§ 4.16 p.m.
§ Baroness Blackstone
My Lords, with the leave of the House, I shall now repeat a Statement made in another place today by my right honourable friend the Secretary of State for Culture, Media and Sport. The Statement is as follows:
"With permission, Mr Speaker, I should like to make a Statement on behalf of my right honourable friend the Secretary of State for Trade and Industry and myself on the draft Communications Bill, produced jointly by our departments and published today. Copies have been placed in the Library and are available from the Vote Office, along with a policy document and Explanatory Notes. It is also available on the world wide web.
"The White Paper in December 2000, A New Future for Communications, set out the Government's objectives: creating a dynamic market; universal access to a choice of diverse services of the highest quality; safeguarding consumers and citizens; and minimising regulation. Everything we announce today flows from those principles.
"The communications industry is of immense importance to this country, so we are determined to proceed wherever possible with the fullest consultation and consensus. That is why we consulted further on media ownership. That is why the Bill published today is in draft and subject to scrutiny by a Joint Committee of both Houses.
"That degree of consultation on major legislation is perhaps unprecedented, but it is important that the legislation has the confidence of the industry and the public.
"There is general agreement that the existing regulatory framework has become outdated by the rapid changes in technology, markets and consumer behaviour over the past six years. The communications industries are regulated in different ways by separate regulators, yet they are coming increasingly closer together in their ownership and their operation.
"The evidence is all around us. TV and radio companies are linked to newspapers, traditional media are developing web sites and cable companies deliver television, radio, telephony, interactive services and broadband Internet.
1016 "This converging industry needs a converged regulator, providing industry-specific regulation with a light touch—a framework which protects the citizen while setting business free and a regulatory framework which offers certainty where it is needed for business plans and investment, and flexibility where it is needed in a fast-moving environment.
"Previous legislation in 1984, 1990 and 1996 has left us with clumsy regulation that inhibits investment and reduces efficiency. The ownership rules send the signal that the UK is not open for investment in our communications industries. The rules on newspaper ownership are opaque, discriminatory and still retain criminal sanctions. The rules on news on ITV have seen investment in ITN fall.
"Furthermore, technology is changing, throwing up new challenges and new opportunities. The case for change is compelling. The twin ideals of regulation are to be light in touch yet effective. The current rules are neither.
"The communications industries are vital to the health of the British economy and to our democracy. Every week we watch over 1 billion hours of television, listen to over 1 billion hours of radio and buy 100 million national, regional and local newspapers. The BBC licence fee costs each viewing household £112 a year and raises £2.5 billion. We send billions of text messages a year. Three-quarters of adults use mobile phones, and 24 million people have Internet access in their homes.
"Crucially, our democratic debate could not take place without the newspapers, television channels, radio stations and Internet sites that tell what is happening. These sources can be biased, sometimes wrong and occasionally strident. But there are many of them, and people can hear many voices. This plurality must be protected at all costs.
"The White Paper proposed one regulator—Ofcom—to replace the ITC, the Radio Authority, the Radiocommunications Agency, the Broadcasting Standards Commission and Oftel. It also suggested the following: Ofcom to have sector-specific powers to promote competition; quality public service broadcasting to be protected; measures to ensure universal access to public service broadcasting channels over all main platforms; the consolidation of ITV, subject to competition rules; the simplification of regulation for commercial radio; BBC regulation to be brought within Ofcom for basic standards and for specific PSB requirements, while retaining the regulatory role of the BBC governors; and the promotion of broadband. Since then, policy has been developed and you see the detail in this draft Bill, supplemented by the policy document.
"I turn now to the structure of Ofcom. Its top board will operate at the highest strategic level. It must be able to move quickly and with agility to address issues in a fast-moving sector. At the heart of its operations will be its sector-specific 1017 responsibility to promote competition to curb abuses of dominant market positions and to ensure fair access to dominant network systems and platforms. In addition, all broadcasters, including the BBC for its commercial services, will continue to be subject to the Competition Act.
"Ofcom will have a number of other duties to promote certain interests, especially those of the nations and regions. That is why we are providing for Ofcom to establish a content board as an integral part of its structure. It will be a significant body, bringing together diverse interests, including those of the different nations of the United Kingdom. There will also be a consumers panel, able to articulate the needs and views of consumers—again, with strong representation from Scotland, Wales and Northern Ireland.
"The draft Bill proposes a regulatory regime which will be lighter in touch, with greater reliance on self-regulation by all broadcasters. Ofcom will be taken out of day-to-day regulation and will use its backstop powers only if licensed broadcasters fail to deliver.
"Ofcom's responsibilities will extend to the BBC for the basic broadcast standards and for agreed quotas for such things as regional production, while also setting the general standards across the industry. It will be responsible for general reviews of public service broadcasting.
"However, the quality of BBC output under its public service remit will remain fully regulated by the governors. This regime, with its detailed scrutiny by governors, is a measure of the special role the BBC fulfils. This system has developed because the BBC's obligations are the greatest, not the least.
"But we recognise that the media of the future must provide the high-quality public service broadcasting that people have enjoyed in the past. Competition alone cannot guarantee this. Public service broadcasting nurtures creativity. It is vital to independent producers. It provides training grounds which sustain the whole sector. It meets the particular needs of local and regional communities, both in programming and in production. And, in the case of the BBC, the £2.5 billion raised annually by the licence fee is venture capital for the whole of British broadcasting.
"Most importantly, public service broadcasting works for the public. The draft Bill therefore proposes for the first time to define 'public service broadcasting' and to consolidate in statute the hierarchy of public service broadcasting that viewers and listeners will readily recognise.
"The draft Bill is much more than a new system for regulating the content of TV and radio broadcasting. Telecommunications become ever more important to our economy and to our society. By bringing together the functions of Oftel and the Radiocommunications Agency with those of the Independent Television Commission, the Radio Authority and the Broadcasting Standards 1018 Commission, we will ensure that content, economics and technology are viewed as a piece, not as fragments.
"The competition responsibilities for Ofcom are intended to deliver dynamic competitive markets in networks and infrastructure as well as in content. Our economy needs access to networks to be opened up. That needs a regulator that is light in touch where possible but powerful where necessary.
"The new regime for telecommunications will enable Ofcom to operate within a harmonised European framework, providing greater certainty so that UK companies are better able to sell their services abroad. The new regime will be lighter in touch, removing the requirement for licensing of telecommunications systems, thereby removing about 400 licences, and replacing it with a much simpler regime for electronic communications. The new regulator will have the right responsibilities and powers to promote competition, tackle abuses and make sure that consumers' interests are protected.
"We will also extend the principles of deregulation and market competition to the allocation of the radio spectrum by introducing spectrum trading. Spectrum is to the modern age what iron and steel were to the first Industrial Revolution. It must be used efficiently.
"Companies need to know that they can gain access to spectrum so that they can bring their ideas to the market. In future, as well as being able to apply for a licence, firms will also be able to buy spectrum from an existing user. This should prevent the hoarding of spectrum, increase the number and range of users, deliver significant benefits to businesses and consumers, and promote the innovation on which future UK competitiveness depends.
"These proposals are broadly in line with the recommendations of Professor Cave's independent review of spectrum management, published in March. We intend to respond to this review by the summer and I would therefore emphasise that all the spectrum management provisions are subject to revision.
"The draft Bill will continue our policy of not imposing regulation on the operation of the Internet, although we will continue to work with the industry to improve the standards of protection available through self-regulation.
"Lastly, I come to media ownership. Competition, and competition rules to regulate undue economic power, are increasingly recognised here and abroad as the best means of delivering innovation, investment and employment. It is our intention to apply the same principles to the communications industry.
"But the media are different from other industries in one crucial respect—They are uniquely import ant to the debate that underpins our democracy. Citizens need access to a range of different media 1019 voices if they are to take informed decisions. We need a system that delivers a plurality of owners, none dominant, and a diversity of output.
"Our approach is simple and proprietor-neutral. We will deregulate' where it is possible to rely on competition law to maintain a wide range of voices. Where it is not, we will establish clear, predictable rules. The changes we are proposing today will remove barriers to investment, will encourage innovation and will allow companies to consolidate and expand.
"Ofcom will combine the important twin roles of promoting competition while protecting plurality and diversity. Within TV, radio and newspaper markets, competition law will tend to encourage dispersed ownership and new entry. We will therefore remove most ownership rules within those markets, retaining only those we need as minimum guarantees of plurality.
"Overall we intend to remove or relax most rules concerning media ownership while keeping those necessary to protect the public interest. We will strengthen safeguards for news and other broadcast content. The rules we will scrap include those which prevent single ownership of ITV; those which prevent large newspaper groups from acquiring Channel 5, and those which prevent ownership of more than one national commercial radio licence. We will ease the complex rules preventing consolidation of ownership of local commercial radio. We will scrap the criminal sanctions that apply in the newspaper merger regime.
"We also intend to scrap the inconsistent rules that prevent the non-European ownership of some broadcasters. It makes no sense that French, Italian or German companies can own TV and radio licences but Canadian, Australian or US companies cannot. The resultant inward investment should allow the UK to benefit rapidly from new ideas and technological developments. New blood, new competition, will help give our industry the edge.
"The recent CMS Select Committee report on communications, for which I thank my right honourable friend and his colleagues, made a case for relying on competition law. But we do not believe that this alone will guarantee the plurality of ownership that democracy demands. We will therefore retain three key limits on cross-media ownership to safeguard debate at every level: national, regional and local.
"First, recognising that most people get their news and information from national newspapers and from terrestrial television, we will keep a simple rule that any newspaper group with over 20 per cent of the national market will not be able to own a significant stake in ITV, the only commercial public service broadcaster with universal access to a mass audience, currently 25 per cent of all TV viewing. Secondly, a parallel 20 per cent rule will prevent anyone with a dominant position in local newspapers owning the regional ITV licence in the same area. Thirdly, there 1020 will be a scheme to ensure that at least three commercial, local or regional media voices exist—in newspapers, TV and radio—in addition to the BBC in almost every local community.
"Where necessary we will retain and strengthen content regulation to ensure the quality, impartiality and diversity of broadcasting services. Ofcom will have the power to investigate the news and current affairs programming of any local radio service if it has concerns about accuracy or impartiality. It will have a new duty to protect and promote the local content of local radio services. It can vary any licence on change of control to ensure the character of the service is maintained. For ITV, this will protect regional production and programming requirements. It will oversee the nominated news provider system for ITV to ensure high-quality and independent news on freeto-air public service television.
"In sum, these changes will be deregulatory. We will depend more on competition, and on competition law exercised by a sector-specific regulator. Ownership regulations will disappear or be reduced. Self-regulation will be extended wherever possible. Complex schemes for licensing networks and access to them will be scrapped and replaced with a streamlined system. All regulations will be reviewed regularly.
"The rules that will remain will be simple and purposeful: a streamlined system for newspaper mergers; simple limits on cross-ownership of ITV and the largest newspaper groups; minimum levels of ownership for local radio, and for cross-ownership by local newspapers; content rules in broadcasting to ensure UK production, regional production, local and regional programmes and accurate, impartial news and information; and public service broadcasting protected in the digital future as it has been in the analogue past.
"Reform of the regulation of this vital sector is a major task. The draft Bill will exceed 250 clauses. The accompanying documents also indicate areas of policy not yet fully reflected in the draft clauses, notably those giving effect to the policies on media ownership which I have announced today. Like the changes to the BBC agreement, these will be published shortly so that they can be considered alongside the draft Bill.
"Our proposals are subject to a three-month consultation period and I am delighted that both Houses have agreed also to subject the draft Bill to pre-legislative scrutiny. We shall bring forward the Communications Bill itself as soon as parliamentary time allows.
"My right honourable friend and I want Britain to have the most dynamic communications industry in the world. We want Britain to continue to have the best quality TV and radio in the world. This Bill is the route map to making these ambitions a reality. We look forward to hearing the views of honourable Members, and we commend the draft Communications Bill to the House".
My Lords, that concludes the Statement.
§ 4.36 p.m.
§ Baroness Anelay of St Johns
My Lords, I thank the Minister for repeating the Statement made by the Secretary of State in another place. There is much to welcome within it, as far as we can appreciate from the lack of detail. Certainly, its length—I do not complain about the length at which it had to be made—reflects the sheer complexity of the Bill and the wide array of issues it covers.
I welcome the commitment to the promotion of competition and the fact that there will be an attempt to define public service broadcasting within the Bill, welcome the relaxation of onerous regulation, which is no longer justified. However, when we see the detail the acid test will be whether the Government can deliver. When I entered the Chamber I was not able to get hold of a copy of the Bill or of the Explanatory Notes, which I understand are contained in a volume that is as large as most Bills, if not larger. Indeed, the policy statement is another lengthy government publication. There is much for us to consider before we come to decision on the detail. However, overall the acid test will be whether the Government are able to achieve light-touch regulation, ensuring that Ofcom is powerful where necessary—I welcome that commitment by the Government—or whether we end up with a heavy-handed regulator which deals with micro-management rather than stepping back from detailed regulation.
The lengthy Statement today seems to slide by the fact that as long ago as 1997 the Government promised in their manifesto that this Bill would be upon us. At that stage we did not expect that it would be only a draft Bill. However, here we are. After all those years of gestation the broadcast and telecoms industries have moved on rapidly yet we have a Bill that is defective, in the Government's own admission, because it omits significant sections on cross-media ownership and spectrum.
The question we have to consider is how the Joint Committee will be able properly to scrutinise the Government's proposals on those matters alongside the draft Bill clauses. The Minister states that there should he efficient use of spectrum. I welcome that commitment. We all agree with that. The question is how she will achieve that. The noble Baroness said that the Government intend to respond to Professor Cave's independent: review of spectrum management by the summer and that all spectrum management provisions are therefore subject to revisions.
The Minister went on to say that the changes to the BBC agreement and to cross-media ownership will be published shortly so that they can be considered alongside the Bill. However, she then stated that all the proposals are subject to a three-month consultation period. That means that the working period of the Joint Committee will be parallel to the period of consultation on those significant proposals which should he in the main Bill. The question is how the Joint Committee will be able properly to organise its work to take into account the responses which must 1022 necessarily be sent to the Government on the Bill unless it is in a position to hear evidence from all those organisations which will respond to the Government.
The Joint Committee has a tough task ahead. The telecom and broadcast industries have had to wait a long time for the Bill. It is important that we look at the issues in detail. However, I should like to ask a few general questions today.
The Minister referred to the relationship between Ofcom and competition law. How will the Government resolve the relationship between Ofcom and the Competition Commission? Who will have primacy in decision making when decisions relate to both? Can the Minister explain what protection consumers will have by virtue of the special treatment being accorded to the BBC which still leaves it partly outside the remit of Ofcom? Does the Minister agree that it is important for Ofcom to deal fairly with all the broadcast and telecom providers with regard to the specific aspect of the electronic guide?
I welcome the Minister's comment that the Government want to be neutral when dealing with cross-media ownership issues. I direct her to the Government's approach to people who are platform providers in broadcast and telecoms. How do the Government intend to ensure that there is fair access to the electronic programming guide? A similar question arises in relation to fair access to platforms.
The failure of ITV Digital casts a long shadow over the digital broadcast business. I hope that we shall all be able to work together to force that shadow back as rapidly as possible for the health of our broadcast industries. Do the Government still set their target date for the switching off of analogue as 2006 to 2010? Does the Minister accept that a viable digital terrestrial platform system is essential to the digital future of telecoms and broadcast industries and that the DTT platform should give their customers access to pay-TV as well as to free-to-air channels to avoid their being treated as second-class consumers?
I believe that the Joint Committee's members have a difficult task ahead. I pay tribute to all members but noble Lords will appreciate that I have to say a particular thank you to my own Bacic-Benchers who have agreed to serve on the committee: the noble Lords, Lord Crickhowell and Lord Pilkington, in this House, and my honourable friend Mr Andrew Lansley in another place.
Before concluding today, I think it appropriate better to acquaint the press with what may or may not happen behind the scenes in your Lordships' House. I was disappointed to read the press stories about who may or may not be chairman of the Joint Committee. When the issue was raised in this House, there was a cross-party agreement that pressure should be put on the Government for the establishment of a Joint Committee. The Government agreed to that. It was a case of the House working together.
The stories have been, first, that a Conservative Peer would chair the committee. I do not know of that. It was not a decision taken. There were stories also that the Government had put pressure on the 1023 committee to elect a Labour Peer as chairman. That is not for me to know. I am of the opinion, as I am sure are my noble friends, that it is for the committee to decide who the chairman will be. As a personal matter, I fully support whatever decision the committee makes. I know that my colleagues would also say happily now that we respect the integrity and ability of both Labour Peers, with whom this House has worked for some time, who are to serve on the committee. We would accept with equanimity the nomination and election of either of those Labour Peers. Indeed, we would welcome either as chairman of the committee. Their abilities would be respected and we would work happily with them. I hope to knock on the head some of the somewhat ridiculous stories in the press. Ministers are unable to serve on the committee. In wishing to follow the spirit of the rules, shadow Ministers therefore did not press their suit to become members of the committee.
I shall follow the proceedings very carefully indeed. I was pleased to learn that the BBC will help me. If I cannot be there in person looking over the shoulders of the committee, the BBC has stated that it has made careful—I think rather clever—arrangements to ensure that the proceedings will be available either on broadcast channels or via the Internet, thereby performing its public broadcast remit.
Finally, I have one basic question with regard to the operation of the committee. If the Joint Committee makes a recommendation that the Government do not wish to accept, will the Government publish the reasons why they refuse to accept the committee's recommendation?
§ 4.47 p.m.
§ Lord McNally
My Lords, the noble Baroness, Lady Anelay, having referred to the press gossip, I was rather disappointed when she announced that the Conservatives are willing to accept a Labour nominee for chairmanship of the Joint Select Committee. My ears pricked up. I had thought that we might have a total deadlock between the Government and Opposition Front Benches whereby some humble Liberal Democrat might emerge as likely candidate. However, hopes were dashed again.
As the noble Baroness said, we have been awaiting the Bill for some time. Although there is a welcome, it is a "better late than never" welcome. On the other hand, it is important not to feel pressed to make snap decisions. Various crises and emergencies will always arise in the communications industry as in any other industry. I hope that we are legislating for the long term and will not be subject to premature "bounces". For that reason, like the noble Baroness, we welcome the decision to set up the pre-legislative Select Committee.
We also welcome the approach that the Government have taken to the BBC. In previous decisions, they have given the leadership and funding 1024 to prepare for the digital age. The noble Baroness recognised the special role of the BBC. Whoever thought of the phrase that the fee is,venture capital for the whole of British broadcasting",has my admiration. It is a better and more accurate description than that of a poll tax when describing the good that it does for all broadcasting.
It is important that the period ahead should be one of transparency and access for all who want to express their views. I welcome the Minister's statement that the Bill and its documents are on the world-wide web. I hope that the new technologies will be used to broaden consultation. It is also good that underlying the Statement was a rejection of the view of the Select Committee in another place that these matters could be left solely to market forces—something that we on these Benches do not accept.
For many reasons the Minister emphasised the democratic factors at work—the underpinning of the communications industry of our democracy. However, it is equally important that we have a communications industry which underpins and helps to strengthen the values of our culture and our regional differences.
The noble Baroness, Lady Anelay, raised the question that will be in many minds given previous experiences of turf wars between regulators. If Ofcom is to have responsibility for competition, will it have the final say; or will we get into long-drawn out tussles between the views of Ofcom and the competition authority? That point needs to be clarified. We welcome the content board, the consumer panel and the promise of regional representation. Will such regional representation be determined by the regional assemblies and the Scottish Parliament?
The devil will be in the detail. However, we welcome the Government's general gist that they envisage the restriction of cross-media ownership as essential for quality, diversity and choice in the media.
While giving the idea of a single ITV company a broad welcome, we need to ensure that the regional and public services commitments of the existing ITV companies are carried over into a single ITV company. Like the noble Baroness, Lady Anelay, I should like further clarification of the Government's thinking on the digital/terrestrial platform vacated by ITV Digital. We see this as an opportunity to introduce some real lateral thinking. It certainly should be used as a launch pad for the free-to-air offer. There again, if the Government really mean to keep to the 2006–10 framework, they must put muscle behind a campaign about the free-to-air offer. Far too many people still associate digital television with subscription television. We shall not reach the targets required unless we ensure that people understand that there is now a very high-quality, free-to-air service available to them.
I turn to one of our main concerns regarding some of the phrases used in the Statement; for example—a "streamlined system", "simple limits on cross ownership", and "minimum levels". It does not seem so very long ago that we were talking about the 1025 communications revolution in terms of it providing cheaper and wider access to communities, individuals, and small interest groups. We were told that it would be the "great liberator", but now legislation seems to emphasise making it easier for the big boys to get bigger, to get consolidation, with its concentration on all those words like "profitability", "cost efficiency", "shareholder value", "market share", and so on. Such phraseology may make sense to big, international conglomerates, but it may not be in the interests of local communities, local interest groups, and, indeed, our civic well-being in general.
Can the Minister tell us what will happen now to Channel 5? Is it really up for grabs? Perhaps I may leave the following thought in the Minister's mind. When the Sun newspaper was bought it was an almost defunct, former TUC newspaper; in other words, the nature of its influence depends on who owns it and what is done with it.
This Bill could be one of the defining pieces of legislation of the 21st century, provided that a framework for communications recognises the unique contribution that the communications industry makes not only to our democracy, but also to our culture and regional and national identities. Communications do not represent just another product like a tin of beans. Public service broadcasting is not simply a euphemism for market failure. If the Government demonstrate a belief in those maxims, they will have our support in creating a piece of legislation of which we can all be proud.
§ 4.53 p.m.
§ Baroness Blackstone
My Lords, I am most grateful to both speakers from the Opposition Front Benches for their very thoughtful comments about this big and complex piece of legislation; and, indeed, for the questions that they have raised. Due to the length of the initial Statement—about which I apologise—and the detailed questions that followed, I hope that noble Lords will forgive me if I take a little longer to respond than would normally be the case.
I am grateful for the broad welcome for the Statement expressed by both the noble Baroness, Lady Anelay, and the noble Lord, Lord McNally. I accept that the acid test will be light-touch regulation, the avoidance of micro-management, as mentioned by the noble Baroness, and, at the same time, as the noble Lord, Lord McNally, said, protection for the interests of local listeners and viewers so that it does not become simply a matter of deregulating for big business.
I shall try to deal with some of the specific questions raised thus far. The noble Baroness, Lady Anelay, raised a point on the BBC and consumers. As I am sure the noble Baroness will agree, viewers and listeners should make their views known principally to the broadcasters. The BBC's significant responsibilities are set out in its Charter and Agreement. The BBC governors are best able to ensure that the corporation does deliver; and, indeed, other public sector broadcasters are being put into a similar position, which is something I believe the noble Baroness will welcome.
1026 The noble Baroness asked what the Government's response might be to the Joint Committee's report. We shall publish a reasoned response as soon as we are able to do so after the completion of the report. The noble Baroness also made some general comments about timing. She seems to regret the fact that we have not travelled further down the road in this respect. I believe that she is being a little hard on the Government. We have said that Ofcom will he up and running by the end of 2003; and we are still on track to achieve that aim. We issued a White Paper, which obviously took some time to prepare. This was followed by a consultation period and, subsequently, a further consultation period on cross-media ownership.
While I am on the subject of consultation, I should tell the House that we are consulting separately on the Cave review. We can ensure that responses are available to the Joint Committee. It is important for us to consider such issues both properly and thoroughly. Parliament will have plenty of opportunity to debate any resulting changes when the Bill is eventually introduced.
Both the noble Baroness and the noble Lord, Lord McNally, asked about the relationship between Ofcom and the Competition Commission. I can confirm that Ofcom will have concurrent powers with the commission. It will normally be clear which is in the lead, but there will, of course, be some boundary issues—indeed, I shall not pretend that there will not—which will have to be agreed between the two bodies, so that industry knows early on which one will be in the lead. Clearly, they will have to work extremely closely together.
The noble Baroness also asked about electronic programme guides. I believe that our proposals add both clarity and certainty to a system that is already regulated by the ITC and Oftel through a joint working group. As I am sure the noble Baroness is aware, EPGs could become more important in the future; and, therefore, we need a statutory scheme. As for the issue regarding the switch from analogue to digital, I can confirm that our target is still to achieve this by the year 2010. That deadline has not changed as a result of the demise of one commercial company in the area.
I believe that I have answered most of the questions raised. However, in the light of one of the noble Baroness's comments, there is one important point that I should make clear with regard to the legislation; namely, the issue of late clauses and the Joint Committee. Where it has not been possible to provide draft clauses in the Bill published today, we shall make them available as soon as possible. We shall certainly do so while the Joint Committee is undertaking its work.
Finally, on the membership of the committee and its chairmanship, I just think that one should never believe anything that people write in newspapers. But I am extremely pleased to hear that the noble Baroness would be very happy with either of the nominated Labour members chairing the committee.
§ 5 p.m.
§ Lord Borrie
My Lords, perhaps I may ask my noble friend the Minister a question on cross-media ownership. I very much welcomed the points made in the early part of the Statement; that matters such as plurality and diversity are important and that mere economic matters should not be the only ones considered when deciding whether or not cross-media ownership is to be allowed.
The latter part of the Statement mentioned that although a number of perhaps tiresome and detailed regulations on cross-media ownership are to go, three limits—I cannot remember each one—are to remain. But I hope that I do not do the Statement an injustice by saying that they seemed to preserve into the indefinite future what one might call the "20 per cent rule".
Since the obviously approved criteria in the Statement of the need to have diversity of views throughout our media and diversity and plurality of ownership—which are for newspaper mergers at the present time, but only for such mergers enshrined in the Fair Trading Act—why could we not do away with all inflexible rigid rules, such as the 20 per cent rule? These matters could be determined in the first instance by Ofcom but then the Competition Commission and, if necessary, the competition appeal tribunal, which is set up in the Enterprise Bill.
The trouble with the 20 per cent rule is that it is inflexible and rigid. It may have been appropriate at the time of the Broadcasting Act 1996; it may be appropriate in 2002; but who knows whether it will be appropriate in 2010 or subsequently? Why not allow the appropriate authorities—I may not have mentioned them in their correct form—to determine in the circumstances in 2005–2010, whenever it is, whether, in considering the criteria of the need for diversity and plurality, the proposal for cross-media ownership should or should not be permitted?
§ Baroness Blackstone
My Lords, perhaps it will be helpful to my noble friend Lord Borrie if I run through the regulations we are removing and those we will keep. My noble friend said that it was not completely clear from the Statement. Foreign ownership rules will be scrapped. Regulatory barriers to a single ITV are removed, apart from the competition authority's scrutiny. That means that there can be a merger between Carlton and Granada. Joint ownership of TV and radio stations is allowed. Large newspaper companies can now buy Channel 5 and an increased range of radio stations. Significant consolidation will be permitted in radio markets. The regulatory burdens on newspaper owners of the special merger scheme are scaled down. That is a substantial change in the direction that the noble Lord wants to see happening.
The 20 per cent rule will remain in relation to newspapers purchasing television companies because we believe that newspapers and TV are the most influential media in terms of news and opinions. But 1028 Ofcom will review these rules at least every three years. That will provide the flexibility that I think that my noble friend is asking for.
§ Lord Lipsey
My Lords, I start by welcoming the bipartisan spirit in which my noble friend's Statement today has been approached and which will carry on into the Joint Committee. Perhaps I may also—in danger of breaching that—say that it is good that this Bill has been produced now—albeit with gaps and albeit that some people would have liked to see it earlier rather than the Government giving way to the endless temptations to delay, to consult in private and to negotiate with powerful vested interests.
In the light of the fact that some clauses are not in the Bill and others, the Government have made clear, are even greener than the Bill as a whole, does my noble friend see virtue in the Joint Committee following the example set by the committee on the Financial Services and Markets Act in producing its report in two stages—one on the first set of proposals that are fully articulated, and, if necessary, another one later on the clauses that are not at present in the Bill.
Finally, in recognising that this is a communications Bill and not just a broadcasting bill, does my noble friend agree that the issue of the precise relationship between the BBC and Ofcom, although important, is not all-important? Does she hope with me that our debates and the Joint Committee's debates do not get bogged down on that one terribly tempting subject—on which many of us have opined at great length—but instead cover the whole waterfront of the commercial as well as the contents implications for this vital legislation?
§ Baroness Blackstone
My Lords, I am grateful to my noble friend Lord Lipsey for his welcome of the greater transparency and openness of the whole process with respect to the Bill. He asks whether there is any virtue in following what happened with the Financial Markets and Services Act by having two staged reports, with the second stage on the clauses that are not in the Bill as published today. I shall certainly take that matter back to my right honourable friend the Secretary of State. However, I would hope that if we can get these additional clauses drafted quickly the committee will be able to complete its report in one go, thus avoiding a second stage. If we have a second stage, it delays the Government's response to the committee's report, which could in turn delay the introduction of the Bill whenever parliamentary time is available.
I share my noble friend's view that it would be a great pity if the Joint Committee spent a huge amount of time debating the relationship between the BBC and Ofcom. There is so much else in the Bill of enormous importance. If the committee were to do that, it would be a real abrogation of its responsibility to undertake a proper perusal of the whole of the Bill and all its complexities.
§ Lord Skelmersdale
My Lords, that is the whole point, is it not? I must confess that I arrived in the 1029 middle of the Statement, but I have read it. This is an enormously wide subject. It is absolutely right that it should be given what I can only describe—and as my noble friend on the Front Bench almost described it—as an elephantine gestation period. Whether she was commenting or complaining was not entirely clear to me and possibly was not entirely clear to other Members of your Lordships' House.
Be that as it may, I also think that it is right that this should be one of the first Bills—if not the first— to go through the novel experience of having a pre-legislative scrutiny stage. But there are ideas circulating in your Lordships' House that where a Bill has a pre-legislative scrutiny stage it may also be subject to a carry-over Motion. Clearly, I cannot ask to bind anyone else, so can I have the Minister's personal assurance that she will not encourage moves in that direction in this case or, indeed, in any other?
§ Baroness Blackstone
My Lords, perhaps I should say to the noble Lord that elephantine pregnancies sometimes produce good results and I hope that that will be the case here—that the amount of time, work and thin king that will have gone into the Bill will in the end produce a better Bill and a better regulatory system. The issue of carry-over is really a matter not for me but for the business managers to decide. All that I can say is that the Government's hope and intention is that the Bill will be on the statute book by the end of July 2003.
§ Lord Dubs
My Lords, I give the Statement a warm welcome. I shall resist the temptation to make a Second Reading debate speech today and leave it for the appropriate time. Instead, I shall ask my noble friend one specific question. I welcome the brave effort to define public service broadcasting. I cannot wait to get out of here and get my hands on the Bill to read what it says. Whose responsibility will it be to define public service broadcasting as regards the BBC-on the assumption that it will be for Ofcom to define it for other broadcasters?
§ Baroness Blackstone
My Lords, public service broadcasting will be defined in the Bill and will apply to all broadcasters, whoever they may be, including the BBC. It will be up to the BBC to ensure that it lives up to that definition and up to the governors to ensure impartiality and the qualitative aspects of content.
§ Baroness Howe of Idlicote
My Lords, while welcoming the news that there is to be a content board and various representation of consumer interests, will there be a parallel carriage board—otherwise, it may be thought that content is on a different level from communications and competition? Can the Minister explain why there should be a special board as part of Ofcom for that side of its deliberations? In view of the importance that she has rightly attached to the power of the media to influence us all, has she given further thought to individual human rights concerning 1030 unfairness or infringement of privacy? Will those questions be taken more seriously by a more independent—and transparently independent—body?
§ Baroness Blackstone
My Lords, I am not sure that I heard what the noble Baroness asked about an additional board—it sounded like a parish board.
§ Baroness Howe of Idlicote
My Lords, to clarify, I said carriage—content and carriage—because originally there was an idea that there should be two separate boards. My point is that just setting up a content board may appear to make it something of a second-class citizen that will receive less consideration underneath the all-embracing Ofcom board.
§ Baroness Blackstone
My Lords, the thinking behind the need to establish a separate content board was that the range and responsibilities of Ofcom across a huge range of tier one and tier two issues, as well as some tier three issues, will make its task difficult, as noble Lords have implied. Many responses in the consultation considered it desirable to have a content board to represent the wide public interest in what broadcasters put out—in content. Having a separate board will allow greater scrutiny of content aspects of the regulation of broadcasting.
On the issue of human rights, as I understand it, the infringement of privacy is currently the responsibility of the Broadcasting Standards Commission, which is independent of the broadcasters, and that that will be retained in Ofcom—it will play that role.
§ Lord Brooke of Sutton Mandeville
My Lords, I congratulate the Minister warmly on the clarity and comprehensiveness of the Statement, especially as its scale meant that it took 19 minutes to deliver. Better right than wrong, whatever the timetable, is the best guide of all. When the Minister said concerning Ofcom versus the Competition Commission that it would generally be clear which was in the lead, did she mean that the clarity would be a priori or that it would derive from the new legislation?
§ Baroness Blackstone
My Lords, I am not sure how to answer that question. The new legislation will provide a substantial amount of clarity about their respective roles, but as I said in response to the noble Baroness, Lady Anelay, and the noble Lord, Lord McNally, there are clearly some boundary issues where there may be some blurring and where both sides will need to agree exactly who does what.
§ Baroness Jay of Paddington
My Lords, perhaps I may say how much I welcome the fact that the Statement—and therefore, presumably, the Bill—puts such emphasis on the need for continuing regulation in this complex field, even in the 21st century, when the technology is so complicated and the global ownership of media so extensive. In that regard, and perhaps contrary to my noble friend Lord Borrie, I welcome the continuation of what he described as the 20 per cent rule.
1031 Will my noble friend expand a little on the phrase that she used about opening up market trading in spectrum? I think that the Statement referred to that as being something equivalent to iron and steel in the first Industrial Revolution, which in itself is an interesting concept. Will my noble friend expand a little on that notion?
§ Baroness Blackstone
My Lords, I am grateful to my noble friend for her welcome for the retention of the 20 per cent rule. On spectrum, as I said, we shall respond in some detail in the summer to the Cave review and may then be able to provide a clear answer to that question. A wide range of recommendations were made to try to maximise the economic and social benefits from what is of course a finite resource. Rather than raising some of those issues now, perhaps it would be better if I could respond later. Ofcom will certainly have a separate duty of spectrum management and ministerial powers of intervention should be limited. I gather that the response to the consultation will be published soon. That will set out a number of detailed options.