Communications Bill

HL Deb 02 July 2003 vol 650 cc886-955

3.19 p.m.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

Clause 312 [OFCOM's standards code]:

Lord Gordon of Strathblane

moved Amendment No. 182: Page 275, line 37, leave out "unsuitable" and insert "which may be misleading, harmful or offensive

The noble Lord said: My Lords, last night my noble friend Lord McIntosh, in replying to one of the debates, said, at col. 835, that the great advantage of the words "suitable" and "sufficient" is that they are capable of a wide meaning. To that I reply that one man's flexibility is another man's uncertainty. That is the core of the reasoning behind my amendments.

Over the years, the advertising industry has acquired widespread respect for the way in which it has regulated itself and submitted to regulation in the case of broadcasting. I think that it is safe to say that very few political speeches would meet the standards of the Advertising Association or the Advertising Standards Authority.

Adverts are extremely expensive to make and no one in the advertising world would want to incur a great deal of expenditure on an advert which might ultimately fall foul of the regulator. For that reason, producers seek to pre-clear the scripts and treatment so that they know, before they commit to expenditure of what can often amount to hundreds of thousands of pounds, that the advert will be all right in terms of regulation.

The terms that the industry has become used to are very precise: "misleading", "offensive" and "harmful". While I concede that they were not set out in the 1990 Act, they have certainly been used in all the codes governing advertising control since then. Let me say in passing that the word "unsuitable" was not used in the 1990 Act either. We are concerned about the huge uncertainty that could arise as a result of the introduction of such a vague term, perhaps resulting in advertising campaigns falling foul of the regulator.

It is that very imprecision that is causing the bother. By chance I bumped into my noble friend Lord McIntosh a little earlier. He told me that a letter was on its way, but I have not yet received it. My noble friend was kind enough to show me the draft. I have read it and, while I do not wish to appear ungracious, if all we can do is seek a synonym for "unsuitable", that simply will not address the problem. It would be more honest for me to divide the House today than to save the matter for Third Reading. I do that with regret because I very much admire my noble friend for having given ground over the past few days where it has been important to do so. The whole approach to the Bill has been transformed.

I am also grateful to him for allowing me to see the draft of his letter. However, no amount of searching through Roget's Thesaurus for a word other than "unsuitable" will help, especially if we substitute it with another vague term that would give Ofcom more power in a hitherto undefined form. I do not believe that that is going to be acceptable.

My noble friend's letter mentions that one of the problem areas might be the ban on certain categories, such as political advertising. He goes on to state that while, it may not be misleading, harmful or offensive in itself— I believe that many noble Lords might question that— Ofcom must have the power to enforce such a ban. But the ban on certain categories of advertising is still in the Bill. There is no problem about that. I have done nothing to vitiate the position in any way.

A further problem we must deal with is scheduling. When I raised this matter in Committee, Ministers objected by saying that this might not catch scheduling that could affect the under 16 year-olds or children in general. The noble Baroness, Lady Howe, intervened to point out that the commission had always interpreted "misleading, harmful or offensive" in terms of the audience which might be watching at the time. But I have gone further and tabled a second amendment, Amendment No. 183, which, in his letter, the Minister kindly acknowledges would meet the scheduling problem.

I have also weakened Amendment No. 182 to make it state not only "misleading, harmful or offensive", but, which may be misleading, harmful or offensive", thus widening its scope to give Ofcom surer ground on which to defend itself against any advertiser who might unreasonably think that he had been ill treated.

I feel therefore that I must press these amendments today. Every noble Lord who spoke in the debate in Committee was in favour of them. They met with the approval of a former chairman of the Advertising Association, a former chairman of the Advertising Standards Authority, the noble Baroness, Lady Howe, with her long experience of broadcasting standards and, at the time—although I gather that it has been leant on since—the ITC. So we want to press ahead and try to settle the matter today. I beg to move.

The Chairman of Committees (Lord Brabazon of Tara)

My Lords, I should inform the House that there is a misprint in the Marshalled List. The amendment proposed should read: Page 275, line 37, leave out "unsuitable advertising" and insert "advertising which may be misleading, harmful or offensive".

Lord Borrie

My Lords, in Committee the Government stated that they were keen for Ofcom to have a broad power to ban the advertising of certain products and services—some, no doubt, it could not know of in advance. The Government have indicated that they want Ofcom to have that broad power in order to prevent the inappropriate and unsuitable scheduling of certain types of advertisement, say, around programmes aimed at children. Such concerns on the part of the Government are understandable, but to enable Ofcom to ban "unsuitable" advertising is, in the minds of supporters of the amendment, much too sweeping a power to give to any regulatory agency because it would become almost immune to challenge.

I hope that the Government will recognise that Amendments Nos. 182 and 183 are designed both to achieve the Government's own practical objectives and to introduce precision to the powers being given to Ofcom. As my noble friend Lord Gordon of Strathblane indicated, the protection of persons aged under 18 is now mentioned specifically; so that particular worry has been dealt with. Moreover, the power to enable Ofcom to prevent advertising, which may be misleading, harmful or offensive", should give Ofcom ample ability to do what the Government feel is needed, whether it be a power to ban advertisements for gun clubs and other examples that we know about or to ensure that adverts scheduled around children's programmes are adequately controlled. I support both amendments. I hope that the Government will feel able to do the same and accept them.

3.30 p.m.

Baroness Buscombe

My Lords, I am grateful to the Minister for faxing over to me at lunchtime today the letter referred to by the noble Lord, Lord Gordon of Strathblane. I strongly support the amendment, to which both my name and that of my noble friend Lord Saatchi have been added. Notwithstanding our gratitude to the Minister for what he had to say in his letter, I too am not yet satisfied and feel that the matter should be pressed to a vote today. I shall set out the reasons.

As someone who was an advertising practitioner and lawyer, albeit some time ago, I have enormous sympathy with the concerns being expressed by the advertising industry about the sweeping terminology, "unsuitable advertising". First, what is unsuitable for one is not necessarily unsuitable for another. Advertising that is misleading, harmful or offensive embraces concrete and objective concepts. That is the difference.

Every time this issue has been raised during the passage of the Bill both in another place and in your Lordships' House, the legitimate concerns of the advertising industry have been, to be frank, rather cursorily and inadequately addressed by the Government. The Minister in another place said that the word "unsuitable" is needed to enable the regulator to ban the advertising of products such as tobacco. However, in the current environment I would be most surprised if the regulator was not able to prohibit the advertising of such products under the heading of "harmful". I believe that that word is used frequently in the warning on the front of cigarette packets. Having given up smoking, I cannot remember, but I think that that is fair; I do not think that the cigarette packet would say "unsuitable".

The Minister also said that the word was needed to implement international obligations, in particular the "TV without frontiers" directive, but the need to take account of such obligations is specifically required in Clause 312(7). The Minister went on to say that the word was needed to implement the provisions of the Broadcasting Act 1990, but so far as I can see the sections of that Act applicable to advertising already appear in the Bill.

In the debate on Second Reading in your Lordships' House, the noble Lord, Lord McIntosh, remarked that "unsuitable" simply means advertising that may be unsuitable for certain times and certain audiences and that it is similar to the current powers of the ITC. In Committee the noble Lord, Lord Davies, said that the word "unsuitable" was purposely broad and sweeping and went on to remark that none of the contributions from Peers in support of the amendment had commented in any way on the specific nature of broadcasting and the concept of the watershed. However, I do not think that that is quite true.

The noble Baroness, Lady Howe, made specific reference to the fact that the BSC had taken the timing of the broadcast and its audience into account and she backed the use of specific criteria such as Amendment No. 182 allows.

So many reasons have been given with so little clarity in giving them that it is no wonder there has been no resolution of this quite focused and technical issue. The Government have defended "unsuitable" with different reasons on different occasions—and on none of those occasions have they succeeded in reassuring the advertising industry that the clause represents a good basis for primary legislation on advertising.

It would appear that the problem has arisen because of the structure of the Bill. All the provisions of the 1990 Act are contained in the Bill, but the big difference is that in the Bill the provisions relating to advertising have to be interpreted against the standards objectives in Clause 312. So "unsuitable" is a "suitable" standards objective, say the Government, precisely because it is a catch-all word. "Misleading, harmful or offensive" are not suitable standards objectives because they may or may not exclude some things that the regulator may want to ban.

It has never been the intention of the advertising industry to restrict the scope of existing codes, which have worked well for the past 20 years. Nor was it the intention, of that I am sure, of the ITC and Radio Authority, both of whom supported the original amendment at the Committee stage in your Lordships' House. I know from my own experience in the advertising business that it is most important to encourage certainty in terms of the application of the rules.

The Minister's letter addressed to the noble Lord, Lord Gordon, referred to Section 93 of the Broadcasting Act in relation to radio and stated: Although the word 'unsuitable' does not appear, nor do the words 'misleading, harmful or offensive'". In practice, everyone beyond your Lordships' House, in industry and across the whole media industry, understand the meaning of "misleading, harmful or offensive", and know the parameters, to a large extent, of how that fits in on a day-to-day basis.

I have a real problem with the word "unsuitable". I am grateful that in our negotiations we have encouraged the Minister to consider an alternative but I am not sufficiently assured not to press the amendment to a Division. It is our duty to support the interests of the industry and to confirm everything that we have said at every stage thus far in your Lordships' House.

The Lord Bishop of Manchester

My Lords, I, too, find much that is persuasive in the argument of the noble Lord, Lord Gordon. His amendment provides a clearer definition of the standards to which broadcast advertisers must adhere. It is akin to the standard required by the Advertising Standards Authority for non-broadcast advertisements.

The word "unsuitable" in this context is, as the noble Baroness, Lady Buscombe, indicated, difficult to define. In my view, it is more difficult than the words "misleading, harmful or offensive". For example, in the advertising slots in and around children's programmes, adverts for the latest craze toys at Christmas time are no doubt very suitable from the viewpoint of the children watching but they may be highly unsuitable from the point of view of their parents.

Again taking the example of children's programmes, I am concerned that there are occasions when the advertising slots between pre-watershed programmes are used to advertise more adult pursuits and products and more adult television programmes. I know that there are commercial pressures on broadcasters but I should like an assurance that Ofcom will be watchful and strict about such matters and, indeed, about all matters relating to the enforcement of the watershed.

If the Minister is not minded to accept the amendment, I look to him to give a robust semantic defence of the word "unsuitable" to show that it is more appropriate here than "misleading, harmful or offensive"; that its meaning, as teased out by the Minister, will be carefully and firmly applied by Ofcom to uphold standards in this area rather than to let them drift; and that, in any case, misleading, harmful or offensive advertisements will be proscribed.

If the noble Lord, Lord Gordon, is intent on pressing his amendment to a Division, the Minister's response will help me to decide whether to support the Government or the noble Lord, Lord Gordon.

Lord Thomson of Monifieth

My Lords, I support the amendment of the noble Lord, Lord Gordon, who has made an earnest attempt to meet the anxieties expressed by the Government at the Committee stage. As a former regulator with both the ASA and the IBA I find myself very uncomfortable with the broad and sweeping terminology currently contained in Clause 312(2)(g). The word "unsuitable" means different things to different people and in the debate so far we have not had enough comfort from the Government in terms of its precise meaning or purpose. I share the views of the right reverend Prelate in that regard.

An Act of Parliament should be drafted to leave as little room as possible for unintended interpretations by courts in the future. We know what we mean by "misleading, harmful or offensive", and have done so over many years. They are well tried terms which form the basis of the existing radio and television advertising codes.

I note from the Committee stage debate on 3rd June that the Government want the standards objective for advertising to be as broad as possible, to cover both undesirable product categories and inappropriate scheduling. I well understand their concern but, in my view, the new amendments would generally achieve both aims. "Harm" or "offence" can be used to apply to all kinds of things, including scheduling. For example, section 7.3.6 of the ITC code of advertising standards requires that appropriate timing restrictions be applied to advertisements which might harm or distress children or which would otherwise be unsuitable for them. This falls within the main section on "harm and distress" in Section 7.3 of the ITC code.

The Radio Authority has a similar requirement. Section 11 of its advertising and sponsorship code states that, advertisements likely to be heard by a significant number of children … must not include any material which might result in harm to them, whether physically, mentally or morally".

If the Government are going to persist with the word "unsuitable" as a standards objective for advertising they must produce good examples that would not be covered by "harm", "offence" or "misleading". In my experience, these terms have been usefully applied in a wide-ranging way by regulators to date. The words have been used very widely for a very long time and the self-regulation system of advertising standards has worked very well.

I am genuinely puzzled as to why the Government are resisting the amendment and making such heavy weather of it. I have not had the advantage of a letter from the Minister and so I cannot speak about that. We have more fundamental and serious matters to discuss at this stage of the Bill and I wonder why the Government are digging themselves in on this matter.

Baroness Carnegy of Lour

My Lords, I have not spoken on the Bill before and I hope that your Lordships will not mind me saying that I find it very strange how the Government are talking themselves into the odd use of words. Only the other day the noble Lord, Lord McIntosh, told us that, whatever our nationality, we must consider ourselves citizens if we lived in this country rather than members of a community. That seems a rather refined way of using language.

The concept of suitability is subjective. The right reverend Prelate made the point that it depends on who you are and what you consider to he suitable. The amendment makes a very good attempt to be far clearer. We do not want a regulator to decide about the "suitability" of something when the word is so subjective. It would be better for him to decide whether something was "misleading, harmful or offensive" because they are much clearer concepts. I support the amendment.

Baroness Howe of Idlicote

My Lords, I, too, share the concern and puzzlement expressed by the noble Lord, Lord Thomson, as to why the Government should be digging in their toes about this. Everybody who has spoken and who spoke on the previous occasion felt that the three words in the amendment were far more indicative of what we were all talking about than the single word that the Minister preferred. Not only that hut, if I may say so, I think all three words give a concept to each one of the words used and help better to define the individual's interpretation.

I will repeat what I said last time. All the previous regulators took into account the timing of the programme, which is crucial, and I see no reason why that will not continue to happen. Obviously, at certain later times of the night things would be permitted which would not be permitted earlier or, rather, it would not be a question of finding against the advertiser. But a major problem is that adverts come upon you suddenly. Unlike the increasing encouragement to broadcasters to put warnings on their programmes, which are extremely effective in helping parents and others to decide whether to turn off, suddenly the adverts come on. That aspect needs to be taken very seriously.

Given all the things that have been said about combining the advertising standards approach and this amendment being the right way forward, I hope the Government will decide that they can change their mind.

Lord Davies of Oldham

My Lords, I am grateful for the debate and the attempt to clarify an issue which has exercised the Government and to which we have attempted to respond as positively as possible. Let us be absolutely clear: there is no real difference of principle between the Government, the regulators and the industry about what we are seeking to achieve. However, I will develop my response in terms of indicating that we are not holding fast to the term "unsuitable" so I will not respond to the invitation from the right reverend Prelate to produce a robust definition of the word. That would take me rather longer than your Lordships would bear.

I shall indicate, as we sought to indicate in our letter to colleagues who were signatories to the amendment, that we were prepared for further discussion. But I shall resist the amendments because they will not improve the Bill. Therefore, they ought not to be pressed to a vote this afternoon. I hope they are not, and, if they are, I hope noble Lords will recognise that the Government have reservations about the terms contained in them and are prepared to discuss the situation further prior to Third Reading.

The current advertising standards for broadcasting are generally considered effective, as the noble Lord, Lord Thomson, and others said. There is, it seems clear, no desire to limit Ofcom's ability to address issues of public interest and public concern in the most effective way. The question is simply whether, on the one hand, the amendment would provide the necessary scope to Ofcom and, on the other, whether "unsuitable" is too broad a term which would open the way to mischievous pressure to ban advertising on flimsy grounds.

Let me make it absolutely clear, therefore, that the Government's policy from the outset has been that Ofcom should have the same scope to regulate broadcast advertising as the ITC and the Radio Authority. The current statutory scope has obviously been wide enough to accommodate the current codes. I emphasise that it is not the issue of what is in legislation that is the determinant of the effectiveness of Ofcom's operation; it is the code, where the necessary terms will appear, that we need to address. That is why, if the Bill becomes an Act, we need a term which is sufficiently broad for the code to have the flexibility, over time, to define itself with some precision according to the needs of our community. The concept must be wide enough to address any future concerns—

Lord Lester of Herne Hill

My Lords, I am very grateful to the Minister for giving way. Will he agree, however, that in view of the impact on freedom of commercial speech that regulation has in the context of, for example, the European Convention on Human Rights, reasonable legal certainty has to be achieved, either on the face of the Bill or in a legally binding code? Is not the virtue of the amendment that it achieves greater legal certainty than the very vague word that is there?

3.45 p.m.

Lord Davies of Oldham

My Lords, I hear what the noble Lord says and treat it with respect, as I always do. But we consider that the term "harmful" in the amendment might well be open to the same problem of being difficult to define legally. If we relied upon "harmful" to deal with the watershed, we might have great difficulty in establishing the legal certainty of just how "harmful" a programme was in relation to whether it came before or after the watershed.

It was suggested in Committee that the three words in the amendment defined the current scope of the ITC and Radio Authority powers. In fact, Section 9(1) of the Broadcasting Act 1990 specifies only this: It shall be the duty of the Commission—

1. (a) after the appropriate consultation, to draw up, and from time to time review, a code—
1. (i) governing standards and practice in advertising …
2. (ii) prescribing the advertisements and methods of advertising … to be prohibited, or to be prohibited in particular circumstances; and
2. (b) to do all that they can to secure that the provisions of the code are observed in the provision of licensed services".

Similar provisions apply to radio. There is no mention of the three words in this amendment. The statute gives the current regulators the widest discretion. I repeat: the words "misleading, harmful or offensive"—which I recognise have had their value in the code with regard to regulation in recent years—are not the basis of broadcast advertising regulation in the parent 1990 Act.

However, as in the 1990 Act, the Bill provides for the development of a code after consultation. It is the code which provides the clear rules and the regulatory certainty which is necessary. The three words in the amendment appear in the current codes which will be inherited by Ofcom. They could continue to form the core of any new codes developed by Ofcom or a co-regulatory body. As my noble friend Lord Gordon of Strathblane indicated in Committee, these words have indeed provided some regulatory certainty for a number of years. Nothing in the Bill prevents them from continuing to form the core of Ofcom's codes, but they do not necessarily justify all that is in the codes. That has not needed to be tested because the statute does not limit the codes to "misleading, harmful or offensive" matters.

We therefore cannot he confident that these words would provide a sufficiently secure basis for the regulation of broadcast advertising. If the amendment were accepted, Ofcom could he subject to challenge if it could not prove that the advertisement was "misleading, harmful or offensive" ultimately to the satisfaction of a court.

Our policy, therefore, is to roll forward the wide scope of the 1990 Act, with detailed rules set out in a code produced, of course, after wide consultation. I can assure the House that the Independent Television Commission and the Radio Authority have discussed these provisions within the department. They recognise the need for the wide scope of the 1990 Act and fully support the Government's policy of rolling that forward in the Bill.

I accept that we need to discuss the word "unsuitable" further, and we are prepared to have discussions with colleagues before Third Reading. However, I should explain why it appears in the Bill. It is because the Bill is structured differently from the 1990 Act. It sets out the high-level principles applying to broadcasting standards. These apply to advertisements in the same way as they apply to programmes.

Clause 312(2)(g) effectively answers the question: what is Ofcom's particular duty in relation to advertising standards? All Ofcom's responsibility for advertising, whether specified in national or international legislation, must be consistent with that duty. Further detail specific to advertising is provided at Clauses 314 and 315. So, for example, the ban on political advertising, specifically provided for in Clause 314, must be within the scope of the provision of Clause 312. Such advertisements may not be misleading, harmful or offensive but, as Ministers have tried to explain at previous stages, we believe that there are good reasons for maintaining the ban on political advertisements. That is one example of why we are obliged to draw the statute widely. A similar example is the distinction between radio programming and advertising. Listeners must be aware when they are hearing a commercial promotion rather than programming. That would not fall within the terms of the amendment. Other examples have been mentioned in previous debates.

The point has also been made that "unsuitable" might be misinterpreted by interest groups, but that is the problem with "harm" too. If it were to have the wide meaning necessary to maintain even the current levels of regulation, it would be open to the same challenge. But the regulator cannot regulate advertising on a whim. The current statutory provisions provide full regulatory flexibility, but the regulator has to come to a reasoned and defensible view on what should or should not be allowed. That is tested in the statutory consultation on the specific provisions of a draft code. The Bill's provisions require exactly the same and make it no easier than now for the regulator to act on inadequate evidence.

However, we are prepared to consider alternative ways in which to achieve the policy, which is not one of a clash of principles. We want to ensure that we have the chance to discuss matters further. I cannot promise to succeed hut we shall certainly examine whether there is any scope to make further progress.

In summary, the draft Bill simply places the current statutory scope for broadcast advertising regulation within the new structures of standards objectives. It provides for clear regulatory rules to be defined in codes so that industry has regulatory certainty and knows where it stands. It provides a robust base for current standards to be rolled forward and for flexibility to address future concerns so that viewers' and listeners' interests are safeguarded. The amendments would not achieve that.

For those who take the view of the right reverend Prelate that there are anxieties about the Government's position as enshrined in the Bill, we are prepared to have further discussion. However, we do not believe that the case has been made by those who have presented the arguments for the amendments today. We shall seek to make progress on the matter.

In presenting the amendments, my noble friend Lord Gordon asked whether the Government were offering some attempt to produce a synonym for "unsuitable". He will recognise that I have shied away from that invitation, which was reinforced by the right reverend Prelate.

The Lord Bishop of Manchester

My Lords, the invitation still stands, and if the Minister wishes to respond to it, I am sure that your Lordships would be most interested to hear him.

Lord Davies of Oldham

My Lords, I am grateful for the renewal of the invitation, but I shall resist it for the second time. We are not seeking a synonym for "unsuitable"; we are seeking to ensure that the Bill does not offer a peg for lobby groups to demand inappropriate advertising bans. We are trying to ensure that the Bill has the breadth to create the opportunities for the codes to be specific but also to guard against mischievous activity in those terms.

My noble friend Lord Borrie said that the problem with the phrase "unsuitable" was that it would be unchallengeable in court, but that is not so. The specific regulatory rules must appear in any code that we produce under the legislation—a code developed after the fullest consultation. Those specific rules, rather than the breadth of the legislation, must be robust against the challenge, provided that the legislation has a proper basis for the development of the code.

I apologise to noble Lords for taking so long over my reply, but interesting points were raised and the Government are seeking to achieve a solution on the basis of consensus. However, we cannot accept the amendment and I ask my noble friend to consider withdrawing it.

Lord Gordon of Strathblane

My Lords, I have considered withdrawing, but I have rejected the option because there is still a gulf in this matter. The Minister's letter suggests that the Government want to continue the current situation. It is certainly true that my words do not appear in the 1990 Act, but neither does "unsuitable". It simply gives the ITC and the Radio Authority an obligation to draw up a code—it says nothing beyond that. My words have the advantage of being in the current codes. Therefore, although I fully concede that even my words are very subjective—after all, one could argue about the meaning of "harmful" and "offensive"—they are slightly more precise than either "unsuitable" or any other single portmanteau word designed to give Ofcom wider powers than the current codes give it.

My feeling is that the advertising industry has grown up with the term, "misleading, harmful or offensive", knows how to interpret it and how not to offend against it. More importantly, the regulators know how to apply it. Why trade certainty, which has produced good regulation and self-regulation in the past 20 years of the industry, for something that manifestly produces uncertainty?

I do not want to appear ungracious, and I am grateful to the Minister for his letter and his offer to talk, but I have a feeling that we are not going to get anywhere. We shall simply overcrowd Third Reading, which will already feature quite a few postponed Divisions. I wish to test the opinion of the House.

3.58 p.m.

On Question, Whether the said amendment (No. 182) shall be agreed to?

Their Lordships divided: Contents, 158; Not-Contents, 117.

Division No. 1
CONTENTS
Aberdare, L.	Holme of Cheltenham, L.
Addington, L.	Hooper, B.
Anelay of St Johns, B.	Hooson, L.
Astor of Hever, L.	Howe, E.
Attlee, E.	Howe of Aberavon, L.
Avebury, L.	Howe of Idlicote, B.
Baker of Dorking, L.	Howell of Guildford, L.
Barker, B.	Howie of Troon, L.
Beaumont of Whitley, L.	Hylton, L.
Biffen, L.	Jacobs, L.
Blatch, B.	Jenkin of Roding, L.
Borrie, L.	Jopling, L.
Bradshaw, L.	Kimball, L.
Bridgeman, V.	Kingsland, L.
Bridges, L.	Laird, L.
Brittan of Spennithorne, L.	Laming, L.
Brooke of Sutton Mandeville, L.	Lester of Herne Hill, L.
Brougham and Vaux, L.	Lindsay, E.
Bruce of Donington, L.	Linklater of Butterstone, B.
Buscombe, B.	Liverpool, E.
Byford, B.	Livsey of Talgarth, L.
Carlisle of Bucklow, L.	Luke, L.
Carnegy of Lour, B.	McColl of Dulwich, L.
Carrington, L.	MacGregor of Pulham Market, L
Chalfont, L.
Chan, L.	Maclennan of Rogart, L.
Chorley, L.	McNally, L.
Clement-Jones, L.	Maddock, B.
Coe, L.	Mancroft, L.
Cope of Berkeley, L.	Mar, C.
Cox, B.	Mar and Kellie, E.
Craig of Radley, L.	Marsh, L.
Crickhowell, L.	Methuen, L.
Cuckney, L.	Michie of Gallanach, B.
Dahrendorf, L.	Miller of Chilthorne Domer, B.
Denham, L.	Miller of Hendon, B.
Dholakia, L.	Mishcon, L.
Eden of Winton, L.	Molyneaux of Killead, L.
Elles, B.	Moser, L.
Elliott of Morpeth, L.	Mowbray and Stourton, L,
Elton, L.	Moynihan, L.
Ezra, L.	Murton of Lindisfarne, L.
Falkland, V.	Naseby, L.
Ferrers, E.	Newby, L.
Flather, B.	Noakes, B.
Gardner of Parkes, B.	Northesk, E.
Glentoran, L.	Northover, B.
Goodhart, L.	Norton of Louth, L.
Gordon of Strathblane, L. [Teller]	Oakeshott of Seagrove Bay, L.
	O'Cathain, B.
Gray of Contin, L.	Onslow, E.
Greaves, L.	Palmer, L.
Griffiths of Fforestfach, L.	Patel, L.
Hamwee, B.	Pearson of Rannoch, L.
Harris of Richmond, B.	Peel, E.
Higgins, L.	Peyton of Yeovil, L.
Hodgson of Astley Abbotts, L.	Platt of Writtle, B.

Portsmouth, Bp.	Southwark, Bp.
Rawlings, B.	Stevens of Ludgate, L.
Razzall, L.	Strathclyde, L.
Redesdale, L.	Taverne, L.
Renton, L.	Thomas of Gwydir, L.
Roberts of Conwy, L.	Thomas of Walliswood, B.
Rodgers of Quarry Bank, L.	Thomson of Monifieth, L. [Teller]
Russell, E.
Russell-Johnston, L.	Tordoff, L.
Saatchi, L.	Trefgarne, L.
St John of Fawsley, L.	Trumpington, B.
Sandberg, L.	Truro, Bp.
	Ullswater, V.
Scott of Needham Market, B.	Vivian, L
Seccombe, B.	Waddington, L.
Sharman, L.	Wade of Chorlton, L.
Sharp of Guildford, B.	Wakeham, L.
Sharples, B.	Wallace of Saltaire, L.
Shaw of Northstead, L.	Walmsley, B.
Shutt of Greetland, L.	Warnock, B.
Skelmersdale, L.	Wigoder, L.
Skidelsky, L.	Williams of Crosby, B.
Smith of Clifton, L.	Williams of Elvel, L.
Soulsby of Swaffham Prior, L.	Williamson of Horton, L.

NOT-CONTENTS
Acton, L.	Grocott, L. [Teller]
Ahmed, L.	Hardy of Wath, L.
Allen of Abbeydale, L.	Harris of Haringey, L.
Alli, L.	Harrison, L.
Ampthill, L.	Haskel, L.
Andrews, B.	Haskins, L.
Ashton of Upholland, B.	Hayman, B.
Bach, L.	Hogg of Cumbernauld, L.
Barnett, L.	Hollis of Heigham, B.
Bassam of Brighton, L.	Howells of St. Davids, B.
Berkeley, L.	Hoyle, L.
Bernstein of Craigweil, L.	Hughes of Woodside, L.
Bhatia, L.	Hunt of Kings Heath, L.
Blackstone, B.	Irvine of Lairg, L.
Bragg, L.	Janner of Braunstone, L.
Brett, L.	Jeger, B.
Brooke of Alverthorpe, L.	Jones, L.
Brookman, L.	Judd, L.
Brooks of Tremorfa, L.	King of West Bromwich, L.
Campbell-Savours, L.	Kirkhill, L.
Carter, L.	Lea of Crondall.L.
Christopher, L.	Lipsey, L.
Clarke of Hampstead, L.	Lockwood, B.
Clinton-Davis, L.	Lofthouse of Pontefract, L.
Cohen of Pimlico, B.	Macdonald of Tradeston, L.
Corbett of Castle Vale, L.	McIntosh of Haringey, L.
Crawley, B.	McIntosh of Hudnall, B.
David, B.	MacKenzie of Culkein, L.
Davies of Oldham, L. [Teller]	Mackenzie of Framwellgate, L.
Dean of Thornton-le-Fylde, B.	Manchester, Bp.
Desai, L.	Massey of Darwen, B.
Dixon, L.	Merlyn-Rees, L.
Donoughue, L.	Mitchell, L.
Dubs, L.	Morris of Aberavon, L.
Evans of Parkside, L.	Morris of Manchester, L.
Evans of Temple Guiting, L.	Parekh, L.
Falconer of Thoroton, L. (Lord Chancellor)	Patel of Blackburn, L.
	Pendry, L.
Farrington of Ribbleton, B.	Pitkeathley, B.
Faulkner of Worcester, L.	Plant of Highfield, L.
Filkin, L.	Ponsonby of Shulbrede, L.
Fyfe of Fairfield, L.	Prys-Davies, L.
Gale, B.	Ramsay of Cartvale, B.
Gibson of Market Rasen, B.	Rea, L.
Golding, B.	Rendell of Babergh, B.
Goldsmith, L.	Richard, L.
Goudie, B.	Rix, L.
Gould of Potternewton, B.	Roll of Ipsden, L.
Graham of Edmonton, L.	Rooker, L.

Sainsbury of Turville, L.	Taylor of Blackburn, L.
Scotland of Asthal, B.	Temple-Morris, L.
Sheldon, L.	Thornton, B.
Simon, V.	Turnberg, L.
Slim, V.	Turner of Camden, B.
	Warner, L.
Smith of Gilmorehill, B.	Warwick of Undercliffe, B.
Stallard, L.	Whitty, L.
Strabolgi, L.	Williams of Mostyn, L. (Lord President of the Council)
Strange, B.
Symons of Vernham Dean, B.	Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

4.10 p.m.

Clause 314 [Objectives for advertisements and sponsorship]:

Lord Gordon of Strathblane

moved Amendment No. 183: Page 277, line 45, leave out "312(2)(g)" and insert "312(2)(a), (g)

On Question, amendment agreed to.

Clause 330 [Promotion of equal opportunities and training]:

[Amendment No. 184 not moved.]

Lord Davies of Oldham

moved Amendment No. 184A: Page 290, line 27, at end insert— ( ) The conditions imposed by virtue of this section may include provision for treating obligations to make the arrangements mentioned in subsections (1) to (3), or to do anything mentioned in subsection (4), as discharged where a member of a group of companies to which the licence holder belongs—

1. (a) has made the required arrangements in relation to employment with the licence holder; or
2. (b) has done anything required by subsection (4) in relation to those arrangements."

The noble Lord said: My Lords, in moving Amendment No. 184A, I wish to speak also to the other government amendments with which it is grouped.

This group of government amendments fulfils the commitment that we gave in Committee to consider Amendment No. 271A tabled by the noble Lord, Lord Crickhowell. The aim of that amendment was to ensure that the equal opportunities and training requirements set out in Clause 330 apply to companies which, while individually small, are part of a much larger group of companies.

Clause 330 requires Ofcom to impose conditions in Broadcasting Act licences for services to which the clause applies that oblige licence holders to make arrangements for promoting sex and race equality and fair treatment for disabled people and for training.

In response to an amendment tabled by the noble Lord, Lord Addington, we announced last week that we would change the current references to fair treatment for disabled people to the more up-to-date term of "equalisation of opportunities".

The conditions in Clause 330 currently apply to a service if (a) the licence holder employs more than the threshold number of people—currently 20—in connection with providing his service and (b) in any year the service is provided for more than the threshold number of days, which is currently 31.

Both those threshold arrangements are intended to avoid imposing disproportionate burdens on small companies. However, there is a potential loophole in that, as drafted, the requirements of Clause 330 would not apply to companies that, while individually small, were part of a much larger group of companies. We propose to address that issue by allowing for the numbers of staff employed across a group of companies or a range of services to be aggregated. In particular, as well as being satisfied when a single licence holder employs more than 20 staff in connection with broadcasting services, the threshold will also be met if the licence holder is in a group of companies that together employ more than 20 staff in that connection. That is achieved principally by Amendment No. 184D, by the new definition of "licensed service" in Amendment No. 184E and by the definition of "a group of companies" in Amendment No. 184G.

Two companies are in a group if, for instance, one controls the other or both are controlled by a third company. The definition of "control" set out in Part 1 of Schedule 2 to the Broadcasting Act 1990 applies for this purpose. However, it is staff employed only in connection with broadcasting who are counted. Employees who are not engaged in broadcasting activities are not counted.

These amendments also cater for the case of a single company that provides more than one service. All staff employed in connection with any of the services are counted. I beg to move.

4.15 p.m.

Lord Crickhowell

My Lords, in Committee I tabled an amendment which attempted to close the particular loophole to which the Minister referred. I am very grateful to him for meeting the commitment made on that occasion that suitable government amendments would be tabled. I am wholly satisfied with what has been done.

On Question, amendment agreed to.

Lord Davies of Oldham

moved Amendments Nos. 184B to 184G:

Page 290, line 31, leave out from beginning to "employs" in line 34 and insert— (b) the requirements of both subsections (6) and (6A) are satisfied in the case of that service.

(6) The requirements of this subsection are satisfied in the case of a service provided by a person if— (a) that person

Page 290, line 35, leave out "persons" and insert "individuals."

Page 290, line 36, leave out from "or to "on" in line 3S and insert "licensed services; or

(b) the threshold number is exceeded by the aggregate number of individuals who are, or are likely to be, employed in that connection by members of a group of companies comprising that person and one or more other bodies corporate.

(6A) The requirements of this subsection are satisfied in the case of a service if the licence authorising the provision of that service authorises either that service or another service authorised by that licence to be provided"

Page 290, line 43, at end insert— "licensed service", in relation to an employee or likely employee of a person, means a service the provision of which—

1. (a) by that person, or
2. (b) by a body corporate which is a member of the same group of companies as that person,

is authorised by a Broadcasting Act licence;

Page 291, line 1, leave out "persons" and insert "individuals"

Page 291, line 2, at end insert—

"(7A) For the purposes of this section a person is a member of a group of companies to which a person licensed to provide a service belongs if, and only if, both of them are bodies corporate and either—

1. (a) one of them is controlled by the other; or
2. (b) both of them are controlled by the same person.

(7B) In subsection (7A) "controlled" has the same meaning as in Part 1 of Schedule 2 to the 1990 Act."

The noble Lord said: My Lords, I beg to move Amendments Nos. 184B to 184G en bloc.

On Question, amendments agreed to.

Schedule 12 [Corresponding obligations of the BBC and Welsh Authority]:

[Amendments Nos. 185 and 186 had been withdrawn from the Marshalled List.]

Lord McIntosh of Haringey

moved Amendment No. 187: Page 402, line 43, leave out from "under" to end of line 45 and insert "the BBC Charter and Agreement

On Question, amendment agreed to.

[Amendment No. 188 not moved.]

Schedule 13 [Financial penalties under the Broadcasting Acts]:

Lord McIntosh of Haringey

moved Amendment No. 188A: Page 424, line 14, after second "to" insert "television multiplex services and general

The noble Lord said: My Lords, in moving Amendment No. 188A, I wish to speak also to Amendments Nos. 188B to 188H, 213A, 213B, 216A to 216D and 241C. As we know, digital radio is becoming more and more popular but it is also available on digital television, although I cannot seem to get it on my freeserve.

In licensing terms this means that a television multiplex service or general multiplex can carry digital radio services. That is provided for in the Bill. Some consequential amendments were necessary to ensure that the penalties for contraventions relating to digital radio programmes services take into account the services carried on a general multiplex or on a TV multiplex as well as those carried on a national radio multiplex. Some of the amendments necessary to achieve that are already contained in the Bill but it has been brought to our attention that others need to be made, and these amendments complete the picture. They also make minor corrections to amendments in Schedules 13 to 15 of the Bill that for television already achieve the necessary extension of the basis on which penalties are calculated. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey

moved Amendments Nos. 188B to 188H:

Page 424, line 38, after second "to" insert "television multiplex services and general"

Page 426, line 32, leave out "national radio multiplex revenue" and insert "relevant multiplex services"

Page 426, line 41, leave out from "revenue" to "is" in line 44 and insert— (a) attributable to a person in relation to national radio multiplex services,

Page 427, line 1, leave out "in any other case" and insert "attributable to a person in relation to television multiplex services or general multiplex services"

Page 427, line 19, leave out "national radio multiplex revenue" and insert "relevant multiplex services"

Page 427, line 31, leave out from "revenue" to "is" in line 34 and insert— (a) attributable to a person in relation to national radio multiplex services,

Page 427, line 36, leave out "in any other case" and insert "attributable to a person in relation to general multiplex services"

On Question, amendments agreed to.

Lord McIntosh of Haringey

moved Amendment No. 188J: After Clause 339, insert the following new clause—

"STATEMENT OF CHARGING PRINCIPLES

(1) OFCOM are not to fix a tariff under section 4(3) or 87(3) of the 1990 Act or under section 4(3) or 43(3) of the 1996 Act (tariffs for fees payable under Broadcasting Act licences for recovering OFCOM's costs) unless—

1. (a) at the time they do so, there is in force a statement of the principles that OFCOM are proposing to apply in fixing that tariff; and
2. (b) the tariff is fixed in accordance with those principles.

(2) Those principles must be such as appear to OFCOM to be likely to secure, on the basis of such estimates of the likely costs that it is practicable for them to make—

1. (a) that the aggregate amount of the Broadcasting Act licence fees that are required to be paid to OFCOM during a financial year is sufficient to enable them to meet, but does not exceed, the cost to them of the carrying out during that year of their functions relating to the regulation of broadcasting;
2. (b) that the requirement imposed by virtue of paragraph (a) is satisfied by the application to such fees of tariffs that are justifiable and proportionate to the matters in respect of which they are imposed; and
3. (c) that the relationship between meeting the cost of carrying out those functions and the tariffs applied to such fees is transparent.

(3) Before making or revising a statement of principles OFCOM must consult such of the persons who, in OFCOM's opinion, are likely to be affected by those principles as they think fit.

(4) The making or revision of a statement of principles for the purposes of this section has to be by the publication of the statement, or revised statement, in such manner as OFCOM consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by it.

(5) As soon as reasonably practicable after the end of each financial year, OFCOM must publish a statement setting out, for that year—

1. (a) the aggregate amount received by them during that year in respect of Broadcasting Act licence fees required to be paid during that year;
2. (b) the aggregate amount outstanding and likely to be paid or recovered in respect of Broadcasting Act licence fees that are required to be so paid; and
3. (c) the cost to OFCOM of the carrying out during that year of their functions relating to the regulation of broadcasting.

(6) Any deficit or surplus shown (after applying this subsection for all previous years) by a statement under subsection (5) shall be—

1. (a) carried forward; and
2. (b) taken into account in determining what is required to satisfy the requirement imposed by virtue of subsection (2)(a) in relation to the following year.

(7) References in this section to OFCOM's functions relating to the regulation of broadcasting do not include references to any of their functions in relation to the BBC or the Welsh Authority.

(8) In this section— Broadcasting Act licence fee" means a fee required to be paid to OFCOM in pursuance of conditions included in a Broadcasting Act licence under any of the following provisions—

1. (a) section 4(1)(b) or 87(1)(c) of the 1990 Act; or
2. (b) section 4(1)(b) or 43(1)(c) of the 1996 Act;

"financial year" means a period of twelve months ending with 31st March."

The noble Lord said: My Lords, in moving Amendment No. 188J, I wish to speak also to government Amendments Nos. 210A, 210B, 213ZA, 216ZA, 226B, 238ZA, 238ZB. 241A and 241B.

During the consideration of the Bill in Committee, a number of amendments were tabled regarding the funding of Ofcom. One of those amendments, tabled by the noble Lords, Lord Crickhowell, Lord Puttnam, Lord McNally and Lord Hussey of North Bradley, was designed to provide that administrative charges set under the broadcasting legislation should be set in accordance with clear principles and relate only to functions related to broadcasting.

In responding to that amendment I made clear that it has been our general approach that the costs of sectoral regulation should be borne by those who are regulated and I indicated that the Government would consider tabling provisions which would introduce a statement of charging principles for broadcasting comparable to that for networks and services. Therefore, I should now like to speak to the amendments which are designed to give effect to such a statement of principles.

First, Amendment No. 188J will require Ofcom to have in place a statement of the principles which it proposes to apply in fixing tariffs for licence fees payable under the Broadcasting Acts 1990 and 1996 and for any such tariff to be fixed in accordance with those principles.

Those principles must be likely to secure that the aggregate amount of Broadcasting Act licence fees required to be paid to Ofcom in any financial year is sufficient to enable it to meet, but does not exceed, the costs to Ofcom of carrying out its functions in relation to the regulation of broadcasting during that year. The tariffs which apply to such fees must be justifiable and proportionate to the matters to which they are imposed and there should be a transparent relationship between the costs of carrying out those functions and the tariffs applied to such fees.

Subsections (3) and (4) of the new clause would require that, before making or revising any statement of principles, Ofcom consults anyone it considers likely to be affected by it. Ofcom would also have to publish any statement of principles or revisions to it in such a way as to bring it to the attention of anyone likely to be affected.

In addition, under subsections (5) and (6) of the proposed new clause, Ofcom will have to publish a statement after the end of each financial year setting out the aggregate amount of Broadcasting Act licence fees received by it that year, the aggregate amount of Broadcasting Act licence fees remaining outstanding and likely to be paid or recovered, and the cost to Ofcom of carrying out its functions in relation to broadcasting during that year. Any deficit or surplus would then be carried forward by Ofcom and taken into account in determining the amount required in the following year.

As it is not the intention that the costs associated with Ofcom's regulation of the BBC and the Welsh Authority should be borne by other broadcasters, subsection (7) of the proposed new clause specifically excludes Ofcom's functions in relation to the regulation of the BBC and the Welsh Authority. Of course, there are provisions in Clauses 195(4) and 204(6) that enable Ofcom to charge the BBC and Welsh Authority for the costs of carrying out their functions associated with their regulation. The proposed new clause will ensure that broadcasters have a similar comfort to that given to the providers of networks and services as a result of the electronic communications directives—that the costs that they will be charged by Ofcom will be only in relation to the regulation of their particular sector.

Of course, there was concern about general issues on the funding of Ofcom. The noble Lord, Lord Puttnam, raised issues on that about which he sought assurance. Although I do not think that they need to be addressed through provisions in the Bill, I want to respond to the thrust of his points.

The first related to the general costs of Ofcom, for which it will not be able to make a charge on the providers of networks and services or where such costs are not clearly referable to the regulation of a particular sector. As I made clear in responding to the earlier debate, the Government have always recognised that there would be such costs, mainly due to restrictions put in place by the authorisation directive, and that, where they clearly cannot be covered by other means, the costs will be covered by payment of grant from the Exchequer. I am pleased to give that assurance to the House again.

One area of particular concern raised by the noble Lord, Lord Puttnam, related to the funding of Ofcom's competition functions under Part 5. The House will be aware that the general principle applied to regulators in other sectors operating with similar concurrent powers has been that the cost of investigations under those powers should be borne by the relevant sector. In the case of Ofcom, the effect of the authorisation directive is to rule out such charges being made in relation to networks and services. That will mean that, where such costs are incurred by Ofcom in relation to networks and services, they will have to be met by the Exchequer.

The noble Lord, Lord Puttnam, also sought further assurance that, should Ofcom have substantial legal costs or damages awarded against it by the courts, the Government would support Ofcom and underpin those costs. Again, in responding, I indicated that that would indeed be the case. The matter is not unusual to Ofcom. For example, the consideration is central to the funding of the Office of Fair Trading, which carries an equal uncertainty about the outcome of its investigations. Of course, Ofcom would need to consider the possible consequences of any action that it may undertake and the risks associated with them, including the financial risk, and make appropriate provision in its budgets to bear such risk. However, we would not want Ofcom to be in a position in which it was deterred from taking the necessary action because of fears of the possible financial consequences of losing a legal challenge to its decisions.

Therefore, given the difficulty of forecasting litigation costs, where Ofcom has acted perfectly reasonably but finds that it has large and unavoidable increases in legal costs or damages awarded against it that it could not reasonably have predicted and cannot meet by other needs, it would be necessary for it to make the case for support to be provided from the Exchequer. I am therefore happy to assure the House again that, in such circumstances, the Government would consider access to the reserve.

Amendments Nos. 210A, 210B, 213ZA, 216ZA, 226B, 238ZA, 238ZB, 241A and 241B are minor consequential changes resulting from the provisions in the proposed new clause. Amendment No. 226B makes paragraph 8(1) of the schedule to the Office of Communications Act 2002, relating to Ofcom finances, consistent with the proposed new clause. Amendments Nos. 210A, 210B, 213ZA, 216ZA, 238ZA, 238ZB, 241A and 241B make consequential amendments and repeals in Sections 4 and 87 of the 1990 Act and Sections 4 and 43 of the 1996 Act. I also need to draw attention to Amendments Nos. 216ZA and 241B, which correct an unconnected amendment in Section 43(2)(b)(ii) of the Broadcasting Act 1996, consequential on the transfer of the Secretary of State's spectrum management functions to Ofcom, which had been missed previously. I beg to move.

Lord Alli

My Lords, I want to speak to Amendment No. 224A, which is grouped with this set of government amendments. Before doing so, I should tell the Minister that, although I did not understand everything that he said on the amendments, I felt a sense of reassurance, particularly when it came to the financing of Ofcom.

Amendment No. 224A has two purposes. First, it welcomes Clause 394 and the obligation that it places on Ofcom. Secondly, it ensures that the objectives of the clause are achieved as early as possible in the life of what will then be the Act.

Noble Lords will appreciate that Clause 394 sets out a principle which has worked successfully in broadcasting. It is that Ofcom's function of collecting, on behalf of the Treasury, the economic rent from the use of the airwaves should be separate from the process of funding Ofcom itself. Once the system envisaged by that clause comes into effect, it will allow Ofcom to retain that part of the sums paid to it for use of the spectrum, which is required to cover Ofcom's costs of carrying out the functions relating to the use of the airwaves. To do that, Ofcom will be required to publish a statement of principles authorising the retention of the sums paid to it.

When in operation, Clause 394 will therefore reinforce the independent status of Ofcom, and free it from the need for direct government funding for the purposes of activities relating to the use of the spectrum. The clause as drafted, however, is silent about when all that must start to happen. I am keen to ensure that Clause 394 is brought into operation speedily, to establish the independence of Ofcom. The proposed amendment seeks to ensure that Ofcom institutes the new arrangements as early as possible. I hope that the noble Lord can reassure me that, if he cannot accept Amendment No. 244A, he will try to make such provisions go through.

Lord Puttnam

My Lords, I thank the Minister. It is an extraordinarily generous and full decision by the Government to address what were very real problems. The noble Lord, Lord Crickhowell, first raised them in Committee more than a year ago, and has gnawed away at the bone. I find it quite interesting that, with no sound and fury, we are about to pass what may end up as the most important single amendment for the future life of Ofcom. It is a relatively small child entering a very big playground with a lot of tough kids in it. That the Government have been prepared to put their arm around that child and see it through to maturity is a very important step. Were I the noble Lord, Lord Currie, I would regard this as the most significant concession that the Government have given. I am truly grateful.

Lord McNally

My Lords, I am quite sure that the noble Lord, Lord Currie, will welcome the concession. I want to highlight and welcome the more general point that the Minister made about the funding of Ofcom. He will recall that, when Ofcom was set up, there was a general assumption that the bringing together of five regulators into one would bring savings with it, and that Ofcom would be a leaner beast. I understand that, during the Bill's passage through Parliament, 53 new responsibilities have been given to Ofcom. All that I ask the Minister is to keep an eye on his colleagues in the Treasury, and make sure that they do not go candle-end saving. We want an Ofcom that works, and Parliament is willing to pay for that.

Lord McIntosh of Haringey

My Lords, if the noble Lord, Lord McNally, would refrain from placing more obligations on Ofcom and undertake to do that during the remainder of the passage of the Bill, both the Treasury and I would be very happy. I am grateful for what has been said, especially by the noble Lord, Lord Puttnam, but I need also to respond to the noble Lord, Lord Alli, and the point is slightly complex.

Let me explain the system for Ofcom recovering the cost of carrying out its spectrum functions. Spectrum payments are made for the use of a scarce national resource, and prices are generally set using either auctions or by reference to spectrum management considerations, not in relation to the cost of regulation. Payments can be regarded as fair recompense for a resource that is a public asset and is, rightly, income for the Exchequer.

Clause 393 requires amounts received by Ofcom under the Wireless Telegraphy Act to be paid to the Consolidated Fund. In practice, an administrative arrangement will be put in place between Ofcom and the Treasury to allow the requisite amount needed to meet the cost of Ofcom carrying out its spectrum functions to be taken out of those moneys and appropriated to Ofcom. So that Ofcom can have similar arrangements for each of its main income streams, Ofcom has indicated that it would eventually like to move to a new system in which it could retain sufficient amounts from the payments made under the Wireless Telegraphy Act to meet the costs of carrying out its spectrum functions. Under the new arrangement, Ofcom would make a statement of principles, which would be approved by the Treasury, setting out the basis on which it would calculate the costs of carrying out its spectrum functions and retain the necessary amounts. Clause 394 would therefore allow those new arrangements to be put in place.

Ofcom intends to move to the new regime as soon as practicable but, realistically, it is unlikely to be able to do so before 2005. There will be further discussion between Ofcom and the Treasury to settle the detail of how the system would work before it was possible for it to be introduced. Indeed, Clause 394(10) requires the Treasury to give its consent before a statement of principles, which is required under the clause, can be made, revised or withdrawn.

Clause 394 provides the legal mechanism for bringing the new system into force. When that further work has been done, I am sure that Ofcom will want to start the discussions as soon as it can but I do not believe that it would be appropriate to place a deadline on it. I hope that the noble Lord, Lord Alli, will therefore not press the amendment.

4.30 p.m.

Lord Alli

My Lords, before the Minister concludes, I am grateful for that reply, which I will study carefully. If he could use his good offices to ensure that that is done as quickly as possible, I should certainly be content.

Lord McIntosh of Haringey

My Lords, it is in everyone's interest that that should be done. I hope that the amendment will be agreed to.

On Question, amendment agreed to.

Lord Puttnam

moved Amendment No. 189: Before Clause 340, insert the following new clause—

"MEDIA PLURALITY PUBLIC INTEREST CONSIDERATION

(1) Section 58 of the Enterprise Act 2002 (c. 40) (specified considerations) shall be amended as follows.

(2) After subsection (2B) (which is inserted by section 368 of this Act) there shall be inserted— (2C) The public interest in the promotion and maintenance—

1. (a) of a plurality of media owners committed to a balanced and impartial presentation of news and to a balanced presentation of comment, and
2. (b) of a wide range of voices such as to satisfy a variety of tastes and interests

is specified in this section.

(3) In subsection (3), after the words "any consideration", there shall be inserted "(other than the consideration specified in subsection (2C))"."

The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 190, 191, 192, 199A, 222B and 222C.

I know that I speak for all members of the Joint Scrutiny Committee in this House and another place. I received this morning an Early-Day Motion signed by all six Commons members of that committee supporting the amendment. More particularly, I spoke this morning to the noble Lord, Lord Hussey, who I always felt was the conscience of our committee. He asked me to apologise to the House for the fact that he is unable to join us, having only just returned home from hospital. I know that the House will join me in wishing the noble Lord a speedy recovery.

Noble Lords

Hear, hear.

Lord Puttnam

My Lords, when we completed our report, the noble Lord, Lord Hussey, made it clear that he regarded the "public interest plurality test" as the most important and far-reaching of all our recommendations. During our telephone conversation this morning, he asked me to tell the House that, having had almost a year in which to reflect and review dispassionately developments in the media, he has slightly changed his mind. He now regards the amendment as twice as important as he did then!

In the statement accompanying the publication of our report on Wednesday, 31st July 2002, the Joint Scrutiny Committee said: At the heart of our conclusions and recommendations about media ownership is the proposal for a new plurality test to be used in connection with mergers and takeovers across all media. We hope that this recommendation will stimulate an important and timely debate". Little did we know how right we were.

For us, the legislation rested on three vital pillars. The first was that the citizens' interests were paramount in respect of the provision of content and information; we dealt with that last Monday, when the House made its view overwhelmingly clear. The second was that Ofcom was sufficiently well resourced to withstand attack from the biggest beasts in the jungle and was able to slug it out on equal terms in respect of firepower and expertise. We dealt with that a few moments ago. The third was that a plurality test should be introduced that was sufficient to look across all media and make determinations in the best interests of the citizen. Those were, if you like, the three non-negotiables.

In Committee, the noble Lord, Lord Borrie, made the most interesting and concrete contribution to our discussions on the plurality test. I will repeat some of his comments. He said: I believe that the same sort of consideration which influenced people concerned with democracy in the 1960s in relation to the press now justifies a stricter control over cross-media mergers that is applicable to other goods and services. Amendment No. 280A"— now renumbered as Amendment No. 189— proposes a reporting role by the Office of Fair Trading. It proposes that by amending the Enterprise Act, the Competition Commission, when faced with a reference concerning cross-media ownership, would be concerned not just with economic matters but with the much wider concern for plurality and diversity in the media. The Government claim … that a Competition Commission involvement in such cross-media mergers would lead to uncertainty. Indeed it would. One cannot deny that during a period of a reference there must be uncertainty as to the outcome—otherwise what would be the point of the reference? However, I would suggest that that is a small price to pay for ensuring a free and diverse media. Once ownership is changed, it is exceedingly difficult to revert to square one; the damage may have been done".—[Official Report, 5/6/03; col. 1437.] I have nothing to add to the thoroughness of those remarks, beyond saying that they possibly lay the ghost once and for all that the provision of information within the media is anything but the sale of widgets.

There has been a terrifying situation for a number of years in which the media are seen as just another business. They are not just another business. There has been a great deal of confusion, which I will illustrate. The honourable Member of Parliament for Maldon and Chelmsford East said in today's Financial Times that, the plurality test undermined the government's desire to relax the laws governing the media. The whole thrust of the communications bill is to liberalise the rules on ownership. A plurality test erects another obstacle in the way of takeovers within the media sector". I am puzzled by that because in last Friday's Guardian, the honourable gentleman was quoted as saying: My view is that a plurality test has some merit, but it is very difficult to define. I would rather the test applied across the board, however, than just to certain companies". It is absolutely clear that the test is designed specifically to apply across the board; otherwise, frankly, there would be very little point in pressing the amendment.

It has been possible at times during the endless discussions surrounding the clause to believe that the Bill is something of a "luvvies' charter", as it was put to me. During the earlier and noisier stages of an orchestrated appeal to the hearts and minds, we were lured on by the promise of access to high-quality US programming. The same six or seven titles were trotted out—always, I found, starting and ending with "The West Wing".

It is interesting to note that at last week's congressional hearings on media ownership, one Congressman typified the current output of programming from America's commercial media as "The Axis of Drivel", referring to the preponderance of look-alike reality programmes on so many broadcast and cable channels, and so little substance in news reporting and public interest programming. The truth is that television in this country has always enjoyed a greater variety and diversity of output than has ever been genuinely available in the United States. It is rather odd that in recent years, modesty seems not to have allowed us to trumpet that fact!

Another Member of Congress at the same session, Mr Byron Dorgan of North Dakota, was thoroughly unimpressed when a broadcast lobbyist, testifying before his committee, insisted that there was no need for regulations regarding ownership because there were, after all, in America more choices, more channels and more voices in the media landscape than ever before. "Yes", Mr Dorgan replied, more voices but only one ventriloquist".

Much has been made in the past few weeks of the underlying rationale of the amendment. I have heard it referred to as the "Murdoch clause"; it has even been described as something that attempts to demonise sections of the media. That is not and never has been the case. The Secretary of State was entirely right in insisting that the Bill and the amendment were entirely "proprietor neutral". It is more to do, as I see it, with attempting to make our democracy proprietor neutral.

In view of the change occurring today in the presidency of the European Union, it seems entirely appropriate to look at what we are trying to protect against in that context. It is what I see as a drift in media ownership and a drift in the relationship between media ownership and, as it were, a census of power. We have spoken at length about the Bill being "future-proof'', because the situation that we face is not current. I can well envisage a time, 10 years from now, when I, among others, may say, "Come back, Rupert, all is forgiven", and we shall look upon today as the golden age of media plurality.

I want to talk about something a little more serious. In Prospect magazine of January 2003, John Lloyd wrote briefly about the government of Silvio Berlusconi. He said that it is, an affront to the democratic values which the nations of the European Union affirm as their most precious heritage. It ruthlessly manipulates the large majority it gained in both Houses of Parliament in the election of spring 2001 to pass legislation tailored for the Prime Minister's commercial benefit. It controls almost all of the nation's television channels. It is, in many respects, comparable with governments of post-Soviet states. Most worryingly, Berlusconi's form of politics may be showing us our own future. Italy has often been in the vanguard of history. Berlusconi has brought to democratic government another novelty—a populist videocracy. Berlusconi symbolises the logic of modern media politics. He focuses on the present and on presentation. Contradictions disappear down a memory hole. It is a kind of soft version of 1984, where everything that is asserted now is true, and is capable at any time in the future of being declared false—or just forgotten. The vast and delusive power of television is now linked to a politician who has shown that he has few scruples in its use. It may also be prompting other would-be tribunes of the people to think that they too can, with impunity, unite media and political power into one party or one person. Berlusconi in power is a danger to a great country, a danger to Europe's proclaimed ideas and a danger to a world in which the media have 'wrapped themselves around public life', and may, in the end, strangle it". That is what the amendment attempts to achieve. It is a move towards making the "Berlusconi-isation" of British democracy an impossibility. That is what the issue over our future-proofing of the Bill is all about. The amendment is no luvvies' charter—far from it. Achieving a rigorous public interest plurality test is something that this House as a whole can, in my judgment, be very proud of.

In moving the amendment, I must put the following to the Minister. If the Government indicate today their intention to move amendments at Third Reading to extend the relevant Enterprise Act provisions to cover media plurality, 1 hope that my noble friend will be able to answer the following specific questions. First, can he give the House an assurance that such provisions will be brought into force before, or at the same time as, the lifting of restrictions on media ownership contained in the Bill? Secondly, can he indicate whether or not it is intended that the Secretary of State's powers of intervention under Sections 59 to 66 of the Enterprise Act will extend to the media plurality provisions, and, if not, why not? With my heart very slightly in my mouth, but full of hope, I beg to move.

4.45 p.m.

Lord McIntosh of Haringey

My Lords, a number of people have suggested to me that it would help the House if I intervened now. I have no wish to curtail debate and certainly, with the leave of the House, I wish to respond before my noble friend Lord Puttnam concludes the debate. But I have things to say which I hope will be found helpful.

I want to deal, first, with the amendments before us and then make it clear that, although we cannot accept them in their current form, we nevertheless accept the principle behind them. I then want to outline our own plans to bring forward amendments for consideration at Third Reading.

I shall start with the amendments that we are discussing. We are supportive of the principle behind them that essentially we should safeguard plurality and diversity, or "the public voice", as my noble friend Lord Puttnam described it. But I have to be negative for a moment and say that we have grave doubts about the way that the drafting does not appear to distinguish adequately between broadcast media and newspapers.

We fear that the amendments would blur the distinction between the two in a way that would be damaging to both. For example, Amendment No. 189 refers to the need for "a wide range of voices". The word "voices" is further defined as, views and opinions represented to a significant degree in the media", rather than any sense of diversity as such. That confuses broadcast media, where there is already strong content regulation, with the print media, where there is none. The concept of "views and opinions" is completely alien to broadcast media. All licensed broadcasters are already required by law to ensure that news—1 quote from Clause 312 of the Bill—is "presented with due impartiality" and "reported with due accuracy". Furthermore, all broadcasters must exclude from their programmes—I quote from the Broadcasting Act 1990— all expressions of the views and opinions of the person providing the service on matters … which are of political or industrial controversy or relate to current public policy".

Broadcast media services, therefore, do not, and should not, have "views and opinions" in the same way as newspapers, quite rightly, have an editorial stance. Taken to one possible logical conclusion, the text of the amendment could have the effect of stopping broadcasters from being impartial and allowing them to have "views and opinions". I cannot believe, and would not want to argue, that that is the intention behind the amendments. But they would introduce uncertainty into the proper functions and role of broadcasters. That could be absolutely catastrophic for the integrity of British broadcasting.

The amendments would also seem to encourage the introduction of content regulation into newspapers. A free press is a cornerstone of democracy, and we tamper with it at our peril. That may not be the intention behind the amendments—indeed, knowing my noble friend Lord Puttnam as I do, I am sure that it is not—but it is how the need for, a balanced presentation of comment",

for example, could be interpreted. For those reasons, we cannot accept the amendments as they stand.

With the technical points aside, I can be far more positive. I now want to turn to the subject of media ownership and plurality. Media plurality is important for a healthy and informed democratic society. The underlying principle is that it would be dangerous for any one person to control too much of the media because of his or her ability to influence opinions and set the political agenda. It is therefore essential to set limits on concentrations of ownership. Competition law will do that to some degree and may, in fact, be all that is needed in many cases. But there is no guarantee that that will always be so.

That is particularly true in the case of cross-media concentrations, where the competition authorities may well take the view that the markets are separate and that consequently there is no effect on competition. That is a completely proper conclusion as regards competition but it may not be sufficient to safeguard the appropriate level of plurality. That is why we have specific restrictions on media ownership which are additional to competition rules.

Plurality is a very subjective notion. It is not susceptible to the same kind of economic analysis as competition issues. It is very much a matter of judgment of what "feels" right. For this Bill, our approach has been to examine each media audience, including cross-media audiences, and to judge the level of plurality that we consider necessary. It is important to recognise that setting artificial limits on markets can make them economically less efficient. But we need to protect plurality and recognise that there is a minimum level of plurality below which we must never go.

However, it is important to recognise that more is not always better. A very fragmented industry is certainly a very plural industry, but small, weak players may not have the necessary resources or skills to produce high-quality programming. Greater consolidation which does not threaten plurality should improve services to viewers and listeners. High-quality, really memorable TV programmes are usually only possible because we have TV companies with the necessary resources to make them.

The purpose of the amendments before us is to introduce an additional level of protection to plurality by extending the public interest test in the Enterprise Act to enable a media plurality test to be carried out in the event of a qualifying media merger. A qualifying merger is one where enterprises cease to be distinct and either the United Kingdom turnover of the acquired enterprise exceeds £70 million or the new entity has at least a 25 per cent share of supply of goods or services of any description in the UK or in a substantial part of the UK.

We originally proposed the idea of a plurality test in the consultation document on media ownership, which we published in November 2001. The responses were generally unenthusiastic as it was felt that the test introduced an unhelpful degree of uncertainty into media mergers. However, the world has moved on since then and a number of our policies have changed and developed. We are now proposing a more liberal ownership regime for local radio. We are proposing removing the restrictions on foreign ownership and allowing a major national newspaper to own Channel 5. We have also listened carefully to the points made in this House and elsewhere. Indeed, no reader of the broadsheet press can have avoided this debate.

Two main arguments have been used in favour of a plurality test, both essentially about the need to "future-proof" the Bill. First, it is argued that a plurality test allows for the gradual dismantling of media ownership rules over time. As we move towards a digital, multi-channel future, the degree of choice available to us will make it increasingly difficult for any one person to have a dominant position in the media and may remove, or reduce, the need for ownership rules. Under these circumstances, a plurality test may be a sufficient safeguard of plurality.

Secondly, circumstances may change. We took the view that there were many good reasons for removing the restrictions on a major newspaper owning or controlling Channel 5. I shall not repeat the arguments now. However, it is possible that over time Channel 5 may become much more similar in size and reach to Channel 3. It is impossible to predict whether this will happen but, given the possibility, we must have a plurality regime flexible enough to react to changing circumstances.

I add a third argument in favour of a plurality test. I have already mentioned the rule which prevents a national newspaper with more than 20 per cent of the market, or a body in which such a paper has more than a 20 per cent interest, from holding a Channel 3 licence—sometimes referred to as the 20:20 rule. This rule has served us well, but it has a "cliff-edge", all or nothing, element to it. On the one hand, it makes an absolute distinction between a national newspaper with 19.9 per cent of the market and one with 20.1 per cent—a kind of Mr Micawber distinction. On the other hand, it makes no distinction between a newspaper with 20.1 per cent of the market and one with 35 per cent or 40 per cent or more. The rule is therefore somewhat arbitrary in its effect. A plurality test would, in principle, allow the Secretary of State to make a judgment on media mergers, based on the particular circumstances of the case. The Government are therefore persuaded that we should accept the principle behind these amendments, and bring forward government amendments at Third Reading to introduce a plurality test.

Let me outline how we think such a test would operate. We propose to extend the scope of the Enterprise Act so that qualifying mergers could be subject to a media plurality test. In these cases the Secretary of State will be able to intervene where she believes the merger would have a damaging effect on plurality. The test would not be, "Does the merger lessen plurality?". Any merger, by definition, reduces plurality to some extent. It will be for Ministers to determine whether the merger causes sufficient plurality concerns for it to be blocked, or for conditions to be attached. Similarly, the test must also recognise that there is a minimum level of plurality which must be maintained.

We propose that the power be wide enough to capture all media mergers, including cross-media mergers. We would intend as a matter of policy normally to apply the test in practice only to those areas where the current rules are being removed completely. This means that, usually, the Secretary of State would consider intervening on plurality grounds only in the following areas: national newspapers with more than 20 per cent of the market/Channel 5; national newspapers with more than 20 per cent of the market/national radio service, Channel 3; Channel 3/ national radio; Channel 5/national radio; and national radio/national radio.

The noble Lord, Lord Puttnam, asked whether this test would "effectively rule out" a major national newspaper owning Channel 5. The answer is that the test will ensure that the Secretary of State can investigate any merger which threatens plurality. It will clearly prevent unacceptable levels of cross-media dominance. But it is inherent in the nature of a test that one cannot predict the outcome in advance in any individual case. It will be necessary to analyse and consider all the relevant circumstances at the time on a case-by-case basis.

This, of course, is in the nature of merger legislation. It is exactly the same approach as would have to be taken if the amendments tabled by the noble Lord, Lord Puttnam, were agreed. I do not believe that it would normally be sensible or desirable to intervene and apply the test to areas where there have never been media ownership restrictions, or to areas where there continue to be ownership rules, as the continuing rules will protect plurality.

In order to give the media industry some degree of certainty, the Government will publish guidance setting out in more detail the areas where the test will generally be applied and the factors that will be considered. It is not the Government's intention that the test should apply more widely. However, guidance obviously cannot fetter the Secretary of State's discretion or her ability to respond to changing market circumstances and we would not rule out its wider use in an extreme and rare case.

I believe that the plurality test should consider the number of owners in the relevant market. That will have resonance if one looks at the amendments before the House. The market would be a single medium or, in the case of a cross-media merger, a number of media markets. The test will also address—and again I ask noble Lords to look back at the test of the amendment before us—the need for a wide range of high-quality broadcasting calculated to appeal to a wide variety of tastes and interests, and the need for a genuine commitment to the issues covered in Ofcom's standards code set out in Clause 312 of the Bill, including the need for impartiality and accurate presentation of news. The plurality test would sit alongside the special newspaper regime, which would continue to consider newspaper-only mergers.

The noble Lord, Lord Puttnam, asked for an assurance that such plurality provisions will be brought into force before or at the same time as the lifting of restrictions on media ownership contained in the Bill. The answer is yes, I give him that assurance. He also asked whether it is intended that the Secretary of State's powers of intervention under Sections 59 to 66 of the Enterprise Act will extend to the media plurality provisions. The answer again is yes.

I hope that the assurances I have given about our intention to introduce a media plurality test, and my detailed explanation of how the test would operate, will persuade the House not to press the amendment before us. I shall be tabling government amendments for consideration at Third Reading before the end of the week. I shall also circulate the text of our amendments to every noble Lord who has expressed interest in the issue.

Lord Crickhowell

My Lords, my name stands below that of the noble Lord, Lord Puttnam, on the amendment. I do not have to say much because we had an admirable introduction to the subject from the noble Lord. Those who heard his speech will understand why we who served on the Joint Scrutiny Committee came to admire his contribution so much.

He referred to the noble Lord, Lord Hussey of North Bradley, who I am pleased to hear is out of hospital. During the Committee stage, I was greatly influenced by his views on this topic. Before I reached a conclusion on the subject when we debated it, I specifically asked that he should give the Joint Scrutiny Committee his opinion. After hearing it, I came firmly behind him.

The Minister has made an important statement. The difficulty about statements of this kind during a Report stage, when deals have been done, is that we are put in a considerable difficulty. The issues are important and the amendments which will be tabled are complex. We cannot make final judgments on the nature of the deal that has been done until we see the amendments on the Marshalled List and have had an opportunity to examine them. Therefore, we must reserve judgment.

That is of particular significance when we come to consider the next group of amendments, about which I have a further word to say. However, I cannot resist picking up two of the Minister's phrases. The first is, "The world has moved on". If the world has moved on, it owes a great deal to the work of the noble Lord, Lord Puttnam, in applying pressure on the Government to consider the matter.

I also smiled, as I believe did the noble Lord. Lord Puttnam, when we were told that the scale of the activities of Channel 5 and Channel 3 might alter. That was a point made repeatedly in the Joint Committee to Ministers and one to which we received an unhelpful response at the time. However, again, I am glad that the point is now accepted and understood.

I have only one other remark at this stage. The noble Lord, Lord Puttnam, made some extremely pungent and effective remarks about the state of broadcasting in other parts of the world, in the United States and Italy in particular. The amendments will not have a significant impact one way or another on the question of foreign ownership; the pros and cons of that argument rest on different points. I shall develop that point when we come to debate that group of amendments.

I hope that those who heard the observations by the noble Lord, Lord Puttnam, about what is happening in other parts of the world and the activities of the conglomerates will perhaps stay to hear our debate on the important issue of foreign ownership. Clearly, there are powerful arguments on both sides. However, I believe that the issues are almost as important as those we are discussing on this amendment.

I thank the Government for listening to the views expressed, particularly by those of us who served on the Joint Committee. I hope that when I come to study the amendments at Third Reading I shall find that they wholly meet the requirements we have set for them.

5 P.m.

Lord Borrie

My Lords, the House owes a tremendous debt to my noble friend Lord Puttnam and, indeed, to the scrutiny committee for the way in which on this and related issues they have persisted, especially in Committee, in pursuing this exceedingly important matter of cross-media ownership. The work of my noble friend Lord Puttnam has not been confined solely to chairmanship of that committee or, indeed, to speeches made in this House but included work behind the scenes. The outcome of that has been demonstrated to the House today. My compliments to my noble friend Lord Puttnam must be equalled by my compliments to the Minister. I listened to him with increasing admiration for the thoroughness with which he has "married" this Bill with the Enterprise Act and married the objectives and intentions of what I might call the Puttnam amendment to the Government's desire to ensure a practical, legally watertight system which will be successful and useful no doubt for many years to come.

It is difficult for us all to appreciate the full extent of the detail of the amendment which will now be tabled. It would be useless on my part or, if I may suggest, for other noble Lords to speculate too much about that today. We shall wait with tremendous interest but our final views will depend on a detailed study of that amendment. We have achieved a great deal today and I am grateful to the Minister.

Lord Fowler

My Lords, I, too, congratulate the noble Lord, Lord Puttnam, on his success in winning this government concession, at which, self-evidently, he has worked so hard and for so long. We shall wait to see the final details of the amendment, but I agree with the comments of the Minister about the distinction between newspapers and the broadcast media. Clearly, as regards content, there is an important distinction.

As regards the amendment tabled by the noble Lord, Lord Puttnam, the "media plurality public interest" test is perhaps not the snappiest title the noble Lord has come up with in his career. It is some way from "Chariots of Fire". However, I believe it will have a tremendous impact.

I have one comment in support of the noble Lord, Lord Crickhowell. I am slightly puzzled as to why he should have removed his name from a later amendment on foreign ownership. It seems to me that, important as this concession has been, the noble Lord, Lord Crickhowell, is entirely right that it does not settle the issues on foreign ownership, in relation not only to his amendment but to other amendments too.

In practical terms, the test will include a group which already has major investments in the United Kingdom but may exclude a major group that has no investments at this point inside the United Kingdom. In normal circumstances I would not object to that. However, I would point out that a United States company can still take over ITV while no British company can take over even a United States radio station, let alone a major television company. We shall, very shortly, I hope, come to that.

However, at this stage I want to make the point that important as the government concession has been, it has by no means settled all the questions and important arguments there are on the Bill. I believe that the one I have just mentioned, subject to an amendment from the noble Lord, Lord Gordon, is one of the greatest importance. Having said that, like my noble friend I congratulate the noble Lord, Lord Puttnam, on his very substantial success.

Lord Thomson of Monifieth

My Lords, from the Back Benches of this corner of the House I join in the tributes paid first to all Members in all four quarters of the House who served on the pre-legislative scrutiny committee and prepared the ground for what we have just arrived at today, which is a remarkable and constructive achievement. I pay a special tribute to the noble Lord, Lord Puttnam, for his quiet leadership and the persistence with which he has brought about the situation we are in today.

As compliments are flying around. I too pay mine to the Minister for his speech, which we all need to read and carefully study. It was an important, analytical and also rather eloquent speech. I do not want to detract from the compliment in any way but his view of the state of the old but vitally important virtue of due impartiality in the broadcast media was a little romantic when one sees what happens on some of the channels these days. That applies equally, perhaps, to his view of the other side, the print media, if one looks back to the great dictum of CP Scott all those years ago and his model for print journalism that comment is free but facts are sacred. I am bound to say that one of the least obvious practitioners of that great golden rule of CP Scott is the modern Guardian. However, having said that, this has been an important stage in your Lordships' House today. We are all deeply indebted to the noble Lord, Lord Puttnam, and his colleagues, and to the response from the Minister.

The Lord Bishop of Manchester

My Lords, from these Benches perhaps I may add our congratulations to the noble Lords, Lord Puttnam and Lord McIntosh. It is heartening to know that the Government support the principle behind the plurality public interest test, to which the noble Lord, Lord Puttnam, spoke eloquently and effectively. On these Benches we believe it is important to have such a test for the common good; that economic regulation alone cannot provide it and that it is not sufficient to leave such matters to chance.

The way forward proposed by the noble Lord, Lord Puttnam, and to which the Government have given such a positive response today would avoid the more absurd consequences of over-reliance on market forces. If after further negotiation between the Government and the noble Lord a consensus is achieved, certainly we believe it would find felicitous and widespread support in a way that other proposals are unlikely to achieve.

Perhaps I may add a particular point of interest. We have here a potential solution to the question of religious ownership restrictions. That was voiced by the noble Lord, Lord Puttnam, in Committee and recorded in Hansard at cols. 1433 and 1434. It was also voiced in Committee in another place, where there was also cross-party support.

In Committee, the noble Lord, Lord Puttnam, referred to three aspects in favour of his proposed public interest test. Of the third, he said: The third aspect, which is very important, is that it could be used to address the knotty issue of religious ownership. Rather than banning all religious bodies from owning licences and then giving them exceptional leave to do so when there is no longer any evidence of spectrum scarcity, each case could be examined on its merits".—[Official Report, 5/6/03; col. 1433]

As noble Lords know, I have been trying hard to find a solution to this sensitive issue of religious ownership restrictions. I very much want the interested parties to reach a consensus. Therefore, my hope is that the proposal of the noble Lord, Lord Puttnam, especially in Amendment No. 189, will either be accepted or—as government assurances indicate—renegotiated both as a way forward which strengthens plurality of ownership, broadcasting companies and competitive choice and as a potential means of meeting the Government's concerns about religious ownership.

Lord Lipsey

My Lords, I, too, congratulate my noble friend Lord Puttnam on his success. I briefly reply to the point made by the noble Lord, Lord Fowler, among others, who said: "Yes, we will have this and then we will go on to debate foreign ownership and Channel 5". Of course we shall debate that, but the two issues are fundamentally linked. It is not a question of a deal—that is, the Government accept the public interest test and those of us who had doubts on the other issue will let them go.

Some of us were rather uncomfortable with the Bill in the form in which it arrived. It seemed to contain a difficult dilemma. On the one hand, we were not satisfied that purely economic competition regulation was a sufficient safeguard for the integrity and plurality of our media—we believe that—but, some were also uncomfortable with the argument being put on the other side for ownership restrictions. That seemed to say that it was absolutely fine for Signor Berlusconi to own large parts of British media, but that certain very reputable foreign owners—far too much focus has been on Rupert Murdoch as though he is the only one with all the vices and virtues that exist—must be ruled out. That seemed chauvinistic.

This breakthrough has removed that deplorable chauvinistic aspect but has preserved, and indeed put in lights, the public interest which is at the root. It will not be where you come from; it will not even particularly be what kind of chap you are; it will be whether your ownership is such that it endangers public interests by reducing plurality. Incidentally, plurality in media law is a concept that stretches much more widely than simply numbers, as was shown by the verdict of the regulatory authorities in the Bristol radio cases. That is why this is such a tremendous breakthrough and why some of us can now, with a song in our hearts, go through the government Lobby in the unfortunate event that there is a Division, for example, on foreign ownership.

Lord Phillips of Sudbury

My Lords, before the noble Lord, Lord Lipsey, sits down, I am intrigued. He said: "It won't in future be a question of what sort of chap you are"—I think those were his words—"it will be a question of whether you can reliably uphold the public interest in the manner indicated in the amendment". Surely, those two issues go together. If the nature of the proprietor is of, for example, a Berlusconi pattern, it will be directly relevant to the public interest.

Lord Lipsey

My Lords, yes, I think that I misspoke there. I take the point made by the noble Lord.

Baroness Howe of Idlicote

My Lords, as noble Lords will know, the Cross Benches do not have a view, each one of us has an individual approach. From my viewpoint, and possibly from that of one or two other noble Lords who have followed the debate from the beginning, it is a huge relief to have this new concept of plurality and public interest test brought in. Whether in due course we can all be convinced that it applies to all the issues that still worry us, 1 think will need a little more explanation over time.

However, it is a very worthwhile beginning to this debate. Again, I most warmly congratulate the noble Lord, Lord Puttnam. Yet again we have more than one reason to be grateful to the noble Lord and his colleagues. Equally, I give my congratulations, along with those of everyone else, to the noble Lord, Lord McIntosh, who has spoken so eloquently and with such understanding.

5.15 p.m.

Baroness Buscombe

My Lords, will the noble Lord confirm that even if a public interest test were not included on the face of the Bill, the Secretary of State has the power under Section 59 of the Enterprise Act 2002 to introduce such a test at any time by order?

Lord McIntosh of Haringey

My Lords, I have confirmed that Clauses 59 to 66 of the Enterprise Act will be included in any provision that we make. Yes, of course there is an order-making power, but the house is demanding that we put the provision on the face of the Bill, and that in addition we set out not just a numbers test—because that could happen under the Enterprise Act—but the need for a wide range of high-quality broadcasting, which is calculated to appeal to a wide variety of tastes and interests. We propose to include that and the need for a genuine commitment to the standards objective. I doubt whether that would be possible under the Enterprise Act.

Lord Eatwell

My Lords, I begin by declaring an interest as chairman of the Commercial Radio Companies Association. I add my congratulations to the universal congratulatory tone for my noble friend Lord Puttnam. He has sought to achieve something very important: that as many voices as possible provide many viewpoints and a wide diversity of programming throughout the media.

However, I confess that I am slightly worried by the belief that plurality will be a universal panacea to achieve those goals. I am also a little worried about the identity which has emerged in discussion between plurality and the public interest test. They do not seem necessarily to be the same thing.

When my noble friend introduced his amendment he pointed out that the plurality test was designed to apply across the board. Although most of the discussion has taken place with respect to television, perhaps I may be forgiven for reflecting for a moment on the impact on the radio industry.

First, a number of important qualifications were made by my noble friend Lord McIntosh with respect to the amendment of my noble friend Lord Puttnam. He made three points with which I agree completely. I shall list them without going into the arguments. First, he pointed out that there is some confusion in this discussion—a confusion which emerged in the contribution of the right reverend Prelate—between plurality and diversity. Plurality and diversity are not the same thing. A reduction in plurality may often increase diversity of programming and vice-versa. They are not the same thing.

I see some puzzlement on noble Lords' faces, so perhaps I should elaborate a little. Let us suppose that in a given area there are two owners of local music stations. In order to maximise their revenues their rational business strategy would be to play exactly the same kind of music—the most popular music in the area. If those two owners combined, their rational business strategy would be for the two stations to play different kinds of music and thereby maximise the coverage in the market. Therefore, the reduction in plurality would increase diversity and consumer choice.

There have been significant examples of that occurring in the radio industry. For example, the mergers which have taken place in London by Capital Radio have actually increased the diversity of programming across the radio stations taken over by it. So my noble friend the Minister was quite right: plurality and diversity are not the same thing.

Secondly, my noble friend pointed out that there is a degree of elision in the amendments between the newspaper industry and other media. They are not the same. The newspaper industry does not have content regulation, whereas, in this country, we have strict content regulation for broadcast media. Not only does the regulator apply content regulation but, in the radio industry, content regulation is strongly supported by the industry. That helps it to become much more effective.

The third point that my noble friend made with which I agree was that, with respect to the presentation of news, there are requirements on broadcast media to present a fair, balanced and impartial news coverage. That already exists in legislation.

There is a fourth point that my noble friend could have made about the impact in the United Kingdom on plurality issues that does not apply abroad. It is that commercial broadcasters in this country—commercial radio in particular—face a powerful and creative competitor in the form of the BBC. If commercial radio does not provide a wide variety of programming appealing to local tastes, it will inevitably lose its listeners to the BBC. The fact that the BBC is there forces improved performance by commercial radio. Indeed, the effect is reciprocal; they mutually reinforce one another.

I hope that those four elements will be taken into account when the Government draw up their plurality amendment. Those issues are important and mean, with respect to format regulation and the presence of a powerful BBC, that analogies based on Italy, Australia or America—which have been widely used in consideration of the matter—are not valid for the UK.

I draw the House's attention to a wider point. An important book dealing with the issues of media ownership, competition and plurality was published in 1997. It was entitled, The Undeclared War: the struggle for control of the world's film industry. One clear message of that book was the importance of scale in underpinning success in competitive media markets. As we all know, the author of that book was my noble friend Lord Puttnam.

It is therefore ironic that my noble friend's amendments could prevent British companies in other sectors of the media industry from achieving the competitive scale shown to be so important in the history of film. I am worried about that. One factor underlying the failure to build a successful commercial television company of world class in this country—there is not one—has been the fact that we have restricted the growth of commercial television companies and prevented them from competing on a suitable scale with foreign companies.

If we are so determined to force our media companies to be small, we must be sure that we are happy to hand all the long-term competitive advantage to companies based outside the UK. If we are prepared to accept the consequences of that, that is fine, but we should be aware that those are the consequences. In the long term, the consequence will be an ever weaker UK commercial broadcasting sector facing more and more powerful competition overseas. Therefore, the UK sector will be sustainable only by erecting larger and larger protective barriers.

With strong commercial companies overseas and weak commercial companies here, we could also face a BBC able to maintain its position only by getting into bed with those powerful foreign interests. That is happening already.

I am worried about the notion that plurality is a panacea. In drawing up their amendments, I hope that the Government seek to achieve a balance between the attempt to create an environment within which companies can grow and be strong and competitive on a world scale and the diversity of voices, programming and consumer choice that we all seek.

Lord Bragg

My Lords, I shall be brief, but I cannot let this moment pass without adding my congratulations to my noble friend Lord Puttnam whose work in this respect has been mighty, as I and several other noble Lords know, and to my noble friend the Minister for the intelligence and directness of his answer. It proves to me that the Government have listened to their supporters—to those of us who, in the words of the noble Lord, Lord McNally, want to make a good Bill better. The new clause sets out to do just that and I am very pleased that the Government have responded so carefully and so effectively to my noble friend's amendment.

Plurality and adversity—I mean diversity; I have been thrown a bit by my noble friend Lord Eatwell—applied to the spirit of my noble friend the Minister's remarks, should see us through—us being the British public—to preserving the public service interest at the heart of the Bill. We are much further forward after today.

Lord McIntosh of Haringey

My Lords, with the leave of the House, I want to avoid making a second speech and, with three very brief—the stopwatch starts—exceptions, I can do so. I shall respond to all the points about the relationship between plurality and foreign ownership when we deal with Amendment No. 193. I shall deal with the point about religious broadcasting when we reach the appropriate amendment.

Apart from that, I want only to correct something that I said to the noble Baroness, Lady Buscombe. In fact, under Section 58 of the Enterprise Act 2002, a public interest consideration may be added by an order subject to the affirmative resolution procedure. That would cover the two media plurality considerations that I cited. However, in the light of the debate, it has been generally agreed that it is advantageous to write the provision into the Bill.

Lord Puttnam

My Lords, no Oscar speech, I promise. It goes without saying that I am enormously grateful to all noble Lords who have supported this endeavour—it has been an endeavour—for the past 14 months and have brought us to this point. There is one thing that I want to get off my chest. I am very conscious—and not at all comfortable with the fact— that I have been unable to extend to the noble Lords, Lord Crickhowell and Lord McNally, the loyalty that they extended to me. That troubles me.

It is hope fulfilled, I suppose, but I suspect that my heart will remain in my mouth for a few more years. Ofcom will find itself challenged—quite quickly, I suspect—and only then will we know if we have placed our trust in the right quarter. As a matter of fact, I have every confidence that we have.

There are a few people whom I should like to thank because they have been very much behind the scenes. The noble Lord, Lord Grabiner, who has, as it were, been "behind the behind the scenes", has steered me magnificently on the legal aspects of the conclusion at which we have arrived today. I know that my noble friend Lord McIntosh would join me in thanking the noble Lord for his help. The honourable Andrew Lansley—who, I believe, may well be in the Chamber, but I shall not look to find out—was in every respect the architect of this concept. The rest of us have been happy messengers. I hope that he feels that we have handled his child with sufficient care.

It is also well worth saying that 12 people from each party and from both Chambers have supported the concept from day one. If that is not an example of politics at its best, and of the way that scrutiny and cross-party relationships can bring about an excellent result, I am not sure that I shall ever live to see one. Without embarrassing her, perhaps I may also thank the noble Baroness, Lady Buscombe. She has been a model of consistency and common sense in the most difficult and trying of circumstances. I am not sure how I should have managed during the past week to 10 days if she had not been so utterly fair-minded and so genuinely helpful whenever she could be.

With that said, this has been a good day for the House and maybe—who knows?—a good day for the country. I beg to move.

Noble Lords

Oh.

Lord Puttnam

I knew that I should not get to the end of this properly. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 190 to 192 not moved]

Lord Crickhowell

moved Amendment No. 193: Before Clause 340, insert the following new clause—

"INTERIM RETENTION OF CERTAIN RESTRICTIONS ON NON-EEA OWNERSHIP

(1) For paragraph 1(2) and (3) of Part 2 of Schedule 2 to the 1990 Act, there shall be substituted—

"(2) Sub-paragraph (1) shall apply in relation to any Broadcasting Act licence other than a licence to provide a Channel 3 service and a Channel 5 licence as if paragraphs (a) and (b) (and the reference to those paragraphs in paragraph (i)) were omitted."

(2) OFCOM shall carry out the initial review for the purposes of this section within a year of the coming into force of this section.

(3) OFCOM may carry out a subsequent review for the purposes of this section at any time during the period which commences a year after the completion of the initial review under subsection (2) and which concludes with the coming into force of the order made under subsection (7).

(4) A review under this section shall consider whether, in the opinion of OFCOM—

1. (a) the provisions of section 273, 274 and 280 to 284 are operating in such a manner as to provide for a fair and transparent programme supply market with respect to Channels 3 and 5;
2. (b) the relevant provisions of Chapter 4 of this Part are operating in such a manner as to provide for effective content regulation of Channel 3 and Channel 5 services;
3. (c) the provisions of sections 260 to 267 are operating in such a manner as to provide for a continuing significant contribution by Channel 3 and Channel 5 services towards the achievement of the purposes of public service television broadcasting in the United Kingdom specified in section 260;
4. (d) the provisions of sections 344 to 349 provide adequate additional safeguards in case of change of control of Channel 3 services or Channel 5; and
5. (e) the powers available to OFCOM under the Competition Act 1998 (c. 41), Part 4 of the Enterprise Act 2002 (c. 40) and sections 309 to 311 of this Act are adequate to promote effective competition in the broadcasting market in the United Kingdom.

(5) When, as a result of a review carried out in accordance with subsections (2) or (3), OFCOM consider that each condition specified in subsection (4) has been met, they shall make a report to that effect to the Secretary of State, giving reasons.

(6) The Secretary of State shall lay any report made to him under subsection (5) before Parliament.

(7) When a report has been laid before Parliament in accordance with subsection (6), the Secretary of State may by order repeal paragraph 1(1)(a) and (b) of Part 2 of Schedule 2 to the 1990 Act and make such consequential amendments to that Part of that Schedule or to other provisions of that Act or this Act as he thinks fit.

(8) No order is to be made containing provision authorised by subsection (7) unless a draft of the order has been laid before Parliament and approved by a resolution of each House."

The noble Lord said: My Lords, we have just heard that the Government are to introduce very important amendments at Third Reading. However, nothing that the noble Lord, Lord Lipsey, said about the matter makes me change my mind and I do not believe that they are likely to make any difference to the issues covered by my amendment, Amendment No. 193.

The noble Lord, Lord Puttnam, need not feel any guilt. He has negotiated a deal that greatly improves the Bill. It is the nature of deals that something has to be given in return and the House will understand perfectly why he has now withdrawn his name from the amendment. However, the noble Lords, Lord McNally and Lord Hussey of North Bradley, and I have not been party to the negotiations and we feel that the arguments in favour of our amendment remain as strong as ever.

Amendment No. 193 would delay the lifting of restrictions on non-EEA foreign ownership. The Joint Scrutiny Committee, of which we were all members, saw no immediate need for the lifting of the present restrictions. We concluded that to do so before Ofcom is firmly established and has the opportunity to review the state of the market and the way in which regulation is operating would put at risk some of the crown jewels of British broadcasting.

The amendment would require Ofcom to hold an initial review within a year and subsequent reviews as required. If, as a result of a review, it concluded that the restriction could safely be lifted, Ofcom would report that to the Secretary of State and Parliament. An appropriate order could then be laid to be approved by affirmative resolution.

The case in favour of lifting restrictions on foreign ownership now were summarised in Committee by the Minister then in charge of the Bill, the noble Baroness, Lady Blackstone, who said that it should lead to increased investment, productivity and efficiency, together with new skills and ideas. That argument had been advanced at Second Reading by my noble friend Lady Buscombe. My noble friend asked, "What is there to fear?" She told us that we should have more confidence in our culture and allow the consumer to choose. The Minister took a totally different line. She did not propose to leave it to unfettered consumer choice. Responding to what I and others had said about the state of broadcasting in the United States and the massive power of conglomerates, she said that the Government wholeheartedly understood and sympathised with the concerns that had been expressed. She argued that, the UK has strong content regulations which will maintain the quality and impartiality of our programming'—[Official Report, 5/6/03; col. 1474.]

Those who regard public service broadcasting as one of the greatest glories of British broadcasting may, like me, have more confidence that it would be better protected by effective legislation than it would by leaving it all to consumer choice. I shall return to the subject of consumer choice, but I wish first to examine the circumstances in which Ofcom will have to try to enforce regulation and compare them with the very different circumstances in which the rich culture of public service broadcasting was established and developed. Professor Michael Tracey of the University of Colorado, in his latest, remarkable contribution to the argument, reminds us that, the ITV system, while commercially funded, was not market driven. It was based on a monopoly of advertising in a given region, all based on the expectation that it would fulfil certain public service commitments. Channel 4 had a guaranteed income precisely so that it did not have to worry about the market".

As a former director of an ITV company, I can vouch for the fact that in those happy, far-off days, when the advertising revenue came in a rich flood, those of us with responsibility to our shareholders were immensely careful to obey in the minutest detail every regulatory command, and the regulators had no problem in enforcing their will. By the time I finally left the industry, the situation was rather different. A combination of large bids to retain licences and rapidly declining advertising revenue meant that the companies had to cut costs to survive and that the regulators had to relax their controls and respond with understanding to the financial realities of the market.

Ofcom will be taking over its responsibilities in circumstances that will make its task of enforcing regulation very difficult. As the Joint Scrutiny Committee pointed out, and as my noble friend Lady Buscombe observed last night, it will face an enormous range of challenges immediately after it assumes its functions. It will also be taking over at a time when the fall in advertising revenue for Channel 3 licence holders is so severe that it threatens the ability of some of them to fulfil existing commitments and maintain existing standards. In this situation Ofcom will have to use its powers with discretion or may find that the very existence of those companies is imperiled.

Some people might say, "Well, that's one reason why we need foreign investment". However, if foreign investment were to be made in those circumstances, it would not be to obtain the rich pickings from the advertisers' table, or in the expectation that the arrival of investment and ideas would suddenly boost advertising revenue. No, the aim of new owners would be to buy when share prices were depressed, cut costs—by reducing original drama output, for example—and to bring in as much existing material as possible already paid for by US sales on which margins would be large. At the same time, local content would increasingly be created with the object that it could be marketed to international audiences rather than with the particular aim of retaining local character and meeting local need.

In Committee, I referred to the large amount of evidence received in the Joint Committee that that was exactly what would happen. The noble Baroness, Lady Jay of Paddington, and the noble Lord, Lord Bernstein, reinforced the case on the basis of their own direct experience in the market. The usual challenge was thrown out that, if this was the case, why did European countries that have no restriction on their ability to buy British companies not take advantage of the situation and do the same? The fact is that they do not have vast existing libraries of English-speaking product waiting to be disposed of in that way.

I add only two more points before turning to the question of consumer choice and the alleged benefits to the UK of opening up our market. One of the principal benefits of attracting investment and ideas that has emerged in markets other than television is that it can be of great help in making possible sales to other countries, including the United States. Bizarrely, however, the proposal is that we open our markets without any reciprocal opening of the US market. That is one more good reason for not moving fast down the route proposed by the Government, and I warmly support Amendment No. 195 in the name of the noble Lord, Lord Gordon of Strathblane, and my noble friend Lord Fowler.

There are those who argue that because content regulation has been tightened up, there are now adequate controls to ensure that new overseas owners would have to behave themselves. As a regulator of a different industry, I learned that there is a huge difference between regulating the conduct of those who respect what the rules hope to achieve, and who are, by instinct, inclined to conform, and attempting to regulate those who have contempt for the rules and seek to avoid them for their own advantage. I remain to be convinced that Ofcom will find it easy to ensure compliance by a great international conglomerate.

Public service broadcasting is now comprehensively defined in Clause 260 in legislative language. We are talking about creativity, diversity and standards. Can we be confident that such matters will be what consumer choice will safeguard? I suspect that Hugh Carleton Greene, a great director general of the BBC, was right when he argued that what he called the "basic moral values" of truthfulness, justice, freedom, compassion and tolerance are constantly endangered species that one needs to breed and then protect.

In the competitive marketplace of the US, the demand of advertisers always to maximise audiences has led to a reduction in real news broadcasting, the decimation of children's broadcasting and the extraordinary success of reality TV. In a world where the consumer may have a hundred channels he can watch, there is plenty of scope for reality shows. Yes, we can and should have consumer choice, but we have got it, and there is no shortage of choice available to consumers. I am not arguing that there should he. I am arguing that if we value the standards that have been established for public service broadcasting, we cannot and must not leave those to consumer choice.

Speaking in this building on 26th June, Pat Mitchell, the president and CEO of PBS, the United States' public service broadcasting organisation, who has spent nearly 25 years in commercial media and the past three years with the only non-profit media organisation in the United States, warned of a further consolidation of power among a few global conglomerates. My noble friend Lady Buscombe says that we should allow the consumer to choose. Pat Mitchell says that we cannot have a democracy without having a healthy, democratic media system and that the media are too important to leave to the marketplace to control, or direct.

Public service broadcasting, as we know it in this country, is too important to be put at risk by rushing helter-skelter down the de-regulatory slope at a time when the new regulator is likely to be overstretched and relatively feeble, when market conditions make regulation hard to enforce and when the moguls may see an opportunity to exploit. My amendment would not shut the door for ever. It would provide time for Ofcom to establish itself and give it the opportunity to explore the validity of the arguments that we are considering today.

The Government, for reasons that are remarkably unconvincing, are trying to persuade Parliament to take a risky road. We should not allow them to do so, and I find it extraordinary that my Front Bench should be prepared to underwrite the Government's approach. When my noble friend the Chief Whip circulates a note saying that we are being watched closely—minute by minute and in detail—by the media and that the most careful consideration has been given to the issues by senior colleagues in both Houses, I know that those who tell me that heavy pressure has been applied by media moguls are right. My reaction is not to climb down in the face of such pressure but to feel even more strongly that the Bill needs strengthening, not weakening.

The Government and Opposition Whips will usher their flocks into the same Lobby. I hope that there will be many in all parts of the House, and a substantial number in my party, who will feel as I do and will insist on retaining effective safeguards for a system and for standards that are immensely valuable and need our protection. I beg to move.

5.45 p.m.

Lord Gordon of Strathblane

My Lords, I speak to Amendment No. 195, which stands in my name and that of the noble Lord, Lord Fowler. I agree entirely with the remarks made in the previous debate by the noble Lords, Lord Crickhowell and Lord Fowler, to the effect that this is a separate issue from that of the public interest test and should not even be considered in the same breath.

I favour Amendment No. 194, the second of the noble Lord's amendments, rather more than I favour Amendment No. 193. It is not good enough just to give Ofcom breathing space. Amendment No. 194 takes out the disapproval altogether. My amendment is an attempt to achieve reciprocity: we will do it, if they do it. I freely concede that, frankly, if we achieve reciprocity, events will overtake us all, and it will happen automatically.

The man in the street would think that we had taken leave of our collective sense, if he heard that we had decided unilaterally to allow the Americans to own British media, without insisting that they grant a similar right to us. It is, after all, a fundamental principle of trade that it is bilateral. I welcome the removal of barriers. I concede that there are some concerns about United States ownership that, even if the barriers were down and we had reciprocity, might fall foul, in certain circumstances, of the public interest test proposed by the noble Lord, Lord Puttnam. But that is a separate matter.

Discussions go on constantly in GATT on the matter. The great irony is that this might happen at precisely the point at which America might consider it sensible to drop our media restrictions that stop anyone owning more than 20 per cent. I remind the House that one of our most able and talented Commonwealth citizens had to renounce his Australian citizenship, take a primary school test in American history and become an American citizen in order to own anything in the United States. That is how strict they are; that is how resistant they are, even to big media moguls. If progress is to be made, it will not help our negotiators if we give in in advance as regards precisely the prize upon which they might feel tempted to remove their own restrictions.

The reason that America might give in is that boundaries are becoming meaningless nowadays, anyway. Any of us could sit at home and watch al-Jazeera all day, if we wished. We can receive it through satellite. Likewise, in New York, the highest-rated radio programmes on the Internet are both British. I concede that there is an element of distortion of the market, in that expats probably use the Internet because they do not have access to British programmes any other way. However, television is now crossing frontiers—in fact, that is the title of a directive from Europe. To some extent, we can keep out ownership, but we cannot really keep out programmes. It is programmes and programming that influence the public. I am not trying to say, "Never"; I am simply saying, as a principle of trade, "Let us in, if we let them in".

I squirmed with embarrassment at the statement about how ridiculous it was that we were allowing the French, the Germans and the Italians to own but not the Americans, the Canadians and the Australians, as though, somehow, it had been a slip of the draftsman's pen. It is straight common sense. For all that we may dislike some of our European colleagues, particularly the media owners, the fact is that, at the moment, as part of our membership of the European Union, we have access to ownership of their media, and they have access to ownership of ours. Prior to that, Section 12(5)(a) of the Independent Broadcasting Authority Act 1973 insisted that British media must be owned by people who were British. It was only when we joined Europe that we extended it.

We have not felt the impact of Europe very much for the obvious reason that, because of language differences, there has not been the degree of vertical integration—sometimes called "dumping"—that there has been from the United States. That has not happened. It could happen with the United States, Canada or Australia. We must consider that—quite properly—under the public interest test. Even if we had reciprocity of ownership, it would be proper, under the public interest test, for the Secretary of State to say, "I know that we are treating you on all fours with European and UK media, but we think that the danger that you will unload your junk programmes is such that it is not in our interest". That would be fine. The only thing that would happen is that no media owner could be debarred simply because he was American. There might be other issues. That is where the public interest test is required, as well as the foreign ownership restriction. But one is not a substitute for the other.

I invite noble Lords to re-read paragraphs 247 and 248 of the report produced by the noble Lord, Lord Puttnam. I shall not go on about it, as 1 know that he feels embarrassed about it. In those paragraphs, he examines the arguments made for the benefits of foreign ownership. The noble Lord said that he found the arguments "variously lacking in force", which is a polite way of saying that they do not stand up to too much examination.

I am open-minded on whether we should follow the amendment tabled by the noble Lord, Lord Crickhowell—I prefer the second to the first—or, indeed, people might vote for mine. In the light of some amendments that the Government have tabled, which I do not quite understand, it might be appropriate for us to delay a Division until Third Reading. I do not want to heap up more trouble for Third Reading, but I believe that this is such an important matter that a Division is appropriate. I will support another amendment, if that is the preferred route, or invite others to support mine in the Division, which might be more appropriate at Third Reading.

Lord Fowler

My Lords, as the other signatory to Amendment No. 195 with the noble Lord, Lord Gordon of Strathblane, I shall speak briefly to support what he said in an outstandingly succinct speech.

There are two points that I should like to make. First, in no way is this an anti-American amendment. I am strongly pro-American. In the media field, Mr Murdoch deserves great credit for what he has done in this country, particularly in the newspaper area, sweeping away some of the old restrictive practices that were moving a great number of our newspapers towards bankruptcy. He therefore deserves a great deal of credit for that.

Secondly, in no way is this anti-free trade. I am strongly in favour of free trade and of businesses competing with one another on a level playing field. In the case of television and broadcasting, the playing field being created by this Bill is anything but level. Basically, United States companies are being allowed to buy ITV in Britain without any reciprocal arrangement for British companies to do anything like the same in the United States.

With respect, the noble Lord, Lord Lipsey, consistently seems to miss the contrast with the position in the European Union, with which there are reciprocal arrangements. Here, we are introducing a new measure without any reciprocal arrangements. The noble Lord, Lord Gordon, and I find it quite inexplicable in pure business terms. I cannot understand why any country would want to do that.

I think that the arrangement is neither sensible nor in our national interest; apart from the noble Lord, Lord Lipsey, I have found few people who do. It is a complete mystery why the Government are introducing this change. Only a few months ago they, too, took my view. Going back to November 2001, the view of the Government was, Without reciprocal arrangements with other nations that will allow our own companies to expand into their markets, we do not feel we could justify lifting our ban at the present time". That was the Government's own statement.

In Committee, I asked what factors had persuaded them to conduct this extraordinary U-turn in policy. Unfortunately, time was such that the Minister never got round to that point in her summing up. Perhaps the new Minister can say why there was this change of mind—after what consideration and after what meetings. Perhaps he can even say who lobbied for this change in legislation. The extraordinary thing is that the Government, apparently, still want reciprocal arrangements with the United States.

On the face of it, giving away one's strongest negotiating card before the negotiations have begun seems the most extraordinary negotiating tactic, if that is the case. Free trade does not mean simply rolling on one's back, kicking one's legs in the air and allowing the negotiations to be settled in that way.

Perhaps I may put it another way. For a moment let us imagine that we had reciprocal arrangements with the United States, but not with Germany and France. Nevertheless, without any reciprocal agreement, we allowed France and Germany to enter our market unchecked. It is perhaps just conceivable that attitudes therefore might be a little different. My Front Bench might be opposing this measure and not supporting it. Whips might be bussing in old friends of mine who I have scarcely seen in the first two years of my life here.

In the debate so far, I have not heard one argument—I have scarcely heard an argument of any kind—put by either Front Bench which even half persuades me to go along with the Bill on this issue. I strongly support the amendment proposed by the noble Lord, Lord Gordon, and will most certainly vote for it.

Baroness Cohen of Pimlico

My Lords, I rise not exactly to support the amendment proposed by my noble friend Lord Gordon, because I suspect that the issue of reciprocity may be something of a red herring. I have some regret in saying that although my noble friend Lord Puttnam has taken his name off this amendment—as a fellow member of the committee, normally I support the noble Lord in everything—in this case I cannot go along with him. I do not believe that plurality regulation will amount to the same thing as an ownership restriction. Ownership restriction, which I unhesitatingly say must apply far more to any country which makes its programmes in English, I continue to believe is extremely important. I regret to divide the ranks of the committee further on this point but it is important.

I am not sure that reciprocity in the amendment is not a red herring. As I understand it, there are people in the DTI negotiating these kind of agreements through the General Agreement on Tariffs and Trade arrangements at the moment. For me, the real point is not reciprocity but the whole problem of ownership of channels.

Lord Phillips of Sudbury

My Lords, I believe that the United States is right in its policy. So many limes it has been said that in dealing with cultural goods one is dealing with something completely different from virtually anything else. I am concerned that if we allow American investment in our television and radio channels, with the force of their wealth they might very easily and rather quickly invade the jewels of our own television and radio. Like the noble Baroness, Lady Cohen, I am not as sanguine as some may be that the Puttnam amendment—if I can call it that—will come to the aid of our own television and radio companies in those circumstances. I fear that one is moving into a legal minefield in that circumstance. I note that the noble Lord, Lord Puttnam, is gently nodding his head in agreement with my point.

The fact that we allow European Union members to have free access to ownership of our television and radio companies is a matter of history. Two wrongs do not make a right. In any event, there is a huge difference between the United States, with a common language and a parallel history, and European Union member countries, with no commonality of language and a lesser cultural commonality, if I can put it that way. For those and the many other reasons already expressed, I strongly support this group of amendments.

Lord Peyton of Yeovil

My Lords, I warmly support what the noble Lord, Lord Phillips, said and what my noble friend said in his very eloquent moving speech. I shall do so with real, not merely promised, brevity. The whole passage of this very complicated Bill has been a powerful reminder to me of how difficult it is to sustain standards. Standards tend to fall, not to rise. Someone quoted Sir Denis Forman on the qualities that those who are responsible for standards would need to show for them even to be sustained, let alone to rise. Surely, this is not a time when we should think of diminishing the defences that we have. I can see absolutely no grounds for getting rid of the need for reciprocity before doing so.

The amendments have not removed consumer choice from the high table at which it ordinarily sits these days: consumer choice has been told fairly firmly—not before time—that it does not own the high table; it has the privilege of sitting there.

It seems slightly unreal that we should leave this subject without referring to Mr Murdoch. I received a rather strange letter from News International, as did many of your Lordships. It told me one or two things which I knew before and something which I did not know before—that is, that Mr Murdoch did not intend to bid for Channel 5—but I was not quite sure what News International wanted of me. At this stage, I am left with the need to say that Mr Murdoch seems to me to have acquired a position of almost unparalleled influence over our affairs, and I see no possible reason for making it easier for him to expand on that.

I have said what I intended to say, and I have said it with all the conviction that I can muster. I warmly support my noble friend in his amendment and I would say to the noble Lord, Lord Gordon, only that I, too, prefer Amendment No. 194 to Amendment No. 193.

6 p.m.

Lord Thomson of Monifieth

My Lords, I warmly support the amendment moved by the noble Lord, Lord Crickhowell, and I support the views expressed by my colleague, the noble Lord, Lord Peyton.

This is not primarily a matter of economic reciprocity, although it is a useful device in the argument. This is not primarily an economic issue; rather, we are considering the whole character and quality of the broadcasting system of this country, one which is distinctively different from that which has grown up in the United States; it has a quite different history. If we were to open our marketplace to American broadcasting capital, I think that Ofcom would have an extremely difficult job trying to preserve the essential character of broadcasting in this country. I see no reason why we should put ourselves in that position, so I warmly endorse what has been said by the noble Lord, Lord Crickhowell.

Baroness Buscombe

My Lords, I had thought of wearing a form of flak jacket in your Lordships' House today in order to debate these amendments, because I am going to stand four-square with the Government. Her Majesty's Opposition does not support these amendments. Indeed, we are entirely in favour of lifting restrictions on the ownership of national terrestrial broadcasting licences.

As I made quite clear at Second Reading, we believe that lifting the restrictions will open up the broadcasting media to new sources of investment and ideas. Foreign investment has already enabled cable and satellite television to grow in this country. The concern that liberalisation will lead to a flood of foreign content is, we believe, misplaced. Commercial companies operating in a commercial marketplace simply cannot afford to ignore consumer demand. Moreover, all the evidence suggests that domestic programming is popular in the United Kingdom and therefore any media company that wants to be successful in this country must provide the local content that people want or it will not survive. In essence, content is driven by consumer demand, not by ownership, and the two issues should not be confused.

My noble friend Lord Crickhowell was right to point out that I did say at Second Reading that we should have more confidence in our culture and allow the consumer to choose, but I take issue with his suggestion that, in a sense, I sought to take a different view from that of, as I recall, the noble Baroness, Lady Blackstone, on that occasion. I say that because we stand four-square with the Government in the light of the fact that, unlike the United States, we have already, and will continue to have, what has been set out so clearly on the face of the Bill: strong content regulation. That, we believe, makes all the difference.

I am not in the habit of standing at this Dispatch Box to support the Government, but this is one of those rare occasions.

Lord McIntosh of Haringey

My Lords, perhaps I may take the points in a different order from that in which they were debated and start by discussing reciprocity. I shall do so because a number of noble Lords have pointed out that reciprocity is a red herring in the major debate that we are having about foreign ownership. I have to say that I think that that is true.

We have been told that to remove restrictions on non-EEA countries owning UK broadcasting licences without reciprocity would be contrary to all the principles of negotiation and of free trade. I simply do not think that that is the case. First, I should say that it is not the case that there are no reciprocal arrangements with the United States, in particular for UK firms. There is not a complete ban on UK companies investing in US media. A UK company may own up to 20 per cent of a US company with a broadcast licence, and can also own up to 25 per cent of a company whose subsidiary company comes with a broadcast licence.

Secondly, it is not the case that we would be in an unusual situation for the European Union. A number of countries have taken this deregulatory step, including Germany, the Netherlands, Portugal, Spain, Denmark, Ireland, Finland, Belgium and Luxembourg, as well as New Zealand, without reciprocity—and we shall encourage others to do likewise. If it is right to liberalise trade, then our general approach within the World Trade Organisation—formerly GATT—is not to wait for reciprocity before liberalising trade. If it is a good thing to do, we do it. If we did not do it, there would be no progress whatsoever on globalisation and the liberalisation of world trade.

Lord Fowler

My Lords, can the Minister explain why, in November 2001—which is not a long time ago—the Government took precisely the opposite view?

Lord McIntosh of Haringey

My Lords, for the past 18 months the Government have been listening to everyone who has taken part in this debate including, if I may say so, the Joint Committee. The Joint Committee agreed with me and has said that the issue of reciprocity was not pivotal to this debate, and I agree. It is a politer way of saying that it is a red herring, but I really do not think, when we are considering an issue of such importance as the liberalisation of world trade, that we should be diverted by the issue of reciprocity.

I shall now discuss the major issue; that is, whether we should maintain the ban on non-EEA countries. We propose to open up to foreign ownership for one very simple reason: that there is benefit in it for UK broadcasting. It is in our interests to open up.

The current rules are not coherent. I do not doubt that there are noble Lords who would wish to impose the same kind of ban on countries within the European Economic Area, but they know that they cannot do so because of European rules. Those noble Lords are not going to resign from the European Union for that purpose; I can say that with impunity because I see that the noble Lord, Lord Pearson, is not in his place. We are doing this because it is right to do so and because we have so much protection, including the additional protection that has been introduced in debate this afternoon and which will be brought forward by way of amendments tabled at Third Reading.

As a general rule, surely to open up the industry to foreign ownership will allow investment in UK broadcasting from a wider range of sources. No one has denied that point. In other industries, foreign investment has boosted new ideas and improved customer service both within individual companies as well as in that of their competitors. We have seen many examples of foreign investment in our industries, including those so close to the ones we are now discussing—the cable and satellite industries—and we have seen the benefits of such investment in both directions. Indeed, I would go so far as to say that our economy is in very large part dependent on it.

Amendment No. 193 proposes that Ofcom should test the content and competition rules in the Bill before changing the rules on foreign ownership. I take it that this is the ingenious way proposed by the noble Lord, Lord Crickhowell, of softening the difficult position he has in the opposition between himself and his own Front Bench. Of course he has had support, hut not so much for Amendment No. 193 as for Amendment No. 194, which proposes a complete ban.

Lord Gordon of Strathblane

My Lords, I intervene on behalf of the noble Lord, Lord Crickhowell. His amendment reflects what the Joint Committee recommended. It is the Joint Committee recommendation he is putting forward. I do not like it as much as his subsequent amendment but, to be fair to the noble Lord, it is not brought forward as an attempt to resolve the difficulties within the Conservative Party.

Lord McIntosh of Haringey

My Lords, I readily absolve the noble Lord, Lord Crickhowell, of that. I should never impute motives to anyone. I caught myself out by doing so. However, the noble Lord does have two amendments side by side which seek to do different things.

Let me make two points about this group of amendments as a whole—that is, Amendments Nos. 193, 194, 213 and 239. The first concerns the point made by the noble Baroness, Lady Buscombe, about content rules. The Bill protects content quality and any comparisons made with the United States system are bound to be misleading. We will have in place robust and wide-ranging public service remits—which Ofcom will strictly regulate—and the United States has no comparable system.

I have read in the broadsheets—as have we all—passionate articles by people we respect. In particular, I remember an article in the Guardian by Richard Hoggart, whom I not only respect but venerate. He argues against opening up and in favour of Amendments Nos. 193 and 194. But he does so on the false basis that this would overturn the content rules that we have in our broadcasting and that there is a comparability between the nature of content regulation in the United States and in this country. It could not be more different.

The Bill will put in place quotas for original production, EU production, regional and independent production. There will be flexibility in the content provisions. Ofcom will be able to renew the licence commitments on change of control to ensure that new owners maintain the standards of the old. In other words, any change of ownership to any owner from outside the European Economic Area will entail compliance with our content regulations. I do not know whether that is clear to those who argue about the dumbing down of British television as a result.

In radio, Ofcom will have to protect the local content of radio. It will also be able to vary the licence conditions when local licences change control in order to preserve the local character of the station and maintain the quality and range of the service.

Unlike the United States, we also have rules preventing broadcasters from using their companies to further their own political agenda. Broadcast news must be accurate and impartial and companies must not use television or radio in order to express their own views on politics or current public or industrial policy.

I do not know what motivated Rupert Murdoch when he went into the American market and took American citizenship to do so. Although I used to know him very well I have not met him for 50 years and so I am somewhat out of contact. But, whatever were his motivations, they could not apply here. If he was looking to do in this country what he has done with Fox, for example, in the United States, he could not do it. Our regulatory system makes it impossible.

The next matters I want to address concern the plurality amendments we propose to table at Third Reading and the plurality issue which was the subject of our previous debate. The noble Lord, Lord Crickhowell, opened his speech by saying that the plurality issue was irrelevant to this issue. The noble Lord, Lord Gordon, said that this is a totally separate issue and should not be considered in the same breath. That is simply not the case.

The government plurality test addresses the concerns expressed over foreign ownership. My noble friend Lord Puttnam has already acknowledged that case. The test will cover the need for a wide range of high-quality broadcasting calculated to appeal to a wide range of tastes and interests. It will cover the need for a genuine commitment to the standards objectives. Just like existing domestic players, foreign acquirers of UK media could be and will be judged against those tests. I stress that the tests would bite even if foreign companies had no existing UK assets.

6.15 p.m.

Lord Phillips of Sudbury

My Lords, I am grateful to the Minister for giving way. As he is now dealing with the amendment of the noble Lord, Lord Puttnam, does he not accept that that is posited on the basis of plurality of media owners? So it would scarcely be possible for objection to be raised if, for example, one of the big American combines were to purchase one of our television channels.

Lord McIntosh of Haringey

My Lords, as I said, we have considered changes to the Bill to introduce a plurality test. As I have explained, this test would allow us to look at a proposed foreign acquisition from the point of view of the number of owners in the relevant market—the noble Lord, Lord Phillips, is right, in some cases such an acquisition would not change the numbers—and it would enable us to look at a proposed foreign acquisition in the light of the need for a wide range of high-quality broadcasting which is calculated to appeal to a wide variety of tastes and interests, and the need for a genuine commitment to the Ofcom standards code.

Even if the numbers were not changed—and I acknowledge that that could happen—the other criteria in our test, which will be debated at Third Reading, will still apply. Therefore I flatly contradict the view that what we have done and what we have said to the noble Lord, Lord Puttnam, on the plurality test does not affect the issue of foreign ownership.

Lord Phillips of Sudbury

My Lords, I am grateful to the Minister for allowing me to intervene again. Is the noble Lord saying that the Government will go further than the amendment of the noble Lord, Lord Puttnam? There is no reference in that amendment to the "high quality" mentioned by the Minister. The only requirement in the amendment of the noble Lord, Lord Puttnam, is for balanced and impartial presentation of news and balanced presentation of comment. There is nothing about sufficiency of news or comment. It then goes on to refer to a wide range of voices. It mentions nothing about quality.

Lord McIntosh of Haringey

Yes, my Lords. I am saying that we are going further than the amendment of the noble Lord, Lord Puttnam. I am saying that I have done my best in my contribution to the previous debate to set out the basis on which we will uphold the principles of plurality, with which we agree. I am saying that that is directly relevant to the issue of foreign ownership. A very much better argument needs to be brought forward for the paradoxical wish to retain national restrictions when these restrictions have to be shown to be damaging to the national interest.

I am saying to the House that it is in this country's national interest to have free trade. I am saying that it is in our interest to have investment to and from this country. I am saying that there is protection not only in the content regulations which are already part of the Bill, but there is additional protection in the amendments on plurality which will be introduced at Third Reading.

Lord McNally

My Lords, I appreciate the Minister's indignation, but the basic facts are that any of the American groups that will come calling—for example, Disney—would walk past the plurality test. If the Government tried to stop them, I suggest that the Prime Minister would be hauled over to Camp David and any objections would be removed.

Lord McIntosh of Haringey

My Lords, it is a good rhetorical trick to intervene into someone's peroration, is it not? A very good rhetorical trick.

I am saying that if Disney or Viacom or any such organisations want to enter this market they will have to meet the conditions we will set down in a plurality test, which will include the quality conditions and the commitment to a code of standards conditions. On that basis, I would argue that the House should not approve the amendment of the noble Lord, Lord Crickhowell, but should sustain the principle we unanimously supported in the previous debate on plurality.

Lord Crickhowell

My Lords, I can be relatively brief because I am in the happy position that the Minister, for understandable reasons, prepared his speech before he heard mine. Virtually every point he made I had specifically dealt with in the course of my speech, except, perhaps, the last. On the last point, I can only say that I still do not believe it really makes a difference. If and when the company has passed the test and acquired, the question is whether regulation will be an effective weapon with which to defend one of the jewels in our broadcasting system.

I do not often find myself dealing with remarks made from my own Front Bench, but they are relatively easy here, too. My noble friend Lady Buscombe has simplified my task. She advanced only a single argument—one that she advanced at Second Reading—she did not speak in the Committee stage and she repeated her words from Second Reading this afternoon. I am not being difficult; they are useful words. I shall repeat them again so that we are all clear about them—

Baroness Buscombe

My Lords, I am sorry to intervene, but I did speak in Committee. I confirmed and reaffirmed what I had said at Second Reading.

Lord Crickhowell

Exactly, my Lords—my noble friend repeated what she had said at Second Reading. She said, in essence, that content is driven by consumer demand, not by ownership, and that because domestic programming is popular, it will be produced.

The noble Lord, Lord Bernstein, whose experience is probably second to none in this House, said something rather different in Committee: In the television world, the whole point of acquiring another company is distribution. If it increases distribution, it increases profits, as my noble friend Lady Jay of Paddington pointed out. If American companies bought English companies, we would get not greater inward investment but the sale of American programmes in this country".—[Official Report, 5/6/03; col. 1467.] I share that view.

One sometimes wonders what to do when the Whips on both sides, and the principal opposition party, decide to march their troops into the Lobby with the Government. Should those who disagree with them press the issue to a vote? Perhaps it is inevitable that, in the face of those great forces, one will go down to defeat. I believe that I should press the amendment to a vote because I believe, for the reasons I have set out, that one of the greatest jewels of our broadcasting system is being put at risk. I think it is right that I should at least give those who, like me, feel that that is not something that we should support, the opportunity to express themselves. Therefore, I propose to press the amendment to a Division.

6.23 p.m.

On Question, Whether the said amendment (No. 193) shall be agreed to?

Their Lordships divided: Contents, 116; Not-Contents, 127.

Division No. 2
CONTENTS
Addington, L.	Maddock, B.
Avebury, L.	Mancroft, L.
Barker, B.	Mar, C.
Beaumont of Whitley, L.	Methuen, L.
Bowness, L.	Michie of Gallanach, B.
Bradshaw, L.	Miller of Chilthorne Domer, B
Bridges, L.	Monson, L.
Brittan of Spennithorne, L.	Mowbray and Stourton, L.
Brougham and Vaux, L.	Murray of Epping Forest, L.
Bruce of Donington, L.	Newby, L.
Campbell of Alloway, L.	Northbrook, L.
Carnegy of Lour, B.	Northesk, E.
Chadlington, L.	Northover, B.
Chan, L.	Norton of Louth, L.
Chorley, L.	Oakeshott of Seagrove Bay. L.
Clement-Jones, L.	O'Cathain, B.
Cohen of Pimlico, B.	Onslow, E.
Colwyn, L.	Palmer, L.
Cooke of Thorndon, L.	Patten, L.
Craig of Radley, L.	Perry of Southwark, B.
Craigavon, V.	Peyton of Yeovil, L.
Crickhowell, L.[Teller]	Phillips of Sudbury, L.
Darcy de Knayth, B.	Razzall, L.
Dholakia, L.	Redesdale, L.
Elton, L.	Rees, L.
Ezra, L.	Rennard, L.
Falkland, V,	Renton, L.
Feldman, L.	Rix, L.
Ferrers, E.	Rodgers of Quarry Bank, L.
Flather, B.	Russell, E.
Fookes, B.	Russell-Johnston, L.
Fowler, L.	Sandberg, L.
Goodhart, L.	Sandwich, E.
Gordon of Strathblane, L.	Scott of Needham Market, B.
Greaves, L.	Selborne, E.
Green way, L.	Sharman, L.
Hamwee, B.	Sharp of Guildford.B.
Harris of Richmond, B.	Sharpies, B.
Haskins, L.	Shaw of Northstead, L.
Hayhoe, L.	Shrewsbury, E.
Hooper, B.	Shutt of Greetland, L.
Hooson, L.	Smith of Clifton, L.
Howe of Idlicote, B.	Stern, B.
Howie of Troon, L.	Stewartby, L.
Hylton, L.	Strange, B.
Jacobs, L.	Taverne, L.
Jellicoe, E.	Thomas of Gwydir, L.
Jopling, L.	Thomas of Walliswood, B.
Kimball, L.	Thomson of Monifieth, L.
King of Bridgwater, L.	Tordoff, L.
Laird, L.	Trefgarne, L.
Laming, L.	Truro, Bp.
Lamont of Lerwick, L.	Tugendhat, L.
Lester of Herne Hill, L.	Waddington, L.
Linklater of Butterstone, B.	Wallace of Saltaire, L.
Livsey of Talgarth, L.	Walmsley, B.
Lucas, L.	Weatherill, L.
McNally, L. [Teller]	Williams of Crosby, B.

NOT-CONTENTS
Acton, L.	Ashton of Upholland, B.
Ahmed, L.	Astor of Hever, L.
Alli, L.	Attlee, E.
Amos, B.	Bach, L.
Andrews, B.	Bassam of Brighton, L.
Anelay of St Johns, B.	Biffen, L.

Blackstone, B.	King of West Bromwich, L.
Blatch, B.	Kingsland, L.
Borrie, L.	Kirkhill, L.
Brett, L.	Layard, L.
Brooke of Alverthorpe, L.	Lea of Crondall, L.
Buscombe, B.	Lipsey, L.
Byford, B.	Lockwood, B.
Campbell-Savours, L.	Lofthouse of Pontefract, L.
Carter, L.	Luke, L.
Clinton-Davis, L.	Macdonald of Tradeston, L.
Cope of Berkeley, L.	McIntosh of Haringey, L.
Corbett of Castle Vale, L.	MacKenzie of Culkein, L.
Cox, B.	Manchester, Bp.
Crawley, B.	Miller of Hendon, B.
David, B.	Mitchell, L.
Davies of Coity, L.	Morris of Manchester, L.
Davies of Oldham, L. [Teller]	Moynihan, L.
Desai, L.	Noakes, B.
Dixon, L.	Patel of Blackburn, L.
Dormand of Easington, L.	Pendry, L.
Dubs, L.	Pitkeathley, B.
Eatwell, L.	Plant of Highfield, L.
Elliott of Morpeth, L.	Powell of Bayswater, L.
Evans of Parkside, L.	Ramsay of Cartvale, B.
Evans of Temple Guiting, L.	Rawlings, B.
Falkender, B.	Rendell of Babergh, B.
Farrington of Ribbleton, B.	Renwick of Clifton, L.
Faulkner of Worcester, L.	Richard, L.
Filkin, L.	Rooker, L.
Fitt, L.	Saatchi, L.
Fraser of Carmyllie, L.	Sainsbury of Turville, L.
Fyfe of Fairfield, L.	Sawyer, L.
Gale, B.	Scotland of Asthal, B.
Gibson of Market Rasen, B.	Seccombe, B.
Glentoran, L.	Simon, V.
Golding, B.	Skelmersdale, L.
Goldsmith, L.	Stallard, L.
Gould of Potternewton, B.	Stone of Blackheath, L.
Graham of Edmonton, L.	Swinfen, L.
Griffiths of Fforestfach, L.	Symons of Vemham Dean, B
Grocott, L. [Teller]	Temple-Morris, L.
Harris of Haringey, L.	Thomas of Macclesfield, L.
Harris of Peckham, L.	Thornton, B.
Harrison, L.	Turnberg, L.
Haskel, L.	Uddin, B.
Hayman, B.	Ullswater, V.
Higgins, L.	Vivian, L.
Hilton of Eggardon, B.	Wakeham, L.
Hodgson of Astley Abbotts, L.	Warner, L.
Hogg of Cumbernauld, L.	Warwick of Undercliffe, B.
Hollick, L.	Watson of Invergowrie, L.
Hollis of Heigham, B.	Whitaker, B.
Howell of Guildford, L.	Whitty, L.
Howells of St. Davids, B.	Williams of Elvel.L.
Hunt of Chesterton, L.	Williams of Mostyn, L. (Lord President of the Council)
Hunt of Kings Heath, L.
Irvine of Lairg, L.	Woolmer of Leeds, L.
Jenkin of Roding, L.	Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.34 p.m.

Clause 340 [Modification of disqualification provisions]:

Lord McIntosh of Haringey

moved Amendment No. 193A: Page 295, leave out line 6.

On Question, amendment agreed to.

The Deputy Speaker (Lord Grenfell)

My Lords, I should tell the House that if Amendment No. 194 is agreed to, I cannot call Amendments Nos. 195 or 195A.

[Amendments Nos. 194 and 195 not moved.]

Lord McIntosh of Haringey

My Lords, I should not have moved Amendment No. 193A formally, as it is about advertising agencies. May I move Amendment No. 195A?

Lord Tordoff

My Lords, I may be wrong, but I thought that the amendment had already been dealt with and put to the shout.

Lord McIntosh of Haringey

My Lords, yes, it has been agreed, but I somewhat misled the House by moving it formally when I should have spoken to it.

Lord Evans of Temple Guiting

moved Amendment No. 195A: Page 295, line 8, leave out from "States):" to end of line 9 and insert "shall cease to have effect

The noble Lord said: My Lords, in the communications White Paper, we proposed removing the ban on advertising agencies holding broadcasting licences. We did so on the grounds that we should prevent bodies from holding broadcasting licences only when there was a clear case for doing so. We took the view that any concerns that might arise could be met through the regulation of competition, including through the licensing regime and the operation of general competition legislation, such as the Competition Act 1998 and the Enterprise Act.

However, it is clear that many are concerned about that step and do not believe that sufficient safeguards exist to prevent abuse or, perhaps more importantly, the perception of a conflict of interest for an advertising agency that holds a broadcasting licence. We were particularly influenced by the recent correspondence that we have received from the Institute of Practitioners in Advertising—the IPA—which made it clear that the advertising industry itself is now opposed to the change.

We have considered all the representations carefully and have decided to amend the Bill through Amendments Nos. 193A, 195A and 238ZC, so as to restore the restrictions on advertising agencies holding broadcasting licences. In the light of our amendments, we consider Amendment No. 197 is unnecessary, but Amendment No. 241 completes the package. My noble friend Lord McIntosh has added his name to the amendment, and we shall be happy to accept it today. I beg to move.

The Deputy Speaker

My Lords, I must warn your Lordships that if Amendment No. 195A is agreed to, I cannot call Amendments Nos. 196 or 197.

Lord Gordon of Strathblane

My Lords, this may be out of order, and noble Lords may slap me down by all means, but I am not clear about the effect of Amendment No. 193A, since Amendments Nos. 193A and 195A are together. Amendment No. 193A says, "leave out line 6", which is the line that states that, the following shall cease to have effect". If that line is being left out, the Government have restored the ban on foreign ownership.

Lord Thomson of Monifieth

My Lords, I assume that we will agree with the Government's proposal, but it is extraordinary to have that proposal without any explanation about how the Government came to put themselves in that position. There would have been total astonishment if anyone had suggested, before we started on this Bill, that the Government would propose that advertising agencies could own commercial television franchises. However, the Minister said that the advertising industry had decided that it did not want that.

The advertising industry never wanted the measure and was totally astonished that it was being put in. It came to the conclusion that it would produce great complications with conflicts of interest for the industry. That was an amazing mistake for the Government to make. Sometimes they get the bit between their teeth in the marketplace and forget about the consequences.

Baroness Buscombe

My Lords, I shall be brief. I very much welcome these amendments. However, as I did not say anything on this point at Second Reading or in Committee, I am surprised that the Government have brought forward the proposal. As one who worked at the IPA some years ago, I was fully aware that members of the IPA are not allowed to have interests in the media. If they had such an interest they would have to resign. An important point about institutes such as the IPA is that they underpin self-regulation in the advertising industry. I therefore believe that to remove that restriction could be to erode that very important self-regulatory aspect of the advertising industry.

Lord Evans of Temple Guiting

My Lords, we accept the strictures of the noble Lord, Lord Thomson. However, there was a very full discussion in Committee, where it was generally felt that that was not a good thing to do. We took it away, thought about it and took further advice. We have now come back, and noble Lords have heard our position. I find that wholly admirable.

If I may, I shall write to the noble Lord, Lord Gordon, and try to clear up that issue—if there is an issue—well before Third Reading.

On Question, amendment agreed to.

The Deputy Speaker

My Lords, as Amendment No. 195A is agreed to I cannot call Amendments Nos. 196 or 197. Is Amendment No. 198 not moved?

Baroness Buscombe

My Lords, may I intervene at this point? It was made very clear to me this morning that we had tabled Amendment No. 196A so as to avoid any possibility of pre-emption.

Lord McIntosh of Haringey

My Lords, the manuscript amendment before us is Amendment No. 198A, in place of Amendment No. 198. Amendments Nos. 196 and 197 are indeed pre-empted.

Baroness Buscombe

I apologise, my Lords.

[Amendment No. 198 not moved.]

6.45 p.m.

Baroness Buscombe

moved Amendment No. 198A:

Page 295, line 10, leave out subsections (2) and (3) and insert— ( ) Paragraph 2 of that Part (disqualification for religious bodies) shall cease to have effect.

The noble Baroness said: My Lords, I apologise also for the late tabling of manuscript Amendment No. 198A, which is effectively a redraft of Amendment No. 196. It has been tabled to allow us to debate this extremely important issue, which would not otherwise have been possible following the acceptance of the previous group of amendments.

One of the most extraordinary and unwelcome elements of the Bill comes with the stance taken by the Government on religious broadcasting, as set out in Clause 340. Amendments Nos. 196, 198, 198A and 199—which we tabled and I shall speak to now—seek to remedy the blatant injustice found on the face of the Bill.

I am sure that over the course of this debate we shall hear many excellent arguments as to why religious groups should not be excluded as they currently are, and I shall not attempt to cover all the points here. The Minister knows as well as I do many of the issues concerning human rights, competition law, spectrum scarcity and unfulfilled demand, to name just a few, but I should simply like to tease out a few details to bring to his attention in the hope that it may generate a favourable response.

I begin with a quote from Mark Fisher in another place, former Parliamentary Under-Secretary of State in what was then the Department of National Heritage, now the Department for Culture, Media and Sport. He said: As Minister with responsibility for broadcasting, I was not satisfied with my officials' changing answers when I investigated the Christian broadcasters' disqualification. I believed in their democratic freedom to broadcast to the third of a million people who wrote and petitioned the Department, asking to be allowed to listen. The consumer need could easily have been met, if officials had allowed the Christian music broadcasters to use the additional national radio frequency from the Isle of Man. It was never a technical matter when I was Minister, I don't believe it is a matter of spectrum now. I believed then, and I believe now, that religious broadcasters should bid for national and local licences on a level playing field with other applicants".

The quote touches on a number of points on which I should appreciate responses from the Minister. Does the Minister appreciate that there is unfulfilled demand for religious broadcasting, and that by disqualifying religious groups, many would-be consumers are denied the right to appreciate the broadcast media that they demand? As Mr Fisher commented, a third of a million people petitioned the department on this issue. People want to listen to religious radio stations, but the Bill prevents them from doing so. An example will illustrate this.

Liberty AM Women's Radio, in London, is owned by religious people, resulting in its being disqualified from applying for a digital DAB licence. So, unlike other local radio licensees in the UK, it was denied an automatic rollover of its analogue licence. That resulted in its analogue licence being put out to tender last year. Liberty lost its licence, and this month it is having to shed the last of about 30 full-time jobs in east London. London is losing its only women's radio station. Therefore, Premier Radio is London's only remaining religious radio station. However, it faces a new hurdle, which is digital AM, or DRM.

I should like to ask the Minister whether Premier will be allowed to continue broadcasting on a 1305 DRM multiplex with, say, a gospel music programme, a classical and easy listening contemporary Christian music programme and a current affairs and phone-in live local talk station? Or will some of Premier's AM frequencies be a new casualty of the religious disqualification on DRM, just like Liberty on DAB?

The human rights aspect is ongoing. I wish to make only one brief point on that aspect of the debate. At Committee stage there was reference to a Mr Abdelfattah Amor, a rapporteur on religious freedom in the UN Human Rights Commission. The noble Lord, Lord Avebury, questioned why Mr Amor had not done something about the representations made to the commission by the United Nations Association, if he thought that the representations were valid. Subsequent to that remark, Mr Amor has been contacted and is requesting copies of all the UNA papers about the UK's disqualification of religious persons in broadcasting law. We wait and see what his conclusions shall be.

Mr Fisher also refers to the fact that, with better spectrum management, new spectrum could be made available so that the scarcity argument no longer applies. I understand that the Minister has received a copy of the Report on UK Radio Broadcasting Spectrum Availability from the Centre for Justice and Liberty, which persuasively sets down the opportunities available to the Government for making additional spectrum available and which is endorsed by a number of radio communications experts. Although I am unable to boast their level of expertise and experience in this field, as I understand it, several options are open to the Government which would create new spectrum availability.

Mr Fisher referred to the Isle of Man, which would have been the location of a transmitter site for an additional independent analogue frequency at 279 kHz, and has yet to be brought into use. Additionally, 225 kHz has been allocated to the United Kingdom as another possible national independent radio station. Moreover, technological advances make way for a host of opportunities. I am thinking in particular of Digital Radio Mondiale—DRM—which could double or even triple radio services on AM. The list goes on.

The long and the short of it seems to be that the Government's arguments on spectrum scarcity are severely flawed. What little water is held at present by this logic will certainly be eliminated in the future due to technological advances. As "future-proofing" is something we are striving to do with this Bill, I do not see why it should not apply here.

While I certainly do not believe that spare spectrum should automatically be allocated to religious broadcasters, surely they deserve the opportunity to bid for the licence alongside everyone else. Importantly, Ofcom could then exercise its discretion as to whether the bid has sufficient merit to warrant full consideration. It would be a level playing field for applications. Putting a disqualification on the face of the Bill is therefore both short-sighted, as spectrum scarcity is not a long-term problem, and draconian, as there are more than enough safeguards in place.

As we discussed at length in Committee, the Bill as it stands already ensures that fanatical organisations or those that are otherwise unfit to broadcast are prevented from being granted a licence, or have it removed if they broadcast unsuitable material. Indeed, if, following today's proceedings, we have included in the legislation a public interest test—effectively an additional layer—then to continue with a religious disqualification with that additional safeguard in place might underpin the claim that it could never be in the public interest to have religious broadcasting, and that is surely not the case.

It now seems doubly unacceptable to exclude religious groups and I hope that the Government will reconsider their stance in the light of this. The point is a matter of principle. As such it is not a matter of entering into negotiation on which type of licences religious groups should or should not be disqualified from. Religious groups should not have been disqualified from any type of licence, and the Government should now seek to rectify that.

I gather that the noble Lord, Lord Brennan, has not arrived. I suspect that he may not arrive in time given that he is in court in the Midlands. The noble Lord contacted me and other noble Lords to confirm that he continued to support the amendment notwithstanding that he was not able to be present. Noble Lords will recall that the noble Lord, Lord Brennan, made a very powerful speech in Committee which we believe was valid then and is valid now. The noble Lord talked much about democratic choice. Noble Lords might like to remember that as that is what the matter comes down to. It is about democratic choice and seeking a level playing field, at least as regards applications for licences. I beg to move.

The Lord Bishop of Manchester

My Lords, I support the amendments to which the noble Baroness, Lady Buscombe, spoke with such eloquence and conviction. I spoke in some detail on Second Reading and in Committee on the issues that the amendments raise. I shall not, therefore, repeat what I said in those debates save to emphasise that I recognise the constructive contribution and potential of the independent religious broadcasting industry.

As the noble Baroness, Lady Buscombe, indicated, independent religious broadcasters find themselves disadvantaged by the means of controlling licence allocation, which I suggest could be achieved in other ways. For example, there are strong content regulations which could be even further strengthened, as the committee chaired by the noble Lord, Lord Puttnam, recommended. Some of the more damaging and possibly unintended consequences could then be avoided, thereby removing the necessity for current disqualifications.

The Church has expressed concerns over several areas of the Bill and throughout its progress I have sought to bridge the gap in those areas between the Churches, the Government and the broadcasters. Indeed, I led a cross-party delegation to the Secretary of State to find a way forward on these religious issues. I have encouraged my colleagues to negotiate a solution and to find a consensus but up to now on this particular issue there has been no success. I am disappointed about that. But even though there may be a Vote on the amendment tonight, I still very much hope that the door will not be closed to further negotiations in the future. Indeed, I hope that such negotiations will have been made more possible by the debate we had earlier on the public interest plurality test. It is all the more necessary because independent religious broadcasters will now face yet another hurdle of regulation in the Bill under the public interest test.

In supporting the amendment, I look for the Minister's assurance that he will engage in discussions in the hope—this is my deep hope—that a solution may be brought to Third Reading.

Baroness Howe of Idlicote

My Lords, I, too, support the amendments in the group in the name of the noble Baroness, Lady Buscombe. Like the right reverend Prelate the Bishop of Manchester I had hoped—indeed, I still hope—that we would find an agreed solution to the issue of the remaining prohibitions on media licence ownership by those with a religious background. I hope that that can be achieved before Third Reading.

I had hoped that the acceptance in principle by the Government of the plurality public interest test would mean a preparedness by the Minister to accept the amendments of the noble Baroness, Lady Buscombe. If that had been the case, any potential applicants with a faith background would, in addition to the plurality public interest test, also have to abide by an additional religious regulation as to what form of religious broadcasting would or would not be acceptable. In other words a double hurdle would already be in place, and rightly so for those who wish to avoid the more extreme kinds of religious broadcasting sometimes found, for example, in the United States. But unless the Government accept the amendments of the noble Baroness, Lady Buscombe, those with a faith background applying for a licence would indeed face a triple jeopardy: public interest plurality test; specific religious requirements; and the prohibitions to licence ownership remaining in the Bill.

Surely that would mean there would be an even greater risk of human rights infringement than might have existed previously— notably those indicated by the pre-legislative scrutiny committee, the Joint Committee on Human Rights and the religious advisory committee of the UNA.

I had very much hoped that the noble Lord, Lord Brennan, would speak this evening. We have received a note expressing his sadness that he cannot be here. One of the points he wanted to stress that he still believed was that this continued disqualification is a breach of human rights.

In 1999 or 2000, I think, the then DCMS broadcasting Minister, Janet Anderson, was pleased to claim credit for the White Paper's commitment to allow religious broadcasters to apply for national analogue radio licences. One can well understand the frustration—indeed, the resentment—that those still prohibited must feel when that promise never materialised. They were never even invited to the consultations on the subject. If you add that to the fact that, as we have heard, considerable doubt has now been cast on the Government's fall-back argument—using the scarcity of spectrum availability as an excuse for not removing these restrictions—it must be clear that those still prohibited and the considerable potential audience who want to hear their programmes are being denied a right to practise their profession. As we know, they can apply for licences in other EC countries and, if granted, their programmes can often be heard in the UK. The only difference is that neither the licences nor those programmes are subject to the same rigorous public service broadcasting regulation that would be applied had they been allowed to practise their profession over here.

I very much hope that the Government will either change their mind or announce that they have always been of the same mind. I hope that they will remove these quite unnecessary restrictions on those with a religious faith background.

Lord Bragg

My Lords, I am very sympathetic to what the noble Baroness, Lady Buscombe, said, but I am rather puzzled by it. It seems to me that the religious voices in this country are very important indeed. They are massively important for many young people I know in terms of their own spirituality, whether or not they are churchgoers—and most of them are not. They are massively important for an enormous number of people who have faith, and that cannot be judged just by people who go to church on Sundays. People of very different religious faiths adhere to them extremely strongly.

It seems to me that in many areas of this country at the moment discussions are taking place through religion. It is unfortunate sometimes to use anecdotal evidence, but I heard a perfectly sensible BBC local radio programme the other morning. It lasted for about an hour. It was a phone-in about attitudes towards Muslims in this country, with a sensible young man taking the calls. It was all expressed in terms of religion. I was crying out for religious people on the programme or a religious channel where the matter could be expressed more fully and more richly and challenged in a way that would satisfy the people who were phoning in, most of whom were seeking information and enlightenment and not the argy-bargy which, sadly, occurred.

Religion is still one of the principal ways for many people to manage their lives. For many people in groups, communities and the country as a whole, it is a way to manage how they think that the community should go. Simply because we see some appalling examples in the United States of America, it does not mean that we should go that way. We do not go that way in many other areas of our broadcasting. The spectrum will be available soon, as the noble Baroness, Lady Buscombe, pointed out. Will the Minister give us some assurance that he will think again about the issue? As the right reverend Prelate the Bishop of Manchester said, the opening of the door would be extremely welcome.

We are dealing with something about which we are rather diffident in this country. We deal with it in subterraneous ways, but it is very important to us. We are dealing with a democracy of ideas, and are in danger of excluding a huge area and body of ideas that informs many people, some very consciously, some very effortfully, some unconsciously but it is still around. It would be dangerous, and a denial of their freedom to express their ideas, were we to shut the door firmly at this time. I hope that we can have some assurance that the matter will be looked at again.

7 p.m.

Lord Chan

My Lords, I also support the amendment. There are no local Christian radio licences granted outside London, and I would certainly like to tune into Christian radio in Liverpool and elsewhere on Merseyside. That is very important. The current disqualification on religious broadcasting, particularly Christian radio companies, means that there is a definite disadvantage to those of us who want to listen to Christian radio.

More than 70 per cent of people in the 2001 national census declared that they were Christian. Another 5.5 per cent declared that they were followers of other faiths. That is the majority of the country, so the matter is particularly important. I, too, am very puzzled as to why the disqualification has continued in regard to Christian radio stations applying for licences.

A large number of people—I understand that the number is 276,000—have sent petitions to the department asking for Christian broadcasting. Over many years, many constituency petitions have been laid before Parliament in another place, including those from the constituencies of the Prime Minister and other Cabinet Ministers. That shows at least some unmet public demand from people such as me throughout the country. If regulators or market conditions frustrate our quite legitimate demands for such services, this is the opportunity to put an end to that in Parliament. The Government could lift the ban.

In other countries in Europe, such as the Netherlands, religious radio stations have no difficulty at all applying for licences and receiving licences. Further afield, in New Zealand, a country with a much smaller population, there are several radio stations broadcasting with a Christian background. I hope that the Minister will accept the amendment.

Lord Elton

My Lords, back in the 1980s, I was for a time the Minister with responsibility at the Home Office for radio regulatory affairs. I am entirely persuaded that the argument on spectrum is short term and will rapidly fail. For the purposes of this debate, it should therefore be disregarded. However, a much bigger and more important issue is the way in which our society and the media that serve it developed over the previous century and into the current century. We have become an increasingly materialist and secularised society. That has been very much helped by the media.

Our children have lived through a whole series of revolutions, none of which were even on the horizon when I was a child. They lived through the credit card revolution. Noble Lords will remember that very damaging slogan: Take the waiting out of wanting". something that is a lesson and strikes a very valuable chord. Then we had the drugs revolution, which introduced a whole spectrum of new temptations against which children need to be armed not by humanist considerations, but by spiritual considerations. As the pressures have grown, so the availability of a spiritual dimension in our media has diminished.

The Bill is relegating, for the first time, any religious applicants for licence to a second class. There are the first-class secular applicants and the second-class spiritual applicants, which must be unacceptable not only from the spiritual point of view, but from the equality point of view of which I had hitherto thought that the Government were so very well seized.

It is a question of democratic choice, not only of Christian wishes. I speak as a Christian, and I am very open to that argument, but the question is about the whole range of spiritual belief. Other religions should not be locked out of this forum, thus making them in another respect minorities in our society. The proposal in the Bill is wholly bad, therefore.

An extraordinary product of the regime that we have already is that there is only one local religious Christian broadcasting company, and that is in the metropolis. Why should the South East be particular in that way? Why should a third hurdle be put up, as the noble Baroness, Lady Howe, eloquently put it, on the course over which any applicant has to go to get a licence?

The provision is targeted against an interest that it would benefit this country to encourage. I ask the noble Lord to think again about it. If not, I shall gladly go into the Lobby with my noble friend in support of her amendment.

Lord Puttnam

My Lords, I shall briefly break my purdah to support the arguments that I have been hearing, particularly that of the noble Lord, Lord Elton. Successive governments have hidden behind spectrum scarcity as a way of not getting their heads around a difficult but very important issue.

I was on the "Today" programme this morning. I happened to be speaking immediately after the right reverend Prelate the Bishop of Southwark. I heard myself say on air, and I certainly believe it, that I had very little to add to what Tom Butler had just said because it made total sense. There are many mornings when, as I am in shower, I wish that the whole of the "Today" programme were "Thought for the Day", because it makes a lot more sense than anything that precedes or follows it.

We are talking about a marketplace of ideas. It would he extremely nice to think that the marketplace of ideas built around faith had as important a role to play as any other marketplace in the media spectrum.

Lord Hylton

My Lords, I apologise for not having been able to take part in earlier stages of the Bill. Of course, I am well aware that religious broadcasting in the United States has quite often earned itself a bad name. I do not think that the same phenomena are likely to repeat themselves in this country, given the very different nature of our religious culture and of the various faiths and religious groups here. I would have thought that there was a very strong case for further experiments in religious local radio broadcasts. The human rights case for them has been mentioned, and it seems to me to rest on freedom of expression as well as freedom of belief and religion. There should of course be ample opportunities for humanists to put their point of view, just as for religious believers. In today's world situation, many conflicts are raging or are liable to break out and inter-faith dialogue is particularly needed. I should have thought that religious broadcasting would provide a good opportunity for inter-faith dialogue to take place on the radio in a reasonably public manner. The right reverend Prelate the Bishop of Manchester made excellent points about content regulation and public interest tests. On all those grounds, I ask the Government to think again, perhaps to convene a working party on the subject and to explore the way forward.

Lord McIntosh of Haringey

My Lords, we have heard some passionate speeches about religion and religious broadcasting and the need for religion in our society. It so happens that, as an unbeliever, I do not agree with them but that is really not the point. The amendments and this part of the Bill are not about religious broadcasting; they are about a very limited restriction on the ownership of channels.

The fundamental point is that the Bill has—in direct contrast to what the noble Lord, Lord Elton, said—enormously increased the ability of religious organisations to operate radio and television channels. I am sure that the right reverend Prelate the Bishop of Manchester will confirm that, from our debates yesterday and with universal agreement, we refined and expanded the requirement on public service broadcasters to cover religious matters in their programming.

The Lord Bishop of Manchester

My Lords, I am indeed happy to confirm that I warmly welcomed that aspect of the religious remit within public service broadcasting and I recognise also that there has been a relaxation of the regulations in the area that we are debating. Other issues of course remain and the amendments seek to raise them.

Lord McIntosh of Haringey

Indeed, my Lords, and I am trying to address those issues. I make it clear that the debate is not about religion or religious broadcasting; it is about a residual restriction on the ownership of certain—a very limited number of—channels, where there is still spectrum scarcity in relation to religious organisations.

Lord Elton

My Lords, I apologise for interrupting because I should probably know the answer but, when new channels become available, am I right in believing that they will not be subject to those restrictions?

Lord McIntosh of Haringey

My Lords, I am coming to the end of my speech rather than at its beginning but, yes, where there is no spectrum scarcity, licences are already available to religious organisations. When new spectrum becomes available, we can remove the ban by order. I believe that I could sit down on that point, couldn't I?

Baroness Buscombe

That is fine, my Lords, because it foreshortens my response. This is a matter of principle. It is rather like the ITN debate, which involved saying, "It is okay in future but not quite right now". As the noble Lord, Lord Hylton, said, this matter is about freedom of expression, freedom of belief and democratic choice. If that were the case, why is there not discrimination in relation to other bodies on the grounds of spectrum scarcity?

I support all noble Lords who took part in this debate; all of them made such powerful speeches. I refer in particular to the right reverend Prelate the Bishop of Manchester, the noble Lords, Lord Bragg, Lord Chan, Lord Hylton and Lord Puttnam, the noble Baroness, Lady Howe, and my noble friend Lord Elton. Each of them supported the amendment, for which I am very grateful. We must agree to disagree with the Government. I wish to test the opinion of the House.

7.14 p.m.

On Question, Whether the said amendment (No. 198A) shall be agreed to?

Their Lordships divided: Contents, 115; Not-Contents, 99.

Division No. 3
CONTENTS
Addington, L.	Kimball, L.
Anelay of St Johns, B.	Kingsland, L.
Astor, V.	Laird, L.
Astor of Hever, L.	Livsey of Talgarth, L.
Attlee, E.	Lucas, L.
Barker, B.	Luke, L.
Blatch, B.	McColl of Dulwich, L.
Bowness, L.	McNally, L.
Brougham and Vaux, L.	Maddock, B.
Buscombe, B.	Manchester, Bp.
Byford, B.	Mancroft, L.
Carlisle of Bucklow, L.	Mar, C.
Carnegy of Lour, B.	Miller of Chilthorne Domer, B.
Chan, L.	Miller of Hendon, B.
Chorley, L.	Monson, L.
Clement-Jones, L.	Montagu of Beaulieu, L.
Colville of Culross, V.	Mowbray and Stourton, L.
Colwyn, L.	Moynihan, L.
Cope of Berkeley, L. [Teller]	Noakes, B.
Cox, B.	Northbrook, L.
Crathorne, L.	Northover, B.
Crickhowell, L.	Norton of Louth, L.
Dahrendorf, L.	O'Cathain, B.
Darcy de Knayth, B.	Onslow, E.
Eccles of Moulton, B.	Palmer, L.
Elliott of Morpeth, L.	Patten, L.
Elton, L.	Pearson of Rannoch, L.
Ezra, L.	Peel, E.
Fookes, B.	Perry of Southwark, B.
Freeman, L.	Phillips of Sudbury, L.
Freyberg, L.	Plummer of St. Marylebone, L.
Geddes, L.	Portsmouth, Bp.
Greenway, L.	Rawlings, B.
Griffiths of Fforestfach, L.	Redesdale, L.
Hamwee, B.	Rees, L.
Hanningfield, L.	Rennard, L.
Harris of Peckham, L.	Renton, L.
Harris of Richmond, B.	Rodgers of Quarry Bank, L.
Hayhoe, L.	Russell, E.
Higgins, L.	Russell-Johnston, L.
Hodgson of Astley Abbotts, L.	Saatchi, L.
Holme of Cheltenham, L.	Sandberg, L.
Hooper, B.	Seccombe, B. [Teller]
Hooson, L.	Selborne, E.
Howe of Aberavon, L.	Sharp of Guildford, B.
Howe of Idlicote, B.	Sharples, B.
Hylton, L.	Shaw of Northstead, L.
Jenkin of Roding, L.	Shrewsbury, E.

Shutt of Greetland, L.	Tordoff, L.
Skelmersdale, L.	Tugendhat, L.
Smith of Clifton, L.	Ullswater, V.
Stewartby, L.	Vivian, L.
Swinfen, L.	Waddington, L.
	Wakeham, L.
Thomas of Gresford, L.	Wallace of Saltaire, L.
Thomas of Gwydir, L.	Walmsley, B.
Thomas of Walliswood, B.	Williams of Crosby, B.
Thomson of Monifieth, L.	Williamson of Horton, L.

NOT-CONTENTS
Acton, L.	Haskins, L.
Ahmed, L.	Hayman, B.
Alli, L.	Hilton of Eggardon, B.
Amos, B.	Hogg of Cumbernauld, L.
Andrews, B.	Hollick, L.
Ashton of Upholland, B.	Hollis of Heigham, B.
Bach, L.	Howells of St. Davids, B.
Bassam of Brighton, L.	Hoyle, L.
Bernstein of Craigweil, L.	Hunt of Chesterton, L.
Blackstone, B.	Hunt of Kings Heath, L.
Borrie, L.	King of West Bromwich, L.
Bragg, L.	Kirkhill, L.
Brett, L.	Lea of Crondall, L.
Brooke of Alverthorpe, L.	Lipsey, L.
Brookman, L.	Lockwood, B.
Campbell-Savours, L.	Lofthouse of Pontefract, L.
Carter, L.	Macdonald of Tradeston, L.
Clark of Windermere, L.	McIntosh of Haringey, L.
Clarke of Hampstead, L.	McIntosh of Hudnall, B.
Clinton-Davis, L.	MacKenzie of Culkein, L.
Cohen of Pimlico, B.	Massey of Darwen, B.
Corbett of Castle Vale, L.	Morris of Manchester, L.
Craigavon, V.	Parekh, L.
Crawley, B.	Patel of Blackburn, L.
David, B.	Pendry, L.
Davies of Coity, L.	Pitkeathley, B.
Davies of Oldham, L. [Teller]	Puttnam, L.
Desai, L.	Ramsay of Cartvale, B.
Dixon, L.	Rendell of Babergh, B.
Dormand of Easington, L.	Renwick of Clifton, L.
Dubs, L.	Richard. L.
Evans of Parkside, L.	Rooker, L.
Evans of Temple Guiting, L.	Sainsbury of Turville, L.
Falkender, B.	Sawyer, L.
Farrington of Ribbleton, B.	Scotland of Asthal, B.
Faulkner of Worcester, L.	Sewel, L.
Filkin, L.	Simon, V.
Fyfe of Fairfield, L.	Stallard, L.
Gale, B.	Symons of Vernham Dean, B.
Gibson of Market Rasen, B.	Thornton, B.
Golding, B.	Truro, Bp.
Goldsmith, L.	Turner of Camden, B.
Gordon of Strathblane, L.	Warner, L.
Goudie, B.	Warwick of Undercliffe, B.
Gould of Potternewton, B.	Watson of Invergowrie, L.
Graham of Edmonton, L.	Whitty, L.
Grocott, L. [Teller]	Williams of Mostyn, L. (Lord President of the Council)
Harris of Haringey, L.
Harrison, L.	Woolmer of Leeds, L.
Haskel, L.	Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.

7.25 p.m.

[Amendment No. 199 not moved.]

Clause 342 [Relaxation of licence-holding restrictions]:

[Amendment No. 199 A not moved.]

Schedule 14 [Media ownership rules]:

Lord McNally

had given notice of his intention to move Amendment No. 200:

Page 430, line 23, at end insert—