HL Deb 01 July 2003 vol 650 cc819-70

Consideration of amendments on Report resumed.

Clause 72 [Conditional access systems and access to digital services]:

Lord Gordon of Strathblanemoved Amendment No. 134:

Page 72. line 36, at end insert— () It shall be the duty of OFCOM to draw up and to issue guidance as to the manner in which access-related conditions set in accordance with subsection (2)(b) (and in particular the first indent to sub-paragraph (b) of Part I to Annex I to the Access Directive) may be satisfied in relation to each protected programme service. () Such guidance must be issued by OFCOM within twelve months from the commencement of this section. () Before publishing or revising the guidance, OFCOM must consult with every person providing a protected programme service and any other person as they think fit. () It shall he the duty of OFCOM to carry out regular reviews of the operation of the access related conditions set in accordance with subsection (2)(b) and the guidance in respect of them, and to prepare and publish a report on every review in such manner as they consider appropriate for bringing it to the attention of persons who, in their opinion, are likely to be affected by it. () Every report published by OFCOM under this section must set out OFCOM's findings in carrying out the review, any recommendations made by them and any changes to the guidance as OFCOM consider appropriate.

The noble Lord said: My Lords, I was enormously encouraged by the reply of the noble Lord, Lord Davies, to the earlier debate on electronic programme guides and ensuring that there was due prominence, in that I recall his saying that he thought that it would be appropriate for Ofcom to publish a code on the matter. That is exactly what I am seeking by these amendments; nothing more elaborate than that. I was also at least mildly encouraged by the response of the noble Lord, Lord McIntosh, when I raised this issue in Committee. He said: I hope that when Ofcom takes over those responsibilities and has in addition the responsibility for complying with Part 1, Annex 1, of the directive and the wording of Clause 72, it will provide the guidance that my noble friend seeks without spelling that out in the Bill".—[Official Report, 3/6/03; col. 1194.] I hope that the Minister is right, but I should like some reassurance. The honest truth is that we have had Oftel for a very long time but we have not seen the sort of transparency of code for which I am looking.

I know that some noble Lords think that this amendment is unnecessary and that it is the sort of thing that Ofcom would do automatically. I wish that that were true. Unfortunately it cannot be guaranteed. Oftel, for example, has not so far declared that Sky Subscriber Services Ltd has a significant market power. That is self-evidently obvious. A market survey would demonstrate it in about a quarter of an hour. However, Oftel has not done that yet. So there is no guarantee that Ofcom is going to give this the priority that we are seeking.

Some people are unaware that no one really knows what people are currently paying for conditional access. The BBC has just done a deal but no one knows what the rate is or what rate other channels are paying for conditional access. I know that it is not quite conditional access in the case of the BBC but I will come to that in a moment. The fact is that we should have a transparent regime. If it is possible for various regulators to spell out the price of electricity and gas then it should be possible for Ofcom to spell out the price of conditional access. It is an important issue. Without that the whole digital revolution cannot take place properly.

The BBC deal does not make my amendment redundant; far from it. I am very glad that the BBC has reached agreement with Sky, but what that agreement has thrown up is that quite clearly the BBC still needed what Sky has referred to as "regionalisation" in order to deliver the appropriate BBC regional service in slot 101 and slot 102. Sky is regarding that as a form of conditional access, which is probably right—I make no complaint about that. However, that means that nobody knows what rates the BBC is paying. Perhaps more importantly, because it has not yet been decided, nobody knows what rate Channel 3—which has much more specific regional obligations—will have to pay to Sky. If the BBC has just done a deal, we should be able to assume that the same will automatically apply to ITV when it comes to look for that agreement. However, we cannot make that assumption and that cannot be right.

The conditional access costs will continue to be crucial. It has been a contentious issue for a long time. I do not blame the Government for introducing 34 pages of clauses exactly a year ago, withdrawing them before the Bill even hit the Commons and then relying entirely on the European directive. However, we need some assurance that someone will put flesh on the bones and that we will have a transparent regime that we can all understand. Indeed, we should be able to forecast what will have to be paid for conditional access. All that my amendment does it to ask Ofcom to do that—to spell it out clearly and quickly. If the Government are not disposed to accept the amendment, will they at least confirm that it is their view that Ofcom should act in such a way as a matter of urgency when it takes over in December? I beg to move.

Lord Thomson of Monifieth

My Lords, I apologise for not being in my place when the noble Lord, Lord Gordon of Strathblane, began his speech. I strongly support the case that he has made for some means—preferably legislative and statutory—to make the conditional access system open and transparent.

Conditional access has created a major problem and distortion for the broadcasting system in this country from the earliest days following its introduction. I remember arguments about it in earlier Broadcasting Acts. The decision that the BBC has apparently been able to make is a healthy one in terms of the overall situation, but very many problems remain to be solved. The noble Lord, Lord Gordon of Strathblane, has performed a service by putting down this amendment and pressing, in one way or another, for total transparency about the pricing arrangements associated with conditional access. It is in the interests of the general viewer of television in this country.

Lord Bragg

My Lords, I support the amendment of my noble friend Lord Gordon of Strathblane. I, too, apologise for not being in my place. That adjournment put us all at a disadvantage. We thought that we had seven or eight minutes; we had two or three.

I support every word said by my noble friend Lord Thomson, as I have done over the years in listening to his wise counsel. We have been on the same side in many battles. Transparency for conditional access is absolutely essential. Otherwise, there is an opportunity for fudge and for exploitation. Heaven forfend, but the opportunity is there.

There is no reason why there should not be transparency. There is no reason why there should not be a relationship established between different broadcasters seeking that access. If one particular organisation can monopolise and manipulate it, that is another distortion in what is supposed to help a market process. I therefore heartily support the amendment of my noble friend Lord Gordon of Strathblane.

Baroness Buscombe

My Lords, we on these Benches also support the amendment proposed by the noble Lord, Lord Gordon of Strathblane. As noble Lords have said, it would oblige Ofcom to publish guidance on how it will interpret the obligation placed on conditional access providers to offer their services to all broadcasters on fair, reasonable and nondiscriminatory terms. A transparent regime is important. The amendment would not set a price for conditional access, nor would it prejudge how Ofcom goes about determining what is a fair and reasonable price. However, it will ensure that Ofcom reviews the pricing regime as a matter of priority.

I also want to speak to Amendments Nos. 136 to 138. Those amendments return to an issue debated in Committee. There remains a concern that wording used in Clause 269 and subsection (2) in particular suggests that there are other intermediary players in the satellite broadcasting process to or through which PSBs may offer their service. Consequently, the digital satellite platform is not an open platform.

I welcome the Minister's statement in Committee that the satellite platform is open in the sense that any broadcaster can approach the operator of a satellite and negotiate facilities for the transmission of a service and also buy conditional access and EPG services from Sky in the UK. Clearly, that is not in dispute. In view of that consensus, it is difficult to understand the Government's explanation of the clause in Committee when the Minister said: The first objective aims to secure that the channel provider does not refuse to provide his channel to the provider of a satellite service, if they can agree terms". He also said: It is, therefore, quite different from the second objective which requires the channel provider to ensure that its service will be made available to satellite viewers, and to ensure that as many people as practicable can receive the service. The second objective does not mean that an intermediary is required".—[Official Report, 3/6/03; col. 1196.] It appears from those statements that the first objective has been designed to apply to instances at which an intermediary provider and a satellite broadcasting process exists. Why otherwise would a PSB be refusing to provide its channel to that provider? But why is the first objective needed at all? Given that we all agree that the satellite platform is open, it is difficult to see how a situation could arise in which a PSB could refuse to provide its channel to the provider of an intermediate satellite service.

We contend that there is no possibility of that happening in the UK because the only satellite platform that exists is open and the PSBs already conform to objective 2 by making their services available to viewers directly without any intermediary players being involved. The Minister in fact confirmed in Committee that as things stand the second objective might suffice, but if the situation changes, the other objectives could be brought into play to ensure universal availability".—[Official Report, 3/6/03; col. 1197.] I should be grateful if the Minister would explain how the situation might change to where a PSB is in a position to refuse to provide his channel to a satellite service, which justifies the existence of the first objective. Otherwise, I urge the Minister to accept my amendments, which would ensure that Clause 269 is a more accurate reflection of the way in which the UK's satellite platform actually operates.

8.45 p.m.

Lord McIntosh of Haringey

My Lords, let me begin by addressing Amendment No. 134. The intention of this amendment is to place Ofcom under a duty to issue guidance on how the requirements of conditions set under Clause 72 can be met. Subsection (2) of the clause deals with the setting of access-related conditions in relation to conditional access systems. One of the key requirements of those conditions, set out in Part I of Annex I of the access directive, is that operators of conditional access systems should offer those services to all broadcasters on a fair, reasonable and non-discriminatory basis.

The Government recognise that the question of what constitutes "fair, reasonable and non-discriminatory" access is of crucial importance, not least to public service broadcasters; it is a very difficult issue. It is therefore entirely appropriate and desirable that Ofcom should issue guidance on how those requirements can be met. In any case, it has been Oftel's practice to do so, and I am confident that Ofcom will follow that practice.

The only question is whether it is necessary to place a duty on Ofcom on this point in the Bill. That is not the Government's view. There are a great many things which it is sensible—even desirable—for Ofcom to do but which we do not think it necessary to put in the Bill. Except for a few questions of very fundamental importance, such as the use of its powers to impose financial penalties, we do not think it necessary or desirable to specify all the matters on which it would be desirable for Ofcom to issue guidance. It has been said amiably enough that the Bill is long enough. The proposed requirement is unnecessary and would add to Ofcom's procedural load without in practice adding anything to the degree of transparency and regulatory certainty which will be provided in accordance with the directive because, as I say, I am sure that Ofcom will follow Oftel's existing practice on this point; I would expect it to do so.

Lord Thomson of Monifieth

My Lords, is the noble Lord really saying that the way conditional access works is a matter for guidance and not a matter for proper regulation? Is it not a much more serious matter than simply one of providing reasonable guidance?

Lord McIntosh of Haringey

My Lords, guidance is quite a powerful thing, in its place. Ofcom has the responsibility of adhering to the conditions of part 1 of annex 1 of the access directive. If it does not: do so, then we are in trouble with Europe. It is therefore Ofcom's responsibility to achieve that aim. How it does it is a matter for Ofcom. If it can do it through guidance, then it is entirely proper that it should do it through guidance.

Perhaps I may now turn to Amendments Nos. 136, 137 and 138. Here I do not have very much more to add to what I said in Committee. We all share the objective of providing universal and free availability of the public service broadcasting channels. The debate in Committee demonstrated that we all share a common understanding of the processes by which satellite television reaches us today. But we also agree that technology moves faster than legislation and that we should, if we can, make the Bill as future-proof as possible.

As we explained in Committee, there is scope for various models of satellite broadcasting. While some broadcasters will do all the work themselves, others will use a satellite service operator. Some will broadcast in the clear; others will have their services encrypted. Again, as we made clear in Committee, it is a mistake to think that Clause 269 implies that public service broadcasting channels can only he made available to viewers by offering their channels to, for example, Sky to broadcast on satellite. What matters for us is not the means by which the channels are made available but the result that the clause delivers, which is the availability to satellite viewers of public service channels.

Ofcom will impose the conditions that it considers appropriate to secure that the licensed public service channels are at all times offered as available to be broadcast by means of every major satellite television service. Ofcom will pursue three objectives, but it might not need to impose conditions to secure all three of them for any one channel. That will depend on the means by which the channel provider ensures that its service will be available to satellite viewers. The second objective can be secured in a way that does not imply that an intermediary is required.

As I explained in Committee, as things stand, we might be able to achieve our goal of universal availability through the second objective alone; but if the situation changes, the other objectives could be brought into play. It might also be the case that, because a public service broadcaster is broadcasting its channels itself, no further conditions need to be imposed in order to achieve the third objective, as public service broadcasters are already required to make their services available free of charge—otherwise, it serves the purpose that the provider of a satellite television service cannot charge for reception of the public service channels alongside the pay channels that it provides.

Perhaps I may finish by repeating what we are trying to do: whatever the market or technical conditions prevailing in the future, we aim to ensure that public service channels continue to be universally available free of charge. We think that that is provided by the clause as drafted. Therefore, we do not see any need for the amendments.

Lord Gordon of Strathblane

My Lords, I thank the Minister for his reply and those noble Lords who took part in the debate entirely in my support. I have in mind, in particular, the noble Lords, Lord Thomson and Lord Bragg, and the noble Baroness, Lady Buscombe.

I am slightly unhappy that the Minister has chosen to say that Ofcom should follow the example of Oftel. I am quite happy to accept the noble Lord's expression of hope that it is the proper function of Ofcom to spell this out and give us a transparent regime; but to add that Oftel's practice should be followed rather vitiates it.

There is no transparent regime at the moment. There are no noble Lords in this House, including, I suspect, government Ministers, who know who pays what to Sky for conditional access. That cannot be a satisfactory situation.

When the Minister liaises with Ofcom, I trust that he will see the need to stress that we hope that Ofcom will behave in a very much more transparent and speedy manner than Oftel. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 268 [Must-offer obligations in relation to networks]:

[Amendment No. 135 not moved.]

Clause 269 [Must-offer obligations in relation to satellite services]:

[Amendments Nos. 136 to 139 not moved.]

Clause 273 [Programming quotas for independent productions]:

[Amendment No. 140 had been withdrawn from the Marshalled List.]

Baroness Buscombemoved Amendment No. 140A: Page 245, line 24, after "programmes" insert "which are made by independent producers

The noble Baroness said: My Lords, in moving Amendment No. 140A, I shall speak also to Amendment No. 141A. These amendments seek to introduce an alternative definition of "independent" for the purposes of the independent production quota. The quota requires that each licensed public service channel ensures that a minimum of 25 per cent of broadcasting time is allocated to independent production.

Currently, production companies which have an ownership relationship—that is, those that share the same parent but have no preferential commissioning relationship with a broadcaster—are deemed to be non-qualifying independents. The current regime determines independence based on common shareholding criteria. The Broadcasting (Independent Productions) (Amendment) Order has recently revised the requirements for independent production companies. Share restrictions now apply only in respect of any broadcaster which provides a television service intended for reception anywhere in the United Kingdom.

The amendment adopts a definition of "independence" that would allow companies which gain no economic advantage from an ownership relationship with another broadcaster to produce programmes that qualify for the quota. The amendment proposes an economic dependency test which requires producers who have more than a 25 per cent common shareholding with a broadcaster to show that they have derived no more than 33 per cent of their gross revenue from production activity from that broadcaster. The test would be easy to measure and proposes that if a production company should change status and become economically dependent on the main broadcaster, it would automatically lose its independent status.

The amendment differs slightly from the one tabled in Committee as it includes a provision that prohibits any producers who are owned or controlled by a broadcaster from qualifying for the independent production quota if a sister company receives more than 33 per cent of its revenue from that broadcaster, even if the company concerned makes nothing at all from the broadcaster. The amendment has been refined to alleviate concerns expressed in Committee that such a test could allow the quota to be attacked by the back door.

We urge the Government to consider these amendments as we feel that the independent sector is of fundamental importance to the broadcasting industry. I beg to move.

Lord Crickhowell

My Lords, earlier in the evening I warned my noble friend that I had some anxieties about her amendment. I had read it only during the course of our proceedings, and I was worried that it might raise the difficulty with which I dealt in Committee. On hearing what my noble friend said and on reading and re-reading the definitions in Amendment No. 141A, I believe that my anxieties may be misplaced. As my noble friend said, they are concerned with ownership relationships.

But perhaps I may explain my anxieties. During the Committee stage, I raised the issue of ITV companies being able to bid for independent production. I said that that was the kind of argument that Ofcom was being established to settle. It is for Ofcom to decide what role the ITV companies can play in the UK programme supply market over and above their regional licence obligations. For that reason, I tabled the amendment. The Minister who replied to me on that occasion said that, indeed, this was an issue for Ofcom. The noble Baroness, Lady Blackstone, said: These subsections give Ofcom a duty to consider all aspects of the programming quota for independent productions, including the definitions that the Secretary of State has made by order under Clause 273 and Schedule 12 to define qualifying programmes and independent production".—[Official Report, 3/6/03; cols. 1209–10.] I emerged satisfied from that debate because I felt that a clear steer had been given to Ofcom: that it was Ofcom which would deal with the matter. We were dealing with Clause 273 which defines in subsection (2)(b) that, independent productions is a reference to programmes of such description as the Secretary of State may by order specify as describing the programmes that are to be independent productions for the purposes of this section". Perhaps my suspicions were aroused because the noble Lord, Lord Alli, withdrew Amendments Nos. 140 and 141 which would have raised the issue of quotas by value as well as volume. I wondered whether there was a connection with the fact that this amendment had been tabled.

All I seek is an assurance that the amendment introduced by my noble friend relating to programmes which are made by independent producers, which are then defined, will not later impose a restriction preventing Ofcom going down the route for which I argued in Committee and which the Minister said that Ofcom would be able to follow. I hope that it does not inhibit the ability of the Secretary of State to produce suitable definitions.

On re-reading several times my noble friend's amendment on ownership relationships, I think that the position is all right. But I seek reassurance that the position established earlier, which I think was wholly satisfactory, has not in some way been undermined.

9 p.m.

Lord Bragg

My Lords, on the noble Lord's last point, is it possible for the Minister to give us some reassurance that the smaller regional public service television companies in ITV, which for many reasons are languishing at present, can under well-regulated and transparent circumstances be allowed to behave and pitch as independents in the grander scheme of things? They are quite restricted with ITV. They are excluded from the BBC at present. They are in a very difficult position all round. This is a very good chance to help regional television and everything that goes with it. I should be pleased if we could have a reassurance on that.

Lord Lipsey

My Lords, I support my noble friend and the tenor of the debate. It is quite curious that when the BBC had a problem with its independent suppliers about Endemol which caused it to miss its quota the Government rushed forward with an order to correct the position. ITV never seems to receive quite the same solicitousness from Ministers.

However, on the other point raised by my noble friend, one of the characteristics of the ITV regional companies is that they are companies making programmes outside the M25. With great respect, much of the "indie-industry" is also outside the M25. I hope that there is to he some parity of treatment between the attention given to the BBC's problems and that given to ITV and that the amendments will be regarded with sympathy.

Lord Davies of Oldham

My Lords, as has been indicated in several contributions, the amendments are similar to ones we discussed in Committee so I shall keep my response brief.

The amendments seem to be intended to ensure that producers with an ownership link to UK broadcasters can be considered independent subject to an economic dependency test. The ITC considered this very issue in its UK programme supply review, which examined the overall economic health of the TV programme supply market in the UK, and in particular the role of independent producers within it.

The ITC concluded that there was not a case at the moment for changes in qualification criteria to include producers who have ownership links to UK broadcasters. It considered available evidence which showed that producers in this category were not being unduly affected by exclusion from the quota at present, and that a change of definition would most likely impact adversely on other, non-aligned, independent producers. The ITC therefore recommended that the current definitions should remain unchanged for the time being.

The situation, however, will be kept under review. Ofcom will be required to review the operation of the quota, including the various definitions, on an annual basis and report to the Secretary of State. Any further changes to the definitions can be made by secondary legislation, though the amendments we are now considering—this must be a signal and crippling disadvantage to them—would effectively take that flexibility away by defining the term "independent producer" on the face of the legislation.

What would be the point of Ofcom's review if there were no means of giving effect to its recommendations? Therefore, that argues very much in favour of our current approach of' defining in secondary legislation the terms "independent productions" and "qualifying programmes". It gives us that flexibility. We cannot know whether the definitions in place today will remain appropriate in 10, five or even two years' time. We need the flexibility of the order-making power to ensure that these definitions are right. To define in primary legislation the term "independent producer" would greatly restrict this flexibility.

I have heard what my noble friends have said in their eloquent pleas about the issues with regard to particular groups of independent producers. My noble friend the Minister is prepared to talk to them further to see whether we can make progress on what they have identified as a real issue. However, I am indicating this evening that we do not consider that the solution lies in changing the primary legislation.

Lord McNally

My Lords, does the Minister agree that the initiative, which was very welcome at the time, that emerged from the pre-legislative Select Committee was for the ITC to make a study? From that study came some very useful advances for the independent sector. Would it not be far better if the kind of proposals put forward by the noble Lords, Lord Crickhowell and Lord Bragg, for the smaller ITV companies could be dealt with in a similar pragmatic way once Ofcom was up and running? I did not indicate this earlier, but if the noble Lord is looking for support in that approach, he will have it from these Benches.

Lord Davies of Oldham

My Lords, uncharacteristically, the noble Lord, Lord McNally, is late to the party, but his contribution is very welcome. I see considerable merit in what he indicates. The noble Lord is, in his usual benign way, giving necessary reinforcement to the Government as to why he thinks we should reject the rigidity implicit in the amendments.

Baroness Buscombe

My Lords, I thank the Minister for his response. Of course I would like to be early for a party. I think that was rather an unfair comment about the noble Lord, Lord McNally.

I am rather disappointed by the Minister's response. One of the reasons for tabling these amendments was to follow up the order to which the noble Lord, Lord Lipsey, referred, with which we were not happy. It seemed to be prejudiced against some of the smaller companies and to be a reaction to a particular situation—Endemol. We felt that was rather unfair. So we are reluctant to trust that the order route is satisfactory.

That said, if the Minister is suggesting to me that our amendments would remove future flexibility by defining the term "independent production", I am concerned I notice my noble friend Lord Crickhowell nodding at that remark. I defer to my noble friend on that issue. It is disappointing. We worked hard to try to table an amendment that would alleviate the clear concern in Committee that such tests as we were keen to apply could allow the quota to be attacked by the back door.

That said, I am pleased that the Minister has offered further discussion about the smaller regional TV companies, for example. The suggestion made by the noble Lord, Lord McNally, is a good one. Therefore, for now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 141 had been withdrawn from the Marshalled List.]

[Amendment No. 141A not moved.]

Clause 276 [Appointed news providers for Channel 3]:

Baroness Buscombemoved Amendment No. 142: Page 249, line 17, leave out paragraphs (a) and (b).

The noble Baroness said: My Lords, I shall speak to Amendments No. 142 and 143 in Clause 276, to Amendments Nos. 144 and 145 in Clause 277, to Amendment No. 146, after Clause 277, and to Amendment No. 244 in my name and that of the noble Lords, Lord McNally and Lord Gordon of Strathblane, and the noble Baroness, Lady Howe of Idlicote. I thank those noble Lords for adding their names to those important amendments.

Taken together, the effect of Amendments Nos. 142, 143, 145 and 146 would be to delete the requirement for Channel 3 to appoint a new supplier from among a list of companies that have secured nominated status from the regulator. De facto, that would also do away with current ownership restrictions placed on the so-called nominated news provider. However, it would retain the obligation on Channel 3 to supply a news service competitive with other national news services. It would also retain the new powers proposed by the Government that give Ofcom power to issue guidance on the terms that it believes will be necessary to secure the delivery by any news provider appointed by Channel 3 to meet its news obligations. As well as giving guidance on those terms, Ofcom will have the power under Clause 276(3)(d) to approve the terms agreed between Channel 3 and its news supplier.

Those are powerful provisions that will ensure that Channel 3 has a news supplier that is adequately resourced to discharge the obligations with regard to news on Channel 3 included in the Bill. Amendment 204 is a consequential amendment that deletes Clause 343, which would raise the current 20 per cent ownership limit to 40 per cent. Taken together, those amendments, which were also presented in Committee, would remove the proposed ITN ownership restrictions while retaining clear obligations on ITV to properly fund a news service that is capable of competing with that of Sky News and the BBC.

The issues in this debate have been well rehearsed both in another place and in Committee in this House. Whatever initial opposition there was at the start of the process has gradually evaporated to the point where, in Committee, the Minister faced the unenviable task of being the only Member of your Lordships' House out of 10 who spoke on the issue to defend the status quo.

The power and persuasion of the arguments deployed across the Chamber during our debate in Committee exposed the fact that the Government have no clear or logical reason for retaining ownership restrictions on ITN. Each argument that has been advanced by the Government has been comprehensively dismissed.

First, Ministers argued that the retention of the current rules is necessary to protect the editorial quality of news on ITV. But, as acknowledged by the Government elsewhere in the Bill, editorial quality is more appropriately safeguarded by content regulation than by ownership. The quality and impartiality of news on television is indeed a matter of great importance. That is why we, along with ITV and ITN, are happy to support those aspects of Clause 276 that strengthen the obligations on Channel 3 to provide a high quality news service and give Ofcom greater powers with regard to the terms agreed.

Secondly, it has been argued that it is important to keep the rules on ITN ownership because we do not know who might own ITV following the Government's relaxation of the media ownership rules, the implication being that ITN might fall into the hands of foreigners. This is perverse nonsense from a Government who are relaxing the rules to allow non-EEA owners of ITV. In addition, the current rules do not afford ITN any such protection. In the last bidding round for the ITV contract, the ITC approved a bid from a largely foreign-led consortium consisting of Sky, Bloomberg and CBS. ITV chose to stick with ITN, but there is nothing in the current Bill to prevent ITV awarding the contract to a company other than ITN next time around.

Finally the Government have argued that increasing the share that any individual company may hold in ITN from 20 per cent to 40 per cent will help to boost investment in the company by allowing it to move from a minimum of five to three shareholders. But if this relaxation is of such benefit, why is it that ITN has been the most vociferous opponent of the rules as currently framed in the Bill? Have the Government not begun to ask themselves why, if these rules are so good for ITN, it is ITN that has led the charge against them?

It is because they will have the opposite effect. They will condemn ITN to a fragmented shareholding structure and make it more difficult for its management team to secure investment, grow the business and keep the ITN brand strong. In Committee the Government indicated that Ofcom would be able to lift the ownership rules and that they did not object to Ofcom looking at this as an early priority. But the reality is that, on taking office, Ofcom will immediately have to deal with the obligatory review of the whole of public service broadcasting to inform the BBC's charter review process, the replacement of every Channel 3 analogue licence and the Channel 5 analogue licence with new digital licences, the establishment of a new co-regulatory body to regulate broadcast advertising, the setting of origination targets and quotas and the introduction of new programme codes, to name only a few of its tasks.

The reality is that if we leave this to Ofcom, it will slip to the middle or bottom of a very long list of priorities. That will leave ITN labouring under ownership restrictions not faced by any of its competitors, unable to secure the investment it badly needs now if it is to sustain its position as a market leader in news supply. There is clear support across the House and across the broadcasting industry for the removal of these rules. Their removal will help to strengthen ITN and the news supply market in the United Kingdom.

In Committee the Minister promised to bring forward amendments on Report that might meet us half way. These have not materialised and I take that as a positive sign that Ministers are prepared to meet us not just half way, but at the final destination. I hope that the Minister will be able to give us a clear assurance on this point so that we are not compelled to divide the House on an issue on which there is such wide agreement. I beg to move.

9.15 p.m.

Lord McIntosh of Haringey

My Lords, I wonder if I might intervene now because I have something positive to say, which may be helpful. I do not wish to curtail debate and I shall be glad to respond to any further points that are made, but what I have to say now may be helpful to noble Lords.

We have listened carefully to all the arguments and we have been persuaded that we should modify the arrangements for an appointed news provider for Channel 3. We shall bring forward amendments at Third Reading to do so. Let me outline what we propose.

We will remove the ownership restrictions on the appointed news provider, thus removing the legal obstacles preventing ITV or anyone else from taking a majority shareholding in the appointed news provider or owning it outright. For clarity, I should add that we shall retain the restriction on bodies disqualified from holding broadcasting licences by virtue of Part. II of Schedule 2 to the Broadcasting Act 1990, such as political parties, from having an interest in the appointed news provider. I would add in passing, since I must have some retaliation for the powerful speech just made by the noble Baroness, Lady Buscombe, that the amendments as tabled would have removed that restriction, which I am sure was not their intention.

We shall also introduce a new restriction. As the House is well aware, there are restrictions preventing newspaper owners with 20 per cent or more of the national newspaper market, or bodies controlled by such owners, from holding an ITV licence. However, there are no specific restrictions on such bodies from having an interest in the appointed news provider. Although, like everyone else, they are prevented from having more than a 20 per cent interest in the news provider, once we remove the ownership restrictions they could own the appointed news provider outright. It would be odd, to say the least, for such a body to be prevented from holding a Channel 3 licence and yet he able to provide it with its news—its most politically and democratically sensitive material. We will therefore amend the Bill so that a person who cannot hold a Channel 3 licence cannot have more than a 20 per cent share in the Channel 3 news provider.

This leaves these bodies in exactly the same position as they are under the current legislation. So they will not he prejudiced, but they will not benefit either from the ownership relaxation we are providing. We will retain all the other important quality aspects of the appointed news provider regime currently set out in the Bill which require Channel 3 to provide a news programme capable of competing effectively nationally and which is adequately funded.

We will also amend the Bill to ensure that Ofcom can obtain all the information it needs from ITV or the appointed news provider to assure itself that the necessary funding arrangements are in place and working properly. As a safeguard, we will retain a power in Clause 276 to reintroduce further ownership restrictions on an appointed news provider in the future. This could he done, for example, as the result of a recommendation from the reviews that Ofcom is required to conduct when Channel 3 or Channel 5 licences change hands, or when Ofcom carries out a review of the media ownership rules under Clause 384. We think this is a useful safeguard.

Clearly, any decision to reintroduce limits in the future would have to be reasonable and proportionate and comply in particular with our European Convention on Human Rights obligations. I hope that that is helpful to the debate.

Lord Bragg

My Lords, I was about to make an immensely long and repetitive speech on this subject. Instead, I thank my noble friend the Minister for such a generous and helpful response to the concentrated views expressed across the House.

Lord Fowler

My Lords, I, too, was about to make a long and spirited speech on this subject. I, too, thank the Minister. I congratulate my noble friend Lady Buscombe on the persistence with which she has put the case and for the victory she has secured.

ITN has a proud history. "News at Ten" has been genuinely innovative over the years and reporting standards have been very high. In recent years some of us feared that ITN had lost its way—particularly in regard to its decision to move the main evening news programme around the schedules—but its coverage of the Iraq war, where one of its reporters was so tragically killed, showed that its old skill and flair are still present. That needs to be underlined.

The Minister, urged on by my noble friend, has taken away one of the restrictions on ITN. It did not seem to make any kind of sense to deter investment in the way it was deterred under the rules, even as modified, in the Government's first proposals. The BBC owns its own news service, Sky owns its own news service, and we can now have a situation where ITV can benefit from the same kind of freedom. I believe that, as a result of that, it will go forward from strength to strength and become a major force in British and international television, as it deserves to be.

Lord Crickhowell

My Lords, I was not going to make a long speech because I said what I wanted to say at the Committee stage. I thank the Minister for his wholly helpful statement. It needs to be said that the restrictions he suggested are also very reasonable. The balance he has produced is acceptable and greatly improves the Bill.

Like my noble friend Lord Fowler, I, too, congratulate my noble friend on the Front Bench on a notable victory. She has achieved a significant improvement to the Bill—a very satisfactory outcome. It shows that when the House works on a cross-Bench basis with support from all parts of the House we can improve legislation, as we have done on this occasion.

Baroness Howe of Idlicote

My Lords, I also congratulate both the Government and the noble Baroness, Lady Buscombe.

I admit that when we debated this in Committee the arguments were so convincing, made even more convincing now, that I could not believe that the Government would not give way. I also admit that I made a rather cross comment about the Government not giving way. I take that back unreservedly. I am delighted that the Government have given way, and I agree that the additional conditions make much sense for the future. So there is no need to say any more, just congratulations.

Lord McNally

My Lords, I am sure that I can help the noble Lord, Lord Lipsey. It is a matter of historical record that two years ago the Liberal Democrat conference adopted a policy document that advocated this policy at a time when even ITN did not believe that that was achievable. That only goes to show that what the Liberal Democrats said two years ago, the Conservatives and the Labour Party pretty well catch up when they get going. Thank you very much, Minister.

Lord Lipsey

My Lords, I am tempted to say that I was about to make a short speech but will instead embark on a long one. All that I wish to say in response to this remarkable development is that this Report stage demonstrates this House working at its best. I contrast that with a less satisfactory Bill, such as the Licensing Bill.

There has been give and take on this Bill, a good atmosphere, genuine argument, and as a result—I do not like the words "concessions" or "victories"—we have made progress by consensus. I happily pay tribute to the role played by the noble Baroness, Lady Buscombe, and I also thank the Minister for the approach that he has injected into this Report stage. For once, we can be proud of our work.

Lord McIntosh of Haringey

My Lords, with the leave of the House, I have no response, except to say that I have been outnumbered 10 to one on more than one occasion, and I expect that to continue. It does not always mean that I am wrong. On this occasion I add my congratulations to those who have successfully argued the case.

Baroness Buscombe

My Lords, it gives me great pleasure to thank the Minister for his response. I also thank all noble Lords who have contributed to this important debate through the different stages of the Bill—my noble friends Lord Fowler and Lord Crickhowell, the noble Lords, Lord Bragg, Lord Lipsey and Lord McNally, and the noble Baroness, Lady Howe.

I thank those who have complemented me, but this is a victory for all noble Lords and for the Government, who are now making good law. It is an example of your Lordships' House working at its best, but I also thank the Secretary of State for offering me the opportunity to debate these issues with the Minister. That contributed greatly to the result that we have achieved. The Minister has given a clear assurance and was kind enough to give me advance notice of his comments. We have come a long way and we are enormously grateful. We shall consider the proposed amendments with care, to ensure that they fully reflect the Government's reassurances and the Minister's comments this evening. On that basis, it gives me great pleasure to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 143 not moved.]

Clause 277 [Power to repeal Channel 3 news provider provisions]:

[Amendments Nos. 144 and 145 not moved.]

[Amendment No. 146 not moved.]

9.30 p.m.

Clause 281 [Regional programme-making for channels 3 and 5]:

Lord Puttnammoved Amendment No. 146A: Page 253, line 11, leave out "suitable" and insert substantial

The noble Lord said: My Lords, I rise briefly to move—move again—the amendment. I read carefully the Hansard report of our discussion in Committee. It was a fairly sad occasion. I then went to the Oxford English Dictionary and looked up the definition of the words "substantial" and "suitable". According to the OED, "substantial" means, Having solid worth or value, of real significance; solid; weighty; important, worthwhile".

The dictionary adds "ample and nourishing". Under "suitable", we find: fitted for or appropriate to a purpose".

I suggest that there is no contest between the meaning of those two words. It is clear that what we are looking for, in the context of the clause, is "substantial". I would even be prepared happily to settle for "significant". In no way can the word "suitable" be applied. I beg to move.

Lord Crickhowell

My Lords, the Minister is basking in the glow of the approval of the whole House for the action that he took on the previous amendment. He can gain even greater approval if, on this occasion, he again accepts this utterly reasonable amendment, which will strengthen the Bill. The issue has been raised repeatedly by the noble Lord, Lord Puttnam, and the amendment deserves support.

I am optimistic that, with the Minister in such positive and constructive form, we can make another improvement to the Bill.

Baroness Buscombe

My Lords, we support the amendments.

Lord McIntosh of Haringey

My Lords, in Committee, the noble Lord, Lord Puttnam, said, I think, that we were losing a "slam-dunk" opportunity to be flexible. We debated the amendments in Committee, and I cannot accept the amendments before us today. I listened carefully to the views that were expressed in Committee, and I hope that, even if we cannot accept the exact wording proposed, there will be something that we can do to meet the concerns expressed.

The concerns expressed are difficult, and I am not sure that we got that across adequately in Committee. The problem is that, unlike the word "substantial", the current words "suitable" and "sufficient" have a wide meaning. I know that that is a cause of concern to some people, but the words give Ofcom essential flexibility to apply the targets for regional production, investment in regional production, and regional programming at a level appropriate to the service in question.

We need flexibility because this is not an area in which one size can fit all. There are considerable differences in the production capabilities of the different regional Channel 3 licensees. What is right for, say, Granada in Manchester, with a well established production base, may not be right for smaller licensees such as Channel or Ulster or for the London licensees. Similarly, what may be right for Channel 3 may not be right for Channel 5, which has no production base of its own and is, after all, a national service. I know that the amendments do not apply to Channel 4, but the same arguments would apply there.

Ofcom would have no flexibility, as it does at the moment, to take such factors into account when setting targets. For example, if it were to set a target for Channel 5 that appeared to them to be "substantial", that target would set a threshold because Ofcom would have deemed it to be "substantial". It would not have the flexibility to set targets significantly above that threshold to determine, for example, that a "substantial" amount in the case of a Channel 3 service should be much higher than for Channel 5. So, there is a danger that the targets would be set at the lowest common denominator. That is not what we want.

There is also a problem with regional programming. The current word—"sufficient"—gives Ofcom the flexibility to take individual circumstances into account but ensures that whatever targets are imposed must be enough, in its view. Clearly, the regional programming requirements in relation to the national Channel 3 service—currently GM TV—should be different from those of the regional licensees, but the amendments would take away any discretion for Ofcom to take that into account in setting targets.

But—I had to say that, because that is the view of parliamentary counsel expert in these drafting matters—

Lord Crickhowell

My Lords, can I encourage the Minister by saying that I agree with what he has been saying? I think there is a point that needs to be taken into account. Because we are on Report I can make the point only by intervention. If he can meet us at least half way while providing the flexibility that I agree is required, I for one will be satisfied.

Lord McIntosh of Haringey

My Lords, I had reached the word "but". We recognise the strength of feeling on the matter and we want to do what we can to address the concerns expressed. We must ensure that Ofcom has the flexibility to treat different services differently, but within that we will look at whether we can find some alternative wording that would be more satisfactory.

We hope that it will be possible to incorporate the word "significant"—which I believe was the fallback position of my noble friend Lord Puttnam—perhaps with a qualification to ensure that Ofcom's flexibility is preserved. We will come back with suggestions on Third Reading.

Lord Puttnam

My Lords, I thank the Minister for that generous offer. I agree entirely with the noble Lord, Lord Crickhowell, that the first part of the Minister's answer was accurate and absolutely fair. I would settle comfortably on the word "significant". I shall make one other point with respect to "suitable". We live in a world of downward pressure: on costs and on quality. I have always been concerned that the word "suitable" represented an escape clause for those who wished to press downwards. I think "significant" would serve nicely and I hope that it finds an ability to commend itself to the Government. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 146B and 146C not moved.]

Clause 282 [Regional programmes on Channel 3]:

[Amendments Nos. 146D to 146M not moved.]

Lord Crickhowellmoved Amendment No. 147: After Clause 282, insert the following new clause—


(1) In the event that the share of audience or share of revenue of Channel 5 for any twelve month period is in excess of 15 per cent, as measured by OFCOM in their review under section 351, the Secretary of State shall by order, require OFCOM to review the conditions placed upon Channel 5 under sections 274 and 281.

(2) Following such a review, OFCOM shall be required to increase the proportions of original and regional programmes required to be produced by Channel 5 to meet or exceed those most recently required of Channel 3.

(3) In the event that Channel 3, in the same period, had a share of audience or share of revenue below 15 per cent, the proportions of original and regional programmes required to be produced by Channel 5 should be no less than those levels produced by Channel 3 when its share of audience was last at or above 15 per cent."

The noble Lord said: My Lords, my noble friend Lord Renton of Mount Harry, who tabled the amendment, cannot be here tonight. I added my name to it because I have been an advocate of future-proofing. It seemed a good idea to provide for a situation where Channel 5 might grow and have a much larger share of business than it has at present.

That is all I need to say about the amendment. The object is to future-proof and provide for what might well happen in the future. Whether it is perfect in its present form I would not know; I suspect that, as usual on these occasions, Ministers will find technical faults. But the principle seems absolutely sound. It is right, even in the absence of my noble friend Lord Renton of Mount Harry, that we should have the opportunity for a brief debate on the principle and to hear what the Minister has to say. I beg to move.

Viscount Falkland

My Lords, we on these Benches agree with the amendment in the name of the noble Lord, Lord Renton of Mount Harry, and the explanation given by the noble Lord, Lord Crickhowell. We think it is a sensible approach. I spoke to the amendment last time; in fact I agreed with the noble Lord, Lord Renton of Mount Harry, to put my name to it. but something went wrong with a technicality in our procedures. I repeat that I agree with the sensible provision for the future contained in the amendment.

Lord Brooke of Sutton Mandeville

My Lords, I indicated in Committee a sympathy for my noble friend Lord Renton of Mount Harry's then-Amendment No. 233A. I rise again in his absence on Report to support his Amendment No. 147. Indeed, I go a little further than my noble friend Lord Crickhowell.

I appreciate that returning to the issue on Report might be regarded as an example of the self-indulgence to which the Leader of the House alluded the other day, but I hope that I shall be forgiven for using this opportunity to reflect a little further on what the noble Lord, Lord Davies, said about my noble friend's amendment in Committee. He first said that Ofcom's discretion would be circumscribed in setting targets by this amendment through its concentration on viewer numbers, and I acknowledge the logic of that.

Secondly, however, he went on to say that the then Amendment No. 200, which is not part of this package now, might, lead to decreases in the various requirements on public service channels in response to falling revenues and audience shares, rather than increases".—[Official Report, 3/6/02; col. 1216.] This does not seem a fair charge tonight against the wording of my noble friend's Amendment No. 147.

Finally, the noble Lord said that my noble friend's then amendment, which is parallel to tonight's, would have represented a penalty for success and might have led a shrewd channel owner to curb the channel's growth in viewers when it was approaching the high jump bar which my noble friend's amendment represented. I appreciate that the noble Lord, Lord Davies, was not speaking to the issues of media ownership at col. 1216 for those issues then lay ahead of us, just as they do tonight. But they certainly underlay the motivation of my noble friend's amendments in Committee as well as on Report this evening.

A powerful plank in the Government's arguments for their media ownership proposals in the Bill is the desire to encourage investment. But any businessman, like the shrewd channel owner which the noble Lord, Lord Davies, mentioned in Committee and to whom I have just referred, prefers, when making an investment, to deal with known facts and with constants rather than with variables and uncertainties. We all know how much the independent channels have overpaid the Treasury for their licences in the past and thus foregone the capital they could have invested in their regional channels' programming because one cannot spend the same money twice.

The same observation, incidentally, applies to the Treasury's much larger recent auction for the telecommunications licences. The Treasury may smile in both instances but the massive, excessive expenditure in acquiring the licences—again, in both instances—cannot represent investment in the productive side of the two respective industries.

So I support the efforts of my noble friend Lord Renton of Mount Harry to introduce certainty rather than uncertainty into genuine investment decisions, and I support my noble friend Lord Crickhowell in bringing this matter back for consideration in your Lordships' House at Report.

Lord McIntosh of Haringey

My Lords, the purpose of this amendment seems to be to allow Ofcom to ratchet up Channel 5's original production and regional programme-making requirements if its audience share or share of revenues exceed 15 per cent. We discussed this amendment in detail in Committee. It seems to be an attempt to deal with concerns about the future ownership of Channel 5. That is really what is behind it; we will be discussing it tomorrow and I shall leave my arguments on that major issue and on the related issues of plurality and public interest tests in merger legislation until we reach that point. In the meantime, I have some comments about this amendment which, if the noble Lord, Lord Crickhowell, will forgive me, I do not think will survive the major debates we have tomorrow.

I am not persuaded of the need for this amendment for two reasons. First, I am not convinced it will have the right effect. A 15 per cent target might appear an appropriate level for audience share or share of investment in the current climate, but we can only guess at how the broadcasting landscape could look in, say, five years' time. If there is really an expansion of successful channels, possibly nobody will get 15 per cent, in which case this does not seem very relevant. To have a rigid threshold based on 2003 audience share levels on the face of the Bill seems unhelpful.

Furthermore, the amendment only considers the relationship between Channel 5 and Channel 3. I do not think it is right to make a direct and inflexible comparison between these two public service channels, particularly when it is possible that both channels could in the future find themselves in a weaker market position as multi-channel viewing gains ground—which is another way of saying what I have just said in my own words.

Secondly, Ofcom already has a range of powers to ensure that targets for original and regional production are set and maintained at the right levels. These include the annual factual and statistical report on television and radio services in the United Kingdom, which will include consideration of the financial condition of the market and any trends appearing or operating in the size of the audience; regular reviews of the public service remit and the extent to which public service broadcasters have provided television services which, as a whole, fulfil the purposes of public service broadcasting in the United Kingdom; and the review of various public service obligations, including original and regional productions, on a change of control of a Channel 3 or Channel 5 licence, to ensure that standards do not fall.

As well as those specific powers, the Bill also preserves for Ofcom a general power under the Broadcasting Act 1990 to vary a licence having given the holder a reasonable opportunity to make representations. So Ofcom may at any time alter the original and regional production requirements following consultation with the licence holder.

I am confident that Ofcom will set the right targets, review them as appropriate and take action when necessary. I am therefore not persuaded that a further, very specific power of the nature proposed is needed.

9.45 p.m.

Lord Crickhowell

My Lords, the Minister has given a helpful response in the sense that he has spelt out the powers available. As on many occasions I have advocated that Ofcom is the right body to review such matters and to put forward subsequent advice or take decisions, I accept much of what he has said. The point has been made, and in the circumstances it is right for me to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 148 had been re-tabled as Amendment No. 152A.]

Clause 298 [Code relating to provision for the deaf and visually impaired]:

Lord Ashley of Stokemoved Amendment No. 149: Page 264, line 42, leave out "from time to time" and insert "at least once every three years

The noble Lord said: My Lords, it is no exaggeration to say that this group—Amendments Nos. 149 to 159A—will determine not only the future amount of television that can be enjoyed by disabled people with sensory impairment but the quality of their enjoyment. General technological advances have been made, and the potential for the future is immense, as we are all well aware. The adjustments that must be made for disabled people are very tiny by comparison. There is no doubt that companies could make them if they so chose. It is Parliament's responsibility to see that they do so.

Tonight I shall focus on four areas. First, I shall refer to Ofcom reviewing the code—Amendment No. 149. Secondly, I shall speak about the inclusion of deaf-blind people. Thirdly, I shall speak to Amendment No. 153 on the time scale for reaching targets. Fourthly, I shall talk about the power of Ofcom to exclude programmes from having to meet the requirements. I shall also comment briefly on the government amendments.

Amendment No. 149 will require Ofcom to review the code relating to the provisions for deaf and visually impaired people at least once every three years instead of "from time to time". We discussed the issue in Committee, and those who supported me agreed that the phrase is far too vague and far too loose. The noble Baroness, Lady Blackstone, rejected our views in Committee, arguing that we should trust Ofcom. She said that she would expect Ofcom to review and revise the code regularly, and that to require more would impose an unnecessary burden.

I disagree for three reasons. First, I am sure that those about to lead Ofcom—the noble Lord, Lord Currie, in particular—will take their responsibilities seriously. However, their successors may not do so. Secondly, Ofcom will be an extraordinarily busy regulator, and it may be inadequately funded for that task. Without a legal requirement to review the code, it will be pushed aside to make way for any other business legally required. The sheer volume of Ofcom's work could be decisive. Thirdly and significantly, placing a statutory requirement on the timing of a review signals Parliament's view that the code is a matter of importance.

It is not a question of trusting Ofcom, as intimated by the noble Baroness, Lady Blackstone. It is a matter of Parliament telling Ofcom that the code really matters to disabled people and must be kept updated because of the dynamism of the industry and the rising expectations of disabled people.

I turn to Amendment No. 150. In Committee the noble Baroness, Lady Blackstone, recognised the special problems of those who are deafblind, but she was content to leave the Bill as it was without any amendment referring to them. However, it is essential to recognise that without such reference in the Bill Ofcom will not have the authority to meet the special needs of those with a dual handicap. Provision for those who are deaf and provision for those who are blind are simply not enough because that assumes that those who are hearing impaired can see well and that those who are visually impaired can hear well. Clearly, that is not the case. There is a wide spectrum of impairment ranging across both disabilities and allowance has to be made for that.

It would be especially unfortunate to reject this amendment because it is quite easily possible to make simple changes that would be of great benefit to deafblind people. For example, increasing the size of lettering or changing the font can make all the difference for those who are deaf but have little sight. We do not know what benefits will emerge for the future, but for now we must ensure that Ofcom has the power to consider them. We hope that the Government will accept this amendment. Frankly, I think that it would be outrageous for the Bill to leave this House without a reference to deafblind people.

I turn to my Amendments Nos. 150B and 153. It really is ridiculous to allow television companies 10 years to reach the subtitling target set out in the Bill. For a dynamic industry 10 years must seem like a joke. In Committee my views received welcome support, even from the Minister. The noble Baroness, Lady Blackstone, accepted the thrust of the argument and said that challenging interim five-year targets would be set. As usual, my noble friend Lord McIntosh has kept faith and tabled new clauses which go some way towards relieving the deep anxieties of many disabled people. We are pleased that all sides of the House understandably expressed concerned at the incredible 10-year provision in the Bill.

I shall therefore not be moving my Amendments Nos. 150B and 153. However, I am very sorry that my noble friend's timescale does nothing about targets for signing and audio-description. I think that it is wrong to fail to do so. I hope that when he replies he will be able to make some provision on signing and audio-description, both of which are terribly important.

The new clauses will ensure that there are a number of developments which are very important to disabled people. Ofcom would have the responsibility to see that every television channel promotes the service they offer to disabled people. That is really splendid news on this important issue.

The figures for subtitles, signing and audio-description will now be averaged over 12 months rather than on a weekly basis. I appreciate that companies want some flexibility. However, to move from a weekly to an annual basis is far too big a jump. It is just not acceptable. I think that a monthly basis would be a reasonable compromise. It is not clear how that will affect disabled people, but I expect it to be less of an issue on subtitling than on signing and audio-description. Disabled people and Members on both sides of the House will appreciate any clarification from my noble friend on those two points—signing and audio-description.

The Bill's five-year interim target for subtitles is set at 60 per cent. Although that is less than my amendment provides for, it is a compromise and is none the worse for that, especially because of the important addendums that the target may be increased, the date may be brought forward by order of the Secretary of State, and Ofcom will have explicit power to set further interim targets after the 10-year anniversary. The significance of that is that subtitles may be extended beyond 80 per cent, moving us closer to the dream of 100 per cent subtitles, where all deaf people can watch all television in comfort and with comprehension. That would he one of the best, if not the best record, in the whole world.

I shall mention a final provision of the new clauses. Where the Secretary of State chooses to alter any of the 10-year targets by order, he can do so only by replacing them with a higher target. Again, that is good news. I express my appreciation to the Government and to my noble friend Lord McIntosh in particular for the constructive way in which they have tackled these problems.

In brief, the Bill clearly has good intentions that will give deaf and visually impaired people much greater access to television. It could and should enable them to share in the welcome expansion of programmes of all kinds. However, so much depends on its future implementation. In particular, the exemption of programmes should be minimal, or it could be massive. On that hinges the value of the Bill to people with hearing and visual disabilities. Ofcom will decide which programmes will be excluded and that is right and proper. The issues that it should consider in making its decision are a matter for Parliament and not for Ofcom. The current wording is so loose that it could lead to either minimal or massive exemptions. The issue should be debated in this House so that Ofcom can know our views and then get on with its job.

My own view and that of some Members of this House, as it is of the RNID and other organisations concerned with these problems, is that exemptions should be absolutely minimal and should be granted only for exceptional and pressing reasons. It would be very helpful if Ofcom were to give advance notice of applications and an opportunity for voluntary organisations to comment before any exemptions are made.

If my noble friend Lord McIntosh were to give an assurance that Ofcom would be expected to operate in an open and consultative manner on exemptions, as does the Federal Communications Commission in the United States, it would he tremendously important for deaf people and a very healthy development.

I have tabled Amendment No. 155 because in any discussion on disability, I have found that one striking fact emerges; that is, the effects of practically any disability are perceived very differently by the public from those experiencing the disability. That has very important implications for the Bill because Ofcom can assess the benefits of subtitling, signing and audio description in one way, but disabled people see them entirely differently. The public could regard subtitles, for example, with mild interest or possibly irritation, whereas to a deaf person they are crucial to watching and comprehending television. Without them, in a real sense, television is useless and irrelevant to profoundly deaf people because they cannot understand the dialogue—imagine that. Basically, that is the reason for my amendment, and I hope that my noble friend the Minister will he able to accept it.

Amendment No. 156 also relates to the need to have more than an official view before making a decision on exclusion or inclusion. Organisations for the disabled can effectively reflect the views of disabled people, and they need to have the right to do so. Consultation and transparency lead to a very different animal from protestations—which is all we have now—and the amendment would provide for them.

I know that my noble friend the Minister will do what he can, and I thank him very sincerely for the great advances that we are making for deaf and sight impaired people in the Bill. I greatly appreciate all that he has done. I beg to move.

10 p.m.

Lord McIntosh of Haringey

My Lords, I do not want to get into the habit of speaking twice on every group of amendments but it might be for the convenience of the House if I speak to the many government amendments in this group and then respond to the debate at the end as briefly as possible.

We have made clear throughout the passage of the Bill that we fully recognise the importance of access to television services for people with sensory impairments. The provisions in this Bill and other recent developments will lead to a very significant improvement on the current position. In July 2001 we increased the subtitling target for digital terrestrial broadcasters from 50 per cent to 80 per cent. In the Bill, we have extended this requirement, and requirements to provide signing and audio description. I know that the noble Lord, Lord Ashley, is not satisfied with what we are doing in that regard but we have made changes. That requirement will apply to all licensed broadcasters including. for the first time, digital cable and satellite broadcasters. Those changes should lead to a dramatic increase in the provision of services to help people with sensory impairments to enjoy television. We know that many people would like us to do more. The noble Lord, Lord Ashley, knows that whenever I offer him something, he wants more. I pay tribute to him for that; he is a doughty fighter and he is very difficult to resist. We indicated in Committee that we would bring forward amendments at Report to deal with two of the concerns that had been expressed. The government amendments in this group represent the outcome of that commitment and also make a further concession to address Amendment No. 157.

The first part of Amendment No. 150A deals with the concerns expressed that many sensorily impaired people are unaware of the existence of subtitling, signing and audio description, and are therefore unable to benefit. The amendment will place Ofcom under a duty to include in its code on access to television for people with sensory impairments a requirement that broadcasters make adequate information about those services available to those who are likely to want to make use of them.

The second part of Amendment No. 150A fulfils our commitment to introduce a fixed, five-year interim target for subtitling, to ensure that progress towards meeting the main target by the 10th anniversary is accelerated in the early years. That target will apply to all services for which the relevant date is after the passing of the Bill; that is, all television licensable content services and restricted television services, and those digital television programme services and licensed public service channels the provision of which begins after the passing of the Bill. There is certainly an incentive here to get the Bill passed.

The target will be 60 per cent. In determining that percentage, we have taken into account both the desire of people with hearing impairments to ensure more subtitling provision, and the understandable concerns of broadcasters about the additional costs that this will impose on them. We believe that a target of 60 per cent strikes the right balance. It is a tough but achievable figure for the broadcasters and will lead to the availability of much more subtitling than might have been expected on a linear progression to 80 per cent.

Amendment No. 156F allows the Secretary of State to set a higher target, or require the target to be met by a different anniversary, where it appears that the 60 per cent target is likely to be fulfilled before the fifth anniversary. That will ensure that there is flexibility to require more from those services for which the 60 per cent target would be less challenging. I hasten to add that that is an upward motion, not a downward one.

Finally, Amendment No. 156H deals with another point of concern which we did not specifically undertake to consider in Committee. That amendment will ensure that the provision of subtitling, signing and audio description is not cut back, by changing the existing order-making power in Clause 301(1)(b) to ensure that the percentage figure for the 10-year targets for all those services can only be increased in future, not decreased. As I said, we introduced the amendment specifically to address the intention underlying Amendment No. 157, which we may be debating very shortly.

I hope that the House will agree with me that these amendments show that the Government take these issues very seriously, that we have listened to the concerns expressed and that we are prepared to act where appropriate. We believe that we have gone as far as we can and that it would not be right to impose any further burdens on broadcasters in this area. I have not gone into the detail of all the other amendments but it is obvious that they are consequential on the major points to which I referred.

Lord Carter

My Lords, the only contribution I intend to make is on the government amendments. It is something of a culture shock for me to be questioning the Government on the quality of their amendments.

The amendments to which my noble friend referred were Amendments Nos. 150, 150D, 150E, 151A and 152B to leave out "in every week". We believe that this has been introduced without any consultation with the relevant organisations to increase flexibility for the broadcasters. In other words, they are allowed to concentrate their provision on certain weeks or months in the year so long as they reach the overall average year target. At the moment they are judged against a weekly output averaged over a year.

We are not quite clear what powers Ofcom has to prevent abuse. Let me give an example. There are dead periods of the year in television—the summer—when there are a great many repeats and very little origination of programmes. That could be the period that the broadcaster chose to use rather than the period when there were a lot of original programmes. We are not being suspicious here, but we are concerned about something introduced, as we understand it, at the behest of the broadcasters to increase their flexibility. We are not sure why.

I think that my noble friend will now have to reply at the end of the debate, but he has to deal with this concern. We do not quite understand why it has been done. Has Ofcom enough power to prevent the broadcaster using this change to vary the proportions that are subtitled, and so on, to suit themselves? At the moment there seems to be a system of weekly averaging over the year which works in favour of disabled people. It would be extremely helpful if my noble friend could specifically deal with that point.

Lord Addington

My Lords, I would like to become an echo to the noble Lord, Lord Carter, on that last point. The idea is to make sure that people are not cut off from the media of entertainment, news and cultural involvement that is provided with broadcasting. If you are getting programmes only every second week or for a period of time, you are cut off. It does not matter if there is that block of time, you are still cut off.

The noble Lord, Lord Carter, puts his finger on a very serious concern. If the Minister can explain why this concern is irrelevant, I would go away from here fairly happy—but only if we received that assurance. Without that a great hole will have been made in an otherwise very welcome government amendment.

The only other amendment I wish to speak to is Amendment No. 149. As the noble Lord, Lord Ashley, pointed out, the deafblind do not fall into the category of the hearing or visually impaired. They are a separate group who share some characteristics. They should appear on the face of the Bill. It is clear that they have not been brought into government thinking—certainly not into the main part of it. They are a small group and should have been included.

This is a very good opportunity to make sure that they are brought into the structure of government thinking. It is not a great crime on the part of the Government; it is just a case of adjusting your mind to a new set of problems. You may think that you have dealt with a disability issue hut, so long as you are naming individual disabilities, you will discover that there is something else. I am rather like a scratched record on the matter but until there is a more structured approach which includes disability rights as civil rights within the whole structure I have to persist.

This Bill does many good things, but its structure means that you are naming disability groups. The deafblind should certainly be here. For that matter. I would like to see the other disability groups who might be affected also named—but that is by the by. If we are here dealing with sensory impairment, the deafblind are certainly an important, if small, group. Having said that, provided that we are worrying about nothing when it comes to the weekly quotas, the noble Lord's amendment is very welcome and I thank him for putting it forward.

Baroness Darcy de Knayth

My Lords, as my name has been added to some of these amendments, I want to thank the Minister very much for his amendments and to endorse all that has been said thus far. I should like the target to be reached a little more quickly, hut I appreciate very much what the Minister has done. I echo the plea of the noble Lord. Lord Addington, for more focus to be placed on the deafblind because they run the risk of far more exclusion than anyone else.

Baroness Buscombe

My Lords, for all the reasons that the noble Lord, Lord Ashley of Stoke, has given, we have considerable sympathy with Amendment No. 149, which would give Ofcom the duty to draw up a code on provisions for the deaf and visually impaired at least once every three years rather than from time to time.

Although I am reluctant to place an unnecessary burden on Ofcom, the reality is that, with the rapid pace of change in technology, a report must be produced regularly to ensure that it is up to date and includes the latest developments and opportunities for disabled people in the communications industry. Perhaps the Minister would find a period of time other than three years a little more palatable, but we believe that the terminology "from time to time" somewhat reeks of deadlines being pushed further and further back.

Amendment No. 155 recognises that able-bodied people are often not the best judges of what benefits disabled people. We on these Benches support this amendment. It seems a sensible addition to the Bill in that it recognises that disabled people themselves are the best judges of what would and would not be of benefit.

Government Amendment No. 156F would empower the Secretary of State to alter either the percentage target or the date by which a target should be reached if it seemed that the original target would he met in advance of the deadline. The intention behind this amendment is sound. Some channels will find it easier than others to meet targets. Where rapid progress can be made, the Secretary of State should raise the bar for such channels. However, the amendment concerns us in that it provides an incentive for channels to do the minimum possible to meet the targets so that they do not give the Secretary of State a reason for revising their target upwards. Therefore, can the Minister assure us on this matter? I question what reasons the Government have for believing that this amendment will not act as a disincentive for channels to meet their targets.

Baroness Howe of Idlicote

My Lords, I rise merely to congratulate the Government on what they have done thus far. It is clearly a move in the right direction, although, as has been pointed out by the noble Baroness, Lady Buscombe, some clauses still cause considerable concern—not least, Clauses 149 and 150. While we all appreciate that there has been some movement on the part of the Government, I hope that the Minister will realise how strong the feeling is in this direction and that he will be able to do rather more by Third Reading.

10.15 p.m.

Lord McIntosh of Haringey

My Lords, with the leave of the House, I shall respond to non-government amendments and to points made in the debate. Amendment No. 149 would require Ofcom to review and revise its code relating to provision for the deaf and visually impaired, at least once every three years", rather than "from time to time". That would be the case regardless of whether it was thought that any review or revision was necessary.

We fully expect Ofcom to review and revise its code regularly, but we believe that decisions on the frequency of the reviews should be left to Ofcom, which has the expertise and experience to judge when they might be necessary. The situation might be very different in five or 10 years' time from the current one. We may need to have such reviews far more frequently in the near future and far less frequently later, or, as technology develops, the other way round. Frankly, I do not believe that Amendment No. 149 would lead to a different end result.

Amendment No. 150 would require Ofcom's code relating to provision for the deaf and visually impaired to give guidance on the extent to which applicable services should promote the understanding and enjoyment of programmes by persons with a dual sensory impairment, as well as persons who are deaf or hard of hearing, and blind or partially sighted. We do not underestimate the problems faced by people with a dual sensory impairment. We certainly recognise that they have particular needs. But we do not believe that an amendment to the Bill is necessary.

Realistically, a person would need to have some form of hearing or visual ability in order to enjoy or understand television. In this case, the current duty to promote understanding and enjoyment for people who are deaf or hard of hearing and blind or partially sighted would seem to satisfy that need.

There is specialist equipment such as the talking teletext service, which is particularly useful for people with dual sensory impairment. The ITC's technology group believes that it is possible to design a digital version of the talking teletext equipment—I referred to that in debating an earlier amendment—and suggests that the equipment manufacturers work with broadcasters and set-top box manufacturers to try to find a commercial solution. I think that that is the right way to proceed and more likely to bring about the desired result than bringing forward an amendment to the Bill.

I remind the House that government Amendment No. 22, which we moved last week, introduced a duty on Ofcom that focuses on widening the availability of consumer equipment which is convenient for use by the widest practical range of users, including disabled people. That was in response to Amendment No. 39 tabled by the noble Lord, Lord Ashley, in Committee. Ofcom will be required to take those steps, and enter into such arrangements as will encourage others to secure that wide availability. It would not be appropriate for Ofcom to become involved in design, much less manufacture and marketing; so the focus is correct.

Amendment No. 152 is consequential to Amendment No. 151, which will be discussed in the following group.

The noble Lord, Lord Ashley, said that he will not move Amendment No. 150B, so I can move on from that, except to say that we still think that a 10-year period in which to satisfy those obligations is right. It gives those services with new obligations, such as digital, cable and satellite services, enough time to plan for the introduction of these new requirements. That is important, because there are substantial costs involved. Ten years is a long time, that is why we have agreed a fixed, five-year interim target, which is the purpose of government Amendment No. 150A. I know that the noble Lord, Lord Ashley, is not satisfied with that response. However, I know that it is also recognised around the House that that is a significant improvement.

Amendment No. 153 would require all channels to achieve at least 40 per cent of their 10-year targets for subtitling, signing and audio description by the first anniversary of the relevant date; and at least 90 per cent of their 10-year targets by the fifth anniversary of the relevant date.

Government Amendment No. 150A goes a considerable way towards meeting this amendment. After consideration, we thought that a fixed, five-year interim target should only apply to subtitling, which is a well-established technology. We concluded that a five-year target of 60 per cent struck the right balance between the objective of accelerating the provision of subtitling and the need to avoid imposing new burdens on broadcasters in an unreasonable time-scale. I know that some people would wish for higher than 60 per cent. I know that some people would wish it to include signing and audio description, which are less well developed than subtitling. But I hope that they will accept that we have listened to the concerns and acted on them.

On Amendment No. 154, Ofcom's code relating to provision for the deaf and visually impaired must set out the descriptions of programmes that should be excluded from the subtitling, signing and audio description obligations. The amendment would mean that Ofcom would have to consider the number of viewers per programme when considering which programmes should be excluded from these obligations.

In excluding programmes, or in special cases all programmes in a service, Ofcom must have regard to a number of factors set out in subsection (6)(a) to (f) of Clause 298. Those include the size of the intended audience for the programme. I am not clear how Amendment No. 154 would add to those requirements.

Amendment No. 155 aims to ensure that Ofcom would have to have regard to the extent of the benefit as perceived by the disabled person in setting out the descriptions of programmes which should be excluded programmes, rather than just the extent of the benefit for disabled people as now.

Amendment No. 156 would require Ofcom to have regard in the same context to the views of organisations representing persons who are hearing or visually impaired. Both amendments seem to be aimed at ensuring that Ofcom consults disabled people and their representatives on individual exclusions and that they decide which programmes it is appropriate to exclude from the perspective of the disabled person. Ofcom is already required to consult these people on its code relating to provision. That code will set out the overall policy on programme exclusions. So the RNID, the RNIB and others with an interest are already consulted on the policy regarding exclusions.

In making decisions on individual exclusions, Ofcom will only be applying the code and we are not persuaded of the need for further consultations.

My noble friend Lord Ashley made a particular point on the need for targets for signing and audio-description, to which I have already referred. He referred to the need for Ofcom to act in an open and consultative manner. I entirely agree. I can give him an assurance that we would expect Ofcom to do just that.

My noble friend Lord Carter raised the issue of the targets on a weekly basis. There is not a change of policy, only a change in drafting. At present there is a tension between the requirement in Clause 298(2) for figures to be averaged over a 12-month period and the apparent requirement in Clause 298(3) for targets to be met every week. We have never intended that broadcasters should meet targets every week. That could be very difficult.

Therefore, we require some way to bring these two figures together. The answer is that the 12-month period continually rolls forward. For example, if the year starts on 1st January 2004, the target must be met over the period to 31st December 2004, but it must be met also over the period 8th January 2004 to 7th January 2005, 15th January 2004 to 14th January 2005 and so on. So although the target is calculated over a 12-month period, it is based on figures calculated on a weekly basis. That should make clustering of provisions in fallow periods harder to hide and so help to discourage it, which is the matter that concerned my noble friend Lord Carter.

I understand the point made by the noble Lord, Lord Addington, about deafblind being a different category. Although I recognise the tragic position of those people, I say only that their problems are wider than those of broadcasting. The whole issue of how they communicate with the outside world of course relates to broadcasting, but it also relates to other forms of communication. Of course broadcasting has an important role to play, but there are other developments that must impact to enable them to communicate at all with the outside world. It is important that we should recognise that, as well as broadcasters recognising their problems.

Lord Ashley of Stoke

My Lords, I thank all noble Lords who have taken part in the debate. We have not received all we asked for, but, being realistic, in politics one never does. It is my conviction that millions of disabled people will look back on tonight as a landmark. I shall certainly associate it with the name of my noble friend Lord McIntosh. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 150 not moved.]

The Chairman of Committees

I should point out that if Amendment No. 150A is agreed to, I cannot call Amendment No. 150B.

Lord McIntosh of Haringeymoved Amendment No. 150A:

Page 265, line 8, leave out subsection (2) and insert—

"(1A) The code must include provision for securing that every provider of a service to which this section applies ensures that adequate information about the assistance for disabled people that is provided in relation to that service is made available to those who are likely to want to make use of it.

(2) The code must also require that, from the fifth and tenth anniversaries of the relevant date, the obligations in subsections (2A) and (3), respectively, must be fulfilled by reference to averages computed over each of the following—

  1. (a) the twelve month period beginning with the anniversary in question; and
  2. (b) every twelve month period ending one week after the end of the previous period for which an average fell to be computed.

(2A) The obligation to be fulfilled from the fifth anniversary of the relevant date is that at least 60 per cent. of so much of every service which—

  1. (a) is a service to which this section applies, and
  2. (b) has a relevant date after the passing of this Act,
as consists of programmes that are not excluded programmes must be accompanied by subtitling."

On Question, amendment agreed to.

[Amendment No. 150B not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 150C to 150E:

Page 265, line 14, leave out "Those obligations" and insert "The obligations to be fulfilled from the tenth anniversary of the relevant date"

Page 265, line 15, leave out "in every week".

Page 265, line 18, leave out "in every week".

On Question, amendments agreed to.

Lord Addington moved Amendment No. 151:

Page 265. line 20, at end insert— () that at least 50 per cent in every week of so much of—

  1. (i) a Channel 3 service,
  2. (ii) Channel 4,
  3. (iii) Channel 5, or
  4. (iv) S4C Digital
as consists of programmes that are not excluded programmes must be accompanied by audio-description for the blind.

The noble Lord said: My Lords, this amendment will make much more sense if Amendment No. 152 is taken at the same time—it was a long list and there were bound to be one or two mistakes, but nothing fatal.

Those amendments concern targets for audio description. Taken together, they are designed to ensure that we get 50 per cent targets for audio description. That is now certainly achievable—we referred to this earlier. We have a network that may speed us on our way—it is called the Sky broadcasting system—if we are prepared to pump in enough money to allow us access, which is not that great. I refer the House to comments made earlier today.

If we have that attitude, we will probably be able to achieve something similar to that which has just been achieved with subtitling. It has been said that the technology is not quite advanced as that in subtitling; but it is not far off; it is not much more expensive. It is about £200 an hour more expensive, on the figures that have been cited to me for about two years. In other words, we could accept that and do something, if we had the will. There are technical problems with getting the box and having it transferred to terrestrial digital, but that is achievable, if we have sufficient political will. However, it is best that we leave that matter there.

However, I hope that the Government will closely consider Amendment No. 152A. That would mean that repeats would not be considered twice. There would thus be a commitment to ensure that under the very modest target of 10 per cent of programmes to be audio described, they would be new programmes. That will have the huge advantage of a bank of audio described programmes. As we use viewer peaks, if a programme is a success, it is understandable—indeed, commendable—that it is repeated; but let us ensure that only new programmes are counted.

I believe that the noble Lord mentioned that Amendment No. 156H pre-empts Amendment No. 157. The aim was that targets could only be raised. I am slightly annoyed that the Government spotted that first and did not give me a chance to say so, but, hey, you cannot have everything.

Turning to Amendments Nos. 158 and 159, we have already discussed the principle of having a regular review written into legislation. I ask the Government to think again about that, because they should consider the concept. It is important to know that one can review things regularly and not wait for something to occur, especially when things change so quickly.

I turn to government Amendment No. 160. That is very interesting and I await to hear what the Minister has to say about it. I beg to move.

Lord Carter

My Lords, I shall speak briefly to Amendment No. 152A. It repeats a point that we raised in Committee under an amendment in my name, to which we have not received a satisfactory answer. It concerns the calculation of the percentage for audio description—the 10 per cent. From briefing that we received from the BBC and others, we discovered that repeats are included in that calculation. For example if "EastEnders" is audio described, if the omnibus edition on Sunday is also audio described, that is included in the percentage. On other channels, the same programme may be frequently repeated.

If it was required that all qualifying audio description was on new programming, even though the target remained at 10 per cent, that would quickly increase the amount of audio described material. It is as simple as that. I cannot quite see why either the broadcasters or the Government want to resist that, because that is an easy way to increase the amount of audio description without altering the percentage in the Bill. I hope that the Minister will be able to give a logical reason why repeats should be included.

Turning to sub-paragraph (ii), I had thought that Ofcom would have the power to vary rather than to increase the percentage because, while I know that the Minister will be briefed to tell me that under Clause 301 the Government will have the power to alter the percentages by affirmative order, the sub-paragraph marks an attempt to probe whether a way could be found for Ofcom to deal with this problem. For certain major broadcasters the figure of 10 per cent will be too low, but for some of the smaller broadcasters, it is actually too high. Does Ofcom have the power to vary the percentage in order to meet the particular circumstances of each broadcaster?

However, the main point I wish to put is that contained in sub-paragraph (i). If we are to have a target of 10 per cent, then it is important to ensure that it is met on programmes that have not previously been audio described and that repeats should not be included.

10.30 p.m.

Lord McIntosh of Haringey

My Lords, we have had a full debate on the needs of people with sensory impairments so I shall try not to go over old ground. Let me start by introducing government Amendment No. 160 to Clause 304. It addresses the concerns expressed in Committee that the electronic programme guides should be as accessible as possible to people with disabilities, who might need them even more than ordinary viewers.

The amendment should help to ensure that electronic programme guides are easy to use and that solutions are developed to ensure, for instance, that blind people can have an audio electronic programme guide. It should deal with the need for the availability of aids to viewing such as subtitles, signing and audio description to be clearly indicated in and accessed through the guide. I hope that the House will agree that in this we have listened to the concerns expressed and have acted accordingly.

I shall respond to the other amendments in this group. Amendment No. 151 proposes setting a 50 per cent audio description target for the licensed public service broadcasters and S4C Digital. As we have made clear, the 10 per cent target for audio description represents the result of a thorough review and consultation by the Government in 2001. After due consideration we concluded that the 10 per cent target should be maintained in the light of the costs of providing the service and, in particular, the unresolved production and distribution difficulties with the audio description modules needed to receive the service.

I do not disagree with the noble Lord, Lord Addington, that in the future things could improve, perhaps even in the near future, but at present we are disappointed that the current problems with the module have not been solved. We shall continue to work with interested parties to identify possible solutions. In any case, the Secretary of State has the power to increase the 10 per cent target for audio description. So if there were significant advances in the current technology, the target could be increased. We shall keep this under review.

Amendment No. 152A, retabled from Amendment No. 148, proposes that the target for programmes that must be audio described should apply only to programmes which have not previously been audio described, the point made by my noble friend Lord Carter. This would mean that repeats of the same programme could not count towards the target percentage.

We do not think that it is necessary to do this. Programmes which have already been audio described could be discounted from the calculations if Ofcom were to conclude that such repeats should be excluded programmes. That is provided for in Clause 298(5). I suggest that representatives and organisations of those with visual impairments ought to discuss that with Ofcom.

Amendment No. 152A also seeks to give Ofcom the power to vary the 10 per cent audio description target for some broadcasters. Ofcom already has the flexibility to set different interim targets for different broadcasters, but we believe that it is right for the Secretary of State to set the 10-year target itself. This is a political rather than a broadcasting matter.

Clause 301, as my noble friend Lord Carter anticipated, allows the Secretary of State, following consultation with Ofcom, to increase by order the target percentage for audio description. So even though the target is currently 10 per cent, if significant technological advances were made leading to a more widespread take-up of the modules, the targets could be increased. I hope that that will happen. In any case, once the 10-year anniversary has passed, Ofcom can set further targets through the provision in government Amendment No. 156A, which we have just discussed. On my noble friend's question of whether there could be a lower percentage, I shall have to write to him.

As the noble Lord, Lord Addington, recognised, Amendment No. 157 is already covered by government Amendment No. 156H. Amendments Nos. 158 and 159 would require the Secretary of State to conduct a review before making an order to modify the 10-year targets for subtitling, signing and audio description.

I presume the review is intended to be on the same lines as that proposed in Amendment No. 159. This sets out a detailed procedure for the Secretary of State to review the targets after one and three years. Of course the targets should be kept under review, but the process set out in Amendment No. 158 is unnecessary and overly burdensome, particularly when the review is intended to take place so soon after these issues have been thoroughly consulted upon and debated in the context of the Bill.

I commend Amendment No. 160. I hope that the other amendments will not be pressed.

Lord Addington

My Lords, I shall welcome Amendment No. 160 when we come to it but first let me get the usual suspects out of the way first. The system for broadcasting audio description to those who wish to use it is in a mess. It is a cloud hanging over this part of the Bill. That is why we need to have proper provision for it on the face of the Bill. We should think twice about allowing broadcasters to go on for years producing audio described programmes that no one can receive.

As to Amendment No. 152A, we need firmer assurances in regard to specially produced programmes. We are trying to build up a bank of new programmes and we need something more solid. At the moment programmes are repeated over and over again. One wonders what percentage of an audio-described "Fawlty Towers" or "Porridge" the BBC would use. Forget about "EastEnders", which is repeated once a week. How many times have we seen these programmes? I suspect that most of us could reproduce the dialogue word for word. Indeed, the generation that discovered "Monty Python" five years after it was originally shown could do so in regard to certain episodes. We have to look at the matter of specialist services again.

Having said that, I thank the Government for meeting us at least part of the way. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringeymoved Amendment No. 151A: Page 265, line 21, leave out "in every week".

On Question, amendment agreed to.

[Amendments Nos. 152 and 152A not moved.]

Lord McIntosh of Haringeymoved Amendment No. 152B: Page 265, line 25, leave out "in every week".

On Question, amendment agreed to.

[Amendment No. 153 not moved.]

Lord McIntosh of Haringeymoved Amendments Nos. 153A to 153C: Page 265, line 29, after "in" insert "subsection (2A) or in Page 265, line 31, after "that" insert "subsection or Page 265, line 33, after "to" insert "subsection (2A) and

On Question, amendments agreed to.

[Amendment No. 154 not moved.]

Lord McIntosh of Haringeymoved Amendment No. 154A: Page 265, line 35, after "that" insert "subsection or

On Question, amendment agreed to.

[Amendments Nos. 155 and 156 not moved.]

Lord McIntosh of Haringeymoved Amendments Nos. 156A to 156C: Page 266, line 8, leave out from "(9)," to "and" in line 9 and insert "from dates falling before an anniversary mentioned in subsection (2); () requirements on persons providing such services to meet further targets from dates falling after the anniversary mentioned in subsection (3); Page 266, line 16, leave out from "(2)" to end of line 17. Page 266, line 28, leave out paragraph (f).

On Question, amendments agreed to.

Clause 300 [Meaning of "relevant date" in s.298]:

Lord McIntosh of Haringeymoved Amendments Nos. 156D and 156E: Page 267, line 18, at end insert "or Page 267, line 19, leave out from "service" to end of line 21.

On Question, amendments agreed to.

Clause 301 [Power to modify targets in s.298]:

Lord McIntosh of Haringeymoved Amendments Nos. 156F to 156J:

Page 267, line 34, at end insert— () Where it appears to the Secretary of State, in the case of services of a particular description, that the obligation specified in section 298(2A) has been or is likely to be fulfilled in their case before the anniversary so specified, he may by order modify section 298 so as to do one or both of the following—

  1. (a) increase the percentage so specified in relation to services of that description;
  2. (b) substitute a different anniversary for the anniversary by which that obligation must be fulfilled in the case of such services."

Page 267, line 37, leave out "specified in subsection (2) of that section" and insert "by which the obligations specified in subsection (3) of that section must be fulfilled"

Page 267, line 39, leave out "different" and insert "higher"

Page 267, line 40, leave out "subsection (3) of that section' and insert "that subsection"

On Question, amendments agreed to.

[Amendment No. 157 not moved.]

Lord McIntosh of Haringeymoved Amendment No. 157A: Page 267, line 41, leave out "virtue of subsection (1)" and insert "an order under this section

On Question, amendment agreed to.

[Amendments Nos. 158 and 159 not moved.]

Lord McIntosh of Haringeymoved Amendment No. 159A: Page 268, line 4, leave out "subsection (1)" and insert "this section

On Question, amendment agreed to.

Clause 304 [Code of practice for electronic programme guides]:

Lord McIntosh of Haringeymoved Amendment No. 160:

Page 269, line 11, at end insert— () The practices required by the code must also include the incorporation of such features in electronic programme guides as OFCOM consider appropriate for securing that persons with disabilities affecting their sight or hearing or both—

  1. (a) are able, so far as practicable, to make use of such guides for all the same purposes as persons without such disabilities; and
  2. (b) are informed about, and are able to make use of, whatever assistance for disabled people is provided in relation to the programmes listed or promoted."

On Question, amendment agreed to.

[Amendments Nos. 161 to 163 not moved.]

Lord McIntosh of Haringeymoved Amendment No. 164: Page 269, line 28, leave out paragraph (a).

On Question, amendment agreed to.

Clause 306 [Character and coverage of sound broadcasting services]:

Baroness Buscombehad given notice of her intention to move Amendment No. 165:

Page 270, leave out lines 13 to 16 and insert— (b) that the departure would not narrow the range of programmes (including in particular the diversity of music) available by way of relevant independent radio services to persons living in the area or locality for which the service is to be provided,

The noble Baroness said: My Lords, in rising to speak to the next group of amendments, I shall not move our Amendments Nos. 165, 166, 167, 205, 206 and 207.

Instead, we commend the Government on responding to the amendments tabled by the Opposition in Committee. We welcome the Government's move to address our concerns regarding the inclusion of music in Clauses 306 and 348, rather than in Clause 307. Furthermore, we support the Government's shift towards making the burden on commercial radio, under Clause 307, less onerous and prescriptive. We are also pleased that the amendments to Clause 307, tabled by the Minister, reflect the policy advocated from these Benches, in both your Lordships' House and the other place, throughout the passage of the Bill.

[Amendment No. 165 not moved.]

Lord Davies of Oldhammoved Amendment No. 165A:

Page 270, line 23, at end insert— (1B) The matters to which OFCOM must have regard in determining for the purposes of this section the character of a service provided under a local licence include, in particular, the selection of spoken material and music in programmes included in the service."

The noble Lord said: My Lords, I shall also speak to the remaining government amendments in this group. I am enormously grateful to the noble Baroness, Lady Buscombe, for the position that she has adopted, and her recognition of the way we have responded to debates in Committee and tabled our amendments. However, I am not sure whether the whole House agrees with the noble Baroness that we have carried out the task that we embarked upon, in responding to the Committee debate, to create a new situation with our amendments, which we hope will be commended to the whole industry. I am aware that concerns have been expressed about aspects of the proposals prior to the tabling of our amendments. However, at this stage I shall curtail my contribution and listen to the debate from those who wish to express anxieties about our amendments, and then reply. I beg to move.

Lord Eatwell

My Lords, it is difficult not to take up the Minister's invitation. I declare an interest as chairman of the Commercial Radio Companies Association, and I shall speak to this bloc of government amendments.

On Second Reading I was highly critical of Clause 307, which was introduced without any consultation. That would have imposed a one-size-fits-all localness code on local radio stations from Capital Radio, London to Oban Radio on the west coast of Scotland. I argued that this was not only excessively onerous regulation, but also unnecessary, because all the requisite powers to enforce localness are available in flexible, licence-specific form in Clause 306. I thank the Minister for the consultation that has since taken place on these matters, and congratulate him on the amendments to Clause 307.

Instead of the extreme micro-management that characterised the old Clause 307, the new Clause 307 passes to Ofcom the responsibility of drawing up guidance on how localness should be achieved. Given that the Government have abandoned the previous definition of "localness", based on inputs—where employees live, what might be the proportion of local advertising, and so on—is it the Government's understanding that these input controls would not and could not be introduced by Ofcom in the form of guidance? To put the matter another way, can we now consider Clause 306 as embodying the rules on localness, and Clause 307 as containing the guidance?

Will the Minister confirm that it is not the Government's intention that the guidance referred to in Clause 307 should be the means of introducing new regulatory controls by the back door? I should like that confirmation.

I turn to Amendments Nos. 165 and 165A. I am glad that the noble Baroness did not press Amendment No. 165. I ask those who put forward these amendments regarding the music industry to consider two facts as regards Amendment No. 165A, which was moved: first, the UK music industry is 10 times larger than the commercial radio industry; secondly, the music industry is predominantly American owned, whereas the commercial radio industry is predominantly British. The Government must consider whether they have got their priorities right in that amendment.

I wish that I could be as complimentary about the new clause set out in government Amendment No. 66A as I have been about the amendments to Clause 307. Amendment No. 166A inserts yet another new clause introduced under cover of darkness, without consultation. Like many such clauses, the new clause, introduced with excessive haste, is totally at variance with the spirit of the rest of the Bill. When they published the Bill in draft form, my right honourable friends the Secretary of State for Culture, Media and Sport and the Secretary of State for Trade and Industry jointly declared: Unnecessary regulations need to be removed wherever possible … Red tape and the frictional cost of regulation will be reduced, allowing companies to grow and invest more freely". Yet, this evening, the Minister wishes to impose new, extra regulation through Amendment No. 166A, governing consultation about change of local service formats. Why?

Ofcom already has the power to consult, if it sees fit. What is to be gained by removing its discretion and forcing it to consult in every case in which a format is to be changed? Have the Government no faith in the noble Lord, Lord Currie, and his team, that all discretion must be removed from him?

There are over 250 commercial radio stations in the UK. During 2002, the Radio Authority agreed to 35 changes in formats. Holding month-long consultations on those 35 changes such as the Government seek to impose would significantly increase the regulatory burden. Will the. Minister tell us what was the outcome of the Government's regulatory impact assessment of the new clause? What is the regulatory cost that the regulatory impact assessment tells us will be associated with the clause? Can the Minister say which decisions made in the past year by the Radio Authority to permit change of format he now believes to have been made in error? Exactly which of the Radio Authority's decisions would have benefited from the elaborate procedures set out in Amendment No. 166A? The Government say that they believe in evidence-based policy. Will the Minister gave us the evidence of the errors that the Radio Authority has made?

Amendment No. I 66A is about increased consultation. Yet the Government have failed to consult. Will the Minister at least do the decent thing and withdraw Amendment No. 166A, so that there can be a period of consultation prior to Third Reading?

10.45 p.m.

Lord McNally

My Lords, that was a robust defence of the interests of the Commercial Radio Companies Association by its chairman. I have no objection to that. I welcome the government amendments that recognise the importance of music in radio, and I am grateful for them.

It is interesting that the government amendments to Clause 307 represent a weakening of powers. The Commercial Radio Companies Association should take credit for some good lobbying in that direction. However, the noble Lord, Lord Eatwell, has to understand that commercial radio is operating against a background of some deep public concern. The truth is that when we look abroad and see the future, it does not work in terms of diversity in local radio. We on these Benches do not want to see any further weakening and we certainly would not support the deletion of Clause 307. There are even concerns about Amendment No. 166. Amendment No. 166A seeks to introduce new Section 106ZA. Subsection (4) of the new section states: OFCOM—

  1. (a) are not required to publish a notice under this section, and
  2. (b) may specify a period of less than 28 days in such a notice as the period for representations,
if they consider that the publication of the notice, or allowing a longer period for representations, would result in a delay that would be likely prejudicially to affect the interests of the licence holder". That could be quite a get-out.

All I am saying is that matching the indignant tone of the noble Lord, Lord Eatwell, is a counterbalancing concern that our local radio could go—and in some cases is already going—the way that deregulation has gone in other countries; namely. station after station being hoovered up by large conglomerates, which homogenise the product to the detriment of local voice, music and identity. In a way the Minister is caught between a rock and a hard place. There is more than one side to the argument, and I look forward to his response.

Lord Eatwell

My Lords, before the noble Lord sits down, since he mentioned me, will he acknowledge that in the other countries he is thinking of—probably the United States and Australia—format regulation does not exist? In Britain we have strict format regulation, which ensures that diversity in radio is maintained, and the homogenising process he described cannot occur?

Lord McNally

My Lords, I agree that we have format content, and by God we are determined to keep it.

Lord Davies of Oldham

My Lords, I am delighted that that little exchange helped to clarify some of the key issues involved with the amendments. As I have indicated, the amendments were tabled in the light of consultation and the discussion in Committee, where we promised to address these issues, which were forcefully addressed on that occasion.

The change to Clause 306, which deals with the requests for departures from the character of the service, makes it completely clear that the character of a service includes the music and spoken material selected for inclusion on that service. The same change is made to Clause 348, which deals with variations to licences following change of control. That ensures that Ofcom must consider the selection of music played on a station when considering the character of the station. That provision has general approval.

The new clause requires Ofcom to consult on requests to depart from the character of a service, except where there are considerations of commercial confidentiality—so it is not the case that it happens on all occasions—or where the time taken would prejudice the interest of a licence holder. In circumstances where a radio station might be in severe difficulties, Ofcom has the capacity to reach a judgment on whether it needs to engage in those procedures.

There are also a number of changes to Clause 307, which deals with Ofcom's duty to secure that local material is included in local radio stations. The amendments we have tabled make it clear that not all services need include local material. We make it clear that a suitable proportion of local material must be locally made. We remove specific examples of what the guidance could cover and remove references to the need to secure "local connections". We remove references to a code to emphasise that the clause is concerned not with a code but with guidance; we define more clearly what is meant by local material, making it clear that it includes music; and we make it clear that local advertising is not to be included in that guidance.

Those were some of the issues raised in Committee and which have been raised with us through the industry on which we believe we have made a suitable response. The guidance only bites on the station on the conditions already included in licences. It is not a way of introducing regulation via the back door, which I think my noble friend Lord Eatwell indicated, and might be a justified suspicion. Because of the restrictions under which the guidance operates, we are ensuring that it is not additional regulation in those terms. I hope he will recognise the value of that point.

We do not accept the argument that the guidance is all about "one size fits all". We think there are clearly levels of flexibility which meet some of the points about which my noble friend indicated he was anxious. In our view, guidance is inherently less regulatory than changing licences. The guidance will have effect only in so far as there are already localness conditions in a licence. It will not place new requirements on the licence holder. Rather, it will merely interpret and explain existing requirements which are often loosely defined. For example, there may be requirements that a service includes, features of particular local relevance or be, a locally-oriented station for the area". The guidance could set out the sort of things which a station could do to satisfy these requirements.

The notion of the guidance being "one size fits all" is misplaced. Guidance is only guidance, and it will remain the responsibility of the licence holder to decide how to meet whatever undertakings it has already given. Secondly, as I indicated, the guidance will just bite on existing commitments into which the licence holder has entered.

My noble friend expressed anxieties in other areas, particularly on Amendment No. 166A, in which, as he will appreciate, I see considerable merit. There could be many people who may wish to express their opinion on any proposed change, from other stations in the area to the music industry and to those who would be most affected—the listeners to the station. This seems a good example of open and consultative regulation. We have built in safeguards for the industry. The minimum time period for consultation has been kept down to 28 days so as to avoid unnecessary delays in the process. Furthermore, Ofcom does not have to consult where that would involve publishing matters which are commercially confidential. It can choose to foreshorten the period of consultation or not consult at all if it is anxious about the viability of the station.

We are seeking to indicate, through these amendments, that, far from the guidance being an excessively tough regulatory mechanism, it is well suited to the needs of the industry. It takes into account what the noble Lord, Lord McNally, indicated—that we have to strike a balance between two perspectives on the achievements and value of local radio. We are seeking, through the amendments and as a result of the discussions we have had, to strike that balance. The noble Lord, Lord McNally, kindly referred to me being between a rock and a hard place. I do not know which is more comfortable, but I will try and find out. I beg to move.

On Question, amendment agreed to.

[Amendment No. 166 not moved.]

Lord Davies of Oldhammoved Amendment No. 166A: After Clause 306, insert the following new clause—

"CONSULTATION ABOUT CHANGE OF CHARACTER OF LOCAL SERVICES After section 106 of the 1990 Act there shall be inserted—


(1) Before deciding for the purposes of a condition imposed under section 106(1 A) whether to consent to a departure from the character of a service provided under a local licence, OFCOM must publish a notice specifying—

  1. (a) the proposed departure; and
  2. (b) the period in which representations may be made to OFCOM about the proposal.

(2) That period must end not less than 28 days after the date of publication of the notice.

(3) The notice must be published in such manner as appears to OFCOM to be appropriate for bringing it to the attention of the persons who, in OFCOM's opinion, are likely to be affected by the departure.

(4) OFCOM—

  1. (a) are not required to publish a notice under this section, and
  2. (b) may specify a period of less than 28 days in such a notice as the period for representations,
if they consider that the publication of the notice, or allowing a longer period for representations, would result in a delay that would be likely prejudicially to affect the interests of the licence holder.

(5) OFCOM are not required under this section—

  1. (a) to publish any matter that is confidential in accordance with subsection (5) or (6); or
  2. (b) to publish anything that it would not be reasonably practicable to publish without disclosing such a matter.

(6) A matter is confidential under this subsection if—

  1. (a) it relates specifically to the affairs of a particular body; and
  2. (b) its publication would or might, in OFCOM's opinion, seriously and prejudicially affect the interests of that body.

(7) A matter is confidential under this subsection if—

  1. (a) it relates specifically to the private affairs of an individual; and
  2. (b) its publication would or might, in OFCOM's opinion, seriously and prejudicially affect the interests of that individual.""

On Question, amendment agreed to.

Clause 307 [Local content and character of local sound broadcasting services]:

Lord Davies of Oldhammoved Amendments Nos. 166B to 166Q:

Page 271, line 6, after "services" insert -but, in the case of each such service, only if and to the extent (if any) that OFCOM consider appropriate in that case"

Page 271, line 7, leave out from "that" to end of line 8 and insert ", where such Programmes are included in such a service, what appears to OFCOM to be a suitable Pro Portion of them consists of locally-made Programmes."

Page 271, line 10, leave out "a code giving"

Page 271, line 12, leave out "code" and insert "guidance"

Page 271, line 14, leave out subsections (3) and (4).

Page 271, line 31, leave out "code may make different provision" and insert "guidance may be different"

Page 271, line 32, leave out "code" and insert "guidance"

Page 271, line 33, leave out "code" and insert "guidance"

Page 271, line 39, leave out "code and every revision of the code" and insert "guidance and every revision of it"

Page 271, line 42, leave out from beginning to end of line 2 on Page 272.

Page 272, line 4, leave out "(including news)"

Page 272, line 10, at end insert "or a Part of it"

Page 272, line 13, at end insert— "material" includes news, information and others Poken material and music; and Programme" does not include an advertisement,

Page 272, line 14, leave out second "in" and insert "within"

On Question, amendments agreed to.

[Amendment No. 167 not moved.]

11 p.m.

Baroness Buscombemoved Amendment No. 168: Page 273, line 32, leave out "and

The noble Baroness said: My Lords, I shall also speak to Amendments Nos. 168 to 171 and 173 to 181. I regret that the debate on the amendments in Committee failed to take us much further, so I have decided to return once again to this extremely important issue.

I shall first review the issue to hand. At present it appears that the Bill contains no restriction on Ofcom's ability to undertake the economic regulation of broadcasting using its Broadcasting Act powers through broadcasters' licences, as opposed to its Competition Act powers or its sector specific competition powers.

In the latter two instances, economic regulation is by definition a matter of competition, and decisions taken through these routes by Ofcom are subject to full rights of appeal to the competition appeals tribunal. In the former instance, regulation of broadcasters through their licences for a competition purpose is also subject to full rights of appeal to the CAT where that is the only or main reason for the decision. However, economic regulation may not always be a matter of competition. It may, for example, be a matter of promoting consumers' interests with little or no competition element. For example, Ofcom could impose conditions on broadcasting licensees relating to the packaging and pricing of channels and services pursuant to its Clause 3 duties to further the interests of consumers in relevant markets or to secure the availability of a wide range of TV and radio services.

In such instances, where economic regulation is applied through broadcasters' licences for reasons not wholly or mainly for a competition purpose, there is no right of appeal to the CAT. Instead, broadcasters may only take the more limited route of judicial review, which looks at the decision-making process only, not the merits of the decision. That stands in stark contrast to the economic regulation of, for example, telephony providers and providers of other electronic communications networks and services under Part 2 of the Bill where all decisions are subject to appeal to the CAT.

With one very significant exception, Amendments Nos. 173 and 174 would address this problem by ensuring that any person affected by a decision of Ofcom to exercise any of its Broadcasting Act powers in fulfilment of general duties under Section 3 may appeal to the CAT. The exception is that Amendment No. 175 would amend Clause 310(8) to ensure that the right of appeal to the CAT is disapplied in relation to all Ofcom's content functions unless any such decision were made for a competition purpose as reflected in Amendment No. 176.

Amendments Nos. 178 to 191 are consequential to these amendments and widen the scope of any future Ofcom review of its codes, guidance, directions and, as proposed in Amendment No. 179, conditions.

In Committee the Minister drew a distinction between Part 2 and Part 3 of the Bill. In Part 3, he explained, Ofcom is required to make "subjective content judgments" that are subject to appeal by judicial review only, while in Part 2 there are no subjective content judgments, and all decisions are subject to appeal to the CAT.

I agree with that analysis in relation to "content judgments". As I have made clear all along, my amendments do not seek to introduce a right of appeal to the CAT on all Ofcom decisions under its Broadcasting Act powers. I recognise that most content decisions will have some economic impact. however small, and accept that they should attract no more than a right of judicial review. That is why my amendments disapply the CAT appeals route to Ofcom's content functions.

Rather, as I said, my amendments seek to bring within the CAT appeals process those decisions taken and imposed in Broadcasting Act licences under Part 3 that are not wholly or mainly for a competition purpose but nevertheless are unambiguously economic regulation. That is the extent of their ambition.

I regret to say that I was confused by some of what the Minister had to say in response to the amendments in Committee. At one point he appeared to agree with me that a CAT appeal would be appropriate where economic regulation was applied to broadcasters for reasons other than a competition purpose. The Minister said: Intervention, such as economic regulation in pricing and in the packaging of channels made in the interests of consumers should be treated in the same way in terms of route of appeal as a competition intervention. For example, Ofcom may wish to intervene in Sky's packaging of channels so that consumers could have more choice of packages without having to buy a lot of unwanted channels as a minimum".

However, the Minister went on to say: But the purpose of the intervention would be a subjective question of what represented an acceptable amount of consumer choice".

Given the Minister's previous statement that subjective decisions under Part 3 are subject only to judicial review, this would appear to confirm that a CAT appeal would not be possible for economic regulation in pricing and packaging of channels made in the interests of consumers. I should be grateful for some clarification from the Minister.

In rejecting these amendments in Committee the Minister also argued: Ofcom's duty to further the interests of consumers is qualified by the parameter, where appropriate, of promoting competition".—[Official Report, 3/6/03; 1293.] The Minister suggested in this regard that an intervention in the packaging of channels in the consumer interest would not be possible unless Ofcom could show that it was not appropriate to achieve the same result through the use of general or sectoral competition powers, and that such a decision could be challenged through judicial review.

This explanation, I regret to say, provides no assurances and completely misses the point of the amendments. The fact is that even if Ofcom were able to show that it was inappropriate to achieve the desired level of channel unpackaging through general or sectoral competition powers, the regulation pursuant to the duty to further the interests of consumers would still be a purely economic one. This should be subject to a right of appeal to the CAT. To suggest that Broadcasting Act licensees could challenge the process through judicial review is a wholly inadequate substitute for a right of appeal to the CAT.

It is also important to point out that there are Clause 3 duties other than the furthering of consumer interests which OFCOM could use to impose economic regulation through broadcasters' licences. The duty to secure a wide range of television and radio services, for example, could equally be used by Ofcom to require the unpackaging of channels, without any identified competition purpose.

I also raised in Committee the inequity that cable operators, who are retailers of pay television, will escape regulation of their pay TV retail activities, as they may not hold TLCS licences unless they themselves provide channels whereas identical retail activities of satellite operators will be regulated simply because the satellite operator happens to hold TLCS licences for channels which he himself provides. The Minister said in response simply that no unfair treatment exists because a cable operator who owned a channel would be in the same position as the satellite operator.

Here, again, the point has been missed. Clearly, where cable companies do not have their own channels, they do not require a licence for these. I am not arguing that that is an unfair position. What I am saying is that because such licences are not owned by cable operators they do not find themselves exposed to the same potential for economic regulation of, say, pricing and packaging television services. That is the inequality that I wish the Government to address, or at least against which to provide additional safeguards for broadcasters through an appeal to the CAT.

In conclusion, therefore, I am disappointed that the Government have yet again failed to address our core concerns on this issue. Let me say again that I am not talking about a CAT appeal for subjective content regulation, as I think the Government by now understand. Yet they seek in their answers to present a simplistic divide between content regulation on the one hand, with an appeal through judicial review, and economic regulation for a competition purpose on the other, with an appeal to the CAT. It is difficult to understand why the Government refuse to acknowledge that economic regulation for reasons other than a wholly or mainly competition purpose may take place under Part 3 and a right of appeal to the CAT should be provided.

I now turn briefly to my other amendments. Amendments Nos. 168 and 169 seek to extend Clause 310(1) to cover Ofcom's powers to issue codes of practice or guidance to holders of licences. In spite of the Minister's view that such a provision is already provided for under subsection (1)(d), I continue to believe that it would be helpful for that to be more clearly indicated on the face of the Bill.

Amendments Nos. 170 and 171 would require Ofcom not to use its Broadcasting Act powers on any matter where that matter is capable of being dealt with under the Competition Act. The amendments would replace the current wording which simply provides that, before exercising any of its Broadcasting Act powers for a competition purpose, Ofcom should consider whether a more appropriate way to proceed would be under the Competition Act. The Minister in Committee opposed these amendments, on the basis that where conduct breaches both the competition and broadcasting Acts, it might still be more appropriate to act under the Broadcasting Act. Yet the Minister provides no examples of where that might in fact be the case. Perhaps he can take the opportunity tonight to provide some examples to justify his position.

Finally, my Amendment No. 177 would introduce additional procedural safeguards into Part 3 of the Bill along similar lines to the set of tests for setting or modifying conditions in Clause 44 in Part 2 of the Bill.

I am pleased that the Minister agreed with the principle behind the amendments, but am surprised by his view that the Bill, contains sufficient provisions to ensure that that is delivered".—[Official Report, 3/6/03; col. 1295.] Where in the Bill are these provisions to be found? If they are there, why have the Government also seen the need to introduce specific conditions into Part 2? Further clarification on this matter would be welcome. I beg to move.

Lord McNally

My Lords, I shall be extremely succinct. These Benches do not share the concerns voiced by the noble Baroness, Lady Buscombe, about Clause 310. We think that the indiscretions and powers contained therein are about right.

Lord Davies of Oldham

My Lords, at this late hour I am glad to see that normal relations between the Front Benches have been resumed. We are in the critical relationship again after a period of amity that lasted all of one hour, but for which I am duly grateful.

The noble Baroness, Lady Buscombe. did lay one charge. I will not repeat all the arguments we heard in Committee. She quoted from the Committee proceedings that I had said that: intervention, such as economic regulation in pricing and in the packaging of channels made in the interests of consumers, should be treated in the same way in terms of route of appeal as a competition intervention".—[Official Report, 3/6/03; col. 1293.] She is right; that is what I said. However, I fear that she is taking my remarks somewhat out of context. We were discussing in Committee whether Ofcom could use its general duty to further the interests of consumers to intervene in the packaging and pricing of channels. I made it quite clear that it would be difficult to see how Ofcom could justify intervening in the packaging of channels in the consumer interest without being able to show that it was not appropriate via the competition powers that Ofcom will have.

It is hard to imagine, therefore, a situation where any intervention in pricing and packaging of channels, which is the nub of the issue, would not be undertaken using Ofcom's competition powers. It therefore follows that the noble Baroness gets the result that she desires. Such an intervention would have a route of appeal to the CAT, which is the point that we were trying to establish.

I should like to be clear about what the principal effect of the amendment tabled by the noble Baroness would be and why we do not intend to accept it. The amendment stems obviously from her concern, clearly expressed in her speech this evening as it was in Committee, on the part of one broadcaster in particular, that if Ofcom undertakes economic regulation other than for a competition purpose—as defined in Clause 310(7) for example—under its duty in Clause 3 to promote the interests of consumers, that broadcaster would not have a route of appeal to the Competition Appeal Tribunal.

The main difference of view between that broadcaster and the Government derives from the broadcaster's understanding of economic regulation. It considers all interventions in the economic arrangements of broadcasters—for example, the packaging of channels—to be purely economic issues, whereas we consider that such issues can contain significant elements of consumer interest.

In our view, therefore, regard should be paid, when considering appeal mechanisms, to the purpose of the regulator's intervention, as well as to its effect. That is why we have made sure that interventions for a competition purpose should have a route of appeal to the CAT. The broadcaster's specific concern is that Ofcom will use its general duty, to further the interests of consumers". and to intervene in the packaging of its channels. I tried to make it clear in Committee, and I shall make another attempt this evening, that Ofcom's duty to further the interests of consumers is limited by the parameter where appropriate by promoting competition. That means that contrary to what the broadcaster fears, Ofcom cannot simply intervene in the packaging of its channels in the consumer's interests without being able to show that it was not appropriate to resolve the issue by encouraging more competition. As I said earlier, I fear that Ofcom's efforts to evaluate properly those options could result in challenge under judicial review. The noble Baroness will recognise the strength of that sanction.

I hope that I have reassured the noble Baroness sufficiently for her to consider withdrawing her amendments. I also want briefly to mention Amendment No. 172, which she graciously mentioned. I shall move it in due course. We agreed to consider an opposition amendment that sought to require Ofcom to inform any person affected of the use of the Broadcasting Act powers for a competition purpose and also to inform those affected that they may appeal to the Competition Appeal Tribunal against the intervention. We agree with the principle. That is why the amendment will be a requirement on Ofcom in that respect.

Baroness Buscombe

My Lords, I thank the Minister for his response. The hour is very late and I do not want to detain the House. I am rather disappointed that he did not move further in the direction that I sought on the amendments. I shall take away his response and think about it, but for now I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 169 to 171 not moved.]

Lord McIntosh of Haringeymoved Amendment No. 172:

Page 273, line 42, at end insert— (3A) If OFCOM have decided to exercise any of their Broadcasting Act powers for a competition purpose, they must, on or before doing so, give a notification of their decision. (3B) A notification under subsection (3A) must—

  1. (a) be given to such persons, or published in such manner, as appears to OFCOM to be appropriate for bringing it to the attention of the persons who, in OFCOM's opinion, are likely to be affected by their decision; and
  2. (b) must describe the rights conferred by subsection (4) on the persons affected by that decision."

On Question, amendment agreed to.

[Amendments Nos. 173 to 176 not moved.]

[Amendment No. 177 not moved.]

Clause 311 [Review of powers exercised for competition purposes]:

[Amendments Nos. 178 to 181 not moved.]

Lord Grocott

My Lords, I beg to move that further consideration on Report be now adjourned.

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

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