Lords Sitting of 8 July 2003

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Newcastle.

NHS: Specialised Commissioning
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
Whether they will require strategic health authorities to monitor and keep the Government informed about the progress being made regarding the formation of consortia to purchase specialised services; and whether they will give strategic health authorities the power to require primary care trusts to form consortia for the purchase of such services.
The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, primary care trusts decide whether they wish to form purchasing consortia for specific specialised services. Overall arrangements for commissioning specialised services are performance managed by strategic health authorities. In turn, strategic health authorities are subject to a national process of assessment which will include their processes for strategically reviewing the commissioning of specialised services. There are no plans to change those arrangements.
Lord Ashley of Stoke: My Lords, is my noble friend aware that this Question is about people with rare but serious conditions that are very expensive to treat? The Government seem to be failing some of them. Currently, only the combination of primary care trusts and consortia can handle these cases and cope with the expense. In my view, and according to that Answer, all the Government seem to be doing is making recommendations or guiding and advising. What they should be doing is demanding that primary care trusts establish consortia and requiring them to carry out that work. Without such a combination, these people will remain neglected, and that would be inexcusable. It is the Government's job to see that primary care trusts are not left to their own devices. They are reluctant to combine, but unless they do they cannot treat this small but vital number of very important cases, some of them people with life-threatening conditions.
Lord Warner: My Lords, I am aware of my noble friend's concerns. However, it is also true that the Government have tried to shift the balance of power—the title of the document published in 2002—to devolve more responsibility to a lower level. We have also issued guidance on the commissioning arrangements for specialised services to try to address some of the concerns expressed by my noble friend. However, we have not just issued guidance. A Department of Health survey showed that, in the first three years of their existence, regional
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specialised commissioning groups had made significant advances in establishing commissioning arrangements for those specialised services. Those included in particular the eight national priority services, which I will not go into but which I am sure are well known to many noble Lords. The survey also looked at the commissioning arrangements for other specialised services and found very reassuring evidence that things were going in an extremely satisfactory manner.
Lord Clement-Jones: My Lords, this House last debated specialised services in April 2003. During that debate, the answers given were widely at variance with answers which have subsequently become available from John Hutton, the health Minister, and indeed from Ministers in this House. The guidance given in April clearly lacks the clarity needed by those who are now responsible for commissioning. Will the Minister undertake to reissue that guidance in a much clearer form?
Lord Warner: No, my Lords.
Lord Campbell of Croy: My Lords. has any consortia of this kind for buying these services yet been formed? If so, how many?
Lord Warner: My Lords, I am not sure that I understand the drift of the noble Lord's question. We do not collect a lot of information of this kind centrally, as I thought I had made clear. However, if he would like to write to me about particular concerns I shall be happy to make inquiries.
Lord Walton of Detchant: My Lords, if one accepts, as one must, that clinical research is a vital function of the National Health Service, can the Minister assure us that that will be preserved and enhanced in the arrangements that he has been talking about? There is no doubt at all that the results of research not only nourish but produce major developments in clinical care. Will he also take account of the parlous state of clinical academic medicine at the present time, which is very serious when one talks about the future of clinical research in the United Kingdom?
Lord Warner: My Lords, on the latter part of the noble Lord's question, I am aware of the concerns about academic medicine. Work is under way, particularly in relation to a number of inquiries—but that is rather wide of the Question. On the particular issues of research in relation to commissioning, nothing in these new arrangements for commissioning should damage the research interests.
Baroness Finlay of Llandaff: My Lords, will the Minister explain what specific plans are in place to monitor the commissioning of cancer services given the need for the exceptional tracking exercise recently?
Lord Warner: My Lords, the arrangements for monitoring specialised cancer services are the same as for other specialised services; they are as indicated in my

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earlier Answer to my noble friend Lord Ashley. It will be for the department to assess with strategic health authorities, when they assess their accountability, the performance in this area.
Baroness Lockwood: My Lords, does my noble friend the Minister agree that primary care trusts also have strategic responsibilities not only in connection with specialist commissioning but in a wider area? Does he agree with me that, particularly in metropolitan areas, primary care trusts tend to think of their own corner and not of the strategic role they clearly have?
Lord Warner: My Lords, I understand my noble friend's concerns. Primary care trusts have a responsibility in relation to their particular areas and in relation to specialised services, which go much wider. As I said, we have carried out a survey which, without being complacent, is rather reassuring about the way in which primary care trusts are tackling specialised services.
Lord McColl of Dulwich: My Lords, I wonder if the Minister could help us in this rather confused area. Who is responsible for, say, providing the services for children who need kidney transplants, and to whom are they accountable?
Lord Warner: My Lords, about 36 specialised service areas are defined. I am trying to skim down the list to see whether the services the noble Lord mentioned are included. My eyes do not immediately alight upon them so I do not think they are included. However, I shall write to the noble Lord.
Baroness Masham of Ilton: My Lords, what will the treatments be called? They used to be called supra-regional specialties and then out-of-area treatments. Will the money follow the patient?
Lord Warner: My Lords, as I tried to say earlier, they are called specialised services. A set of national definitions identifies those services—36 in all. They are covered by PCT consortia for commissioning where populations of 1 million or more are covered by those services. That is about as far as I can go.

Royal Mail: Transport Policy
2.44 p.m.
Lord Berkeley Lord Berkeley asked Her Majesty's Government:
What evidence Postcomm will require from Royal Mail in order to determine whether it will be able to meet its performance after withdrawal of its rail freight services.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, Postcomm is in the process of
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considering the action plans Royal Mail has presented to it to underpin this year's service quality targets. I have no doubt that one of the issues it will be looking at will be the potential impact of implementing Royal Mail's multi-modal transport review.
Lord Berkeley: My Lords, I am grateful to my noble friend for that Answer. I declare an interest as chairman of the Rail Freight Group. Does he not agree that as Royal Mail is a government-owned company it should comply with government policy to use as much rail freight as possible rather than road? Should it not also in its appraisal use the Government's appraisal and methodology in comparing the benefits and the costs of road, rail and air for value for money, environmental benefit and performance? Will he ensure therefore that Postcomm requires the Royal Mail to do that as part of the review?
Lord Sainsbury of Turville: My Lords, it is for Postcomm to ask those questions. On the figures that I have the air and road only network results in fewer carbon emissions than the air, road, rail proposal. It also involves fewer lorry movements although more miles per annum. It is arguably a better environmental scenario.
Lord Roberts of Conwy: My Lords, is it not the case that Royal Mail anticipates that it will reduce its losses by some £90 million a year by switching from rail to road? Would it not be wrong to interfere with such a wise commercial judgment?
Lord Sainsbury of Turville: My Lords, the figure of £90 million is the total savings from the total transport review. Transferring rail services to road will save about £25 million which is a substantial amount of money. It is a commercial decision for Royal Mail to take rather than the Government.
Lord Ezra: My Lords, is the situation not complicated by the incidence of VAT which is payable on rail freight but not on road movements by Royal Mail? Of the saving of £25 million, how much is accounted for by VAT?
Lord Sainsbury of Turville: My Lords, as the noble Lord asked that question on a previous occasion, this time I can give him the answer. The £25 million saving would come down to £19.5 million. It would nevertheless still be a very substantial saving. It arises because VAT is not paid on stamps. Therefore, VAT cannot be recovered from the railways. I hope the noble Lord is not suggesting that we should charge VAT on stamps as a way of solving the problem.
Baroness Greengross: My Lords, what has to happen before the Government acknowledge that such a decision is of major public interest and is much broader than purely a commercial cost matter?
Lord Sainsbury of Turville: My Lords, in the past 25 years during which I have had any connection with

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the postal service, I believe that Royal Mail has suffered enormously under all governments through Ministers and civil servants interfering in commercial decisions. It is not the intention of the DTI to continue with that tradition.
Lord Campbell-Savours: My Lords—
Lord Renton: My Lords, will it be borne in mind—
The Lord President of the Council (Lord Williams of Mostyn): My Lords, it is the turn of this side.
Lord Campbell-Savours: My Lords, my noble friend will be aware that a number of my noble friends are perplexed by the answers that he is giving on this particular matter. What is the point of Labour Members of Parliament and Labour activists knocking on doors up and down the land and assuring people that we intend to move freight from road to rail when we are totally incapable of intervening on this occasion when the public utility is owned by the taxpayer? It is owned by us. We are the shareholders.
Lord Sainsbury of Turville: My Lords, the amount of mail as a total percentage of freight is very small; it is about half of 1 per cent. The Secretary of State sets social and environmental targets against which Postcomm measures performance. However, as I suggested, in this particular case it is not at all clear that continuing with the rail freight operation is environmentally the best solution.
Lord Howell of Guildford: My Lords, the Minister said that it was correct not to intervene in a commercial decision, but has he seen discussion in the newspapers of proposals for a heavy congestion charge on the motorways? Up to 50p per mile is mentioned. As we are moving into an age of charges for transport on roads, what will happen then? Will the Post Office do its sums again and decide that it ought to go back to rail?
Lord Sainsbury of Turville: My Lords, as I am sure the noble Lord knows, the situation is that about 70 per cent of the future network connections—that is, the journeys that take place—will take place between 6.30 in the evening and 3 o'clock in the morning, when congestion is not a major issue.
Lord Brookman: My Lords, I assume that the Minister will be aware that, on these Benches at least, there is great concern about these proposals. For example, how on earth will the situation be dealt with at Christmas time, when some 150 extra trains are brought into play to deal with the Christmas surge? Does he think that that can be handled by road, or maybe by air as well? It seems absurd.
Lord Sainsbury of Turville: My Lords, it is very difficult—which is why it has been such a disaster in the past—for Ministers and civil servants to try to control the operational arrangements of an industry of
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this scale and complexity. It is simply not possible, nor do I think it desirable, for us to start imposing our judgment on how those operational services are run, at Christmas or at any other time.
Lord Renton: My Lords, will it be borne in mind that Royal Mail has always, so far, delivered first-class mail promptly? Will the Minister ensure that that continues?
Lord Sainsbury of Turville: My Lords, clear service targets are laid down by Postcomm, and it is the job of Postcomm to measure the performance of Royal Mail against those. In looking at the action plans of Royal Mail, it will take into account whether, in its judgment, they will lead to the service standards that it has laid down.
Lord Mackie of Benshie: My Lords, is the Post Office meeting its performance targets at present? Two cheques have gone missing from my mail in the past three weeks?
Lord Sainsbury of Turville: My Lords, I am very sorry that the noble Lord has had that particular problem, but I do not think it is relevant to the Question that we are considering.

Weapons of Mass Destruction
2.53 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
To what extent the Joint Intelligence Committee was consulted on the contents of the dossier on weapons of mass destruction.
Lord Williams of Mostyn: My Lords, the chairman of the Joint Intelligence Committee was responsible for the production of the September dossier. There was no attempt to override the judgment of the chairman at any point in the process. Intelligence was not inserted; neither was it exaggerated at the instruction of Ministers or special advisers. The Government welcome the Foreign Affairs Committee's conclusion on this point.
Lord Peyton of Yeovil: My Lords, the noble and learned Lord is not quite answering the Question. Did the Joint Intelligence Committee have sight of either version of the dossier? When the noble and learned Lord has answered that, perhaps he will go on to a further underlying question; namely, whether anything has been done to reassure the troops in Iraq, who must be rather upset by the squabble that is going on, which no one is going to win and in which everyone may come off a loser. Not only that, but will he, first, congratulate them on the achievement of getting rid of

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Saddam and, secondly, will he make sure that they are given some clue as to what they are going to do next and how long they will be in Iraq?
Lord Williams of Mostyn: My Lords, on the latter point, I could not agree more with the noble Lord. Our troops in Iraq are carrying out their professional duties with their usual skill and calm attachment to duty. Going back to the Question, the chairman of the Joint Intelligence Committee was responsible for the production of the dossier. I have authority to tell your Lordships that I believe the dossier was published on 24th September. On 23rd September—if we want to go to responsibility for the contents—the chairman of the Joint Intelligence Committee was actually at the printers checking the proofs.
Lord Wallace of Saltaire: My Lords, does the noble and learned Lord the Leader of the House recall that some of us questioned whether or not the evidence presented in those dossiers at the time justified the conclusions that were reached? Does he also recall that, after the Falklands War—where there was much less questioning of the intelligence provided to the government beforehand—the government accepted that a judicial inquiry would clear the air? Do we not now need something that will very much clear the air?
Lord Williams of Mostyn: My Lords, clearing the air is usefully done by attending to fact, not assertion. There has been a vast amount of false assertion put forward here—not necessarily knowing it to be false at the time, but without the grace to recognise that false assertions having been made, an apology might well be in order.
I go, if I may, to one or two conclusions of the FAC:
"We conclude that Alastair Campbell did not play any role in the inclusion of the 45 minutes claim in the September dossier".
"We conclude"—
this is conclusion 14, found at paragraph 86—
"that the claims made in the September dossier were in all probability well founded on the basis of the intelligence then available, although as we have already stated we have concerns about the emphasis given to some of them. We further conclude that, in the absence of reliable evidence that intelligence personnel have either complained about or sought to distance themselves from the content of the dossier, allegations of politically inspired meddling cannot credibly be established".
So we are waiting, I imagine, for an apology.
Lord Archer of Sandwell: My Lords, will my noble and learned friend confirm that the Intelligence and Security Committee is now conducting an investigation into this matter? Would it not be sensible to await the outcome?
Lord Williams of Mostyn: My Lords, it is indeed, as my noble and learned friend indicated, considering this matter and it is going to be given the fullest possible assistance at the specific direction of the Prime Minister. The Prime Minister has said that, subject of course to the usual constraints of sensitive intelligence and on a basis to be agreed by that committee, the report will be published. My noble and learned friend
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of course serves on that committee. It is a committee of absolute integrity, and I do respectfully suggest that those who make unsubstantiated allegations might well attend to the report that is about to be published.
Lady Saltoun of Abernethy: My Lords, when did preparation of the dossier start?
Lord Williams of Mostyn: My Lords, the preparation of the dossier cannot be said to have started at any particular time. The Joint Intelligence Committee, as a number of your Lordships know, produces regular assessments. It was decided that a dossier should be produced. The responsibility for the production of that dossier was with Mr Scarlett, the chairman of the Joint Intelligence Committee. I repeat: he had such a close involvement that he was actually checking the proofs, the final format and the final content on the day that the printing run was to start. on the day before publication.
Lord King of Bridgwater: My Lords, the Lord President has quoted from the report of the Foreign Affairs Committee—a number of whose members made clear that they could not give a full report because they did not have access to all the material. Endorsing what the noble and learned Lord, Lord Archer, has said—who is a previous colleague of mine on the Intelligence and Security Committee—will the Minister confirm, first, reinforcing what he said, that no reasonable request from the Intelligence and Security Committee will be refused; and that material that was refused to the Foreign Affairs Committee will be made available to the Intelligence and Security Committee? Will he further confirm that, having regard to the fact that virtually all these matters are now history and not subject to acute sensitive intelligence, the Government will raise no objection if, for part of its hearing, the Intelligence and Security Committee decides to sit in public?
Lord Williams of Mostyn: My Lords, I certainly give the assurance for which the noble Lord asks. He and I both had dealings together when he was a distinguished member of the ISC. So far as concerns the committee sitting in public, if the committee, having borne in mind the very sensitive ramifications which the noble Lords knows of as well as I, wished to sit in public, that, it seems to me, would be a matter for its own decision. I do not entirely agree with the noble Lord when he says that this is historic. He will know as well as I that, even if intelligence becomes historic, the danger to sources continues, sometimes for many years.
Lord Saatchi: My Lords, have not the answers that the Leader of the House has given in reply to questions on this subject revealed the weaknesses of the Select Committee system? As the noble and learned Lord has ruled out a judicial inquiry, does he not think that we could learn from the American system of congressional committees? The American constitution, in I believe Articles 1 and 2, confers on those committees what the

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constitution calls all the necessary powers in order to investigate effectively and to hold the executive to account. If there is not to be a judicial inquiry on controversial matters such as these, does the noble and learned Lord think that we could learn much from the American system when trying to correct the widely perceived imbalance that we have in this country between the power of the executive and the power of Parliament?
Lord Williams of Mostyn: My Lords, whether we can learn from any other select committees in any part of the world, whatever the jurisdiction, is certainly worthy of consideration. The budgets of congressional committees of inquiry, whether in the House of Representatives or in the Senate, are very substantial and they have the benefit—some would say—of being assisted by qualified cross-examiners.
Lord Renfrew of Kaimsthorn: My Lords, does the noble and learned Lord share the reported view of the Foreign Secretary in relation to the second, February part of the report that it was a horlicks? In those circumstances does he feel that it was entirely consistent of the Foreign Secretary yesterday publicly to call on the BBC to offer an apology for its rather more circumscribed criticisms of the first September report?
Lord Williams of Mostyn: My Lords, the Question concerns the first dossier and I responded to that. I was never quite sure what an "absolute horlicks" meant and I am still waiting to be told. The important question in relation to the apology is that assertions were made by the BBC that have proved to be wrong. If one looks at what was said in the dossier, to which the Question of the noble Lord, Lord Peyton, referred, the 45-minute issue is dealt with there. Journalistic ethics are an important part of a civil society. With great respect, it seems to me that if the BBC sometimes gets things wrong, it would not be a bad idea to say so.
Baroness Thomas of Walliswood: My Lords—
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, I believe it is time to move on to the next Question.

Iraq: Post-war Security and Reconstruction
3.2 p.m.
Baroness Williams of Crosby Baroness Williams of Crosby asked Her Majesty's Government:
What discussions were held with the United States, prior to the military action against Iraq, about plans for post-war security and reconstruction.
Baroness Symons of Vernham Dean: My Lords, Her Majesty's Government had a wide range of discussions with United States interlocutors on contingency plans
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for post-war security and reconstruction if the Iraqi regime failed to comply with United Nations Security Council Resolution 1441. At the Azores summit on 16th March, shortly before the conflict began, the Prime Minister and President Bush set out a vision for Iraq committing the coalition to work closely with inter alia the United Nations to ensure an appropriate post-conflict administration and to support the Iraqi people.
Baroness Williams of Crosby: My Lords, does the Minister recall that on 14th February Mr Donald Rumsfeld, the Defence Secretary, said:
"With Iraq … there has been time to prepare. We have set up a Post War Planning Office"?
That was echoed by the Deputy National Security Adviser who said that there had been extensive discussion over months between the United States agencies about the post-war planning. Can the Minister tell the House whether the United Kingdom was fully consulted at all stages and whether it raised any objections for what in retrospect now looks like a very complacent set of assumptions about what would happen to Iraq once the conflict was over?
Baroness Symons of Vernham Dean: My Lords, the noble Baroness has mentioned what was said in America about United States planning. The Foreign Office, the MoD, DfID and indeed the DTI liaised extensively with each other and liaised also with United States counterparts in the State Department, the Pentagon, US Aid and other relevant United States authorities. From the outset it was very clear that coalition forces would be responsible for humanitarian assistance in the aftermath of any fighting and, of course, that UN authority would be needed for reconstruction.
The noble Baroness says that this has been characterised by complacency. I do not agree with that. There was a great deal of work to be done and there remains a great deal of work to be done. Two months after the end of decisive combat operations, I am bound to say that Iraq is already arguably better off than a number of post-conflict areas with which we have been associated in recent years.
Lord Hylton: My Lords, do the Government agree that the experience of Bosnia and Kosovo shows clearly that the first thing that needs to be restored is law and order and a system of justice? Can the noble Baroness tell the House what criminal and civil codes are now in force or in use in Iraq?
Baroness Symons of Vernham Dean: My Lords, to be honest I do not agree that it is solely law and order and civil justice that has to be restored. There are also the vital issues of food, of water, of electricity, of sustaining the basics of life itself. The noble Lord shakes his head, but I can assure him that, were those vital necessities not being delivered to the people of Iraq, I am absolutely certain that he would be one of the first to be on his feet making exactly that point to me. It is not a matter of just shaking his head, if I may

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say so, because troops also have to be engaged in ensuring that those basic necessities of life are delivered.
As to what is happening on law and order and justice, policing is improving. There are now 33,000 Iraqi troops operating in Iraq; some 8,000 of those are in Baghdad; and there are also about 3,000 operating in Basra. The courthouses are starting to open: as I understand it, currently three in Baghdad and one in Basra. So the justice system is now starting to reassert itself.
Lord Judd: My Lords—
Lord Forsyth of Drumlean: My Lords—
Lord Williams of Mostyn: My Lords, there is time for both noble Lords to ask a question.
Lord Judd: My Lords, accepting the assurance of my noble friend that reconstruction is a matrix, as of course it is, nevertheless can she tell the House exactly what resources are being put into the redevelopment of the system of justice and of civil policing?
Baroness Symons of Vernham Dean: My Lords, I cannot quantify what is going in, in terms of money being spent. but I can tell your Lordships that the security situation is being controlled by coalition troops. The number of coalition patrols has increased and there are now around 2.500 patrols a day across Iraq, and I can tell my noble friend that 200 of those are jointly conducted with the Iraqi police. As of 24th June, Iraqi police were conducting their first patrols on their own, which is a major step in helping Iraqis to return to a self-policed environment. It is important that we are talking here not only about what the coalition is able to bring to security on the ground, but also increasingly about what Iraqi policemen are bringing to the security on the ground.
Lord Forsyth of Drumlean: My Lords, given that the Government fought the war because they believed that there were weapons of mass destruction that may fall into the hands of extremist groups through Saddam Hussein's regime, why are the Government so calm, and indeed almost complacent, about the failure to enforce law and order which has resulted in looting and in all kinds of materials possibly falling into the wrong hands? What are the Government doing to ensure that we are not at risk of that happening if they believe that there were weapons of mass destruction in Iraq?
Baroness Symons of Vernham Dean: My Lords, if by the use of the word "calm" the noble Lord is trying to imply that the Government are complacent on this issue, I reject that entirely. I have just explained to your Lordships what is happening, with increased patrolling from coalition forces—some 2,500 patrols, as I have indicated, every day—and the increased provision for Iraqi policemen also to be involved.
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Of course, the issue of finding weapons of mass destruction is very important, but I am bound to say to your Lordships that I think it has greater importance in the United Kingdom, perhaps in both Houses of Parliament and perhaps also in our press, than necessarily it does on the ground in Iraq. The majority of Iraqi people want to ensure that they are living in an environment where they can send their children to school, where they can be sure about their health, where they have secure policing and where they have access to food and water. I point your Lordships to the fact that yesterday, for example, there was the first meeting of the new Baghdad city council, a not unimportant issue. The noble Lord may shake his head and look exasperated. If the noble Lord does not believe that it is important that democracy is being established in the city of Baghdad then I beg to disagree with him.
Lord Hannay of Chiswick: My Lords—
Lord Alderdice: My Lords, the noble Baroness refers to the situation—
Lord Williams of Mostyn: My Lords, I apologise to the noble Lords; we are well over time.

Inland Revenue and Customs and Excise: Treasury Review
3.10 p.m.
Lord Freeman Lord Freeman asked Her Majesty's Government:
What purpose is intended to be achieved by the Treasury review of the Inland Revenue and Customs and Excise announced by the Chancellor of the Exchequer.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, the primary focus of the review will be to make public service delivery more effective and efficient. It will examine the best organisational arrangements for delivering the Government's tax objectives. It will consider the case for changes in the law where necessary to allow the full benefits of particular arrangements to be realised, and it will pay particular attention to the need to ensure the continued effectiveness of the core business of revenue collection and administration.
Lord Freeman: My Lords, if it is confirmed by this review or otherwise that financial loss has been suffered by those who have applied for tax credits and not yet received payments due to inefficiencies in the system, will the Minister confirm that the Inland Revenue code of practice will definitely permit compensation?
Lord McIntosh of Haringey: My Lords, there has been a great deal of misrepresentation on this issue, although I can give the noble Lord, Lord Freeman, the

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assurance that he seeks. It has been claimed that there has been a great deal of loss. There has certainly been delay in dealing with telephone calls and with correspondence. Anyone who has applied for tax credits and has shown his or her eligibility for tax credits will get the money which is due.
Lord Newby: My Lords, can the noble Lord confirm that one option being considered by the review is whether the Inland Revenue and HM Customs and Excise might merge? Within that context, will the review be considering whether the extensive powers which are currently held by Customs officers might be extended to Inland Revenue officials?
Lord McIntosh of Haringey: My Lords, I am glad to be answering a supplementary question which is about the original Question on the Order Paper. Yes, I can confirm that that is one of the options being considered. The matter of the potential merger of the Inland Revenue and Customs and Excise has been on the public agenda since a parliamentary committee of inquiry in 1862. It was last considered by the Government in 1993 and by the Treasury Select Committee in 1999. So this is not a new proposal, if indeed that is what emerges from the current review. But the question of the powers of Customs and Excise and Inland Revenue officials will undoubtedly be a part of the review.
Lord Brooke of Alverthorpe: My Lords, can my noble friend say who is to undertake the review and when it will report?
Lord McIntosh of Haringey: My Lords, the review will be conducted by the Treasury and it will report in due course.
Lord Saatchi: My Lords, in the discussion of this merger, has there not been an unattractive tendency lately to blame Inland Revenue officials for faults which really lie with Ministers—for example, the Chancellor landed the Inland Revenue with the task of administering tax credits, which have nothing to do with tax at all? As the Minister is aware, it was in your Lordships' House that it emerged that 90 per cent of all tax credit payments totalling £15 billion a year actually exceed the total tax liability of the recipient. In other words, they are not tax credits at all.
Lord McIntosh of Haringey: My Lords, if there has been criticism of officials in the Inland Revenue, it has not come from the Government. The Chancellor has explicitly praised the Inland Revenue for the way in which it has taken on the very substantial additional tasks imposed on it by the tax credit regime.
The Earl of Northesk: My Lords, in reviewing the administration of tax, will this review also investigate the issue of fraud, particularly in respect of tax credits?
Lord McIntosh of Haringey: My Lords, there are continuing reviews on the issue of fraud, just as there are continuing reviews on, for example, failures of
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prosecution for fraud, if that is to what the noble Earl, Lord Northesk, is referring. One such review being conducted by Mr Justice Butterfield will be reporting very shortly, probably next week. We shall be interested to see the findings.

Communications Bill
3.15 p.m.
Lord McIntosh of Haringey: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Communications Bill, have consented to place their prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament, for the purposes of the Bill.
Read a third time.
Clause 3 [General duties of OFCOM]:
Lord McNally Lord McNally moved Amendment No. 1:
Page 3, line 8, at end insert "with due regard to the qualifications and limitations contained in paragraph 6A of Schedule 14"
The noble Lord said: My Lords, Amendment No. 1 paves the way for Amendment No. 131 that is grouped with it, which I hope will provide the core of the debate that we are about to have. That amendment stands in the name of the noble Lord, Lord Crickhowell, and is identical to an amendment which has being tabled at different stages of the Bill in the names of the noble Lords, Lord Hussey and Lord Puttnam. The name of the noble Lord, Lord Hussey, does not appear on this amendment. As he is unwell, I did not think it right to disturb him to ask whether he would put his name to it. The name of the noble Lord, Lord Puttnam, is not on the amendment for reasons which I fully understand and accept.
The Puttnam committee report had a tripod of recommendations, which it believed would immensely strengthen the Bill in providing essential protection for our communications industry against the predatory instincts of the global multi-media conglomerates. The first recommendation was that Ofcom should be able to test the totally unproven assertion that ITV would benefit from American ownership and American money before opening up our markets without any reciprocation on the part of the Americans.
Last week the Government were able to resist the amendment by 11 votes, with only half of Labour Peers supporting the Government and helped over the line by a three-line Whip from the Conservative Front Bench.
The second leg of the Puttnam tripod was the inclusion of a tough plurality public interest test. Thanks to the persuasive powers of the noble Lord, Lord Puttnam, the Government will be bringing forward amendments to insert such a test later today.
That brings us to the third leg of the tripod which is contained in this grouping before the House. The amendment seeks to put specific restrictions on the ownership of Channel 5 in terms of cross-media

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ownership between print media, satellite and terrestrial television, which would—as did happen—as I said at Second Reading, create a grotesque concentration of power in any industry and in the communications industry would constitute a threat to our democracy.
I can already hear the Minister arguing that this amendment is no longer needed thanks to the tough new plurality clause which we are about to receive. But is that so? Not according to the Financial Times. On 3rd July, the day after the Puttnam plurality amendment was accepted, it quoted an unnamed senior DCMS official as saying that the amendment would not hamper the principle of allowing US media groups to bid for ITV or enabling newspaper publishers to seek control of Channel 5.
The media expert, Owen Gibson, in the Guardian said:
"Competition lawyers believe that the new test will be a significant hurdle to media owners wanting to branch out into other sectors. A lot will depend on how Ofcom, which under Lord Currie has promised to retain a 'light touch', chooses to interpret the public interest test".
So, there we have it: after today we are in the hands of the media lawyers and an untried regulator and an untested piece of legislation. That is why the House should take this final opportunity to have its say on the matter.
The plurality test provides Ofcom with a big and powerful gun. These amendments give a clear direction as to which way it should be pointed. Some people say that this is aimed at the ambitions of Mr Rupert Murdoch, but Tessa Jowell has told us at great length that this is not a Bill tailored to Mr Murdoch's ambitions. Furthermore, Mr Murdoch has said that he has no interest in Channel 5. So let us have no more about this being an anti-Murdoch amendment. It is aimed at thwarting any Australian/American multimedia conglomerate with significant press and satellite holdings taking such a stranglehold on the British media.
I know that asking Labour Members to vote with us today puts great strains on their loyalty. The Whips are very persuasive. I am a great fan of "24" on BBC2, which is an example of good American television. As devotees may know, in Sunday's episode the hero, Jack Bauer, was left in the hands of the world's most cruel and sadistic torturer, who, I understand, was on loan from the Government Whips' Office.
I ask Members on all Benches to ask themselves what they will answer in the future when asked about what they did to make sure that the right safeguards were in place. What if the plurality test does not prove as strong as we think it is? What if the noble Lord, Lord Currie, proves less robust in his interpretation than we would like? What if Mr Murdoch changes his mind and comes calling for Channel 5?
We all remember the impressive mea culpa of the noble Lord, Lord Renton, about the 1990 Act. What will noble Lords who today vote "Not-Content" say? "David Puttnam asked me not to vote"; "I thought the plurality tests would be enough"; "I was bullied by the Whips"; or will they say, "I used the one personal
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power I had—my vote in the Lobby—to send a message to government, Ofcom and to the media moguls that we expect diversity and choice to be defended with vigour and this legislation to be interpreted robustly"?
As the noble Lord, Lord Crickhowell, reminded us on Report, the media moguls have a record of challenging rather than complying with regulation.
Shortly before I entered the Chamber, I received an e-mail from a senior person in the television industry who asked me to put the following questions to the Minister. He said:
"If, as the Government is implying, the plurality test is the solution, that begs the question why the 20/20 rules are being retained for ITV. If the test is not enough for ITV—where the competition and plurality hurdles to Murdoch takeover would anyway be immense—it is disingenuous for Government to imply that the plurality test alone is enough for C5—where actually the competition and (as defined) plurality concerns may be surmountable.
Furthermore, the Government extending the 20/20 rule to ITN at the same time as introducing the plurality test. Again this suggests that the plurality test is not enough and gives a lie to the argument that it is too late in the day for extending the scope of 20/20.
Those points were made by an expert within the industry and it will be interesting to know what the Minister says about them.
Essentially, this amendment had its origin in the recommendation of the Puttnam committee, which said that if the Government believed that it is unacceptable for a major terrestrial channel, a major newspaper group and the dominant satellite network to be open to shared ownership, then the clearest and most straightforward way to achieve that was to maintain the prohibition on ownership of Channel 5 which presently exists.
The questions to be answered today are clear-cut and simple. Do the Government consider such a concentration of media power to be unacceptable? If so, why do they resist the most unambiguous and clear-cut way of preventing such an accumulation of cross-media power?
Listen carefully, my Lords, and if the answers are not convincing, I hope noble Lords from all Benches will join me in the "Content" Lobby today. I beg to move.
Lord Crickhowell: My Lords, my name is attached to Amendment No. 131 and I therefore support the noble Lord, Lord McNally, on both the amendments in this group.
The noble Lord concluded his remarks with a quote from the Puttnam committee, which I was going to take as the simple proposition on which to base my speech. He referred to this being the clearest and most straightforward way to make sure that we did not have a major terrestrial channel, a major newspaper group and a dominant satellite network open to shared ownership.
The noble Lord, Lord McNally, also observed earlier in his speech that the Government will argue that now we have a plurality test, these amendments

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are superfluous. He said that the plurality test would depend upon the approach of the chairman of Ofcom and his hoard and on the effectiveness of the legislation. However, it is a little worse than that. It is actually going to depend on the attitude of Ministers and the action of Ministers. I want to say a little more about that.
Noble Lords must be clear that the purpose of the plurality test as it is about to be added to this Bill by the government amendments, which we will debate later, is not to impose a plurality test. The purpose is to enable a media plurality test to be carried out in the event of a qualifying merger.
According to the Minister on Report,
"a plurality test would, in principle, allow the Secretary of State to make a judgment on media mergers".
He went on to say:
"It will be for Ministers to determine whether the merger causes sufficient plurality concerns for it to be blocked, or for conditions to he attached".—[Official Report, 2/7/03; col. 914.]
Therefore the test is very conditional and it is all in the hands of Ministers. The test may be effective if Ministers decide to act, but that is a very big if. We know, because Ministers have told us, that the Government took the view that there were very good reasons for removing the restrictions on a major newspaper owning or controlling Channel 5, although in response to repeated questions since, it has emerged that the only difference they can spell out is the difference in size between Channel 3 arid Channel 5 at the present time.
We know that the Government intend to be restrictive in their use of this new plurality power. There is no guarantee that the Government would use it to prevent a major national newspaper owning Channel 5—the Minister made that perfectly clear on Report. I refer to his remarks in col. 915 of the Official Report of 2nd July 2003.
We are told the Government will publish guidelines setting out in more detail the areas where the test will generally be applied. I am not sure whether these guidelines have yet been issued. In any case, guidelines are only guidelines. Therefore, we have before us what might be termed the "if, maybe, possibly, and then again, possibly not" clause.
However, the arguments against allowing a newspaper which has a national market share of 20 per cent owning Channel 5 are immediate and compelling. They do not depend on some future increase in Channel 5's market share. Those arguments were put with great conviction, with admirable brevity and clarity and with unanswerable logic by my noble friend Lord Glentoran, speaking from the Opposition Front Bench in Committee. I agreed with everything he said then. He provided grounds enough to support the certainty of the amendment before we again fog it all with the uncertainty provided by the Government's plurality test.
There is a another compelling reason for Parliament removing the uncertainty. We know that there has never been a moment in the history of the modern media when its barons have not been prepared to exert
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every pressure in support of their own interests. We also know that there has never been a time when the powers of media barons to exert pressures have been greater—greater perhaps than when Stanley Baldwin made his famous remark about "power without responsibility … the prerogative of the harlot down the ages".
As the Bill has gone through Parliament, pressure has been applied to both the Government and the Opposition to allow the giant oligarchies the maximum freedom to exploit their already great power. I am alarmed at the prospect that we leave all this uncertainty in the hands of Ministers, who will inevitably and unavoidably come under greater pressure, no matter which party is in power. That pressure will be political and financial to allow the great media moguls to have their way.
We should build certainty into the Bill. I therefore urge my noble friends to support this amendment and with it Amendment No. 131.
3.30 p.m.
Lord Lipsey: My Lords, I accept the test that the noble Lord, Lord McNally, has put before us; namely, when we go into the Lobbies today, we should be thinking hard about how in 10 or 20 years we shall answer for our vote in the light of developments. I accept the test and have thought hard about the subject as a result. I want to make only three brief observations.
First, the noble Lord, Lord McNally, described the committee's recommendations as a trifle. I do not see it like that. I believe that in the plurality test we have a solid pillar which requires little by way of gothic buttresses to be added to it. It is sufficient to stand.
Secondly, although there are dangers such as those described by the noble Lord, Lord McNally, there is another. That is that Channel 5 does not do very well. In five or 10 years' time, the only people who might he prepared to invest in it are those who would not on plurality grounds be ideal. The Minister at the time will be able to account for that, but we are legislating for five, 10, 15 or 20 years.
If Channel 5 goes belly-up due to the fact that no one is prepared to invest in it because the law we have passed allows no flexibility for changing circumstances, that might be regrettable, particularly for those who get pleasure from Channel 5. It is, after all, a channel contributing to plurality, but it has no guaranteed existence. That is a matter that this House should weigh.
I want, thirdly, to comment on a matter that weighs heavily with me. In my time in this House—it is short compared with most noble Lords—I have known no other Bill that has changed so much during the course of its passage here. The Government have been prepared to make many fundamental changes. Indeed, one only has to look at today's Marshalled List to see the number of government amendments. They have not been tabled because the Government have cocked things up, but tabled in response to the views put forward by this House.

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Like many noble Lords, I know the kind of arguments that occur among Ministers when considering amendments which come from this House. Many people in another place and elsewhere say, "Oh, don't pay any attention to them"; or they say, "If you give them concessions, what's the good? They just want more. They are insatiable, that lot. Take them on. Ignore them". Perhaps the Licensing Bill is an example of that.
Thanks to my noble friend Lord Puttnam, we have achieved a remarkable result with this Bill. It is beyond what most of us would have believed. We are now right, particularly Members on this side of the House, to say, "The deal is done. It is a success. We have achieved the objectives we wanted to achieve and now we will support the Government through the rest of the Bill".
Lord Pilkington of Oxenford: My Lords, I was a member of the Joint Committee and I must remind your Lordships that we put forward a modest proposal that Ofcom should consider this matter. The Government's concession is that Ministers should consider the position. I totally share the view of my noble friend Lord Crickhowell that Ministers are subject to enormous pressure. The committee was united in the view that Ofcom should consider the position. It did not, as the noble Lord, Lord Lipsey, said, recommend setting the situation in tablets of stone. It said, "Allow this body, which is neutral and not subject to political pressures, to consider the position".
I urge your Lordships to support Amendment No. 1 tabled by the noble Lord, Lord McNally. Ministers are politicians and are subject to pressure. My noble friend Lord Crickhowell is right about that—he was one of them. I urge the House not to follow the honeyed words that we have just heard.
Baroness Cohen of Pimlico: My Lords, I support the amendment tabled by the noble Lord, Lord McNally. The plurality test, though useful, will not quite do the job, particularly if it is in the hands of Ministers to apply it. I was prepared to consider the plurality test when Ofcom, which one hoped would be independent of Ministers, had the application in its hands.
Media are political. We would do well not to be too confident about how culture stands up to anyone else's agenda. It does not stand up very well—it never has. I therefore consider it important to put in place as many bodies charged with considering the preservation of our culture which do not include Ministers. I therefore support the amendment.
Lord Peyton of Yeovil: My Lords, I want briefly to support every word the noble Baroness, Lady Cohen, has just spoken. In particular, I want to echo what was said by my noble friends Lord Crickhowell and Lord Pilkington. I do not believe that the plurality test stands on its own and I greatly hope that your Lordships will support the amendment moved by the noble Lord, Lord McNally.
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I sadly add this. While I have every admiration for the way in which my noble friend Lady Buscombe has led the opposition to the Bill, I deeply regret this lacuna. I speak for myself and not for her. I suspect that she is under heavy pressure from some gentleman down the corridor, whose name I can never remember, who has given contrary instructions in this particular context. I can say only that I deeply regret that and I shall certainly disregard them with some happiness and support the amendment in the name of the noble Lord, Lord McNally.
Lord Phillips of Sudbury: My Lords, I want briefly to make a point referred to rather vividly by the noble Lord, Lord McIntosh, when we last debated the Bill; namely, that the extent to which tests of the complex and rubbery kind which are implicit in his Amendment No. 85, which introduces the plurality test, can be the subject of intense legal bombardment by well-financed and resourced would-be litigators, should not be under-estimated by this House.
While undoubtedly the concession made previously and the tabling of the plurality amendment is most important, I believe that the rigour which would be added to it by the amendment in the name of my noble friend Lord McNally would carry the position much further. Amendment No. 85, introducing the plurality test, talks about,
"a sufficient plurality of persons with control of the media enterprises".
Media lawyers will lick their lips at the extent to which that will give them endless prospect for muzzling and befuddling the poor old lawyers who will be working for Ofcom.
I invite your Lordships to look at some of the other great regulators we have set up in the past 20 years. Let us take, for example, the Serious Fraud Office, which in the past five years has brought only a single prosecution for insider trading while everyone in the City knows that it is an hourly and daily event. Why? Because the criteria for the bringing of a prosecution and the range of legal guns levelled against the authorities if they try to prosecute are such as to make an insider trading prosecution a farce. I put that point to the House as a practical consideration.
Baroness Howe of Idlicote: My Lords, I also wish to support the amendment of the noble Lord, Lord McNally. There are two points that I wish to make, both of which have been made already but they need emphasising. The noble Lord, Lord Crickhowell, pointed to the two tests that already exist and have been reaffirmed by the government amendment—the test of 20 per cent for both ITN and Channel 3. There really is no argument why the same restrictions should not apply to any would-be owner of Channel 5.
The second point is one that other noble Lords have expressed. It is about the involvement of Ministers. As noble Lords will know, I have always had a great concern about the telecommunications and contents side coming together—the techies and the fluffies—because there could well and truly be conflicts of

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interest. Naturally, the Minister for Trade and Industry will be the one to be consulted. However, there are two Ministers who are to be responsible for this Bill. It is important to know that both would be consulted before any decision was taken.
Having said all that, I agree entirely with the noble Lord, Lord Lipsey. We have had a tremendous response from the Government and we all applaud that. It is this continued worry that we wish to reinforce by testing the amendment of the noble Lord, Lord McNally.
Lord Borrie: My Lords, I would like to speak against the amendment of the noble Lord, Lord McNally, despite the fact that I admire his work in this field. As he made a comment on the strength of Government Whips, I add to my admiration the way in which the Liberal Democrat Whips have gathered such a splendid force behind him. Not for the first time, the Liberal Democrats are extremely good at filling their Benches in support of this important amendment.
This Bill, which will be passed in the very near future, is one which will stand for a considerable period of time. If I concentrate on Amendment No. 131 which specifically deals with Channel 5 licences, it says anyone having a national newspaper market share of 20 per cent or more shall not be allowed to acquire Channel 5. That is concentrating on the now and near future. What my noble friend Lord Puttnam, the noble Lord. Lord McNally and others of the pre-legislative scrutiny committee were really concerned with was to make the Bill future proof. They were not just concerning themselves with the temporary moment. They were to consider life as we go ahead in which there will be huge numbers of channels of various kinds—terrestrial, satellite and others whose names we do not yet know. Things will not be the same in five or 10 years.
If we look at the amendment more closely, it is such an inflexible position to say 20 per cent. While that may be a significant figure at the present time, who knows what will be the right figure in years to come? Who knows whether it is desirable that an owner of 19 per cent should be allowed freely to acquire Channel 5? The noble Lord may say if' anybody does not fit the exact criteria of Amendment No. 131, then he may come within the plurality test which is to be introduced by the government amendment. It seems to me that the plurality test which has been moved before by my noble friend Lord Puttnam, but criticised by others today because of ministerial involvement, is much more future proof, much more sensible to put into a Bill which we hope will last for many years.
I cannot see a government of any complexion being particularly keen to have a communications Bill of any kind for years to come because of the difficulties of this one. Of course the plurality test involves Ministers because as noble Lords know, it fits into the structure of the Enterprise Act 2002. But that is not to diminish the role of the principal adviser on these matters— Ofcom. Its views would be known and made public. No government Minister with any sense, whether in an existing or future government, will override the
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carefully reasoned advice of Ofcom—assuming it is carefully reasoned. I do not believe that Ministers will go off on a wild tangent of their own in a matter of this sort.
My noble friend Lord Puttnam, the noble Lords, Lord McNally and Lord Crickhowell, and other noble Lords have promoted the plurality test for months. It is now shortly to be proposed by the Minister. This is something which can cater for all situations, for the future as well as the present. Having this extraordinarily inflexible amendment, which the noble Lord, Lord McNally put forward, is not necessary.
3.45 p.m.
Lord Maclennan of Rogart: My Lords, perhaps I may begin by saying to the noble Lord, Lord Borrie, that I am not here because anyone suggested that I ought to be here. I am here because his suggestion that this very large Bill could be made future proof in the way he suggests, is certainly not borne out by experience of earlier attempts in 1990 and 1996 to regulate cross-media ownership for all time. I do not imagine the present Bill will have any greater success in longevity. What is quite clear from my recollection of those Bills is that if one seeks to set up a framework to protect diversity, it is necessary to have figures which the noble Lord characterises as arbitrary. Percentage wise, it has been done before and no doubt will be done again. The nub of the opposition has not come so much on the merits of the particular amendments before us as the suggestion by the noble Lord, Lord Lipsey, that somehow if we were to carry these amendments we would be chancing our arm too far, pressing our luck too far. The suggestion is that the response of the Government might be less rational as a consequence.
What has characterised the debate on this Bill has been the degree of dialogue between the Government and many other interested parties. With a Bill of such major importance and of such gargantuan extent, it seems entirely appropriate that that should be the approach. I recognise that the time available to consider these matters has been very great, but I do not believe it has been too much or that the Government are likely to abandon the approach that they have taken which is to consider these matters on their merits. As my noble friend Lord McNally said, this amendment was not put forward by the Puttnam committee as an alternative to the plurality clause. As I read the report, this was seen as a belt and braces measure necessary because of the importance of this issue. I cannot think that at this stage the judgment of what we would be doing if we carried my noble friend's amendments and that of the noble Lord, Lord Crickhowell, would be any different in another place, where there is, properly, considerable unease about media concentration, not just now, but in the long term. Many of those engaged in this debate, and who will be engaged in further consideration of the Bill, took part in debate on the 1990 and 1996 Bills. The noble Lord, Lord Corbett, who participated in those debates, expressed concern about these matters at that time. I see no reason to believe that the

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judgments of principle made then would be any less focused today. I hope that we will not shy away from our duty to provide the best framework possible and that we will take the advice of the noble Lord, Lord Puttnam, and his colleagues in supporting my noble friend's amendments.
Lord Gordon of Strathblane: My Lords, I, too, support the amendment of the noble Lord, Lord McNally. I concede that, at worst, it is a belt and braces measure and that the clause might not be necessary if the plurality test is strong enough. However, in a matter as important as media ownership, which is pivotal to the future of democracy in this country, I would rather—save in the presence of the noble Lord, Lord Peyton—add a clause than take a chance on the issue not being caught. Given that there are already 400-odd clauses, I do not think that the rainforests will be endangered by the use of extra paper.
I agree with the noble Lord, Lord Maclennan, that the amendment addresses a subject different from the plurality test. It addresses a specific. At Second Reading, I said in passing that I cannot see why people are treating Channel 5 differently from Channel 3; after all, both are terrestrial television services licensed by the Independent Broadcasting Authority. Why are we treating one differently from the other? Two reasons can be alleged. The first is audience size. Surely we all recognise that that could change. Channel 5 could end up with a bigger audience, particularly allied to media promotion from a national newspaper. Channel 3's audience could well decrease, so that argument does not hold water.
The only argument that bears examination is that, at present, Channel 5 does not cover the whole of the UK. At present, the channel covers over 75 per cent, but that could change. Why are we treating Channel 5 so much differently from Channel 3? If it is logical to impose restrictions for Channel 3, it is also logical to impose them for Channel 5. This clause is a specific. It is not an alternative to the plurality test; it is an addition to it to ensure that there is no possible doubt about what noble Lords mean. At the moment, I support the amendment.
Lord Thomson of Monifieth: My Lords, I support my noble friend Lord McNally. Normally, I agree with the noble Lord, Lord Borrie, on these matters, but I was tempted by his remark that he puts his faith in the fact that he could not foresee a situation in which Ofcom's serious views were rejected by Ministers. The noble Lord, Lord Borrie, was a very distinguished director of the Office of Fair Trading for a very long time. I do not know the full details of his history, but I would be very surprised if he was totally content with all the ministerial decisions put before him.
I support the views that the noble Lord, Lord Gordon of Strathblane, has expressed. Channel 5 must be regarded as a distinctive, separate case to be dealt with on its own merits. It is the fifth terrestrial public service channel in this country. It is true that, because of its lack
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of total coverage and for other reasons, the public service regulator has given it a lighter remit than the other ITV channels. However, that will change.
I find Channel 5 rather good these days. Very often, I find programmes on the channel that interest me. I hope earnestly that its standards and coverage will improve. I see no reason why it should be treated separately from the ownership considerations that apply to the rest of the public service commercially-funded system in this country—the ITV system. For those reasons, it is wholly right that Channel 5, as the fifth channel of our public service broadcasting system, should be safeguarded as proposed by my noble friend Lord McNally.
Lord Sheldon: My Lords, for some years now, I have been concerned about the increasingly close relationship between the Government and the media. We have seen it as an extreme form—nowhere near the one that we are discussing today—in Berlusconi, where there is almost a fusion between certain parts of the media and important parts of the government. That is what concerns me most. That relationship seems to be growing over time. We have never had that kind of relationship in this modern media age, but we are seeing it now. This is an opportunity for us to say, "Enough is enough". There comes a time when one must bring it to a halt.
Politicians now depend more than ever before, not so much on getting support from the media, but on avoiding unfavourable mentions from them. That has now become an important aspect of government and political life. We need greater safeguards to protect us from the increasing powers of these kinds of relationships. For that reason, I support the amendment moved by the noble Lord, Lord McNally.
Baroness Buscombe: My Lords, I wish to be very brief. I join the noble Baroness, Lady Howe, and the noble Lord, Lord Lipsey, in congratulating the Government for making many moves in relation to the Bill. I do not think that it is the case, as the noble Lord. Lord Lipsey, stated, that we are worried about pushing our luck too far. I genuinely mean that. Several noble Lords, including myself, were deeply concerned, when we set out to scrutinise the Bill in your Lordships' House, that the Government would not show signs of shifting, and of listening to noble Lords and our debates.
However, the Government have listened on several occasions. On behalf of Her Majesty's Opposition. I am extremely grateful for that. We support the Government on this issue. It is right to liberalise ownership rules for Channel 5, particularly given that the Government have tabled amendments to the Enterprise Act to introduce a plurality test in certain media mergers. Given that the plurality public interest test will act as a belt-and-braces safeguard—some have talked about a pillar—in addition to powerful competition law, we simply do not believe that it makes sense now to retain limits on cross-media ownership.

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With the exception of the noble Lord, Lord Borrie, who made a very powerful speech with which I agreed entirely, and the noble Lord, Lord Phillips of Sudbury, who referred to the OFT, noble Lords have spoken as if the OFT and the Competition Commission do not exist. They play powerfully important roles in such issues and the question of mergers. We believe strongly that Ofcom will have very powerful content rules. Ofcom will be in the driving seat rather than Ministers, as the noble Lord, Lord Borrie, said.
On several issues on which the Government have moved in your Lordships' House, we have concentrated on the need to future proof the Bill. As the noble Lord, Lord Borrie, said, there is a concern that if the amendments were carried today, we would place in the Bill an unnecessary inflexibility on Ofcom's ability to act in the future. I ask the noble Lord, Lord McNally, to respond to the brief statement that the noble Lord made on Report with regard to similar amendments.
The noble Lord, Lord McNally, said:
"in the light of the very important statement made by the Minister today about plurality and its effect on the Bill, I shall not move this amendment".—[Official Report, 2/7/03; col. 955.]
Was the noble Lord, Lord McNally, deciding on principle last week that it was not necessary to move his amendment in relation to Channel 5, or was it that the troops were not there to support him? That is terribly important, because it is unfortunate that we are not debating the government amendments on plurality before debating Channel 5. It would be helpful to have that point answered.
4 p.m.
Lord McNally: My Lords, I thought that I had cleared that matter up in my opening remarks. Within 24 hours, according to the Financial Times on 3rd July, an unnamed senior official at the DCMS was putting the concessions well into the margins of the Bill and making them extremely discretionary. That was why I was determined to bring this matter back to the House.
Lord McIntosh of Haringey: My Lords, I must start by congratulating the noble Lord, Lord McNally, on the way in which he has succeeded in paving this debate.
Lord McNally: My Lords, when I was faced with this dilemma, I was told that the expert on paving Bills in Opposition was the noble Lord, Lord McIntosh of Haringey, so I was following the master.
Lord McIntosh of Haringey: My Lords, that is precisely why I was congratulating the noble Lord, Lord McNally. I was about to say that I did that for 14 years and enjoyed it. I challenge the noble Lord to achieve what I once did, which was to move an amendment in Part 6 of a Bill that would retrospectively have changed provisions in Parts 2, 3, 4 and 5. He can have a go at that if he wants to.
The noble Lord's amendment has had a very bizarre effect, paving up the debate on Channel 5 now. The amendment will be considered before the debate on the
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plurality clause. That means that I now have to bore your Lordships by saying what the plurality test, which will be introduced in the next group of amendments, will do. If my noble friend Lord Sheldon had heard what I am going to say, he would not have been able to say what he said about Berlusconi and Beaverbrook. The answers to all of the points that have been made are to be found in the plurality amendment.
The media plurality test is a new public interest consideration added to Section 58 of the Enterprise Act 2002, in addition to a consideration relating to national security that was included in the 2002 Act and the newspaper merger public interest considerations that are already in the Bill. The wording seeks to ensure that the Secretary of State can intervene in a proposed or completed merger between broadcasters or between broadcasters and newspaper proprietors.
The clause deals at great length and in detail, in many amendments, with the whole issue of cross-media ownership, which was not recognised by the noble Lord, Lord McNally, in his speech. It proposes to ensure sufficient plurality of persons controlling media enterprises in relation to: every different audience in the United Kingdom or a particular area or locality in the United Kingdom: the need for diversity of broadcasting throughout the United Kingdom; and the need for persons controlling or carrying on media enterprises to have a genuine commitment to attainment in relation to the broadcasting standards objective in the Bill— impartiality generally and impartial and accurate news, for example.
The amendment exactly addresses the problems of the potential motivation of individual media proprietors or would-be media proprietors seeking to enter broadcasting markets—be it Channel 3 or Channel 5—in this country. However, the difference between this amendment and the amendment tabled by the noble Lord, Lord McNally, is that ours has two bases. It is based on principle and is not directed at individuals—and I really do deplore the noble Lord's levity when he said that his amendment was not about Mr Murdoch, but was about American or Australian moguls, because he could not name a second one, could he?
Our amendment is not only based on principle—in other words, on the competition legislation that has existed for many years. It is not untested, but is based on the high standards that are required of media owners throughout this Bill and the way in which the plurality amendments, which I hope that we will agree, protect the high standards of broadcasting in this country. Against that, the speech made by the noble Lord, Lord McNally—although not his supporters, who made serious speeches—was disgraceful. He talked about industry experts, the Financial Times, unnamed senior officials in the DCMS and Government Whips, but almost not at all about the substance of his amendment, which is an ad hominem amendment, directed at an American Australian media mogul.

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The way in which the noble Lord, Lord McNally, has approached this amendment has debased the argument in this House. The rest of the debate has been perfectly proper, but the noble Lord, Lord McNally, has sought to have this debate before the one on the plurality test. He has sought to do so in a personal and light-hearted manner. This is a serious matter that deserves serious consideration. I believe that the noble Lord, Lord McNally, has not given it that serious consideration.
Lord Crickhowell: My Lords, I am glad that the Minister said that some of the supporters of the noble Lord, Lord McNally, were serious. I believe that the noble Lord, Lord McNally, was also serious. Would the Minister not agree that he made almost every single point that he made tonight when speaking on the subject on 2nd July on Report? The Minister might also give us the credit for reading ahead to the amendments that we will discuss later. It was only after reading this amendment and re-reading what the noble Lord, Lord McNally, said, that I came to the firm decision to support this amendment. I hope that my noble friends will also support it.
Lord McIntosh of Haringey: My Lords, I absolve the noble Lord, Lord Crickhowell, of any blame, because he put his name to the amendment at a late stage. The noble Lord, Lord McNally, however, tabled his amendment before I had tabled my plurality amendment, despite the fact that he withdrew it on the argument that he had to see the plurality amendment before he tabled his own amendment. That argument will not wash.
I am also a little surprised that the noble Lord, Lord McNally, continued to say that this was the view of the Joint Scrutiny Committee. That committee said:
"We consider that matters relating to the consolidation of ITV and Channel 5 could properly be decided through competition law strengthened by the plurality test".
That is exactly what the Government are doing, as the noble Baroness, Lady Buscombe, and others recognise. I commend that view to the House.
Lord Pilkington of Oxenford: My Lords, I am sorry to interrupt, but the committee wanted Ofcom. The great worry that the Minister has not dealt with is that the Minister will decide the criteria. There is considerable worry on this side of House about the pressure imposed on Ministers. I hope that the Minister will answer that point.
Lord McIntosh of Haringey: My Lords, I was going to answer that point. The noble Lord, Lord Pilkington, cannot take me very seriously if he thinks that I would ignore that point. The noble Lord. Lord McNally, seems to base his argument on three questions—what happens if Channel 5 grows, how we ensure that Channel 5 does not fall into the wrong hands, and the contention that any protections offered by the plurality test could be swept the way on a Minister's say so. That is the point made by the noble Lord, Lord Pilkington.
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I will take each point in turn. First, what happens if Channel 5 grows? The noble Lord, Lord Gordon, referred to that point. We would very much like to see Channel 5 grow. Channel 5 has just over 6 per cent of the audience and a reach of only 80 per cent of the country. We do not think that Channel 5 is large enough to need protecting in the same way as ITV. That is the difference between Channel 3 and Channel 5. There is a range of protections and controls that the Bill will put in place in the event that Channel 5 grows to the size of ITV. For example, Ofcom could alter the channel's original programme requirements, or the quota for independent productions could be changed by order by the Secretary of State. If Channel 5's audience share becomes broadly equivalent to that of ITV, the Secretary of State may introduce an appointed news provider scheme similar to that for the Channel 3 system. or Ofcom could change the obligations for Channel 3.
How do we ensure that Channel 5 does not fall into the wrong hands? There are the plurality tests. As I said, the tests will allow the Secretary of State—I shall come to the point made by the noble Lord, Lord Pilkington of Oxenford—to intervene in cases in which she believes that a merger causes sufficient plurality concerns for it to be blocked or for conditions to he attached. The test will enable us to examine a newspaper acquisition of Channel 5 with a view to ensuring that a minimum level of plurality is maintained. The test will also address the need for a plurality of owners, a wide range of high quality broadcasting calculated to appeal to a wide range of tastes and interests, and a genuine commitment to Ofcom's standards code.
There is also a power for Ofcom to review the Channel 5 licence when it changes hands and, if necessary, impose new licence conditions on the new licence holder, if the change is thought to be prejudicial to aspects of the service. There are rules in place that will prevent an unreasonable amount of cross-promotion, which will be regulated by Ofcom and the OFT. For example, the cross-promotion of other television channels and programmes is not allowed to cause annoyance to viewers, and licensees for Channels 3, 4 and 5 are not permitted to promote multi-channel platform service operators such as the Sky platform.
If, at some point in the future, the regulator believed that the cross-promotion rules in place were no longer relevant. Ofcom would be able, with consultation, to change the rules on cross-promotion. The noble Lord, Lord Phillips of Sudbury, implied that the big beasts would work their way around content regulations with armies of lawyers. Big companies always look for the greatest commercial advantage in any rules-based system, but there is also the possibility, which the noble Lord apparently rules out, that a large company, having been examined by the Competition Commission, might be suitable. It might be a good thing. As I said, the Joint Scrutiny Committee did not rule that out. It suggested that it should and could be properly decided through competition law, strengthened by the plurality test.

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The noble Lords, Lord Crickhowell and Lord Pilkington of Oxenford, in particular, addressed the issue of the role of Ministers. The test involves three independent regulators: Ofcom, the Office of Fair Trading and the Competition Commission. They are not, as the noble Lord, Lord McNally, alleges, untested regulators. The OFT has been running for more than 30 years, and the Competition Commission has run for about 30 years too. They are all independent bodies commanding respect, and I do not care to hear them called "untested".
The whole point about the public interest merger test is that it is for those independent regulators to make recommendations. It is for Ministers to make decisions. Does anybody seriously think that, if the independent regulators said, having regard to the provisions of the plurality test contained in Amendment No. 85, which we have yet to debate, that a Minister had flouted their advice and had done so for the base reasons suggested by several noble Lords—it is legitimate to criticise Ministers and ascribe base reasons to them—that Minister would get away with it? Of course not.
I propose to the House that we should address the issue of cross-media ownership and plurality on the basis of principle, not of levity and ad hominem arguments about Australian-American moguls. We would do ourselves credit if we gave proper prominence to the rule of law in this country and avoided the kind of temporary political advantage proposed in the amendment.
4.15 p.m.
Lord McNally: My Lords, I suppose that we all respond to difficult situations in different ways. I often say that, perhaps, I do so with a little too much levity. Others respond by speaking louder and using a little bombast. It is a matter of choice. The more I listened to the Minister, the more I thought of the phrase:
"The louder he talked of his honour, the faster we counted our spoons".
I spent a long time on the Bill, and I was proud to have the noble Lords, Lord Crickhowell, Lord Sheldon, Lord Gordon of Strathblane, Lord Peyton of Yeovil and Lord Pilkington of Oxenford, the noble Baroness, Lady Cohen of Pimlico, and my noble friends Lord Maclennan of Rogart and Lord Phillips of Sudbury with me today. I may be frivolous, but they are not. I say to the noble Lord, Lord Lipsey, that it is not some wonderful thing that, at Third Reading, a Labour government should propose concessions on plurality. I would have expected a Labour government to have had such a test as the flagship of the Bill.
As for my attack on Mr Murdoch, the noble Lord, Lord Sheldon, put his finger on it. He mentioned the matter a week or so ago at a seminar. The Rubicon was crossed when Tony Blair travelled halfway round the world to address a News International conference. There are concerns about the close links between the media and politics not only in Britain or Europe, but around the world. In the 1930s, we were afraid that the fascists would take over the government and then control the press: in the 21st century, there may be a
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danger that the fascists will take control of the press and then control the government. The dangers are there.
We talked about Mr Murdoch: OK, let us take Mr Murdoch. The Columbia Journalism Review said:
"Rupert Murdoch's Fox is leading the charge on the station ownership issue … Murdoch is threatening to fold the Post"—
the New York Post—
"if the FCC doesn't bend the rules to allow him (over media activists' objections) to own those two TV stations and a newspaper in the same city".
The Guardian, reporting from Australia, said:
"Rupert Murdoch's business ambitions in his home country have been thwarted after the Australian senate passed a bill limiting cross-media ownership yesterday … 'That final amendment … is a dagger through the heart of cross-media reform,' said communications minister Richard Alston. 'We'll send it back to the [house of representatives]. I'm sure they'll make some changes, including the removal of Senator Harradine's amendment, and we'll see where we go from there.'… The government controls the lower house and the bill is expected to go through another senate vote this year as the government maintains pressure on an upper house it feels is blocking too much legislation",
The indignation shown by the noble Lord, Lord McIntosh of Haringey, in his desire to defend Mr Murdoch runs in the face of 20 years' experience.
The noble Lord, Lord Lipsey, said that, at some time, Channel 5 might be in such dire straits that we might have to bend the rules a little to save it. That is how Mr Murdoch got The Times; that is how he got his satellite television monopoly. We must not consider the amendment as an alternative to the plurality test. I am delighted at the plurality test. I welcome not only the plurality test but the many other amendments that the noble Lord, Lord Puttnam, with principle and great skill, has managed to insert. However, that better Bill needs the amendment. For all the talk from the noble Lord, Lord Borrie, about future proofing, the 20:20 arrangements are in for Channel 3 and ITN. They must be in for Channel 5 because there is a clear and present danger that there will be a call to bring Channel 5 into cross-media ownership. That would be dangerous for our democracy and damaging to other parts of our media.
I shall say one more thing. My noble friend Lord Maclennan of Rogart mentioned another place. Some 126 Members of another place signed an Early Day Motion in support of the amendment at an earlier stage of the Bill's passage. The proposer of that Early Day Motion, Mr John Grogan MP, who was himself a member of our committee, was quoted in the Independent as follows:
"I was frustrated that we did not get a chance to debate and vote on this in the Commons. If the Lords knock it back, then we will have a chance and there will be quite a rebellion".
That has not been discussed, but this belt and braces amendment is needed. I hope that the Minister will bring forward those plurality clauses, which will be a great tribute to the Bill. The clear and present danger that exists with regard to Channel 5 justifies this amendment, and I urge noble Lords on all Benches to join me in the Contents Lobby today.
4.21 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 137; Not Contents, 167.

Division No. 1

CONTENTS

Ackner, L.

Lester of Herne Hill. L

Acton, L.

Lewis of Newnham, L.

Addington, L.

Linklater of Butterstone, B.

Alderdice, L.

Liverpool, E.

Ampthill, L.

Lucas, L.

Avebury, L.

Ludford, B.

Barker, B.

MacGregor of Pulham Market, L

Beaumont of Whitley, L.

Bledisloe, V.

Mackie of Benshie, L.

Bowness, L.

Maclennan of Rogart, L.

Bradshaw, L.

McNally, L. [Teller]

Bridges, L.

Maddock, B.

Brightman, L.

Maginnis of Drumglass, L.

Brittan of Spennithorne, L.

Mar and Kellie, E.

Brooke of Sutton Mandeville, L.

Mayhew of Twysden, L.

Burnham, L.

Methuen, L.

Caithness, E.

Michie of Gallanach, B.

Chorley, L.

Miller of Chilthorne Domer, B.

Clement-Jones, L.

Morgan, L.

Cohen of Pimlico, B.

Newby, L.

Colwyn, L.

Northbrook, L.

Condon, L.

Northover, B.

Craig of Radley, L.

Oakeshotto of Seagrove Bay, L.

Crickhowell, L. [Teller]

O'Cathain, B.

Dahrendorf, L.

O'Neill of Bengarve, B.

Darcy de Knayth, B.

Onslow, E.

Dean of Thornton-le-Fylde, B.

Oppenheim-Bames, B.

Dholakia, L.

Palmer. L.

Donoughue. L.

Parekh, L.

Dundee, E.

Perry of Southwark, B.

Eden of Winton, L.

Perry of Walton, L.

Elton, L.

Peyton of Yeovil, L.

Erroll, E.

Phillips of Sudbury, L.

Ezra, L.

Pilkington of Oxenford, L.

Falkland, V.

Prashar, B.

Fearn, L.

Quinton, L.

Ferrers, E.

Razzall, L.

Finlay of Llandaff, B.

Redesdale, L.

Fowler, L.

Rennard, L.

Gavron, L.

Rodgers of Quarry Bank, L.

Goodhart, L.

Rogan, L.

Gordon of Strathblane, L.

Russell, E.

Gray of Contin, L. Greaves, L.

Russell-Johnston, L.

Greaves, L.

Ryder of Wensum, L.

Greengross, B.

Sandberg, L.

Hamwee, B.

Sandwich, E.

Hannay of Chiswick, L.

Sawyer, L.

Harris of Richmond, B.

Scott of Needham Market, B.

Hayhoe, L.

Selsdon, L.

Holme of Cheltenham, L.

Sharp of Guildford, B.

Hooper, B.

Sharpies, B.

Hooson, L.

Sheldon, L.

Howarth of Breckland, B.

Shutt of Greetland, L.

Howe of Aberavon, L.

Smith of Clifton, L.

Howe of Idlicote, B.

Stevens of Ludgate, L.

Hurd of Westwell, L.

Stoddart of Swindon, L.

Hylton, L.

Strange. B.

Jacobs, L.

Taverne, L.

Jopling, L.

Tebbit, L.

King of Bridgwater, L.

Thomas of Walliswood, B.

Laird, L.

Thomson of Monifieth, L.

Lamont of Lerwick, L.

Tope, L.

Lane of Horsell, L.

Tordoff, L.

156

Waddington, L.

Watson of Richmond, L.

Walker of Worcester, L.

Wedderburn of Charlton, L.

Wallace of Saltaire, L.

Wigoder, L.

Walmsley, B.

Williams of Crosby, B.

Walpole, L

Williamson of Horton, L

Warnock, B.

Windlesham, L.

NOT-CONTENTS

Aberdare, L.

Gregson, L.

Allenby of Megiddo. V.

Grocott, L. [Teller]

Alli, L.

Hanham, B.

Alton of Liverpool, L.

Hanningfield, L.

Andrews, B.

Hardy of Wath, L.

Anelay of St Johns, B.

Harris of Peckham, L.

Archer of Sandwell, L.

Harrison, L.

Ashcroft, L.

Haskel, L.

Astor of Hever, L.

Hodgson of Astley Abbotts, L.

Ashton of Upholland, B.

Higgins, L.

Attlee, E.

Hogg of Cumbernauld, L.

Bach, L.

Hollick, L.

Barnett, L.

Hollis of Heigham, B.

Bassam of Brighton, L.

Howe, E.

Bhatia, L.

Howell of Guildford, L.

Biffen, L.

Howells of St. Davids, B.

Billingham, B.

Howie of Troon. L.

Blackstone, B.

Hughes of Woodside, L.

Blackwell, L.

Hunt of Wirral, L.

Blatch, B.

Irvine of Lairg, L.

Borne, L.

Janner of Braunstone, L.

Brett, L.

Jenkin of Roding, L.

Brooke of Alverthorpe, L.

Jones, L.

Brookman, L.

Jordan. L.

Bruce of Donington, L.

King of West Bromwich, L.

Burlison. L.

Kirkhill, L.

Buscombe, B.

Knight of Collingtree, B.

Byford. B.

Lang of Monkton, L.

Campbell-Savours, L.

Lea of Crondall, L,

Carnegy of Lour, B.

Lindsay, E.

Carter, L.

Lipsey, L.

Chalfont, L.

Lockwood, B.

Clark of Windermere, L.

Lofthouse of Pontefract. L.

Clarke of Hampstead, L.

Luke. L.

Clinton-Davis. L.

Lyell, L.

Cooe of Berkeley L

McColl of Dulwich, L.

Corbett of Castle Vale, L.

Macdonald of Tradeston, L.

Crathorne. L.

Mclntosh of Haringey, L.

Crawley, B.

MacKenzie of Culkein, L.

Davies of Oldham, L. [Teller]

Mackenzie of Framwellgate, L.

Denham, L.

Manchester. Bp.

Desai, L.

Marsh, L.

Dixon, L.

Mason of Barnsley, L.

Dixon-Smith, L.

Miller of Hendon, B.

Dormand of Easington, L.

Mitchell, L.

Dubs, L.

Molyneaux of Killead, L.

Eatwell. L.

Monro of Langholm, L.

Elder, L.

Montrose, D.

Elliott of Morpeth, L.

Morgan of Huyton, B.

Evans of Parkside, L.

Morris of Manchester, L.

Evans of Temple Guiting. L.

Moser, L.

Evans of Watford, L.

Mowbray and Stourton, L.

Farrington of Ribbleton, B.

Moynihan, L.

Faulkner of Worcester, L.

Murton of Lindisfarne, L.

Fitt, L.

Nicol. B.

Flather. B.

Noakes, B.

Freeman, L.

Norton of Louth, L.

Fyfe of Fairfield, L.

Patel of Blackburn, L.

Gale. B.

Pendry, L.

Gardner of Parkes, B.

Pitkeathley, B.

Gibson of Market Rasen, B.

Plummer of St. Marylebone, L.

Glenarthur, L.

Powell of Bayswater, L.

Glentoran, L.

Prys-Davies, L.

Golding, B.

Radice, L.

Goldsmith. L.

Ramsay of Cartvale, B.

Gould of Pottemewton, B.

Randall of St. Budeaux, L.

Graham of Edmonton, L.

Roll of Ipsden, L.

157

Rooker, L.

Symons of Vernham Dean, B.

Saatchi, L.

Temple-Morris, L.

Sainsbury of Turville, L.

Trumpington, B.

Saltoun of Abemethy, Ly.

Turnberg, L.

Sanderson of Bowden, L.

Ullswater, V.

Scotland of Asthal, B.

Vinson, L.

Seccombe, B.

Vivian, L.

Shaw of Northstead, L.

Wade of Chorlton, L.

Simon, V.

Wakeham, L.

Skelmersdale, L.

Warner, L.

Smith of Gilmorehill, B.

Watson of Invergowrie, L.

Smith of Leigh, L.

Whitaker, B.

Soulsby of Swaffham Prior, L.

Whitty, L.

Stallard, L.

Wilcox, B.

Strabolgi, L.

Williams of Elvel, L.

Strathclyde, L.

Williams of Mostyn, L.(Lord President of the Council)

Swinfen, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.31 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 2:
Page 3, line 23, after "a" insert "sufficient"
The noble Lord said: My Lords, in moving Amendment No. 2, I shall speak also to Amendments Nos. 83 to 116, 118, 120, 121, 132 to 136 and 148. I made clear on Report that I intended to bring forward amendments at Third Reading to introduce a media plurality test. I have now done so and the amendments are before us. These amendments will 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 UK 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 United Kingdom or in a substantial part of the United Kingdom. We shall also be able to look at a qualifying merger where an existing share of 25 per cent or more changes hands.
By extending the scope of the Enterprise Act so that qualifying mergers could be subject to a media plurality test, the Secretary of State will be able to intervene where she believes a merger would have a damaging effect on plurality. In principle, all media mergers, including cross-media mergers, can be subject to a media plurality test. However, we intend as a matter of policy normally to apply the test in practice to those areas only where the current rules are being removed completely. That would mean 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.
As I explained on Report, we do not believe that it would normally be desirable or sensible to intervene and apply the test to areas where there have never been media ownership restrictions or to areas where there
158
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 Secretary of State is likely to consider intervening on media plurality grounds. Guidance obviously cannot fetter the Secretary of State's discretion and we would not rule out its wider use in an extreme and rare case.
The test will ensure that the Secretary of State can ask Ofcom and, if necessary, the Competition Commission to investigate any merger which threatened plurality. It will prevent unacceptable levels of cross-media dominance and ensure a minimum level of plurality. The media plurality test would sit alongside the special—page 26 of the brief is missing. I had to be caught out some time. Thank you; it is missing in this version too. I shall correct any self evident errors—or perhaps not. With real apologies, I shall start that sentence again.
The media plurality test would sit alongside the special newspaper public interest test, which would continue to consider newspaper-only mergers. So it is a rather important page. The 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 Secretary of State's powers of intervention under Sections 59 to 66 of the Enterprise Act will extend to the media plurality provisions.
I hope that the House will allow me a few minutes to explain the effect of the main provisions set out in these amendments, although to some extent I have done so twice already. Amendment No. 85 inserts a new public interest consideration into Section 58 of the Enterprise Act 2002. It specifies that public interest considerations may be looked at in mergers that satisfy the relevant jurisdictional criteria.
Under the Enterprise Act, the vast majority of mergers will be considered only under the test of whether they would result in a substantial lessening of competition. However, the legislation also makes provision for intervention by the Secretary of State on specified public interest grounds. Currently, the only specified consideration is national security. Clause 372 specifies new newspaper public interest considerations. This clause adds a new subsection (2)(c) to Section 58 and sets out a public interest consideration that may apply to media and cross-media mergers.
As a result, the Secretary of State will have the ability to intervene in relation to mergers involving media enterprises and to investigate the impact of the merger on the need, in relation to every different audience in the United Kingdom or in a particular area or locality of the UK, for there to be a sufficient plurality of persons with control of the media enterprises serving that audience; the need for the availability throughout the United Kingdom of a wide range of broadcasting which, taken as a whole, is both of high quality and calculated to appeal to a wide variety of tastes and interests; and the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine

159
commitment to the attainment in relation to broadcasting of the standards objectives set out in Section 315 of the Bill. I commend these amendments to the House. I beg to move Amendment No. 2.
Baroness Buscombe: My Lords, I should like to press the Minister on several points concerning the scope and purpose of his amendments. On Report, the Minister set out clear boundaries to the Government's intended plurality test. In particular, he stated that it would be,
"a matter of policy normally to apply the test in practice to those areas where the current rules are being removed completely".
In addition, he added—which he added again today—that,
"usually, the Secretary of State would consider intervening",
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".— [Official Report, 2/7/03; col. 915.]
This clearly stated approach to the plurality test reflects the key concerns expressed by the noble Lord, Lord Puttnam, and others throughout the passage of the Bill and in the pre-legislative scrutiny process. That is a concern over a liberalisation of the cross-ownership provisions for Channel 5—as we have heard today—as well as the prospect of investment by non-EEA companies in UK media companies in Channels 3 and 5 (and UK radio).
I am concerned therefore that it is not just these carefully targeted policy aims that are reflected in these amendments. Instead, having considered the amendments, it appears that the Government are presenting us with a plurality test which could be applied to all "merger situations" involving broadcasters or broadcasters and newspapers which qualify for investigation under the Enterprise Act 2002. It could also apply to transactions that initially may not qualify for investigation, but concerning which the Government's amendment to Clause 375 would permit an intervention notice to be served. Such transactions would include mergers and acquisitions among cable and satellite channels that have launched in the UK without any of the special privileges or protections given to those broadcasters using scarce, analogue terrestrial frequencies, and which have not had any special media ownership rules applied to them previously. Examples, of which there are almost limitless permutations, might include the acquisition of the National Geographic Channel or History Channel by Discovery Networks, the acquisition of additional music video channels by MTV or the purchase of one channel provider by anothe—for example Flextech Television and Turner.
The provision represents a major shift in government communications policy and as the Government are aware it is of significant concern to all broadcasters, who now face another regulatory barrier and greater uncertainty. I should like to remind your Lordships of the comments of the broadcasting
160
Minister during the Committee stage of the Bill in another place. The Minister said that the problem with the plurality plus competition test was that,
"it inevitably leads to uncertainty … Although businesses may be used to dealing with uncertainty daily, they do not actively seek out uncertainty. We should make clear rules where appropriate. If we accepted the amendment"—
that is not the amendment proposed today, but one proposed in another place—
"we would effectively be putting those who wanted to acquire media assets in a worse position. In addition to complying with the clear and transparent ownership rules and satisfying the competition authorities, an owner would face the further obstacle of satisfying a plurality test. The Bill is intended to remove regulations, not to impose new and unnecessary ones".— [Official Report, Commons Standing Committee E, 6/2/03; cols. 1002–04.]
I recognise that the Government have subsequently introduced amendments into your Lordships' House as a compromise. I also recognise that the Minister said on Report—and has confirmed today—that guidance would be produced to clarify the provisions and narrowly to define the scope of the plurality test. However, we are concerned that nothing has been produced yet. It is creating disquiet in the industry and on the part of the Opposition that such wide provisions are being introduced with the promise of guidance to come once the Bill has received Royal Assent.
In the absence of such guidance I should be grateful if the Minister would provide further clarification. Why have the Government gone to the trouble of including all broadcasters in the plurality test, only to produce guidance to exclude most of them from it? Surely a better solution would have been to amend Clause 373 to narrow the target of the plurality test in the first instance to Channel 3, Channel 5 and radio; that is, the scarce analogue terrestrial frequency services, which have been the source of the concerns of the noble Lord, Lord Puttnam, and others about non-EEA and cross-media ownership all along.
I should also be grateful if the Minister would explain the status of the guidance to be produced, and why this has not been made available at the same time as the amendments to the Bill. After all, if a key feature of the plurality test is that it is to be narrowly applied by the guidance, so as give broadcasters confidence and clarity, it naturally follows that the two must be considered hand in hand. How are we to decide on the merits of the amendments when they represent only half the story? Such guidance is unlikely to have the same legal force as the provisions in the Bill, so the certainty that could be derived from it is likely to be limited.
I should be grateful if the Minister could clarify the Government's intentions towards the existing 20:20 ownership rule governing Channel 3 licences in the light of the new plurality test. As the Minister said on Report, the 20:20 rule has something of a cliff-edge element to it, with the plurality test allowing "finer judgments" to be made in particular cases according to circumstances. Given that it is his stated intention to apply the plurality test in this particular case and, in

161
addition, only where the current rules are being removed completely, it would follow that the 20:20 rule should be abolished.
Lord Fowler: My Lords, I also have one or two concerns and shall speak briefly. I agree with the Minister that it would have been much more useful had we been able to debate this set of amendments prior to our debate on Channel 5. There is no question that it might have illuminated that debate.
Having read not only the clauses and the amendments, but the Minister's letter, I think this is a useful addition and I congratulate the noble Lord, Lord Puttnam, on achieving it. However, I do not think that it answers some of the concerns relating to the Bill, in particular, those relating to the rules on foreign ownership that we were debating under the first set of amendments. It seems to me that it is not intended to do so.
I am not clear why the Minister was so upset with the noble Lord, Lord McNally, for mentioning the report in the Financial Times. It seemed to me that that report was relevant to this debate. It said that senior officials of his department insisted that the amendment would not hamper the principle of allowing United States' media groups to bid for ITV or enabling newspaper publishers to seek control of Channel 5. I know that the Government are rather concerned about sources at the moment, but there is no dispute about the source in that case. Senior officials have told the Financial Times that that is the issue, and as far as I know the department have done nothing to correct that.
I think that we are allowed to be a little sceptical about some aspects of the Bill. At the end of the day, the decision will rest with the Secretary of State—there is no question about that. The Minister's letter to the Front Bench leaders said that the provision enables the Secretary of State to intervene in a case. It does enable, but of course it does not require. At present, we do not all have overwhelming confidence that the Government would intervene in particular circumstances.
There is no rule set down to deal with a number of the cases that we will be discussing. There is, for example, no rule, such as the one that I have included in an amendment to be debated later, for making reciprocal arrangements a condition if a United States company takes over a British television company. We will debate later whether that rule is right or wrong—I can perhaps predict what the Minister's reply will be—but at least if that rule is in the legislation, we know exactly where we are.
The Secretary of State is not bound by the advice given. The Minister made much of his contention that no Minister would ever overrule the advice given to him in this area. I am not entirely sure that that is correct. There are examples where the unanimous recommendations of the Office of Fair Trading have been overruled. I remember one instance involving regional newspapers—the Nottingham Evening Post—where the OFT said quite clearly that deal should not go ahead, but it was overruled. It was overruled, as it happens, by the Government of which I was a member.
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I did not agree, but that was the decision. The Minister will say that that example concerns a Conservative Government and that nothing of that kind would ever happen under a Labour Government, but that slightly beggars belief.
The amendment is a useful addition, but I do not think that we should place too much emphasis on it. Personally, I welcome what has been done and what the noble Lord, Lord Puttnam, has achieved, but I give only two cheers for the final version of the amendment.
Lord Puttnam: My Lords, I offer the Government two and a half cheers. They are to be congratulated. An enormous amount of work has gone into making the amendment possible. I would personally like to thank Paula Carter, who has helped me enormously. and the Bill team, who have done Trojan work. I am not sure that they will thank me for thanking them, but they have done an extraordinary job in hammering through what is in some senses new law. We have come a long way.
These amendments must be seen as all of a piece with the amendments to the general duties that we have already agreed. Together, those provisions are the double bolts. I have now talked to enough lawyers and judges, who have assured me that those two aspects of the Bill, taken together, represent a very serious impediment to the type of dominance that the clause is intended to prevent.
That is one thing. I come to the other issue. Several noble Lords mentioned the Financial Times article. The last Division went as it did—but I have to tell the Government that I believe that the Division was quite avoidable. It was caused by a misbrieting given to the Financial Times last week, which gave the impression for whatever reason that the amendment might not bite as the Government intended, or as the proposers of the amendment intended. That could have been avoided.
I beg the Government to do two things. First, I ask them not to be tempted by the wish expressed by the noble Baroness, Lady Buscombe, to restrict the breadth of what has been created. That breadth is very important. Secondly, they should make it very clear, and not only in this Chamber but outside, that they have taken a big step in a very important direction and are intent on giving the noble Lord, Lord Currie, all the powers and all the encouragement to take the route that the House has clearly indicated.
There is real fear about media dominance. The Government have come a long way in accepting those fears, which have been made apparent today by the comparative narrowness of the previous Division. However, I look for some form of assurance that we will not be battered next week by the type of Commons amendments that would undermine much of the good work achieved in this House over the past weeks and months. I welcome the amendment gratefully.
Baroness Howe of Idlicote: My Lords, I hope that the noble Lord will forgive me. We have had pretty little time to get used to these wonderful new amendments, but I welcome them. I have actually read them but, if I have not understood them thoroughly, I apologise in advance.
I want to return to the point that I made earlier, which the Minister, perhaps rightly, did not answer in the earlier debate. With all the tests that will be applied, we come back to the point that it will be a Minister who makes the decision, although admittedly advised by Ofcom. With regard to both the content and the technology aspects—and particularly the content aspect—I am concerned that there will be more than an assumption that the Secretary of State at the DCMS will also be consulted. I am certain that Ofcom will consider both sides of the question; we have been told often enough that that is its intention. However, I am concerned that there are often problems when two Ministers are responsible for something. While congratulating the Minister on all the amendments, I should be grateful for an answer to that question.
Lord McNally: My Lords, I welcome the amendments and the moderate and temperate tone in which the Minister introduced them. However, I make one point as a genuine seeker after truth. An executive from one of the specialist music stations asked me whether it would be seen as a dangerous accretion of media power if a music station with one per cent of the total audience acquired another music station with one per cent of the total audience, or whether it would be said that the stations had only 2 per cent of the total audience, even if they had a larger share of the music-only stations. I told him that I would put that question to the Minister, and I was sure that he would get an answer.
The broader question of how far and how real this is a step forward goes to the heart of the comments made by the noble Lord, Lord Puttnam. The Financial Times article was not an accident. There have been parallel messages coming from the Government: the kind of messages that the Minister has given from the Front Bench here, and the kind of speeches that Mr Kim Howells and officials have made at specialist conferences, which have continued to emphasise that this is the freewheeling, free enterprise, deregulatory Bill that was so carefully crafted in Downing Street all those months ago.
It has also been irritating to hear the continual message that Parliament has somehow interfered in this perfect process. I went to a seminar organised by the ever-industrious the noble Lord, Lord Lipsey, where the noble Lord and an official combined to lecture the assembled attendees, some of whom had more political experience than both of them put together, about the realities of legislating. One reality of legislating for me is that Parliament does matter and governments should listen.
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I was very worried when Mr Stephen Carter was reported as showing a certain tetchiness about the way in which Parliament was messing about with the Bill. I asked for the text of his speech. and was pleased to read that,
"as a creature of statute Ofcom will deliver to whatever rulebook it inherits from Parliament".
Quite so.
Sometimes when we are discussing civics education, I think that it might be worth applying it to some civil and public servants, to show them where the relative balance lies between their powers and Parliament's powers. We do not want to see some carefully crafted briefing, 48 hours after the Bill has left this place, saying, "Don't worry, all those silly old people are now out of the way and we can march on to the new land".
The Minister has made a great to-do about how powerful the test is, and we want to make sure that it works. I am not making any predictions. However, Mr Murdoch will come calling, believe me, because it fits into his strategy and his pattern. The noble Lord, Lord Lipsey, should know that when he comes calling he never plays just by the rules. As he did in New York, he will threaten to close down The Times if he does not get his way, or he will have some other blockbuster to intimidate Ministers.
The issue is a lot tougher than the Minister implied, but the amendments are welcome, as long as the Minister lives up to his promises and the public servants who are get the rulebooks from Parliament live up to them too.
Lord Phillips of Sudbury: My Lords, I want briefly to ask the Minister whether I heard him correctly when he referred to the possibility of the director of Ofcom imposing conditions in relation to matters dealt with by Amendment No. 85. Is that the case? If so, is the Minister concerned by some of the precedents for the imposition of conditions attached to newspaper takeovers in the past, which it would be fair to say have been ineffectual in practice?
5 p.m.
Lord McIntosh of Haringey: My Lords, I am grateful for the welcoming and moderate tone of the debate. I must say a word to the noble Lord, Lord McNally. He accused me of shouting. and maybe I did. He made a debating speech and I made one in reply, but I did not at any stage question the sincerity behind his speech. Of course, I know that he feels strongly about these matters, and always has. I simply did not like the way in which he introduced his amendments, and I said so.
The noble Baroness, Lady Buscombe, started by asking why we did not specify a narrow test in the Bill—why we went for a wide test and then imposed restrictions on it. We considered a narrow test but decided on balance that we could get to substantially the same place through taking a wide power and limiting its general application as set out in guidance.

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In exceptional circumstances—I think that I used the phrase "extreme and rare circumstances"—we might want to apply the test more widely if there were genuine plurality concerns. This approach allows us to do so. However, we recognise that the share of supply of goods or services in the United Kingdom—or a substantial part of the United Kingdom in the case of a relevant merger situation—or when one of the parties has an existing share of a supply of broadcasting of at least 25 per cent, could cause the Secretary of State to decide to intervene. We intend generally to intervene only in those areas where we have removed all ownership rules. However, we cannot rule out the possibility that in exceptional circumstances we will look at other orders. Nevertheless, I think that we have diminished uncertainty as far as possible by setting out in my speech all of those relationships which we expect to be covered. I think that that deals with the point that the noble Baroness, Lady Buscombe, raised about uncertainty.
The noble Baroness, Lady Buscombe, then went on to quote points made in the House of Commons. I do not know how to respond to that. We have responded to debate in this House. We have responded to debate over a period of something like three months now. The fact that we have responded late in the day means that we have been concerned and worrying about it. We have certainly been doing that, as the noble Lord, Lord Puttnam, recognised. I hope that if I am offered the choice of being charged with introducing amendments late and charged with being inflexible, I will accept the charge of tabling amendments late rather than of being inflexible. That means—the noble Baroness asked about guidance—that guidance cannot be produced in time. We cannot produce guidance simultaneously with approximately 44 complex amendments, which is what we have done.
The noble Baroness asked particularly about satellite and cable channels. Although we do not think that there is normally an issue of plurality test there, we could see plurality tests applying in some rare cases if a large number of news or educational channels would he coming under single control. I do not know what that means as regards the question that the noble Lord, Lord McNally, asked about music channels. I take it that he is talking about what I call "serious music channels" with a small share of the market.
Lord McNally: No, my Lords. On cable television there may he four or five specialist music channels playing various kinds of pop. If one channel took over another, its share would increase from 20 per cent to 40 per cent of the channels. Would that worry or trigger any of this legislation?
Lord McIntosh of Haringey: My Lords, I would be very surprised if it would. As I have just been saying, cable and satellite channels are not currently regulated and we would not expect them to raise questions of plurality. However, if someone were to take over all the music channels, I think that the "extreme and rare" case to which I referred might well come into force.
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The noble Baroness, Lady Buscombe, referred to the issue of the 20 per cent rule. I think that the point about these amendments in departing from the 20 per cent rule is that it is possible that someone with 19 per cent of the national newspaper market might raise plurality concerns, which is why we did not want cliff-edge regulation. The provision would enable Ministers to distinguish those with larger holdings in the event that the 20 per cent rule was removed. We do not have any plans to remove it, but a well-established plurality test may make removing it a possibility in the future.
The noble Lords, Lord Fowler, Lord Puttnam and Lord McNally, all referred to the Financial Times article, which of course I read. However, I have to say that I and the members of the Bill team do not know who the unnamed source was. Whether anyone is briefing against us, I do not know; it is not a matter on which I can comment. However, on the substance of the article, if the Bill is passed as it stands, yes, investment from non-EEA sources will he possible. However, although the plurality test will allow foreign investments to be made, if necessary they will be considered by the Competition Commission on a case-by-case basis. If they raise concerns, those cases can be targeted. If those concerns are found to be justified, those cases could be blocked. That is the point that we were making last week in the foreign ownership debate.
I should like to say to the noble Lord, Lord Puttnam, how grateful I am to him for his continued involvement in debate on this issue, at any rate over the time that I have been involved in the Bill's passage. I think that he carries a great deal of the credit for what is widely accepted as being improvements to the Bill. I pay tribute to him for what he has done. I agree with him that we need to get the general duties right so that they work with the spirit of the Bill. However, I can confirm that, pending that which has to be done in another place, this amendment, if we agree to it today, is in black and white. It clearly bites right across the range. The Government have taken a big step. I am grateful to the noble Lord, Lord Puttnam, for giving encouragement to the noble Lord, Lord Currie, in the way that he carries out the Bills provisions.
The noble Baroness, Lady Howe, asked which Secretary of State would be involved. In legislation there is only one Secretary of State. The legislation applies regardless of whether the Department of Trade and Industry or the Department for Culture, Media and Sport is abolished. There will still be a Secretary of State who is responsible for carrying out the law. I do not think that she should place any significance on the fact that the Secretary of State currently responsible for competition policy is the Secretary of State for Trade and Industry, and certainly not on the personalities concerned. However, in so far as there are two Secretaries of State involved in these issues, they will, as they have been doing, work closely on the Bill.
The noble Lord, Lord Phillips, asked about precedents for conditions under the newspaper merger regime. There certainly have been headline cases where conditions have been thought to be ineffectual.

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However, there are many other cases where they appear to have worked well. Generally, we think that undertakings will be given effect to in broadcasting licences, which are readily enforceable, as I think is well recognised. Of course newspapers are not licensed, and for newspapers a merger can always be prohibited.
I hope that that deals with the points raised in debate.
On Question, amendment agreed to.
Lord Davies of Oldham Lord Davies of Oldham moved Amendment No. 3:
Page 3, line 38, leave out "particular" and insert "all cases to—

(a) the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and

(b) any other principles appearing to OFCOM to represent the best regulatory practice.

(4A) OFCOM must also have regard, in performing those duties"
The noble Lord said: My Lords, in moving this amendment I shall also speak to government Amendments Nos. 6, 7, 81 and 82.
We have been clear that Ofcom will be a good regulator. As we are giving it strong powers, that is only right. It is important that as Ofcom carries out its functions the principles of good regulatory practice should apply. We have listened to the concerns vigorously expressed by the noble Baroness, Lady Buscombe, that the provisions in Clause 3(4)(b) and (d) were not sufficiently robust to ensure that the principles applied when they should. We have therefore brought forward amendments to address the concerns that she expressed on that occasion.
We agree with the noble Baroness that the principles of good regulatory practice must always be relevant to Ofcom's decision-making and that Ofcom should apply those principles uniformly. There is to that extent a shade of difference between the application of good regulatory practice and the other matters to which Ofcom should have regard under Clause 3(4). Good regulatory practice is always relevant. The other matters may or may not be relevant in particular circumstances or in particular cases. We are happy to reflect that shade of difference through the structure of the clause.
The amendments retain the current drafting that Ofcom will have regard to the principles. It may be helpful if I explain why that is the right approach. For a person or a body to have regard to a matter when taking specified action is a substantial legal obligation. If they fail to have regard to the matter in deciding what action to take, or whether to take action, or have regard to it in the wrong way, the action which is taken is liable to be held by a court to be unlawful or legally ineffective. It will not be sufficient for Ofcom to consider the principles of regulatory practice for the sake of form only or to consider and reject them for no good reason.
I hope that I have assured the noble Baroness that the phrase "have regard to" is a significant legal phrase and obligation and tightens up the inevitable obligations upon Ofcom. Good regulatory practice should be a consistent and central tenet in Ofcom's operations. I believe these amendments ensure that it will he. I beg to move.
Baroness Buscombe: My Lords, I thank the Minister for responding to our concerns which we raised throughout our debates, beginning with Second Reading, in relation to good regulatory practice. The Minister knows that we have always been concerned about the expression "must have regard". Therefore we are extremely pleased that the Minister listened to our concerns and brought forward these amendments. They are not quite the amendments that we would have liked but I am grateful that the Minister read almost verbatim from a letter addressed to myself dated 30th June which reassured me that we are talking about a substantial legal obligation. I am grateful to the Minister for that. We welcome the amendments.
On Question, amendment agreed to.
5.15 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 4:
Page 3. line 39, at end insert—
"() the desirability of promoting the fulfilment of the purposes of public service television broadcasting in the United Kingdom:"
The noble Lord said: My Lords, in moving Amendment No. 4, I wish to speak also to Amendments Nos. 27, 32 and 123, and, if the noble Lord, Lord Phillips, will allow me, speak also favourably to Amendment No. 5.
We debated in Committee, and on Report, earlier amendments tabled by the noble Lord which the Government found they could not accept, but I made it clear that we supported the spirit behind the amendments because the Bill aims to secure the future of public service broadcasting in this country.
We now have revised duties for Ofcom and I must say that the noble Lord, Lord Phillips, skilfully responded both to the Government's reservations and those expressed by noble Lords in earlier debates, as well as to the other changes to Clause 3, in bringing forward his revised amendment.
I have argued previously that it was undesirable to refer to public service broadcasting in Clause 3, given the detailed regime established in Part 3 of the Bill, but the proposal of the noble Lord, Lord Phillips, fits very neatly in the new structure of Clause 3 and much improves it. The Government are grateful to the noble Lord for the tenacity with which he pursued his aim.
I should have been happy to accept his amendment, except that there are slight drafting weaknesses which I believe our amendments address. They are simply to tie the Clause 3 duty more transparently and clearly to

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the fulfilment of the purposes of public service television broadcasting as set out in Clause 262, and to make consequential amendments to Clauses 227, 268 and 402. I hope that the noble Lord will agree that the government amendments give effect to what he sought to achieve. I beg to move.
Lord Phillips of Sudbury: My Lords, I am extremely grateful to the Government and to the Minister for in effect accepting the amendment which, as the Minister rightly says, was pressed strongly not only by myself but also in particular by those whose names were attached to the amendment: the noble Baronesses, Lady O'Neill and Lady Howe, my noble friend Lord McNally and the noble Lord, Lord Fowler. In Committee there was an hour long debate on the matter. I am sure that everyone will be extremely content that what must be by any reckoning the most single important non-economic factor linking into Clauses 262 and 263, as they now are, is written into the keynote clause of the Bill. I am grateful for that.
At Second Reading I mentioned that I felt that commercial strains fell heavily on producers and programme makers in commercial television. Indeed, the noble Lord, Lord Birt, added his own gloomy prognostication to that theme. I gave as an example my local television company, Anglia, which I know and with which I have worked closely for many years, and was perhaps a little unfair to it in that it has done better than some other commercial television companies in relation to what one might call the public broadcasting remit or standards.
I know that good programme makers and producers, of whom there are very many in the commercial sector, will welcome this entrenchment of the public service broadcasting remit in Clause 3 as it will strengthen their hand when the going gets a bit rough. That is all I need to say. Later we shall deal with an amendment to the enforcement clause, which is now Clause 268, and there will be more to say then. In the mean time I am most grateful to those who supported this long campaign and to the Government and the Minister for concurring. I beg leave to—no, I do not do anything, do I?
Lord Fowler: My Lords, not yet. I wish to add to what the noble Lord, Lord Phillips, said. This is an important amendment. I congratulate the noble Lord, Lord Phillips, on his persistence with it. I congratulate the Government on accepting it. Personally, I prefer the wording of the amendment as it stands now without the Government's amendment, but we shall not argue about that because the Minister has given way.
As has been said, public service broadcasting is not just about the BBC, but the dispute between the BBC and the Government is being used to attack the very concept of public service broadcasting in this country. It is argued that there are other options: government controlled radio and television making no pretence to
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be other than the Government's mouthpiece or the kind of marginal public service broadcasting that exists in the United States.
My own view is that the standards of public service broadcasting are so demonstrably superior to any of those other brands that it is something that we should fight very hard to preserve in this country. In that respect the Government have been entirely right in putting that at the head of the Bill. Perhaps one might add in parenthesis that one hopes that the tabling of this amendment by the Government might mark an end to the rather futile warfare between the Government and the BBC at the moment. It would be in everyone's interest if that were to take place. I shall not go further down that particular road, but I congratulate the Government on underlining their belief in public service broadcasting.
Baroness Howe of Idlicote: My Lords, as one who has put my name to the amendment of the noble Lord, Lord Phillips, on many occasions, as he acknowledged, I, too, congratulate the Government. I also particularly congratulate the noble Lord, Lord Phillips, on his persistence. The measure will give considerable reassurance to many organisations. I mention especially the Voice of the Viewer and Listener and Public Voice, representatives of which have written many times to your Lordships throughout the Bill's passage. Indeed, many individual citizens have let us know how deeply concerned they are to preserve that unique quality of British broadcasting which they consider is crucially embedded in public service requirements.
As has already been said, British public service broadcasting is the bench-mark not just for British terrestrial channels but for all broadcasters who wish to compete for our viewing time. Again, I congratulate all concerned and particularly the wider public who made us aware of their views.
Baroness O'Neill of Bengarve: My Lords, I shall not spin this debate out, but I should like to ask the Minister what are the reasons for the restriction of Amendment No. 4 for the purposes of public service television broadcasting. That is the substantive difference between the government amendment and that of the noble Lord, Lord Phillips. So far, I have failed to understand the reason for that restriction.
Lord Davies of Oldham: My Lords, I shall not talk about public service radio—that is effectively the BBC, and its purposes are set out and secured through the BBC Charter and Agreement rather than in the Bill. When we talk about public service television, we are talking about a wide range of channels, but public service radio is the remit of the BBC. That is why Amendment No. 4 is expressed in these terms. I accordingly commend it to the House.
On question, amendment agreed to.
[Amendment No. 5 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 6 and 7:
Page 3, line 41, leave out paragraph (b).
Page 3, line 46, leave out paragraph (d).
On Question, amendments agreed to.
Clause 14 [Consumer consultation]:
Baroness Buscombe Baroness Buscombe moved Amendment No. 8:
Page 18, line 5, leave out from "matter" to end.
The noble Baroness said: My Lords, the House will recall that the words in brackets in Clause 16(5) which my amendment seeks to remove are the words inserted by the Government on 15th May in Committee into what was then Clause 15(5), dealing with areas which should be subject to consultation by the consumer panel.
The purpose of the government amendment was, according to the Minister,
"to give the consumer panel the power to consider matters of content which are referred to it by Ofcom".—[Official Report, 15/5/03: col. 357.]
The Minister said that these would be matters that had a "high consumer dimension", and misleading advertising was cited as an example.
Your Lordships will recall that we debated the issue again on the second day of Report, on 26th June, in relation to Amendment No. 33. The aim of my amendment then was to remove the words in brackets, and thus return to the clarity of remit previously given to the consumer panel. It was identical to the amendment that I am moving now.
My amendment reflects concerns expressed to me by content providers and the advertising industry throughout the progress of the Bill in this House about the potential for overlap between the consumer panel and the content board, and the need for clearly defined boundaries between the two.
The Government gave some reassurance at Report stage on 26th June that the consumer panel would not have free rein to advise on content, and that it could do so only when asked by Ofcom. That was helpful, but I do not believe that it goes far enough. It is essential, going forwards, to have clarity between the functions of the regulatory and advisory bodies. Otherwise, the whole purpose of creating a single regulator—to develop a common regulatory approach across the communications sector and to avoid regulatory overlap—will have been pointless.
The Minister also referred to the fact that that has been government policy since the White Paper. Yes, that is true—but have not the Government developed the remit of the content board since then; and is it not true that Ofcom is required to carry out research on public opinion and the experience of consumers in accordance with Clause 14 of the Bill? Surely that should be sufficient to ensure that Ofcom's policy on content issues takes full account of wide consumer concern.
The Government said that the wording that they added in Committee was merely to correct a disparity between what is now Clause 16(5) and Clause 16(6)(c). I believe that it goes further than that. My reading of the Bill is that there is no disparity in the meaning of the respective clauses if the words in brackets in Clause 16(5)—
"other than one referred to them for advice by OFCOM"—
are taken out. It then means that the consumer panel can give advice to Ofcom in relation to any matter except content, which is specifically excluded under Clause 16(5). However, if the words in brackets are left in Clause 16(5), this would nullify the specific exclusion created for content by that clause. In other words, the opposite effect is achieved.
In conclusion, my amendment seeks to address the concern that I know still exists among content providers in the advertising industry that there should be complete clarity and avoidance of overlaps between the consumer panel and the content board. I beg to move.
Lord Thomson of Monifieth: My Lords, I support the noble Baroness, Lady Buscombe, in her amendment. The noble Baroness described succinctly the previous discussions that have taken place on this matter. I share her desire as regards the value of achieving certainty over the frontier between the responsibilities of the consumer panel and those of the content board before the Bill finally leaves this House.
The consumer panel has clear and important responsibilities—there is no question about that. So does the content board. But they are distinctively different. One of the advantages of this mammoth Bill is that it tidies up the landscape of communications and clears the regulatory undergrowth of competing responsibilities.
Ofcom has a massive task ahead of it dealing with the pressures of conflicting interests, some of them very powerful. Ofcom deserves the maximum of clarity in the Bill that finally completes its passage. It does not deserve having thrust on it the duty of deciding which content matters have such "high consumer dimension" that the content board should be second-guessed by the consumer panel.
It is a quite unnecessary fudging of the regulatory frontiers. It will confuse the work of the content board and will add a dimension of uncertainty to a regulatory system for television advertising which has a record of working well and which is in the process of development within the new responsibilities of Ofcom.
It is true, as the Government have previously pointed out, that there was a specific reference in the original policy document relating to the draft Bill to the consumer panel having a say in,
"content issues that have a high consumer dimension, such as rules on misleading advertising".

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But the Bill itself permits Ofcom to contract out its functions and to promote "effective" self-regulation. If key areas may he contracted out, leaving Ofcom as a backstop regulator, albeit with teeth, surely we should be careful about giving Ofcom's consumer panel a statutory role, however limited, in content.
It is no secret in this House after our prolonged discussions that a key area which may he contracted out by Ofcom in the near future, subject to the results of a public consultation, is the regulation of broadcast advertising, using aspects of the ASA system.
The Bill provides that self-regulation of areas coordinated by the Bill must be, first, adequately funded and, secondly, independent of the industry that it regulates. An effective self-regulatory system operating in a co-regulatory framework would surely base policy decisions on input from consumers as well as from the industry. It would surely also ensure that the complaints adjudication process is properly and effectively managed, with published performance indicators.
If broadcast advertising is contracted out, Ofcom would become the backstop regulator. Would it not be odd in such circumstances for Ofcom to refer advertising content matters to its consumer panel if the self-regulatory system is already using established procedures for taking views from consumers?
Advertising is but one case, but I believe it demonstrates that we have to be extremely careful, as we move into the new regulatory environment, not to perpetuate the problems created by previous legislation—where, for example, there were overlaps between the ITC and BSC advertising remits which sometimes resulted in conflicting decisions. We are creating a single regulator with the purpose of developing a unified approach to communications policy and we must therefore ensure that we avoid creating overlaps and additional bureaucracy within the regulator and its boards and advisory groups, one of which is the consumer panel.
The consumer panel is important, but we must avoid two groupings giving conflicting advice. It would be a recipe for confusion and delay to have an advertising self-regulatory system consulting with consumers and relevant interest groups and advertising also being discussed by Ofcom's own consumer panel.
5.30 p.m.
Lord Davies of Oldham: My Lords, the noble Lord, Lord Thomson, is certainly right when he says that we have been round this course before. We have had substantial discussions on these issues as the noble Baroness, Lady Buscombe, attested when moving the amendment. We have discussed a similar matter at Committee and Report stages. I understood that the amendment had been brought back at Report stage so that the Government would have an opportunity to put on record the details of a letter that my noble friend Lord McIntosh sent to the Advertising Association. The letter assured the industry—I take this opportunity of renewing that assurance—that this provision does not risk double jeopardy and that there is no perception that misleading advertising is a problem. It was not our
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intention to suggest that it is. I had hoped that our answer on Report gave further reassurance to the industry, although the noble Baroness has renewed her fears on their part again today.
The consumer panel is an advisory body and has no regulatory powers. The contents board of course is part of the regulatory structure, but the consumer panel is not. The consumer panel will provide another means of advice for Ofcom if Ofcom wants to use it.
I understand that there is a more fundamental objection to the policy of Ofcom being able to refer matters of content with a high consumer dimension to the consumer panel for advice—please note, for advice, not regulation; not for decision taking, just for advice.
The principle behind the amendment seems to be at some odds with the will of the Chamber when it gave Ofcom a principal duty to further the interests of consumers and citizens. The joint scrutiny committee was quite clear that it, while recognising that,
"the interests of the citizen in the nature of broadcast content should first and foremost be represented by the Content Board … nevertheless support the current proposals in the draft Bill whereby certain issues could be examined by the Consumer Panel at the instigation of Ofcom's main Board".
That is exactly what the Bill says.
The noble Baroness, Lady Buscombe, said on Report that she wanted to be sure that nothing in the Bill undermines the advertising industry's ability to regulate itself successfully. She has emphasised that point again and as we said on Report we agree with her wholeheartedly, but we do not see how this provision could undermine the Advertising Association's plans for co-regulation. It does not.
Furthermore, I believe that if we were to deny Ofcom that flexibility we would be doing consumers a great disservice. As my noble friend Lord Evans fully explained on Report, this is not about advertising. There are some—not many— content-related matters, such as the bundling of different channels on pay TV services that could have a high consumer dimension on which Ofcom may need to seek expert consumer advice.
The consumer panel is best placed to give Ofcom that advice. This is not about blurring the boundaries or muddying the waters, as the noble Lord, Lord Thomson, was suggesting. The content board, within the regulatory structure, is the proper place for matters of content. I believe that we are totally agreed on that point. But on the few issues where there is a high consumer dimension we must not deny Ofcom the flexibility of hearing the consumer voice.
Responses to the consultation on the draft Bill fell into two fairly distinct camps on this issue. Powerful interests like BSkyB were quite clear that they did not want the consumer panel to be able to advise on content matters referred to them by Ofcom. They were concerned that the consumer panel should have,
"no jurisdiction over content-related issues or the terms on which content services are provided".
The consumer lobby, in the other camp, wanted the panel to have a much broader remit that allowed it free reign over all of Ofcom's remit, including content. Some, like Channel 5, were supportive of the Government's position that the consumer panel,

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"should only be required to consider broadcasting/content issues when instructed to do so by Ofcom".
This is the balance that we have struck between two competing perspectives on this issue. We believe that the balance that we have struck provides certainty for the industry and gives consumers a voice on content matters where Ofcom decides that its advice is relevant. BskyB have nothing to fear. The panel has no jurisdiction over content. Ofcom merely has the ability to seek its advice and we have made it clear that we expect it to do so only when matters of content have a high consumer dimension.
At Report stage the noble Baroness, Lady Buscombe, said that she felt the wording that this amendment removes was unnecessary. We introduced the wording to give certainty in respect to our policy which has always been clear throughout the Bill. Clause 16(6)(c) which provides for the panel to,
"give advice to Ofcom in relation to any matter referred to the panel by Ofcom for advice",
is where it is given effect.
But we were concerned that there was a tension between Clause 16(6)(c) and Clause 16(5). I think that the debates in Committee, on Report, and again today—the noble Baroness has put her case with admirable clarity—have helped us to examine the matter further. It is the Government's intention in drafting the Clause 16(6)(c) that "any matter" would include matters of content where there is a high consumer dimension and where Ofcom chooses to seek advice. I firmly believe that it is in the interests of consumers that this is so. I hope that the noble Baroness at this late stage—we have tried to persuade her on two previous occasions without conspicuous success—will say that we have sought to strike a balance between competing interests in these terms and that we have a provision that will secure the interests of consumers so she will withdraw her amendment.
Baroness Buscombe: My Lords, I thank the Minister for his response. He has worked hard today and on previous occasions to allay industry fears. The Minister said that the wording we seek to remove was introduced to give certainty on government policy. Unfortunately, it has done the opposite.
We have talked ad infinitum to the industry during each stage of the Bill. The advertising industry, in particular, but also content providers remain deeply concerned. As I said on Report, which the Minister was kind enough to repeat, this industry has proved entirely capable of successful self-regulation. We believe that it deserves our whole-hearted support, a matter referred to by the noble Lord, Lord Thomson. I am very grateful to him for his support.
This is an important issue and one that is causing great concern. It is true that we have been around the course before, but there is still uncertainty and we remain dissatisfied on the matter. Therefore, I wish to test the opinion of the House.
5.40 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 158; Not-Contents, 141.

Division No. 2

CONTENTS

Aberdare, L.

Howell of Guildford, L.

Addington, L.

Hunt of Wirral, L.

Alderdice, L.

Jenkin of Roding, L.

Allenby of Megiddo, V.

Jopling, L.

Alton of Liverpool, L.

Kimball, L.

Anelay of St Johns, B.

King of Bridgwater, L.

Ashcroft, L.

Knight of Collingtree, B.

Astor of Hever, L.

Laird, L.

Attlee, E.

Lamont of Lerwick, L.

Avebury, L.

Lane of Horsell, L.

Baker of Dorking, L.

Lester of Herne Hill, L.

Barker, B.

Lindsay, E.

Beaumont of Whitley, L.

Linklater of Butterstone, B.

Biffen, L.

Liverpool, E.

Blaker, L.

Lucas, L.

Blatch, B.

Ludford, B.

Bowness, L.

Luke, L.

Bradshaw, L.

Lyell, L.

Brittan of Spennithorne, L.

MacGregor of Pulham Market L.

Brooke of Sutton Mandeville, L.

Brougham and Vaux, L.

Mackie of Benshie, L.

Burnham, L.

McNally, L.

Buscombe, B.

Maddock, B.

Byford, B.

Maginnis of Drumglass, L.

Caithness, E.

Mancroft, L.

Campbell of Alloway, L.

Mar and Kellie, E.

Carlisle of Bucklow, L.

Masham of Ilton, B.

Carnegy of Lour, B.

Mayhew of Twysden, L.

Chan, L.

Methuen, L.

Colwyn, L.

Michie of Gallanach, B.

Cope of Berkeley, L.

Miller of Chilthorne Domer, B.

Cox, B.

Miller of Hendon, B.

Craig of Radley, L.

Monro of Langholm, L.

Craigavon, V.

Monson, L.

Crathorne, L.

Montrose, D.

Crickhowell, L.

Mowbray and Stourton, L.

Dahrendorf, L.

Moynihan, L.

Dholakia, L.

Murton of Lindisfarne, L.

Dixon-Smith, L.

Newby, L.

Dundee, E.

Noakes, B.

Elliott of Morpeth, L.

Northesk, E.

Elton, L.

Northover, B.

Falkland, V.

Norton of Louth, L.

Ferrers, E.

Oakeshott of Seagrove Bay, L.

Fowler, L.

O'Cathain, B.

Freeman, L.

Oppenheim-Barnes, B.

Gardner of Parkes, B.

Perry of Walton, L.

Glentoran, L.

Peyton of Yeovil, L.

Goodhart, L.

Phillips of Sudbury, L.

Gray of Contin, L.

Plummer of St. Marylebone, L.

Greaves, L.

Rawlings, B.

Griffiths of Fforestfach, L.

Razzall, L.

Hamwee, B.

Reay, L.

Hanham, B.

Redesdale, L.

Hanningfield, L.

Renfrew of Kaimsthorn, L.

Harris of Richmond, B.

Rennard, L.

Henley, L.

Renton, L.

Higgins, L.

Roberts of Conwy, L.

Hodgson of Astley Abbotts, L.

Rodgers of Quarry Bank, L.

Hooper, B.

Russell, E.

Hooson, L.

Saatchi, L.

Howe, E.

Saltoun of Abernethy, Ly.

Howe of Aberavon, L.

Sandberg, L.

177

Sanderson of Bowden, L.

Thomas of Gwydir, L.

Sandwich, E.

Thomas of Swynnerton, L

Scott of Needham Market, B.

Thomas of Walliswood, B.

Seccombe. B. [Teller]

Thomson of Monifieth, L.

Selborne, E.

Tope, L.

Sharp of Guildford, B.

Tordoff, L.

Sharpies, B.

Trumpington, B.

Shaw of Northstead, L.

vinson, L.

Vivian, L. [Teller]

Shutt of Greetland, L.

Waddington, L.

Skelmersdale, L.

Wakeham, L.

Smith of Clifton, L.

Wallace of Saltaire, L.

Stewartby, L.

Walmsley, B.

Sloddart of Swindon, L.

Watson of Richmond, L.

Strathclyde, L.

Wilcox, B.

Swinfen, L.

Williams of Crosby, B.

Tebbit, L.

Windlesham, L.

NOT-CONTENTS

Acton, L.

Gordon of Strathblane, L.

Ahmed, L.

Gould of Potternewton, B.

Alli, L.

Graham of Edmonton, L.

Ampthill, L.

Grocott, L. [Teller]

Andrews, B.

Hardy of Wath, L.

Archer of Sandwell, L.

Harrison, L.

Ashton of Upholland, B.

Haskel, L.

Bach, L.

Hayman, B.

Barnett, L.

Hogg of Cumbernauld, L.

Bassam of Brighton, L.

Hollick, L.

Bernstein of Craigweil, L.

Hollis of Heigham, B.

Bhatia, L.

Howarth of Breckland, B.

Billingham, B.

Howe of Idlicote, B.

Blackstone, B.

Howells of St. Davids, B.

Bledisloe, V.

Howie of Troon, L.

Borrie, L.

Hoyle, L.

Bragg, L.

Hughes of Woodside, L.

Brett. L.

Hunt of Chesterton, L.

Brooke of Alverihorpe, L.

Irvine of Lairg, L.

Brookman, L.

Jones. L.

Burlison, L.

Judd, L.

Campbell-Savours, L.

King of West Bromwich, L.

Carter, L.

Kirkhill, L.

Chandos, V.

Layard, L.

Chorley, L.

Lea of Crondall, L.

Christopher, L.

Lipsey, L.

Clark of Windermere, L.

Lockwood, B.

Clarke of Hampstead, L.

Lofthouse of Pontefract, L.

Clinton-Davis, L.

Macdonald of Tradeston, L.

Cohen of Pimlico, B.

McIntosh of Haringey, L.

Corbett of Castle Vale, L.

McIntosh of Hudnall, B.

Crawley, B.

MacKenzie of Culkein, L.

Darcy de Knayth, B.

Mackenzie of Framwellgate, L

David, B.

Mallalieu, B.

Davies of Coity, L.

Mar, C.

Davies of Oldham, L. [Teller]

Marsh, L.

Dean of Thornton-le-Fylde, B.

Mason of Barnsley, L.

Desai, L.

Massey of Darwen, B.

Dixon, L.

Mishcon, L.

Donoughue, L.

Mitchell, L.

Dormand of Easington, L.

Morgan, L.

Dubs, L.

Morris of Manchester, L.

Elder, L.

Murray of Epping Forest, L.

Erroll, E.

Nicol, B.

Evans of Parkside, L.

O'Neill of Bengarve, B.

Evans of Temple Guiting, L.

Orme, L.

Evans of Watford, L.

Ouseley, L.

Farrington of Ribbleton, B.

Palmer, L.

Faulkner of Worcester, L.

Parekh, L.

Finlay of Llandaff, B.

Patel, L.

Fyfe of Fairfield, L.

Patel of Blackburn, L.

Gale, B.

Paul, L.

Gavron. L.

Pendry, L.

Gibson of Market Rasen, B.

Peston, L.

Golding, B.

Pitkeathley, B.

Goldsmith, L.

Prashar, B.

178

Prys-Davies, L.

Strange, B.

Puttnam, L.

Symons of Vernham Dean, B

Radice, L.

Taylor of Blackburn, L.

Ramsay of Cartvale, B.

Temple-Morris, L.

Randall of St. Budeaux, L.

Thornton, B.

Rendell of Babergh, B.

Turner of Camden, B.

Roll of Ipsden, L.

Walpole, L.

Rooker, L.

Warner, L.

Sainsbury of Turville, L.

Whitaker, B.

Sawyer, L.

Whitty, L.

Scotland of Asthal,B.

Williams of Elvel, L.

Sheldon, L.

Williams of Mostyn, L.(Lord President of the Council)

Simon, V.

Smith of Gilmorehill, B.

Williamson of Horton, L.

Smith of Leigh, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.50 p.m.
Lord Randall of St Budeaux Lord Randall of St Budeaux moved Amendment No. 9:
Page 19, leave out lines 14 to 16 and insert "is not"
The noble Lord said: My Lords, I want to make a short speech because I am dealing with the finance being presented for small to medium enterprises and the telecommunications implications.
I start by bringing in a few introduction notes. First, the current Act provides satisfactory protection and regulation for SM Es. Secondly, the SME performance is vital for economic reform in the United Kingdom.
There is deep concern that the Bill will weaken the protection of SMEs in a very serious way. Also, the proposed case is to retain for SMEs the level of standards for SMEs in the current Act.
I will speak briefly on the perception of SMEs. During the Portuguese presidency of the European Union it was decided that all 15 member states should have a key role in economic reform. The Prime Minister contributed significantly to this, which showed the vital role that SMEs have. Additionally. the DTI has a "think small first" policy and the Better Regulation Task Force. 'They are very important policies and show the significance of SMEs in the United Kingdom.
In addition, the Minister for SMEs, Nigel Griffiths MP, paid tribute to Britain's 3.7 million SME businesses, which he said are responsible for generating £1 trillion in our economy and employ 12 million people.
The good reputation of SMEs in the United Kingdom is now being recognised by other member states in the European Union. It is worrying that the current Act has worked well for SMEs, but the proposed legislation would undoubtedly weaken SME interests as a whole.
People are asking, why on Earth are we attempting to change the current legislation regarding SMEs when it has worked satisfactorily?
Those in the SME representative bodies are confused as to why the Government are weakening SMEs by means of their legislation when at the same

179
time the Government have expressed support for SMEs and their important contribution to the UK economy.
I will briefly explain the main concerns that SMEs and their representative organisations have about the Bill.
First, they welcome the Bill's consumer panel, which will promote the interests of consumers. A strong consumer panel should act as an effective counterbalance in the interests of industry, particularly large players, and it should provide useful input into regulatory decision making.
As I have already implied, the proposed consumer panel, which will protect the interests of SMEs, is weaker than the current arrangements in the Act. The Bill describes the consumer panel's role in relation to domestic and small business consumers. In practice, this means that the elements in the relationship between the new consumer panel and SMEs are used in deciding whether SMEs are chosen or rejected when it comes to protection and regulation provided by the consumer panel.
This is a complicated issue but, briefly, the valuation of SMEs' acceptability by the consumer panel will take into account the following definition points. SMEs, as consumers in the market for services or facilities such as computer systems, would be acceptable provided that neither is a communications provider or a person who makes associated facilities available; or a person who is a consumer in the market in respect of an undertaking carried out by him or for which more than 10 individuals work.
The consumer panel is therefore being changed so as to protect the interests of SMEs in this country.
So what are we worried about? This part of the Bill ignores the reality that many SMEs are both consumers—in that they subscribe to a communications provider—and service providers, for example, hardware/software maintenance and retail shops.
What are the consequences? They are that small businesses with 10 or more employees are highly likely to be consumers of communications services. However, if small businesses are also part of the communications industry, they will not be represented by the very important consumer panel, which is a matter of great concern. This is so even if SMEs have legitimate concerns and interests as consumers of communications services that are totally unrelated to their own products or services.
I wonder what estimates the DTI has made about the number of exclusions of SMEs arising from the consumer panel. This is an important question for the various representative bodies not just in the UK but in the European Union. I beg to move.
Baroness Buscombe: My Lords, I support these amendments, but of course I would because we put them down in Committee. I am rather tempted to welcome the noble Lord, Lord Randall of St Budeaux, to the Bill, albeit at a rather late stage. As chairman of
180
a project linked to the Small Business Bureau, he is obviously very keen to support the interests of small businesses.
This is an issue we have spoken to at earlier stages of the Bill. It is an important issue and we very much hope that the Government will be able to respond positively to these amendments today.
6 p.m.
Lord Davies of Oldham: My Lords, it is certainly the case that we have discussed these amendments previously and it is a little late in the Bill for such fundamental concepts to re-emerge. We did not have the opportunity of considering them at the Report stage. I will do my best to reply to my noble friend's long list of amendments.
I shall take Amendments Nos. 10 to 16 together, as their combined effect would be to make the Secretary of State responsible for appointing and removing the members of the consumer panel. As the noble Baroness, Lady Buscombe, recalled, we discussed this in Committee in response to her amendments. We explained at that time why it was not our intention that appointments to the consumer panel should be made by the Secretary of State and nothing has changed since to alter our view.
There are two possible models which might be followed in establishing the consumer panel. The first is the approach adopted in the case of Energy Watch and Post Watch—and the other is that followed by the Financial Services Authority.
Both Energy Watch and Post Watch were established as separate non-departmental public bodies with a separate legal identity and their own secretariats and staff. They each have significant complaint handling responsibilities which the Ofcom consumer panel will not have. As separate bodies, it is appropriate that the appointments to those bodies should be made by the Secretary of State.
The model we have followed for establishing the consumer panel is that adopted for the Financial Services Authority where, although the members are appointed by the FSA, albeit with the chairman's appointment subject to the approval of the Treasury, the panel is still able to operate perfectly independently of the FSA itself. We believe this provides a more appropriate model for Ofcom and have presented our arguments to the House on previous occasions.
We have also put in place a number of measures designed to ensure that the panel is able to work independently. These include the consumer panel being a legally separate unincorporated body and operationally independent from Ofcom; the panel being able to formulate its annual work plan and be responsible for allocating its own resources; providing the panel with the power to establish its own advisory committees and to determine its procedures; ensuring that no member or employee of Ofcom is able to be a member of the consumer panel; and that Ofcom must explain the reasons why it might not accept the advice given to it by the panel. On the second day of Report, we moved a government amendment to require the

181
consumer panel to publish an annual report, adding an extra element of transparency and accountability to the panel's work. When taken together, we believe that the whole package will ensure that the consumer panel will be able to act as an effective, independent voice for consumers.
Amendment No. 9 suggests that as well as domestic consumers, the remit of the consumer panel covers small businesses of no more than 10 employees because the experiences of these businesses are similar to the experiences of domestic consumers in the markets for communications networks and services. Businesses of this size may lack the resources and expertise to tackle any communications problems they may experience and they will have particular issues as consumers on which the consumer panel will be able to advise Ofcom.
We have excluded communications providers and persons supplying associated facilities—even if they have no more than 10 employees—because they may have different needs as consumers that would not fit with the tight focus of the panel. I know that some members of the small business community have expressed concern that this exclusion will cover many small IT businesses, but let me assure the House that this is just not the case. The definitions of "communications provider" and associated facilities are set out in Clauses 402 and 30 respectively.
Amendment No. 17 would in its first part effectively create the consumer panel as some kind of "watchdog" for Ofcom, monitoring it and reporting on what it has been doing. This is not the role we want to create for the panel. We have made clear during the passage of the Bill that we want to ensure that the consumer panel acts as the independent voice of consumers. I indicated today the way in which that has been established in the Bill. The phrase "a critical friend" has often been used, but sums up nicely the way we envisage the consumer panel operating by working closely with Ofcom in order to provide it with expert advice.
The remaining parts of Amendment No. 17 relate to the power of the consumer panel to establish committees and would, in effect, require the panel to establish advisory bodies for England, Scotland, Wales and Northern Ireland and one for small businesses. We have had debates on these issues, too, during the passage of the Bill. One of the measures we have included to ensure the independence of the consumer panel is the power for it to determine what committees it feels are necessary in order to provide advice about its functions. We did so in response to the recommendation from the pre-legislative scrutiny committee.
Finally, I turn to Amendments Nos. 18 and 19, which would require the consumer panel to make arrangements for regulating its own procedures and those of any committees it establishes. The Bill as it stands allows the panel to make such arrangements as it sees fit. Given what I have already said about not wishing to constrain the independence of the panel unnecessarily, I cannot imagine that the consumer
182
panel would not want to make proper arrangements. It would certainly make its operation needlessly difficult if it did not.
In the light of those assurances—and I have no doubt that my noble friend has had a chance to study our previous debates on these issues—I hope he will feel we have aired the issues sufficiently and will be prepared to withdraw his amendment.
Lord Randall of St Budeaux: My Lords, I am absolutely dumb struck by the comments I have just heard from my noble friend. I beg leave not to test the opinion of the House.
Amendment, by leave, withdrawn.
Clause 17 [Membership etc. of the Consumer Panel]:
[Amendments Nos. 10 to 16 not moved.]
Clause 18 [Committees and other procedure of the Consumer Panel]:
[Amendments Nos. 17 to 19 not moved.]
Lord Evans of Temple Guiting Lord Evans of Temple Guiting moved Amendment No. 20:
After Clause 19, insert the following new clause—
"ADVISORY COMMITTEES FOR DIFFERENT PARTS OF THE UNITED KINGDOM

(1) It shall be the duty of OFCOM, in accordance with the following provisions of this section, to exercise their powers under paragraph 14 of the Schedule to the Office of Communications Act 2002 (c. 11) (committees of OFCOM) to establish and maintain a committee for each of the following parts of the United Kingdom—

(a) England;

(b) Wales;

(c) Scotland; and

(d) Northern Ireland.

(2) Each committee shall consist of—

(a) a chairman appointed by OFCOM; and

(b) such number of other members appointed by OFCOM as OFCOM think fit.

(3) In appointing a person in accordance with this section to be a member of a committee, OFCOM must have regard to the desirability of ensuring that the person appointed is able to represent the interests and opinions, in relation to communications matters, of persons living in the part of the United Kingdom for which the committee has been established.

(4) The function of each committee shall be to provide advice to OFCOM (including other committees established by OFCOM) about the interests and opinions, in relation to communications matters, of persons living in the part of the United Kingdom for which the committee has been established.

(5) A committee established under this section may also, at the request of the Consumer Panel, provide advice about those interests and opinions to the Consumer Panel.

(6) The consent of OFCOM is required for the giving of advice under subsection (5).

(7) In this section "communications matters" has the same meaning as in section 3."

The noble Lord said: My Lords, your Lordships will recall that in responding to an amendment tabled al the Report stage by the noble Baroness, Lady Finlay, and the noble Lord, Lord Roberts, we recognised the anxieties the nations have expressed that their voices should be heard within Ofcom. We therefore agreed to

183
consider tabling a government amendment to ensure that Ofcom should establish advisory committees for each of the nations.
Amendment No. 20 would place Ofcom under a duty to establish and maintain committees for each of England, Wales, Scotland and Northern Ireland in order to provide Ofcom with advice about the interests and opinions of people living in the respective nations in relation to communications matters.
It will be for Ofcom to appoint the chairman of each committee and such numbers of other members as Ofcom thinks appropriate. In doing so, Ofcom would need to have regard to the need to ensure that the people appointed to each national advisory committee are able to represent the interests and opinions of those living in the relevant part of the United Kingdom in relation to communication matters.
The national advisory committees would be able to provide advice to other committees established by Ofcom, including the content board. In view of the independent status of the consumer panel, it would of course be possible for the panel to establish its own national committees should it so wish. However, we have also made provision that it would be possible for the national advisory committees to provide advice to the consumer panel should the panel request such advice and Ofcom consents.
Also at the Report stage we considered two amendments tabled by the noble Lord, Lord Addington, that would put a requirement for a disabled and elderly person's advisory committee on the face of the Bill. One amendment required Ofcom to establish and maintain an advisory committee on the interests of disabled and elderly people and the other required the consumer panel to do so.
Consistent with our approach on the advisory committees for the nations and regions that I have just set out, Amendment No. 21 will require Ofcom to establish and maintain a committee to advise it on the interests of disabled people and of elderly people across its remit.
As I have said, we do not want to get embroiled in the detail of Ofcom's organisational structure—it must have the flexibility to make operational decisions without being tied into complex statutory requirements. For this reason, we have kept the clause simple and avoided over-prescription. We have also allowed the same flexibility that the national committees have to advise the consumer panel, if they request it and with Ofcom's consent.
I set out in some detail in Committee and again at Report the powers which underpin the panel's independence and self-determination. This is why we have not taken forward the second amendment that was tabled at Report which would require the consumer panel to establish a committee for disabled and elderly people. Our amendment does not preclude
184
the panel from establishing such a committee and it paves the way for an element of joined-up working if that is what the panel and Ofcom desire. I beg to move.
Baroness Finlay of Llandaff: My Lords, I would like to speak briefly in support of this amendment this afternoon and to welcome it. The amendment recognises the unique nature of each part of the United Kingdom. It is in the spirit of devolution and it allows Ofcom to ensure it meets the special needs of individual areas instead of trying to cater for the whole of the UK in a blanket way.
While I am on my feet, I would also like to welcome Amendment No. 21, which recognises that elderly and disabled people have special needs. We have an increasingly elderly population. I am glad that the Government have recognised that the needs of elderly and disabled people may be quite different and that Ofcom must take this into account.
Lord Roberts of Conwy: My Lords, I compliment the noble Lord and the Government on introducing the new clause represented by Amendment No. 20. I also compliment the chairman of Ofcom on the wisdom he displayed when he addressed your Lordships' House during Report stage. I also compliment the noble Baroness, Lady Finlay of Llandaff, on her persistence, which gave the noble Lord, Lord Currie of Marylebone, his opportunity. The Government have given us all we asked for and more. The function and scope of the advisory committees is not confined to devolved areas of government in Wales, Scotland and Northern Ireland but ranges over all communication matters as defined in Clause 3(11), and I am sure that that is right.
I am slightly mystified as to why the consumer panel is specifically mentioned in subsection (5) but not the content board. It did beg the question of whether the committees could advise the content board with or without the consent of Ofcom. But the noble Lord, in speaking to the clause, made it quite clear that the content board could also be advised. He might just wish to clarify why the consent of Ofcom is required by the committees before they advise the consumer panel. Of course Ofcom should be kept informed, but consent to advise is something different. It smacks of potential prohibition. I shall not belabour the point, but this also applies to Amendment No. 21, of which I approve, which gives powers of advice to the committee for the elderly and disabled. But again I ask why the consent of Ofcom has to be obtained by that committee before it advises the consumer panel?
Lord Thomas of Gresford: My Lords, I also welcome this amendment. We are very grateful to the Government for listening to the arguments that were put forward. I should like to pay tribute to the leadership of the noble Baroness, Lady Finlay of Llandaff, on this topic. She has done a brilliant job. The only criticism I have of this amendment is that I would have wished to see a closer link with the National Assembly for Wales when it comes to the Welsh committee. I hope that the committee membership will be formed with proper consultation

185
with the National Assembly. I see that the Minister is nodding. I hope that he will be able to give me that assurance when he comes to reply.
6.15 p.m.
The Lord Bishop of Manchester: My Lords, much congratulation for persistence is being spread around your Lordships' House. I look at Amendment No. 21 and take the opportunity to congratulate the noble Lord, Lord Ashley—not in his place today—and also the noble Lord, Lord Addington, on their persistence on behalf of the elderly and the disabled. I welcome particularly this amendment. I hope that the noble Lord, Lord Addington does. I congratulate the Government on listening.
Lord Peyton of Yeovil: My Lords, there must be some disturbing dissident note here and I propose to sound it. The Minister gave me some pleasure when he said that the Government did not want to get embroiled in the intestinal arrangements of Ofcom. That is very satisfactory. It is much better than just having a committee appointed by the Government. I am tempted to ask whether Ofcom really welcomes all these duties. I suspect, from an earlier stage in the Bill when we were talking about appointing a committee to represent the needs of the elderly and disabled, that Ofcom will be reasonably happy with this arrangement.
I always rail against the pathetic faith we have that the appointment of a committee will actually achieve something. Very often committees have too many people on them. Half the people there ought to be doing something more important and the other half ought never to be let loose at all. The National Health Service is festooned with them. They are a nuisance, they take up the time of busy people. Committees very often need themselves to be scrutinised. It would be very healthy if every committee were compelled to examine what they did last year and then decide whether they have any excuse for remaining in existence.
Let us look briefly at subsection (3) of Amendment No. 20:
"In appointing a person in accordance with this section to be a member of a committee, OFCOM must have regard to the desirability of ensuring that the person appointed is able to represent the interests and opinions, in relation to communications matters".
I would have thought that that idea would have occurred to Ofcom. It does not need to be told on a page of the statute that it must find people who are interested and knowledgeable on the subject.
Lord Carter: My Lords, I welcome particularly Amendment No. 21. There are two amendments in later groups with which the Government have come a long way towards the views of those of us who have spoken on issues concerning disability. I would like to thank all my noble friends on the Front Bench and my noble friend Lady Blackstone for the way in which they have responded to our concerns.
186
I have one point on the two amendments, which was raised by the noble Lord. Lord Roberts of Conwy. Under subsections (5) and (6) the consent of the consumer panel is required before these committees can give advice. They have to ask for it. Then Ofcom has to consent to it. This means that the advisory committee will tend to be reactive rather than proactive on behalf of the nations and the elderly and disabled. I await an answer on this.
Baroness Darcy de Knayth: My Lords, perhaps may very briefly intervene on the side of the accolades. This is an amendment we have wanted very much. It is an important amendment. I would say to the noble Lord, Lord Peyton of Yeovil, that one disabled person or someone with knowledge of disability is no substitute for an advisory committee whose members know exactly what they are talking about and can explore all the issues. We have discussed this at length and Ofcom is perfectly happy. I very much appreciate the Minister having done this.
Baroness Wilcox: My Lords, we are pleased that the Government have listened and responded to the arguments that, along with the noble Lords, Lord Addington, Lord Carter, and others, we made on Report. They have added to the Bill a commitment to establish and maintain an advisory committee on elderly and disabled people. We thank the Government.
Lord Addington: My Lords, I thank everyone who helped to have the amendment tabled. No matter whose name appeared on the amendment, it was definitely a team effort to bring it here. Taking on the noble Lord, Lord Peyton. slightly, I think that we should have a committee to consider the functioning of committees. We should always bear in mind that the entire House often sits as a Committee. Another committee to give advice might be a suitable present from us to the whole process.
Lord Evans of Temple Guiting: My Lords, I am most grateful for the general welcome that the two government amendments have received. In response to the noble Lord, Lord Roberts, and my noble friend Lord Carter, I said earlier that we did not want to get embroiled in the detail of Ofcom's organisational structure. We tried to make the committee system in relation to these amendments as flexible as possible. There is neither a hidden agenda nor anything sinister related to the points that the noble Lords raised. Given Ofcom's interpretation of the amendments, and having listened to the debate—we will also read Hansard—I am absolutely sure that any concerns noble Lords may have will be allayed.
The noble Lord, Lord Thomas of Gresford, asked for an assurance that the countries in question will be consulted fully about the committees. I can give that assurance.
The noble Lord, Lord Peyton, a man after my own heart, hates bureaucracy and talked about "intestinal arrangements". I am sure that we have all taken on hoard his points. He ridiculed the wording concerned with

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appointing persons able to represent communications. We must acknowledge that communications is a very broad church. The intention is that those appointed do not, for example, have an interest in film as part of communications and nothing else; rather they must have a broad interest and an ability to contribute.
Lord Roberts of Conwy: My Lords, before the noble Lord sits down, he should promise to consider further the point that the noble Lord, Lord Carter, and I have made. In proposed subsections (5) and (6) in Amendment No. 20, and similarly in Amendment No. 21, it is curious that the consumer panel should request advice from the appropriate committees and then have to gain the consent of Ofcom before that advice is given. It seems a somewhat strangulated approach. I should be grateful if the Minister would agree to consider the point.
Lord Evans of Temple Guiting: My Lords, I have just received a note on the matter. If the following explanation does not satisfy the noble Lord, Lord Roberts, I shall write to him. The content board is part of Ofcom; the consumer panel is not. That is why special arrangements must be made. Consent is needed because this is part of Ofcom.
On Question, amendment agreed to.
Lord Evans of Temple Guiting Lord Evans of Temple Guiting moved Amendment No. 21:
After Clause 19, insert the following new clause—
"ADVISORY COMMITTEE ON ELDERLY AND DISABLED PERSONS

(1) It shall be the duty of OFCOM, in accordance with the following provisions of this section, to exercise their powers under paragraph 14 of the Schedule to the Office of Communications Act 2002 (c.11) (committees of OFCOM) to establish and maintain a committee to provide the advice specified in this section.

(2) The committee shall consist of—

(a) a chairman appointed by OFCOM; and

(b) such number of other members appointed by OFCOM as OFCOM think fit.

(3) In appointing persons to be members of the committee, OFCOM must have regard to the desirability of ensuring that the members of the committee include—

(a) persons who are familiar with the needs of the elderly; and

(b) persons who are familiar with the needs of persons with disabilities.

(4) The function of the committee shall be to provide advice to OFCOM (including other committees established by OFCOM) about the interests, in relation to communications matters, of—

(a) the elderly; and

(b) persons with disabilities.

(5) The committee may also, at the request of the Consumer Panel, provide advice about those interests to the Consumer Panel.

(6) The consent of OFCOM is required for the giving of advice under subsection (5).

(7) In this section "communications matters" has the same meaning as in section 3."

On Question, amendment agreed to.
Clause 25 [Training and equality of opportunity]:
Lord Evans of Temple Guiting Lord Evans of Temple Guiting moved Amendment No. 22:
Page 24, line 21, leave out "fair treatment of ' and insert "equalisation of opportunities for"
The noble Lord said: My Lords, I shall speak also to Amendments Nos. 70 and 128. The amendments are tabled in response to concerns expressed on Report by the noble Lord, Lord Addington, that the term,
"fair treatment of disabled persons",
used in Clauses 25 and 333 was not in line with the terminology used in other disability legislation.
We explained on Report that the use of the term "fair treatment" mirrored the current obligations in the Broadcasting Act 1996 and was well understood in the context of that legislation. However, we accept that more recent disability legislation, such as the Disability Rights Commission Act 1999, preferred the term "equalisation of opportunities" and that it would be helpful for our legislation to be as consistent as possible with other legislation in the area. We therefore undertook to table amendments at Third Reading to substitute the current references to "fair treatment" with the more up-to-date term "equalisation of opportunities". The amendments fulfil that commitment. We have also extended the change to the equivalent provision for the Welsh authority in Schedule 12 to the Bill. I beg to move.
Lord Carter: My Lords, I thank the Government. I moved the amendments on the issue in Committee and on Report, so I am extremely grateful. I had wondered why the word "equalisation", rather than "equality", of opportunity was used. However, apart from the fact that the word is consistent with the wording of the 1999 Act, the dictionary states that "equality" is the state of being equal. "Equalisation" is not defined, but I understand it as a process of achieving equality, which is what equality of opportunity is all about.
Lord Addington: My Lords, this is just a case of saying "thank you" again. There has been a relay: the noble Lord, Lord Carter, to start, Addington second, with Evans and McIntosh to finish. We got there. It is nice to know that the Government listen sometimes.
Baroness Darcy de Knayth: My Lords, I express my support as one who did not get in on the list earlier.
On Question, amendment agreed to.
Clause 92 [Notification of contravention of conditions]:
Lord Avebury Lord Avebury moved Amendment No. 23:
Page 89, line 2, at end insert—
"() Where OFCOM receive a complaint, or otherwise become aware, that a person may be in contravention or have contravened a condition set under section 43, they shall inform that person in writing of the nature of the suspected contravention and that they are conducting an assessment of available evidence, which may lead to that person being given a notification under subsection(2)."
The noble Lord said: My Lords, as the Minister knows, we are still of the opinion that, in relation to a contravention of conditions set under Clause 43, this clause as drafted incorrectly translates the word "find" in the directive into,
"determine that there are reasonable grounds for believing"
in the Bill. However, clearly, we were not going to make any headway in convincing the Government on that point.
In this amendment, we have relied on the Minister's observation on Report that:
"In many instances—probably the majority—prior investigation of the matter in issue will be necessary before Ofcom will he able to decide whether or not it has such 'reasonable grounds".—[Official Report, 26/6/03; col. 423.]
The amendment provides that, when Ofcom receives a complaint or otherwise becomes aware that a person may have contravened a condition, it should notify that person that it is conducting an assessment of the evidence which may lead to a notification under Clause 92. That means that, at least in the majority of cases. the person has a prior opportunity to correct the alleged breach, thus reducing the number of occasions when Ofcom must take the serious step of issuing a notification, or to submit evidence to Ofcom showing that he is complying with the conditions notified. That may convince Ofcom that the complaint did not provide reasonable grounds for believing that a Clause 43 condition had been contravened. In either case, unnecessary notifications under Clause 92(1), which could have damaging effects on the provider concerned, would be avoided.
The noble Lord, Lord Currie, the chairman of Ofcom, has written to me about the matter. He has been good enough to make clear that it will be only in rare and extreme cases that Ofcom might have to act without warning. He said that, in the normal course of events, Ofcom would undertake a preliminary investigation, letting the operator concerned know as soon as possible so that in some cases it is possible.
"to resolve the matter speedily and informally, without the whole panoply of the Notification Procedures having to be involved".
That is indeed most helpful. I suggest that the noble Lord, Lord Currie of Marylebone, does what I have advised the Government to do, which is to place his letter on Ofcom's website so that it can receive wider circulation, instead of simply lodging it in the Library of your Lordship's House as he has been asked to do. I beg to move.
6.30 p.m.
Baroness Buscombe: My Lords, I rise to support the amendment to which my name is added. We are returning to a very important issue that I spike about as early as Second Reading. We are in a strange situation that I have discussed with the noble Lord, Lord Avebury. He and I were minded to test the opinion of the House today on this issue because we are both deeply concerned that the Government have not, until now, responded sufficiently to allay concerns or rebut the problem. As the noble Lord. Lord Currie, quite rightly said in his letter addressed to Lord Avebury,
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operators are concerned that Ofcom will have gone a long way down the road of investigating an alleged breach leading to a possible enforcement order before operators are even made aware that they are under investigation, and thus have the opportunity to make representation.
We are extremely grateful that, at the 11th hour, this letter was written by the noble Lord, Lord Currie. To our minds and in discussion with the industry, the letter has made a difference. The issue is an important one and we were determined to be robust on behalf of the industry. We are very glad that the letter has been forthcoming.
We would have preferred, however, to have the matter included in the Bill. We are concerned. and we know that the industry is also concerned, to ensure that we do not in any way remove important flexibility in the way that Ofcom proceeds in the future. Therefore, we have decided to agree to accept the contents of the letter, although, as the noble Lord, Lord Avebury, rightly said, please let us make this letter as public as possible as quickly as possible to allay concerns beyond your Lordships' House.
Lord McIntosh of Haringey: My Lords, it is obvious that we have considered this matter very carefully and discussed it with the noble Lord, Lord Avebury. We are willing to discuss it with the noble Baroness, Lady Buscombe. We understand that the assurances that the noble Lord, Lord Currie, has offered have given sufficient comfort for the amendment to be withdrawn.
The amendment relates to the matter of Ofcom's detailed administrative and operational practice, rather than to any substantive matter of policy, so we do not think that it is right to include the provision in the Bill. However, we acknowledge that, as a matter of good regulatory practice and in accordance with the principle of transparent regulation, Ofcom should ensure that, except when clearly justified. the subjects of any investigation it undertakes, even an informal preliminary one, are made aware of Ofcom's interest at an early stage.
As always, there will need to be provision for some exceptions to the rule. The exceptional circumstances that we have in mind would be those in which advance notice would be likely to prejudice Ofcom's ability to intervene effectively. In certain cases the element of surprise is crucial to ensuring, for example, that vital evidence is not destroyed. I hope that such cases will be very rare.
Since this is principally a matter for Ofcom, I am glad to confirm that the noble Lord, Lord Currie. has written to the noble Lord, Lord Avebury, advising him that Ofcom also accepts the principle underlying this amendment. and will include a suitable provision in public guidance on the administrative procedures that it is preparing. Moreover, operators and others with an interest in these matters will have ample opportunity to discuss with Ofcom the precise detail of how this process will operate. Before it formally takes over its enforcement role, Ofcom will consult on public guidance and other procedural matters too.

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A copy of the letter from the noble Lord, Lord Currie, will be placed in the House Library and I am sure that he will agree to place it on the website. I am grateful for the way in which the amendment has been moved.
Lord Avebury: My Lords, I also thank the Minister for his courtesy in discussing this matter with me yesterday. He could has resolved this problem, which has caused enormous concern in the industry, as the noble Baroness, Lady Buscombe, said, if we had arrived at the solution much earlier. I am sorry that we had to take it up to the wire, but we felt that the issue was important.
Lord McIntosh of Haringey: My Lords, better late than inflexible.
Lord Avebury: I quite agree, my Lords. I am thankful that the department is as flexible as it has proved to be. I hope that the Minister will not take it amiss if I say that, as the period that the Bill has to be on the statute book approaches, we have noticed something of an increase in the flexibility of the department. Of course, that may be purely coincidental. I am happy to beg leave to withdraw the amendment with the assurances that have been given and with the extremely helpful letter that we received from the chairman of Ofcom.
Amendment, by leave, withdrawn.
Clause 157 [Grant of recognised spectrum access]:
Lord Avebury Lord Avebury moved Amendment No. 24:
Page 145, line 27, at end insert—
"() OFCOM shall carry out an impact assessment in line with section 7, prior to any introduction of recognised spectrum access, having due regard to the international implications of such a measure."
The noble Lord said: My Lords, we have had a great many discussions about the merits of recognised spectrum access throughout the proceedings of the Bill. There have been parallel debates going on as a result of the Radiocommunications Agency's consultation on the subject. I do not propose to rehearse those arguments today, but I merely point out that the matter is still highly controversial. Even those who were most in favour of RSAs, such as the spectrum management advisory group, acknowledge that there are unresolved problems such as the distortion of competition that would arise in the European Union if RSA is introduced in some countries and not in others. The taxation aspects also have to be more fully assessed.
In order to resolve this and other outstanding issues before RSA is introduced, we propose in this amendment that Ofcom should undertake an impact assessment under Clause 7. That clause gives Ofcom power to carry out impact assessments when it proposes to do anything important for the purposes of, or in connection with, its functions. The definition of importance in Clause 7(2) certainly applies to the introduction of RSA. An impact assessment would allow persons likely to be affected by RSA to make
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representations, and for the outcome of the assessment to be published. We think that that process will be useful, because it would enable the international implications to be evaluated with the aid of those concerned, especially those in the European satellite industry. I beg to move.
Baroness Buscombe: My Lords, the Minister and I have had extensive exchanges on RSAs in Committee and on Report. I have raised a whole host of issues in relation to the way in which the Government intend to implement RSAs and the powers of control and intervention that the Government intend to give Ofcom in this area.
My concerns remain unallayed in several important areas. The Bill still fails to provide sufficiently robust requirements for consultation with the industry and other interested parties. I remain to be convinced that auctioning is an appropriate tool for RSAs. Ofcom's powers to limit spectrum use, modify and revoke licences and place conditions on spectrum trading, all reflect a hugely interventionist approach in this area.
I am pleased, however, that the Government have recognised the concerns that I expressed on behalf of many in the industry on one particular issue—that there is no reason to allow Ofcom to impose conditions or restrictions on the transmission or broadcasting of particular matters on RSAs. It is right for that particular provision to be removed from the Bill.
I shall not take up much more time on the matter, but there is one question that I put to the Minister on Report which he has failed to answer. In Committee, the Minister expressed his personal sympathy with the arguments that I put forward in favour of grandfathering the RSA proposals to pre-existing satellite transponder agreements, which have not factored in the possibility of RSA. It is, I think he agreed, important not to discriminate in providing such protection to terrestrial broadcasters' licensing agreements and satellite transponder agreements.
The Minister has indicated, however, that the timing of the introduction of charges for RSA will be a matter for Ofcom. Yet, in their response to the review of radio spectrum management, the Government said that spectrum trading and pricing, as regards terrestrial broadcasters, would not take effect while they had existing licences that did not anticipate such pricing. If the Government can make such a clear policy statement on terrestrial frequencies, what is stopping the Minister from making an equivalent policy statement today on satellite transponder agreements, rather than simply expressing a personal view?
Lord McIntosh of Haringey: My Lords, with such issues, we return to the issue of recognised spectrum access. I am told that it is also called "radio signals from afar". I shall speak to Amendment No. 25, about which the noble Baroness, Lady Buscombe, spoke, but I shall speak first to Amendment No. 24, which was moved by the noble Lord, Lord Avebury.
We listened carefully to the noble Lord, and we understand the concerns. We agree about the importance of impact assessments. They are an essential component

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of evidence-based policy making. However, we do not think it necessary to amend the Bill with regard to assessments for RSA.
Given the significance of the RSA provisions, I would expect Ofcom to follow the Clause 7 procedure and carry out an impact assessment before deciding whether to proceed. I would further expect the assessment to have due regard to the international nature of the satellite services, if it relates to satellites, that is. We should bear it in mind that RSA may be introduced for other services, which is a good reason to allow Ofcom a measure of flexibility over the detailed contents of the assessment and not to prescribe them in the Bill.
Clause 7 places Ofcom under an obligation to publish impact assessments in important cases. It is difficult to imagine that RSA is not important. It will be open to operators or anyone else to make representations to Ofcom, if an assessment omits a material consideration, and Ofcom will be required not to implement the proposal until:it has taken account of representations received. That is in addition to the duty under Clause 400, which will also apply. Clause 7 already makes sufficient provision for impact assessments without any need for special provision in respect of RSA.
I turn to Amendment No. 25. On Report, I undertook to review the scope of Ofcom's power to make a grant of RSA subject to restrictions and conditions. The noble Baroness, Lady Buscombe, had asked why Ofcom needed such a power, especially in relation to the content of transmissions and broadcasts, and she moved Amendments to remove the power from the Bill.
I have looked carefully at subsection (5) of Clause 157 to see whether we could narrow Ofcom's powers without compromising the effective management of the radio spectrum. Amendment No. 25 is the result of that consideration. It will remove from the clause Ofcom's express powers in relation to restrictions and conditions on content. On reflection, we agree with the noble Baroness's argument that they are unnecessary for RSA. She made a fair point, and I am grateful to her. The issue has been extensively debated, and I congratulate the noble Baroness, Lady Buscombe, and the noble Lord, Lord Avebury, on the persistence with which they have pursued the matter.
The noble Baroness asked why I could not give a categoric assurance on grandfathering. It is not really for the Government to do that. Decisions on RSA will be a matter for Ofcom. Unlike for licensed users of spectrum, such as terrestrial broadcasters, the Secretary of State has no existing powers relating to RSA, which is a new system introduced by the Bill. The situation with RSA is more complex, and the effects are not limited to broadcasting. For example, decisions on RSA could affect the availability of spectrum for terrestrial fixed links in the 11 gigahertz band, which is used by Astra for Sky transmissions and shared with terrestrial services. It is for Ofcom to balance such considerations, but I repeat my view that I expect it to take account of any implications for switchover.
6.45 p.m.
Lord Avebury: My Lords, I hope that what the Minister said about grandfathering has satisfied the noble Baroness, Lady Buscombe, to some extent, at least. Perhaps she could get a letter from the chairman of Ofcom—similar to the one that we secured with regard to the previous amendment—that would say what he thought was possible?
Lord McIntosh of Haringey: My Lords, I shall ask him to do that.
Lord Avebury: My Lords, I am grateful to the Minister. That would be useful, even if he cannot give a complete undertaking that the same procedures will be applied to satellite as are applied to terrestrial to give whatever undertakings are possible about the extension of licences that might be covered in future by the introduction of RSA.
The Minister has also said, effectively, that we have what we want. An impact assessment will be conducted under Clause 7. Moreover, he has drawn attention to Clause 400, which reinforces the necessity for Ofcom to take account of representations from the industry before introducing RSA. I hope that that will also go a long way towards reassuring the industry that there will not be a sudden introduction of RSA without the fullest possible consultation.
We have achieved quite a lot in our discussions on the matter, and I sincerely hope that Ofcom will be as receptive to representations from the satellite industry as it ought to be. We look forward to continued consultations with Ofcom, so that we can guide it, if it feels that it is necessary for your Lordships to continue to take an interest in the matter a long time after the Bill has left the House. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 25:
Page 146, line 12, leave out paragraphs (b) and (c).
On Question, amendment agreed to.
Clause 217 [Licensing of the public teletext service]:
Lord Addington Lord Addington moved Amendment No. 26:
Page 195, line 8, at end insert—
"(4A) The licence must contain the conditions that OFCOM consider appropriate for securing that persons with disabilities affecting their sight or hearing or both are able, so far as practicable, to make use of the service for all the same purposes as persons without such disabilities."
The noble Lord said: My Lords, when I first saw the group of amendments, I was a little worried by the fact that there were 83 clauses between Amendments Nos. 26 and 49. However, they probably hang together with regard to subject matter.
Amendment No. 26 deals with the teletext service. There has been an interesting debate on the matter. Analogue teletext meant that people who had access to Braille typewriters were able to use teletext and thus

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get information. It was of great benefit to them. It meant that the blind and the deafblind who could use Braille had a way of getting information.
We have tried many things to get the Government to move on the matter. We started off ambitiously in Committee, but I hope that the Government will be able to accept this amendment. The aim is to mirror what was done on the electronic programme guide, on which the Government were able to move towards us. If it is possible to do something because of an advance in technology, we should take the argument on board. That is a reasonable approach. As the technology comes on line, we should be allowed to use it. I hope that the Government will respond favourably.
Clause 300, to which Amendment No. 49 relates, covers the issue of people with a dual sensory impairment. The Government have undergone something of a learning process in respect of those with a dual sensory impairment—the deafblind. The department has undergone something of a learning process. One wonders why other Ministers did not bring forward that matter for us. It does not matter, as long as we get there in the end.
The deafblind—those with dual sensory impairment—are a specific group with specific problems. However, they are not even one consistent group. There are those who are born deafblind and those who are initially blind or deaf and then lose the other sense. Those secondary groups can, as their senses deteriorate, get access to services made available by current technology. It is possible to give assistance to a subset within a subset of a specific condition. All that this amendment does is suggest that the Government, or those in power, must bear in mind those considerations. I hope that the Government are able to accept the amendment.
Amendment No. 50 is probably the most controversial of all the amendments. I believe that I previously described audio description as the cock-up school of history, in which broadcasters could be told to audio describe X number of programmes only to discover that no one can receive the audio description. The most recent information that I have is that 49—or has it gone up to 50?—people can receive several thousand hours of audio-described programmes. That is an absurdity, but there is a solution, because for those on Sky—I hope my noble friend will forgive me for saying something fairly nice about—
Lord McNally: My Lords, a wonderful company!
Lord Addington: My Lords, Australian-American broadcasting conglomerates allow one to receive a firm kind of audio description, although it is not as good. I believe that there are two different kinds—broadcaster mixed and receiver mixed. I understand that the receiver mixed system, which the free-to-air people have been working on, is renowned for its superiority. It is better; it has many bonuses; it can be used individually; one does not need to have broadcasts to the entire room. Everything about it is better. But if you cannot receive it, it does not matter
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very much whether it is better. Therefore, if we push forward here, we can simply say that those free-to-air broadcasters must allow their audio description programmes to be broadcast by Sky to those who have Sky; namely, 24 per cent of the target population, or about 480,000, according to the figures that I have been given. That surely makes sense.
A number of arguments have been advanced and a number of letters written about this matter. I believe that at the back of those is the fact that trying to get a producer for the chip to go into the new box may well be discouraged. I have come to the conclusion that that is at the back of the resistance. Therefore, if one manages to scare off someone from the potential market by saying that this should go through Sky, one may well continue the process. I believe that that is one of the greatest points of resistance by the free-to-air broadcasters. I suggest that the Government should consider forcing those free-to-air broadcasters to make this service available to what is under a quarter of their potential market, when they are already pumping vast amounts of money into the audio description itself. I beg to move.
Lord McIntosh of Haringey: My Lords, I do not want to prolong the debate and I shall not make a speech now. However, I want to indicate that I shall advise the House to accept Amendments Nos. 26 and 49.
Lord Puttnam: My Lords, perhaps I may briefly gatecrash the amendment tabled in the name of the noble Lord, Lord Addington, to deal with a small problem that I have. Due to a miscommunication between me and the Public Bill Office, Amendment No. 50, which relates to backstop powers on training, failed to make it from Report stage to Third Reading. As it was not a contentious issue when I left it at Report stage, and as it has some bearing on the utilisation of new technology, I hope that the Minister will kindly help me further with regard to that particular issue.
Baroness Darcy de Knayth: My Lords, I support what the noble Lord, Lord Addington, has said and welcome what the Minister is about to say. I am very pleased that the deafblind—a most excluded group of people—will at last get something. However, I am saddened that the Minister does not propose to accept Amendment No. 50. I support all that the noble Lord, Lord Addington, has said. We are in an absurd situation. It would be ridiculous to be unable to get what is available and hope for better prospects later.
Baroness Howe of Idlicote: My Lords, I, too, express my pleasure at hearing that Amendments Nos. 26 and 49 have been accepted and also to add my concern that Amendment No. 50 has not. Over a number of sittings in Committee and at Report stage, the noble Lord, Lord Addington, has made the problems clear to us all, and we have also been very well briefed by the RNIB and others. With about half a million people being disadvantaged in this way and 22 per cent of people over 60 having both a hearing and visual

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problem, it is quite absurd—I believe that that is the right word — that we are not moving faster, especially as the facilities are in place and as this amendment would ensure that suitable provision was made for such people. I therefore support all these amendments.
Baroness Buscombe: My Lords, I rise to say briefly that we welcome the Minister's forthcoming response to these amendments. Our only concern, which I hope the Minister will allay, has been to ensure that the legislation is not technology specific. I believe that that would he a great mistake. It is important for Ofcom to he given the flexibility to drive forward these proposals and to respond to technology.
Lord McIntosh of Haringey: My Lords, I hope that the House will agree that we have listened not only today but throughout to the views expressed and have shown ourselves willing to make changes. At Report stage we introduced a new duty for Ofcom to encourage the availability of easily-useable apparatus; we acted on the need for broadcasters to make available adequate information about subtitling, signing and audio-description services to those likely to want to use them; we introduced the 60 per cent, five-year interim target for subtitling; we addressed the concern that electronic programme guides should be as accessible as possible to people with disabilities. I am grateful to all those who have pressed us to make those changes.
Amendment No. 26 would require Ofcom to include in the public teletext licence conditions to ensure that people with sight or hearing disabilities are able to use the service for all the same purposes as people without such disabilities. Teletext provides a valuable service, but it is licensed as a text service. We do not want to change the name of the service. We agree that we would like it to be available to people with disabilities, in so far as that is reasonably practicable. We will therefore accept the amendment. There are some technical difficulties to be addressed with regard to the drafting and the placement of the amendment in the Bill. However, I can assure the noble Lord, Lord Addington, that what comes back from the Commons will preserve the effect of his amendment.
Amendment No. 49 would require Ofcom's code relating to provisions for the deaf and visually impaired to give guidance on the extent to which applicable services should promote the understanding and enjoyment of programmes by people with a dual sensory impairment, as well as people who are deaf or hard of hearing and blind or partially sighted. We understand the very particular needs that are involved. As we have said, realistically, a person will need to have some degree of sight or hearing to be able to benefit from television; and, as such, they would be covered by the provisions. I regret that the substantive effect of the amendment is not entirely clear. However, we understand the strength of feeling. The amendment has a great deal of support, and we shall accept it on that basis. Again we may need to make some minor changes to the amendment, but they will not affect the spirit of it.
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Amendment No. 50 is more difficult. We have already discussed the provision of audio-description services. I am well aware of their importance for visually impaired people. We all agree that there should be more audio-described programmes. The amendment would require broadcasters to provide their audio-description services in a form intelligible by their users. That is so obvious that there should be no need to write it into the statute, and the amendment does not appear to add much to the Bill. But it could be counterproductive. It is not clear why we would need such an amendment for audio-description services but not for sub-titling or signing. We certainly would not want to imply that there is no corresponding need for subtitling or signing to reach users in an intelligible form. That is the danger of this amendment. However, we understand that particular problems surround the provision of audio description that do not arise for subtitling and signing.
There are currently two ways of transmitting audio description—either mixed with the programme sound as an alternative to the normal soundtrack or in a separate stream that is mixed with the soundtrack in the viewer's set-top box. Both systems have their advantages and disadvantages.
The purpose of the amendment is to get broadcasters to provide their services using a specific system compatible with Sky set-top boxes instead of another one developed by the BBC and other partners which can only be received on 45 prototypes. That would allow Sky viewers to receive the programmes audio-described by the broadcasters which have to provide audio description. We fully understand the desire to make the best use of currently available technology to accelerate the provision of audio-description.
That would not solve the problem of the non-Sky viewers. I agree with noble Lords who said that we must not be equipment specific. There is not enough bandwidth available on the digital terrestrial plat form to operate a system similar to the one used on satellite television. The drafting of the amendment presumes that the solution lies in the hands of the broadcasters. In fact, one only has to look at the example of current developments in EPGs to see that future models may depend as much on manufacturers of equipment as on the broadcasters themselves. So we think that this is a matter better left to the codes, since that will mean the regulator can take into account the latest developments and direct the broadcasters accordingly. In future, there might be other options or equipment that might have more benefits and less disadvantages. But my point is that we should not be picking winners now—a point which I think was taken up in debate.
Perhaps I may now address the gatecrasher. Yes, we understand the point that he makes about training. I can just about relate it to this group of amendments. The Government would like to make it clear that the obligations placed in the Bill represent a serious and ongoing obligation to invest in training. We see these requirements as vital to the future success of the sector. Unless we invest in people and their skills our vibrant audio-visual media will eventually go the way of shipbuilding and any other traditional manufacturing

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industries. On the recommendation of the ITC's programme supply review, the Secretary of State asked Skillset to set up a task force to report back to Ofcom on training. We keenly await the recommendations of the task force and expect a robust and vigorous strategy for the industry to emerge as a result.
Broadcasting is just one part of the audio-visual industry. Skillset and the UK Film Council are currently working with the film industry to develop a comprehensive film skills strategy to be launched in September. We look forward to the DTI and Skillset working together with the new media to address skills strategies to drive productivity and competitiveness of the sector. It is particularly fitting to be addressing these issues on the eve of the launch of the Government's national skills strategy, which places particular emphasis on the need for industries to work collaboratively to advance the implementation of skills strategies within their sectors. The Government will continue to monitor this broad range of training and development activities closely, particularly compliance with measures.
7 p.m.
Lord Addington: My Lords, I thank the noble Lord for accepting my first two amendments—a brace is a good haul for one day. Amendment No. 50 is designed to deal with an ongoing problem as it currently exists. I heard what the noble Lord said and I have decided not to seek the opinion of the House, although it crossed my mind more than once. I offer the Minister one thought on this matter: I promise never to come back to this subject provided boxes are produced with the relevant technology within, say, eight months from now. If not, I shall come back and badger the Government to merry hell to do something about it. There is no point in ensuring that something beneficial is produced which cannot be received.
Lord McIntosh of Haringey: My Lords, I do not think that I can take up the direct challenge made by the noble Lord, Lord Addington. However, I am told that the technology is readily available and that some manufacturers are looking at producing the appropriate equipment. It is not a matter that the Government can command manufacturers to do.
Lord Addington: My Lords, yes, and apparently there have been manufacturers interested in audio-description ever since the first broadcasts were made. That is what is behind it. I suggest that there is some way in which the Government can improve matters.
On Question, amendment agreed to.
Clause 227 [Report in anticipation of new licensing round]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 27:
Page 204, line 31, leave out subsection (6).
On Question, amendment agreed to.
Clause 239 [Television multiplex services]:
Lord Avebury Lord Avebury moved Amendment No. 28:
Page 216, line 9, at end insert—
"() When making an order under this section the Secretary of State shall require OFCOM to—

(a) do what it can to sustain the availability of a digital frequency for an existing analogue Restricted Services Licences channel;

(b) consult with existing local television channel Restricted Services Licences licensees about transitional arrangements for broadcasting on Digital Terrestrial Television in their local area; and

(c) begin the digital local television licensing process prior to digital switch-over."

The noble Lord said: My Lords, this amendment concerns the availability of frequencies for existing local television services which are broadcasting under restricted services licences. In Committee I gave the example of Channel M in Manchester. The problem is that when the switchover to digital occurs, there is no guarantee that spectrum will be made available for these services. The then Minister, the noble Baroness, Lady Blackstone, said that it was,
"for Ofcom to determine, within the framework of its statutory duties, what spectrum should be available for those different types of services".—[Official Report, 20/5/03; col. 753.]
The RSL broadcasters were not reassured by that statement and we fear that when digital local frequencies come to be allocated, which may not be until after 2010, their current situation of operating on low-power, poor-quality frequencies will be perpetuated. In the past, the frequency planners have leaned towards the interests of the bigger organisations at the expense of independent local channels. That could easily be repeated in the digital spectrum.
The RSLs are not represented on the spectrum planning committee and have not been asked for an opinion by the planners. We therefore hope that the Government will require Ofcom to do three things: first, to provide digital frequency for existing analogue RSL broadcasters; secondly, to consult with them on transitional arrangements for DTT broadcasts in their local areas; and, thirdly, to begin the process of allocating digital frequencies for local TV now, so that existing broadcasters do not have to face years of uncertainty which would make it impossible for them to attract investment. We understand that there have been helpful discussions on these matters between most of the RSL TV channels and officials of the DCMS in which assurances have been given, but it would be useful to have those on the record. I beg to move.
Lord McIntosh of Haringey: My Lords, in practical terms, this amendment seeks to give existing television restricted service licensees a guarantee that they will be able to continue after switchover. That would not be appropriate or fair. In fact, it might not even be realistic. I say that it would not be appropriate because paragraph (a) of Amendment No. 28 would mean that Ofcom was required to do what it could to ensure that spectrum is available for existing RSLs. We have never

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given such a guarantee to any other commercial service, nor to any other spectrum user. However, we did decide that Ofcom should have a general duty to manage the spectrum as efficiently as possible. Having done so, we tried not to tie its hands by introducing more specific requirements.
I also feel that it would not be fair. As we said on Report, holders of the current RSLs were perfectly aware that the licences they applied for were restricted in duration and came without any spectrum guarantee. They knew the rules of the game. It is likely that the other operators who decided not to compete for those licences would have responded to an application for long-term licences or for short-term ones that had such a guarantee for the future. It would not be fair to change the rules after the game has begun.
It might turn out that it is not possible to give such a guarantee. Until our spectrum plans are finalised and have international clearance where we need it, we will not know what frequencies will be available on top of those necessary for the six multiplexes. Although it is perhaps unlikely, we might find that in a particular area securing a frequency for an RSL will be possible only if that frequency was not given to one of the six national multiplexes. Would that provision mean that Ofcom would have to give a small RSL priority over a multiplex?
Paragraph (b) of Amendment No. 28 would impose a requirement on Ofcom to consult RSLs about transitional arrangements for broadcasting on DTT in their area. Not only is the drafting of this provision rather unclear but it is also superfluous. As part of the good regulatory practices that it is required to follow, Ofcom will consult all the relevant parties. Therefore, we must oppose this amendment.
However, we understand that there is an issue to be addressed here. Operators have taken the risk of investing in these licences. Yes, they knew the risk beforehand, but they took it, and some of them not only built successful businesses but have created genuinely attractive local services which are now greatly appreciated by their audiences.
Ideally, we would like it if these services were able to continue, while seeing new ones develop. We recognise that if they are willing to invest in developing high quality programmes and play their role in social inclusion, licensees will want to be given as much security as possible for their future. Much as we would like to be able to provide this now, we are simply not in a position to do so, nor will we be until we have a clearer idea of how best to use the available spectrum.
For the time being, therefore, I can do little more than repeat what we said before. After switchover there will, of course, be more spectrum available, principally coming from the 14 frequency channels that will be cleared. However, it may well be inappropriate to use high-value national frequencies for local broadcasting. A preferable solution may be to use the interleaved spectrum that will become available within the frequencies used for the six national multiplexes. This interleaved spectrum could create new opportunities for local television services after switchover.
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Once the spectrum plans for these multiplexes have been finalised, Ofcom will he able to switch its attention to this interleaved spectrum and prepare for its allocation. Once it has done so, I would expect it to consult fully all the stakeholders and present them with a list of options. In addition, the Department for Culture, Media and Sport and the Department of Trade and Industry will undertake a major public consultation exercise on switchover in spring next year and I can assure all concerned that the issues of the availability of local television services and the continuation of existing restricted service licences will be given careful consideration in the course of that exercise.
Lord Avebury: My Lords, I am grateful to the Minister for that assurance and for repeating what I believe was the substance of what was said to the RS Ls at a meeting at the DCMS on 30 June. There was only one point on which the Minister's remarks did not appear quite to tally with the assurances that the industry thought it had received at that meeting—the early advertisement of suitable digital frequencies, identified in areas where local television licences were already operating. The industry thought that that early advertisement of digital licences might be accompanied by a presumption that the existing incumbent would be preferred. However, the Minister seemed to tell your Lordships that the competition would be completely open and that newcomers would have the same chance of having that spectrum as the incumbents.
Lord McIntosh of Haringey: My Lords, we will consult before we make any order affecting the licensing regime for local television services, and one of the questions that we will need to address will be the extent to which previous experience as a local broadcaster has to be taken into account when assessing competing applicants.
Once our spectrum plans are finalised, and the orders on the licensing regime for local television have been made, Ofcom will be able to advertise licences for local television services. It may decide to do this before the relevant digital spectrum actually becomes available, in order to ensure, where appropriate, continuity of existing services, or a smooth start for new ones. However, we do not want to tie Ofcom's hands and the matter must be left to its discretion.
Lord Avebury: My Lords, perhaps we had better pursue the matter through Ofcom, because the RSLs were under the impression that the existing licence holders would be given preference in the allocation of the new digital frequencies, and that did not quite emerge from the Minister's remarks. However, I thank the Minister for the rest of his remarks, which will be useful. I hope that the industry finds that they enable it to plan with greater assurance for the future. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall moved Amendment No. 29:
Page 234, line 29, at end insert—
"() that sufficient high quality original drama is broadcast covering a range of issues in a variety of formats;"
The noble Baroness said: My Lords, my noble friend Lord Lea is unable to be in the Chamber at this time and so at his request I have undertaken to be his understudy in moving Amendment No. 29. I hope that noble Lords will not ask for their money back.
Your Lordships will recall that when this issue was raised on Report by my noble friend Lord Lea, his amendment drew support from all sides of the House. That prompted the Minister to offer a discussion on the subject. That discussion took place, and as a consequence, the Minister has now tabled a most helpful amendment, Amendment No. 30.
Both the amendments seek to protect and enhance the value of drama as part of the range of services available through public service broadcasting. We can be very proud of the range, quality and immediacy of UK television drama at its best, and of the people who produce it—our actors, directors, producers, technicians and above all our writers. I am grateful to the Minister for seeking through his amendment to protect their interests and thereby the interests of us all, and I look forward to hearing his response. I beg to move.
7.15 p.m.
Viscount Falkland: My Lords, I spoke to the amendment of the noble Lord, Lord Lea, on Report. I was unfortunately unable to be at the meeting, to which I was invited, but I am delighted that the Government are taking the matter seriously. As a country, we are very proud of our long-established culture of drama and literature, particularly of the way in which that has been taken up in broadcasting. The points were well made—I echo what the noble Baroness, Lady McIntosh, said.
Baroness Buscombe: My Lords, we are glad that the Government have responded to the good debate that we had on Report in relation to the amendments of the noble Lord, Lord Lea.
Lord Evans of Temple Guiting: My Lords, in Committee and on Report, the noble Lord, Lord Lea, moved Amendments concerned with the place of drama in the public service television remit in what is now Clause 262. The Government were unable to accept the amendments as they stood. However, we have always made clear our view that drama programming must constitute a key element of the public service remit.
The list of programme types specified in Clause 262 already refers to drama as one aspect of the UK's cultural activity and its diversity. However, reflecting on the concerns raised in the earlier debates we have had a helpful meeting with the noble Lord, Lord Lea and the noble Baroness, Lady McIntosh. In the light of that we have concluded that it is right for the Bill to offer a little more detail as to how the term "drama"
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should be interpreted. Hence this proposed amendment to Clause 262, which makes clear that the term "drama" as used in the clause includes contemporary and other drama in a variety of different formats.
We see this new provision as encompassing both new ideas and new writing in the field of drama. It emphasises, too, the wide range of formats that television drama can take, whether it be one-off dramas, serials or themed series, to mention just a few examples. I should also emphasise once again that drama, along with all the other listed programme types, is covered by the overarching provisions in subsection (4) of Clause 262, which specify the purposes of public service broadcasting. These make explicit reference both to programmes dealing with a wide range of subject-matter and to programmes which embody high general standards with respect to content and quality. So quality of programming and diversity of subject-matter encompass the entire list of programming requirements, drama no less than the others.
The quota regime for original and independent programming by public service broadcasters will encompass drama, together with all the programme types included in the public service remit. I hope the House will agree that Amendment No. 30 provides a satisfactory way of meeting the points raised in the earlier debates. I would ask the noble Baroness, Lady McIntosh, speaking on behalf of the noble Lord, Lord Lea, to withdraw Amendment No. 29, with a view to my moving Amendment No. 30.
Baroness McIntosh of Hudnall: My Lords, I am grateful to my noble friend the Minister for that series of helpful observations. We are concerned to ensure that the reach, diversity, originality and innovation of UK television drama is protected. We can agree that the amendment introduced by the Government will do that. Consequently, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 30:
Page 236, line 18, at end insert "; and
"drama" includes contemporary and other drama in a variety of different formats."
On Question, amendment agreed to.
Clause 268 [Enforcement of public service remits]:
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 31:
Page 241, line 7, leave out from "serious" to end of line 8.
The noble Lord said: My Lords, the amendment relates to the strength or otherwise of the enforcement powers of Ofcom under the Bill. A great deal of energy has been expended in the House over the balance of the Bill between economic and market forces on the one hand and "cultural goods" on the other—the values and standards that are to be required under the Bill. Unless Clause 268 is equal to the task, all the hopes that the House—including the Government—has

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reposed in the public service broadcasting requirements in what are now Clauses 262 and 263 will be useless.
We on these Benches have one particular and specific anxiety about Clause 268. In order for Ofcom to form an opinion as to whether it can use the enforcement powers under the clause, it has first of all to decide whether the broadcaster has,
"failed to fulfil the public service remit",
under Clauses 262 and 263.
In addition, if Ofcom decides that there is such a failure, it must come to the opinion that it is a "serious" failure. Then Ofcom has a discretion as to whether in those circumstances it will proceed to enforce its powers. That discretion depends on whether,
"the situation requires the exercise of their powers".
Further, in reaching that decision, various factors are laid down in the clause to which Ofcom must, "have regard, in particular". One of those is the,
"general economic and market conditions",
prevailing, which may impact on the failure concerned.
Noble Lords may think, "So far, so weak", but that is not the end of it, because even if all those tests are complied with, no enforcement is possible if Ofcom is satisfied that the failure is,
"excused by economic or market conditions".
I have checked with the extremely helpful civil servants who are working on the Bill, and their and my belief is that the first test,
"excused by economic or market conditions",
is particular and specific to the broadcaster that has failed to meet the public service broadcasting remit.
That seems to mean that, if a media group, as is typical, puts a particular broadcaster into a subsidiary and intentionally runs it on an extremely short and limited financial lead, starving it of any resources that it does not need imminently for broadcasting purposes and driving it into a programme of broadcasting that falls foul of the public service remit, Ofcom could not then take enforcement proceedings against that subsidiary company. Ofcom must be satisfied that the failure is not excused by the particular and specific economic conditions of the broadcaster concerned, or it has no further powers under the clause.
I hope that I do not to need to labour the danger of that potential state of affairs. It would allow a single broadcaster to burst through the public service remit net on the grounds of its own incompetence or, more likely, on the grounds that it did not have the wherewithal, having been starved by its parent company. It may not be able to meet the public service remit for that reason. One can think of many examples of a media group purchasing an overpriced television company and then not having the money to put into programming.
One can think of a great many circumstances in which the company concerned will be beyond the reach of Ofcom on the grounds in the clause.
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Therefore, we believe that the clause is seriously weakened unless those words are removed where they first appear in subsection (2). I beg to move.
Baroness Howe of Idlicote: My Lords, I believe that it was I who raised this issue in Committee in the first place. The noble Lord, Lord Phillips, has not only explained the matter much more succinctly than I did but has added other complications that could easily occur if the circumstances that he described arose.
It is absurd that there should be a double let-out, in that the clause says,
"is not excused by economic or market conditions",
in a specific sense, before moving down to the,
"general economic and market conditions",
which are part of the general aspects to which Ofcom must have particular regard.
I am absolutely behind the amendment, and am worried that the Government have not seen fit to take note of it and remove what appears to be a bias in favour of the broadcaster under these circumstances.
Lord Lipsey: My Lords, I do not believe that the amendment is well advised, for two reasons. First, we are moving from the old world of broadcasting to a new world of broadcasting. Some of us like that more than others, but that is what is happening. In the days when ITV had guaranteed revenues and spectrum shortage and did not have to pay for its licences, we did not have to worry much about economic conditions getting in the way of its public service obligations. I hope that we will never have to do so in future, but we are in the world of greater competition, so it is sensible to have some sort of safety valve built into the Bill. The clause is a safety valve.
It worries me that, at every stage, this House has displayed a lack of confidence in Ofcom. The noble Lord, Lord Phillips of Sudbury, was as coherent as ever in inventing a transparent device that a company might adopt to get round the provisions and saying that Ofcom would not be able to do anything about it. The clause is quite clear that such a matter is left to the opinion of Ofcom; it would see through such a device like a shot. The provision is wise and I hope that the Minister will not accept the amendment.
Lord Crickhowell: My Lords, the noble Lord, Lord Phillips, will know that no one has been a stronger advocate of public service remits and the need to protect and strengthen them than me, and I have supported other amendments that he has tabled. He will also know that I have not always agreed with the noble Lord, Lord Lipsey. However, I have a certain sympathy with the view that he has just expressed.
I could not quite understand the argument of the noble Lord, Lord Phillips, that we would allow a loophole for financial incompetence. That is certainly not how I read the clause. Having lived through some difficult times in the industry, in the days when I was a director in it, I believe that there should be an escape clause under the discretion of Ofcom for general economic conditions. It will not be in anyone's interest

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if Ofcom is forced into an action that might bring down a perfectly good company or organisation, which is doing its best and would normally, over a period, be able to meet the conditions but is facing a temporary situation in which it cannot. Such situations have arisen, and no doubt will arise again in future, when a company cannot do so for reasons entirely outside its control.
I hope that Ofcom will have a certain amount of discretion. I am not a lawyer, and I do not have the noble Lord's expertise in this matter but, as I read the clause, there is some discretion given. Therefore, I am slightly puzzled by his amendment.
7.30 p.m.
Lord Phillips of Sudbury: My Lords, I am grateful to the noble Lord for giving way. However, the very point to which he refers is in the Bill, and I would leave it in the Bill. Ofcom does have to have regard in particular to the general economic and market conditions. I do not seek to strike that from the Bill. However, as the noble Baroness, Lady Howe, said, this is a second provision which is particular to the particular company. It is that which seems to me to drive a coach and horses through the strength of these enforcement powers.
Lord Crickhowell: My Lords, I have made my point. I do not wish to add anything further.
Lord McIntosh of Haringey: My Lords, Amendment No. 31 relates to the circumstances in which Ofcom may choose not to impose direct regulation on a broadcaster in the case of a serious failure either to fulfil the broadcaster's own public service remit or to make an adequate contribution to the overall public service remit. The Bill provides that Ofcom's enforcement powers can be used only if it considers that the broadcaster's failure is serious and is not excused by economic or market conditions. Enforcement powers include removing the broadcaster's self-regulation—in the third tier of the public service regime—and imposing direct regulation on that broadcaster.
Amendment No. 31 would prevent Ofcom considering whether a broadcaster's failure either to fulfil its individual public service remit or to make an adequate contribution are excused by economic or market conditions. So it would reduce the circumstances in which Ofcom could exempt a broadcaster under Clause 268(2)(a) to those in which the failure was not considered to be serious. Under Clause 268(2)(b) Ofcom also has to determine whether the situation requires the exercise of its enforcement powers. As the noble Baroness, Lady Blackstone, explained, it would not be realistic or reasonable for Ofcom to ignore the impact of economic and market conditions on the ability of licensed broadcasters to fulfil their remits.
All licensed broadcasters operate in a commercial market, as the noble Lord, Lord Crickhowell, said. They are affected by external economic conditions. Concern was expressed both in Committee and on
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Report that the double reference to "economic and market conditions" in Clause 263 might allow economic and market conditions to become Ofcom's overriding consideration when making a judgment about using enforcement powers. I shall set out again why that would not occur.
Under subsection (2)(a), Ofcom will consider whether the failure of the provider is serious and whether or not that failure is excused by economic and market conditions. I should make this clear because the noble Lord, Lord Phillips, made a great point about subsidiaries and the possibility of a broadcaster starving the service of funds. The question is whether the failure is excused by economic conditions specific to the broadcaster. We do not think that Ofcom would conclude that the failure was excused if the failure was caused by the broadcaster's incompetence. We are still looking at economic or market conditions.
Under subsection (2)(b), Ofcom will determine whether the situation requires the exercise of its powers, having regard to a number of matters including the general economic and market conditions affecting broadcasters. "General economic and market conditions" in subsection (3) therefore relates to Ofcom's decision on whether or not to exercise its enforcement powers. The reference removed by this amendment concerns the nature of a provider's failure to fulfil the public service remit.
The combined effect of those two provisions is that Ofcom can consider whether the specific failure of the provider is excused by economic or market conditions and can decide—taking into account a number of factors, one of which is the general economic and market conditions affecting broadcasters across the board—whether to take enforcement action. We do not accept that these provisions give economic and market conditions too great an influence over Ofcom's enforcement powers.
I should make it very clear that the issue of whether or not a failure can be excused by economic or market conditions will be judged by Ofcom, not the broadcaster. The enforcement process must have due regard to the realities of the marketplace in which commercial broadcasters have to operate. However, it is not intended to provide an easy get-out for broadcasters wanting to escape their public service obligations. I am confident that Ofcom will not regard it in that way.
In short, I believe that the Bill as it stands formulates Ofcom's enforcement powers in a sensible way and that it would not be right to remove the existing reference to economic or market conditions.
Lord Phillips of Sudbury: My Lords, before the Minister sits down, I should like to ask a question, an affirmative answer to which would go some way towards reassuring me. Where Ofcom is looking at a broadcaster in order to form an opinion on whether its failure to comply with public service broadcasting standards is excused by economic or market conditions, what will be the position if it turns out to be a subsidiary which has not been incompetent but

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whose parent company—the media group or holding company—has simply not provided sufficient capitalisation for it to undertake programming that meets its public service broadcasting requirements? Would that bring the individual broadcaster within the net? Would that excuse the broadcaster or would it not? I feel sure that the Minister will see my point. I know from my own professional life that a great deal of extreme financial cunning is employed in such groups. What if it were possible to construct financially a set-up whereby the financial problems of the subsidiary could not be taken back to the parent company for the purposes of this clause?
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Phillips, has repeated at length the argument that he used in his original speech. My answer is "No". The question is whether the failure is excused by economic conditions specific to the broadcaster. It does not matter whether it is a subsidiary or a parent company. Ofcom will not allow someone to get round their obligations by setting up a subsidiary and starving it of funds.
Lord Phillips of Sudbury: My Lords, I take that last reply to mean "Yes" and not "No"—that Ofcom could take account of the parent company's conduct in deciding whether the wholly-owned subsidiary had an excuse. That is of considerable solace. I hope that the Minister is right in that. I suspect that it may be a passage of Hansard that is pored over. As I detect little support from other Benches, with reluctance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Davies of Oldham: My Lords, I beg to move that the further proceedings after Third Reading be now adjourned until 8.37 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Army, Air Force and Naval Discipline Acts (Continuation) Order 2003
7.37 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach) rose to move, That the draft order laid before the House on 28th April be approved [18th Report from the Joint Committee].
The noble Lord said: My Lords, the order is an essential part of the process by which Parliament continues in force the service discipline Acts. The main element of that process is the five-yearly Armed Forces Acts. The most recent of these, the Act that we passed in 2001, extended the lives of the Army and Air Force Acts 1955 and the Naval Discipline Act 1957 for a further five years. However, this is subject to both Houses approving an order such as this one in each intervening year. The service discipline Acts provide the statutory basis for discipline in the Armed Forces.
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Because of that they are of critical importance, and so therefore is this order, as the means of ensuring that the discipline Acts remain in force. The draft order was approved in another place on 1st July.
The Explanatory Memorandum accompanying the order addresses its compatibility with the rights provided under the European Convention on Human Rights. The order raises convention issues only in that it continues in force three Acts that have been developed over the years, by successive administrations, to reflect the rights set out in the convention. In last year's debate, I mentioned the European Court of Human Rights judgment in the case of Morris v the United Kingdom. That court had taken the view that the procedures for post-trial review provided for in the service discipline Acts were not compatible with Article 6 of the convention. That was on the basis that the involvement of non-judicial service authorities in the review of court martial findings and sentences impaired the independence of the court martial. They took that view even though the process is intended as a safeguard for the accused.
I advised the House last year that we had not yet decided how to react to that judgment. I did so because the same issues concerning post-trial review were also being addressed by your Lordships' House in its judicial capacity. We naturally wanted to await their Lordships' judgment before taking a decision on the future of the review procedure.
As it happens, that judgment, in the case of Boyd, Hastie and Spear, expressed a positive view of the procedure. It accepted that post-trial review served as a safeguard for the accused. The judgment also acknowledged that any changes made as a result of the review process were themselves appealable, so that the courts would be able to have the last word on the cases concerned. In formulating their own judgment, their Lordships were fully aware of the earlier Strasbourg judgment in the Morris case.
Because of the judgment by the Appellate Committee, we are able to say this year that the service discipline Acts are compatible with the convention rights and that so also is the present order continuing the Acts.
So where does that leave us? The issue of the compatibility of the review procedure has been raised again in the case of Grieves. Because of the conflicting judgments in the previous two cases, the Grieves case is going to be heard by the Grand Chamber of the European Court of Human Rights. The hearing will be later this year. It would, of course, be inappropriate to anticipate what this further judgment will say or to consider at this stage how we might react to it, although we are keen to have the issue settled.
One conclusion we can draw from their Lordships' judgment is that it illustrates how valuable it can be that our domestic courts are now more readily able to address convention points, following the Human Rights Act. The Grand Chamber of the European Court will now have the benefit of the arguments set out in the Appellate Committee's judgment. This has not been the case with previous cases concerning our military justice system that have gone to Strasbourg. We should see this as a positive advance.
I should now like to move on to our plans to replace the service discipline Acts with a single tri-service Act. This is in order to provide a framework of Armed Forces legislation that will better meet the future needs of the services.
We are continuing to develop policy for the proposed new legislation. The focus remains on establishing how best to harmonise the services' differing disciplinary powers and procedures. This is so that the tri-service Act will fulfil the objective of improving the administration of discipline where the services operate together. We are looking closely at the arrangements for summary discipline and for courts martial. In doing so, we are aiming to build on those aspects that are common between the services, while seeking to ensure that their requirements are appropriately reflected in the new procedures.
At the same time, we are looking at the other areas covered by the legislation, such as the system for members of the Armed Forces making complaints. This is at present essentially the same in all the services. However, the tri-service Act will be an opportunity to try to develop procedures that better meet the likely future expectations of our people.
The Government and the Armed Forces attach considerable importance to the tri-service Act project. This is reflected in the substantial resources that are being devoted to working out both the principles and the detail of the legislation. Although the work on policy development is taking a little longer than we had envisaged, this is not affecting our overall timetable. In any case, as I know the House will readily agree, it really is essential that we get the policy right. Nevertheless we hope that the next five-yearly Armed Forces Bill, due in the 2005–06 Session, can be the vehicle for the tri-service legislation. This will obviously be subject to the availability of parliamentary time for what is expected to be a very large Bill.
I know that the noble Lord, Lord Vivian, is concerned about consultation on the Bill before its formal introduction. I do not intend today to outline what form such consultation will take. It is, if I may say so, a little early to do so for a Bill which is most unlikely to be introduced in either of the next two Sessions. We shall keep the options under review, and I have little doubt that nearer the time we shall discuss these through the usual channels.
However, I can assure the noble Lord and the House that we fully appreciate the depth of experience and expertise on these matters in your Lordships' House. It will certainly be our intention to assist the House by providing details of the main proposals for the tri-service Act once we have firmed these up. As I suggested last year, I imagine that this alone will be sufficient to generate reactions of various sorts from noble Lords.
Discipline in the Armed Forces is not a goal in itself. It serves the vital function of underpinning operational effectiveness. I scarcely need to remind this House of how both the effectiveness of our forces and their
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discipline have recently been put to the most demanding of tests. They have come through with flying colours.
Our attention in the past few months has naturally been focused on the operations in the Gulf region. However, I know that the House would not want for one moment to overlook what the men and women of the three services do on our behalf, wherever they are serving at the time. They are among the nation's most priceless assets, and I am sure that the House will once again wish to join me in paying tribute to them. I beg to move.
Moved, That the draft order laid before the House on 28th April be approved [18th report from the Joint Committee].—(Lord Bach.)
Lord Vivian: My Lords, I am most grateful to the Minister for moving the order. I am grateful also for the order which will follow in due course. I wish to speak to both orders. The first concerns the annual continuation order for the Army, Air Force and Naval Discipline Acts and the second concerns the Armed Forces (Review of Search and Seizure) Order 2003. From these Benches we support these two orders and I am grateful to the Minister for his clear explanation of the first order. I have no doubt that he will also clearly explain the second order.
I am sure that I do not need to remind your Lordships of the critical importance of high morale for our Armed Forces, which consists of the fair application of military discipline, good sound training and high military ethos. The efficiency and state of morale of a regiment is the sole responsibility of a commanding officer and for that reason such military discipline powers are vested in him. If we undermine those powers or reduce them in any way, we shall destroy the ethos and morale of regiments and may be left with inefficient regiments that may not be successful in times of conflict. I sincerely hope that no further amendments will be made to the summary discipline powers of a commanding officer and no more changes made to the courts martial system.
Throughout the drafting process of the new tri-service Bill mentioned by the Minister, I can only hope that after every clause has been drafted the question is asked: "Have we undermined or reduced the powers of a commanding officer in any way"? Should the answer be in the affirmative, the clause really must be reexamined to prevent those powers being reduced. The new Bill will be of such importance that every attempt should be made to retain the effectiveness of the military discipline system, ensuring that commanding officers retain their full powers.
I have a number of questions to ask but I shall keep my remarks short. First, I shall deal with the continuation order 2003 and then with the search and seizure order. When we processed the 2002 continuation order about a year ago, I covered a number of points that do not yet appear to have been followed up, but I expect that in due course they will be resolved.

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Could the Minister expand on what progress has been made in the drafting of the tri-service measure so far? The Minister will recall that he said that by this year the policy development stage should be complete and that he would consider whether it would be possible to publish information about the Government's proposals. Is the policy development stage now complete?
Last year I made the observation that due to the nature of the three services and their different roles there may he a need to introduce some parts of the Bill which will be applicable only to a specific service. Could the Minister say what progress has been made in relation to the possible need for that?
This is an opportunity to comment on some disciplinary matters that have occurred in Iraq over recent months. It has been reported that two soldiers were returned from Iraq because they questioned the legality of the war and yet it would appear that no disciplinary charges will be brought against them. Could the Minister say if there is any truth in this allegation and, if there is, what are the reasons for not bringing military charges against them? A second point for concern is the allegations against a number of British soldiers who may have committed serious crimes against Iraqi prisoners of war. Will the Minister assure the House that if, as a result of investigations, the case is substantiated, the strongest possible action will be taken against them if they are found to blame?
I move to a matter that I raised last year concerning the International Criminal Court. The Minister informed me that the complementary provisions of the statute whereby we have primacy of jurisdiction in cases where our nationals are accused provide the protection that our service personnel require. He went on to say that, in other words, if the UK decided that there was no case to answer, then the International Criminal Court would not have jurisdiction unless it could claim that the United Kingdom was deliberately shielding war criminals or that the justice system had broken down. It would appear that the International Criminal Court could misinterpret or misunderstand the UK position of "no case to answer", with the understanding that the UK was unwilling or unable to proceed with a prosecution. If that happened, it could give rise to the International Criminal Court claiming jurisdiction over such an incidence. Will the Minister kindly give the House further reassurance on this issue?
I turn briefly to the second order, the Armed Forces (Review of Search and Seizure) Order 2003. I understand that the order has been laid as Part 2 of the 2001 Act, providing for the first time a statutory regime for powers of entry, search and seizure in connection with the investigations of offences under the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957, and that this draft order will be part of that regime. The powers of a commanding officer for entry, search and seizure of property has been discussed in great detail previously and I understand that the proposed order will continue to allow commanding officers to have those limited powers, subject to judicial review. if I am correct in my
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assertions, will the Minister assure the House that the Armed Forces legal directorates are content with the order?
In conclusion, I should like to take this opportunity to pay tribute to the men and women, and to the families, of our Armed Forces. They have been over-committed and many of their families have faced extra-long periods of separation. They have performed their tasks highly successfully, with great skill, bravery and determination, and I am sure that all of your Lordships, on all sides of the House, are immensely proud of all their many achievements.
In the recent defence debate, I stressed the importance of ensuring that the Armed Forces are given a fair deal. I should like to take this occasion to remind the Minister to examine now how pay, conditions of service and allowances can be increased and improved; as, otherwise, we may lose many trained and experienced servicemen. The tri-service Armed Forces disciplinary Bill is yet another part of this fair deal. It is essential that this new legislation is right and easy for commanding officers to interpret and administrate. As I have said, military discipline, in combination with the military ethos and sound training, ensures high morale and operational effectiveness.
Lord Redesdale: My Lords, I shall speak to both orders. The Minister mentioned the case of Grieves— confirming the court martial and the fact that the case will be heard by the European Court of European Rights. We shall have to await the outcome; but if the outcome goes against the Government, what action will be taken, and under what time-scale?
We support the move to a tri-service Act, which is seen to be in 2005–06—although the Minister said in his introduction that this will be down to the availability of time. That is a form of words often used by Ministers, but I hope that he will confirm that it will be seen as an essential piece of legislation. Its importance is such that, in another place, Dr Lewis Moonie mentioned the fact that it was raised by the noble Lord, Lord Vivian, last year. It is only fair—
Lord Bach: My Lords, for the record, I think that the honourable Member to whom the noble Lord refers was my colleague the Minister, Mr Ivor Caplin.
Lord Redesdale: My Lords, that was last year obviously, but Dr Moonie raised this point in the House of Commons Standing Committee on Delegated Legislation this year. I apologise to the House for not making that clear.
The only reason I raise the point is that it is rare for this House to receive a mention in another place and the noble Lord, Lord Vivian, should be aware of the compliment paid to him by Dr Moonie. He said:
"Lord Vivian was a brigadier in the Army. He has vast experience of the armed forces, as have so many Members of the upper House. Many have served in the highest positions in each of the armed forces. The contribution that they can make to the process cannot be overestimated".

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I mention that because, obviously, we like to believe that the debates in this House are taken note of in another place. In talking about the provisions for court martial and the changes that will be made, the noble Lord, Lord Vivian, mentioned the powers of commanding officers. We take on board the importance of the views of commanding officers.
The noble Lord, Lord Vivian, also raised the question of the two service personnel who questioned the legality of war in Iraq. Before the vote in the House of Commons, we on these Benches questioned the legality of war in Iraq. We question at what stage those prosecutions will be taken, if they are to be taken at all. However, I was interested to note from newspaper articles—I merely give this the weight that it was given in the press—the stated position of Robin Cook in regard to the legality of the war in Iraq.
We support all the work that is being done by our troops in Iraq at the present time and do not question their professionalism. We support both orders. I very much hope that the tri-service Act proposed for 2005–06 will be brought forward.
Earl Attlee: My Lords, I am grateful to the Minister for his explanation of the order. I remind the House that I have a peripheral interest. I say "peripheral" because I no longer serve in the Regular Army and I am not likely to called up again for some time, I hope. I serve for only a few days a year with the TA.
I have no difficulty with the orders themselves. The Minister mentioned the complaints procedure, otherwise known as the grievance procedure. I can assure him that there is much scope for improvement in the grievance procedure, particularly in respect of the time-scales to draw such matters to a conclusion.
Prior to going to the Gulf, I had to consider whether I was prepared to take the anthrax vaccination. I did. On mobilisation, it was very clearly a free, informed choice as to whether or not one was going to take the vaccination. Great efforts were made in that regard.
Interestingly, and despite trying quite hard myself, I was unable to obtain a booster vaccination in theatre. Consequently, the cost of the original vaccination, which I understand is quite expensive, was wasted, and now I have no protection against anthrax.
But during the operation in Iraq Ministers authorised the taking of the NAPS tablets—the nerve agent pre-treatment sets. NAPS is a prophylactic treatment to mitigate the effects of nerve agent poisoning. However, service personnel were compelled under military law to take the NAPS tablets. I had no difficulty with that; I wanted to take them in order to be fully protected. But can the Minister explain why military law was used to compel the taking of NAPS but not the anthrax vaccination?
8 p.m.
Lord Burnham: My Lords, the Minister will be in no doubt whatever why I have risen to my feet on this subject. I have done so every year since 1997 in regard to the renewal of the tri-service Act. When the noble Lord
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says that a tri-service discipline Act is taking a little longer than we envisaged, that is an understatement. That is clearly the case of Jarndyce and Jarndyce. I have no doubt whatever that it will be many years before we have a tri-service discipline Act. There is no reason why that should be so. There was talk about the next two Sessions.
My noble friend Lord Vivian and the noble Lord, Lord Redesdale, were far too gentle with the Minister and with his civil servants on the delay in getting a tri-service Act together. The civil servants, the people who should be producing it, need a very serious kicking so that we can have a draft Bill by this time next year, when we next discuss the renewal of this order. I hope and believe that the noble Lord, Lord Gilbert, will support me on those points.
Lord Bach: My Lords, I am grateful to all noble Lords who have spoken on this order. Some important points have been made. I thank noble Lords for their support for the continuation order. It is very important. I agree with what the noble Lord, Lord Vivian, said about the critical importance of high morale. That is at the centre of everything that we are trying to do in this area.
I have been asked a number of questions. One concerned why the tri-service Bill is taking so long. The noble Lord, Lord Burnham, in his inimitable way, suggested that there had been undue delay up to now. I do not believe that that is fair. It is likely to be a very long Bill, if it comes before Parliament at all. The House will know that after five years we must have a discipline Bill before Parliament, as we did in 2001. We very much want the next one to be the tri-service Bill. It must be understood that that will be a long piece of legislation because of the changes that it will mean to the three Acts that presently apply. Such matters take a very long time. I shall bear in mind what the noble Lord, Lord Burnham, said. If I am in this place this time next year I shall come here fearful and I dare say that my civil servants will come even more fearful.
Why the delay? What is holding up matters? I want to be frank with the House. I said that we hoped that the policy development would be complete and it is not. I have to concede that. In principle, the services have agreed that the tri-service Bill, as it is called, should provide for a single system of service law, which would replace the separate systems that we are used to. If achieved it would mean that for the first time personnel in all three services will have the same rights and be subject to the same disciplinary powers. In many of those areas—for example, in the courts martial system—the services have largely agreed on common future procedures that will make the service system of law a reality.
There are some significant issues of detail that remain to be decided. notably in the key area of summary discipline. The three services are proud of their traditions and the noble Lord, Lord Burnham, knows them as well as anyone in the House. It has not yet been possible to settle on a harmonised level of

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powers to be exercisable by commanding officers. The main difficulty is the extent of the present differences between the Royal Navy and the other services.
At present the Royal Navy is able to deal summarily with a much wider range of offences and is able to award greater punishment than either the Army or the RAF. The Royal Navy has a maximum period in detention of 90 days, for example, rather than the 60 days available to the other two services. Work continues on finding a suitable harmonised level of powers. That is a key issue for a tri-service Act and one that we shall have to solve. Perhaps for once it is not fair to blame the Civil Service, but we should perhaps ask the services themselves to come to an accommodation on that. I am confident that in the normal way they will.
I was asked about discipline in two different forms by the noble Lord, Lord Vivian. One was in relation to the two soldiers who were mentioned in the newspapers. The point was taken at length by his honourable friend in another place, but that is not a good point. The two soldiers returned home for different and separate reasons. One soldier wanted to go home because of a serious domestic problem which I do not intend to go into. Through discussion with the soldier, the real reasons for him wanting to get out of Iraq were identified. The soldier was compassionately returned to the UK; he is still serving with his regiment and has no desire to leave the Army. It would have been inappropriate for disciplinary action to have been considered in his case.
The second soldier was a young man who suffered psychiatric problems during his time in the Gulf. He was returned home for medical reasons and assessed as being temperamentally unsuited to military service and has been discharged. I hope that the noble Lord will agree that both those cases—I shall not go into any more detail—were suitably dealt with, as is often the case.
We know that there are a number of allegations against British soldiers of mistreatment of Iraqis. As the noble Lord would expect, we take such allegations extremely seriously and full investigations are taking place. I shall not comment on any individual case today.
On a tri-service Act and on undermining commanding officers, it is key that any changes should underpin operational effectiveness. That, of course, means the commanding officer's role still being very important.
I was asked about the International Criminal Court. I do not believe that the noble Lord, Lord Vivian, need worry. As he knows, the purpose of the International Criminal Court is to ensure that those who commit the gravest crimes do not do so with impunity. Those crimes are crimes against humanity, war crimes and genocide. There is no question of the ICC investigating any allegations of breaches of international law other than the ones in statute.
UK service personnel are not at risk from malicious or politically motivated investigation or prosecution by the ICC. Under the statute, the UK has
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complementary jurisdiction to the ICC, so it is for the UK, and not the International Criminal Court, to investigate and if necessary prosecute any allegations against UK personnel.
The ICC could intervene against our wishes only if it could claim that the UK was unwilling or unable to proceed; in effect, that means that our system of justice needs to have broken down or that we were deliberately shielding something. In my view, that is inconceivable.
The noble Lord, Lord Redesdale, tempts me to say what we would do about the Grieves case. In the words of a very famous former Liberal Prime Minister, he will have to wait and see. Of course we are not going to commit ourselves at this stage, nor would he expect us to. As far as a tri-service Act is concerned, we shall do our best, as he requests.
I was particularly pleased to hear from the noble Earl, Lord Attlee. We know that he served in the Gulf. He was too modest about his role. As noble Lords from all sides of the House have said, we are very proud indeed to have him as one of our number. I am flattering him to some extent because I do not have the faintest idea what the answer is to the question with which he finished his speech. I promise to write to the noble Earl as soon as I possibly can with the answer.
The noble Earl referred to grievance procedures being too long. We recognise the need to speed up decisions. That is part of the work we are effecting on the tri-service legislation.
I hope that I have covered the questions asked by noble Lords.
On Question, Motion agreed to.

Armed Forces (Review of Search and Seizure) Order 2003
8.10 p.m.
Lord Bach Lord Bach rose to move, That the draft order laid before the House on 28th April be approved [19th Report from the Joint Committee].
The noble Lord said: My Lords, the draft order will be made under the Armed Forces Act 2001, which requires that it will follow the affirmative procedure, needing approval by both Houses. The draft was approved in another place on 2nd July.
Part 2 of the 2001 Act provides a statutory regime for powers of entry, search and seizure in connection with the investigations of offences under the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957. It does not affect commanding officers' powers to authorise searches within their units for purposes other than the investigation of offences, or to search service premises that are not living accommodation. That is spelt out in Section 16 of the Act.
By and large, Part 2 reflects the procedures that have to be followed by the civil police under the Police: and Criminal Evidence Act 1984. Thus, the usual

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procedure for entering and searching premises will be by warrant granted by a judicial officer under Section 5 of the Act.
However, Part 2 is also designed to cater for the realities of service life. It is recognised that it will not always be practicable in the Armed Forces to obtain a warrant in advance of an entry and search of premises. Section 7 of the Act therefore provides commanding officers with a limited power to authorise a search without a warrant of the living accommodation of persons under their command.
Following a search under Section 7, in which property has been seized and retained, Section 8 provides that the commanding officer must request a judicial officer to undertake a review of the search and of the seizure and retention of the property. That is to provide appropriate retrospective safeguards in the absence of a warrant. Section 8 also enables the Secretary of State to make orders prescribing the powers and duties of judicial officers in respect of these reviews. This draft order sets out those powers and duties, particularly the criteria for decisions on the retention or return of property that has been seized. The judicial officer shall adopt such procedures at the review as he sees fit, although he shall take into account representations made by certain people, including the officer who authorised the search and the occupier of the premises that were searched.
The draft order details the circumstances when seized property should be returned. Special provision is made for when the judicial officer is satisfied that it would be in the interests of justice to permit the retention of property. The legal services in the Armed Forces are content with this section of the Bill. They were obviously consulted when the Bill went through the House and of course they have been consulted on this draft order.
Part 2 of the 2001 Act responds to the need for the services to remove uncertainty and to have a clear structure and definition for their powers of search and the seizure of property. It is planned that it will be commenced in its entirety on 30th September this year. The provisions of this order have to be in place before Part 2 as a whole can take effect. I commend the draft order to the House. I beg to move.
Moved, That the draft order laid before the House on 28th April be approved [19th Report from the Joint Committee].—(Lord Bach.)
Lord Vivian: My Lords, with the leave of the House, I have nothing further to add to my original statement.
On Question, Motion agreed to.
Baroness Crawley: My Lords, I beg to move that the House do now adjourn during pleasure until 8.37 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.14 p.m. to 8.37 p.m.]

Communications Bill
Proceedings after Third Reading resumed on Clause 268.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 32:
Page 242. line 23, leave out subsection (11 ).
On Question, amendment agreed to.
Clause 278 [Appointed news providers.for Channel 3]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 33:
Page 252, line 45. leave out paragraphs (a) and (b).
The noble Lord said: My Lords, I speak also to Amendments Nos. 34 to 45. 72, 80, 117, 119, 122, 126 and 145 to 147.
During Committee we listened with interest to very considerable debate on the nomination and ownership rules for the Channel 3 news provider. We were convinced by the arguments in favour of their removal. I indicated on Report that I would be tabling amendments to make changes to the Bill. These amendments lift most of the ownership restrictions of the Channel 3 news provider and remove the obligation that the news provider be selected from bodies nominated by Ofcom.
The Bill will still require that national news on regional Channel 3 programmes is provided by a single body corporate, but removes the system that requires that body to be nominated by Ofcom.
The amendments will remove the rules restricting anyone from owning more than 20 per cent of the appointed news provider, which prevented ITV from owning its own news provider.
Ownership restrictions will still apply so that any body which is prevented from holding a Channel 3 licence by Part 2 of Schedule 2 to the 1990 Act faces equivalent restrictions as regards being. or having an interest in, the Channel 3 news provider. For example, political bodies would not be able to be, control, or own more than a 5 per cent interest in, the news provider.
In addition, ownership restrictions that apply to a Channel 3 licence also apply to the news provider so that, for example, a national or local newspaper with 20 per cent or more of the market cannot be the Channel 3 news provider. A national newspaper with 20 per cent or more of the market cannot have more than a 20 per cent share in the news provider and the news provider cannot have more than a 20 per cent interest in such a newspaper.
We believe that these rules are fair. It would be odd, to say the least, to allow a body that could not hold a Channel 3 licence to provide the news for it. The current rules prevent anyone from holding more than a 20 per cent interest in the news provider, so the new rules leave those affected in the same position as everyone is under current rules.
We have been careful to maintain the quality regulation applied to the news provider contract. There will continue to he provisions requiring that

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Channel 3's national news is able to compete with other national news services. The requirements for Ofcom to approve the contract for the appointed news provider to ensure that it is adequately funded will also remain.
We have also included provisions so that Ofcom will be able to obtain all the information it needs from ITV or the appointed news provider to assure itself that the necessary arrangements are in place and working properly. We are grateful to both ITN and ITV, whom we have consulted on the transitional provisions.
The Bill as amended will also allow for the creation of a Channel 5 scheme comparable to the appointed news provider system for Channel 3 and we will be able to modify by order the quality and ownership aspects of the Channel 3 scheme and any Channel 5 scheme. I beg to move.
Baroness Buscombe: My Lords, I thank the Minister for his helpful explanation of the purpose and effect of these amendments. He made a fulsome statement at the Report stage in which he signalled that the Government had been persuaded by the case for change and he has been true to his word.
These amendments are good news for ITN and will help to ensure that there is strong competition in the news supply market between ITN, the BBC and Sky News in the years to come.
In removing unnecessary ownership regulation and the arcane nominated news provider arrangements, these amendments bring the Bill closer to the Government's original intention. But, importantly, as the Minister has said, they also retain the quality aspects of Clause 278 that require ITV to supply a news programme that is competitive with other national news programmes and that give Ofcom the power to approve the terms of any future contract as adequate to deliver ITV's news obligations.
I understand from discussions with ITN and ITV that the amendments in no way affect the status of the current ITV news contract, which will run unchanged until 2008, and that they will have no effect on other important ITN contracts such as that for Channel 4. That is good news.
Finally, I thank the Minister once again for bringing forward these amendments and for being persuaded of the case for change that was made so eloquently by distinguished Members on all sides of your Lordships' House. We support the amendments.
Lord McNally: My Lords, I echo what has been said by the noble Baroness, Lady Buscombe. I had great pleasure in working with her on these matters at an earlier stage of the Bill. Would that we could have worked together on some other aspects—but there it is.
It was touching to find that the 20:20 rules, which at four o'clock today were part of yesterday's legislation, appear back spanking new. I am pleased that the noble Lord, Lord Borrie, is not present to hear that. But as the noble Baroness, Lady Buscombe, said, this is good news; it is a win-win situation.
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It is good news for the British people because they have a chance of getting ITN back to its glory days. One of the interesting issues about the Iraq war was that when ITN was given the extra resources during the war, it showed that it had lost none of its old élan, skills and zip. That is only to the good.
Whatever happens as regards the ownership of ITV, surely the lesson is that a news provider which is an integral part of the organisation, as BBC news is with BBC and Sky News is with Sky, is better cared for and a better organisation. That gives us genuine competition, quality and diversity, which is to he welcomed.
I welcome the positive way in which the Minister has approached the matter and we fully support the amendments.
8.45 p.m.
Baroness Howe of ldlicote: My Lords, I was one of the signatories on the previous occasion. I should also like to thank the Minister for seeing the sense of what was proposed and coming forward with these amendments. I know how happy everyone concerned is.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 34 to 40:
Page 253, line 3, leave out "such an appointment is made" and insert "a body is appointed as the appointed news provider"
Page 253, line 5, leave out from beginning to "appointment" in line 6 and insert "body's finances are adequate, throughout the period of its"
Page 253, line 9, leave out "such"
Page 253, line 9, at end insert—
"(3A) The conditions imposed under this section must include the conditions that OFCOM consider appropriate for securing that arrangements maintained between—

(a) the holders of regional Channel 3 licences, and

(b) the body which is the appointed the news provider,

ensure that that body is subject to an obligation. enforceable by OFCOM, to provide OFCOM with all such information as they may require for the purpose of carrying out their functions."
Page 253, line 12, leave out "person who" and insert "body which"
Page 253, line 36, after "(d)" insert "or (3A)"
Page 253, line 37, at end insert?—
"() Section 32 of the 1990 Act (nomination of bodies eligible for appointment as news providers) shall cease to have effect."
On Question, amendments agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 41:
After Clause 278, insert the following new clause—
"DISQUALIFICATION FROM APPOINTMENT AS NEWS PROVIDER

(1) The regulatory regime for every regional Channel 3 service includes the conditions that OFCOM consider appropriate for securing—

(a) that a body is not appointed as the appointed news provider if it falls within subsection (2); and

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(b) that the appointment of a body as the appointed news provider ceases to have effect if it becomes a body falling within that subsection.

(2) A body falls within this subsection if—

(a) it is a disqualified person under Part 2 of Schedule 2 to the 1990 Act in relation to a Channel 3 licence; or

(b) there would be a contravention of Part 1 of Schedule 14 to this Act (whether by that body or by another person) if that body held a licence to provide a Channel 3 service, or held a licence to provide such a service for a particular area for which such a service is provided."

On Question, amendment agreed to.
Clause 279 [Power to repeal Channel 3 news provider provisions]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 42:
Page 253, line 40, leave out from "repeal" to end of line and insert "or otherwise modify any of the provisions of section 278 or (Disqualification from appointment as news provider)"
On Question, amendment agreed to.
Clause 280 [News providers for Channel 5]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 43 to 45:
Page 254. line 11, leave out from "278" to end of line 12 and insert "or (Disqualification from appointment as news provider)"
Page 254, line 14, leave out from "278" to end and insert "or (Disqualification from appointment as news provider)"
Page 254, line 19, leave out "person" and insert "body"
On Question, amendments agreed to.
Clause 283 [Regional programme-making for Channels 3 and 5]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 46:
Page 257, line 22, at end insert—
"() A proportion is not to be regarded by OFCOM as suitable for the purposes of a provision of this section if it constitutes less than a significant proportion of the programmes or expenditure in question."
The noble Lord said: My Lords, in the previous stages, we had a debate which I thought was rather theological at times on the words "suitable and sufficient". My noble friend Lord Puttnam accused me of missing a slam dunk opportunity—whatever that means—to make a meaningful concession. We are not missing the slam dunk opportunity now. We felt that the words then proposed were too loose and might not provide Ofcom with the tools necessary to ensure that levels of regional production and programming are sustained in the future. However, we recognised the strength of feeling and we undertook to do what we could to address the concerns expressed. This could be by incorporating the word "significant" along with a qualification—which we believe is immensely important—to ensure that Ofcom retains the flexibility it needs to treat different services differently.
We undertook to come back with suggestions on Third Reading, which is what we have done. Amendment No. 46 provides that in determining what is a suitable proportion for the purpose of Clause 283, Ofcom must not regard a proportion as suitable if it constitutes less than a significant proportion of the
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programmes or expenditure in question. The suitable proportions in question are the proportion of Channel 3 or Channel 4 programmes to be made in the United Kingdom outside the M25 area. We also detail the proportion of expenditure by the providers of Channel 3 services or the Channel 5 service on programme production at different production centres outside the M25 area.
Amendment No. 48 makes similar provision to Clause 285, which deals with Channel 4. Although the amendments tabled on Report did not cover Channel 4, we think that equivalent changes should be made in the interests of consistency.
Amendment No. 47 provides that in determining what is a suitable proportion for the purpose of Clause 284, Ofcom must not regard a proportion as suitable if it constitutes less than a significant proportion of the programmes in question. The suitable programmes in question here are the proportion of regional local programmes to be made in the area for which the service is provided and the proportion of regional programmes, other than news, to be shown at or adjacent to peak time.
We believe that these amendments deal with the points of concern expressed in this House while preserving the essential flexibility for Ofcom and avoiding undue interference in broadcasters' commissioning and scheduling decisions. I beg to move.
Baroness Buscombe: My Lords, we support Amendments Nos. 46, 47 and 48. The noble Lord, Lord Puttnam, said on Report that it is important that we get this matter right so that the production of television programmes in the regions is nurtured and sustained. But as the Minister pointed out, it is also important that Ofcom retains sufficient flexibility. It must be able to take account of the differences between smaller ITV licensees such as Border Television and the larger areas such as Granada, as well as the differences between Channels 3, 4, and 5. My noble friend Lord Crickhowell requested on Report that the Government meet the proponents of this cause half way. The noble Lord, Lord Puttnam, said that he would,
"settle comfortably on the word 'significant"'.—[Official Report, 1/7/03; col. 837.]
rather than "substantial". These amendments do precisely that and I therefore support the Minister.
Lord McNally: My Lords, if the Minister does not think it frivolous or light-hearted, I wish to say that these are slam-dunk amendments.
On Question, amendment agreed to.
Clause 284 [Regional programmes on Channel 3]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 47:
Page 259, line 18, at end insert—
"() A proportion is not to be regarded by OFCOM as suitable for the purposes of a provision of this section if it constitutes less than a significant proportion of the programmes in question."
On Question, amendment agreed to.
Clause 285 [Regional programme-making for Channel 4]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 48:
Page 260, line 15, at end insert—
"() A proportion is not to be regarded by OFCOM as suitable for the purposes of a provision of this section if it constitutes less than a significant proportion of the programmes or expenditure in question."
On Question, amendment agreed to.
Clause 300 [Code relating to provision for the deaf and visually impaired]:
Lord McNally Lord McNally moved Amendment No. 49:
Page 268, line 26, at end insert "and
(iii) persons with a dual sensory impairment."
On Question, amendment agreed to.
[Amendment No. 50 not moved.]
Clause 306 [Code of practice for electronic programme guides]:
Lord Davies of Oldham Lord Davies of Oldham moved Amendments No. 51 and 52:
Page 273, line 9, leave out from second "promotion" to end of line 11 and insert ", for members of its intended audience, of the programmes included in each public service channel; and
(b) the facilities, in the case of each such channel, for members of its intended audience to select or access the programmes included in it."
Page 273. line 34, at end insert—
"() In this section "intended audience", in relation to a service of any description, means

(a) if the service is provided only for a particular area or locality of the United Kingdom, members of the public in that area or locality;

(b) if it is provided for members of a particular community, members of that community; and

(c) in any other case, members of the public in the United Kingdom."

The noble Lord said: My Lords, throughout Committee and Report stages, there was general agreement that the obligation to give due prominence to the listing of public service channels on EPGs should apply to the national or regional variation of those channels provided for the area in which the channel was being watched; for example, BBC Wales in Wales or Granada in the North West. There were also concerns that we should find a form of words that gave the clearest possible indication of our public policy objective without predicting the outcome of any commercial negotiations that operators would need to conclude if we were to see the objective delivered.
The amendments reconcile those different aims. Their effect would be that, where a public service channel is provided in different versions for different regions or areas, a viewer watching the channel in one of those areas could access the relevant version of the channel through the channel's primary EPG listing.
To make it crystal clear, it is a matter of public policy that all regional variations of a public service channel should benefit from due prominence to the same extent.
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How that is achieved is a matter that should be determined through commercial negotiations under Ofcom's supervision.
I hope that that statement will reassure both those who want regional versions of public service channels to be given due prominence, and those who want to make it clear that, in order to achieve that objective, broadcasters would pay, on fair, reasonable and nondiscriminatory terms, for access to EPG and conditional access systems in so far as that was needed to secure regionalisation. I beg to move.
Baroness Buscombe: My Lords, we support the amendments. We welcome the Minister's statement.
On Question, amendments agreed to.
Clause 309 [Consultation about change of character of local services]:
Lord Davies of Oldham Lord Davies of Oldham moved Amendment No. 53:
Page 275, line 15, leave out "section 106(1A)" and insert "subsection (1A) of section 106"
The noble Lord said: My Lords, in moving this amendment, I shall speak to Amendment No. 55. I shall also speak to Amendments Nos. 54 and 56, which we reject. It is right to require Ofcom to consult on a request for a departure from the character of a station. However, I do not accept that a requirement to consult places significant additional burdens on the industry. The process of requesting a change is no different from current arrangements, and there is no requirement on a radio station to do anything different or additional to what is currently required.
The clause does not require radio stations to incur any expenditure. Any costs incurred by the radio industry will be those that they have chosen to incur, and entirely at their discretion. Some additional costs may be incurred by Ofcom in considering representations, but those are likely to be minimal and are justified by a more accountable and more transparent process.
I am also confident that Ofcom, mindful of its general duties, will exercise this duty in a way that minimises the costs to the radio industry. I am therefore satisfied that it should be Ofcom's duty to consult. We have included the provision because it is important that, where appropriate, Ofcom should seek the views of others before allowing a departure from the character of a station.
I understand that my noble friend Lord Eatwell, who is unable to attend this evening, sees merit in the government amendments. I am very grateful for that. I am in some ways sympathetic to the idea that Ofcom need only consult where the departure is significant, as set out in Amendment No. 54. However, unfortunately, the amendment as drafted would create an unwelcome clash of language between the new consultation provision that would apply when the departure was significant and the language of new subsection (1A), which allows Ofcom to make a departure where it is satisfied that it would not substantially alter the character of the service.
I am pleased to report that I seem to have succeeded in persuading my noble friend Lord Eatwell of the merits of that case. He would not press his amendment if he were present, as he would be supporting the government amendments. I beg to move.
Lord McNally: My Lords, I have good news for the Minister because we support his amendment and would have opposed the amendment tabled by the noble Lord, Lord Eatwell.
Baroness Buscombe: My Lords, the noble Lord, Lord McNally, took the words right out of my mouth.
Lord Davies of Oldham: My Lords, to have the approval of the noble Lord, Lord Eatwell, and the plaudits of the noble Lord, Lord McNally, supported by the noble Baroness, Lady Buscombe, are rewards above and beyond anything I have ever deserved. I commend the amendment to the House.
On Question, amendment agreed to.
[Amendment No. 54 not moved.]
Lord Davies of Oldham Lord Davies of Oldham moved Amendment No. 55:
Page 275, line 17, after "licence" insert "on any of the grounds mentioned in paragraphs (b) to (d) of that subsection"
On Question, amendment agreed to.
[Amendment No. 56 not moved.]
Clause 313 [Exercise of Broadcasting Act powers for a competition purpose]:
Baroness Buscombe Baroness Buscombe moved Amendment No.57:
Page 278, line 14, leave out "and"
The noble Baroness said: My Lords, I speak to Amendments Nos. 57 to 69, which concern economic regulation and appeal.
I return to an issue that we debated extensively in Committee, and again on Report, and which I seek again to address through my amendments. It is an extremely important issue that concerns the scope of broadcasters' rights to appeal regulatory decisions of an economic nature to the Competition Appeals Tribunal. I am disappointed that we made no further progress on this matter on Report, and I believe that the Government's answers so far have failed to address all the concerns that I have raised.
Under Ofcom's Competition Act powers or its sector-specific competition powers, economic regulation is, by definition, a matter of competition, and decisions taken through these routes by Ofcom are subject to full rights of appeal to the Competition Appeals Tribunal. Regulation of broadcasters through their licences "for a competition purpose" is also subject to full rights of appeal to the CAT, when that is the only or main reason for the decision.
My concern, however, lies with the very real possibility that Ofcom may decide to undertake economic regulation of broadcasters—their pricing or packaging of channels, for example—for reasons that
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have nothing to do with competition. Ofcom could, for example, use its duties under Clause 3 of the Bill to undertake such regulation—either, as I have said before, using its duties to further the interests of citizens or consumers in relevant markets or—and this is important—to secure the availability of a wide range of TV and radio services.
In such instances, the Bill would provide no right of appeal to the CAT, and instead would allow only for the more limited route of judicial review, which looks at the decision-making process only and not the merits of the decision. That contrasts with the economic regulation of, for example, telephony providers under Part 2 of the Bill, in which all decisions are subject to appeal to the CAT.
In Committee and on Report, the Minister sought to reassure me on this matter. He argued that, because the duty in Clause 3 to promote the interests of consumers is limited by the parameter,
"where appropriate by promoting competition",
it would be,
"hard to imagine a situation where any intervention in pricing and packaging of channels … would not be undertaken using Ofcom's competition powers".
It therefore follows that I get the result that I desire that,
"Such an intervention would have a route of appeal to the CAT".—[Official Report, 1/7/03; col. 867]
As far as it goes, that is a welcome reassurance. At least now, in the case of the duty to promote the interests of citizens and consumers in relevant markets, we have an indication from the Minister that, in practice, any economic regulation relating to the pricing and packaging under this duty will be appealable to the CAT. However, I am afraid that this is only a partial answer. As I have said, economic regulation of broadcasters could also take place under the Clause 3 duty to secure,
"the availability throughout the UK of a wide range of television and radio services".
My concern, therefore, does not just lie with the duty to further the interests of citizens. In his answers on Report and in Committee, the Minister appeared to misunderstand that point. On Report, he said:
"The amendment…stems from her concern…that if Ofcom undertakes economic regulation other than for a competition purpose…under its duty in Clause 3 to promote the interests of consumers that broadcaster would not have a route of appeal to the Competition Appeal Tribunal".—[Official Report. 1/7/03; col. 868.]
That is not my argument. It goes wider than that, as I have just explained and as I explained in Committee and on Report. I am mystified as to why the Minister's answers fail to address the wider concerns that I have outlined and continue to focus on just one part of them.
I have been brief in my comments, given the time already taken up by the matter. I hope that, even at this late stage in our deliberations, the Government will see the merits of the arguments that I have put forward in this and other debates and will accept my amendment. I beg to move.
9 P.m.
Lord Davies of Oldham: My Lords, as the noble Baroness, Lady Buscombe, emphasised, we have debated the issues at some length. I am sorry that I have not been able to reassure her sufficiently for her not to have tabled the amendments at this stage.
We must be clear about the issues contained in the amendment. It is important to understand the consequences of accepting the amendments. We believe that they have been prompted by a particular broadcaster, a point that noble Lords will wish to bear in mind. Accepting the amendments would risk opening the door to a regulatory regime that is very different from that contained in the Bill. The amendments would seriously damage Ofcom's ability to regulate effectively and flexibly. In particular, they would prevent Ofcom from taking proper account, alongside the important economic and competition issues, of the wider public and consumer issues that we have been pressed to include in the Bill, as we always intended.
Several noble Lords and others have expressed a strong desire to see such interests properly protected. The draft Bill contained many references to that necessity. However, we have also made changes to the Bill as a result of pressure from all parts of the House. We have explained in detail the many procedural and other safeguards against misuse by Ofcom of powers in that area. It is vital that Ofcom is not made subject to further unnecessary handicaps such as the amendments would create.
The noble Baroness will appreciate that I could go on at considerable length about the Government's case. I had great difficulty engaging the attention of noble Lords on the issues in Committee and on Report. Regrettably, we have not reached the agreement that I should have liked. At this late hour, I have no intention of reiterating all the arguments that I have presented in the past. Suffice it to say that we understand that there is at least one broadcaster who is anxious about the provision. I have tried to indicate that, if we met those representations, we would recast the regulatory structure of the Bill. In particular, we would reduce the impact and the effectiveness of the structure that is being created by due deliberation in the House of propositions that we have accepted.
On that basis, I hope that the noble Baroness, having moved the amendment with her usual acumen, will think that I have a strong enough case to prevent her from pressing it.
Baroness Buscombe: My Lords, I thank the Minister for his response. He will not be surprised to hear that I am disappointed by it. It is an important issue, and we have raised it repeatedly.
I hear what the Minister says. I hear his concerns that the amendment could seriously damage Ofcom's power to regulate effectively and flexibly. Obviously, we must seek to avoid that. I shall not press the amendments; it would not be appropriate to do so at this late stage. However, I hope that Ofcom will take on board some of the issues that we raised in the
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debates and address some of them head-to-head—if I may put it that way—with the broadcasters who are particularly concerned about them. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 58 to 65 not moved.]
Clause 314 [Review of powers exercised for competition purposes]:
[Amendments Nos. 66 to 69 not moved.]
Clause 333 [Promotion of equal opportunities and training]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 70:
Page 295, line 3, leave out "fair treatment of" and insert "equalisation of opportunities for"
On Question, amendment agreed to.
Clause 344 [Modification of disqualification provisions]:
Lord Fowler Lord Fowler moved Amendment No. 71:
Page 301, line 28, at end insert "only in relation to individuals and bodies corporate domiciled in countries which offer full reciprocal arrangements for British individuals and bodies corporate to own radio and television services"
The noble Lord said: My Lords, in moving Amendment No. 71, I recall that earlier today the noble Lord, Lord McIntosh, said of another amendment that it was better to be late than inflexible. Although it is late in the day, I very much hope that he will not prove to be inflexible on this issue.
The intention of the amendment is straightforward. It is that there should be reciprocal arrangements between one country and another on the ownership of radio and television services. The essential proposition is that if the rules in Britain allow a company in another country to take over a broadcasting organisation, such as ITV, British media companies should have the same rights in that other country. It would allow free trade on the basis of equal rights on a level playing field. It would bring the law into line with the position inside the European Union, where there are full reciprocal arrangements.
The Government's position is significantly different from that. For example, they would certainly allow American media companies to take over ITV, but they are content that there are no reciprocal arrangements with the United States. We would therefore give complete freedom to an American company to own a British television company, but British companies would face a ban on ownership in the United States. It is not a question of being anti-American or protectionist. As it happens, I am passionately pro-American, and frankly I doubt whether any American administration that I can remember would have been daft enough to contemplate the one-sided arrangement that apparently the British Government are to go along with. Nor do I think that it is protectionist to allow access to our market but to insist that we should have equal rights. It seems self-evident business common sense. If the Government's aim is to

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negotiate reciprocal arrangements, I cannot see what will have been gained by throwing away our strongest negotiating card.
When the noble Lord, Lord Gordon of Strathblane, proposed a similar amendment at Report stage, the Minister sought to dismiss these arguments as of no consequence. Let us examine the Government's case. It will be noted that the legislation that the Government seek to change is the Broadcasting Act 1990, in which, I remember only too well, my noble friend Lady Thatcher took a very close personal interest, to which I and others in this House can testify. She saw no reason to change the law, and she can hardly be described as either protectionist or anti-American.
Even more to the point is the fact that up to 18 months ago the present Government saw no reason to change the law either. In November 2001, the Government said:
"Without reciprocal arrangements with other nations that will allow our own companies to expand into their markets, we do not feel that we could justify lifting our ban at the present time".
That was the present Government's position only 18 months ago. Therefore, I think that we can agree, if on nothing else, to dismiss the argument that this amendment and the amendment proposed earlier by the noble Lord, Lord Gordon, are of no consequence. Until a very short time ago, that was the policy of both major parties in this House.
The Minister had additional arguments. First, he said on Report that the United States were not imposing a full ban. A British company could invest 20 per cent, even at times 25 per cent, in an American broadcasting company. Therefore, the proposition is that one party can take full control and full ownership, while British companies can take 20 per cent. It is precisely because that position is so inherently unsatisfactory that in another part of the Bill we are changing the ownership regulations relating to ITV and ITN.
Secondly, he said that we are not unique and that other countries have no reciprocal arrangements either—namely, Finland, Belgium, the Netherlands, as well as Germany, Spain and New Zealand. In practice, I think that in some of those countries a would-be investor from overseas might find himself in some practical difficulties when it comes to it. But leave that as it may.
What is beyond doubt is that the issue of direct concern is of much greater concern to Britain than to any other country. There is no conceivable doubt about that. For the chairman of a big United States media company, the prize would not be Finland or Belgium, it would be ITV in Britain, which under this Bill will have the right to own ITN. There is a big population in this country; there is no difficulty in language; and there is the opportunity to distribute programmes and share news services. It is a natural target as far as an American company is concerned.
Why therefore have the Government changed their mind? The Minister says that the reason is that they have listened to everyone who has taken part in the debate, including the Joint Committee—well,
"Up to a point, Lord Copper".
The fact is that they have listened to some. The noble Lord, Lord Crickhowell, who has added his name to this amendment, can speak for himself. But I observe that the Joint Committee's point was not that this was irrelevant, it was a rather different and rather longer point than that. I hope that noble Lords will bear with me while I read it. The Joint Committee stated that,
"as matters stand, we do not view the argument on reciprocity as pivotal. If the economic case for permitting US investment emerged as compelling, we would see no impediment in principle in the form of waiting for reciprocal developments. But that case has yet to be established. OFCOM will face an enormous range of challenges immediately after it assumes its regulatory functions. We do not feel that it should face the additional pressure that would arise from the lifting of restrictions on non-EEA ownership until it has established itself as an effective regulator that commands market and public confidence".
It went on, of course, to make a detailed proposition.
The fact is that it is not just that the Government did not go along with my proposal; the Government did not go along with the Joint Committee's proposal either, which was the proposal that they voted down last week. They can hardly claim that they have been listening to what the Joint Committee said. The Minister's arguments would be stronger had not the Government's listening process led not only to the rejection of the reciprocal arrangement solution but also of the solution put forward by the Joint Committee.
I have no doubt that the Government have been listening to some on this issue, but on the issue of foreign ownership I do not think that it was the Joint Committee that they were listening to mainly. The Minister says that we should not be diverted by the issue of reciprocity. Indeed, he sets out a rather wider proposition than that. Again, I quote from the debate on Report:
"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".—[Official Report, 2/7/03; col. 935.]
That is a pretty extreme statement for the Government to make. Is that actually the Government's position? If the position was, for example, that we already had full reciprocal arrangements with the United States but not with France and Germany, would they be introducing this change to the law which would give France and Germany rights without any equality in return? I dare say that one or two newspapers might be challenging such a policy; I dare say that my party would be challenging such a policy; and I dare say that the Government would not be risking the collective wrath by introducing such a policy.
There are some in this House who would impose a full ban on foreign ownership and for whom the amendment does not go far enough. I agree with them to the extent that the issues raised by the ownership of media companies are different in kind from those surrounding ownership of a normal commercial company. They are different not because media

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companies are better than normal companies, but because media companies are an integral part of the democratic process.
The decision on whether there can be foreign ownership has now effectively been taken. That cannot be undone. The amendment is designed to recognise the new world in respect of that issue and to say quite simply, and fairly moderately, that British companies should have equal rights to build up their own media businesses to those we are giving to people overseas. That is our proposition, and it is not an extreme one. It is the kind of proposition that both Conservative and Labour Governments ascribed to up until a few months ago. I very much hope that, even at this stage, the Government will reverse their position. I beg to move.
9.15 p.m.
Lord Crickhowell: My Lords, I put my name to this amendment with some enthusiasm. I made most of the points that needed to be made during the debate on non-EEA ownership. My task has been simplified by the speech of my noble friend Lord Fowler, because he has taken up two points that I was going to comment on.
The Minister on Report uncharacteristically misrepresented the position of the Joint Committee. He said that our position, which was given in detail by my noble friend Lord Fowler, was a politer way of saying that the issue was a red herring. I do not think that that was the Committee's position, and my noble friend Lord Fowler has explained why that was a misrepresentation.
In that debate, the Minister spoke about the importance of opening up our industry to inward investment, and said that that was the compelling argument. I spent a large part of my ministerial career in encouraging, with some success, inward investment into this country. I doubt if there was any Minister who undertook quite so many overseas foreign investment missions to the United States, the Far East and parts of Europe, all with great success, so I do not need to be told why we need foreign investment. However, the overriding reason why we sought to attract that inward investment was that it gave us a base from which we could take our industrial production into Europe and other parts of the world. That is why we did it. In this case, we are talking about our industry's ability to export its products into the greatest available markets, of which the United States is by far the most important.
The Minister said on Report that when dealing with an issue of such importance as the liberalisation of world trade we should not be diverted by the issue of reciprocity. That is an odd way to enter into a negotiation about reciprocity—to throw away one's cards. It does not appear that all members of the Government feel that the issue is entirely irrelevant and should be discarded. The Secretary of' State for Culture, Media and Sport, when giving evidence to the Joint Committee, did not put that argument to us. Indeed, she told us that the decision to lift restrictions was being used as a negotiating tool in discussions with
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US authorities. It is a rather odd negotiating tool—to say that we will give everything away. She clearly thought that it was not entirely convincing herself, as she then said that there was no case for holding out for a reciprocal agreement because no change in US policy appeared in prospect.
It is extraordinary to argue that we should not attempt to get reciprocation because we do not believe that there is much chance of winning the argument. As the noble Lord, Lord Gordon, said, it is particularly perverse given that we are getting quite deep into GATT discussions on that very issue. To surrender our negotiating position in such a way is very odd indeed.
The hour is now late and the arguments have been advanced. This discussion is all part of the wider debate that we have had about the good sense of allowing overseas investment without some control and protection. I warmly support the amendment moved by my noble friend.
Lord McNally: My Lords, not for the first time in this journey, it is a pleasure to follow the noble Lord. Lord Crickhowell. I should make it clear that we on these Benches have never been hostile to foreign ownership or production in our media industries. However, from the start of this exercise there have been two curious contradictions.
The noble Lords, Lord Crickhowell and Lord Fowler. referred to the rum way of conducting trade negotiations, in which one throws in one's hand before the negotiations start. That ties in with another aspect—how far we have retreated in recent years. I started this exercise in the belief that we had in ITV, particularly a unified ITV with its own news provider, the basis of a company that could be a world player. It has always seemed odd to me that we should put that company in play at the most vulnerable time of its existence, rather than that it should be given the opportunity to regroup and find its real worth, as the Joint Committee suggested.
ITV was never given that chance, owing to what I can only call an animosity towards it from within the Government that has almost reached the stage of a vendetta. There appears to be .a belief that existing ITV management had somehow betrayed and let down the Government and that it was so worthless that almost anyone would do better at running ITV. I have never really got to the bottom of that, but it is true. I have spent the past two years attending seminars, round tables and conferences, and I have heard things at the margin from very involved people working at No. 10 and in departments. That animosity is not a figment of my imagination. The Minister must know as well as anyone else the contempt with which ITV has been referred to by people who have had a hand in drafting the strategy. It is both unfair and quite barmy, and it has produced a strange policy whereby we give away our negotiating hand in advance and then go forward on what can only be called a wing and a prayer.
I went to a Royal Television Society seminar address by Tessa Jowell. This takes us right back to Second Reading. She said that this was a magnificent win-win situation in which we would get American management,

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skills and money while retaining the power to make our own programmes and sustain our own creative industries. It would be a wonderful win-win situation, but there is not one shred of evidence to support that possibility.
All of the pre-legislative committee's demands to give Ofcom the time to turn its expert eyes to this matter have been steadfastly refused. Instead, our approach continues to be that of a wing and a prayer. It is astonishing that some of the very successful names which might have sprung to mind a few years ago as welcome buyers of ITV have been responsible for some of the most massive losses and most astounding mismanagement in world corporate history. Again we see the danger.
In this part of the Bill, as in so many other parts, I think that the Government are mounting a tiger. I truly wonder where they will end up in that rather exciting ride.
Lord Gordon of Strathblane: My Lords, I, too, support the amendment. As I said at the previous stage, it is almost unbelievable that we should be giving away our rights without demanding something in return. The man in the street will find it even more unbelievable that the House of Commons did not debate this issue at all, and still more unbelievable that the House to which he must turn to serve as custodian of the nation's interests is liable to give in on it.
It has already been stated that, until quite recently, it was government policy and opposition policy that we do not give anything without getting something in return. The Government's response has been, "We have listened to representations"—but representations from whom? Have they come from the BBC? The BBC is against foreign ownership without reciprocity. Have they come from ITV? It is against foreign ownership without reciprocity. Have they come from Channel 4? Channel 4 is against foreign ownership without reciprocity. From whom have they come? Send your answers on a postcard, please. The only bodies that have offered any evidence to the Government in favour of foreign ownership without reciprocity is Sky and the allies of Sky. No one else is in favour.
We have heard claims at various times in the Bill's passage that we have the finest broadcasting system in the world and we must protect it. Do we really believe that? If we believe it, why do we deny our broadcasting system access to the biggest market in the world—to the United States, with which we share a common language? Why do we make it less likely that our broadcasting interests can achieve reciprocity in the United States by giving away our strongest card?
When the Government published the White Paper they shocked many by saying that they favoured a unified ITV. What was their justification? It was that such an organisation could play a part on the world stage. But would it be the world stage? We would have to forget America because America will not let us in. Perhaps it could be called the world second-stage stage. It is just a nonsense.
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If we believe that reciprocity is desirable, as some Ministers have said it is, then surely we should play our cards to try to achieve that end. The way to do that is to refuse America entry into the UK until we get entry into America. I fully concede that the economies of scale are such that it is unlikely that a British company will take over one of the American networks, but it could at least take over individual television stations or radio stations in major city outlets in the United States. That would be a beginning. If we truly believe that we are better at this than the United States, then that is something in which we should have confidence. We should not be virtually ruling that out by giving the Americans what they want without their having to give anything in return.
It is worth remembering that America is the most powerful nation in the world with huge internal market power and yet it considers it appropriate to impose a limit that no foreigner can own more than 20 per cent of the American media. Why does it consider that appropriate? Why is it so afraid of competition from anywhere else in the world? Are there not perhaps lessons for us in that? Why should we give in so easily?
On Report it was said that all this was really covered by the plurality test. It is not. It is a totally separate issue. I have never met Signor Berlusconi and I do not know whether he is a nice man or not. He may well be a lot nicer than the British media portray him to be. If he applied to take over ITV, he would not fall foul of any nationality interests because he is an EU citizen, but under the public interest test one might wish at least to examine whether it was desirable that he should own our media. The two issues are totally separate. What would happen if an American media company tried to acquire British media? If we had reciprocity with the United States, that company would be allowed in. It would then pass or fail the public interest test, but without nationality being taken into account. It would stand or fall according to how it met the other tests to which Ofcom would subject it. But if it did not grant Britain reciprocity in the United States, it would not even reach that stage. It would not be considered.
It is honestly incredible that we are giving away something that we regard as one of Britain's finest achievements without a fight. I am extremely sad that the Government should have thought of this admittedly quite late in the day. It was not in the White Paper. It was only about a year ago that they dreamt up the idea of allowing foreign interests to come in without demanding reciprocity. I hope that even at this late stage the Government will change their mind.
9.30 p.m.
Baroness Howe of Idlicote: My Lords, I, too, support the amendment moved by the noble Lord, Lord Fowler. On the previous occasion the matter was debated I was completely convinced by the arguments. Having listened particularly to the noble Lord, Lord Gordon, again I am even more convinced than I was on the previous occasion. It seems such an obvious

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first step that one should expect reciprocity between countries on ownership of such an important asset as our broadcasting system, or part of it.
The other advantage of the measure is that it would give Ofcom time to settle in before any reciprocity was arrived at and give the Government time to negotiate with the USA and come to a satisfactory conclusion. We heard it rumoured that that was exactly what was going on. In that case, why not wail until that moment? I very much hope that the Government will think again. We have heard some very important speeches this evening. They could not have been better put. I hope that they will carry the day.
Lord McIntosh of Haringey: My Lords, I think that I have heard all this before. It has been interspersed with flattering quotes from my speech on Report, but otherwise the arguments have not moved on at all as regards the point of view of the noble Lord, Lord Fowler, and his supporters. We voted on foreign ownership amendments on Report and the Government's policy was supported on a Vote in this House. The aim of these amendments—leaving aside whether they will succeed—is to overturn on Third Reading the Vote of this House on Report. That is the truth of the matter. They are aimed at ensuring that television channels in this country will not be opened up to foreign ownership.
The noble Lord, Lord Fowler, argues that the Government should negotiate reciprocity on foreign ownership. Generally. the United Kingdom does just that. The Government are strongly committed to trade liberalisation and work hard with their EU partners and key world trade organizations—I was fascinated to hear about GATT negotiations going on, because my officials and DTI officials know nothing about them!—to remove the barriers which currently block so many potential trading opportunities. However, we do not always work multilaterally if we see something in our interest.
The benefits of opening up markets to foreign investment, as I made clear on Report—and no one has sought to contradict that—are proven. A more liberal investment environment has facilitated increased overseas investment. I congratulate the noble Lord, Lord Crickhowell. I am glad to hear again of his success as Secretary of State for Wales in encouraging inward investment. By 2001, the world stock of foreign direct investment was equivalent to 21 per cent of world gross domestic product, compared with less than 6 per cent in 1982. It is that investment that we want in this country, and it is those opportunities that we want to have overseas.
Some people argue that we are undermining a common European Union position, and that the United States is on the brink of moving on this. Let me reassure the House. There is no common European Union position to undermine. A large number of EU and EEA countries have unilaterally liberalised: Germany, the Netherlands, Portugal. Spain, Denmark, Finland, Belgium and Luxembourg and the only other native English speaker—Ireland.
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In the World Trade Organisation, the European Union negotiates on a common position under Article 133 of the Treaty of Rome. As many noble Lords will know, France effectively maintains a veto on cultural matters and did so at Doha and in Seattle. Unless France has a drastic change of heart, there will he no negotiations on this topic. In other words, it is a matter for individual member states.
So we could enter a long dialogue with the United States about some form of bilateral deal, because that is all that is open to us. We could spend years on this. However, considering the comparative gain for the United States against the comparative gain for this country, I do not somehow think that it will be top of the Federal Communications Commission's priorities.
It is important to remember that some investment is already possible in the United States. The noble Lord, Lord Fowler, acknowledged that. A United Kingdom company could own up to 20 per cent of a US company with a broadcast licence, or 25 per cent of a company whose subsidiary company comes with a broadcast licence.
In reality, the restrictions in place are unlikely in practice to hinder UK investment in US communications. It is doubtful that any British company would be in a position to take a stake larger than what is permitted anyway. As I said on Report, would a company such as Granada, with advertising revenues of £440 million, be likely to try to buy an NBC or a CBS, which share £3.2 billion of advertising revenue between them? If the noble Lord, Lord Gordon, thinks that we can buy individual TV companies in the United States without involving NBC, CBS or the other companies, I do not think he understands very much about the structure of television in the United States.
Perhaps I may remind the House that it is not only the Government who do not think that reciprocity is a key issue. The Puttnam committee has been mentioned on a number of occasions. I remind the House that this is one of the few issues on which the Puttnam committee was divided; and, as I understand it—I do not know about majority or minority views—the conclusion of the committee was that the issue of reciprocity was not "pivotal". It had some reservations about foreign ownership more generally, but it stated:
"we do not view the argument on reciprocity as pivotal".
The noble Baroness, Lady Cohen of Pimlico, made a similar point in more demotic terms.
The fact is that we do not want to wait for the potential benefits for the viewer. Our critics, the noble Lord, Lord Fowler, and others will say, "But it won't be better for the viewer; investors will just dump their programmes here". The remarks of the noble Lord. Lord Gordon, about Berlusconi absolutely proved my point on this issue. He said that Signor Berlusconi could not come to this country and flout all our rules. The same applies to any potential investor from outside the European Economic Area. The system protecting content is such that any investor. including those—
Lord Gordon of Strathblane: My Lords, I thank the Minister for giving way. There is a fundamental difference which is that Signor Berlusconi owns Italian media which do not broadcast in the same language as we do. The American media do and therefore they have the opportunity of vertical integration, which I have previously said is often called "dumping" by the noble Lord, Lord Puttnam, and his committee, in terms of the British media. That is the fundamental difference.
Lord McIntosh of Haringey: My Lords, my noble friend did not make that argument at all in his speech. Also he did not wait for me to make the opposing point that I now propose to make. My point is that investors, including those who would be allowed in by the amendment that was tabled and defeated on Report, must abide by our system. That includes quotas for original production, European Union production, regional and independent production, and it also includes the power of Ofcom to be able to review licence commitments on change of control to ensure that new owners maintain the standards of the old. How does that allow for dumping?
There are provisions allowing Ofcom to review licence obligations for regional programming and production, and original production, and news and current affairs programmes at any time and, after consultation, change the licence. Ofcom will also have to protect the local content of radio. Ofcom 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 to maintain the quality and range of the service.
Unlike the United States—the debate has been very much about 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. Ofcom will have the power to regulate these provisions, imposing fines where necessary, and ultimately, revoking licences of broadcasters who do not fulfil their licence obligations. All those powers will be available to Ofcom to ensure that the quality of our broadcast media will be retained, regardless of the nationality of its owners.
Again, the noble Lord, Lord Fowler, does not choose to recognise the fact, but we shall also have the protection of the new plurality test. We can intervene and investigate an acquisition even if it serves only to replace a significant player rather than consolidating. In those circumstances we can look at the need for the availability throughout the United Kingdom of a wide range of broadcasting which (taken as a whole) is both of high quality and calculated to appeal to a wide variety of tastes and interests; and the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine commitment to the attainment in relation to broadcasting of standards objectives set out in the Bill.
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I recognise that the noble Lord, Lord Fowler, and my noble friend Lord Gordon and others have argued honourably and consistently for the amendment. I recognise their sincerity although I believe that they have failed to keep up with the changes that have taken place in the Bill, particularly the changes that took place on Report as regards foreign ownership and today on plurality.
I believe that this is an opportunistic amendment. Bearing in mind that the House voted last week at Report stage for opening up to foreign investment, to attempt to frustrate and to reverse that decision of the House at Third Reading is an undesirable proposition. If the amendment is moved to a Division I hope that it will be defeated.
9.45 p.m.
Lord Fowler: My Lords, I thank my noble friend Lord Crickhowell, the noble Lord, Lord McNally, the noble Baroness, Lady Howe, and the noble Lord, Lord Gordon, for their support. All the Back-Bench speakers who have spoken in this debate have supported my proposition. The only person who has spoken against it is the Minister.
In particular, I agree with the noble Lord, Lord Gordon, that the man in the street will regard it as unbelievable that we should be giving away our rights in this way. Clearly, that will be the view of many people in this country. The Minister at one stage slightly criticised the media knowledge of the noble Lord, Lord Gordon. Perhaps I may say to him that I suspect that the noble Lord's knowledge of the media is rather deeper than that of many on the Government's Front Bench.
The noble Lord. Lord McIntosh, is also wrong in saying that I am arguing against foreign ownership. I am not; I am saying that if there is to be foreign ownership, there should be reciprocal arrangements. That is the argument. It is fairly simple and straightforward. It is not being put opportunistically, as he says; it is the argument that I and my colleagues have been putting consistently during the passage of the Bill.
I shall not repeat all our arguments. I want to make two points. In no way is this an anti-United States amendment. As I have made clear at every stage. I am strongly pro-American. In no way is this anti-free trade. I am also strongly in favour of free trade: businesses competing with one another on a level playing field. But in the case of television and broadcasting, the playing field will be anything but level. Basically, the Bill allows United States' companies to buy ITV in Britain, and now ITN with it—so ITV and ITN, quite a purchase—without any reciprocal arrangements for British companies. That is what the public will find when they understand the implications of the Bill—and that is what they will find so hard to understand. They will also find it hard to understand why this House and both Front Benches back that particular proposition.
That arrangement is neither sensible nor in our national interests and, frankly, I have found few people who think it is. The hour is late. I have

241
absolutely no illusions. I know perfectly well that many will have gone home. As I look around the House I see many noble Lords I have not seen at earlier stages in the Bill. The Whips on both sides appear to have done their jobs. So I am under no illusions. But I also say this: there is an important principle here. The position of both Front Benches is, frankly, disastrous and they will both come to regret it. So I believe that that opposition, however small, should be expressed and should be on the record. I want to take the view of the House on the subject.
9.47 p.m.
On Question, Whether the said amendment (No. 71) shall he agreed to?
Their Lordships divided: Contents, 37; Not-Contents, 121.

Division No. 3

CONTENTS

Brooke of Sutton Mandeville, L.

MacGregor of Pulham Market, L.

Brougham and Vaux. L.

Carnegy of Lour, B.

McNally, L.

Cohen of Pimlico B.

Miller of Chilthorne Domer, B.

Crickhowell, L. [Teller]

Monro of Langholm, L.

Monson, L.

Elder, L.

Northbrook, L.

Elliott of Morpeth, L.

Northesk, E.

Falkland, V.

Norton of Louth, L.

Fowler, L. [Teller]

O'Cathain, B.

Geddes, L.

O'Neill of Bengarve, B.

Gordon of Strathblane. L.

Phillips of Sudbury, L.

Greenway, L.

Russell, E.

Harris of Richmond, B.

Scott of Needham Market, B.

Henley, L.

Shutt of Greetland, L.

Smith of Clifton, L.

Howe of Aberavon, L.

Sutherland of Houndwood, L.

Howe of Idlicote, B.

Thomson of Monifieth, L.

King of Bridgwater, L.

Tope, L.

Laird, L.

Williams of Crosby, B.

NOT-CONTENTS

Acton, L.

Clinton-Davis, L.

Andrews, B.

Cope of Berkeley, L.

Archer of Sandwell, L.

Corbett of Castle Vale, L.

Ashton of Upholland, B.

Crawley, B.

Astor of Hever, L.

Davies of Coity, L.

Attlee, E.

Davies of Oldham, L. [Teller]

Bach, L.

Dean of Thornton-le-Fylde, B.

Bassam of Brighton, L.

Desai, L.

Billingham, B.

Dixon, L.

Blackstone, B.

Dixon-Smith, L.

Blatch, B.

Dubs, L.

Borrie, L.

Evans of Parkside, L.

Bragg. L.

Evans of Temple Guiting, L.

Brett, L.

Farrington of Ribbleton, B.

Bridgeman, V.

Faulkner of Worcester, L.

Brigstocke, B.

Fyfe of Fairfield, L.

Brooke of Alverthorpe, L.

Gale, B.

Brookman, L.

Gibson of Market Rasen, B.

Burlison, L.

Gilbert, L.

Buscombe, B.

Glentoran, L.

Byford, B.

Golding, B.

Campbell-Savours, L.

Goudie, B.

Carter, L.

Gould of Potternewton, B.

Chandos, V.

Grocott, L. [Teller]

Chester, Bp.

Hanningfield, L.

Clark of Windermere, L.

Hardy of Wath, L.

242

Harris of Haringey, L.

Patel, L.

Harrison, L.

Pendry, L.

Haskel, L.

Pitkeathley, B.

Hayman, B.

Radice, L.

Higgins, L.

Ramsay of Cartvale, B.

Hogg of Cumbernauld, L.

Randall of St. Budeaux, L.

Hollis of Heigham, B.

Rawlings, B.

Howe, E.

Rendell of Babergh, B.

Howells of St. Davids, B.

Renton, L.

Hughes of Woodside, L.

Rooker, L.

Hunt of Wirral, L.

Saatchi. L.

Irvine of Lairg, L.

Sainsbury of Turville. L.

Jay of Paddington, B.

Sawyer, L.

Jones, L.

Scotland of Asthal, B.

Kimball, L.

Seccombe, B.

Kirkhill, L.

Simon, V.

Layard, L.

Smith of Leigh. L.

Lea of Crondall, L.

Soulsby of Swaffham Prior, L.

Lockwood, B.

Stone of Blackheath, L.

Lofthouse of Pontefract, L.

Strathclyde, L.

Luke, L.

Taylor of Blackburn, L.

Macdonald of Tradeston, L.

Taylor of Warwick, L.

McIntosh of Haringey, L.

Thornton, B.

McIntosh of Hudnall, B.

Vivian, L.

MacKenzie of Culkein, L.

Waddington, L.

Manchester, Bp.

Wakeham, L.

Mancroft, L.

Warner, L.

Mar, C.

Warwick of Undercliffe, B.

Masham of Ilton, B.

Watson of Invergowrie, L.

Massey of Darwen, B.

Whitaker, B.

Mayhew of Twysden, L.

Whitty, L.

Miller of Hendon, B.

Wilcox, B.

Mitchell, L.

Williams of Mostyn, L.(Lord President of the Council)

Montrose, D.

Noakes, B.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.58 p.m.
Clause 347 [Restrictions relating to nominated news providers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 72:
Leave out Clause 347.
On Question, amendment agreed to.
Clause 356 [Grants to access radio providers]:
Lord Evans of Temple Guiting Lord Evans of Temple Guiting moved Amendment No. 73:
Page 313, line 44, at end insert—
"() The Secretary of State may by order provide that OFCOM may also make such grants as they consider appropriate to the provider of any service of a description of service in relation to which provision is for the time being in force under section 242."
The noble Lord said: My Lords, in moving Amendment No. 73, I shall speak also to Amendments Nos. 75 to 77 and 79 and to Amendments Nos. 74 and 78 in the names of the noble Lord, Lord McNally, and the noble Viscount, Lord Falkland.
Amendments Nos. 74 and 78 would enable the Secretary of State by order to extend the grant-making power in the Bill to cover local digital television services. We are prepared to accept the intention behind these amendments and have therefore tabled government amendments which will allow access radio grants to be extended by order to cover local digital television services.
We would, however, stress that this should not be taken as a sign that we propose to extend grants to local television in the near future. We do not want to raise unrealistic expectations. It will be difficult to secure any resources for access radio services, never mind having sufficient resources to support local TV as well.
However, if circumstances change in the future, it may be possible to provide support for local TV services, and it makes sense to "future proof" the Bill in the way proposed by these amendments.
We think it is unlikely that grants would be given to for-profit organisations, but do not believe that we should absolutely rule it out in advance. This is consistent with the approach in Clause 260, which refers to access radio services being "primarily" for the good of the public rather than for commercial reasons. I beg to move.
10 p.m.
Viscount of Falkland: My Lords, I rose from these Benches at Report to talk about the importance of community radio and television. We are grateful that the Government have seen fit to table their own amendments which concede provision for Clause 356 to be extended to cover the possibility of supporting future community television. This is perhaps the minimum necessary for the Bill to recognise the increasingly converging nature of community media. With regard to our Amendments Nos. 74 and 77, I would like to make a couple of points. Amendment No. 74 specifies that in extending the fund to cover local digital television, it should be limited to services
"not run for commercial purposes".
We do not consider it necessary or appropriate for the fund to be used to subsidise services whose purposes are primarily commercial. The government amendment does not make that distinction clear, although it would be in the power of the Secretary of State to act later should he see fit to do so by order in Parliament.
Amendment No. 78 and the government Amendment No. 77 both have the effect of removing the words "access radio" from the face of the Bill. We welcome this development. Access radio as a term is problematical and, in the firmly held view of the Community Media Association in particular, its use would be detrimental to the viability and success of community radio in the United Kingdom. The government proposals for access radio are broadly fully in line with the understood concepts and practice of community radio. Only the name "access radio" is new.
This is confusing to funding agencies, as well as policy and opinion formers and others whose support of community radio is important. It sends a message about government commitment to and understanding of the sector. Supporters and practitioners of community radio have been seeking recognition for 20 years. To those in today's converging community
244
media sector, it seems perverse finally to recognise the demand for appropriate legislation but not to call the sector what it calls itself.
I do not think that I need to dwell on this any further. The point has been well made and recognised by the Government. Access radio is a weak brand name and community radio a strong one. I do not think that I need to add anything further. I thank the Government yet again for tabling their amendment.
Lord Evans of Temple Guiting: My Lords, I shall speak very briefly.
Noble Lords: Hear, hear!
Lord Evans of Temple Guiting: My Lords, I shall demonstrate to your Lordships what very briefly means. All listen. The purpose of these amendments is to future proof the Bill to give Ofcom the flexibility that we need.
On Question, amendment agreed to.
[Amendment No. 74 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 75 to 77:
Page 313, line 45, leave out "under" and insert "by virtue of"
Page 314, line 2, leave out "under" and insert "by virtue of"
Page 314, line 6, leave out from "to" to "a" in line 7 and insert "a licence mentioned in subsection (4).
(4) Those licences are—

(a) a licence under Part 1 of the 1990 Act, or under Part 1 of the 1996 Act, which is granted in accordance with any provision made by an order under section 242 of this Act; and"

On Question, amendments agreed to.
[Amendment No. 78 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 79:
Page 314, line 9. at end insert—
"() No order is to be made containing provision authorised by this section unless a draft of the order has been laid before Parliament and approved by a resolution of each House."
On Question, amendment agreed to.
Clause 359 [Interpretation of Part 3]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 80:
Page 316, line 43, at end insert—
""Channel 3 licence" means a licence to provide a Channel 3 service:"
On Question, amendment agreed to.
Clause 367 [OFCOM's functions under Part 4 of the Enterprise Act 2002]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 81:
Page 326, line 45, leave out "or (4)" and insert "to (4A)".
On Question, amendment agreed to.
Clause 368 [OFCOM's functions under the Competition Act 1998]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 82:
Page 328, line 11, leave out "or (4)" and insert "to (4A)".
On Question, amendment agreed to.
Clause 372 [Newspaper public interest considerations]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 83 to 85:
Page 329, line 17, leave out "section 58(2)" and insert "subsection (2) of section 58"
Page 329. line 24, after "a" insert "sufficient"
Page 329. line 27, at end insert—
"(2C) The following are specified in this section—

(a) the need, in relation to every different audience in the United Kingdom or in a particular area or. locality of the United Kingdom, for there to be a sufficient plurality of persons with control of the media enterprises serving that audience;

(b) the need for the availability throughout the United Kingdom of a wide range of broadcasting which (taken as a whole) is both of high quality and calculated to appeal to a wide variety of tastes and interests; and

(c) the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine commitment to the attainment in relation to broadcasting of the standards objectives set out in section 315 of the Communications Act 2003."

(2) After that section there shall be inserted, in Chapter 2 of Part 3—
"58A CONSTRUCTION OF CONSIDERATION SPECIFIED IN SECTION 58(2C)

(1) For the purposes of section 58 and this section an enterprise is a media enterprise if it consists in or involves broadcasting.

(2) In the case of a merger situation in which at least one of the enterprises ceasing to be distinct consists in or involves broadcasting, the references in section 58(2C)(a) or this section to media enterprises include references to newspaper enterprises.

(3) In this Part "newspaper enterprise" means an enterprise consisting in or involving the supply of newspapers.

(4) Wherever in a merger situation two media enterprises serving the same audience cease to be distinct the number of such enterprises serving that audience shall be assumed to be more immediately before they cease to be distinct than it is afterwards.

(5) For the purposes of section 58 where two or more media enterprises—

(a) would fall to be treated as under common ownership or common control for the purposes of section 26, or

(b) are otherwise in the same ownership or under the same control,

they shall be treated (subject to subsection (4)) as all under the control of only one person.
(6) A reference in section 58 or this section to an audience shall be construed in relation to a media enterprise in whichever of the following ways the decision-making authority considers appropriate—

(a) as a reference to any one of the audiences served by that enterprise, taking them separately;

(b) as a reference to all the audiences served by that enterprise, taking them together;

(c) as a reference to a number of those audiences taken together in such group as the decision-making authority considers appropriate; or

(d) as a reference to a part of anything that could be taken to be an audience under any of paragraphs (a) to (c) above.

(7) The criteria for deciding who can be treated for the purposes of this section as comprised in an audience, or as comprised in an audience served by a particular service—

(a) shall be such as the decision-making authority considers appropriate in the circumstances of the case; and

(b) may allow for persons to be treated as members of an audience if they are only potentially members of it.

(8) In this section "audience" includes readership.

(9) The power under subsection (3) of section 58 to modify that section includes power to modify this section."

(2) In section 127(1) of that Act (associated persons to be treated as one person), for the word "and" at the end of paragraph (a) there shall be substituted—
"(aa) for the purposes of section 58(2C); and"."
On Question, amendments agreed to.
Clause 373 [Adaptation of role of OFT in initial investigations and reports]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 86 to 92:
Page 329, line 32, leave out "newspaper" and insert "media"
Page 329, line 36, leave out "newspaper" and insert "media"
Page 330, line 4, leave out "newspaper" and insert "media"
Page 330, line 7, leave out "or (2B)" and insert "to (2C)"
Page 330, line 8, at end insert "broadcasting or"
Page 330, line 9, at end insert—
"(8A) In this Part "broadcasting" means the provision of services the provision of which—

(a) is required to be licensed under Part 1 or 3 of the Broadcasting Act 1990 or Part I or 2 of the Broadcasting Act 1996; or

(b) would be required to be so licensed if provided by a person subject to licensing under the Part in question."

Page 330, line 13, leave out "subsection" and insert "subsect ions (8A) and"
On Question, amendments agreed to.
Clause 374 [Additional investigation and report hr OFCOM ]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 93 and 94:
Page 330, line 21, leave out "newspaper" and insert "media"
Page 330, line 27, leave out "newspaper" and insert "media"
On Question, amendments agreed to.
Clause 375 [Extension of special public interest regime for certain newspaper mergers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 95 to 102:
Page 330, line 38, at beginning insert "In"
Page 330, line 39, leave out from "cases)" to "subsections" in line 40 and insert ", for"
Page 331, line 6, leave out "either"
Page 331, line 8, leave out "or"
Page 331, line 10, at end insert "or
(iii) the condition mentioned in subsection (3D) was satisfied."
Page 331, line 27, at end insert—
"(3D) The condition mentioned in this subsection is that, in relation to the provision of broadcasting of any description, at least one-quarter of all broadcasting of that description provided in the United Kingdom, or in a substantial part of the United Kingdom, was provided by the person or persons by whom one of the enterprises concerned was carried on.""
Page 331, line 28, after "(6)" insert "of that section"
Page 331, line 29, leave out from "(6A)" to first "The" in line 8 on page 332.
() After that section there shall be inserted—
"59A CONSTRUCTION OF CONDITIONS IN SECTION 59(3C) AND (3D)

(1) For the purpose of deciding whether the proportion of one-quarter mentioned in section 59(3C) or (3D) is fulfilled with respect to—

(a) newspapers of any description, or

(b) broadcasting of any description,

the decision-making authority shall apply such criterion (whether value, cost, price, quantity, capacity, number of workers employed or some other criterion, of whatever nature), or such combination of criteria, as the decision-making authority considers appropriate.

(2) References in section 59(3C) to the supply of newspapers shall, in relation to newspapers of any description which are the subject of different forms of supply, be construed in whichever of the following ways the decision-making authority considers appropriate—

(a) as references to any of those forms of supply taken separately;

(b) as references to all those forms of supply taken together; or

(c) as references to any of those forms of supply taken in groups.

(3) For the purposes of subsection (2) the decision-making authority may treat newspapers as being the subject of different forms of supply whenever—

(a) the transactions concerned differ as to their nature, their parties, their terms or their surrounding circumstances; and

(b) the difference is one which, in the opinion of the decision-making authority, ought for the purposes of that subsection to be treated as a material difference.

(4) References in section 59(3D) to the provision of broadcasting shall, in relation to broadcasting of any description which is the subject of different forms of provision, be construed in whichever of the following ways the decision-making authority considers appropriate—

(a) as references to any of those forms of provision taken separately;

(b) as references to all those forms of provision taken together; or

(c) as references to any of those forms of provision taken in groups.

(5) For the purposes of subsection (4) the decision-making authority may treat broadcasting as being the subject of different forms of provision whenever—

(a) the transactions concerned differ as to their nature, their parties, their terms or their surrounding circumstances; and

(b) the difference is one which, in the opinion of the decision-making authority, ought for the purposes of that subsection to be treated as a material difference.

(6) The criteria for deciding when newspapers or broadcasting can be treated, for the purposes of section 59, as newspapers or broadcasting of a separate description shall be such as in any particular case the decision-making authority considers appropriate in the circumstances of that case.

(7) In section 59 and this section "provision" and cognate expressions have the same meaning in relation to broadcasting as in Part 3 of the Communications Act 2003; but this subsection is subject to subsections (3) and (4) of this section.""

On Question, amendments agreed to.
Clause 376 [Adaptation of role of OFT in special public interest regime]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 103 and 104:
Page 332, line 16, leave out "or (2B)" and insert "to (2C)"
Page 332, line 24, leave out "or (2B)" and insert "to (2C)"
On Question, amendments agreed to.
Clause 377 [Additional investigation and report by OFCOM: special public interest cases]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 105 and 106:
Page 332, line 37, leave out "or (2B)" and insert "to (2C)"
Page 333, line 3, leave out "or (2B)" and insert "to (2C)"
On Question, amendments agreed to.
Clause 378 [Public consultation in relation to newspaper mergers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 107 and 108:
Page 333, line 18, leave out "newspaper" and insert "media"
Page 333, line 20, leave out "or (2B)" and insert "to (2C)"
On Question, amendments agreed to.
Clause 380 [Advice and information in relation to newspaper mergers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 109 and 110:
Page 335, line 5, leave out "and (2B)" and insert "to (2C)"
Page 335, line II, leave out "and (2B)" and insert "to (2C)"
On Question, amendments agreed to.
Clause 383 [Monitoring role for OFT in relation to newspaper mergers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 111 and 112:
Page 336, line 21, leave out "or (2B)" and insert "to (2C)"
Page 336, line 28, leave out "or (2B)" and insert "to (2C)"
On Question, amendments agreed to.
Clause 384 [Enforcement powers in relation to newspaper mergers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 113 to 115:
Page 336, line 37, leave out "or" and insert—
"() an intervention notice which mentions any other media public interest consideration in relation to a relevant merger situation in which one of the enterprises ceasing to be distinct is a newspaper enterprise;"
Page 336, line 39, after "(2B);" insert "or
() a special intervention notice which, in relation to a special merger situation in which one of the enterprises ceasing to be distinct is a newspaper enterprise, mentions a consideration specified in section 58(2C);"
Page 337, line 17, at end insert—
"() In this paragraph "newspaper public interest consideration" means a media public interest consideration other than one which is such a consideration—

(a) by virtue of section 58(2C); or

249

(b) by virtue of having been, in the opinion of the Secretary of State, concerned with broadcasting and a consideration that ought to have been specified in section 58."

On Question, amendments agreed to.
Clause 385 [Alterations concerning newspaper panel of Competition Commission]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 116:
Page 337, line 26, leave out "Part 3 of" and insert "paragraph 20A of Schedule 8 to"
On Question, amendment agreed to
Clause 388 [Review of media ownership]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 117 to 122:
Page 338, line 39, leave out "section 278 of this Act and section 32 of the 1990 Act" and insert "sections 278 and (Disqualification from appointment as news provider)"
Page 339, line 3, at end insert "or other media enterprises"
Page 339, line 12, leave out "in relation to news provision" and insert "under sections 279 and 280"
Page 339, line 13, leave out "59(6E)" and insert "59(6A)"
Page 339, line 14, leave out "newspaper" and insert "media"
Page 339, line 15, leave out subsection (5).
On Question. amendments agreed to.
Clause 402 [General interpretation]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 123:
Page 352, line 42. at end insert—
""purposes of public service television broadcasting in the United Kingdom" shall be construed in accordance with subsection (4) of section 262 and subsections (5) and (6) of that section shall apply for the purposes of any provision of this Act referring to such purposes as they apply for the purposes of a report under that section:"
On Question, amendment agreed to.
The Countess of Mar: My Lords, Perhaps I may ask the noble Lord the Chief Whip how long he believes the House should continue sitting.
Lord Grocott: My Lords, we shall continue until we finish, but the intervention has delayed proceedings by another 20 seconds.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 124:
After Clause 405, insert the following new clause—
"MODIFICATIONS CONSEQUENTIAL ON REGULATIONS IMPLEMENTING DIRECTIVES

(1) This section applies if it appears to the Secretary of State that regulations under section 2 of the European Communities Act 1972 (c. 68) for giving effect to Community obligations imposed by the Communications Directives have come into force before the passing of this Act.

(2) The Secretary of State may by order—

(a) repeal any relevant provision of this Act which appears to him to be unnecessary, or to have become spent, in consequence of the regulations;

(b) make such other modifications of the relevant provisions of this Act as he considers appropriate in consequence of the regulations;

(c) revoke provision made by the regulations; and

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(d) make transitory or transitional provision in relation to anything done by or under the regulations.

(3) The Secretary of State's power under this section includes power to make consequential amendments of enactments not contained in this Act.

(4) In this section—
"the Communications Directives" means—

(a) the Access Directive, that is to say, Directive 2002/19/EC of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities;

(b) the Authorisation Directive, that is to say, Directive 2002/20/EC of the European Parliament and of the Council on the authorisation of electronic communications networks and services;

(c) the Framework Directive, that is to say, Directive 2002/ 21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services;

(d) the Universal Service Directive, that is to say, Directive 2002/22/EC of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services;

"relevant provision of this Act" means a provision contained in—

(a) Part 1, 2 or 6; or

(b) Chapter 1 of Part 5.

(5) No order is to be made containing provision authorised by this section 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, I am in the unusual position of moving an amendment that I hope is unnecessary. The fact that I am moving it does not mean that the Government believe that the Bill will not receive Royal Assent before the Summer Recess, nor that the European Community directives will not he implemented through the Act and the instruments made under it. However, it would be irresponsible of us not to have a contingency plan.
The plan has been in the public domain since March. It consists of a set of regulations to be made under the European Communities Act 1972, which would enable us to fulfil our Community obligations for the interim period between 25th July and the date on which the relevant provisions of the Bill could be eventually commenced. The DTI has consulted on those interim regulations. The response to the consultation, together with the revised draft of the regulations, is about to be published.
The substance of the interim regime would be the same as the regulatory regime that will be established once the Bill is passed. But the effect of making such interim regulations would be that the regulatory framework that would exist when the Bill was passed would not be the same as that which it had been drafted to replace. That would, for example, make redundant a number of the amendments contained in Schedule 17 to the Bill and a number of the repeals and revocations contained in Schedule 19.
The power proposed in the new plans would enable the raft of technical and legal modifications that would have to be made to the Bill once enacted, as a result of the making of the interim regulations, to be effected in

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the most efficient manner. It would enable the foundation of the new regime to be shifted to the new Act with a minimum of delay.
I hope that the new clause proves unnecessary, but it would be irresponsible of the Government not to provide for the possibility. I beg to move.
The Earl of Northesk: My Lords, I am gratified by the Minister's introduction of the amendment. It is intriguing to find this curious way of getting around a problem. None the less, I am delighted that it is there. I simply ask the Minister to explain how, under this procedure, the Bill remains substantially amendable. That is how the regulations that it seeks to circumvent need to be resolved.
Lord McIntosh of Haringey: My Lords, however we implement the legislation, ultimately it must be done through the Bill—it must be done through primary legislation. We have the power under the European Communities Act to make interim provision. That involves certain changes in transitional provisions. However, fundamentally, we must implement the directives, and we will do so.
On Question, amendment agreed to.
Clause 407 [Short title, commencement and extent]:
Lord Fowler Lord Fowler moved Amendment No. 125:
Page 359, line 14, at end insert—
"() This Act shall cease to have effect at the expiry of five years after it receives Royal Assent, unless before that time a joint committee of both Houses of Parliament has reported on the operation of this Act, and the report has been debated in both Houses."
The noble Lord said: My Lords, I gather that there is some speculation that I may divide the House on this amendment. For the benefit of those below the gangway, I give the assurance that I will not divide the House. I hope that that improves their arrangements. For old time's sake, in the case of the former Minister for Transport, I hope that that helps him.
The point of this amendment is very simple. It may seem draconian that the Act should fall in five years, given the time and effort expended on it. It may just he that not everyone would welcome a long debate on a new Act. That fate is easily avoided by setting up a committee of both Houses to scrutinise the effects of the Act in practice and to see how it has worked out.
The aim is not to reopen old debates, but to examine whether the intention of the Bill has been realised; in other words—if I could have the Minister's attention for just 30 seconds—I propose a post-legislative scrutiny committee. The Bill has benefited enormously from pre-legislative scrutiny. Again, I pay tribute to the committee, its chairman, the noble Lord, Lord Puttnam, and my noble friend Lord Crickhowell.
I know that the business managers grumbled about the delay. Indeed, the present Leader of the Commons called the proceedings a "filibuster". I do not believe that there was a filibuster. The choice is whether you want speedy legislation or good legislation. To my
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mind, the pre-legislative scrutiny strengthened the Bill immensely. I hope that that example will be followed with other legislation.
In my experience as a Minister, some of the worst errors are made after the Bill becomes an Act, not because the Bill is not clear or that Ministers intentions have not been set out, but because those intentions have not been acted upon. Ministers move on to other departments, so they are not there to check. New Ministers and civil servants do not give the same priority as their predecessors.
I remember that when I was Social Services Secretary, my then Minister of State, John Major, gave the clearest commitment to the Standing Committee examining the social security reform Bill that the change in the position of widows, and their rights under the state earnings related pension scheme would be the subject of a publicity campaign. Ministers moved on, there was no such campaign and civil servants gave the wrong advice in leaflets. It is inconceivable that errors of that kind would take place if there had been post-legislative scrutiny.
The only argument that could be made against such a proposal is that we could have a communications Select Committee. However, my experience of Select Committees is that they are not accustomed to, nor do they want to go through, the sort of line by line examination that I have in mind. I also think that the advantage of a post-legislative scrutiny committee, which should become standard for major Bills, is that if civil servants know that the implementation of the Bill will be subject to scrutiny, their priority will be to ensure that they are meticulous in carrying out the intentions of the Bill and in fulfilling all pledges that are given.
This Bill is very long and much depends on whether Ofcom has the right powers. The Government have introduced new measures such as the plurality test, which may or may not prove significant. However, at some stage during the five years after this Bill becomes an Act, a post-legislative scrutiny committee should be set up to consider how well the legislation has worked in practice. That would he to the benefit of this House and, above all, to the benefit of the public. I beg to move.
Lord McNally: My Lords, I support this proposal. I do not think that it cuts across the idea of a media Select Committee. However, the idea of "Puttnam II—The Sequel" has many attractions. Next time round, I will try to work out how to get publicity in the newspapers for what I am trying to do with the Bill without every story being accompanied by the most wonderful photograph of the noble Lord, Lord Puttnam. Regardless of what the story is about or the origins of the story, newspapers still get the same wonderful picture from their libraries.
Lord McIntosh of Haringey: He should grow a beard, my Lords.
Lord McNally: My Lords, I think not.
The idea proposed by the noble Lord, Lord Fowler, gives us an opportunity. Governments that stay in office for a while lose their desire for danger, and pre-legislative scrutiny has proved a dangerous exercise. However, I believe that it brings better legislation. It has been a great exercise, although, in the corridors of Whitehall there will be those who say, "Don't try it again, or if you do, don't put somebody as assiduous as the noble Lord, Lord Puttnam, in charge of the committee". The idea of post-legislative scrutiny is one which, in one of the Government's more radical moments, they should consider favourably.
10.15 p.m.
Lord McIntosh of Haringey: My Lords, having heard his speech, I absolve the noble Lord, Lord Fowler, of any intention to kill the Bill after five years. He did not make that suggestion, and I am grateful for that.
This is the last Bill that wants post-legislative scrutiny. It has been a long and, some people would say, tortuous procedure. We started with the publication of the communications White Paper in December 2000; we had consultation on the White Paper; we had further consultation on media ownership in January 2002; we published the Bill in May 2002; and we had pre-legislative scrutiny under the able chairmanship of the noble Lord, Lord Puttnam. By the time that Ofcorm is up and running, the process will have taken three years from start to finish.
I recognise that it is not the noble Lord's intention that we should start all over again in five years' time, but even the threat of post-legislative scrutiny of the kind that he proposes—I assume that he means it seriously; I do not think that he means it to be a paper exercise—would wreak havoc on the communications industry. The provision that he proposes would mean that everything that Ofcom did, everything that the industry did and everything that is done on behalf of consumers—all of those things—would be put into the melting-pot. It does not say anywhere in the amendment what would happen if the Government had to give effect to the post-legislative scrutiny and there had to be amendments to the Bill. None of those things is in the amendment; it is only the beginning of an idea of an amendment. It is the nucleus of an amendment, but it has not been thought through.
It is not within the Government's gift to set up committees of Parliament anyway. We could not accept the amendment even if we wanted to. I can tell the noble Lord, Lord McNally, that we are not giving up on the idea of pre-legislative scrutiny. As he knows, we have just proposed the setting up of a Joint Committee of both Houses for pre-legislative scrutiny of the gambling Bill for which I will be responsible. I look forward very much to that. We are in favour of pre-legislative scrutiny; we are not afraid of it. We recognise that there are dangers, but we think that there are huge opportunities.
In any case, there are plenty of procedures for reporting to Parliament. The Secretary of State and Ofcom must report on the carrying out of their
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functions by virtue, respectively, of Clause 387 and paragraph 12 of the schedule to the Office of Communications Act 2002. They will have to report annually. Both reports will be laid before Parliament, and the usual channels can provide for debate. It is then for Parliament to decide whether and how to scrutinise and debate the reports. I am sure that there will he plenty of interest in this Chamber and in another place, when that time comes.
I do not oppose in principle and in all circumstances the idea of post-legislative scrutiny, but we should give the industry, Ofcom and everybody concerned an opportunity to settle down and implement the provisions of the Bill. Above all, we should not introduce post-legislative scrutiny for a Bill that has already had such a degree of pre-legislative scrutiny.
Lord Fowler: My Lords, I guess that that is the nearest that I shall get to agreement with anything that I have said during the passage of the Bill, albeit in the very mild form in which the noble Lord put it at the end of his speech. I shall do as I said, and I shall not seek to divide the House.
There is a serious question to be considered by Parliament. I stand by what I said: many of the problems with legislation are due not to the drafting of an Act but to its implementation. I make no complaint about the pre-legislative scrutiny that the Bill has had. It has been a model of that. However, I guarantee that problems, issues and faults in the legislation, which none of us can forecast at the moment, will become apparent. Governments generally would he wise to think of the post-legislative stage in a way that they have not done previously.
The Minister has been almost helpful to me, and I thank him for that. As this is the last word that I shall say in the debate, I also thank him for his courtesy during the Bill's passage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 [Functions transferred to OFCOM]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 126:
Page 361, line 10, leave out paragraph (e).
On Question, amendment agreed to.
Schedule 11 [Approval, imposition and modification of networking arrangements]:
Lord Evans of Temple Guiting Lord Evans of Temple Guiting moved Amendment No. 127:
Page 406, line 37, at end insert—
"() Where the defaulter is a partnership constituted under the law of Scotland, the power of the court to punish the defaulter includes power to punish a member of the partnership."
The noble Lord said: My Lords, this is a minor amendment to paragraph 13 of Schedule 11 to the Bill. Under paragraph 12 of that schedule, Ofcom may by notice require a person to produce such information and documents as they consider necessary to determine for the purposes of Section 290 or that schedule whether the competition tests have been satisfied. Those information provisions are enforced

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by the contempt of court provisions in paragraph 13 of Schedule 11. The amendment reflects the special legal nature of Scottish partnerships by stating that where a defaulter—that is, a person who has failed to comply with an information notice—is a partnership constituted under the law of Scotland, the power of the court to punish the defaulter includes the power to punish a member of the partnership. I beg to move.
On Question, amendment agreed to.
Schedule 12 [Corresponding obligations of the BBC and Welsh Authority]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 128:
Page 423, line 8, leave out "fair treatment of" and insert "equalisation of opportunities for"
On Question, amendment agreed to.
Schedule 13 [Financial penalties under the Broadcasting Acts]:
Lord Davies of Oldham Lord Davies of Oldham moved Amendments Nos. 129 and 130:
Page 433, line 2, leave out "and" and insert—
"(5B) A determination or estimate for the purposes of subsection (2A) or (5) above of the share of multiplex revenue"
Page 433, line 36, leave out "and" and insert—
"(6B) A determination or estimate for the purposes of subsection (2A) or (6) above of the share of multiplex revenue"
The noble Lord said: My Lords, as probably my last contribution to this Bill from the Dispatch Box, I have been given the opportunity to make a virtuoso performance to a crowded Chamber. Accordingly, I beg to move.
On Question, amendments agreed to.
Schedule 14 [Media ownership rules]:
[Amendment No. 131 not moved.]
Schedule 15 [Amendments of Broadcasting Acts]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 132:
Page 447, line 15, leave out paragraph 17.
On Question, amendment agreed to.
Schedule 16 [Further amendments in connection with newspaper mergers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 133 to 136:
Page 491, line 24, leave out "59(6E)" and insert "59(6A)"
Page 491, line 26, leave out -59(6E1" and insert "59(6A)"
Page 491, line 28, at end insert—
"() After the entry relating to "Anti-competitive outcome" there shall be inserted—
"Broadcasting Section 44(8A)"
"() After the entry relating to "Market in the United Kingdom" there shall be inserted—
"Media public interest Section 44(8)""
consideration
Page 491, leave out lines 31 and 32 and insert—"
Newspaper enterprise Section 58A(3)""
On Question, amendments agreed to.
Schedule 18 [Transitional Provisions]:
Lord Evans of Temple Guiting Lord Evans of Temple Guiting moved Amendment No. 137:
Page 538, line 19, after first "a" insert "person (whether or not a"
The noble Lord said: My Lords, paragraphs 3 and 4 of this schedule, which were inserted on Report, provide a wider range of savings for agreements that are in some sense conditional on the holding of licences under the 1984 Act. However, the noble Lord, Lord Avebury, questioned whether they would be effective to save certain rights of Crown Castle, the transmission services company, which are expressed by references to licences held by other persons. Officials have discussed the situation with Crown Castle, and I am happy to table amendments that the company confirm will resolve their concern.
These amendments broaden the references to licence under the 1984 Act, so that licences can be held by any person. That will effectively save any rights or obligations expressed by reference to licences held by persons who are not party to the agreements. The consequential amendments clarify the rights and obligations in question for a person who is a party to the agreement. I should also like to move three small amendments correcting minor errors and omissions in these paragraphs. I beg to move Amendments Nos. 137 to 144.
The Countess of Mar: My Lords, perhaps I may point out to the noble Lord that he can move only the first amendment, Amendment No. 137, and that he speaks to the rest of the amendments.
Lord Evans of Temple Guiting: My Lords, I am grateful to the noble Countess. That was pointed out by my noble friend Lord McIntosh as I sat down.On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 138 to 145:
Page 538, line 40, at end insert "or electronic communications service"
Page 539, line 27, after "person" insert "("the contracting party")" .
Page 539, line 28, at end insert "or another person (whether or not a party to the agreement)"
Page 539, line 34, leave out "that person" and insert "the contracting party"
Page 539, line 36, leave out "the case of a person who" and insert "relation to a case in which the person in question".
Page 539, line 46, at end insert "or electronic communications service"
Page 550, line 21, leave out "or electronic communications service"
Page 558, line 42, leave out paragraph 35 and insert—
"Continuity in relation to appointed news provider
35 Where a body holds an appointment for the purposes of section 31(2) of the 1990 Act immediately before the date of the commencement of section 278 of this Act—

(a) that appointment shall have effect in relation to times on and after that date as an appointment for the purposes of arrangements entered into in accordance with conditions imposed under section 278 of this Act;

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(b) the arrangements under which that appointment was made shall have effect in relation to such times as arrangements so entered into; and

(c) so much of the appointment or arrangements, or of any agreement to which the body is a party, as makes provision by reference to the body's ceasing to be nominated under section 32 of the 1990 Act shall have effect in relation to such times as if references to ceasing to be so nominated were references to becoming a body falling within section (Disqualification from appointment as news provider)(2) of this Act."

On Question, amendments agreed to.
Schedule 19 [Repeals]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 146 and 147:
Page 574, column 2, leave out lines 29 and 30 and insert—
"Sections 30 to 36."
Page 580, line 7, leave out "and 75" and insert "to 76"
On Question, amendments agreed to.
In the Title:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 148:
Line 5, leave out "newspaper mergers" and insert "mergers involving newspaper and other media enterprises"
On Question, amendment agreed to.
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord McIntosh of Haringey.)
Lord Puttnam: My Lords, the hour is late. However, as I have spent two years of my life and other members of the House have spent significant periods of their lives on this Bill, it is important to make one or two small points before the Bill passes. I believe that the noble Lord, Lord Fowler, did the House a favour in raising the issues that he did. I want to speak very briefly about the principle of pre-legislative scrutiny—about what I and, I am sure, the noble Lord, Lord McNally, have learned from it—and offer the Government a few observations.
I was delighted to hear the noble Lord, Lord McIntosh, say that there was no question about the future of pre-legislative scrutiny, but that was not the story that we were being told two or three months ago, when the general word around my party was that we were seriously damaging the future of pre-legislative scrutiny by appearing to be so pernickety.
The Government would do well to look again at the report of the committee and reflect on the way in which they reacted to the initial recommendations a year ago. Hours and hours of legislative time could have been saved had the Government been more moderate and more thoughtful in their response. We have made enormous progress on the Bill, but a great deal of that progress could have been made by a more thoughtful response in the first place. I take some blame for that. It is important for me to say that I think I allowed an over-adversarial relationship to be created between the pre-legislative scrutiny committee and the Bill team.
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The lesson that I would offer to anyone chairing a prelegislative scrutiny committee in future is not to allow that division to occur. It was unnecessary, but it has, I stress, caused this House many unnecessary hours of debate and dissent.
I have learnt an extraordinary lesson about the parliamentary process. It is fundamental that in any forthcoming discussions in this Chamber about the future of the House of Lords, someone must take into account who will do the job of scrutinising legislation. If one thing has been absolutely apparent, it is that no form of adequate scrutiny took place before the Bill came to this House. It has been a total disgrace. No one yet has been able to explain adequately why no proper scrutiny currently takes place in another place. That is a very serious issue. I hope that someone somewhere will read these remarks and address them in a serious way.
I would also suggest that any government tie pre-legislative scrutiny to a commitment to take Committee stage out of the Chamber. It would free up time in this Chamber; it would move governrnent business along; and I do not believe that any damage would occur in the process. I pass that on as serious advice because, again, hours and hours of time could have been advantageously saved.
I shall leave the last word to a man I admire very much—the founder of CNN, Ted Turner. Why Ted Turner? Ted Turner is exactly the type of media entrepreneur that I think this Bill was intended to encourage into a possible interest in this country. On 30th May, he wrote in the Washington Post:
"the Federal Communications Commission (FCC) is expected to adopt dramatic rule changes that will extend the market dominance of the five media corporations that control most of what Americans read, see and hear. I"—
Mr Turner, and not me, sadly—
"am a major shareholder in the largest of those five corporations, yet—speaking only for myself, and not for AOL Time Warner—I oppose these rules. They will stifle debate, inhibit new ideas and shut out smaller businesses trying to compete.…When the smaller businesses are gone, where will the new ideas come from? Nor does this trend bode well for new ideas in our democracy—ideas that only come from diverse news and vigorous reporting".
He continued:
"Even more troubling are the warning signs that large media corporations—with massive market power—could abuse that power by slanting news coverage in ways that serve their political or financial interests. There is always the danger that news organizations can push positive stories to gain friends in government, or unleash negative stories on artists, activists or politicians who cross them, or tell their audiences only the news that confirms entrenched views. But the danger is greater when there are no competitors to air the side of the story that the corporation wishes to ignore".
Anyone looking at the news coverage of this Bill as it has gone through Parliament would have seen a marked difference between the coverage it got in certain publications and the almost complete blank it received from others. Ted Turner went on to say:
"Naturally, corporations say they would never suppress speech. That may be true. But it's not their intentions that matter. It's their capabilities. The new FCC rules would give them more power to cut important ideas out of the public debate, and it's precisely that power that rules should prevent".

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I hope that through the amendments that we have recently attached to this genuinely excellent Bill, we have precisely addressed Ted Turner's worst fears, and as a consequence we may continue to enjoy the best and most plural broadcast environment in the world. We are handing the Bill on to the noble Lord, Lord Currie, and I am reminded very much of when my father taught me to ride a bicycle. He spent many hours running up and down the street, holding the saddle of my bike, until one day I turned around and realised that he had let go and was not there.
Tonight we have let go of the bike. The noble Lord, Lord Currie, will be asked to pedal away and all our best wishes and—speaking for myself—our dearest hopes go with him and with Ofcom. I am grateful to all noble Lords who have taken part in this debate. The Bill has been important. We have covered very interesting and important areas in a remarkably good spirit, albeit at great length.
Lord McNally: My Lords, I know that the Minister will groan inwardly, but there are two points that I want to make. I wish that I could wish the Bill Godspeed with the same confidence as the noble Lord, Lord Puttnam, but the more I have looked at the issue, the more I have seen large global forces at work that will not go away. I said that the Government have mounted a tiger, and I wonder how many in a few years' time will be making mea culpas similar to that made by the noble Lord, Lord Renton, about the 1990 Broadcasting Bill.
The other thing that I have been left with, apart from the wonderful experience of serving under the noble Lord, Lord Puttnam, on the pre-legislative committee, is a determination that the next stage of this matter—the defence of the BBC and the BBC Charter—is a battle that has to be won. I send the Bill on with that in mind.
Baroness Buscombe: My Lords, this has been an amazing experience for all of us. I want to thank all noble Lords for the great courtesy that they have shown throughout the debates and I wish the Bill well.
Lord Currie of Marylebone: My Lords, as chairman of Ofcom, I express my thanks for the enormous care and thoroughness with which your Lordships have considered this Bill. The House has lived up to its fine reputation as an effective revising chamber. In many respects, the Bill leaves the House in a much better shape than when it arrived. I pay tribute to noble Lords from all parts of the House for the care and consideration that they have given to it.
Ofcom is very much the servant of statute, and my colleagues and I have been aware that it is for Parliament to determine Ofcom's duties, responsibilities and powers and for us to make that work to best effect. That is why I have intervened sparingly in the debates. However, I
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have listened carefully and read all those contributions that I have been unable to hear in person. The debates that we have had will inform how Ofcom moves—or cycles—forward, and they will certainly inform the way that we set up and proceed to carry out the duties that Parliament has laid upon us.
As a result of the successful amendment of the noble Lord, Lord Puttnam, on Report, Ofcom now has the word "citizen" as part of its principal general duty. I, for one, would be delighted if that word remains firmly in the principal duty of Ofcom when the Bill finally emerges from the parliamentary process, which it has not yet quite done. That would provide welcome clarity.
We have struck a good balance, giving Ofcom clear instructions but also flexibility to deal with the unforeseen—to strike the best balance for the public interest in each individual circumstance. However, there is one issue that I must flag up. The amendment of the noble Lord, Lord Puttnam, had a second impact, which was to put the citizen's interest above that of the consumer in the area of broadcasting and spectrum, but not in that of telecoms. That creates different duties in different parts of Ofcom's activities, which will cause difficulty. It will make Ofcom subject to judicial review and may reduce the effectiveness of Ofcom. It will be the big players, not the small players, who will take advantage of that.
I hope that the Bill in its final form will cast Ofcom's general duties in terms that put the citizen and consumer interest in parity. I emphasise that point, because some noble Lords said that they were not altogether clear where I stood at Report. The citizen's interest is very much at the heart of what Ofcom wants to achieve. My fellow members are in no doubt about the deep concern that the House has for the interests of citizens.
The communications industry is not like any other industry; it is central to our society and our democracy. That is something that the Ofcom board feels with both its head and its heart. However, we believe that if Parliament defines Ofcom's general duty in terms of parity, we are confident that in all circumstances—both those we can foresee and those we cannot—we will be able to reach the best solutions in the public interest. Those solutions should properly reflect the keen concern for citizens that have been expressed in this House.
If we are able at the end of the parliamentary process to have both clarity and parity in Ofcom's general duties, we will have a truly excellent Bill that will serve the public interest and enable Ofcom to pursue it to best effect.
The Lord Bishop of Manchester: My Lords, I am sure that all these speeches have been slightly out of order, but I cannot allow the Bishops' Benches not to be included in these final remarks. God speed the working out of the Bill and the job of Ofcom.
Lord McIntosh of Haringey: My Lords, I do not believe in speeches on the Motion that the Bill do now pass, and I try to avoid them, but they have been made. Therefore, the very least that I can do for the sake of courtesy is to express my gratitude to all noble Lords who have taken part in proceedings on the Bill. I hope that they listened very carefully to the wise words of the noble Lord, Lord Currie, a minute or two ago.
Above all, I want to pay tribute to the work of the members of the Bill team who have been fantastic, both in the quality of the advice that they have given
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and the way in which they have taken up the challenges that have been brought to the Bill in this House, which, as has been said, is rather different from the way in which matters are considered in another place Having said that, once again I commend the Bill to the House.
On Question, Bill passed, and returned to the Commons with amendments.
House adjourned at twenty-two minutes before eleven o'clock.