  2. (b) the Welsh Authority,
  3. (c) the Commission, and
  4. (d) in relation to a relevant event, the person from whom the rights to televise that event may be acquired;
and for the purposes of this subsection a relevant event is a sporting or other event of national interest which the Secretary of State proposes to include in, or omit from, the list. (3) As soon as he has drawn up or revised such a list as is mentioned in subsection (1), the Secretary of State shall publish the list in such manner as he considers appropriate for bringing it to the attention of—
  1. (a) the persons mentioned in subsection (2), and
  2. (b) every person who is the holder of a licence granted by the Commission under Part I of the 1990 Act or a digital programme licence granted by them under Part II of this Act.
(4) In this section "national interest" includes interest within England, Scotland, Wales or Northern Ireland. (5) The addition of any relevant event to such a list as is mentioned in subsection (1) shall not affect—
  1. (a) the validity of any contract entered into before the date on which the Secretary of State consulted the persons mentioned in subsection (2) in relation to the proposed addition, or
  2. (b) the exercise of any rights acquired under such a contract.
(6) The list drawn up by the Secretary of State for the purposes of section 182 of the 1990 Act, as that list is in force immediately before the commencement of this section, shall be taken to have been drawn up for the purposes of this Part.").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Inglewood moved Amendments Nos. 21 to 28: After Clause 77, insert the following new clause— CATEGORIES OF SERVICE (".—(1) For the purposes of this Part television programme services shall be divided into two categories as follows

  1. (a) such of the services specified in subsection (2) as are provided without any charge being made for the reception of programmes included in the service, and
  2. (b) all television programme services not for the time being falling within paragraph (a).
(2) The services referred to in subsection (1)(a) are—
  1. (a) regional and national Channel 3 services,
  2. (b) Channel 4, and
  3. (c) the television broadcasting services provided by the BBC.
(3) The Secretary of State may by order amend subsection (2) so as to remove any service from, or add any service to, the services specified in it. (4) An order under subsection (3) shall be subject to annulment in pursuance of a resolution of either House of Parliament."). Insert the following new clause— CONTRACT FOR EXCLUSIVE RIGHT TO TELEVISE LISTED EVENT TO BE VOID (".—(1) Any contract entered into after the commencement of this section under which a television programme provider acquires rights to televise the whole or any part of a listed event live for reception in the United Kingdom, or in any area of the United Kingdom, shall be void so far as it purports, in relation to the whole or any part of the event or in relation to reception in the United Kingdom or any area of the United Kingdom, to grant those rights exclusively to any one television programme provider. (2) In this Part "television programme provider" means the BBC, the Welsh Authority or any person who is the holder of any licence under Part I of the 1990 Act or a digital programme licence under Part II of this Act. (3) For the purposes of this section rights to televise the whole or any part of an event live for reception in any area granted to a television programme provider are granted exclusively if the person granting them—
  1. (a) has not granted any such right to any other television programme provider, and
  2. (b) is precluded by the terms of the contract from doing so.). Insert the following new clause—
CONTRACT FOR TELEVISING LISTED EVENT MUST SPECIFY CATEGORY OF SERVICE (".—(1) Any contract entered into after the commencement of this section shall be void so far as it purports to grant to a television programme provider rights to televise the whole or any part of a listed event live for reception in the United Kingdom, or any area of the United Kingdom, unless the contract complies with subsection (2). (2) A contract complies with this subsection if the terms of the contract allow the television programme provider to include the live coverage of the listed event—
  1. (a) only in a television programme service falling within paragraph (a) of subsection (1) of section (Categories of service), or
  2. (b) only in a television programme service falling within paragraph (b) of that subsection.")
Insert the following new clause— RESTRICTION ON TELEVISING OF LISTED EVENT (".—(1) A person providing a service falling within either of the categories set out in subsection (1) of section (Categories of service) ("the first service") for reception in the United Kingdom or in any area of the United Kingdom shall not, without the previous consent of the Commission, include in that service live coverage of the whole or any part of a listed event unless—
  1. (a) another person, who is providing a service falling within the other category set out in that subsection ("the second service"), has acquired the right to include in the second service live coverage of the whole of the event or of that part of the event, and
  2. (b) the area for which the second service is provided consists of or includes the whole, or substantially the whole, of the area for which the first service is provided.
(2) The Commission may revoke any consent given by them under subsection (1). (3) Failure to comply with subsection (1) shall not affect the validity of any contract. (4) Subsection (1) shall not have effect where the television programme provider providing the first service is exercising rights acquired before the commencement of this section."). Insert the following new clause— POWER OF COMMISSION TO IMPOSE PENALTY (".—(1) If the Commission—
  1. (a) are satisfied that the holder of a licence under Part I of the 1990 Act or a digital programme licence under Part II of this Act has failed to comply with subsection (1) of section (Restriction on televising of listed event), and
  2. (b) are not satisfied that in all the circumstances it would be unreasonable to expect him to have complied with that subsection,
they may require him to pay, within a specified period, a specified financial penalty to the Commission. (2) If the Commission are satisfied that, in connection with an application for consent under subsection (1) of section (Restriction on televising of listed event), the holder of a licence under Part I of the 1990 Act or a digital programme licence under Part II of this Act has—
  1. (a) provided them with information which was false in a material particular, or
  2. (b) withheld any material information with the intention of causing the Commission to be misled,
they may require him to pay, within a specified period, a specified financial penalty to the Commission.
(3) The amount of any financial penalty imposed on any person under subsection (I) or (2) shall not exceed the amount produced by multiplying the relevant consideration by the prescribed multiplier. (4) In subsection (3)—
  1. (a) "the relevant consideration" means an amount determined by the Commission as representing so much of any consideration paid by the person on whom the penalty is being imposed as is attributable to the acquisition of the rights to televise the event in question, and
  2. (b) "the prescribed multiplier" means such number as the Secretary of State may from time to time by order prescribe.
(5) An order under subsection (4)(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament. (6) Where the Commission receive any amount payable to them by virtue of subsection (1) or (2), that amount shall not form part of the revenues of the Commission but shall be paid into the Consolidated Fund. (7) Any amount payable by any person to the Commission by virtue of subsection (1) or (2) shall be recoverable by them as a debt due to them from that person."). Insert the following new clause— REPORT TO SECRETARY OF STATE ("—(1) If the Commission
  1. (a) are satisfied that a broadcasting body has failed to comply with subsection (1) of section (Restriction on televising of listed event), and
  2. (b) are not satisfied that in all the circumstances it would be unreasonable to expect the body to have complied with that subsection,
they shall make a report on the matter to the Secretary of State.
(2) If the Commission are satisfied that, in connection with an application for consent under subsection (I) of section (Restriction on televising of listed event), a broadcasting body has
  1. (a) provided them with information which was false in a material particular, or
  2. (b) withheld any material information with the intention of causing the Commission to be misled,
they shall make a report on the matter to the Secretary of State.
(3) In this section "broadcasting body" means the BBC or the Welsh Authority."). Insert the following new clause— CODE OF GUIDANCE (".—(1) The Commission shall draw up, and may from time to time review, a code—
  1. (a) specifying the circumstances in which the televising of listed events generally, or of a particular listed event, is, or is not, to be treated as live for the purposes of this Part, and
  2. (b) giving guidance as to the matters which they will take into account in determining—
    1. (i) whether to give or revoke their consent under section (Restriction on televising of listed event)(1), or
    2. (ii) for the purposes of section (Power of Commission to impose penalty)(1) or (Report to Secretary of State)(1), whether in all the circumstances it is unreasonable to expect a television programme provider to comply with section (Restriction on televising of listed event)(1).
(2) In exercising their powers under this Part, the Commission shall have regard to the provisions of the code. (3) Before drawing up or revising the code the Commission shall consult such persons as appear to the Commission to be appropriate. (4) As soon as the Commission have drawn up or revised such a code, the Commission shall publish the code in such manner as they consider appropriate for bringing it to the attention of—
  1. (a) the BBC,
  2. (b) the Welsh Authority,
  3. (c) every person from whom the rights to televise a listed event may be acquired, and
  4. (d) every person who is the holder of a licence granted by the Commission under Part I of the 1990 Act or a digital programme licence granted by them under Part II of this Act.").
Insert the following new clause— INTERPRETATION OF PART IVA AND SUPPLEMENTARY PROVISIONS (".—(1) In this Part (unless the context otherwise requires)— Channel 4" has the same meaning as in Part I of the 1990 Act; the Commission" means the Independent Television Commission; listed event" has the meaning given by section (Listed events)(1); live" shall be construed in accordance with the code drawn up under section (Code of guidance); national Channel 3 service" and "regional Channel 3 service have the same meaning as in Part I of the 1990 Act; television broadcasting service" has the same meaning as in Part I of the 1990 Act; television programme provider" has the meaning given by section (Contract for exclusive right to televise listed event to be void)(2); television programme service" has the same meaning as in Part I of the 1990 Act. (2) Section 182 of the 1990 Act (certain events not to be shown on pay-per-view terms) shall cease to have effect.").

The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move them en bloc.

On Question, amendments agreed to.

6.45 p.m.

Baroness David moved Amendment No. 29: After Clause 78, insert the following new clause— BSC TO PROVIDE GUIDANCE FOR EDUCATIONAL BROADCASTS (" . It shall be the duty of the BSC to draw up, and from time to time review, guidance as to standards and practices to be followed in connection with programmes which fulfil the obligation of the BBC to provide—

  1. (a) education; and
  2. (b) educational content.").

The noble Baroness said: My Lords, this amendment places on the new Broadcasting Standards Commission a duty to draw up and review guidance on the content and nature of broadcasting defined as "education" and that which has some educational content. We want to see some such provision appear on the face of the Bill.

This amendment was moved at Committee stage by my noble friend Lady Farrington. Replying to the debate at that stage the Minister said that, The amendment … seeks to treat the BBC on a different footing from … other public service broadcasters".—[Official Report, 15/2/96; col. 822.]

In fact, this amendment seeks to bring the BBC in line with other public service broadcasters, as the independent terrestrial television companies and Channel 4 are regulated by the ITC. The BBC is unique in that its education programmes are not monitored and evaluated by any independent body. Channel 4 has a minimum number of hours for schools programmes but there is still no such requirement for the BBC. The Agreement between the Secretary of State and the BBC requires the BBC, to have programmes of an educational nature…as well as formal education".

This loosely worded double requirement allows the BBC to blur the distinction between education programmes and programmes with some educational content. This amendment separates the two elements, thereby requiring the nature of each to be understood and addressed.

At present, the Bill provides that the Broadcasting Standards Commission will have responsibilities in two areas: first, the treatment of individuals in respect of fairness and privacy; and secondly, standards of taste and decency. Both of those involve it reacting to actual or potential broadcasts. Placing a third responsibility on the Commission to ensure high standards in education broadcasting and broadcasting with some educational content will allow it to adopt a positive role which will set an example to the other public service broadcasters.

The need for an amendment of this kind arises from concern about the changes which seem to have occurred in the BBC's education broadcasting provision over the last year. The BBC is seeking higher ratings by diluting its education mission. Evidence of this dilution is provided by the fact that the chat show "Esther", presented by Esther Rantzen, the antiques quiz show "Going for a song" and the entertainment programme "Ruby's Health Quest", as well as "My Brilliant Career", the documentaries about failed businessmen, are all examples of programmes which have been funded by the education budget. I know the arguments which the BBC puts forward to justify such programmes.

The BBC's ring-fenced budget for adult education, Education for Adults, is now being transferred into general programming and the controllers of BBC 1, Alan Yentob, and of BBC 2, Michael Jackson, have effectively been given the power to decide what programmes are educational and who should make them.

At this point I want to remind your Lordships that this is the International Year of Life-Long Learning. This very morning I received a document from the National Institute of Adult Continuing Education, its response to the Government's consultation document on lifetime learning. I should like to read from its page on broadcasting. It states: The 1990 Broadcasting Act ended the obligation on terrestrial independent television companies to provide educational programming for adults. Yet all the evidence points to the importance television can play in reaching under-participating groups free at the point of use in their own homes, and motivating people to participate in education and training activities … The adult literacy campaign of the 1970s was kick started by prime time television, through BBC's On the Move. Adult Learners' Week each year includes programming on all channels backed by a freephone helpline, attracting some 50,000 people, more than half of whom are unemployed to phone seeking opportunities for adult learning. An impressive number turn the enquiry into active enrolment. The BBC/ALBSU"—

that is the learning programme for those with learning difficulties— Family Literacy adverts in 1995 stimulated 350,000 people to phone for family literacy packs. Terrestrial television is still a major influence on the lives of Britain's adults, and is likely to remain so".

It is important that programmes are available at prime time. It is because people just happen on these programmes that they have such an effect. They are not going to video programmes—they may well not have a video—and if they are broadcast at midnight they are not going to get them and the whole effect will go.

We want to encourage regulators to approve programming designed to motivate, like short promotional sketches. At the same time, the Government should welcome the development of dedicated programming, like that on the Learning Zone, which reaches already committed learners, while—and this is important—maintaining an obligation on the BBC and Channel 4 to provide accessible programming for adult learners during prime time evening slots, as well as after midnight and in the afternoon. I hope that that plea from the national institute will have some effect.

Seventy per cent. of programmes will be made by independents or other BBC departments. The BBC justifies this change by contending that any factual programme-maker can make education programmes. The BBC is reducing the number of new television programmes it is making for schools. It will be making only 90 hours a year, fewer programmes than Channel 4 is required to make for schools. The BBC is also asking producers who have no experience of making schools programmes to start making them.

Schools programmes require very different skills from those needed to make mainstream television programmes. One important reason for that is that schools programmes need to follow the national curriculum and need to be a suitable resource which teachers can pursue effectively in the classroom. With favourite and memorable programmes such as "You and Me", "Storytime" and, more recently, "Come Outside" and "Hotch Potch House", the BBC has built a distinguished reputation in programmes for the under-fives. The programmes carefully lay firm foundations for children before they enter school. These programmes will all disappear, replaced by a daily programme made by children's entertainment producers. There has been no involvement from the BBC's education policy unit in supervising a proper education framework for the programmes. This has resulted in the distinction between education programmes and programmes with some education content being blurred.

While this amendment seeks guidance for both categories, its purpose is to ensure that the content and methodology of education programmes meet, and continue to meet, the highest standards of production practice. This includes ensuring that any curriculum requirements are met; that proper account is taken of changes in teaching practice; that the programme is appropriate to the age and other characteristics of the intended audience; and that effectiveness of the programme (or series) in fulfilling its educational function is evaluated.

Only if those and similar criteria are met will it be possible for the BBC to fulfil its obligation to disseminate education, which is expressed in the draft Charter and the draft Agreement. I wish to make it clear that I have great belief in the BBC and I very much respect what it does. I believe that, because of the need to keep up its ratings and because of the money involved, it has perhaps been forced into doing what I have been complaining about in the amendment. I strongly believe that provision for education should be written on the face of the Bill and I hope that the Minister will appreciate my keenness in wanting to provide that in the amendment. I beg to move.

Lord Donoughue

My Lords, perhaps I may add briefly to what my noble friend said and make a couple of general points which go wider than the BBC, though including it. There is no provision in the Bill to enable education to benefit from the greater scope and opportunity for choice and for specialist broadcasting, such as education, which is provided by the digital revolution. That is the positive side and the positive opportunity that is missed.

The negative side relates to a time in the future when the BBC and Channel 4 analogue services cease; when they are switched off. We shall then be left with the digital multiplex providers sitting on 12-year licences with renewal who will have no educational obligations whatever. All that we have helping education are the commitments in the BBC Charter for 10 years ahead. However, as I and other noble Lords pointed out when we debated the matter, those commitments have already been weakened.

Britain last had an opportunity to establish a specific education channel when BSB left the Marco Polo satellite vacant. That opportunity was not taken. We now have a new opportunity with digital television and this Bill and it would be wrong and sad to miss it again. I hope that the Government, in anything that the Minister can say today or in proceedings in another place, will find a way to improve the guarantees for educational broadcasting and in particular to write that into the Bill.

Lord Inglewood

My Lords, I expect that it will come as no surprise to the noble Baroness, Lady David, when I say at the outset that this is a matter for the Governors of the BBC and not for the BSC. The BBC's obligations in respect of the provision of educational programming are contained in its Charter and Agreement and it is for the Governors to ensure that those obligations are met. Similar obligations are placed on independent broadcasters under the 1990 Act. I do not believe that this is an area in which the BSC can usefully, or indeed appropriately, play a part, nor do I believe that it is desirable to single out the BBC or any other broadcaster for special treatment by the BSC, however important the sector may be, as is clear in this instance.

The BBC's record of providing educational programming is impressive. This year, BBC Education will broadcast over 4,200 hours of programmes. Nearly 80 per cent. of primary schools use BBC broadcasts. The BBC has operated in partnership with the Open University since 1970 and broadcasts over 2,000 Open University programmes on television and radio each year.

The BBC's new Charter and Agreement includes a new requirement in Clause 32(e) of the Agreement that home services: contain programmes of an educational nature (including specialist factual, religious and social issues programmes as well as formal education and vocational training programmes)". We have discussed the matter in a different context and on a number of occasions during debates on the Bill. There are a variety of ways in which those who believe that the BBC may not be honouring its obligations can take that matter forward. As I intimated earlier, I do not believe that what the noble Baroness proposes is an appropriate extension of those means. The BBC has also set out its aim to develop and strengthen educational programming over the coming years. It is increasing funding to the tune of an additional £1.5 million for the Education Directorate for the next year and is increasing broadcast hours of educational programmes.

The noble Lord, Lord Donoughue, painted a bleak and I believe unfair picture of the future of educational broadcasting. In the digital world the existing public service broadcasters will still be subject to the existing criteria in respect of educational matters. In addition, looking at the way in which the multiplex licences are to be allocated one sees that the core criterion as regards the services is that there should be variety. Within that variety there is great potential for educational services. Those who want to achieve multiplex licences must look to a wide range of programmes, which includes possible educational programmes.

I believe that a fair picture of the future is not emerging in front of us; it is said that there will be a desert for education. The Government see the amendment as unnecessary and an entirely unjustified expansion of the BSC's remit into a new area. For those reasons we would resist it.

Baroness David

My Lords, I thank the Minister for his careful answer. As he said, it was not altogether unexpected, particularly his comments about attaching the amendment to the BSC. I hope that his predictions will prove to be correct: we shall be watching most carefully. I am most anxious about those adults who have not had a good education and about young people who have missed out and at 16, 17 or 18 are not sure what they want to do. They may happen to see such programmes quite by accident and may be taken with them. They may then decide that they want to go on to further education or to obtain some qualifications. I am afraid that such people may miss out.

We shall be watching the situation carefully and I hope that provisions for education can be put on the face of the Bill and pursued a little further in another place. Clearly, at this time the only suitable thing for me to do is to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7 p.m.

Clause 79 [Power to publish guidance relating to avoidance of unjust or unfair treatment or interference with privacy]:

Lord Inglewood moved Amendment No. 30: Page 68, line 8, leave out ("guidance relating") and insert ("a code giving guidance as").

The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment No. 31.

Your Lordships will recall the debates which we had during Committee and Report stages where the noble Lord, Lord Chalfont, and others proposed a number of amendments intended to change the wording used in the Bill to describe the BSC's "guidance" on fairness. The Government have listened carefully to the concerns of those noble Lords, and have, after careful consideration, decided that the existing wording is, indeed, anomalous.

The Government's Amendment No. 30 is therefore intended to rename the existing "guidance" as "a code giving guidance". That will have the effect of standardising the form of words used across the broadcasting spectrum: in the Bill, in the 1990 Act, and in the BBC's new Charter and Agreement.

I am aware that some noble Lords would prefer the Government to go further. However, the Government remain satisfied that the form of words used here is sufficiently clear and has been effective in the past.

The Government have also reconsidered the role of the BSC's fairness code, and the Government's Amendment No. 31 would require broadcasting and regulatory bodies to reflect that code in drawing up or revising their own guidance, just as they are at present required to do in respect of the BSC's standards code. I beg to move.

Viscount Caldecote

My Lords, in Committee I moved a similar amendment designed to strengthen the clause. Amendment No. 30 accepts very largely the principle which I tried to put forward. Therefore, I am extremely grateful to my noble friend on the Front Bench for accepting in principle what we were trying to achieve. That is another example of his listening carefully to what was said and being ready to try to accommodate us whenever he can. I am extremely grateful to my noble friend.

On Question, amendment agreed to.

Lord Inglewood moved Amendment No. 31: Page 68, line 13, at end insert— ("( ) It shall be the duty of each broadcasting or regulatory body, when drawing up or revising any code relating to principles and practice in connection with programmes, or in connection with the obtaining of material to be included in programmes, to reflect the general effect of so much of the code referred to in subsection (1) (as for the time being in force) as is relevant to the programmes in question.").

On Question, amendment agreed to.

Clause 83 [Complaints of unfair treatment etc.]:

Baroness Dean of Thornton-le-Fylde moved Amendment No. 32: Page 71, leave out lines 2 to 7.

The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 34 and 35, all of which deal with the issue of direct interest. It is not a new subject. It was discussed in some depth in Committee. Indeed, at the invitation of the Minister we withdrew an amendment because the Minister suggested that both the Government and I should reconsider the matter.

He suggested to me also that perhaps a lawyer should look at the amendments because I drafted the amendments for Committee stage and, of course, I am not a lawyer. We have done that, and the amendments before the House this evening have been drafted by a lawyer. However, I gather that the department may have a different view about their legal status and, indeed, the breadth of the amendments.

From some points of view, although certainly not from mine, direct interest is a potentially controversial area. Therefore, it may help the House if I say what the amendments are not about before I go on to describe what they are intended to achieve.

The amendments are not about the whole area of impartiality or incorporating that aspect into the Bill. That has been discussed previously. If that were the intention, neither the Broadcasting Standards Commission nor any other public commission would have the resources to deal with issues about which any member of the public or group, whether or not incorporated, could make a complaint. Nor are the amendments about party political broadcasts and impartiality in that respect. Indeed, that is covered by Clause 107 of the 1990 Act.

So what are the amendments about? They aim to deal with the situation in which a programme is unfair. It may not be unfair to one individual but, rather, unfair in relation to a group of people or perhaps in relation to a very narrow subject area.

Both the 1990 Act and this Bill leave open to judicial review the question of redress. When I was a member of the Broadcasting Complaints Commission—and I declare an interest in that I was a member of that commission until about 15 months ago—complaints were often received in which we felt that there was a sufficient direct interest. That was then challenged by the broadcasters who indicated that they would take the matter to judicial review. Sometimes they did and sometimes they did not carry out that threat. Of course, although individuals may have such a legal right, they do not have that right in practice because of the cost involved. When the commission is taken to judicial review, the cost is on the public purse.

These amendments intend to avoid that situation. I approach the amendments from the point of view that I assume that when the Secretary of State appoints members to the Broadcasting Standards Commission the individuals appointed will be responsible; they will consider all the aspects of the case before accepting it and accept accountability and responsibility for that. Therefore, the Secretary of State should be prepared to give credit to and trust to the commission.

In the past 18 months, there have been two judicial reviews in relation to the issue of direct interest. One case was in relation to a village called Elmton. In that case, the judge accepted that there was a direct interest as a broad concept. In that case the parish council felt that it had a defined interest in a programme which alleged that that small Derbyshire village harboured racists. Therefore, as a consequence, the complaint was covered by the provisions of the 1990 Act.

In that same period of 18 months, a complaint was made in relation to the National Council for One Parent Families. That was referred to in Committee and the Minister has written to me about that. In that case, the judge cast doubt on the Elmton judgment but he did not give the reasons behind those doubts or how he had reached his conclusions. Did the National Council for One Parent Families fail the direct interest test because it was a national body representing hundreds and perhaps hundreds of thousands of unidentifiable people—lone parents in that case—or did the judgment in that case mean that no representative body may complain unless it can point to named individuals? Does the size of the organisation matter? Is the membership of the organisation crucial in judging direct interest? Should a body which represents members of our community who, by the very nature of their disability—for example, people with mental disabilities—are unable to become members or indeed to complain, be prevented from representing that particular group in relation to direct interest?

I mentioned the case of the National Council for One Parent Families, and that is a good example of the direct interest issue. In that programme, a young woman by the name of Michelle Ellis was treated unfairly. The complaint was dealt with and the commission found unfairness. But under that very narrow definition of direct interest, the Broadcasting Complaints Commission could not deal with the programme as a whole. Indeed, there were sections within that programme which were judged to be unfair in their treatment of the issue but they did not relate directly to Michelle Ellis who made the complaint.

I suggest to the House that the amendments before us this evening relate to the raison d'être of the Broadcasting Complaints Commission. For example, what would happen in relation to a programme which unfairly treated people who are blind? Could the RNIB make a complaint? Could SANE make a complaint on behalf of people with mental disabilities? Could trade unions make a complaint on behalf of their members?

If the Broadcasting Standards Commission is not given jurisdiction in such cases as having sufficient direct interest, I believe that many will go without redress. Without the new body there is no redress except through the courts. We are dealing with groups of people who do not have the resources—either financially or otherwise—to take such issues through the courts. The amendment would not open the floodgates as has been suggested by some people. Left as it is, judicial review is something which in my view will happen increasingly as the new commission tries to carry out its responsibility to viewers and listeners. I beg to move.

Lord Inglewood

My Lords, I am most grateful to the noble Baroness for having explained to me her thinking behind the proposed amendments, and for letting me see an early version in draft form. I understand that she takes as her starting point in the issue the case of the "Panorama" programme "Babies on Benefit" where, noble Lords will recall, the court found that the Broadcasting Complaints Commission was acting beyond its remit in entertaining a complaint from the National Council for One Parent Families. I shall take the amendment in the sense described so helpfully by the noble Baroness.

The issue in that case was that the complaint in question was brought to the BCC by the organisation, not on behalf of a named participant in the programme but on behalf of the interests of single mothers. In establishing the BCC, the Government's intention was that it should defend the personal rights of those appearing in television programmes. The same role is intended for the new commission. It was not the Government's intention that either commission should be used as a forum for interest groups to air their grievances about the treatment or representation of groups of individuals who might be indirectly affected by a programme.

The Government are particularly concerned that the commission's role, in providing an opportunity for those who feel that they have been treated unfairly by a broadcaster, or had their privacy infringed in some way, should not he diluted. There is no reason why an interest group, or a representative of one, may not be authorised by an individual to make a complaint on his or her behalf. Both the 1990 Act and the Bill allow for that to happen. If, in the case that I mentioned earlier, the interest group had been authorised by an individual featured in the programme to make a complaint of unfair treatment, then the BCC could quite legitimately have entertained the complaint.

I think that in that context it is important to be clear that there is nothing to prevent a complaint of the kind that the noble Baroness is concerned about being made to the regulator; that is to say, the Governors of the BBC, the ITC, the Radio Authority in the case of a radio programme, or the Welsh Authority. That seems to us to be the right way to deal with the type of matter under discussion. It is for those reasons that the Government feel that it is both unnecessary and unhelpful to extend the commission's remit in the way proposed. Therefore, we resist the amendments.

Baroness Dean of Thornton-le-Fylde

My Lords, I thank the Minister for his response. I do not welcome it, but at least it makes the Government's position clear. After considering both the meeting that I had with the Minister and the exchange of correspondence that has taken place between us, I regret to say that there still seems to be a block between us on the matter. It may be that a programme is unfair, but it may not be unfair directly to one individual featured in it. That is where the kernel of the matter lies. I expect that the devil is in the detail in the sense that the Minister is obviously concerned about having a remit which is open-ended. That is not the intention of the amendment.

Normally when we are told that complaints can be made to the BBC or, indeed, to the regulator, one would welcome such information. However, I have not yet built up the confidence in either of those two areas that I believe the public have as regards the old Broadcasting Complaints Commission and the Broadcasting Standards Council, both of which will be replaced by the new body. The Minister's response does not meet the points that we have made. I hope that the issue will not be dropped; indeed, I believe that it will be raised time and time again. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.15 p.m.

Clause 87 [Consideration of fairness complaints]:

Baroness Dean of Thornton-le-Fylde moved Amendment No. 33: Page 72, line 42, at end insert— ("(f) to provide the BSC in respect of unfairness complaints with full unedited visual or sound recordings and transcripts of the making of the programme which is the subject of the complaint so far as the relevant person has in his possession a visual or sound recording of it,").

The noble Baroness said: My Lords, the above amendment deals with an issue that was tabled on the Marshalled List in Committee to which the Minister gave a most helpful response and to which we now return. I have to say that the Minister has also written to me on the matter and indicated that the broadcasting companies have been approached by his department. However, as of last Friday, I believe they had not all responded. I am not in a position to say whether that indicates their interest in the matter, in that they think that if they do not answer the matter will, perhaps, go by the wayside.

However, I am in a position to judge the fact that time and time again one would have complaints about a programme from an individual—and there is no division between us in that area. The complaint would be accepted as legitimate and, in the process of dealing with it, questions would be put at the oral hearing to the complainant, who would say, "Yes, I know it says that in the programme but, if you look at the whole interview; you will find that just before that part that was edited and shown I said this or that and omitting it completely put out of context what I said".

On many occasions the broadcasters would hand over the unedited tapes—the rushes, as I believe they are called—and that would help considerably. Sometimes it would help the commission find in favour of a broadcaster and sometimes in favour of a complainant. But by no means are they available by right. For example, if one had a broadcast from an independent producer, as sometimes would be the case, he might say, "Sorry, we've destroyed those tapes". One would then be left with the programme and, therefore, unable in some instances to reach a really fair adjudication either as regards the broadcaster or, indeed, the individual complainant.

I shall be most interested to hear the Minister's response to the amendment and to know whether he has heard from the broadcasters. Their views would certainly be most welcome. I should point out in conclusion that the amendment was not intended to develop a situation where we would have a warehouse south of the river housing hundreds and hundreds of tapes indefinitely simply to meet that provision in the Bill. That was not the intention. Indeed, it would not be necessary. If one looks at the position as regards radio, the stations are required to keep all tapes for three months after transmission of the programme. A provision along those lines would be most welcome, especially as there is a time limit on the ability of individuals or organisations to make complaints under the Bill. I beg to move.

Lord Inglewood

My Lords, the noble Baroness has again been most helpful in her introduction of the amendment. As she said, and as noble Lords will recall, the noble Baroness previously tabled the amendment, which would require broadcasters to provide the BSC with transcripts and all available unedited material used in the making of a programme against which a fairness complaint had been made. At that time I said that the Government would resist the amendment. However, I subsequently met the noble Baroness and, having heard her arguments, agreed that we would consider the matter further.

The noble Baroness will know that the Government are not unsympathetic to her desire to ensure that broadcasters co-operate with the BSC in providing sufficient information to enable the commission to reach a properly informed adjudication. However, after careful consideration of her proposals, in consultation with broadcasting and regulatory bodies, a number of practical difficulties have presented themselves.

One problem lies with the lack of a corresponding requirement upon broadcasters to retain the additional material in question. Clearly—and the noble Baroness has, I believe, acknowledged this point—it would he quite impractical and unreasonable to require broadcasters to find the additional resources and space to store such material for all programmes. As the noble Baroness pointed out, the unedited material used in making a programme may be several times the quantity of that used in the final transmission. However, in the absence of such a requirement, there is nothing to prevent an unscrupulous broadcaster from simply deliberately destroying, before a request has been received, any material which he does not wish to hand over were such a request to be made.

Additionally, there could also be quite legitimate reasons why a broadcaster might be unwilling to hand over such material; for example, it might infringe the privacy of other participants in the programme or reveal a confidential journalistic source. We wish to avoid giving the BSC powers which would go beyond those available to the courts to demand material without hearing argument and without a public interest exemption in situations where the courts would need to make an order under the Police and Criminal Evidence Act.

These are important points which we shall have to take into account. However, we remain sympathetic to the thinking behind the amendment of the noble Baroness. With your Lordships' leave, I should like the opportunity to consult more widely before the Government's more detailed response is made to another place.

Baroness Dean of Thornton-le-Fylde

My Lords, that was a helpful response, particularly as regards the latter points the Minister made. In our experience of the Bill, when a measure has been promised it has been forthcoming. We respect the integrity of the Minister as regards his proposal. I shall await with interest the Bill's passage in another place to see what emerges. I thank the Minister for his response. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 101 [Interpretation of Part V]:

[Amendments Nos. 34 and 35 not moved.]

Baroness Trumpington

My Lords, I beg to move that further proceedings on the Third Reading of the Bill be now adjourned. In moving the Motion I suggest that we do not return to this business until twenty minutes past eight o'clock.

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