Lords Sitting of 3 June 2003

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chester

WTO: Animal Welfare
Lord Beaumont of Whitleyasked Her Majesty's Government:
What steps they are taking to persuade the World Trade Organisation to include the welfare of animals as a justification for discrimination in trade.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, the United Kingdom has been working with the European Union on this issue for a number of years. Animal welfare issues have long been included among the EU's World Trade Organisation negotiating priorities and at Doha the EU successfully ensured that the issue of farm animal welfare was on the agenda for the current Agreement on Agriculture negotiations.
Lord Beaumont of Whitley: My Lords, I thank the Minister for that encouraging reply. Will the Government do their best, and also stimulate our European partners, to try to achieve the result that all people of goodwill want; namely, that we should be able to choose between food which has been humanely produced and that which has been inhumanely produced and that no economic considerations should stand in the way of that?
Baroness Symons of Vernham Dean: My Lords, we will do what we can. It is United Kingdom policy wherever possible to try to raise the level of animal welfare internationally through dialogue and through engagement. Unilateral action can often be counterproductive, as I am sure that the noble Lord will recognise. On occasions, it can work against efforts to persuade others. It is important to note that many developing countries view our concerns about animal welfare as trade discrimination. They believe that our concerns are trade restrictions that affect them as developing countries disproportionately. I am sure that the noble Lord understands that it is not so much the issues about finance and costs as the issues about developing countries that we are bearing in the forefront of our minds.
Lord Elliott of Morpeth: My Lords, does the Minister agree that if third world countries, practising in many cases inhumane methods of production, are allowed to import without any control, that could undermine EU producers?
Baroness Symons of Vernham Dean: My Lords, there are a number of considerations to bear in mind in
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relation to not only third world countries, as the noble Lord puts it, but also a number of other countries bound by the WTO. I hope that I have made it very clear to the noble Lord, Lord Beaumont of Whitley, that we shall do what we can to pursue animal welfare issues. The WTO rules, agreed by a consensus of all the WTO member states, are designed to provide the framework in which they operate. They do not specifically prevent measures which are aimed at raising animal welfare, but they do regulate it. They regulate it by discriminating about third country imports; about imports and domestically produced goods; and they also regulate it as to measures which are thought to be arbitrary or disguised restrictions on trade.
Lord Tomlinson: My Lords, does my noble friend agree that, rather than have a system whereby one seeks to use anything as a justification for discrimination in trade, it would be far better if we concentrated on obtaining agreed standards of animal welfare and continued to propagate the interests of open, free trade and not seek to have any barriers to that process?
Baroness Symons of Vernham Dean: My Lords, I agree. It is important to engage with all countries—not just developing countries but others—about animal welfare standards. That we are seeking to do, which is why I laid the great stress I did to the noble Lord, Lord Beaumont of Whitley, on engaging in a dialogue on these issues. Given that, we believe that it is important to operate within a rules-based organisation like the WTO, so that when there are disagreements about these issues there is a means of resolving them.
Lord Mackie of Benshie: My Lords, can the Minister tell the House whether in the EU, never mind the world, standards are equal, because our farmers are inclined to believe that the standards in Europe are not as rigorous as they are here?
Baroness Symons of Vernham Dean: My Lords, I hope that I can do a little better than that. I can provide the noble Lord with a recent Commission communication, some 41) pages long. I am sure that he would not wish me to rehearse it all here, but it is on animal welfare legislation. It was published by the EU in November last year and is a very helpful over-guide of the Commission's approach to improving animal welfare issues internationally. I shall ensure that I send the noble Lord a copy.
Lord Campbell-Savours: My Lords, would not unilateral action actually he very—
Lord Hodgson of Astley Abbotts: My Lords—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, I think that it is the turn of the Opposition.
Lord Hodgson of Astley Abbotts: My Lords, does the Minister recognise that there is rising concern among

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the general public about animal welfare standards of meat and other products imported into this country, often at the expense of the British farmer? Have the Government tried to persuade the World Trade Organisation to permit labelling of such food as not meeting UK welfare standards?
Baroness Symons of Vernham Dean: My Lords, as I am sure the noble Lord knows, we are very keen to see better labelling of all products that are traded. The noble Lord is quite right. There is rising concern not just about animal welfare, but also about human health and the concerns that individuals have, for example, about genetically modified products. The United Kingdom, in concert with our EU partners, believes that better labelling is an important aspect of our current negotiations in the WTO.
Baroness Miller of Chilthorne Domer: My Lords, the Minister said that the EU and this country had some success at Doha. Can she say what has happened since in getting the issue of animal welfare on the agenda in a specific form for Cancun?
Baroness Symons of Vernham Dean: My Lords, I am afraid, as we shall discuss later in Questions in your Lordships' House, that matters are moving rather slowly in Cancun. I hope that the issues about animal welfare will be taken forward. It was indeed a success to get animal welfare on to the agenda. We must remember that the negotiations do not end with Cancun, although it is a very important staging post. As I said, we shall be discussing this matter later, but I would suggest to the noble Baroness that there are probably greater priorities for most developing countries. We should bear in mind that we are discussing the development round. The developing countries will put some other issues very much more to the forefront of the agenda.
The Lord Bishop of Chester: My Lords, does the Minister agree that getting this matter on to the agenda is not just a question of welfare but of the very dignity of being human and of how we treat our fellow creatures, and that the way in which the matter is put across will determine the urgency with which it is treated?
Baroness Symons of Vernham Dean: My Lords, that is an important point. It is not just a matter of considering the general rules although those are enormously important as regards animal welfare standards—as I said to your Lordships, this is a matter that the United Kingdom and our colleagues in the EU take very seriously—but also of considering individual aspects of trade in animal products. Your Lordships will have heard recent discussion about cat and dog fur and there is also debate about seal skins and laying hens. A number of different issues arise which concern not just animal welfare but also, as the right reverend Prelate said, the ways in which we as human beings share the planet with our fellow creatures.

Augustine Chihuri
2.44 p.m.
Lord Astor of Heverasked Her Majesty's Government:
Whether they will take steps to remove Augustine Chihuri, the Commissioner of the Zimbabwe Republic Police, as honorary Vice-President of Interpol.
Baroness Symons of Vernham Dean: My Lords, I am happy to say that we have learnt that Zimbabwe's police commissioner announced in a letter to Interpol dated 28th May that he would step aside from the position we are discussing.
Lord Astor of Hever: My Lords, we very much welcome the resignation. The appointment was seen as support by Interpol for a repressive police force that yesterday viciously beat and shot at peaceful protestors.
The Prime Minister's statement in Evian expressed strong support for NePAD in which African leaders assume responsibility for democracy, human rights and good governance throughout the continent. May I therefore ask the Minister what has been the reaction of governments in the region to Morgan Tsvangirai's arrest and to the court order banning this week's protests—both issued on affidavits in Chihuri's name?
Baroness Symons of Vernham Dean: My Lords, I very much join the noble Lord, Lord Astor of Hever, in welcoming the resignation. The noble Lord is quite right, the Prime Minister made clear in his speech at Evian that there has been significant progress on NePAD, with many countries within the African continent now agreeing to review mechanisms which lie very much at the heart of the NePAD initiative. It is true that Zimbabwe casts something of a shadow over NePAD. None of us can disguise that. But it is our strong view that we cannot hold an entire continent to ransom on the basis of what is happening in one country.
During the G8 summit President Mbeki of South Africa detailed the continuing efforts of African leaders to start interparty dialogue between ZANUPF and the MDC. However, we have not had any specific feedback on the arrest of Mr Morgan Tsvangirai or, indeed, on the way in which the Zimbabwean courts have outlawed the week of action which is currently under way. We shall have a much clearer view of that over the next couple of days.
Lord St John of Bletso: My Lords, with the ever increasing condemnation of Mr Mugabe and his brutal regime in Zimbabwe is it not time for Her Majesty's Government to put pressure on the United Nations Security Council to initiate a full debate on Zimbabwe?
Baroness Symons of Vernham Dean: My Lords, the United Kingdom Government do not hang back from

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wishing to see this matter debated in as authoritative a forum as possible. We wish to see it debated in the EU and in the Commonwealth. We also very much wish to see it debated in the UN. I hope that the noble Lord will understand that not all our partners on the United Nations Security Council take the same view as we do as regards robustly exposing the dreadful shortcomings of the Mugabe regime. There are those who do not wish to have the matter debated with the robustness that the noble Lord and I would like to see.
Lord Avebury: My Lords, will the Minister initiate an inquiry into the manner in which the Interpol rules provide for the appointment of its vice-presidents so that this kind of thing does not happen again? Is the Minister aware that Mr Chihuri was the subject of a court order two years ago for facilitating the illegal seizure of farms and that the latest exploits of the force to which he belongs include not only the arrest of Mr Tsvangirai but also those of the mayor of Bulawayo and the secretary-general of the MDC, Mr Welshman Ncube? Is the Minister also aware that the police force is accused of beating Mr Edwin Dzivaresekwa MP to within an inch of his life and that he is in intensive care? Does the noble Baroness agree that even if we cannot refer those matters to the Security Council, they should be the subject of a rigorous examination by the High Commissioner for Human Rights?
Baroness Symons of Vernham Dean: My Lords, I have a great deal of sympathy with what the noble Lord said. As regards the way in which the police commissioner was awarded the honorary vice presidency, Her Majesty's Government were not involved in Interpol's decision. I believe that it was a matter of precedent that those who had been elected in the past were then given an honorary vice presidency, as happened in the case that we are discussing. I agree with the noble Lord that where the situation changes on the ground there should be a mechanism for reviewing exactly that automaticity. The police force in Zimbabwe has become something of an instrument of state terror, as the noble Lord, Lord Avebury, described in the examples that he cited. As I say, I have a great deal of sympathy with the points that he made and I shall relay them to my right honourable friends.
Lord Elton: My Lords, is it not the case that as well as those who have already been mentioned as having been arrested yesterday, no fewer than four other MPs were arrested, all members of the main opposition party, and that at least one of them is said to have been held without food for 24 hours? Can the noble Baroness tell us a little more about the regime which Mr Chihuri represents and of any other effective action we can take to discourage this kind of atrocious behaviour?
Baroness Symons of Vernham Dean: My Lords, reports are still coming in as to the full extent of what happened. The noble Lord cites arrests made yesterday. I do not yet have any information about
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what has gone on today. The Zimbabwean high court issued a provisional order on 31st May declaring that the MDC and Morgan Tsvangirai were,
"interdicted from holding the mass stay away and public demonstrations scheduled for 2 to 6 June".
The order was given by Justice Hlatshwayo following an application made, as has been pointed out, by Commissioner Chihuri. As we know, Mr Tsvangirai was arrested yesterday morning for contempt of court, in so far as he defied that interim order. He was then released an hour and a half later to attend his treason trial.
Baroness Park of Monmouth: My Lords, the Minister will remember that when this country tried to raise such an issue last year, the African Union voted it down. Have the Government considered asking Mr Mbeki, in his character as chairman of the African Union under President Gaddafi, what it intends to do? At the G8 last year, we were told that good governance was not really in the gift of NePAD, but an issue for the African Union. What have we done to try to use that, and to put the African Union on the stand and ask what it is doing about that situation in an African country where Africans are murdering Africans?
Baroness Symons of Vernham Dean: My Lords, that is a difficult question, as I am sure that the noble Baroness understands. It is difficult to ensure that we get the support that we need from African Union countries while still having a robust position ourselves, and to try to avoid putting anyone else in the dock other than those in the Mugabe regime who should be there.
The noble Baroness is quite right: the EU tabled a resolution in the 59th session of the UN Commission on Human Rights, and it fell to a no-action motion proposed by South Africa on behalf of the Africa group. We were enormously disappointed by that reaction from the Africa group. On the other hand, Presidents Mbeki, Obasanjo and Muluzi visited Harare from 5th May for meetings with Mr Mugabe and Morgan Tsvangirai, and we very much welcome their continued engagement in trying to tackle the problems facing Zimbabwe.
We are talking to those in the African continent whom we believe can bring pressure to bear on the Mugabe regime, but there is a delicate balance to strike to ensure their full engagement and that they put pressure on the regime in the way needed.

Money Laundering
2.53 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
Whether they will review the restrictions imposed by the Financial Services Authority under the Money Laundering Regulations 1993, requiring firms to obtain and record sufficient evidence of the identity of their clients, and seek to eliminate those

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restrictions which obstruct legitimate business without causing any inconvenience to those whose aim is to launder money.
Lord Davies of Oldham: My Lords, the Financial Services Authority has statutory powers under the Financial Services and Markets Act 2000 to issue rules to counter money laundering. The rules are consistent with the Money Laundering Regulations 1993, and require financial institutions to obtain satisfactory evidence of a client's identity and to keep records for five years. The regulations are not prescriptive about how identification should be made, and nor are FSA rules. In supervising compliance, the FSA tries to ensure that they are applied in a flexible manner that does not interfere with legitimate business.
Lord Peyton of Yeovil: My Lords, is the Minister aware that he has followed most admirably the criterion for Answers of adding absolutely nothing to what is already known on the subject? Having said that, does he accept that it is common ground between us that money laundering is a disreputable practice to be discouraged? What ought to be common ground as well is that it is undesirable to gum up legitimate business with silly regulations. Does he accept that an example of that is for banks and others, before they open a simple account with people, to require from the customer, actual or intended, proof in the form of a utility bill that they live at the address to which the bank has just addressed their communication? That verges on the barmy.
Lord Davies of Oldham: My Lords, I had never conceived of it as being a Minister's job to educate the House, but merely to reply to Questions in the way in which they had been phrased. The rules are not prescriptive. One or two financial institutions have asked for evidence along the lines that the noble Lord suggests, but that is not required by any legislation, including the FSA rules. Guidance is being issued that indicates that, so long as proper identification is established, the means by which that is achieved is for the institution itself to decide.
Baroness Gardner of Parkes: My Lords, will the Minister see that some advice on the subject goes to, for example, building societies? My recent experience has told me that if I want to open a new account at a building society of which I have already been a customer for many years, it still insists on new identification. It says that that is the law—that in its view it is obliged to do so. When customers ask whether the building society cannot refer to their other account, it says that it is not allowed to do so under the Data Protection Act. It seems that there is great overkill for people who have established accounts. Something should be done to educate such bodies, and perhaps the FSA should do so.
Lord Davies of Oldham: My Lords, as I indicated, the FSA is not responsible for the way in which
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building societies interpret their need to establish identity. We should return to the main reason for the requirements and rules. It will be recognised that money laundering is not only a heinous offence but, in this day and age, can be a way to sustain international terrorism. Therefore it is only right that we employ requirements of full rigour with regard to institutions. However, the noble Baroness indicated where building societies might look at the matter again.
Lord Newby: My Lords, does the Minister accept that banks and building societies routinely require the procedures already mentioned because they believe, rightly or wrongly, that they are legal requirements with legal deadlines? No doubt many noble Lords other than myself who have long-standing accounts with banks and other financial institutions have, like me, been required to turn up bearing passports and a utility bill to prove who they are.
Does the noble Lord accept that such box-ticking will frankly be completely useless in dealing with sophisticated money launderers? Does he further accept that it is more important that the FSA issues guidelines about how members of staff of banks and other financial institutions follow due diligence beyond mere box-ticking, to check that people who come through the front door are not potential money launderers?
Lord Davies of Oldham: My Lords, I have considerable sympathy with the sentiments expressed by the noble Lord. The exercise is not meant to a box-ticking one, but to ensure that the identity of the person concerned with opening or transferring moneys between accounts is obtained accurately. I assure him that the Financial Services Authority is all too well aware of the fact that there are areas of some confusion. It, too, is eager to emphasise not box-ticking but efficacy. He is absolutely right to say that the rules are intended to control significant abuse, and we solve that problem not by mindless box-ticking but by an intelligent approach to establishing proper identity.
Lord Monson: My Lords, does the Minister agree that although it may be perfectly sensible to require people investing £10,000 or £20,000 to produce a certified copy of their passport and a utility bill, it is quite ridiculous to require people investing £500 or £1,000 to go to such trouble and expense? Money launderers do not deal in such small sums.
Lord Davies of Oldham: My Lords, the noble Lord may have greater experience of the phenomenon than I have. I am not too sure that we could establish

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anything in terms of accounts. Surely we have to establish the identity of the person opening the account.
Lord Saatchi: My Lords, is not—
Lord Hughes of Woodside: My Lords, if there were no checks on identity or addresses, I could easily register an account in perhaps the names of noble Lords of substantial means.
A Noble Lord: The rich ones.
Lord Hughes of Woodside: My Lords, I shall not point in any direction. There may be some on my own side, for all I know.
If by chance a cheque in the name of one of those noble Lords was mistakenly put in my mail box, I could happily collect it. I am sure that they would complain bitterly if I were to assume their identity.
Lord Davies of Oldham: My Lords, I hope that I detected a rather large hypothesis in the noble Lord's contribution. He is right that we need rules and regulations to guard against any form of fraud or money laundering. Noble Lords will be aware that there has been increased sensitivity in recent years because of laundering, which provides international terrorists with opportunities to get their hands on increased amounts of money, and because there have been one or two notorious cases involving substantial movements of money into this country. It was very important indeed that the regulations were in place.

WTO: Cancun Meeting
3.1 p.m.
Lord Dubs Lord Dubs asked Her Majesty's Government:
What discussions they have had with European Union partners in preparation for the forthcoming World Trade Organisation meeting in Cancun, Mexico.
Baroness Symons of Vernham Dean: My Lords, Her Majesty's Government have regular detailed discussions with European partners at ministerial and official level on issues relating to the current World Trade Organisation trade round. Our current priorities in the run-up to the ministerial meeting in Cancun are agriculture and a settlement of the issue of trade-related intellectual property rights and access to medicines. I am next due to meet my European Union colleagues in Palermo on 6th July.
Lord Dubs: My Lords, I thank my noble friend for her helpful Answer. Is she aware that the average European Union cow is subsidised to the extent of 2.4 dollars a day and that that compares with the 2 dollars a day on which more than 3 billion people—more than half the world's population—have to live? In light of that statistic, is it not clear that the main
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priority in Cancun—I believe that my noble friend more or less said this—must be to help developing countries to achieve a more competitive position in the world agricultural market, given that they face heavily subsided products from rich countries?
Baroness Symons of Vernham Dean: Yes, my Lords. I am very much aware of the appalling statistic that my noble friend rehearsed. The figures vary slightly but I use those statistics myself in trying to persuade my European colleagues that it is monstrous that we do not move from the current position on agricultural subsidies.
I have just come from a meeting this lunchtime of members of the various high commissions of the Commonwealth from around London, where we discussed the WTO. The opening contribution from a developing country was precisely the point raised by my noble friend; that is, that before everything else, the issue involving agriculture is absolutely vital to developing countries.
Lord Elton: My Lords, does the Minister recognise that this is a central issue for the development of policy? A world in which there is such a gross difference between the wealth of different communities is not only immoral but also unsafe. Does she also recognise that it will take great political courage to undertake policies that must in the end involve costs for this country? That courage is greatly needed in governments of any party.
Baroness Symons of Vernham Dean: Yes, my Lords. I hope that not only I recognise that but my right honourable friends the Foreign Secretary and the Secretary of State for Trade and Industry and my noble friend the Secretary of State at MID recognise that as well. This is a central issue. As the noble Lord said, this is a moral issue and it also involves safety. As we have discussed in your Lordships' House, the increasing levels of poverty in some parts of the world provide fertile territory for those who wish to exploit them for purposes of terrorism and other issues. It is vital that the trade round is a success but I shall not try in any way to undercut the real difficulties that I have foreseen in the trade round. It is already an uphill struggle and there is no indication that it will get any easier in the next few weeks and months.
Lord Hannay of Chiswick: My Lords, does the noble Baroness agree that the issue that we must address as a member of the European Union is only part of the problem? It is good to hear that we are fighting our corner in that regard to get a better trade system. However, the United States must also pull its weight in this regard. Is she satisfied, from what President Bush said at the Evian Summit, that the United States will be prepared to reduce the level of subsidy that, in a different way, is just as damaging to developing countries as to ours?
Baroness Symons of Vernham Dean: My Lords, the United States must pull its weight; I absolutely agree. The farm Bill, which was passed shortly after the Doha declaration and which referred to phasing out farm subsidies, was a great disappointment to many of us. We must be careful in this regard. The fact is that the United States subsidises its agriculture to the extent of about 23 per cent of expenditure but we in the European Union do so by in the region of 35 per cent. I am afraid that we must also look very carefully at our own house. This issue involves not just the United States but also Japan. The failure to reach an agreement on this at Evian is very disappointing. The export subsidies moratorium that was suggested was not agreed at Evian. I hope that we can return to that issue at the ministerial meeting at Cancun.
Lord Razzall: My Lords, to follow the Minister's response to the noble Lord, Lord Hannay, and in view of Her Majesty's Government's support for the United States in our joint adventure in Iraq, does she accept that this is perhaps the best moment for a decade to extract a quid pro quo from the United States Government in return for our support? I refer in particular to farm subsidies, which, as has been indicated, are particularly damaging to Africa. That does not merely involve farm subsidies; there is also the matter of the steel industry. Noble Lords will be well aware that the United States is in dispute with the World Trade Organisation over potential subsidies. Is this not a moment for the Prime Minister to exercise his muscle with his new-found friend?
Baroness Symons of Vernham Dean: My Lords, the United States is not our new-found friend; it has been our friend for a very long time.
I disagree with the noble Lord, Lord Razzall. I do not accept the equivalence of the steel dispute and the issue of poverty in developing countries. I am sorry but I believe that they are very different. The sort of equivalence that the noble Lord, Lord Razzall, gave them is inappropriate. My argument in relation to the United States involves not a quid pro quo, as the noble Lord put it, but the fact that it is in its interest for the world's prosperity to be more equally divided, in order to create the safer world to which the noble Lord, Lord Elton. referred a moment or two ago. World prosperity is continuing to grow—we should make no mistake about that—although it currently does so somewhat unevenly. If fewer countries are able to access that growing prosperity, and if thereby the gulf between the rich and the poor becomes ever wider, the unsafe world to which the noble Lord, Lord Elton, referred would become even more of a difficulty.
Lord Hodgson of Astley Abbotts: My Lords, can the Minister—
Lord Williams of Mostyn: My Lords, we are out of time now.

Iraq: Looting
3.8 p.m.
Baroness Williams of Crosby Baroness Williams of Crosby asked Her Majesty's Government:
Why, given the United Kingdom's responsibility as an occupying power under international law, no steps were taken to protect Basra University from looters.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My Lords, British forces entered the north of the city of Basra at the beginning of April. Their most immediate priority was to engage and defeat enemy forces. As soon as that had been achieved, units were deployed to secure Basra University. Looters were expelled and some stolen goods were recovered. British forces continued to protect the university, which I understand is now open, until the security situation improved.
Baroness Williams of Crosby: My Lords, does the Minister accept that that is—how can I put it?—a rather favourable view of what has happened? Some 2 million books, some of which date back to 1015, are understood to have been burnt at Basra University. The astronomy section was destroyed and a great deal of the university was laid to waste. Does the Minister accept that a month after the noble Baroness, Lady Symons, chided my noble friend Lord Redesdale for having suggested that Basra University could be protected, Human Rights Watch today published a report that shows that there are still daily killings in Basra and that looting is continuing? To use its words, there is no adequate security as yet even in that area after dark. Will the Government take urgent steps to arrange for the appropriate personnel who are police-trained rather than militarily-trained to go into the British area of occupation? That is all the more important, given that Mr Sawers, the Government's civil service representative, has now said that the likelihood is that the occupation coalition authority will be in charge for at least another year, and possibly even 18 months.
Lord Bach: My Lords, I cannot agree with the noble Baroness that I have given a favourable interpretation, nor that my noble friend Lady Symons in any way chided the noble Lord. Lord Redesdale, at an earlier Question Time. I must repeat the facts. The University of Basra in the north of the city was attacked by the Royal Regiment of Fusiliers on 6th April because it was being defended. A BBC report suggested that the last hideout for the Fedayeen in that city was in the university, where many foreign jihadis had signed up to study in the Koranic studies department. One of the main thrusts of our attack took them through he university as they moved towards the Iraqi naval academy. Much damage was done, alas, to the university—not by looters at that stage, but because of the fighting.

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It was necessary to fight to win the war to liberate Iraq and Basra in particular. However, I want to stress that as soon as enemy forces had been defeated and UK forces fell back to secure the area, when they returned looters had been there in the meantime. The British forces expelled between 1,000 and 1,500 looters from the university site and confiscated stolen items. It is a large site of about two square kilometres. One regiment occupied the site for 72 hours before handing over to a squadron of the Queen's Royal Lancers, who continued to protect the site and establish links with lecturers and other university staff. Those are the facts of the situation.
As far as concerns the noble Baroness's general comments about Basra, of course there are still problems at this stage. It would be ridiculous to suggest that any part of Iraq would become a liberal democracy the moment the ruthless dictator fell. In fact, there have been joint patrols by UK military and Iraqi police since 13th April in that city, where we have had responsibilities. Some 800 police are now reported to have returned to work in the area. I am advised that the security situation overall in that city is getting better rather than worse.
Baroness Rawlings: My Lords, does the Minister accept that the looting that we have seen across Iraq should not detract from the excellent work carried out by British and American forces in liberating Iraq from Saddam Hussein? However, would he agree that, despite his very full answer, the looting and violence we have seen is a clear indication that DfID and the MoD comprehensively failed to work together before the conflict on proper contingency planning for how they would manage the peace? In particular, does the Minister agree with the analysis of Clare Short, who said this weekend that because she had been "duped" by the Prime Minister:
"The preparations for post-conflict were poor, and that is why we have got the chaos and suffering that we have now."?
Lord Bach: My Lords, I am afraid that I do not agree with the noble Baroness's question, however kindly she puts it, and I certainly do not agree with what Ms Short had to say.
Lord Redesdale: My Lords, has any action been taken by 1 he British, or are the British prompting their American allies, to protect any of the archaeological sites in Iraq, because there is widescale reporting of looting on a massive scale that will make the destruction of the Baghdad museum seem paltry in comparison?
Lord Bach: My Lords, I know the concern of the noble Lord and other noble Lords on that issue. Any looting of such sites is unacceptable. Coalition forces have attempted to stop that where possible. He knows that Resolution 1483 imposes a new prohibition on trade in or transfer of cultural or religious items. We have been informed by the United States authorities that there are guards now at the Baghdad museum and that looting of its artefacts is under control. The
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United States has retrieved over 40,000 manuscripts and 400 other artefacts that were stolen from the Baghdad museum. I think that it is established now that many items that were reported missing in those early days had in fact been stored in vaults since the beginning of the military operations. However, I do not dispute that there is still a problem as far as cultural sites are concerned. We and our coalition allies are determined to sort that out.

Communications Bill
3.15 p.m.
The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Blackstone.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 261 [Public service remits of licensed providers]:
Viscount Falklandmoved Amendment No. 189:
Page 232, line 43, leave out subsection (2) and insert—
"(2) The public service remit for every regional Channel 3 service is the provision of a wide range of high quality and diverse programming which, in particular, includes a substantial range of high quality original production and satisfies the tastes and interests of the part of the United Kingdom for which that service is licensed.
(2A) The public service remit for every national Channel 3 service is the provision of a wide range of high quality and diverse programming which, in particular, includes a substantial range of high quality original production.
(2B) The public service remit for Channel 5 is the provision of a range of high quality and diverse programming."
The noble Viscount said: The noble Lord, Lord Puttnam, has asked my noble friend Lord McNally and me to move this amendment for him in his place. At the same time I shall also speak to Amendment No. 190, which is down both in my name and that of my noble friend Lord McNally. Amendment No. 189 concerns the Channel 3 service, which was the subject of some debate in the pre-legislative scrutiny that was chaired by the noble Lord, Lord Puttnam. The amendment expressed the concerns that were evident on that occasion about the public service remit for every regional Channel 3 service. There was a concern, which is the substance of the amendment, that there should be a continued provision of a wide range of high quality and diverse programming.
The amendment provides an opportunity to debate the recommendation of the joint committee that the public service remit for each of the Channel 3 services should require urgently the provision of this range of high quality and diverse programming. That would include a high proportion of high quality original production. In particular it should satisfy the tastes

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and the interests of that part of the United Kingdom which that Channel 3 service served. The pressures could be great on the Channel 3 services, as I am sure that noble Lords will realise, with limited sources of advertising and increased strong competition which exists even now before the provisions of the Bill, should they be passed, become an Act.
Amendment No. 190 in my name and that of my noble friend Lord McNally deals with other aspects of Channel 3. In the Government's White Paper of December 2000 they promised that Channel 3 would have continuing responsibilities for a similar range of programming to that of the BBC and Channel 4, albeit with targets set at lower levels. The genres of programming are clearly set out in Clause 260, but the degree to which ITV is expected to abide by them depends on its individual remit. That remit is, perhaps alarmingly, exactly the same as that of Channel 5, even though Channel 3 has a universal reach, which Channel 5 does not. At present, Channel 3 has a share of the peak-time audience of around 33 per cent, whereas Channel 5 has a reach of around 6 per cent. Furthermore, the programme budget of Channel 3 is around six times that of Channel 5.
Channel 3 has an historic place in broadcasting ecology as a mixture of commercial and public service provision. It is a successful competitor to BBC 1 and in particular has been a successful provider over a number of years of regional programming. Channel 5 bears lighter obligations because it was intended that it should be a small, niche commercial channel.
We contend that the public service broadcasting ecology I have mentioned would be greatly undermined if ITV's remit freed it from its Tier 3 obligations. This could be further aggravated by the ownership rule changes, allowing ITV to centralise and to he taken over by possibly a large non-British corporation. In such an environment, it is vital within the British ecology that Channel 3 has a strong public service remit which, to put it as mildly as I can, acts as a strong reminder to any aggressive new owner—whether that be a UK owner or, more possibly, an international corporation—and underwrites the commitment to regional programming and to general factual programming. I beg to move.
Lord Phillips of Sudbury: I want to make some boring, lawyers' points which nevertheless are not unimportant in terms of the construction of the Bill. I am sure that one of the most difficult tasks of the parliamentary draftsman was to try to write into Clauses 260 and 261 the burden of expectation placed upon them by almost all Members who have spoken in favour of the Bill supporting public service standards. My questions in relation to Amendments Nos. 189 and 190 revolve around understanding how Clause 261 fits with Clause 260.
Clause 260 refers in its heading to the "public service remit" for television at large. Nowhere does it make any statement that it is subject to the provisions of Clause 261. The point is that Clause 261, which sets out the public service remit for Channels 3, 4 and 5, is
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infinitely narrower in scope than the provisions of Clause 260. Clause 260(4) lists the "purposes of public service television broadcasting" and the clause twice makes reference to "relevant television services".
My question intends to achieve a greater understanding from the Minister. I have given late notice of the questions, for which I apologise, but in the face of such large pieces of legislation one is operating on a just-in-time basis. I would be pleased to know how one construes the fact that the public service remit of Channel 3 and Channel 5 are confined by Clause 261(2) to,
"the provision of a range of high quality and diverse programming".
I compare that with the requirements of Clause 260(4)(d), which refers separately to "content", "quality" and "editorial integrity". My question is whether the absence of any reference in Clause 261 to "content" as opposed to "quality", and absolute omission of reference to "editorial integrity", is supposed to imply that those two requirements do not carry across into the public service remit for the public service channels, 3, 4 and 5, governed, as it would seem, by Clause 261. Put another way, is Clause 260 generally applicable to Channels 3, 4 and 5 or is the effect of Clause 261 to narrow the scope of Clause 260 with regard to Channels 3, 4 and 5 to just those matters dealt with in Clause 261?
I want to raise at this juncture one other point, bearing in mind that we are at the Committee stage and trying to be of help both to the Government and the Committee. When looking at Clause 261(3), which deals with the public service remit for Channel 4, which is more expansive than that provided for Channels 5 and 3 services, I wonder why it appears to go wider than Clause 260. It deals with "innovation, experiment and creativity", which is not part of the many provisions of Clause 260. That clause refers in only one place to originality and that is with regard to programmes for young persons and children. Similarly, Clause 261(3) talks of programming exhibiting a "distinctive character" as being a public service requirement for Channel 4, but there is nothing like it in Clause 260.
I therefore have a double conundrum. In one sense, Clause 261 is much narrower than Clause 260, but in respect of the distinctive character of programming on the one hand and innovation and creativity on the other, Clause 261 appears to step outside the ambit of Clause 260.
I apologise to the Committee for having to put those technical matters in a way which will be difficult to follow and comprehend, but, frankly, I know of no other way of contending with them in the method that is required; that is, on the Floor of the Chamber.
Baroness Jay of Paddington: Without wanting to follow on the technicalities of the points that have been raised, it is helpful to the Committee and the Bill that Amendments Nos. 189 and 190 attempt to be more specific about the nature of the public service remit. That is of value.

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I am concerned that we might feel some trepidation about being too precise in trying to identify what we feel is realistic in terms of public service remit and in trying to be prescriptive in identifying the qualities necessary in statute for a public service remit to be observed. In that, we have a British concern that we may be trying to over-regulate in statute an issue which should be left to more vague and less clearly identified roles and qualities.
I want to draw the attention of the Committee to a broader point raised in Amendments Nos. 189 and 190. It is the statutory obligation that some of our neighbours and colleagues impose in the public service context on their broadcasters. I think specifically of France and Spain in the European Union and Canada and Australia in the Commonwealth countries. There are very precise statutory obligations ensuring a fair and proportionate broadcast investment contribution to the culture and industry of their respective countries by the broadcasting channels concerned. I am indebted to the former MEP, Carole Tongue, who has produced a useful summary of comparative regulation in various countries within the OECD. If I may just quote briefly from the Australian legislation, it is clear what it expects:
"It is to promote the role of commercial television in developing and reflecting a sense of Australian identity, character and cultural diversity by supporting the community's continued access to television programmes produced under Australian creative control."
It seems to me that if that kind of specific legislation is statutorily embraced within a Commonwealth country—I could go on at much greater length on more specific obligations—then those are some of the issues that we should consider when we look at these amendments.
3.30 p.m.
Lord Bernstein of Craigweil: I should like to support the intention behind Amendments Nos. 189 and 190. I speak as a former television executive. ITV was set up very much with the public service remit that established the BBC. Licences were awarded to companies which could demonstrate the ability to produce programmes of a wide range and of high quality. We had a very effective regulator over many years who insisted that that remit was carried through.
By the end of the 1980s the system was creaking. It needed a review. What it did not need was the Broadcasting Act 1990 which was enacted in the full flow of the Conservative Party's belief in market forces. It decided that money, not programmes, should be the arbiter of the licence renewal system. The intention was to auction franchises to the highest bidder. Fortunately, some of the worst effects were mitigated by the Minister of State at the Home Office inserting some last minute amendments to the Bill and by the pragmatism of the Independent Television Commission in awarding the contracts. Nevertheless, the auctions took place. Many companies overpaid, some by tens of millions of pounds. The inevitable result was that the money that should have gone into programmes went into the pocket of the Treasury.
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I do not wish to say that the current picture is totally black. Some companies within the ITV system still aim to provide public service broadcasting but things are changing. Satellite television is getting both more powerful and more competitive and the ownership of the ITV companies may well change. This Bill would allow United States owners to acquire ITV and US companies are not particularly known for their sensitivity for home-grown original programme-making.
The intention behind these amendments is correct. I take my noble friend Lady Jay's point that one can be over-prescriptive but I believe that the amendment which includes the phrasing.
"a substantial range of high quality original production'.
is important and should be on the face of the Bill.
Lord Puttnam: I thank the noble Viscount, Lord Falkland, for moving Amendment No. 289. 1 have two things to add. I have just spent a most informative weekend at Ditchley Park discussing the relationship between the media, politics and the public with a parallel group of 15 Americans. One thing that most distressed the American group was the almost total absence from American broadcasting of documentaries about the rest of the world. They have become as dead as a dodo.
Amendments Nos. 189, 193 and 194 are all of a piece. They are an attempt to hold the licensees' feet to the fire in terms of programme quality. As an example of why this is necessary, it has already been decided that Channel 3 is no longer required to provide programmes of international interest. The obligation to provide documentaries about the rest of the world has been removed from its licence obligations. That is an example of slippage. It was a foolish thing to do. It is unreasonable to expect that entire area of programming to be left to the BBC. We shall have a diminished television environment as a result. That is the reason for Amendment No. 189, and I am sure it will also have a great bearing on why we will pursue Amendments Nos. 193 and 194.
Lord McIntosh of Haringey: I am very grateful for the way in which these amendments have been spoken to. I do not think the noble Lord, Lord Phillips of Sudbury, should at all apologise for raising the issue of the construction of the Bill because it is indeed complex. If I spend a little time setting out the relationship between Clause 260, which your Lordships' House has already debated, and the following clauses which we are now debating I hope that things will become a little clearer. They did to me when I was trying to work out what they all meant.
Clause 260 sets out the overall remit for all public service broadcasting. To answer the noble Lord's question, that includes Channel 3, Channel 4 and Channel 5. However, it is not an obligation on broadcasters; it is a very detailed set of standards set out for Ofcom. When we debated Clause 260, it was generally accepted that this was the most comprehensive definition of the content of proper

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public service broadcasting that we have ever had. If my noble friend Lord Puttnam looks at Clause 260(6)(c) he will see that coverage of international affairs in news and current affairs and in factual programming is covered in the definitions of Clause 260.
The purpose of it being an obligation on Ofcom is that Ofcom should have the responsibility of reviewing the performance of public service broadcasters, of reporting on that review and of enforcement action. That is not in Clause 260. It comes, as we shall see, in later clauses. It is absolutely essential that we should understand straightaway that Clause 260 is not just a set of words but standards that have to be adhered to, and if they are not adhered to Ofcom has a duty to take enforcement action.
Clause 261, instead of setting the overall remit for all public service broadcasting, defines the remit for each licensed public service channel provider. It divides that up into Channel 3 and Channel 5 for whom the criterion is a range of high quality and diverse programming and for Channel 4 where there is more precise wording. The reason for that is that Clause 261 repeats the existing remit for Channel 4 which was in place when Channel 4 began. It has been generally agreed to be an admirable remit for a public service broadcaster with advertising but without private shareholders.
However, that is not the end of it. We have been talking so far about quality obligations under tier 3 and what these amendments seek to introduce into Clause 261 is quantitative standards under tier 2. I suggest to the Committee that that is unnecessary since all of those requirements are set out in later clauses.
In Clause 274, the requirement for original programming for Channel 3, Channel 4 and Channel 5, which is set out in these amendments, is provided on the face of the Bill.
In Clause 282 the requirement for regional programming in a different sense, that is, programmes made in and of particular interest to the relevant part of the United Kingdom, is set out for Channel 3. In Clause 283 the regional remit for Channel 4 is also set out on the face of the Bill. All of the matters introduced into Clause 261 by the amendments are not necessary because they are spelt out in detail in subsequent clauses of the Bill. I found that enormously difficult to understand and I do not blame anyone, including the noble Lord, Lord Phillips, for finding it difficult, but it is necessary to do it that way.
However, that is not the end. Amendment No. 189 extends the definition for Channel 3 to cover tier 2 matters which, as I said, are already covered. Amendment No. 190 does the same for Channel 3 and for Channel 5, which is a national channel. Here we have a very detailed description of how public service broadcasting should be defined in terms of all the kinds of good programming required from public service broadcasters. That must cover not just factual and entertainment matters, as specified in Amendment No. 189, but all of the other matters specified in Clause 260 plus the elements set out in Clause 261.
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All the points raised are valid and have been taken into account in the drafting of the Bill. I hope that I have shown that our approach is rational and logical and that the Bill's proposals, if not easy to follow immediately, do cover the ground.
Lord Puttnam: For the sake of clarity, the Minister is right in one sense. The words "around the world" are included under programming described as news and current affairs. They have been omitted, or removed, I should say, from,
"programmes that reflect the lives and concerns of different communities and cultural interests and traditions".
I would be completely happy if the words "and from around the world" could be added to paragraph (h); I would be a very content person.
Lord McIntosh of Haringey: Let us think about that. We have already debated Clause 260, but that does not mean that further improvements at the margin are not possible at later stages of the Bill. It is a legitimate point. I do not want to dismiss it without thinking about it.
Lord Phillips of Sudbury: Do I summarise fairly the Minister's proposition by saying that the provisions of Clause 261 are in addition to the provisions of Clause 260; that is, that where one refers to Channel 3, Channel 4 or Channel 5 services, all of the provisions of Clause 260 will apply to those channels notwithstanding the provisions of Clause 261?
Lord McIntosh of Haringey: That is correct. Clause 260 is the overall remit for all public service broadcasters. Clause 261 defines the remit, deliberately in summarised form, because we do not want to repeat everything for Channels 3, 4 and 5.
Lord Phillips of Sudbury: Does the Minister concede that Clause 261 summarises what is in Clause 260 and does not repeat everything, the phrase, I think, that was used? I understand what the Minister says. Is there not a danger that others—as I did—will read Clause 261 as being a more specific requirement for Channels 3, 4 and 5, set out separately in Clause 261, and that therefore there could hereafter be deemed to be a clash between the two? Put another way, everything in Clause 261 is in Clause 260 "with knobs on". One therefore wonders what on earth is the point of Clause 261.
Lord McIntosh of Haringey: The point about Clause 260, as I hope I made clear, is that it is enforceable. It is an obligation on the programmers to put programme policies to Ofcom. It is an obligation on Ofcom to review those programme policies, to report on them and to see that what has been promised is adequate in terms of the detailed requirements of Clause 260 and is carried out.
Clause 260 specifies the difference between Channels 3 and 5. One does not need to repeat everything; one just refers to high quality and diverse programming, which summarises but will not replace

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the obligations in Clause 260. However, it has to be distinguished from Channel 4 where we have made a deliberate decision, which I hope is welcome, to repeat the successful remit established when Channel 4 was first set up. Because of the enforcement powers leading from Clause 260 there is no possibility of lower standards driving out higher standards.
Viscount Falkland: I am grateful to the Minister for his full and interesting reply. I am also grateful to the noble Lord, Lord Puttnam, for his amplification to the content of the amendment, which I moved in his name. The debate has been lively and fascinating. We have reached a subject central to the changes which are taking place or are envisaged in the Bill. I am grateful also to my noble friend Lord Phillips of Sudbury who, in his usual articulate way, has analysed a problem. The House will be in his debt and that of the Minister for having to some extent resolved the difficulties of bringing together Clauses 260 and 261.
The remarks of the noble Baroness, Lady Jay, with her experience, were apposite. I took seriously what she said. One can be over-prescriptive and over-regulate. It is possible that there is a tendency with our tradition to do that. Nevertheless, I hope that our public service remit, unique as it is, will remain in the way we have envisaged it even though we may not have expressed it in a way entirely suitable for the Bill. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 190 not moved.]
Clause 261 agreed to.
Clause 262 agreed to.
Clause 263 [Changes of programme policy]:
[Amendment No. 191 not moved.]
Clause 263 agreed to.
Clauses 264 and 265 agreed to.
Clause 266 [Enforcement of public service remits]:
Lord Holme of Cheltenhammoved Amendment No. 192:
Page 237, line 22, at end insert—
( ) Such failure shall include, without exclusion of other public service responsibilities, a failure to provide such coverage of the proceedings of Parliament, and other elected legislatures within the United Kingdom, as is appropriate and necessary for civic understanding of their purpose and practices."
The noble Lord said: The purpose of Amendment No. 192 is to ensure that whatever other criteria may be used to define a failure to meet public service requirements, they shall include a failure to ensure proper coverage of Parliament and its proceedings and, indeed, of other democratic parliaments or assemblies within the UK. Put more positively, the aim is to ensure that coverage of Parliament is a core element of public service obligations in broadcasting.
There are some—I include myself—who believe that accountability, transparency and governance of the BBC, which after all is the gold standard of public service broadcasting, would be greatly improved with a clear definition of "public service". I am not in
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favour of the British vagueness of which the noble Baroness, Lady Jay, spoke so warmly. I am rather in favour on an important issue such as this of precision.
However, the amendment is not about that larger question; it deals with the very specific issue of parliamentary coverage, on the basis that public service in a parliamentary democracy must mean as an irreducible minimum the promotion of proper understanding by the citizens of the way in which they are represented and governed.
I should declare an interest here, as chairman of the Hansard Society for Parliamentary Government, which coincidentally tonight is launching a report entitled A Tale of Two Houses, which examines how Parliament and parliamentarians are viewed by those who are not traditionally involved in Westminster, drawn in this case from regular viewers of "Big Brother". I can assure the Committee that it makes extremely interesting reading—and very depressing reading in many ways.
It is not the purpose of the amendment to say that much good work is not done by broadcasters. "Yesterday in Parliament" on the radio is a fine example of what can be done. The recent reform of using Central Lobby to get immediacy after debates is a great step forward. But we cannot be entirely confident that the management of broadcasters who have public service obligations will always be sensitive and will always treat this issue with the importance that it deserves. In our society, particularly now that the press relies increasingly on sketches and dramatic political controversy, the broadcasters are one of the main means by which citizens understand what their representatives are doing and why.
No doubt we could do a great deal more on our side of the fence to make the proceedings of Parliament more accessible and comprehensible, as the Select Committee on the Modernisation of the House of Commons has indicated, and as the former Leader of the House, Robin Cook, also intimated. But I believe that broadcasters have a bottom-line responsibility, and they must not be allowed to evade it.
In 1999 MORI carried out an opinion poll for the Hansard Society which showed that 75 per cent of the general public agreed that it was important to have live extracts from Parliament, showing what MPs actually say. Of those who had seen such live extracts, 85 per cent agreed that it was very important to have that, rather than simply intermediation of political reporting. Interestingly, the public are far more likely to recall live coverage of parliamentarians speaking than they are political commentators reporting on what was said in Parliament.
In particular, I do not think it is desirable for Parliament to be treated wholly and solely as a prop in the adversarial drama of partisan politics. It is a sort of tabloid agenda: very high on stimulating sensation, but very low on creating understanding. The amendment is addressed as much as anything to what we might call the populist tendency, which is represented at very senior levels in the BBC and other broadcasters, and the populist tendency is to believe

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that Parliament is simply a subset of politics, and that politics is simply a subset of showbiz. That tendency must be discouraged, which is the intention of the amendment. I hope that it will be taken as encouragement by all those in the BBC—there are many of them—and in the other public service broadcasters, who, often in the face of internal pressures to trivialise, keep the mission of clear communication of Parliament's work alive and kicking.
Baroness Buscombe: I rise to support the amendment, to which my name has been added.
As the noble Lord, Lord Holme, said, the clause seeks to ensure that if Ofcom is of the opinion that a public service channel or teletext provider has not fulfilled its public service remit, Ofcom may exercise its powers under the clause. The amendment ensures that the public service obligation will not be deemed to have been satisfied if there is a failure to provide coverage of the proceedings of Parliament or other elected legislatures. It provides a necessary democratic safeguard by offering members of society the opportunity to remain informed about parliamentary work and procedure. Whilst we appreciate the importance of choice, we believe that providing the freedom to choose can be effected only if the information is supplied by the appropriate institutions.
Baroness Howe of Idlicote: I rise to speak to my Amendment No. 193, which relates to any failure to meet public service broadcasting obligations. The aim is to ensure that any exemptions are not too easily granted.
Unlike Amendment No. 192, whose subject matter is very interesting, the amendment does not add words to the Bill. Rather, it removes a few, because they do not seem to be necessary. As a result of their deletion, Ofcom would be able, still at its discretion, to take action if and when a channel failed to fulfil its public service broadcasting remit or to make an adequate contribution towards the purposes of public service broadcasting.
The words to be removed are:
"and is not excused by economic or market conditions".
It will be noted that "economic and market conditions" are mentioned in subsection (3)(e), which surely provides sufficient safeguards against any potential injustice.
I have to admit that my intention is not just to save a few words in an over-heavy Bill. It is also to ensure that Ofcom is not encouraged to respond too easily to pleas of poverty without exploring other factors.
Lord Lipsey: I rise to support Amendment No. 192, in the name of the noble Lord, Lord Holme, to which I have appended my name.
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If we in Parliament do not show that we take the coverage of Parliament seriously, who on earth do we think will? The answer is "No one", and that is why the amendment deserves to be incorporated in the Bill.
Lord Crickhowell: Amendment No. 194 is included in this group, and as my name stands to it I rise to remind the Committee what the Joint Scrutiny Committee said on the subject.
We have heard in the debate so far that we now have a very clear set of definitions of the public service remit, and we have just heard suggestions for tightening things up still further. The public service remit is clearly of the greatest importance. It was the view of the Joint Scrutiny Committee that if the public service remits had to be changed that would call into question the entire framework of public service broadcasting established by the new legislation, and would surely justify Parliament's looking afresh at the entire issue by considering further primary legislation.
The suggestion that the order-making power should reside with Ofcom rather than the Secretary of State acting solely upon a recommendation by Ofcom would make the matter worse, not better, since it would entail one less safeguard for what could in effect be a very significant change. So the Joint Scrutiny Committee said in paragraph 346 of its report:
"We oppose the power to amend the public service remits of licensed public service channels by means of secondary legislation and recommend accordingly that this provision in Clause 188(1)(a) be removed."
The effect of Amendment No. 194 is to do just that.
Lord Peyton of Yeovil: I warmly support Amendment No. 194, moved by the noble Lord, Lord Holme.
The trouble, of course, is that much of what goes on in Parliament is profoundly boring and terribly dull. The BBC criterion, in its modern populist mood, is never to show the public, or as far as possible to avoid showing the public, anything which is not entertaining, amusing or shocking. I know that it is a rather broad generalisation, but I still believe that television represents one of the greatest forces with which to influence public opinion. If public service broadcasters do nothing to sustain the importance of Parliament, then Parliament will decline in the public mind.
The amendment is very important. I cannot believe that the Government would allow their evident disrespect, at times, for Parliament to take over altogether. I hope very much that the noble Lord, Lord Holme, will press the amendment today or later. I can assure him of my very enthusiastic support for it.
4 p.m.
Lord Brooke of Sutton Mandeville: It is a faint irony that, two-and-a-quarter centuries ago, John Wilkes, who was not the Member of Parliament for my former constituency but Lord Mayor of London, sought to change the reporting of Parliament from oratio obliqua, which was carried out by people such as Doctor Johnson, who sat in the Gallery and tried to remember afterwards what had been said, to oratio

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recta. It is to the credit of Parliament that, two-and-a-quarter centuries later, we are as anxious to see not only that the public have the opportunity to receive public service broadcasting, but that broadcasters are obliged to ensure that it occurs.
Lord McNally: One of the votes during my short-lived tenure at the other end of the corridor of which I am most proud was that I was the "one" in the majority—I always think so—that first carried a vote for the broadcasting of Parliament. The Motion was carried by one vote. There was much concern at that time about the effect on this House and another place of televising Parliament. I also had the leisure time inflicted by the voters of Stockport to watch the first televised broadcast from this House, when Lord Stockton made an electrifying speech about privatisation being akin to selling off the family silver. I remember the great enthusiasm of broadcasters at that time and how heavily we were lobbied to let the cameras in. Then, of course, like children with a toy, they all got bored with us and tried to think of different ways to provide coverage.
The amendment goes to the heart of the matter. When the process started, I told the BBC that it was a wonderful opportunity to win friends by initiating and innovating in its coverage of Parliament and politics. There has not been much fresh thinking on coverage in the past 20 years. Most of the standard flagship programmes are 20 years old or more. The BBC responded with a great internal think, which, so far as I can see, and as my noble friend said, has resulted in a camera in Central Lobby and presenters not wearing ties at weekends. Broadcasters' thinking seems to be overlaid by a great fear that if they try to show an intelligent, thoughtful political programme they will lose audiences, and that that is the be-all and end-all.
I have another fear that, unless we have a watchdog on such coverage, there will be a continuation of the already clear trend of forcing political coverage to the extremes of the schedule, or, even worse, with the new opportunities that digital provides, that political coverage will be ghettoised into a single channel. If that happened, statistics would show that a broadcaster had showed so many hours of political programmes and parliamentary coverage, but all the coverage would be shown on minority digital channels. I want the BBC, in particular, to return to the second and third part of the famous Reithian mantra "to educate and inform".
It cannot be purely accidental that the cynicism and apathy towards our political processes, which we all see as dangerous to our democracy, has coincided with a similar cynicism and apathy in coverage of the political process by all sections of the media. It was pointed out recently that, on reading souvenir editions of newspapers published to mark the Coronation, it is striking how much more adult the coverage of news events was 50 years ago, and how much more time was applied to it. Most of us grew up with the impact of flagship programmes such as "Newsweek" and "Panorama" being shown at peak time to large audiences. There is a grave danger of the ghettoisation
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of politics, which would only accelerate the apathy, cynicism and sheer lack of knowledge of the political process that endangers our democracy. I hope that the Government will treat this very important amendment with the respect that it deserves.
The Lord Bishop of Manchester: Many of the remarks made in this part of the debate echo those already voiced about religious broadcasting in the public service remit and the dangers of marginalisation and moving subjects into ghettos. I have much sympathy with the points being made, not least because I think that there are some allied interests. Like the noble Lord, Lord McNally, I hope that those aspects will be taken very seriously by the Government. I warm to what is being said.
Lord Puttnam: I wish to speak in favour of this group of amendments and to point out a paradox. During the Committee stage, it must have become evident to all of us how seriously we take the issue of broadcasting and the impact of broadcasters. I beg the Front Bench to look across the range of amendments that we have discussed today. Any one of them alone is not necessarily important. We are possibly urging the Government to be over-prescriptive. It may not be so necessary to push for changes by secondary legislation. Is that on its own a big issue? Is it a very big issue that an individual licensee can claim that its economic situation makes it impossible to conform with the obligations that it agreed to? But taking all the issues across the piece—secondary legislation, relaxation because of economic problems, a lack of prescription of obligations—are we really being serious enough about the medium that we are here to reinforce and, to a degree, to protect? I suggest that the Government look across the piece. Taken singly, the issues are not huge, but, taken together, they begin to look a little lackadaisical.
Lord Phillips of Sudbury: I echo the words of my noble friend Lord Holme of Cheltenham and other Members of the Committee who have spoken warmly in favour of Amendment No. 192. I declare an interest as president of the Citizenship Foundation, a charity that I set up 15 years ago precisely because it was quite clear then—as it is even clearer now—that the civic understanding referred to in Amendment No. 192 was simply not present among the majority of young people.
As our deliberations in Parliament year by year grow evermore voluminous and complex, overlaid by a European system of institutions which adds geometrically to the distancing, impersonality and complication of political life generally, it seems as obvious as the nose on one's face that such a clause should be in the Bill. I take the point made by others that we could continue adding and adding to the Bill, but it is already 520 pages long, and the temptation to add a couple of lines is almost irresistible when dealing with a matter of such importance.
It is a pity that the European Union is not mentioned here. The Bill refers only to this Parliament and the legislatures in Scotland and Wales. Whatever

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view one takes, linkages with European institutions grow year by year. The public discontent and lack of understanding towards the European institutions is undoubtedly higher than with regard to this place. Perhaps we shall see an amendment to the amendment at the next stage.
The noble Lord, Lord Lipsey, referred to this issue. If we are honest, we do not do a very good job of making what we do available to the public. A tiny staff deals with public information and press relations. The greater part of what we do in this House is completely unheard and unknown by the wider public. If we intend to thrust upon broadcasters the duties outlined in Amendment No. 192 we should consider more seriously how we may bring home to the people of this country what we purport to do in their name.
I wholeheartedly support Amendment No. 193. We have spent much time and effort over the previous two days in Committee on this part of the Bill. Ultimately, it comes down to an enforcement clause. Clause 266 states in terms that there will be no enforcement unless, first, the failure is serious; and, secondly, it is not excused by economic or market conditions. That is bizarre. It is almost as though the law of theft states that only if the court were of the opinion that the failure of the shoplifter is not serious, and is not excused by hunger or hardship, shall there be a prosecution. It is about the most uncertain note which could be sounded in terms of Ofcom's duty to enforce. Many noble Lords believe that the market conditions, market forces and economic considerations already have too high a profile in this Bill and should not be reinforced in this enforcement provision.
Baroness Jay of Paddington: I rise to speak only because the tenor of some noble Lords' remarks has demonstrated that in my infelicitous use perhaps of double negatives it was thought that I was arguing for less prescription in the public service area rather than the prescription proposed in the previous group of amendments. That is certainly not the case.
I support in general terms the group of amendments to which we now speak. I agree with the remarks of the noble Lord, Lord Phillips, about the characteristics of the enforcement processes under Ofcom. We raised the issue on the previous day in Committee. I was assured then by the noble Baroness, Lady Blackstone, that those enforcement procedures would be regularly enforced and monitored by Ofcom. But I believe that there is an area of concern to which the noble Lord, Lord Phillips, rightly referred.
Like the noble Lord, Lord McNally, I can go back to the golden days of political programming. I declare an interest. I was both a producer and a presenter of the "Panorama" programme when it was shown at eight o'clock on Monday evenings to an audience of 8 million people. I regret that that is no longer so. However, I am not as convinced as the noble Lord, Lord McNally, that that has exclusively to do with the scheduling of the programmes but perhaps more to
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greater choice and the diminution of interest in the political or mainstream affairs of the kind referred to by the noble Lord, Lord Holme.
4.15 p.m.
Baroness Blackstone: Most of the debate has been about the coverage of Parliament. However, I shall start with the broader issue of enforcement.
The Bill currently 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. The 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.
These powers apply to both the broadcaster's fulfilment of his individual public service remit and to his contribution to the overall purposes of public service broadcasting on which, as we know from previous debates, Ofcom will report at least every five years.
Amendment No. 193 would prevent Ofcom from considering whether a broadcaster's failure in these respects might be excused by economic or market conditions. It would reduce the circumstances in which Ofcom could exempt a broadcaster to those in which the failure was not considered to be serious.
Although we want to ensure, of course, that Ofcom has power to intervene when necessary so that we do maintain quality, I do not believe that it would be either realistic or reasonable for Ofcom to ignore the impact of economic and market conditions on the ability of broadcasters to fulfil their remits. Licensed broadcasters operate in a commercial market and are affected by external economic conditions—for example, those which have an effect on advertising revenue.
In discussing an identical amendment in another place, concern was raised that because "economic and market conditions" are mentioned twice in Clause 263, that might allow economic and market conditions to become Ofcom's overriding consideration when making a judgment about the enforcement of a broadcaster's public service remit. I shall explain briefly why I do not believe that that will happen.
Under subsection (2)(a) Ofcom has to consider whether the failure of the provider is serious and is not excused by economic or market conditions. Under subsection(2)(b) it has also to determine that the situation requires the exercise of its powers having regard to a number of matters, including the general economic and market conditions affecting broadcasters. The reference to general economic and market conditions, therefore, forms part of the judgment which has to be made under subsection (2); but it is only one of a number of matters which Ofcom will have to take into account.

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I should also point out that it will be a matter for Ofcom to decide whether the failure is excused by economic or market conditions, although it has to consult the relevant service provider before taking enforcement action.
In short, we 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.
I turn to Amendment No. 192. I have to say at the outset that it is not an amendment that the Government can accept. However, that is not because of any disrespect for Parliament. I was extremely interested in what the noble Lord, Lord McNally, said about the introduction of television. The televising of this House took place before the televising of another place. Indeed, I think that some people in this House were a little disappointed when another place decided to let the cameras in because it meant that the spotlight was moved from your Lordships' House to the House of Commons. I believe that the motivation behind the remarks of the noble Lord, Lord Holme, is laudable. I share it. However, the Bill currently permits Ofcom to take enforcement action if a licensed broadcaster has either failed to fulfil his individual public service remit or failed to make an adequate contribution towards fulfilling the overall public service broadcasting remit. This amendment would require Ofcom to consider enforcement action in the event of a broadcaster's failure to provide appropriate coverage of Parliament or other relevant legislative assemblies in the UK.
While the Government fully accept that coverage of the democratic process is an important element of public service broadcasting, the amendment would in practice create an inconsistency within the public service broadcasting regime. It would in effect create a sanction for failure to provide a service which is not explicitly required under any part of the public service broadcasting regime as enshrined in the Bill. The noble Lord, Lord Holme, might believe that it should be, but it is not. Therefore, his amendment does not work technically.
The noble Lord, Lord Peyton of Yeovil, was a little hard on the BBC. The BBC agreement does include an obligation on the corporation to broadcast a daily account of parliamentary proceedings, which it does. However, so far as the Bill is concerned, there is no direct requirement to provide coverage of Parliament or other legislative bodies, whether in the context of the first tier; the second tier of quantitative obligations for public service broadcasters; or the third tier. On the other hand, a key element of both the second tier quotas and the overall public service remit is the coverage of news and current affairs, which of course encompasses matters relating to politics, the democratic process and, indeed, Parliament.
Our overall approach to the regulation of public service broadcasting is to establish a spectrum of obligations, ranging from the BBC at one end to Channel 5 at the other. Within this framework we do not see a case for imposing a direct—and, indeed, a uniform—obligation in respect of parliamentary
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coverage across the whole public service broadcasting sector. Given the absence of such an explicit obligation, it would obviously make no sense whatever to include failure to provide parliamentary coverage as one of the grounds on which Ofcom may initiate enforcement action.
As to Amendment No. 194, under Clause 267 as it stands, the process of modifying the public service remits can take place only within the framework of reports submitted by Ofcom. The Ofcom reports in question may be those prepared under Clause 260, which deal with the fulfilment of the overall public service remit, or those reports prepared under Clause 226, which Ofcom submits in anticipation of a new licensing round.
In the context of the Clause 260 reports, the Secretary of State can exercise her power to modify the remit only where Ofcom had made a specific recommendation to that effect in its most recent report. However, within the Clause 226 reports, the procedure can be slightly different. In the case of the Clause 226 reports—and only in that case— there is a power for the Secretary of State to modify a remit in the absence of a specific recommendation by Ofcom. She can act in this way provided that Ofcom has made a report within the previous 12 months and, in the light of that report, the Secretary of State considers it right to modify a remit, notwithstanding the absence of a specific recommendation to that effect.
The amendment would remove the Secretary of State's power to take such action in relation to an individual remit but not in relation to the general remit. Although I understand the concern that broadcasters' individual remits should not be modified without good reason, it is right that, solely in the context of the end of a licensing period, the Secretary of State should retain the power to modify both the overall and the individual remits even without a direct recommendation by Ofcom.
Such an opportunity would, in the nature of things, arise only very infrequently on those occasions when the licensed broadcasters' licences came up for renewal. Even when Ofcom had not made a direct recommendation, there could be circumstances where the Secretary of State took the view that it was right to modify a licensed broadcaster's individual remit, and we believe that the Bill should give her the flexibility to do so. However, no such modification could be made without prior consultation with Ofcom, with the broadcaster affected and any other relevant interests. I should emphasise that any order modifying a public service remit must be approved by Parliament.
In the light of what I have said, I hope that the Committee will agree that the approach to enforcement and modification of public service remits set out in the Bill is the right one and that the noble Lord will not press the amendment.
Lord Holme of Cheltenham: I reply exclusively in regard to Amendment No. 192. I regret the rather dusty answer given by the noble Baroness. She will have sensed that a number of senior

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parliamentarians—the noble Lords, Lord Peyton and Lord Brooke, and the noble Baroness, Lady Jay—support the idea that a public service obligation must include proper coverage of Parliament in a parliamentary democracy.
The Minister may well be right in saying that there is a better of way achieving this—perhaps it should be attached to the black hole of what is public service broadcasting—but when she can say in the same response that parliamentary coverage is an important part of public service broadcasting but, moments later, that it is not an obligation in the definition of public service broadcasting, we have an indication of what the problem is. We do not have an adequate definition of public service broadcasting which includes this vital aspect.
I am most grateful to all Members of the Committee who contributed to the debate—my co-signatories to the amendment, my noble friend Lord Phillips and the noble Lord, Lord Puttnam. I am not quite sure about the clerical embrace. I am dealing exclusively with the issue of parliamentary coverage. The right reverend Prelate has his own, very understandable, agenda and I am not sure that I fully accept the analogue.
The only dissentient was the noble Baroness, Lady Howe, who I had the honour of succeeding at the Broadcasting Standards Commission. I am not absolutely sure that I can do justice to her objection so I shall not even try.
But, with that exception, there seemed to be a very strong feeling that the Government should find a way of addressing this problem rather than simply saying that it will be all right on the night. I shall withdraw the amendment now but it is a subject to which we shall return at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Howe of Idlicotemoved Amendment No. 193:
Page 237, line 24, leave out from "serious" to "and" in line 25.
The noble Baroness said: Perhaps I may start by correcting the impression that the noble Lord, Lord Holme, gained from what I said that I was against his amendment. Far from it. I would be totally in support of it. I was merely using the excuse that I was able to withdraw a few words from the Bill rather than having any objection to the interesting proposals outlined. I hope that he will forgive me and accept my apology.
I find what the Minister said about the amendment rather extraordinary. I am not a lawyer—I remain to be corrected later—but, bearing in mind what was said by the noble Lord, Lord Phillips, of how this gives an impression of over-dominance of the market, which is absolutely true, I should have thought that removing this repetition, which is exactly what it is, from the Bill would have improved matters.
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As I read the Bill, omitting from subsection (2) the words suggested in the amendment would mean that there had to be a serious failure and that Ofcom would have to determine that the situation required the exercise of its powers. In making such a determination—it is yet further qualified—Ofcom would have to take account of all the other matters, including the points that I thought we were busily removing from the Bill.
I am a little unhappy about the Minister's reply. I shall of course go away and read exactly what she said but, at the moment, I am not very content. I wish only temporarily to withdraw the amendment.
The Deputy Chairman of Committees (Lord Ampthill): The noble Baroness, having spoken to the amendment previously in its place in the group, has now spoken again at some length. I therefore have to ask her to move the amendment so that there can be a further response. The noble Baroness cannot speak to the amendment without moving it.
Baroness Howe of Idlicote: In which case, I beg to move.
Baroness Blackstone: I have nothing to add to what I said. The amendment was grouped with Amendment No. 192, which has already been withdrawn.
The Deputy Chairman of Committees: What does the noble Baroness now wish to do?
Baroness Howe of Idlicote: I hope that I am doing the correct thing. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 267 [Power to amend public service remits]:
[Amendment No. 194 not moved.]
4.30 p.m.
Clause 61 [Must-carry obligations]:
Lord Aveburymoved Amendment No. 195:
Page 62, line 23, at end insert—
"(g) any local digital television service, (h) any access radio service."
The noble Lord said: Clause 61 contains provisions which ensure that services on the must-carry list are carried by networks used by a significant number of end users as their principal means of receiving television. Subsection (3) is the starting list of the services, which can be amended by the Secretary of State following a review under subsection (8). That review must consider the public benefit which any additional service would offer, the spare capacity available to the providers of the electronic communications networks to whom the must-carry obligations apply, and whether the burden of compliance is proportionate to the objective of securing that particular services to be added to the list are made available to the public by this means.

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In this amendment we ask for local digital television and access radio to be added to the list in the Bill without having to wait for a review. The Joint Committee said at paragraph 144 of the report that the extension of the must-carry list was,
"a matter of considerable public interest"
and the Government envisaged that the power to amend the list might be used to include,
"further channels which may have a general public service remit, or may offer Government or local information services".
We suggest that adding these services now would encourage rapid growth of local digital TV and access radio all over the UK. The Community Media Association tells us that it regularly receives inquiries from groups, often involved in regeneration projects or community development, who would like to run a local channel on cable but have been unable to interest the cable channels in their proposals. In fact, some existing local and community television stations such as Leicester Channel 7, Cambridge and Birmingham, have closed down as the cable industry has consolidated.
Other countries have must-carry obligations in their rules similar to those in this amendment. In the US, Canada, Germany and Sweden, that has led to the creation of many successful local and community channels. These can provide a unique service of local news, local sport and culture, and offer to local people the possibility of becoming involved in their own programming. In the context of this Bill, Clause 241 already requires that local digital TV brings social and economic benefits to the area. Clause 258 requires that access radio,
"confer significant benefits on the public".
Therefore, the public benefit requirement is already satisfied. It is a question of looking at the network capacity and the proportionality of the burden to the advantages of adding these services to the list. Since this comparison must have been made already in the four countries mentioned, it was concluded that the must-carry obligation should be extended in the manner we suggest here. I hope that the Government can accept the amendment. I beg to move.
Lord Lipsey: I shall speak to Amendments Nos. 195A and 195B, which are grouped with Amendment No. 195. Basically, they represent level playing field amendments. I hate that analogy but it serves to accelerate matters. It is the level playing field between cable and satellite as regards must-carry. The position at the moment is that cable must-carry carries for nothing. On the whole, satellite carries for quite a lot of money because of the need to buy additional access.
The amendments tackle the problem by asking that regard be had to, not just the sheer cost to cable, and so on, of supplying cable must-carry services, but, more importantly, the opportunity costs. They take up band width on the cable which someone else cannot buy. That should be taken into account and not merely the financial cost.
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The amendments further ask that regard be had to the level playing field and the adverse effects on cable relative to satellite if too much is ladled on to cable operators in terms of their must-carry obligations. These are modest amendments. I hope that the Minister can give me either comfort or agree to accept them.
Lord McIntosh of Haringey: We are in the curious position of returning to Clause 61, which is what happened in another place as well. It seemed to make sense that we should deal with must-carry together with must-offer and must-provide. That accounts for the order in which we are taking these matters.
The purpose of Clauses 261 and 268 to 272 is to give effect to our policy on must-carry, must-offer, which is to ensure that all public service channels are universally available on all main platforms free to view both before and after switch-over. Clause 61 lists the services which must be carried. The clause also provides that the list cart be amended by the Secretary of State. Any amendments will be subject to an assessment of the impact of an amendment to the list and also consultation with the network operators. I believe it will be understood that we are resistant to making any additions as Amendment No 195 would, without making an assessment of the impact or without consultation with the network operators.
Apart from anything else, the whole of the must-carry regime has been designed to be restricted to television and not extended to radio as Amendment No. 195 seeks. The reason for keeping the process as streamlined as possible and restricting it to all main platforms is very straightforward. We recognise that there are burdens with must-carry with costs and benefits. They have to be assessed. Clearly, local digital television, although admirable, is not in the same category as those described as public service channels which are universally available on main platforms.
I turn now to Amendments Nos. 195A and 195B. They would add further factors to the consideration in making a list of must-carry. The noble Lord, Lord Lipsey, has been very clear in setting out that it is not simply a matter of cost, but also of opportunity costs when there is restricted band width. But the principle that we have worked on in Clause 61 is that there should be an opportunity for review and consultation with network operators. It does not require further primary legislation.
I am well aware of the costs for network operators in must-carry and that cable companies are conscious of the burden. For cable companies the burden of carrying must-carry stations is balanced by the opportunity they have of getting more viewers subscribing because they provide a wider choice. That is why we have the provision for review.
Amendment No. 195B aims to ensure that must-carry will not create any discrimination or competitive imbalance between network operators. It is very

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difficult to read it in any other way than preventing the implementation of must-carry. Clause 61 applies only to those networks,
"by means of which public electronic communications services are provided that are used by a significant number of end-users as their principal means of receiving television programmes".
Networks that are not used in this way will be unaffected. Therefore, to this extent the imposition of must-carry obligations is bound to lead to some degree of "discrimination" if we are to take that term literally.
I am aware that cable operators feel they are at risk of suffering competitive disadvantages as compared with other network providers, such as satellite operators. I understand their concerns. We will have regard to the competitive status of all the affected markets—the broadcasting market, as well as the market for the provision of broadband services. But we see must-carry as a key means of ensuring the universal availability of public service broadcasting, both before and after switch-over. It is a central component of our broadcasting policy, which we could not jeopardise in the way that Amendment No. 195B does, although no doubt unintentionally.
Turning to government Amendment No. 195D, Clause 271 provides the initial list of must-provide services and gives an order-making power to the Secretary of State to modify that list. In its report on the Communications Bill, the Select Committee on Delegated Powers and Regulatory Reform commented that this was a "significant" power and recommended that either the power should be made subject to the affirmative resolution procedure or that the criteria according to which it is to be exercised should be specified. We prefer to specify the criteria because that helps to align it with Clause 61.
Therefore, we set out the criteria for the exercise of the power to amend the list. It cannot be exactly the same as Clause 61 because the two clauses serve different purposes. Clause 61 deals with "must-carry". Clause 271 relates to the "must-offer" provisions in Clause 269 and the "must-provide" provisions in Clause 270. "Must-provide" relates to broadcasters and would place a much more specific obligation on them collectively to make arrangements for persons who cannot otherwise receive digital television to have access to it, free, via satellite.
This amendment provides that, in exercising her power under subsection (2) to amend the list of must-provide services, the Secretary of State must have regard to the public benefit to be secured by the modification, the likely financial effects of the proposed modification on the affected parties and the proportionality of those effects when set against the public benefit secured. I shall seek to move this amendment in its due place.
Lord Avebury: I am sure that all Members of the Committee are aware that neither the cable nor satellite operators have any objection to what is in the must-carry list at the moment. The question is whether there should be any additions to the list at this stage or under what conditions there should be additions later.
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Having listened to the explanation given by the noble Lord, I still consider that we know enough about access radio and local digital television to say that we could add those to the list without imposing a substantial burden on the operators. If that is not the case, I am surprised that the Minister is unable to produce figures because they would have had to be produced if such a decision was made following the review of Ofcom. I am certain that within the department there must be some fairly good ideas of what these costs would be and how they would work out. Obviously, we shall not receive a reply on that today.
As regards the first amendment moved by the noble Lord, Lord Lipsey, I understand his point that we should have the level playing field and that there are opportunity costs involved in any additional must-carry obligations that may be imposed on cable operators in the future. I wonder whether, while everyone is happy about the existing list and the cable operators in particular have not raised an objection to it on the grounds of the costs imposed on them, a different burden is imposed owing to opportunities that have to be foregone as a result of this obligation. I am sure that what they have said to everyone—not just to the noble Lord, Lord Lipsey, and myself is that if future obligations are laid on them, this could have an inhibiting effect on certain other policies which they would like to pursue and which the Government would like them to pursue—in particular, the expansion of broadband capacity. There is something to be said for looking differentially between cable and satellite operators in terms of any future additions that may be made to the must-carry list. It would be useful if the Government would agree to that proposition.
As regards government Amendment No. 195D, power of the Secretary of State to add to the list of must-provide services for the purposes of Clause 270 was, as originally drafted, completely unfettered. While it is unlikely that she would ever be tempted to exercise that power unless there was a significant public benefit to be secured, it is logical that paragraph (a) of this amendment mirrors the similar provision in the must-carry obligations in Clause 61. However, thereafter, the amendment departs from Clause 61(10) in that it refers to the costs to be borne, whereas Clause 61(10)(d) refers to the burden.
Does that mean that the drafters had in mind some non-financial penalties that would be imposed on the providers by adding to the must-carry/must-offer lists, but that any arrangements entered into or imposed under Clause 270 are precisely quantifiable?
4.45 p.m.
Lord McIntosh of Haringey: I have already explained the reason why the wording of Amendment No. 195D departs from the wording of Clause 61. It is dealing with must-provide rather than must-carry. I

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had better write to the noble Lord, Lord Avebury, on the issue of whether there could be any non-financial penalties. None has occurred to me.
Lord Avebury: I assumed that there probably were not, hut I asked the question to be absolutely certain. I should be most grateful if the Minister would be so kind as to write to me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 195A and 195E not moved.]
Clause 61 agreed to.
Clause 72 [Conditional access systems and access to digital services]:
Lord Gordon of Strathblanemoved Amendment No. 195C:
Page 72, line 36, at end insert—
"(2A) It shall he the duty of OFCOM to draw up and to issue guidance as to the manner in which access-related conditions set in accordance with subsection (2)(b) (and in particular the first indent to sub-paragraph (b) of Part I to Annex I to the Access Directive) may be satisfied in relation to each protected programme service.
(2B) Such guidance must be issued by OFCOM within twelve months from the commencement of this section.
(2C) Before publishing or revising the guidance OFCOM must consult with every person providing a protected programme service and any other person as they think fit.
(2D) It shall be the duty of OFCOM to carry out regular reviews of the operation of the access related conditions set in accordance with subsection (2)(b) and the guidance in respect of them and to prepare and publish a report on every review in such manner as they consider appropriate for bringing it to the attention of persons who, in their opinion, are likely to be affected by it.
(2E) Every report published by OFCOM under this section must set out OFCOM's findings in carrying out the review, any recommendations made by them and any changes to the guidance as OFCOM consider appropriate."
The noble Lord said: As the Minister pointed out in replying to the previous debate, the issue of the balance between must-carry and must-offer is extremely complicated and varies according to the platform to which we are referring. Equally, we have all been bombarded with propaganda—I give it no other name—from both the BBC and Sky on the issue of conditional access and the appropriate terms for such to the digital platform.
In some ways, the nature of the argument changed with the announcement made by the BBC that it was to go unencrypted from 1st June. However, I would remind Members of the Committee that 1st June has come and gone and the BBC still has not gone unencrypted. To that extent, the issue of due prominence on the electronic programming guide occupied us on the first or second day in Committee. However, we still need to address the issue of conditional access and the terms on which it would be granted. That issue, first, may arise again and, secondly, not all public service broadcasters may be able to go wholly unencrypted. I refer in particular to Channel 3 which has, quite properly, heavier regional obligations than the BBC.
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From the point of view of the Government, the history is a question of changing tack several times. I do not complain about that: it is a complicated issue and it is much better to change one's mind if one thinks it is wrong. The Government said that they would introduce in May last year 34 clauses on must-carry, which were published in July but then withdrawn before the Bill went to the House of Commons. In Committee in another place, the Liberal Democrat MP, Nick Harvey, tabled the same clauses as the Government first said they were going to introduce and then withdrew. The Government successfully argued against them.
It is very difficult to sift one's way through the propaganda supplied by the BBC, which feels that Sky is going to relegate it adjacent to the porn channels in the electronic programming guide. Sky say that this issue will lead to war with Ireland because channel 101 is RTE in Ireland and the BBC cannot possibly be there. I am not trying even to fix a price. I am simply suggesting that surely it should be the duty of Ofcom to be transparent in how it will arrive at what is a fair price for conditional access.
Make no mistake, this is an important issue. All the talk about content is of course important but if I were the only printer in Europe, no matter how many authors, I would have a fair amount of power. Sky Subscribers Services Ltd, entirely to its credit, has significant market power in the area of conditional access to the digital platform so we must make sure that we get it right; otherwise, we shall have a body controlling access to the digital airwaves that effectively will not be under proper control.
Significant powers exist under the European Union communications directives, provided that Ofcom declares that Sky has significant market power—which, to my mind, is self-evident. Ahead of that, Mr. Kim Howells, speaking in an Adjournment debate in the other place, mentioned that Ofcom has a much wider arena than Oftel, so can look carefully at the problem and decide a proper and fair charge for carriage.
My amendment does simply that. It asks Ofcom to consult and draw up new binding guidelines within the first 12 months of its existence that set out in detail how a fair price is to be determined for all categories of broadcaster, including public service broadcasters. Ofcom would be required to conduct reviews of a fair, reasonable and non-discriminatory regime in light of its functioning and practice. That is simply spelling out to Ofcom what we expect it to do, not trying to do Ofcom's job. I hope that my noble friend the Minister will find that he can accept the amendment.
Lord Peyton of Yeovil: I was rather mystified by the way in which the noble Lord moved his amendment but I rise with some trepidation because he knows a great deal more about the subject. I rather suspect that this long amendment would only do what will happen anyway. Does anything in the Bill stop somebody who has access going to Ofcom and saying. "What do these

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conditions mean?" If so, with great respect to the noble Lord, the proposed rather tricky exercise—which he daringly described as simple—is a waste of time.
Lord Gordon of Strathblane: I am fully in sympathy with the noble Lord's objection to redundant clauses—he wanted to delete Clause 3(6) for that reason—but the amendment goes further than the Oftel system, which has proved entirely unsatisfactory even in terms of the time taken to reach a decision. That is why the amendment is necessary.
Baroness Wilcox: We on these Benches do not disagree with the principle behind the amendment. It is important that Ofcom provides guidance where necessary and reviews and reports regularly on its operation. It is crucial that any publication should be preceded by extensive consultation. It is not, however, necessary to be so prescriptive. Even without the amendment, Ofcom will automatically undertake the functions in question as part of its everyday operations.
If the Government accept the amendment, it should be toned down a touch—not imposing on Ofcom such rigid operational requirements as the publication of guidance "within 12 months" and
"regular reviews of the operation of the access-related conditions".
By all means let the regulator provide guidance where it deems that necessary and review the operation of conditions—but at a pace and frequency of its own choosing.
Proposed subsection (2C) would require that before revising the guidance, Ofcom must consult with every person providing a protected programme service and any other person, as it thinks fit. If consultation is to be required, it should explicitly include the providers of conditional access systems as well as the users, so that all relevant views are canvassed.
Lord Avebury: The noble Lord wants Ofcom to elaborate on the manner in which the conditions set under Clause 72 are to be satisfied, but as the clause already gives Ofcom a power that corresponds precisely with the wording of the directive, the conditions ought themselves to contain enough information for operators to understand what is required of them.
If that were not so, every other clause that gives Ofcom powers to set conditions—such as Clause 74 dealing with the imposition of privileged supplier conditions—would have to be accompanied by a similar set of criteria to those in the amendment, including regular reviews accompanied by reports. Ofcom will of course consult service providers and consumer interests when drawing up the conditions and conduct periodic reviews of the way in which they are working as part of its normal day-to-day operations. I am not sure that it is necessary to spell out those duties.
Lord McIntosh of Haringey: I have rather more sympathy with my noble friend Lord Gordon than
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others who have spoken. It is a difficult issue, as he recognises, and it is not entirely resolved by saying, as we do in Clause 72, that operators of conditional access systems should offer services to all broadcasters on a fair, reasonable and non-discriminatory basis. As the noble Lord, Lord Aveybury, said, that is the wording of Part 1, Annex 1, of the access directive being implemented by the Bill.
It is a complicated matter and has proved complicated in the past. Oftel has already been giving guidance. I am sorry that my noble friend is not satisfied with it—or with the speed at which it has been given. I hope that when Ofcom takes over those responsibilities and has in addition the responsibility for complying with Part 1, Annex 1, of the directive and the wording of Clause 72, it will provide the guidance that my noble friend seeks without spelling that out in the Bill.
On Second Reading, the noble Lord, Lord Currie, asked us not to add anything that was not absolutely necessary to the obligations placed on Ofcom in statute. The noble Baroness, Lady Wilcox, and the noble Lords, Lord Peyton and Lord Avebury, have all emphasised that point and I urge it on my noble friend.
Lord Gordon of Strathblane: Despite the existence of Oftel, none of your Lordships knows how much Sky charges for conditional access to a whole range of broadcasters. Is that a satisfactory situation? Can we ensure that Ofcom behaves differently? I am sure that it will. I hope it will. If my noble friend the Minister had said the same as the noble Baroness, Lady Wilcox, with the force of a Ministerial statement, I would be considerably more content. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 72 agreed to.
Clause 73 agreed to.
Clause 268 [Must-offer obligations in relation to networks]:
[Amendment No. 195CA not moved.]
Clause 268 agreed to.
5 p.m.
Clause 269 [Must-offer obligations in relation to satellite services]:
Baroness Wilcoxmoved Amendment No. 195CB:
Page 241, line 26, leave out "to be broadcast"
The noble Baroness said: I will speak also to Amendments Nos. 195CC and 195CD. Clause 269 sets out must-offer obligations for public service broadcasters in relation to satellite services.
The principle behind these amendments is to ensure that the clause reflects the openness of the satellite platform and the fact that public service broadcasters do not offer their services to Sky or to any other pay TV service or channel packager but broadcast them themselves using satellite capacity obtained from Astra, as do literally dozens of other free-to-air channels on the platform. The proposed amendments

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change the clause to reflect the fact that when a must-provide service is offered as available, it is not offered to an intermediary such as Sky to be "broadcast" but is actually broadcast by the PSB itself.
Concern has been expressed to us that the clause as currently drafted implies that the BBC and other PSB channels can be made available to viewers only by offering as available their channels to, for example, Sky to be "broadcast" on D-Sat. In other words, that as drafted, the wording suggests that there are other intermediary players in the satellite broadcasting process to or through which PSBs must offer their service arid consequently that the digital satellite platform is not an open platform.
This implication results from text that was devised at the stage of the draft Bill that contemplated PSBs offering their channels to satellite packagers. The Government have now rejected the concept of must-carry provisions for satellite packages, recognising that as an open platform any broadcaster, including public service broadcasters, can lease channel capacity from satellite operators such as Astra and Utilstat and offer their services independently of any packager. That is exactly what the BBC, ITV, Channel 4 and Channel 5 already do.
I am aware that the Government may argue that the current wording in Clause 269 is intended to reflect the fact that there are technical elements of the broadcasting process on satellite that the PSBs have to ask others to do, such as uplinking and downlinking the signal or making the necessary technical arrangements for the broadcasting of interactive services. It appears to me, however, that the clause is concerned only with defining where the ultimate responsibility lies for making the service available to viewers by satellite and not the various technical arrangements that might need to be entered into with the satellite platform operators. I hope, therefore, that the Minister will see fit to accept the amendments. I beg to move.
Lord McIntosh of Haringey: Clause 269 is part of the mechanism set out in the Bill to provide quasi universal availability, free to view, of public service broadcasting. I have already explained why I have to refer to quasi universal availability.
I wish to start by setting out the background to the clause. I believe that my understanding of it is the same as that of the noble Baroness, Lady Wilcox. There was much controversy about the best means of securing the availability of public service channels on satellite. The decision made by the BBC to go unencrypted on satellite—although, as the noble Lord, Lord Gordon, said, that was supposed to happen on 1st June but I believe that it did not—might cast some new light on the issue but it does not change it fundamentally. We do not know whether all the technical issues have been solved or whether other broadcasters will follow suit. There is still scope for various models of satellite broadcasting. While some broadcasters will do all the work themselves, others will use a satellite service operator. At the moment, it is in the shared interests of broadcasters, cable operators and satellite providers to
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see PSBs continue to be available on all platforms. But we have to be prepared for a time when that consensus might change, but where, in order to deliver our public policy goals, we still need to see PSBs carried across those platforms, including satellite and cable. The widespread availability of public service channels via satellite, in particular, is an important element of our policy of maintaining universal free access to those channels up to and beyond digital switchover, the must-provide provisions of Clause 270 arc also important here.
I should like to stress that all digital platforms are different, and that, therefore, the way in which the Bill deals with them is different. Different rules apply because there are different kinds of system, but the outcome is the same. The satellite platform is "open" in the sense that any broadcaster, including a public service broadcaster, can approach the operator of a satellite and negotiate facilities for the transmission of the service. That is what happens at present with all the public service channels. At present, the broadcasters also buy conditional access and electronic programme guide services from Sky in the UK, enabling their services to be targeted at the right regional audience, for example, and avoiding problems with broadcasts spilling over into countries where the broadcasters do not own the rights to transmit the material in their programmes. In doing so, they operate under the provisions of the Access Directive, which requires—as we have already discussed—that they be offered access on fair, reasonable and non-discriminatory terms. But they may not need such services: as we are aware, the BBC is planning to broadcast "in clear".
Turning to the amendments themselves, I understand that the promoters of these amendments are concerned that the clause wrongly implies that PSB channels can be made available to viewers only by offering their channels to, for example, Sky to broadcast on satellite. But this clause is less concerned with the means by which the channels are made available as the result that the clause delivers, which is the availability to satellite viewers of public service channels. Under subsection (2) it is up to Ofcom to impose the conditions it considers appropriate to secure that the licensed public service channels are at all times offered as available to be broadcast by means of every satellite television service that is used by a significant number of the persons by whom the broadcasts are received in intelligible form as their principal means of receiving television programmes.
The first objective aims to secure that the channel provider does not refuse to provide his channel to the provider of a satellite service, if they can agree terms. It is, therefore, quite different from the second objective which requires the channel provider to ensure that its service will be made available to satellite viewers, and to ensure that as many people as practicable can receive the service. The second objective does not mean that an intermediary is required: the second objective might be secured that way, but it need not be, as the "satellite television service" might he provided by the broadcaster itself.

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While we are pursuing those three objectives, Ofcom might not need to impose conditions to secure all three of them. So, as things stand, the second objective might suffice, but if the situation changes, the other objectives could be brought into play to ensure universal availability. It might also be the case that, because a public service broadcaster is broadcasting its channels itself, the third objective is superfluous, as public service broadcasters are already required to make their services available for free; otherwise, it serves the purpose that the provider of a satellite television service cannot charge for reception of the public service broadcaster alongside the pay channels. The clause gives Ofcom the tools to achieve the policy aim which I believe we all share.
Whether public service broadcasters choose to use an intermediary provider is a commercial decision for them but the results of the end user must be the same— availability of their public service channels free to view.
Baroness Wilcox: I thank the Minister for his comments. The fact that the BBC did not go encrypted on 1st June means that we are off to rather a poor start. I believe that all Members of the Committee are aware how nervous everyone is about this enormous Bill and about the fact that the words "might" and "may" occur so often. We shall try hard to obtain the reassurance we seek on the Bill. However, having listened to the Minister's comments, I see no point in pursuing the amendment at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 195CC to 195CE not moved.]
Clause 269 agreed to.
Clause 270 [Securing reception of must-provide services in certain areas]:
Baroness Wilcoxmoved Amendment No. 195CF:
Page 243, line 13, leave out paragraph (c) and insert—
"( ) that all persons providing must-provide services contribute such proportion of the cost of making that facility available as is determined by OFCOM as appropriate;"
The noble Baroness said: In moving Amendment No. 195CF, I wish to speak also to Amendments Nos. 195CG and 195CH. The effect of these amendments is to give Ofcom maximum discretion to decide who should pay the costs associated with Clause 270, and in what proportions. Clause 270, furthermore, should not be activated until six months prior to the commencement of the digital switchover process at the earliest.
The purpose of Clause 270 itself is to ensure that as far as is practicable, all UK viewers will continue to be able to receive the public service channels free at the point of consumption once the terrestrial analogue television signal is turned off. More specifically, it would mean that anyone who was obliged to adopt satellite technology in order to receive the free-to-air channels post-switchover was not required to pay for the necessary card to decode the signal and receive the
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channels. That card is commonly known as the solus card, and the Bill proposes that once Clause 266 is activated, it shall become the shared responsibility of the public service channels—Channels 3, 4 and 5 and the BBC—to meet that cost.
Clause 270 is a safety net that the Government quite sensibly seek to put in place to protect viewers who are unable to receive the digital terrestrial signal post-switchover. The rationale behind passing the cost of the solus card on to the public service broadcasters is based on an assumption that if they fail to build the digital terrestrial network out so that its coverage replicates that of the current analogue network, it should be their responsibility to pick up the solus card costs for those viewers forced to rely on satellite technology.
However, given that it is government and not public service broadcasters that will be the chief beneficiary of digital switchover in terms of spectrum release, I wonder whether it is right that broadcasters should be required to meet the costs in their entirety. As the Minister in Committee in another place pointed out during the debate on "must carry, must offer":
"The decision to turn off the analogue signals but to ensure universal access to PSB channels has been taken by the Government and its cost should not be borne by private companies".—[Official Report, Commons Standing Committee E, 21/1/03; col. 656.]
It also seems premature to be committing the public service broadcasters to what are, at present, unquantified costs. Several questions will remain unanswered until we have a more detailed spectrum plan for switchover. For example, how many people will be entitled to solus cards? How is the cost of the cards to be set? Will the obligation be to provide one card per household or for each TV set? Clause 270(3) merely speaks of viewers being provided with a "facility" for receiving digital TV. What does that mean exactly? Perhaps the Minister will tell me.
I am aware that detailed work is already under way within the digital TV action plan, and that the intention is to produce a comprehensive cost-benefit analysis for switchover in the next few weeks followed by a spectrum plan by the end of the year. It is at that point that it may be appropriate to decide who should bear the costs of the obligations arising from Clause 270. I therefore favour wording the Bill in a way that gives Ofcom discretion to make the final decision. That is what the first of our amendments is designed to provide.
Irrespective of who pays for the solus cards and how many are needed, it is clear that the Government's rationale can sensibly apply only at switchover, at which point the currently universally available analogue services will cease to broadcast. Our second amendment seeks to clarify the position by specifying that fact in the Bill.
I understand that officials have privately reassured the broadcasters that the clause will not be activated in advance of switchover, and my colleague in another place, Mr John Greenway, has received similar assurances from the Minister in written

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correspondence. I hope that further clarification can be given by accepting the amendment. 1 beg to move.
5.15 p.m.
Lord McIntosh of Haringey: Clause 270 requires Ofcom to include in the licences for the must-provide services conditions which secure free satellite reception of those services for people who cannot receive them by other means. Nearly everyone will continue, after switchover, to be able to receive their television services through their terrestrial aerial, but a number of households will have to get their digital signals through a satellite dish and a satellite receiver. Like everybody else, they will have to get their digital equipment and pay their licence fee.
As the public service channels have to be encrypted on satellite, however, those households might also need a smart card, software, or some other system allowing them to decrypt the signals and watch the services. As the noble Baroness, Lady Wilcox, said, the current technology is a solus card, but there could be other technologies in future. Those who cannot get their digital public service channels by other means and who have the relevant equipment—the box and the dish—will get the solus card or equivalent system free of charge.
The cost will be shared by the public service broadcasters, including the BBC, and in the event of a dispute Ofcom will determine what each of them has to pay. Although it was not clear to me from what the noble Baroness said, Amendment No. 195CF seems to require Ofcom to set the proportion of the cost that each broadcaster will have to pay a priori, even before any dispute has arisen. That is not how we see regulation. We should let broadcasters discuss together and try to come to an agreement, and only if they fail to do so should Ofcom intervene.
Clause 270 also includes a provision, in subsection (11), to ensure a period of at least six months between the making of a commencement order under Clause 103 and the date on which the clause comes into force. That is to allow time for the licensees of any affected services to apply for a review of the financial terms of their licences under Clause 223, which allows for new terms to be set should those obligations come into force. Amendment No. 195CG would keep the safeguard for the broadcaster, but would prevent commencement from occurring more than six months before digital switchover, which Amendment No. 195CH seeks to define.
I understand the purpose of the amendments, but cannot agree with them. We are working on our plans to implement digital switchover, and we believe that we might need between three to four years to switch off signal access across the whole country. That is because, for technical and logistical reasons, we will not be able to convert all the networks at the same time. The timing that would be imposed by the two amendments might prove totally unrealistic.
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We want as many people as possible to be ready for switchover before it actually happens. We might need to commence the clause in advance of switchover, to ensure that people who will have to rely on satellite can, once they have bought the equipment, get the solus card and other facilities that they need before the analogue signals in their region are switched off. I hope that that explains why we have to resist the amendments.
Baroness Wilcox: I thank the Minister for that very helpful answer. I shall withdraw the amendment, but I would be interested to know whether he could answer the question about the solus cards. Perhaps he cannot at this stage, but it would be interesting to know whether one card will be provided for a household or for each TV set. Can he give us that information?
Lord McIntosh of Haringey: The idea is that it will be free for everyone, but the technology will change. I do not expect that solus cards will be restricted to individual sets rather than to households, and 1 am sure that they will be replaced by other forms of software in due course. If I can add anything to that, I shall gladly write to the noble Baroness. I think the issue is temporary, and we do not want to enshrine an answer to it in the Bill.
Baroness Wilcox: I can understand that. I was just testing. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 195CG and 195CH not moved.]
Clause 270 agreed to.
Clause 271 [Must-provide services for the purposes of s. 270]:
Lord McIntosh of Haringeymoved Amendment No. 195D:
Page 244, line 29, at end insert—
"( ) In determining whether it is appropriate, by an order under subsection (2), to add a service to the list of must-provide services or to remove a service from that list, the Secretary of State must have regard, in particular, to—

(a) the public benefit to be secured by the addition of the service to the list, or by its retention in the list:

(b) the likely effect of the proposed modification as respects the costs to be borne, under arrangements entered into or imposed under section 270, by the persons who, after the coming into force of the modification, would have to be parties to those arrangements: and

(c) the extent to which that effect is proportionate to the benefit mentioned in paragraph (a)."

On Question, amendment agreed to.
Clause 271, as amended, agreed to. Clause 272 agreed to.
Clause 273 [Programming quotas for independent productions]:
[Amendments Nos. 196 to 199 not moved.]
Lord Crickhowellmoved Amendment No. 199ZA:
Page 246, line 25, at end insert—
"( ) It shall be the duty of OFCOM to carry out regular reviews of the operation of the provisions of any order made by the Secretary of State under subsection (2), and the first such review must be carried out no more than 12 months after the commencement of this section and subsequent reviews must be carried out at such intervals as OFCOM may determine.
( ) OFCOM must send a report of every review to the Secretary of State and publish such report in such manner as they consider appropriate, and the report on a review must set out OFCOM's recommendations, in consequence of their conclusions on the review, for the exercise by the Secretary of State of his power to make an order under subsection (2) describing the programmes that are to be independent productions for the purposes of this section."
The noble Lord said: The aim of the amendment is to ensure that Ofcom is required to consider whether ITV regional companies should be accorded the status of independent producers in relation to companies where there is no ownership link.
I have two preliminary observations to make. The first is to take as a text paragraph 192 from the recent ITC review. It states:
"Proposals from Granada and others to reclassify ITV regional centres so that they qualify for the quota are potentially attractive from a regional perspective, but require a more detailed cost benefit appraisal before any changes can be made on this area".
That is a very interesting comment. It makes clear that the issue is by no means settled and that more work needs to be done.
My second observation is that I am reviving an earlier debate to which the noble Lord, Lord Alli, contributed. We did not entirely agree on this subject during the course of that debate. The noble Lord, Lord Alli, is one of the big, strong, fierce cats of the independent sector. He roams in the big cities of London and Manchester. I am speaking on behalf of the smaller animals out in the countries and the regions, far away from those great places. It is with the position of those regional broadcasters that I am concerned.
There are three other brief points that should be made at the outset. First, the independent production sector is rightly promoted in the Bill and I acknowledge that. Secondly, the quality of programme ideas is the basis on which the commissions should be made by broadcasters. Thirdly, the independent production quota should be regarded as a floor and not as a ceiling.
A number of contributions in earlier debates emphasised the importance of regionality and regional production. The Bill places great emphasis on out-of-London production and on a range of production centres. We will debate later amendments that deal with production centres beyond the M25—far beyond it. The interests of the nations and regions are recognised within the structure of Ofcom, but despite the Government's best intentions, the future economic and cultural contribution of ITV regional companies is being constrained in practice.
Surely the role of the ITV companies should not be confined to their regional licence obligations. ITV regional companies are a means of delivering
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programmes that reflect the diversity of the nations and regions on UK networks. One cannot isolate the ITV regional companies and divorce them from the rest of the creative community in which they operate. There is an interdependency which contributes to the general health of the regional production market.
The ITC report on television in the nations and regions, to which I have already referred and which was published last year, stated:
"Television production is also part of the expanding knowledge economy, and can help support and build high quality employment across the UK. Combined with other creative and technical sectors, it can contribute growth to areas under economic pressure, and can help the UK achieve a more balanced economic development across the country".
As a former Secretary of State for Wales, and in the presence of another former Welsh Minister, I can say that we both have great experience of exactly that happening in the Principality during the time that the noble Lord, Lord Roberts of Conwy, and I had responsibility for such matters.
The key to the debate can be found in the paragraph that I have already quoted, paragraph 192, and in paragraph 47 of the review. Paragraph 47 states:
"We therefore suggest that the current rules should remain unchanged unless a full and detailed economic cost benefit analysis shows that there are clear net benefits associated with this proposal. If the definition of qualifying independence were to change, proposals for raising the quota itself might well need to be considered".
The review is therefore saying that although there are obvious benefits to be gained from something of that kind, the possible negative effect on other independent producers has not yet been adequately measured for a final decision to be taken.
However, the ITC review identified concerns about the,
"health of the programme supply market in the Nations and Regions",
adding that,
"economic pressures are creating new challenges for the sustainability of production outside London".
The downturn in advertising revenue is well documented and therefore it is imperative that ITV regional companies are given the opportunity to exploit other potential revenue streams in the programme supply market. The only reason that independent producers would be fearful of competition from ITV companies is if they lack confidence in the quality of their own ideas. After all, the more successful the ITV regional companies are, the better able they will be to continue to support the independent companies in their area. That they do support those companies, I can vouch from my experience as chairman of HTV in the past.
The ITC review had a public interest objective,
"to seek effective measures which will support a vibrant and sustainable production sector throughout the UK".
A review of the disqualification is part of seeking those effective measures, particularly as the report also acknowledges that,
"producers in the Nations and Regions of the UK face increasing economic challenges".

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This is not an issue that can be finally settled by debate across the Chamber. Whether or not I could win the argument with the noble Lord, Lord Alli, were he here, I doubt. It is an argument that depends on further analysis, further information and further review. It is therefore just the kind of argument that Ofcom is being established to settle. It is for Ofcom to decide what role the ITV companies can play in the UK programme supply market over and above their regional licence obligations. It is for that reason that I have tabled an amendment to ensure that it holds a prompt review, and further ones if necessary, so that it can settle a matter which is of great importance for broadcasters in the nations and regions. The strength of feeling on both sides of the debate is a testament to the fact that a review within 12 months is necessary to make a proper assessment of the situation. I beg to move.
Lord Bragg: I support the noble Lord, Lord Crickhowell. I agree with many of the points that he made with such eloquence and in such detail, so I shall be brief.
The current definition of an independent production under the order excludes regional ITV companies from qualification when they are producing for other broadcast networks. That is the nub of it. Perversely, Endemol, which is a large, London-based independent producer, part-owned by an EU broadcaster, continues to qualify. It is partly owned by Spanish interests. What is sauce, or Madeira, for Spain should also be sauce for Newcastle and Carlisle.
The current arrangement undermines Parliament's declared objective of sustaining strong, regional production business around the UK. Like the noble Lord, Lord Crickhowell, I would welcome an obligation being placed on Ofcom to review that matter early in its existence.
The regions have absolutely no guarantee of contributing to the ITV network. I do not know whether that is widely known. They have to fight for their place against tough competition from the big boys from London. If they do not gain access to the ITV network, they can have no sales anywhere else. We should seek to redress that state of affairs. Nearly 90 per cent of all independent production is in London, yet time and again people say how much we should succour—look after and help—the regions. Here is a chance to do so.
Many noble Lords bring far greater experience to the Bill in different ways but I have worked in two of the regions: for Border Television as a producer and later as chairman with Tyne Tees Television in Newcastle. These issues are very important to those communities. They get a high skills base; a feeling of confidence inside a community is generated; and there is employment. The ramifications involve broadcasting and the cultural presence of the place. Children and young people can say, "This is a way in". Many people who have done extremely well in British broadcasting and world broadcasting got their start in such companies when they were flourishing. I cannot
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emphasise enough how much they bring to those communities. This is a chance to do something to help them to build again from a base that has been undermined, partly by the diminution of advertising.
Everything that the noble Lord, Lord Crickhowell, said about cultural and economic importance can be fully endorsed by myself, those who work there and everyone who has lived in the regions and properly examined what is going on. I support the proposal strongly. It is just the sort of issue in relation to which Ofcom should test itself as early as possible.
5.30 p.m.
Lord Roberts of Conwy: I, too, support my noble friend's amendment. In doing so, I draw the attention of noble Lords to the positive contribution of one ITV company that my noble friend knows very well; namely, HTV. It has made a remarkable contribution as an independent supplier of Welsh-language programmes for the Welsh channel S4C. I contrast that position with the company's disqualified status as an independent producer in the English language.
Since 1958, when I was a founder staff member of Television Wales and West, TWW, the ITV contractor for Wales and the west of England has made an outstanding contribution to the provision of quality programmes in the Welsh language. That long and honourable tradition has been continued by HTV since the late 1960s. Before the establishment of S4C, HTV was responsible for making and transmitting Welsh-language programmes on ITV. When S4C came on air in 1982, HTV became a major commercial supplier of programmes for the new fourth channel. As of today, HTV Wales is commissioned to make 110 hours of programmes a year for S4C, including its long-running current affairs programme, "Y Byd ar Bedwar"—"The World on Four"—and one of its most popular rural series.
HTV is considered to be part of the Welsh language independent production sector and is a member of TAC, the Wales independent producers' association. The ability of HTV Wales to bid for commissions on the same terms as other independent companies has stimulated competition and diversity in the Welsh language programme supply market. The relative strength of that market was highlighted in Committee on 22nd May. The Minister, the noble Lord, Lord Evans of Temple Guiting, said:
"We acknowledge not only the authority's linguistic and cultural contribution but the important role it plays in supporting creative industries in Wales…Such industries are doing tremendously well and are, in many ways, making the Welsh economy much stronger than that of its neighbours".—[Official Report, 22/5/03; col. 982.]
HTV Wales, as a supplier to S4C, played its part in the development of that economy. It demonstrates the contribution that ITV regional companies can make to the creative industries over and above their licence obligations. To disqualify HTV Wales from replicating the contribution that it makes to Welsh-language television in the English language is totally inconsistent. I strongly believe that that

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disqualification has hampered the ability of English-language programme makers in Wales to make programmes for the UK market. The contribution is underdeveloped, reflected in the relative lack of Welsh-made programmes on UK networks. That is a very serious issue.
Having commended the role that S4C plays in Wales and its positive impact on the creative industries, I ask the Government why other UK television channels should not be able to make use of the ideas and talent of programme makers working within ITV regional companies on an equal basis with other suppliers. Surely, the competition that the Government are so keen to encourage in the UK programme supply market would be given further stimulus by lifting the disqualification on ITV companies as independent producers.
I am all in favour of the independent producer and I supported the amendment of the noble Lord, Lord Alli, in Committee. However, on reflection, I am sure that it is a grave error to handicap regional ITV companies in producing locally programmes that may well have a wider—national or even international—appeal. I cannot forbear from saying that I once had the great pleasure of producing a programme called "This World of Wales" with the late Richard Burton. I am glad to say that it was even seen coast to coast in America.
Lord Gordon of Strathblane: I support the amendment of the noble Lord, Lord Crickhowell. The automatic disqualification of ITV regional companies acting as independent producers should be removed but I agree that that should be left to Ofcom.
I was intrigued when the noble Lord, Lord Roberts, said that a precedent had been set with Wales and the Welsh channel. The important point is that this is an opportunity to amortise the capital costs of running a small regional ITV operation. I refer not only to the capital costs but also to the human costs. One is able to retain good staff if there is an outlet for people's talents outwith the station. I recognise that in giving them that outlet, they may well end up cutting the umbilical cord and moving off on their own. One hopes that they will not do so outwith the area, although I regret that most of them will probably be on the high road to London and that all the best attempts to stop the inner-M25 region growing out of all proportion will fail.
There should be no automatic prohibition on an ITV regional company being regarded as an independent unless it is clear that it is acting not as an independent but as part of a concert party. That involves saying, "You scratch my back, I'll scratch yours", and a contractual relationship with another ITV company. Ofcom is perfectly capable of seeing through that concert party arrangement. That should not be automatic; it should be judged on a case-by-case basis. I support the noble Lord.
Lord Peyton of Yeovil: I rise to my feet again with great trepidation because I am, so far, in a minority of one. I see that the noble Baroness nods in assent—I
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always look forward to that; it gives me great pleasure. The four noble Lords who have spoken so far are extremely expert in this subject—much more so than I am. Those noble Lords, including my noble friend Lord Crickhowell—I stand in great awe of him—have taken root and are part of the Bill's family, if that is not too disgraceful a thing to be. They were nurtured in the Select Committee and came here already very knowledgeable. The noble Lord has other sources of information.
All I am trying to say, in my lame way, is that I differ from those noble Lords only with the utmost diffidence and doubt, and I must face the virtual certainty that I may well be wrong. That is because the Bill, as far as I am aware, does not for one moment allow for the possibility of Ofcom not being aware of its responsibilities to the regions. I am astonished to note that my noble friend, who knows so much more about the Bill than I do, should wish to increase its volume by adding the amendments, which I regard as unnecessary.
I find myself in the difficult position of disagreeing with those with whom I normally agree. It is not always that I have the pleasure of agreeing, as I apparently do, with the noble Baroness, Lady Blackstone, on the Front Bench. That is a privilege that I rarely enjoy with some discretion. Nevertheless, I enjoy that very much on this occasion. I hope that she will correct me if I am wrong, but the Bill as it stands does not allow for the possibility of Ofcom ignoring its duties to the regions. My knowledge of the regions ever since I have been in Parliament suggests that if Ofcom were to dare to disregard the interests of the regions, Wales and Scotland, the possibility of Ofcom not becoming a serious, if not fatal, casualty of the battle that ensued would be remote. I cannot believe that the Government would welcome the amendment.
Lord Lipsey: The noble Lord unnecessarily disparages himself. He is so knowledgeable about the matter that he even knows the answer that my noble friend the Minister will give before she has given it. Some might say that the noble Lord does not fully appreciate that the clause is aimed at an extremely specific question—that is, the regional production capacity of ITV companies—and not at the general duties of Ofcom with regard to the "indies".
When is an indy not an indy? We found out recently and quite dramatically when it turned out that Endemol, which was previously an indy, on being taken over by a Spanish television company, ceased to be an indy. As a result the BBC missed its quota targets for last year. The Government were helpful to the BBC in that regard and have rushed to change the definition so that being owned by a Spanish television company is not a disqualification from being an indy. I certainly do not wish to dispute that decision.
Also I do not necessarily want to argue that all ITV companies should be regarded as indies. There are strong regional arguments where they should be, but there are no doubt strong arguments on the other side. The amendment moved by the noble Lord, Lord Crickhowell, which I strongly support, does not

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say that they should or they should not be regarded as independents. It says that Ofcom should look at that. With the changing definition, and the difficulty of definition, that seems to be no more than common sense. I hope that the Minister will disappoint the noble Lord, Lord Peyton, but please the great majority of noble Lords who have spoken in the debate by giving the amendment a sympathetic reception.
Viscount Astor: I support my noble friend's amendment. It cleverly covers the arguments that were put against making ITV part of the independent sector during the early stages of the Committee. Noble Lords who were against such an amendment at that stage were concerned that the large ITV companies would simply be able to call themselves independent, and that it would not help the small regional companies, such as that of the noble Lord, Lord Bragg—Border. The great advantage of the amendment moved by my noble friend is that the decision will now be left to Ofcom. It can make that decision and give us the best of both worlds, because it will not only encourage the independent sector, but will allow those within the ITV network—particularly the smaller players—to be considered by Ofcom as to whether they can be part of that independent production sector. The amendment is sound because it covers all the arguments that were put against that process at an earlier stage.
5.45 p.m.
Lord Thomson of Monifieth: I rise to intervene very briefly on hearing the unexpected words from the noble Lord, Lord Peyton, that he might be mistaken in his views on the matter. I suggest that in this case he is unusually mistaken. The truth of the matter about production in that field is that the development of independent production—one of the major developments in British television broadcasting over the last decade or so—was itself very healthy. However, it was a highly centralised development despite all the efforts that were made at various times by various regulators. It was the great Wen of the M25 that was the fatal attraction for independent producers. There has been deprivation of opportunity for television production in smaller regions of the country. That needs positive and vigilant action by Ofcom when it takes on fully its responsibilities. It is production centres such as that of the noble Lord, Lord Bragg, of Border or Grampian that I used to see much of in Scotland, and other small regional television areas, where having a special place in the independent sector would be a necessary countervailing force to the way the independent operation of television has worked.
Lord Brooke of Sutton Mandeville: When we debated these matters on 29th April in those halcyon days at the beginning of the Committee stage, I was an ally of the noble Lord, Lord Alli, in opposition to my noble friend Lord Crickhowell and my noble friend on the Front Bench who had moved the relevant amendments about the regional producers. However, I feel appreciation and gratitude to my noble friend
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Lord Crickhowell for moving the amendment. When the Minister wound up in the last minutes of that hour-long debate on 29th April she alluded to the ITC UK programme supply review and said that the ITC had noted that they did not think that there was a case at present for changes in qualification criteria. The words were "at present" and she went on to claim for Clause 273 that it aimed to ensure that independent producers:
"would continue to make a significant contribution to the programme supply market in the UK as well as allowing the Government the flexibility to make some changes as circumstances dictate".—[Official Report, 29/4/03; col. 686.]
As I said in that debate, I was impressed by the representations made by the independent producers when I was the relevant Minister 10 years ago. However, it seems that the regional companies also need their day in court. The virtue of my noble friend's amendment is that it confers a procedure under which those days in court could occur.
Lord McNally: I supported the absent noble Lord, Lord Alli, when he moved his various amendments in favour of the independent producers. I could well imagine his concern at the tenor of this debate because those who were on the pre-legislative committee remember that it was the persuasive advocacy of PACT and the other independent producers that made us call so strongly for an examination of the case for more help to the independent producers.
That produced rapid action from the Government and the ITC against a background where the feeling was that the approach to independent production by the big battalions had been one of ceilings rather than floors in terms of encouragement. I can well imagine that the independent producers, having made the breakthrough with the pre-legislative scrutiny committee and the ITC, and seeing those new opportunities opening up before them, suddenly saw them being closed just as rapidly by the perhaps newly consolidated ITV companies who used that consolidation to appear as champions of regionality while simply underpinning their own power bases. I am trying to guess at what fear might be expressed. I accept the advocacy of the noble Lords, Lord Crickhowell and Lord Bragg, in such matters and have a gut feeling that there is a case to be examined.
As has been hinted at, not all the independent producers are the barefoot boys and girls waiting for crumbs dropping out of the limousines of ITV and BBC moguls. There are a variety of power bases. My guess is that there is scope for greater encouragement for the independent production sector. Several Members of the Committee also expressed the realisation that by getting production out into the regions and supporting the creative industries, we do a great deal both for the local economies and the self-esteem of those regions. There is a danger of concentration.
As my adopted county is Hertfordshire and around St Albans there are support services for television and film production, I can say to the independent producers that they can come up north to St Albans

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and be outside the M25 and avoid all the strictures that are made in that regard. In relation to regional and independent production, there have been accusations that the BBC and large ITV companies, rather than approach the matter with generosity of spirit and attempt to get production out into the independent companies and the regions, sit down and think, "How can we get around these regulations?".
There is a case for further study. The amendment is sensible and modest because many of the arguments the noble Lord, Lord Alli, put forward at an earlier stage remain valid. Furthermore, the ability to help regional production and the smaller ITV companies needs careful study and Ofcom is well suited to carry out that study. We support the amendment.
Baroness Buscombe: I support the amendment tabled by my noble friend Lord Crickhowell. I had drafted an extensive note setting out the reason for that support, but it would be otiose of me even to attempt to repeat the words of my noble friend and others who have spoken in support of the amendment.
Baroness Blackstone: I believe that the debate will conclude with the noble Lord, Lord Peyton, and me against everyone else! Therefore, I am grateful for a little support from him. I, too, do not believe the amendment is necessary, at least in part for the reasons he gave.
I am also puzzled because I can see little in the amendment which relates to our debates on regional output. Indeed, there is nothing in it. I shall be strict and stick, as we should in Committee, to the amendment. I shall not go over old ground that we discussed during our debates on independent production earlier in Committee. I hope that Members will accept that I am not being unfair but am merely trying to stick to a sensible procedure.
I support the intention behind the amendment, but it is unnecessary because of the amendments made in another place following the ITC's UK programme supply review. Among other things, the amendments have given Ofcom the duty to undertake a review of the programming quota for independent productions as part of their annual factual and statistical reports. So, just as the noble Lord, Lord Peyton of Yeovil, said, we are already requiring Ofcom to take on this responsibility.
Under Clause 351(3)(e), Ofcom must consider what it is appropriate to achieve by conditions and duties under Clause 273 in relation to Channels 3,4 and 5 and paragraphs I and 7 of Schedule 12 in relation to the BBC and the Welsh authority and the effectiveness for that purpose of the conditions and duties for the time being in force. In subsection (3)(f), Ofcom must consider whether it would be appropriate to recommend to the Secretary of State that he exercises any of his powers under that clause or those paragraphs.
These subsections give Ofcom a duty to consider all aspects of the programming quota for independent productions, including the definitions that the
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Secretary of State has made by order under Clause 273 and Schedule 12 to define qualifying programmes and independent production and, furthermore, to make recommendations that he exercise any of his powers under those provisions if appropriate. Moreover, under Clause 351 Ofcom will also be required to publish the report, which is exactly in line with what the noble Lord, Lord Crickhowell, is proposing.
I therefore believe that Ofcom will have all the powers necessary to undertake exactly the duties that the noble Lord, Lord Crickhowell, set out in his amendment and I therefore hope that he will withdraw it.
Lord Crickhowell: I am grateful to the nine Members of the Committee on all sides who supported my amendment. I hope that the Committee will forgive me if in the interests of time I do not name them all. I am grateful to my noble friend Lord Peyton for breaching a long-standing alliance. I must confess that I felt like President George W Bush must have felt when President Chirac launched into him during recent months. It was a sad moment.
My noble friend Lord Roberts of Conwy made an important point which needed making in the light of some of the comments made in earlier debates, particularly by the noble Lord, Lord Alli. The impression was given that if the ITV companies in the regions were given the right to enter the field, they would somehow crush the independent companies. The reality of what happened with Welsh language broadcasting is extremely interesting in this regard. My noble friend is right that before the arrival of S4C, we in HTV had a large share of that Welsh language programming. With the arrival of S4C, we quickly found ourselves losing a large share of it and having to compete like fury to retain an important sector of our output. As the independents came out in competition with us, so they grew in strength and numbers. The effect of that has been to create a vibrant Welsh language broadcasting sector.
As my noble friend said, that has not however been the case in the English language sector. If my noble friend Lord Peyton wondered why this matter needed highlighting, I can give him one good reason. It was as recently as last July that the ITC, now part of Ofcom, produced its report and reached a negative conclusion. I acknowledge what the Minister said about the past and I am pleased that she said it. However, I suspect that now, instead of Ofcom saying, "We looked at that. The ITC looked at it last year. That need not be a priority for us. We have an awful lot to do in the next few years and we can kick that one into touch for a long time to come", it will know that the Minister has drawn attention to its various duties and tasks. It will also know that nine Members of the Committee—a substantial majority of those who spoke—have supported the case for re-opening the issue.
The issue is important now because of the difficulties faced by the ITV sector at this time as a consequence of the recent loss of advertising revenue. So this is an urgent question and although I shall withdraw my amendment, I do so in the knowledge

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that we have perhaps emphasised to Ofcom that this is an important matter. We need action within a very short time. This is not a matter to be kicked into touch.
Amendment, by leave, withdrawn.
Clause 273 agreed to.
Clause 274 [Programming quotas for original productions]:
Viscount Falklandmoved Amendment No. 199A:
Page 247, line 6, at end insert—
"( ) In determining appropriate proportions for the purposes of subsections ( I ) and (2), OFCOM shall have regard to the number of viewers of the public service channel in question."
The noble Viscount said: I beg to move Amendment No. 199A which is, in fact, Amendment No. 201 that has been re-tabled. I also speak to Amendments Nos. 215, 224 and 234. I apologise to the Committee for an error that has crept into Amendment No. 224 where there is a reference to subsection (1). It should be subsection (3). I hope the committee will indulge me in nevertheless allowing me to refer to this amendment.
Amendments Nos. 199A, 215, 224 and 234 should be viewed as complementary amendments to achieve a single purpose. To give the regulator the ability—not the obligation—to review at any time whether the public service requirements on Channel 5 as shown by its audience share, are proportionate to its role in the mainstream television market. The key amendments are Amendments Nos. 199A—formerly 201—and 224. However, in order to apply the principle fairly across the market, Amendments Nos. 215 and 234 are also required. They would give the regulator a similar ability to consider the audience shares of Channels 3 and 4 when applying tier 2 quotas.
As I have said on previous amendments, Channel 5 was originally envisaged as a small commercial niche channel with relatively light public service requirements. It would not be expected to threaten the Channel 3 or 4 market. Government policy, as expressed in this Bill, positively encourages investment in the channel in order to drive up audience share. Were Channel 5 to raise its audience share by three or four percentage points, it would indeed have a comparable audience to Channel 4 and BBC2. In reality, of course, it would not be comparable. Its very light public service obligations would give it a distinct competitive advantage over those two other channels which would both inevitably struggle to fulfil the high levels of public service in both tiers 2 and 3. The regulator would have no power to correct this imbalance as the Bill currently provides Ofcom with the ability to impose quantitative quotas under tier 2 for original and regional production only in the event of a change of ownership of Channel 5.
What is at stake is the fulfilment of those protections of citizens' interests which the Government have repeatedly said they wish to uphold. The four dominant channels, in return for their market privileges, are rightly expected to provide the citizen with high levels of original and regionally based programming, tailored to their needs and interests. A competitive drive against them by a channel without such obligations will produce a downward trend or
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even a spiral of quality in their public service output. In introducing a sliding scale of public service obligations with the BBC at the top end and Channel 5 at the bottom end, the Government must put in place regulation to take account of movements up and down this scale. We believe they must continue to apply these principles to Channel 5, regardless of any changes to media ownership. If the Government's proposed changes to those rules remain intact, there is an overwhelming case for these amendments.
Respected media analysts and academics, which include Professor Steven Barnett of the University of Westminster, noted in a recent letter to the Financial Times that, in the event of Channel 5 being owned by News International—that company is the obvious example, although it may not be interested in Channel 5—it would not be unrealistic to expect that Channel 5 would drive its audiences up to a level which would compete and go beyond those of BBC2 and Channel 4. It could even rival Channel 3 with 16 per cent of market share. Professor Barnett has written in a briefing paper:
"Through heavy cross-promotion from its newspapers and satellite TV platform, through negative coverage of competitor channels and by exploiting its ability to buy key sports and movie rights across pay and free-to-air platforms, News International could potentially transform Channel 5 into the United Kingdom's highest rating television station".
Under these circumstances, a large part of the programming thus being transferred and cross-promoted would probably be imported from outside the United Kingdom. In this scenario, the regulator must have the ability to act to protect original and regionally-produced programming in our mainstream television market beyond the point at which the change of ownership took place. I beg to move.
Lord Peyton of Yeovil: Each time a clause and a line of this Bill comes up, some noble Lords want to give Ofcom yet more things to do. Ofcom will already be very heavily loaded with duties and simply to add to them may give satisfaction to those noble Lords who propose it, but it will be back-breaking for a new organisation. I do not have the pleasure of knowing the noble Lord, Lord Currie, but I have never yet heard in your Lordships' House any suggestion that the noble Lord is not very well suited to the job. Therefore, if the noble Lord, Lord Currie, is all that is claimed by those who know him better than I do, it is high time someone said that he deserves to be trusted with what is already a very difficult job without being given a load of complicated advice, some of which, together with some of the tasks imposed on him, he could not possibly fail to perform. As for the noble Lord, Lord Currie, being told to take account of numbers, they are an all-important part of the game.
Lord Puttnam: I rise to speak to Amendment No. 200. I am a little puzzled at the need for the amendment as this is an area in which I felt that the Joint Scrutiny Committee and the Government were to a very great extent ad idem. The purpose of the amendment is literally to try to place on the face of the Bill some of the duties which the noble Lord, Lord Currie, and Ofcom will fulfil, and the timings.

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By far the most important purpose is to ensure that Ofcom is able to review production commitments, including regional programme-making commitments of the public service channels and Channel 3 in response to any significant change in the revenue or audience share of the relevant channel. It is important to allow a level of flexibility so that if the market-place, audience shares or revenues, change dramatically, Ofcom has the ability to review that situation and act accordingly rather than be boxed into specific time periods.
6.15 p.m.
Lord Renton of Mount Harry: I rise to speak to Amendment No. 233A in this group. I tabled the amendment only yesterday, and therefore appreciate that it is not included in the sixth Marshalled List, although it has been printed and I have it in my hand. In case Members of the Committee have not had time to study the amendment carefully, perhaps I may remind them what it contains.
The amendment suggests that a new clause should be inserted after Clause 282, which will be headed,
"Variation of Public Service Obligations of Channel 5".
Subsection (1) suggests that,
"In the event that the share of audience or share of revenue of Channel 5 for any twelve month period is in excess of 15 per cent, as measured by OFCOM in their review under section 351, the Secretary of State may, by order, require OFCOM to review the conditions placed upon Channel 5 under sections 274 and 281".
The first of those sections deals with the amount of original programming and the second with regional programmes.
Subsection (2) of the new clause suggests that:
"Such a review shall be required to increase the proportions of original and regional programmes to those most recently produced by Channel 3".
Finally, subsection (3) contains a caveat that,
"In the event that Channel 3, in the same period, had a share of audience or share of revenue below 15 per cent, the proportions of original and regional programmes should be equivalent to those levels produced by Channel 3 when its share of audience was at 15 per cent or above".
I carry on the point made by the noble Viscount, Lord Falkland, and the noble Lord, Lord Puttnam. However, I suggest a rather starker and perhaps simpler solution than that proposed in their amendments. Their amendments rely on such words as,
"OFCOM shall have regard to the number of viewers of the public service channel in question",
whether that be Channel 3 or Channel 5.
It is extremely difficult, necessarily, for any outsider, anyone who may have an eye on trying to get control of Channel 5, to know just what those words mean. Surely it would be better to be much more precise in that context and to set a numerical yardstick by which it is clear that if that yardstick is met, if Channel 5 were to have a 15 per cent share of audience as measured by Ofcom at that stage, it would have to match the obligations of Channel 3 in relation to both regional and original programming.
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I hope that I may even persuade my noble friend of many years, Lord Peyton, to follow me in this. I do not suggest a new duty, a new thought for Ofcom, something else which it has to consider. I suggest specifically that under these circumstances,
"the Secretary of State may, by order, require OFCOM to review the conditions placed upon Channel 5".
I believe that that emphasis is important. Either later tonight or Thursday we shall move into the area of cross-media ownership. If it is on Thursday I very much regret that due to other commitments I shall not be here. However, it is necessary that anyone who considers taking over, trying to gain ownership, of Channel 5 should have in advance a very clear view of what are likely to be the public service conditions laid upon him and his company. It would not be right to leave it to a vague way of thinking, "If I do get the audience share up to 15 per cent or 20 cent I shall have to argue with Ofcom about it and I shall lobby Ofcom to see whether I can twist its arm and persuade it that for any reason, whatever it is, precisely the same condition should not be put on me as on Channel 3". It would be a very great mistake to leave that kind of open gap at this time. It would be much better to put this on the face of the Bill.s
That is why—this was considered in the pre-legislative committee of which I was not a member it would be more sensible to insert into the Bill a clause such as I mention at this early stage. Whether the appropriate figure is 15 per cent, 10 per cent or 20 cent would be a matter for further consideration and decision by Members of the Committee. But it would be a starker and, perhaps for that reason, more uncomplicated solution than that suggested by other noble Lords, of simply saying to Ofcom, "If this happens, you must have another look at it and one of the things you should think about is the number of people in the audience".
I believe that Members of the Committee would agree that it is interesting that we are having this debate on the day after the Federal Communications Committee in the United States agreed on substantial further deregulation there, allowing media companies greatly to increase their ownership of either television or radio stations. That caused considerable furore in the United States, as is reported in today's press. Many people in the United States believe that that is a movement in the wrong direction. At this stage of the Bill and in the debates we are shortly to have, we shall have the same considerations before us.
As regards the public service obligations of Channels 3 and 5, I hope noble Lords will forgive me for quoting remarks made by Tessa Jowell, the Secretary of State for Culture, Media and Sport, in today's business section of the Guardian.
"Ms Jowell suggested the Bill had been misrepresented, insisting again that it is 'proprietor neutral'. She said the change in the Five ownership rules would be matched by the most draconian programme regulation in history. If Five changed hands or substantially increased its audience share"—
these are the key words,
"the new media regulator, Ofcom, would review its public service responsibilities with a view to toughening them".

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That is just what we should not allow. We should be much more specific; hence the clause I propose to the Committee.
The Culture Secretary ends her interview with the rather touching words that she wholeheartedly believed in the Bill. She stated:
"I've spent a huge amount of my life over the past two years on this; I think it's good legislation and I have confidence in it".
I spent two years on the Broadcasting Bill between 1987 and 1989 when I was Minister of State to Douglas Hurd, the Home Secretary, now the noble Lord, Lord Hurd. We spent a great deal of time trying to ensure the future independence and continuation in existence of the 14 regional ITV companies. We had no idea of the degree to which satellite would dominate television in this country, satellite that is increasingly owned and dominated by one very substantial newspaper proprietor.
Perhaps I may say to the Culture Secretary that I very much hope that she will not be as disillusioned by the next 10 years of developments in the television and radio world as I have been by the past 10 years after working hard for two years on the Broadcasting Bill of 1990.
Lord Davies of Oldham: The noble Lord, Lord Peyton, has won another friend and influenced another Minister by his contribution to this debate, which has enabled me to reduce the length of my reply. That is because we entirely accept his contention that the main thrust of our response to the amendments is that we already have within the Bill the necessary obligations upon Ofcom for it to do its job, which is to safeguard the very objectives defined by the amendments. that we broadly share them, and that therefore it is not necessary to be as specific as the amendments would indicate.
I shall address myself to the amendment of the noble Lord, Lord Renton, in the context of its grouping and the issues that it raises on the question of increasing potential audience share. He will forgive me if I do not join him in a major debate on the potential change of ownership of Channel 5. We are scheduled to have that debate either in the wee small hours of tomorrow morning or, more likely, on Thursday. I regret that he will not be present then, but that is when the big issues are to be discussed, and that is when we shall have that more wide-ranging debate. However, I shall, I hope, do him the courtesy of responding to his amendment.
Of course, the Government recognise the importance of a strong programme production sector to the health not only of the broadcasting industry, but of our creative economy as a whole. I was pleased to note from the recently published Independent Television Commission annual report that Channel 3, Channel 4 and Channel 5 are all meeting their licence requirements for original and regional production—and in some cases meeting them comfortably. That said, I can of course understand the view of noble Lords that requirements for independent, original and regional production should reflect audience size and
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the changing revenues and audience share of particular channels, which has been the burden of several of the main representations on these amendments.
Those are certainly factors that Ofcom may want to take into account in setting and maintaining production and programme-making targets, but they are not the only ones. Ofcom may also wish to consider, for example, the existing levels of original or regional production achieved and the broader requirements of the public service remit for the channel in question. The Bill already gives Ofcom a range of tools to enable it to set and maintain targets at the right level, and I am not therefore persuaded—any more than the noble Lord, Lord Peyton, was—that that new powers are needed.
I must also confess to some concern that the amendments as drafted might actually prove counter-productive in operation. There are three main concerns.
First, in setting the targets, Ofcom will have its discretion circumscribed if it must in all circumstances give weight to the number of viewers of the channel in question.
Secondly, it is entirely possible under the new clause in Amendment No. 200 that Ofcom's review would lead to decreases in the various requirements on public service channels in response to falling revenues and audience shares, rather than to increases. This could be the case for only one public service channel if, say, Channel 3 lost market share to Channel 5, but all the public service channels could find themselves in weaker market positions as multi-channel viewing gained ground. In such a situation, Ofcom could come under pressure to reduce the production and programme-making requirements for all the public service channels, leading to a net loss for the viewer. That cannot be right.
Thirdly, if, on the other hand, revenues and audience shares for the public service channels—or some of them—increase, and the requirements are increased, as proposed by Amendment No. 233A of the noble Lord, Lord Renton, that will amount to a penalty for success. What incentive would there be for a young channel such as Channel 5 to grow if the result is an automatic increase in its public service commitments, without any consideration being given to the other factors I mentioned earlier as being relevant in the round in setting targets? Far better, a shrewd channel owner might conclude, to manage revenues and audience share at a point where such new obligations do not cut in. That surely cannot be right, either.
Aside from those concerns, I believe that the Bill already provides sufficient protection for programme production and sufficient powers for Ofcom to ensure that targets are set and maintained at the right levels. In the case of the original production quota, that means an appropriate level for ensuring that the relevant channel is consistently of a high quality, and in the case of the regional programme-making quotas it means an appropriate level for ensuring that a suitable proportion of the channel's programmes are

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made in the UK outside the M25 area—and, one hopes, in a number of cases further north than St. Alban's, although I have nothing against that town and for the licensed public service channels that a suitable proportion of their expenditure relates to a range of production centres outside that area.
Ofcom is already required to carry out, as soon possible after the end of the first 12-month period beginning with the commencement of Clause 260, and thereafter at least every five years, a review of the extent to which the public service broadcasters have provided television services which, as a whole, fulfil the purposes of public service broadcasting in the United Kingdom. Ofcom must prepare a report on its findings, with a view to maintaining and strengthening the quality of public service broadcasting.
Ofcom is also required to publish an annual factual and statistical report. The report will follow a review by Ofcom of the provision of television and radio services in the United Kingdom during the relevant period, and will include consideration of the financial condition of the market and any trends appearing or operating in the size of the audience, which is a substantial burden of the amendments. The review will also focus in particular on the operation and effectiveness of the arrangements currently in place in relation to independent productions.
In addition, we have strengthened Ofcom's power to amend licence conditions on a change of control of a Channel 3 licence holder, and given it similar powers in relation to Channel 5. When it is notified of a relevant change of control, Ofcom must review the effect on various programming and production requirements, including original and regional production, and may vary the licence to ensure that the new owner cannot cut back on what the old owner actually delivered. The aim is to ensure that the change of control does not in itself lead to a reduction in the quality of the service.
These strengthened provisions were introduced in response to the ITC's review of the UK programme supply market, which in turn followed concerns in this area raised by my noble friend Lord Puttnam, to which he referred this evening, and by his colleagues on the Joint Scrutiny Committee on the draft Bill. I draw the Committee's attention to the fact that the Government have changed their position in the light of the committee's work and the Bill's progress in the other place.
The ITC's excellent report was published towards the end of last year, and the Government announced shortly afterwards that they had accepted practically all of the ITC's recommendations. As a result, over 60 amendments were made to the Bill in another place. I hope that the Committee will agree that this substantial body of amendments has vastly improved the Bill. They also indicate that the Government have kept an open mind about improvements to the original draft measure.
As well as the specific powers I have mentioned, the Bill preserves for Ofcom a general right under the Broadcasting Act 1990 to vary a licence, having given
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the holder a reasonable opportunity to make representations. So Ofcom may at any time alter the original and regional production requirements, following consultation with the licence holder. The level of the independent production quota is set by the Secretary of State by order, so Ofcom does not have the power to alter this; nor would it be able to do so under the proposed new clause in Amendment No. 200, unless there were further changes.
I hope that I have reassured the Committee that we take production and programme-making very seriously and have made provision in the Bill to ensure that the broadcasters deliver. As the noble Lord, Lord Peyton, said, we must now trust Ofcom to do its job, to set the right targets for regional and original projects, to review them as appropriate and to take action where necessary. Ofcom has the tools to do that and to ensure that the UK has a healthy programme production market able to deliver a wide range of high-quality programmes to the home audience and better able to compete in the global market.
The Bill already contains more than 400 clauses. It is so long because it is a comprehensive measure set out through consultation and through the benefit of work by many noble Lords in the past few months to produce the right structure for the industry. I hope, therefore, that it will be recognised that the amendments are not necessary and that those who moved them will feel able to withdraw them.
6.30 p.m.
Lord McNally: I am growing increasingly worried about the love affair between the Government Front Bench and the noble Lord, Lord Peyton. Since the Government Whip is interested in speeding up passage of the Bill, would it not be an idea to invite the noble Lord, Lord Peyton, down to the Front Bench?
Lord Peyton of Yeovil: What a suggestion, and from what a source. Indeed, how should you spell source? The noble Lord has excelled himself. I am in an opposite camp to the noble Lord, as he reminds me. The noble Lord tends to favour pumping up already large Bills to make them even more obese and gross. I am thoroughly against him in that regard. It is a very respectable point of view. If the noble Lord, Lord McNally, makes a point of rebuking me, I shall hand back those rebukes with interest.
Lord Brooke of Sutton Mandeville: Before the amendment is withdrawn, I intervene extremely briefly. I shall not talk about ownership, as the Minister advised us in relation to Thursday or possibly the small hours of this morning. My noble friend Lord Wakeham, who chaired the relevant Cabinet committee in 1993–94, will recall that, as the Minister, in making propositions I was in exactly the same position as the noble Baroness, Lady Blackstone, and the noble Lord, Lord Davies, in having only one ally in the forum in which we discussed matters. The noble Lord, Lord Peyton, was not on the committee. Had he been, no doubt he would have been my ally.

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My noble friend Lord Renton of Mount Harry will not be present on Thursday. I was, in some senses, the godparent of Channel 5 in that, as is probably reasonably well known, there was what I shall neutrally call a debate between the DTI and what was then the DNH on whether Channel 5 ought to be brought into existence in line with the pledge that the party had previously given. It was determined that it should be brought into being. Much credit should go to my then special adviser, who now runs a venture capital company in the media field. As the godparent, I have a great deal of sympathy with the thoughts that underlie the relevant parts of the amendments proposed by my noble friend.
Viscount Falkland: We all love the noble Lord, Lord Peyton of Yeovil, no less than the noble Lord, Lord Davies of Oldham. I agree in general terms with what the noble Lord, Lord Peyton, said. But we are all human beings, and, human nature being as it is, we all favour our own amendments. We hope—vainly, often—to have our proposals included in the Bill. It would be unnatural of me not to think that the Bill should specifically improve the prospect of Ofcom's job being simpler, not more complicated.
I understand from the reply of the noble Lord, Lord Davies, that there are already provisions in the Bill to deal with the very particular points about Channel 5 and the prospect of an increase in audience share. I am sure that, if I had riot raised those points in my amendment, I would have been viewed as very remiss by the executives of Channel 3 and Channel 4, to name but two broadcasters. There are distinct fears that a situation such as the one that I described will introduce great problems and complications to the television industry. After all, radical concepts have been introduced by the Government in this Bill—for example, widening ownership opportunities. The noble Lord, Lord Renton of Mount Harry, has introduced a very interesting, practical idea. I share with him the view that there may he a need to include in the Bill an indication to potential purchasers of such channels the public service obligations that they will face in certain circumstances.
Having said that, it has been a very interesting debate. I thank all those who have taken part. I suspect that several of the points made will stimulate interest outside the Committee. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 274 agreed to.
[Amendment No. 200 not moved.]
Clause 275 agreed to.
Clause 276 [Appointed news providers for Channel 3]:
Baroness Buscombemoved Amendment No. 202:
Page 249, line 11, leave out paragraphs (a) and (b).
The noble Baroness said: I shall speak also to Amendments Nos. 203 to 206 and to the Question that Clause 343 stand part of the Bill. As many Members of the Committee are aware, Clauses 276 and 277 deal with establishment of the system requiring Channel 3
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to appoint a nominated news provider. Clause 343 proposes ownership restrictions on that nominated supplier. The combined effect of the amendments in the names of the noble Lords, Lord McNally and Lord Gordon of Strathblane, and myself would be to amend the current system requiring the Channel 3 news supplier to be selected only from those companies granted nominated status by the ITC and to do away with ownership restrictions on the Channel 3 news supplier.
Like the Government, we recognise the importance of a high-quality news supplier on Channel 3 that is able to compete with the BBC and Sky. That is why we support retention of the content aspects of Clause 276. Amendment Nos. 202, 203 and 206 leave in place the obligation on Channel 3 to supply a national news service that can compete with those of other national operators. They also retain the obligation on the individual ITV companies to come together to appoint a single supplier. In addition, we accept the new requirements contained in the Bill that give Ofcom the power to ensure that the Channel 3 news supplier is properly resourced to fulfil its functions and to give it the final right of approval of the terms of any contract. Taken together with Clause 275, those are powerful conditions designed to maintain quality and competition in news supply on the UK's terrestrial broadcasters, and we support them.
The introduction of new powers in Clause 276(3)(d) giving Ofcom final approval of the Channel 3 news contract obviates the need for the regulator to grant nominated news status to bidders. Under the current system, suppliers seek nominated status prior to bidding, and the regulator is able to check their financial bona fides at that point. However, they have no say over whether the terms of the final contract are likely to deliver the quality of service that Parliament expects of Channel 3. The shortcomings of the system were exploited to the full in the previous Channel 3 news bidding round by a competitor consortium to ITN, which consisted of Sky News, UTV, CBS and Bloomberg. That competitor consortium, having been granted nominated status by the ITC, bid very low for the contract. As a result ITN was forced to bid very low and the price of the contract was considerably reduced. The ITC had no final say over the terms of the contract.
However, the Government have now introduced measures in the Bill which will prevent that situation recurring. Ofcom will issue guidance on what it believes to be appropriate terms for the contract and will have final approval of the contract. As such, retention of the requirements on Ofcom to consider applications for nominated status is unnecessary.
At the time of the next bidding round, Ofcom could find itself considering applications for nominated status from three or four consortia. What is the point of obliging it to go through the painstaking progress of examining whether or not to award nominated status to each one, including ITN, when Parliament has granted it the power to examine and approve the terms of any contract struck between Channel 3 and its chosen supplier? This, we believe, is a pointless,

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regulatory burden for a regulator that already faces an in-tray of epic proportions. Our amendments would sensibly do away with it.
Amendments Nos. 204 and 205 propose that the Secretary of State should not only have the power to repeal Clause 276 by order but also to modify it. At present, the Bill proposes that the Secretary of State may repeal Clause 276 in its entirety. This seems to us to be something of a nuclear option. As I pointed out, there are content elements of the clause that Ofcom may wish to retain for some time.
I turn now to the main issue: the question of ownership of Channel 3 news supplier and our opposition to Clause 343 standing part of the Bill. This amendment would remove the Government's current proposal to limit any company's shareholding in ITN to 40 per cent. We oppose this clause because we believe that its effect is to inflict significant damage on ITN and in particular its ability to secure investment. It is also in complete contradiction of the Government's general policy, which we on these Benches support, of liberalising ownership where possible and where there are strong content rules and a strong competition law regime in place.
There are detailed provisions in the Bill which safeguard the quality of ITV's news output, whoever owns its supplier. These rules are so extensive that even the joint scrutiny committee, not generally a friend of much of the Government's ownership liberalisation, concluded that,
"we are not convinced that the retention of the nominated news provider provisions for Channel 3 provides a safeguard for the quality and impartiality of news on ITV that could not be provided by licensing and networking arrangements".
The committee went on to recommend an early review by Ofcom of the ownership aspects of this issue.
I know that for many of Members of the Committee this may seem something of an esoteric issue, but for ITN and its employees it is one with hard edged and very real consequences. The imposition of a fragmented ownership structure makes it more difficult to secure shareholder agreement and investment. Perhaps this can be best illustrated by reference to the example of the ITV News Channel. This 24-hour news channel was originally named the ITN News Channel. It was set up by ITN shareholders as a competitor service to Sky News and BBC News 24. However, as noble Lords may imagine, the 24-hour news market is not a very profitable one and after a relatively short period of time a number of the news channel's shareholders wanted the service to close down. However, Carlton and Granada, the main shareholders in ITV and ITN's biggest client, could see a real value in keeping the service on air. So they increased their shareholding in the channel to keep it afloat.
In the wake of the recent war, the wisdom of this decision has been borne out. ITN has been able to maximise the value of its coverage of the war by screening full 24-hour coverage on the ITV News Channel. This has been good for its staff and correspondents who have had increased opportunities
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to get their material on air. It has been good for viewers who have had greater access to exclusive ITN reporting and a wider choice of 24-hour news channels; and it has been good for the quality of news in the United Kingdom in general as it has increased competition with Sky News and BBC News 24.
As this example demonstrates, allowing businesses the freedom to alter their shareholdings in order to maximise investment can be the difference between success and failure. In an increasingly competitive media market, the Government's proposal to limit the maximum shareholding in ITN of any single company to 40 per cent is likely to be to the company's detriment. That is clearly the view of ITN, whose chairman, Mark Wood, wrote in a recent Westminster media forum publication that the ownership cap,
"could undermine ITN's future commercial development, hampering the company's ability to forge new partnerships and closing off the potential that all other commercial media companies have to merge with other companies or for shareholders to increase their stake".
If the Government are prepared to rely elsewhere on content rules as the safeguard for liberalisation of media ownership, there is no reason why they should treat this area any differently, especially as the content rules on Channel 3 news in this Bill are more explicit and tougher than those currently in place.
On these Benches we share the Government's commitment to retaining competition in the news supply market in the UK but disagree profoundly with the way in which they propose to achieve it. Restricting ITN with burdensome ownership rules that will hamper its ability to secure investment will weaken competition in the news supply market and ultimately be to the detriment of viewers and democracy as a whole.
In another place, the Minister, Dr Howells, intimated that the Government would be relaxed about Ofcom reviewing this matter as an early priority. Indeed, the Government have introduced a sunset clause at Clause 277 which would allow repeal of the current system. However, given the extremely heavy workload that Ofcom already faces, I urge Ministers not to pass the buck for this one but to have the courage of their convictions on media ownership and support change now. I commend these amendments to the Committee. I beg to move.
6.45 p.m.
Lord McNally: We on these Benches are very supportive of the amendments and the way in which the noble Baroness put them forward. As she emphasised, they are positively "Peytonite" in their intent. Although the noble Lord is not in his place, I am sure that he hears the praise. I feel him with us now.
I make two brief points. First, without a doubt, when ITV was brought in in the mid-1950s its two greatest achievements were its regional reach and ITN. ITN transformed the way in which television news was presented. In particular, "News at Ten" became the great, popular flagship news programme for almost 20 years. The noble Lord, Lord Renton of Mount Harry, indicated mea culpa about the 1990 Act. One of its

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most disastrous effects was the change of ownership of ITN and the way that ITN related to ITV. I cannot understand why the Government do not follow through the logic that a single ITV would nurture its own news programmes just as Sky nurtures Sky News and the BBC nurtures BBC News. To insert these fiddling restrictions is beyond comprehension.
To have BBC with its 24-hour news channel support, Sky with its 24-hour news channel support and ITN with its 24-hour news channel support would give us good, competitive programming. But, as it is now structured, ITN will be at a permanent disadvantage. As the noble Baroness indicated, at the time of the Iraq war, when the owners injected more money into the service, it demonstrated again that the basic spirit of ITN is still there. I believe that if the Government were to accept the amendments and to allow ITN freely to link up with ITV in a productive way, ITN would quickly recapture all its old glories. We strongly support the amendments.
Lord Peyton of Yeovil: Despite the noble Lord's inability to recognise my presence just now, I should like to repay him in a most generous way by saying that I entirely agree with everything he said—that I supported my noble friend's amendment—which I heard.
Lord Gordon of Strathblane: I, too, support the amendment. For the life of me I cannot understand where is the public interest in removing control of ITN from the ITV companies. After all, ITV founded ITN—for the first 35 years it wholly owned it--and it was one of the least satisfactory aspects of the 1990 Act that removed the control of ITN from ITV. If you trust people to run a franchise, surely you will also trust them to produce what is obviously their flagship programme—that is, their news programme.
In any event, they will already be producing their local news programmes. Do you trust them to do that? Or should we get in a nominated news provider—with no one holding more than 20 per cent or 40 per cent of that—for local news? The whole thing is daft.
As it is a relic of the 1990 Act, I honestly cannot understand why the Government do not go the whole hog and, instead of saying, "We look to Ofcom to consider the matter in the near future", get rid of it now. Let us get back to the good old days when ITV ran ITN, and ran it very well.
Two red herrings have been brought in. One of them, introduced by the ITC, is that somehow there is a danger of foreign ownership. Let us be quite clear, the only people in favour of foreign ownership are on the Government Front Bench and the Opposition Front Bench. No one else in the House will vote for it. When it comes to a vote—as it will at Report stage—I am confident that the Government will be defeated. I shall be very proud to be one of those who defeat them on the issue of foreign ownership. It is the Government who are raising the horror of foreign ownership, not the rest of the Committee.
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In any event, the ITC that is now raising that as a spectre, as the noble Baroness pointed out, is the selfsame ITC that approved a bid from a consortium which was predominantly foreign owned. How hypocritical can you get?
The only issue that genuinely worries me concerns Channel 4. It is true that Channel 4 is an extremely important news outlet for ITN. It is ITN's flagship programme. It is probably the best broadcast news programme—possibly because of its duration of close to a full hour. It is in ITN's own interest to ensure that "Channel 4 News" remains in that pre-eminent position.
Perhaps I may quote a vested interest in reverse. Like all other radio companies, most of my companies subscribe to IRN. In my day, we handed over our Independent Radio News international news gathering to ITN because we had so much confidence in it. I do not believe that there is any danger of it deliberately withholding any news in order to advantage a television company against a radio company or Channel 3 against Channel 4. That is beyond comprehension. I invite the Government to accept the amendment.
Viscount Astor: My Amendment No. 293 is grouped with these amendments and is very similar to the amendment moved by my noble friend.
As the noble Lord, Lord Gordon, reminded the Committee, the 1990 Act introduced the concept of a nominated news provider for Channel 3 and imposed the restriction on its ownership that no company could own more than 20 per cent. Interestingly, these rules were not designed to prevent the ITV companies—all 15 of them at the time—from owning ITN in its entirety but to ensure plurality of ownership at a time when spectrum scarcity created a high barrier to entry into the television market. As we know, consolidation within ITV has meant that the ITV companies themselves are no longer able to own, under the current rules, the majority of ITN.
The concept of a nominated news provider, with strict rules governing its ownership, is outdated. It deters investment in ITN and should be scrapped. It undermines the prospects for the maintenance of a strong independent third force in the supply of news in this country alongside the BBC and Sky. Unless it is changed, we run the risk that ITN may lose the Channel 3 news contract. This would be the death knell for the company. As my noble friend said, in the last round Sky and Bloomberg bid for that contract. Allowing ITV to own its own news provider would be far more likely to secure the future of a third force in this country's news supply.
There are clear obligations on Channel 3 to provide national and international news of high quality in peak time, and on Ofcom to guarantee its quality and to ensure that that news supply will occur in this country. ITV would have an incentive to maximise the efficiency of its news operation by continuing existing news contracts with other broadcasters such as Channel 4.

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We should also note that under the Government's proposals the Bill would grant Ofcom a new power to approve the terms of any new ITV news contract to ensure that the ITV news supplier is adequately resourced to meet all the legislative requirements and any guidelines. This is a power that the regulators have never had in the past. In almost every other country the main commercial broadcasters—for example, CBS, NBC and ABC in America, Channel 9 in Australia and TF1 in France—are allowed to own their own news provider. Single ownership would provide certainty for ITN and help to guarantee investment going forward.
I have read very carefully the debates on the Bill in another place. In all those debates, the Minister singularly failed to offer an adequate reason why the ITV companies should not be able to own their nominated news provider.
Lord Bragg: I support the amendment moved by the noble Baroness, Lady Buscombe. Some of the arguments made in regard to the ownership of ITN bear repeating. As has been said by many noble Lords—it should be repeated in Hansard as often as possible—ITV is the only broadcaster prevented from owning its own news provider. BBC News is at the heart of the BBC and Sky News is at the heart of Sky. I have no idea what ITV has done to be so unjustly and unfairly penalised. It has not been brought to my attention in any argument offered by the Government why it is being so uniquely penalised.
Its record in news is a good one. It showed its true colours—it needs stabilisation in the evening, which is coming to fulfilment—in its coverage of the Iraq war, as has been said and deserves re-saying. At the time of the biggest advertising recession in history, another £6 million was put into its news. It was broadcast at nine o'clock and sometimes attracted 10 million viewers. As has been said by the noble Baroness, Lady Buscombe, and others, when the 24-hours news coverage looked as though it was going down the tubes, ITV bought it. Granada and Carlton put more money into it and increased its audiences by 180 per cent. That is evidence of good intent, good management and good news gathering.
If ITN ownership should revert to ITV—we have heard the mea culpa of how it slipped out of the grasp of ITV, which should also be a part of the argument—there will be a huge opportunity to allow ITV's regional news teams to work more closely with the ITN team in a £100 million news machine. The current ownership rules make this very difficult. The semidetached status of ITN makes it more difficult for good regional news reporters and producers to migrate from the regions to national news and for there to be cross-play between regional and national news.
The ownership cap was responsible for a bidding process that has allowed Sky to push down ITN's budget. The proposed 40 per cent cap on ownership—which I cannot understand—is counter-productive.
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Far from projecting a third news force it allows Sky to take control of more of ITN than any individual ITV company.
We need an ITN which is a big public service news gatherer and broadcaster, as the noble Lord, Lord McNally, said. That is in sight if we accept these amendments and slim the Bill. Very rightly, the Bill is careful of many of the BBC's public service interests and Sky's interests. ITV's public service interests sometimes seem far less well protected and yet it is a big public service provider which gives massive private investment to public service projects and is watched by a great number of people in this country. I have no doubt that if the amendments were accepted it would strengthen ITV, it would strengthen ITN and it would strengthen public service news. I urge the Government to take them on.
7 p.m.
Lord Crickhowell: I am in the happy position of agreeing with almost everything that has been said. Certainly I agree with the speech that has just been made. My noble friend Lady Buscombe will be delighted to hear that I agree also with everything said in her admirable speech. She will be less happy to hear that I agree with everything said by the noble Lord, Lord Gordon, but that takes us to matters that we shall be debating later.
As I listened to the noble Lord, Lord McNally, who spoke in such dogmatic terms, I wondered why we in the Joint Committee took such a cautious view. Whatever the reasons, the world has moved on. ITN's performance during the war in Iraq, of which it provided admirable coverage, showed the quality of its production. That and the state of the market the importance of not handicapping companies with ridiculous rules about sources of capital—together provide compelling reasons for the change that my noble friend proposes.
Lord Lipsey: My noble friend Lord Bragg said that the arguments in favour of the amendment bear repeating. Nevertheless, I shall forbear from repeating them and say one word: viewers. If the Government had brought before your Lordships or the other place a convincing rationale for believing that viewers get a better news service as a result of the existing arrangement, I would stand behind them. There are compelling reasons to think otherwise. Why should companies put a lot of money into something when they can own only a maximum of 40 per cent of it between them?
The integration of regional news with national news is by far the biggest weakness of bulletins at the moment. It can partly be tackled under existing structures but not properly. Some of us favour the amendment because we want better competition in news for viewers—not to please the companies, which are mere instruments, but to please the people we ultimately service. The Government have got to be

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much better at producing a rationale for ignoring what, on the face of it, seems to be in their overwhelming interests.
Baroness Howe of Idlicote: I have listened with great interest to what has been said and agree with every single word. The noble Lord, Lord Crickhowell, questioned why the pre-legislative committee had been a little cautious. Perhaps the answer is that we have had time to reflect. Certainly everything that I have heard and read has more and more convinced me that the amendments of the noble Baroness, Lady Buscombe, are the right way to go.
It is constantly leaked about the place that the Government are not going to give way on anything in the Bill. I hope that they recognise the strength of feeling in the Committee and have had time to think more carefully.
Lord Bernstein of Craigweil: As someone who works in ITV, it seems to me totally bizarre that it should be the only major television channel in the world that cannot own its own news service. My experience of working within a consortium in the broadcasting industry is not a happy one. To persuade all shareholders to agree a policy, to change and sometimes to take a risk is extremely difficult. I am sure that the Government's proposed structure for ITN will put it at a disadvantage in competing with other news services.
Baroness Blackstone: It is not true—as was said by the noble Baroness, Lady Howe—that the Government are resisting everything. They have made a number of concessions and will be making more later today.
Noble Lords: Oh!
Baroness Blackstone: So the noble Baroness should withdraw that remark.
There is obviously strong feeling in the Committee on this particular group of amendments. I must disappoint noble Lords because this is not one that the Government will concede.
If Amendments Nos. 202 and 203 were agreed, there would be no nomination system for news. ITV would be free to appoint any news provider that it chose but it would have to meet the same quality and funding requirements that the current system sets out. Amendment No. 204 would allow the modification rather than the repeal of the requirement in Clause 276. We do not accept that all the changes suggested are appropriate at present, although we acknowledge that there may come a time when part or all of what some Members of the Committee are advocating will become appropriate and be acceptable.
We are already loosening the ownership restrictions, moving from a 20 per cent to a 40 per cent limit to encourage more investment and more dynamic management. The new limit means that instead of a minimum of five owners, ITN can have three.
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As to our arguments for retaining the other restrictions at this stage, TV is a vital source of information and opinion. Viewers think of TV news as trustworthy and impartial. We want to make sure that viewers continue having a choice of high-quality, editorially independent national news from free-to-air television. The nominated news provider system ensures that ITV News, as the main competitor to the BBC, will play a major role in contributing to that choice.
Lord Gordon of Strathblane: I do not believe that any Member of the Committee has suggested anything different. Surely the Minister is not suggesting—if she is, she is sadly wrong—that ITN was anything other than that prior to 1990, when it was wholly owned by ITV.
Baroness Blackstone: No, I am not. ITN has always been an extremely good and reliable news service, watched by a great many people. That does not mean that I should accept entirely my noble friend's arguments.
Licence obligations and other content rules in the Bill can go a considerable way to maintaining high standards but the news provider requirement for Channel 3 provides an additional safeguard in securing a news service that is independent from ITV and the commercial pressures that it may sometimes face.
The Joint Committee agreed that we were right to include the nominated news provision. I am sure that the noble Lord, Lord Crickhowell, accepts that is so and that I do not need to quote the Joint Committee.
As to Amendment No. 293, the Bill already proposes to relax the ownership limit from the current 20 per cent ceiling. We recognise that the limit is inhibitive to investment and management. The newly relaxed limit will provide ITN's ownership and decision-making structure with a greater degree of flexibility and dynamism. Ownership limits are still necessary. A 40 per cent limit on Channel 3 licences, whether alone or in combination, will ensure that the service is independent of the licensees but it will not force any of the existing shareholders to disinvest. The limit merely reflects the current position, which is that five owners hold 20 per cent each. Two of those owners are ITV companies. At the same time, the 40 per cent figure is a good balance between the push for good regulation and securing independence in the news provider.
On Amendments Nos. 205 and 206, we are not suggesting that the current arrangements will remain in place for ever. On the contrary, as the TV market develops that should ensure that the BBC has sufficient competition and the need for ITV to have a separately-owned news provider will be removed.
The Bill already gives the Secretary of State power to repeal the nominated news provider system altogether or to change the limits on ownership of the provider. That means that we will be able to change the restrictions on ownership of a nominated news

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provider as the environment changes. To this end, Clause 384 requires Ofcom to review a number of provisions including those relating to the nominated news provider, and then report the conclusions to the Secretary of State. That report must set out Ofcom's recommendations as to how the Secretary of State should exercise her powers to amend the provisions in the Bill relating to news provision.
The first review must be carried out within three years of Clause 384 coming into effect— in other words, quite soon—but there is nothing to prevent Ofcom conducting a review sooner than that. If it were persuaded in the course of a review that an alternative system of ownership structure would safeguard the quality, impartiality and investment in news on ITV, changes may be made sooner rather than later. The Joint Committee also recommended an early review and we believe that that is a very sensible recommendation. No doubt Ofcom will consider it carefully.
I say to the noble Lord, Lord Crickhowell, that I do not believe, as he claimed, that the world has changed so dramatically in the past six or nine months since the committee, of which he was a member, reported. In line with that thinking and after listening to the arguments which have been put this evening, we will look into the possibility of increasing flexibility for the future. One possible avenue is, as Members of the Committee have said, to separate the nomination process and ownership provisions from those aimed at maintaining high quality and competition in news provision and of securing the adequacy of the resources of the news provider. If that proved to be appropriate, that would keep open for the future the option of removing part of the news provider system that requires the nomination of news providers without needing to sweep away altogether the other protections built into the system. I make one concession and that is that we will consider this matter further and bring forward amendments at Report.
To conclude, we acknowledge that the nominated news provider system may require changing in the future, but we do not believe that we have quite reached that point. ITV is going to face very considerable changes with the removal of the ownership rules which currently prevent a single ITV. We want to wait for Ofcom to be able to assess properly the new environment when there may be a single ITV, and make recommendations that are based on Ofcom's research and expertise. For the time being we believe that the system and the ownership limits associated with it will serve to buttress the quality and the independence of the ITV news service, which I believe everyone in this House wishes to see. We believe that that is particularly important at this time as we reposition our media against the newly deregulated backdrop.
Lord Bragg: Before the Minister sits down, perhaps I may ask a question and make an observation with regard to her response as to why the noble Lord, Lord Crickhowell, might have modified his position.
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The Minister asked what had changed so dramatically in the world in the past six or nine months. A great deal has changed, including ITN's ability to show its true colours in providing news at the highest possible level in the public service fashion.
Sadly, I did not hear an answer to the question as to why ITV is so uniquely penalised in being prevented from owning its own news provider unlike any other major company in the world. It means that ITV is shackled; the ITV regional news is in a straitjacket and ITN is hobbled. I still do not understand why it should be so uniquely penalised. It is a very straightforward question and I would love an answer.
Baroness Blackstone: I do not accept that ITV is hobbled, shackled and uniquely disadvantaged, as my noble friend suggests.
Lord Bragg: With the greatest respect to my noble friend—
Baroness Blackstone: May I finish my answer? I want to be as responsive as I can to my noble friend. I believe that he is using purple prose. I know that he feels very strongly about this matter. What I have said, and made absolutely clear, is that the Government are ready to look at change here. The only matter which divides us is when we do it. Some who have spoken in the debate want change immediately despite the fact that there are likely to be rather sweeping changes as far as ITV is concerned, as opposed to those who believe that we should hold on for a short period, look at the impact of that change, allow Ofcom, with all its expertise, to undertake a review, and then make a change. That seems a sensible and cautious way forward and exactly what the noble Lords, Lord Crickhowell, Lord Puttnam and other members of the Joint Scrutiny Committee proposed only a few months ago.
7.15 p.m.
Viscount Astor: The Minister's response to this group of amendments is enormously disappointing and unsatisfactory. She has given a huge hostage to the future because in effect she said that ownership of ITN affects the regulation by Ofcom of the nominated news provider. In effect, she has linked ownership with regulation. It seems to me, as in many other parts of the Bill, that the Government have sought to separate those two things. She has implied that ownership, whether 20 per cent, 40 per cent, 80 per cent or 100 per cent, will somehow affect the regulation of the nominated news provider.
I believe all Members of the Committee who have spoken reject that argument. The Minister has provided no evidence. She has failed to provide any evidence as to why the Government's position is either in the public interest or the viewers' interest: it is simply not there.
It leads one to wonder why the Government are being so stubborn on this issue. The Minister said that the matter might be considered in the future. That begs

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the question as to whether the Government have some political reason that we do not know about and whether they might have some kind of lever. I hope that is not the case. Unless the Government rethink this matter they will get into very serious trouble because their defence seems to be contrary to all the other principles that we have argued throughout the Bill.
Baroness Buscombe: I thank the Minister for her very full response. The Minister is right in saying that there is strong feeling in the House. My noble friend Lord Crickhowell had the support of nine Members of the Committee in an earlier amendment. I also have the support of nine Members who have spoken eloquently in favour of these very important amendments.
The Minister said that these changes are not appropriate at present. We believe that that says it all. It shows that it is not a principle at stake, but a question of timing. We simply cannot understand what is wrong with making these entirely sensible and appropriate changes now. What are the Government afraid of?
My noble friend Lord Astor spoke of a lever. I have my own thoughts about arm-twisting. There is no clarity to the Minister's argument. There are powers in the Bill to repeal restrictions on ownership rules, but why not now?
Perhaps I may repeat very quickly some of the words of Members of the Committee. As the noble Lord, Lord McNally, said, a single ITV would nurture its own news programme. That is what we are looking for. As the noble Lord, Lord Gordon of Strathblane, said, the current set-up is daft. I entirely accept what he said as regards Channel 4. In our view there is nothing for Channel 4 or others to be afraid of in these proposals.
As my noble friend Lord Astor said, single ownership would provide certainty for ITN. That is what we are looking for. The noble Lord, Lord Bragg, asked again: why should ITN be so uniquely penalised? I do not believe that the Minister gave an adequate reply. The ownership cap on ITN is not in the best interests of the company. In an increasingly competitive news market, ITN needs the flexibility of ownership that will allow it to attract investment so that it can develop and provide robust competition to other news providers.
As Members of the Committee have said, ownership restrictions act as a disincentive to the company's shareholders to invest in the long-term future of the company, making strategic decision making difficult. It also prevents ITN being able to exploit the potential of mergers and acquisitions. I could go on. We believe that the thinking of the Government is entirely inconsistent with their policy on liberalisation of ownership, coupled with strong content rules and a strong competition law regime in place.
I am grateful to the Minister for her reference to having further thought with regard to aspects of these amendments. I look forward to seeing the government amendments that will be tabled on Report. However,
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I must say that the strength of feeling from all side of this Committee confirms to me that this is an issue on which we shall most probably divide, and win, at Report stage. But, for now, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 203 not moved.]
Clause 276 agreed to.
Clause 277 [Power to repeal Channel 3 news provider provisions]:
[Amendments Nos. 204 and 205 not moved.]
Clause 277 agreed to.
[Amendment No. 206 not moved.]
Clauses 278 to 280 agreed to.
Clause 281 [Regional programme-making for Channels 3 and 5]:
Lord Puttnammoved Amendment No. 207:
Page 253, line 1, leave out "suitable" and insert "substantial"
The noble Lord said: In moving Amendment No. 207, I shall speak also to Amendments Nos. 212, 216 and 221, and so provide a real opportunity to crack on. The Joint Scrutiny Committee was unanimous in its view that "substantial" is a more suitable word than "suitable" because "suitable", we felt, was not sufficiently "substantial".
Why did we come to that belief? At the time we were trying not to be timorous. What has surprised us a great deal is the response from the Government to what we thought was a very sensible suggestion. Page 38, paragraph 117, of the Government's response states that,
"we do not consider that amendment to the draft Bill is necessary. There is no reason why a 'suitable' amount cannot be a 'substantial' amount, and, indeed, we would expect it to be so. However, the current wording provides for flexibility so that targets can be maintained at appropriate levels".
The reason for the amendment was to ensure that appropriate levels were substantial. I beg to move.
Viscount Falkland: On these Benches, we support what the noble Lord, Lord Puttnam, has just said. The word "suitable" is extremely sloppy, weak and subjective. Should a club decide that it wants a certain standard of dress or behaviour, it refers to "suitable" behaviour. Who knows what the behaviour will be? The wording needs to be stronger and "substantial" seems to be the appropriate word in this case. I cannot see anything wrong with it; it seems to be utterly appropriate.
Lord McIntosh of Haringey: I am delighted that these amendments have been moved so, what the noble Lord, Lord Kingsland, would call, telegraphically. The amendments are about words, not policy. The clauses have been strengthened as a result of the ITC review. They now clearly show our intent that the preservation of regional programming and programming for the regions should be a high priority.
I ask two questions of my noble friend Lord Puttnam because I do not think we are disagreeing about the importance of the issue. Why cannot

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"suitable" or "sufficient" be substantial? There is no reason why they cannot. Is there not a risk that "substantial" or "significant"—the words proposed by the amendment—would be unsuitable or insufficient? It would be very undesirable to have something which could be unsuitable or insufficient. There is no risk in the Bill, as drafted. There is risk in the amendments.
Lord Puttnam: I honestly think that the answer was in previous conversations in Committee when we were talking about the difference between floors and ceilings in respect of quotas. The whole point of the word "substantial" is to ensure that there is a sense of reaching for something entirely worthwhile. The word "suitable" is de minimis and can easily end up in avoidance. Frankly, I think that the Government are being silly. Here was a slamdunk for them to win a great deal of goodwill and move matters along. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 208 to 224 not moved]
Clause 281 agreed to.
Clause 282 [Regional programmes on Channel 3]:
[Amendments Nos. 225 to 233 not moved]
Clause 282 agreed to.
[Amendment No. 233A not moved.]
Clause 283 [Regional programme-making for Channel 4]:
[Amendment No. 234 not moved.]
Clause 283 agreed to.
Clauses 284 to 289 agreed to.
Schedule 11 agreed to.
Clauses 290 to 294 agreed to.
Lord Evans of Temple Guiting: I beg to move that the House be resumed. In moving this Motion, perhaps I may suggest that Committee stage begin again not before 8.28 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Europol (EUC Report)
7.28 p.m.
Baroness Harris of Richmondrose to ask Her Majesty's Government, in the light of the report of the European Union Committee on Europol's Role in Fighting Crime (5th Report, HL Paper 43), what steps they are taking within the European Union to ensure that the Europol Convention is amended to ensure that Europol has the tools to operate effectively and is properly accountable, particularly to national parliaments.
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The noble Baroness said: My Lords, I should first declare my interest as a former member of the Police Negotiating Board and of the Service Authority for the National Crime Squad.
I am very glad to have the opportunity to open this rather short debate, not only to draw attention to my sub-committee's recent report, Europol's role in fighting crime, but to highlight the role of Europol more generally. I am also grateful to the noble Baroness, Lady Stern, and the noble Lord. Lord Wright of Richmond, two extremely valuable members of the EU sub-committee which I chair, who will be contributing to the debate.
Europol is playing an increasingly important role in the EU in supporting the member states in combating a number of forms of cross-border crime, especially serious organised crime and terrorism. Its work deserves to be more widely recognised and understood. It needs to have the tools to enable it to do its job effectively while, at the same time, being properly accountable for its activities.
The focus of our inquiry was a proposal made last year by the Danish presidency for a protocol to the Europol convention designed to extend Europol's remit and streamline its methods of working. As this is a short debate, I shall not describe our conclusions and recommendations in detail. On many of the issues we support the line that the Government have taken and we are grateful for the detailed and positive response from the Government to our report.
There are, however, one or two areas where we would have preferred the Government to have maintained their original stance. I shall give just one example which relates to the role of national units. At present, the national unit in each member state is the sole channel of communication with Europol. The United Kingdom's national unit is the National Criminal Intelligence Service (NCIS) and it is generally regarded as fulfilling that role very effectively. The Danish presidency's original proposals would have allowed exchange of data directly between Europol and a wide range of national law enforcement agencies in addition to the national units. Initially, the Government were totally opposed to that proposal for reasons which the committee found persuasive. They were, however. unable to negotiate its complete withdrawal. Instead they secured the introduction of a number of safeguards, including, for example, a requirement that any communication between Europol and other law enforcement agencies must be sent simultaneously to the national unit. We recognise that compromises have to be made in negotiation and we understand why the Government have shifted their position on this point. Nevertheless, we remain of the view that the existing system is clear and effective and represents the best safeguard for the protection of personal data.
In the time available to me I should like to concentrate on three areas: protection of data exchanged with third countries; the accountability of Europol; and possible future developments,

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particularly the implications of provisions in the draft constitutional treaty currently being prepared by the Convention on the Future of Europe.
First, I turn to data protection. For Europol, like any intelligence-based organisation, information is its lifeblood. Much of this information will necessarily be data about individuals. It is important that Europol should have the ability to handle those data and exchange them with other authorised agencies. But, given the scale and nature of the data involved, it is vital that they should be subject to stringent data protection safeguards. We took the opportunity in our report to comment on the recent agreement between Europol and the United States of America on the transmission of personal data. We scrutinised that agreement in some depth at the end of last year and identified a number of serious shortcomings. Those included: the breadth of the purposes for which data may he exchanged, which goes further than Europol's own remit; the wide range of US authorities entitled to receive Europol data, which include local as well as state and federal authorities; and the lack of information provided about US data protection systems.
That was an extremely frustrating exercise as we exchanged no fewer than nine letters with the Government but secured no change in the agreement, the text of which—it was clear—had been settled before it had been submitted to us for scrutiny. The eventual outcome was that the Government overrode the scrutiny reserve of both Houses. That is clearly not the right way to ensure adequate parliamentary scrutiny of the transfer of data on British and other European citizens to foreign institutions. I hope that lessons have been learnt from that experience and are being applied to the handling of the EU/US extradition treaty, which is currently under scrutiny by Sub-Committee E.
Europol is now negotiating a series of agreements for the exchange of personal data with other countries, primarily the incoming member states, but also others further afield. I am very pleased to say that these are being handled in a much more deliberate and satisfactory way with proper attention to the scrutiny process that allows an opportunity to suggest changes before the agreements are set in concrete. The role of the Joint Supervisory Body (JSB) is absolutely crucial here. The JSB is composed of senior data protection regulators from each member state. It examines any proposals that have a data protection element and delivers an opinion on them. We were critical of the readiness with which the JSB endorsed the Europol/ USA agreement despite what appeared to us obvious flaws, but in general it performs a crucial role. It has made a number of valuable proposals in relation to other agreements and, particularly relevant to this debate, to the data protection provisions of the proposals that we are considering today.
Secondly, I turn to accountability. The more powers that Europol is given and the wider its role, the greater is the need for effective oversight of its activities. The Danish presidency originally proposed far-reaching provisions for oversight of Europol's activities by the
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European Parliament. Those have been somewhat watered down but still represent a useful step forward. Our concern has been that there should be equivalent oversight by national parliaments, which in our view would be particularly appropriate for an essentially intergovernmental institution. We were therefore disappointed that a proposal for a joint committee to oversee the work of Europol, consisting of members of national parliaments and of the European Parliament, was withdrawn. The Government have explained that the reason for that is that such a provision could not be incorporated directly in the Europol convention hut would require a basis in the treaties. We have been reassured to see that the draft constitutional treaty makes provision for the scrutiny of Europol's activities,
"by the European Parliament, together with the national parliaments".
I urge the Government to endorse that proposal and ensure that it is retained in the treaty as the draft is revised.
Finally, I turn to the future and particularly to the impact that the constitutional treaty is likely to have on Europol. As it stands at present the draft contains both good and bad elements. On the plus side, given the difficulty of amending the convention, it makes sense to leave the definition of Europol's structure, operation, field of action and tasks to secondary legislation; and, as I have said, we welcome the provision about scrutiny by national parliaments. But the very broad remit—in effect "serious" rather than "serious organised crime"—would undo much that has been achieved in the current negotiations on the draft protocol.
The other big issue for the future is whether Europol should become "operational"—a European FBI, as some have argued. We did not express a view on that in our report it was outside our remit but we were concerned that any change of that kind should come about only as a result of an informed debate and not as a consequence of a succession of in themselves relatively small extensions to its remit. One recent step in that direction has been the decision enabling Europol to participate in joint investigation teams. The Government are clear that that should not happen and I hope that they will be vigilant in ensuring that Europol does not acquire operational powers in that way.
There is much more that I could say on this fascinating subject but I look forward to hearing the views of other noble Lords and the response of the Minister to the Question.
7.40 p.m.
Lord Wright of Richmond: My Lords, in so far as Europol is involved in helping to reduce counterfeiting of the euro, I must first declare an interest as a consultant to Declared, one of the companies that prints euros for other members of the European Union and is much involved in helping to devise ways to reduce the risks of counterfeiting.

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I shall be very brief. I share the hope of our chairman, the noble Baroness, Lady Harris of Richmond, that the report of our sub-committee, on which I had the honour to serve, will have highlighted the role of Europol. It may nevertheless be worth emphasising again that, as she said, our report does not call for a major new operational role for Europol, at least not before there has been further informed debate. We welcome the Government's assurance in their response that none of the amendments suggested in the Danish presidency's proposals will have the effect of changing Europol's fundamental role as it exists today.
As the noble Baroness said, information for Europol, as for any intelligence-based organisation, is its life blood. Our committee noted with approval that the British Government have been widely commended for their greater readiness to provide Europol with intelligence than any other member state. Several of our witnesses, both during the inquiry and at previous meetings of the sub-committee, drew attention to that. Needless to say, that readiness to share intelligence, particularly on individuals, carries with it the absolute need to observe the most stringent requirements of data protection.
Within those constraints, I hope that the Government can continue to encourage our European partners, and our applicant partners in the future, to keep Europol adequately supplied with the information that it needs if it is to fulfil its role effectively.
7.42 p.m.
Baroness Stern: My Lords, I welcome the opportunity to debate this important report. The noble Baroness, Lady Harris, said how important it was that Europol should be widely recognised and understood. I endorse that. I suggest that the number of people who have heard of Europol is not great, and that the number who have any idea what it does, who is in charge of it, what information it holds on any of us, and what powers it has, is even smaller. So I am glad that our sub-committee found the time, with so many competing demands, to carry out a study of Europol's work and role. If it is of high quality—I think that it is—we owe that mainly to our excellent Clerk and his staff.
In my view, it is more important than ever that matters such as Europol are taken up by the European Union Committee. Europol is a law enforcement agency. The powers of such agencies have increased, as has their capacity to work together and share information since terrorism became a global issue. We have seen many changes in policy on law enforcement, and the bodies charged with ensuring accountability—our committee is one—are few and under considerable pressure.
Law enforcement agencies need to be able to operate and to catch suspects, but unless there is a balance between law enforcement, accountability and individual rights and protections we shall have lost our
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hard-won fundamental freedoms and will be no more secure than we were before. In that context, I echo the appreciation of the noble Baroness, Lady Harris, for the Government's positive response in many of the areas that we raised. I am glad that they share our concerns.
In this short debate, I want to concentrate on data transfer and data protection, and add a few words on the remit of Europol. One area that preoccupied us in the committee was the agreement between Europol and the United States on the transmission of personal data. We worked from the point of view of acceptance of the need for international police co-operation, but not at the expense of,
"adequate protection of personal data",
which, as the report says, is,
"one of the fundamental common values of the EU member states".
The noble Baroness mentioned the shortcomings of the agreement and the frustrating exchange of letters. I would like to examine in more depth the cause of our concern about that agreement with the United States, and the importance of ensuring "stringent data protection safeguards".
That concern was reflected in the evidence given to the committee by Statewatch and Justice. The debate on the US-Europol agreement has continued since our report. We hope that it has contributed to the informed nature of that debate. In its report, The Balance between Freedom and Security in the Response by the European Union and its Member States to the Terrorist Threats, submitted on 31st March this year, the EU network of independent experts in fundamental rights said that,
"the absence of an independent supervisory authority competent for controlling transmission of data by Europol and the treatment of that data by the United States authorities gives grounds for particular concern".
The essence of the matter is the protection of sensitive personal data, how far they can be disseminated and what they can be used for, and whether they can even be sold for commercial purposes. All countries in Europe—the 45 countries that are members of the Council of Europe, which includes the 15 members of the European Union—are bound by privacy and data protection standards as expressed in Article 8 of the European Convention on Human Rights, and in the 1981 Council of Europe Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data. Article 6 of that convention covers special categories of data. It states that,
"personal data revealing racial origin, political opinions or religious or other beliefs, as well as personal data concerning health or sexual life, may not be processed automatically unless domestic law provides appropriate safeguards. The same shall apply to personal data relating to criminal convictions".
The United States is not a party to any of the conventions and is not bound by those requirements. It operates in an entirely different cultural climate as concerns personal privacy. Should anyone doubt that, they should look at the website of—I take but one example—the Florida Department of Corrections.

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There are five databases on the website. Some of them are about people actually in prison, so it could be argued they are not entitled to much privacy, although I would not argue that myself.
I shall take another database—the released inmates database—at random. It is about people who have left prison. I suggest that noble Lords type in "John Smith" to the database. There are 40 John Smiths. Choose one at random, as I did this afternoon. I chose the one whose hair colour was said to be strawberry. I could then find out all his personal details, such as height, weight, birthday, aliases, tattoos—he has a sun tattooed on his right upper arm—criminal record and prison history. He is now living in Orlando, and there is a photograph. I feel uncomfortable even talking about the matter in the House, but the website is there for all to see. It indicates a totally different approach to personal information from that of countries operating within the European framework.
We recommend in our report that Europol should continue to communicate with only the national units, rather than having direct communication with individual police forces and other agencies. It is good to note that the Government agreed initially with that view. However, I understand that the US-Europol agreement contains no such restriction and the data may be shared with law enforcement agencies throughout the United States. I also understand, although the Minister may well be able to correct me on this, that private companies are employed by some US states to purge voter lists of ex-prisoners who have forfeited their right to vote by having been in prison. Thus personal data may spread even more widely. So there is a need for safeguards to be written into the agreements that Europol makes with other countries outside the European framework.
Was our committee happy with the safeguards that currently operate? The noble Baroness, Lady Harris, mentioned the Joint Supervisory Body, which is concerned with protecting the data that Europol receives. Our committee looked at the report made by the Joint Supervisory Body on which the United Kingdom representative is our Information Commissioner. The opinion of the Joint Supervisory Body on the draft agreement between Europol and the United States indicates that it, too, felt some of the concerns that our committee raised. It suggested that the implementation of the agreement should be monitored,
"in view of the law and regulation in the United States of America in relation to the protection of personal data".
It also stressed the importance of compliance with the five principles of purpose: finality; sensitive data; transmission only to competent federal, state and local authorities; deletion of data; and independent supervision. Our committee was not totally convinced by the decision of the Joint Supervisory Body and wrote to the noble Lord, Lord Filkin, on 11th December stating that,
"the Committee is concerned that the Joint Supervisory Body does not appear to have exercised a sufficiently independent judgement of the important data protection issues involved".
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In answer to my own question, the committee was not happy with the safeguards in operation dealing with the agreement.
We say in our report that Europol has a crucial role in supporting national law enforcement authorities. That is its proper role. It is not an actor but a supporter of actors. Some of our witnesses suspected that there was pressure for Europol to become more operational in its own right. We do not favour a move to a more operational role without a major debate across the EU.
However, I note that the Europol annual report for 2002, which has just been published, states that Europol has a goal of reaching a situation in which two-thirds of its activities are operational. Can the Minister therefore comment on the lessons that have been learnt from the signing of the agreement with the United States and on the idea of a Europol that is two-thirds operational?
7.53 p.m.
Lord Roberts of Conwy: My Lords, the Motion rightly highlights three related aspects of the report. The first is the steps that are being taken to amend the Europol convention, following the changes proposed during the Danish presidency.
The report refers to discussions that have been going on in the Europol working group. We hope that the Minister will update us on progress within the group, and possibly beyond, at ministerial level. The noble Lord might also indicate the way ahead, especially in the context of the draft constitution.
This is an appropriate point at which to commend the report and all those who contributed to it. I for one found myself very much in agreement with most of its conclusions and recommendations and I do not think that the Government will dissent from many of them either, but we shall see.
The second thrust of the Motion has to do with the effective operation of Europol itself. That this is important goes without saying in these days when we are all acutely aware of the transnational dimensions of a wide range of serious organised crime. The definition of Europol's scope in terms of the crime it covers is clearly causing a problem. However, the committee is surely right to suggest that the answer lies in a reference to the definition provided by the UN convention.
The problem of Europol's remit is rather more complex in that I suspect that not all the subscribing countries have effective national bodies or units like our own National Criminal Intelligence Service (NCIS) and the National Crime Squad (NCS). It is not surprising therefore that there is a proposal to extend the remit of Europol beyond its present remit of intelligence gathering, analysis and dissemination to a more operational, investigative role and to extend its reach to subsidiary authorities.
There is—rightly, in my view—a general reluctance in the UK to go down that path, for very good reasons, as the noble Lord, Lord Wright, indicated. Such an enlargement of functions would inevitably lead to a

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diminution of concentration on criminal intelligence gathering, which is a vital weapon in the fight against crime. All of the evidence before the committee indicated a high degree of satisfaction with the national structure that we now have in place for dealing with Europol matters. There was no desire to put it at risk by allowing direct access to subsidiary authorities, which might well lead to duplication, confusion and inefficiency.
The issue of data protection is clearly all important to us, as the noble Baronesses, Lady Harris and Lady Stern, pointed out. I do not see how any authority that has data on the individual citizen can properly carry out its duty to safeguard such data if it does not know where, to whom and why such data have been transferred. The problem is particularly acute with data that are given to third countries, including the United States, and the committee is right to advise caution. The system and the transfer of data are too open to abuse; I am sure of that. I tend to doubt whether the Joint Supervisory Body—good as it may be—is adequate to the task.
With regard to the accountability of Europol, that is inevitably related to its financing. As I understand it, the UK contributes about one-fifth of the organisation's costs; the money comes from the Home Office via NCIS. There is therefore a legitimate parliamentary interest in Europol's activities. The same principle would clearly apply to other national parliaments that contribute to Europol's finances.
Is there a similar financial justification for the European Parliament to have oversight of Europol? Funding from the Community has been suggested but, so far as I am aware, it has not yet materialised. Europol remains an intergovernmental rather than a Community institution. Of course, financial involvement is not the only possible justification for parliamentary interest but a financial contribution does carry a duty to ensure that taxpayers' money is well spent. It is up to Parliament to ensure that.
My personal view is that there should be an interparliamentary committee that corresponds to the Europol management board. The board comprises representatives of each member state and the parliamentary committee should be similarly constituted. However, it is difficult to see how many of the issues raised in the report can be resolved until the new constitution of Europe is finalised and the European dimension of policing and the judicial system are settled. I hope that the Minister will be able to throw some light on the Government's view of that European dimension.
Lord Bassam of Brighton: My Lords, I thank the noble Baroness, Lady Harris of Richmond, for securing this opportunity to have a short debate on an important report and providing us with the opportunity to discuss the role of Europol and the current proposals to amend its legal base. This is an issue of great significance to the Government's delivery agenda for policing organised crime and is of great importance to the security and freedom of
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European Union citizens. The Government recognise and greatly appreciate the thorough and very useful work of Sub-Committee F of the European Union Committee in conducting its enquiry on these matters. The noble Baroness, Lady Harris, the noble Baroness, Lady Stern, and the noble Lord, Lord Wright of Richmond, all served on that committee and made useful and valuable contributions. They have reflected those in their observations during this debate.
Nowadays there are no boundaries for organised criminal groups. Ever-increasing global economic integration and the enormous capabilities of modern technology in transport and communications have enabled criminal groups to extend their illegal activities world-wide. A single country can no longer deal effectively with serious cross-border crimes by acting in isolation. The Government recognise that an effective system of co-operation with our partners across Europe is absolutely essential in the fight against trans-national crimes such as terrorism, drug trafficking, illegal immigration and the trafficking of people. Europol has a key role to play in our efforts to protect the safety and security of all EU citizens.
It was established to facilitate the rapid and secure exchange of intelligence on organised crime between all EU member states and to provide sophisticated analysis of its intelligence to add real value to member states' own law-enforcement investigations. Those are the origins of Europol's efforts to tackle international drug smuggling. Our Government are fully committed to Europol. Since commencing its full activities in 1999 Europol has developed considerably in its role as the EU's criminal intelligence agency. Its progress, as noble Lords who have contributed to the debate have said, has been well supported and strongly influenced by the United Kingdom, in particular through our Europol national unit based at the National Criminal Intelligence Service.
As well as the UK's major financial contribution to Europol, which this year stands at some £6 million, we have been at the forefront among member states in terms of sharing with it relevant intelligence and expertise. The director of Europol has singled out the UK on a number of occasions publicly to praise our engagement with that agency. Our law enforcement agencies have also been among the most effective in utilising Europol's capabilities, and the scale of Europol's support to UK investigations continues to increase. More than 500 UK investigations were supported by Europol in 2002, the highest total among all the member states for the second successive year. Recent major successes have been achieved in operations dealing with Internet paedophilia, illegal immigration networks and drug trafficking.
Europol plays a key role in the Government's strategy for preventing and combating the serious cross-border crimes that threaten the safety and security of the people of this country. The Government will continue to play their full part in making sure that Europol lives up to our highest expectations and to its fullest potential.

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I turn to some of the major issues that were raised during the debate and look at some of the thinking and the purpose behind amendments which are proposed over the way Europol works and the Government's own role in negotiations. As part of our commitment to ensuring that our agencies have the tools they need to fight organised crime, we want to see Europol provide an outstanding service in support of their efforts. For that reason we have supported the overall purpose of the current proposals to amend the Europol Convention that are aimed at improving the effectiveness and service delivery of Europol, and strengthening both its openness and accountability.
As the noble Baronesses, Lady Harris and Lady Stern, said, criminal intelligence is the lifeblood of Europol. Together with our partners we have comprehensively reviewed its procedures for the collection, processing, analysis and transmission of operational data to ensure that the organisation can operate effectively. The proposed amendments to the convention will: streamline Europol's arrangements for providing member states with analytical support; improve the flow of valuable information between states and also appropriate third countries and bodies; and enable it to react with greater speed and efficiency in responding to the needs of national law enforcement agencies.
While offering broad support to the Danish presidency during the course of negotiations, the UK has worked hard on a number of specific points to ensure that we get the amendments right. We have been particularly concerned to ensure that the right balance is found between improving the organisation's flexibility and ensuring that adequate data protection safeguards are in place to protect the storage, processing and use of personal data.
Separate amendments to the Europol Convention, agreed by Ministers at the Justice and Home Affairs Council last November, will enable it to participate in joint investigation teams in a support capacity. The UK played a prominent role in pushing forwards the conclusions of those amendments, to ensure that the benefits of Europol participating in joint investigation teams could be realised as soon as possible. By allowing Europol to support joint investigation we will be ensuring that those teams have quicker and better access to information essential to their investigations.
The noble Baroness, Lady Harris, the noble Lord, Lord Roberts of Conwy, and the noble Baroness, Lady Stern, referred to the question of accountability. We fully recognise the need for Europol to be accountable for its important work. However, first and foremost it must remain accountable to the member states of the European Union through the Europol management board and the Justice and Home Affairs Council. It is our strong view that Europol must focus on delivering real results in the areas of crime that most threaten the member states, and avoid spreading its resources too thinly over an overly ambitious range of tasks. There was certainly consensus within Sub-Committee F on that point.
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In the interests of accountability and delivery, the Government pressed hard in negotiations for the convention to be amended so that Europol will be obliged to implement and report on the priority activities identified by its management board and agreed by the Justice and Home Affairs Council.
Our success in pressing this case will ensure that Europol is more accountable to member states for its performance in meeting its top priorities in the fight against organised crime. The Government also recognise the more important role of parliamentary oversight of Europol's work, particularly by national parliaments.
National parliamentary scrutiny is important because it provides an opportunity for dialogue and is a source of independent external advice. These are two areas where this is particularly important. Perhaps I should make reference to those. The first is Europol's core work as the EU's criminal intelligence agency. It is critical that there is exchange and analysis of personal data and also that there is adequate protection of personal data. That must be one of the fundamental common values of the EU member states. Here national parliaments have a key role to play in ensuring that due care is taken to protect the rights of EU citizens in the treatment of personal data. The noble Baroness, Lady Stern, gave effective reflection to that point.
The second and important significant contribution that the UK makes to Europol's budget is well recognised. Here Parliament has a major role on overseeing Europol's work to ensure that the organisation is delivering adequate value for money and that the Government's spend is justified.
Through the process of domestic parliamentary scrutiny of EU business, the UK Parliament is fully involved in scrutinising legislative proposals on Europol's work, as demonstrated by today's debate. The Government genuinely value the work of the scrutiny committees in both Houses and have found it to be most useful as part of the process in the formulation of policy on co-operation with our EU colleagues.
The noble Baroness, Lady Harris, raised an important issue about the relationship between national units and Europol and the importance of the existing arrangements. What is the Government's view on the provisions in the proposed amendments which might allow competent authorities to seek a route around national units and liaise directly with Europol?
Following intense discussion between the presidency and member states on the role of national units, a consensus was reached in support of the current proposals. These will allow each member state to decide for itself whether to permit its authorities to liaise directly with Europol, subject to the prior involvement of the national unit concerned. It is important that member states and Europol can cooperate effectively and quickly and this new provision will provide extra flexibility and efficiency in certain cases.

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We fully recognise the need for adequate protection of personal data exchanges. The UK successfully pressed for additional safeguards to be put in place, requiring that member states allow direct contact only with designated competent authorities and that information exchanged directly must be copied simultaneously to the national unit.
We are satisfied that these safeguards will ensure that national units retain their full co-ordinating role and enable them to maintain an up-to-date overview of the information flowing to and from Europol.
We also laid great store on ensuring that data protection, particularly personal data protection, measures are in place. We want to ensure that the importance of these protective measures are recognised and valued. It has been necessary to revise some of the procedures governing the storage, processing and transmission of personal data by Europol in order to allow it to operate more effectively and efficiently. But the UK Government have pressed the case throughout the negotiations that these changes should not be at the expense of adequate data protection safeguards—a point which the noble Baroness, Lady Harris, made most forcefully and was well supported in that by the noble Baroness, Lady Stern.
We place particular importance on the role of the joint supervisory body of Europol in providing independent and expert advice on the data protection implications of Europol's activities. For that reason, we pressed the presidency to obtain a further opinion from the joint supervisory body on the revised draft of the amendments.
The noble Lord, Lord Roberts of Conwy, asked about the Government's position on the current provisions on Europol in terms of the draft EU constitution. He was asking what changes the Government believe that might bring. At the end of last year, the UK was actively engaged in the convention's working group on freedom, security and justice. The group's conclusions made clear that a new EU constitution should provide a clear, precise legal base for Europol in order to strengthen and clarify its role.
The convention's current draft articles on justice and home affairs include a specific article on Europol. This is a significant improvement when compared to the current treaty. The article goes some way towards the aims of placing Europol at the centre of EU law enforcement co-operation.
However, in our view, the draft article is at present a little open ended. The UK would prefer it to be made clearer in the article that Europol should focus on crime, which is cross border and affects two or more EU member states. We pressed for this in the most recent convention plenary discussion at the JHA and we will continue to do so.
Finally and importantly, current drafts of the article on Europol highlight the role both of the EP and national parliaments in overseeing its work. The
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Government support the inclusion of this and the need for enhanced democratic accountability with regard to Europol's work.
The noble Lord, Lord Roberts of Conwy, was assiduous as ever in budgetary matters and raised the issue of funding. The Government believe that there should be clarity as to Europol's funding. But we are not opposed to the principle of Europol being financed by the Community budget, a principle provided for in the Treaty on European Union. We are clear about avoiding a mixed model of funding, where cash would come from member states as well as from the Community budget. In our view, that would lead to duplication of lines of accountability, which would be unhelpful for the strategic management of Europol.
This has been a very valuable opportunity to discuss Europol. We are extremely grateful to the noble Baroness, Lady Harris, for her work and the work of the committee. The Government are working hard to remove the remaining obstacles to effective EU police co-operation and the proposed amendments to the Europol Convention support those efforts. We welcome the good progress they are making in improving the accountability and delivery of Europol. The Government will continue to pursue our vision for Europol to develop into a centre for excellence for international co-operation in the sharing and analysis of criminal intelligence.
Baroness Crawley: My Lords, I beg to move that the House do now adjourn during pleasure until 8.28 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.16 to 8.28 p.m. ]

Communications Bill
House again in Committee.
Viscount Falklandmoved Amendment No. 235:
After Clause 294, insert the following new clause—
"EXCLUSION OF LICENSED BETTING OFFICES FROM FREE PUBLIC SHOWING OR PLAYING OF BROADCAST OR CABLE PROGRAMME

(1) Section 72 of the Copyright, Designs and Patents Act 1988 (c. 48) (free public showing or playing of broadcast or cable programme) is amended as follows.

(2) In subsection (2), after paragraph (b) there is inserted—

"(c) if that place is a licensed betting office."

(3) After subsection (4), there is inserted—

"(5) In this section, "licensed betting office" means premises in respect of which a betting office licence, within the meaning of section 9 of the Betting, Gaming and Lotteries Act 1963 (c. 2) (betting office licences and betting agency permits), is for the time being in force.""
The noble Viscount said: Amendment No. 235 inserts a new clause after Clause 294. This is a rather narrow interest but is a matter which has caused concern among broadcasters for some time.
The new clause would allow owners of broadcasting rights to charge for the use of their material when it is broadcast within a licensed betting office, otherwise known as a betting shop. At present free-to-air

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broadcasts can be used by bookmakers in betting shops for commercial gain without any financial return to the rights holders. This mainly affects horse racing, obviously, but it also has an impact on other televised sports.
The new clause is intended to allow owners of television rights to sports events to realise the full value of their assets in circumstances in which those rights are exploited for commercial gain by betting offices.
The best example of how the law puts a sport at a disadvantage is in the case of racing. Currently, approximately 11 per cent of races each year are broadcast via the BBC or Channel 4. These races can be shown in betting shops, as well as pubs and bars, as long as they do not charge for admission, without any payment either to the racecourses or to the broadcasters.
This free service is of some considerable value to betting shops. The televising of racing in this way has helped drive up betting office turnover by an estimated 30 per cent in recent years, which represents considerable money.
Since the introduction of the Copyright, Design and Patents Act 1988, television broadcasting in the United Kingdom has been transformed by the introduction of pay television in the form of either satellite or cable broadcasting. This has led to increased competition in the acquisition of broadcasting rights to live sporting events and accordingly increased the costs associated with those rights—many members of the Committee will remember the great deal of publicity given to the matter in recent times—making it imperative for broadcasters to be able to maximise the exploitation of the rights acquired.
An anomaly has arisen in that, under the current legislation, Sky and cable are able to charge, because their channels are encrypted, but free-to-air terrestrial broadcasters are not. This encourages rights owners not to allow sporting events to be shown on a free-to-air basis. This has to be contrary to the public interest, as I suspect the Government, as well as the Committee, will agree.
The history of this anomaly goes back some years—in fact, back to the middle 1950s. At that time, with the creation of the new broadcast right, hoteliers in particular were keen to ensure that they would not have to pay a fee to enable television broadcasts to be viewed by members of the public at a hotel or guesthouse. The eventual enactment of provisions to exempt broadcasts to an audience where no fee was paid was seen as a vindication of the rights of what became known as the "Scarborough landlady". This phrase was used by politicians at the time to describe the type of person who might have a television lounge in her premises and who would not wish to pay for the ability to show broadcasts to residents.
The noble Baroness, Lady Wilcox, finds this humorous. It is humorous, of course. We find ourselves in a ludicrous position, and I hope that the
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Minister, who said that she would be making some concessions, will make a concession on this matter.
In other words, the Government recognised and wanted to protect exploitation that by its very nature was incidental and inconsequential.
But the situation for racing cannot be described as inconsequential. It is estimated that for horseracing alone the value of the rights is a minimum of £3,250,000 per annum across the industry. Indeed, certain races—the Epsom Derby, which will be at the end of this week, and the Aintree Grand National, being two of the main ones—are clearly viewed to be of such national importance that they are listed events, and therefore virtually mandated to be broadcast on terrestrial television.
Annual betting turnover on the Grand National alone is in the region of £100 million. Betting shops may show the picture of the race free of charge whereas if the race were sold to a pay-TV operator they would have to pay a realistic market price for the right to make a commercial profit out of the pictures. That is surely unreasonably prejudicial to the legitimate interests of Aintree racecourse, for example. The same applies to the other 800-odd terrestrially televised races, which are high-profile, quality events generating significantly higher levels of betting turnover than lesser races and likely to contribute higher levels of profit to the bookmakers as a result.
It is fair to say that, as one would expect, there is no settled agreement between horseracing, bookmakers or broadcasters. In recent times, the whole area has been fraught with many problems, which have caused a great deal of dissent. I do not think there is any particular feeling by bookmakers that it is unjust to correct the anomaly addressed in the amendment. We suggest that there are good arguments for the Government to re-examine seriously the situation. Clearly, we have arrived at neither a logical nor a fair position.
There is unlikely to be another opportunity for the anomaly to be addressed in legislation in the foreseeable future. Therefore, as an alternative. the Government could offer to table their own amendment to allow the changes to be made at a future date, by order, perhaps, and with the agreement of all concerned. I beg to move.
Baroness Buscombe: I support the amendment, which, as we understand it, means that if a horserace is shown on television in a betting shop the owner will have to pay for that privilege. That seems to make sense. The copyright in a horserace belongs to someone; it can be owned. We can think of no reason why someone who runs a betting shop should have the right to take something owned by someone else simply because nobody is charged for admission to the betting shop. The fact that there is no charge for admission is irrelevant because the punter pays one way or another, but not by paying to get in. Bookies are making money out of punters and I can see no sensible reason why they should not pay for the privilege of showing a

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horse race in order to encourage more punters to come in. Bookies are not a special case. We should clarify the clause to make it clear that they are not entitled to disregard the ownership rights of those to whom the copyright belongs.
I hasten to add that I do not make any moral judgment; nor do I seek to prejudice bookmakers in favour of copyright owners. But a balance must be struck somewhere. There seems no reason why bookmakers should not pay the owners of copyrights for using copyright materials. It is as simple as that.
Lord Davies of Oldham: I ask the noble Viscount to withdraw the amendment. While having some sympathy with the case that he puts concerning what he regards as an anomaly, I do not regard the situation as an anomaly. He says it is an anomaly that, if a broadcast is made by Sky or a cable broadcaster, the racing fraternity can reach an arrangement on that broadcast and get paid for it, but, if it is free to air on the BBC or independent television, they cannot. That is not an anomaly; the same case applies to ordinary members of the public when watching television in their own homes. When the public enter a different place from their own home, such as a betting shop, they watch television on the basis of a licence fee having been paid and there is free access to television.
Why should betting shops fit into a particular provision? The noble Viscount says that it is because of an anomaly and that we should deal with it on the basis of the change to copyright royalty. But he will recognise that our reason for having copyright legislation is to protect intellectual property, and it is right that we should do so. If the investment in its creation is protected by copyright restrictions, it means that broadcasters can, for example, obtain royalties from making and selling videos of programmes and granting re-broadcasting rights.s
However, it is not the broadcasters who are lobbying for this amendment. We have not had representations from broadcasters. The noble Viscount indicated that pressure comes from a particular interest; namely, those concerned with horse racing. I am not in any way, shape or form against the horse racing fraternity seeking to increase resources to enhance its sport. But I suggest that it is an inappropriate way to try to tackle the issue of additional resources. It is suggested that there should be change to copyright. That is not the issue; nor have the broadcasters ever thought that it was.
If I may be so bold, I am prepared to give the noble Viscount a hint as to where progress may be made. If the broadcasters were concerned, they could make representations on the matter. We have received none thus far. They could do so not by getting in touch with the DCMS but with the Department of Trade and Industry, the department concerned with copyright law. We have seen no reason why, within the framework of this Bill involving issues of broadcasting, we should address ourselves to that matter. We recognise that so far as concerns the
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industry there is a case. At this stage we are by no means convinced that it is an issue about copyright law. That case needs to be established.
I welcome the airing of the issue. I can only say at present that we do not regard our present proposals as producing an anomaly within the law. The important issue of free broadcasting is a cardinal point. I hope that the noble Viscount will recognise, therefore, why I ask him to withdraw the amendment.
Viscount Falkland: I thank the Minister for replying so carefully and courteously, as he normally does. The noble Lord did not address the important point about the anomaly that Sky and cable television are able to charge because their channels are encrypted but that the free-to-air terrestrial ones are not, encouraging rights owners to avoid showing sporting events on a free-to-air basis. That is a direct result of that anomalous situation. It is clearly not in the public interest. The noble Lord and I recognise that as much high-class sport as possible should be available on free-to-air to those who pay the licence fee. That situation does not allow such freedom.
I intend to withdraw the amendment. Over dinner, the joke was made that should I be successful in gaining any concession my long-standing friendship with the bookmakers would be over. My long-term relationship with the bookmakers now continues; and, I hope, with the British Horseracing Board which has urged me to put forward these views. Perhaps we may revisit the issue on another occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 295 to 297 agreed to.
8.45 p.m.
Clause 298 [Code relating to provision for the deaf and visually impaired]:
Lord Ashley of Stokemoved Amendment No. 236:
Page 264, line 36, leave out "from time to time" and insert "at least once every three years"
The noble Lord said: In moving the amendment, I shall speak also to Amendments Nos. 239, 240, 241, 244, 245, 247, 248 and 249. With all those amendments, it sounds like a big debate ahead but the issue is important rather than big.
The amendment seeks to ensure that the code relating to the understanding and enjoyment of television by deaf and visually impaired people is kept up-to-date. We want the code to be reviewed every three years instead of the ridiculous concept of "from time to time". That could mean anything. It could mean "from decade to decade" or "from each half century onwards". We all agree that the pace of change of technology in the broadcasting industry is phenomenal and that the number of cable and satellite channels is growing rapidly. We should like the code to be kept up to date and regularly reviewed. A review every three years would ensure that it does not lag behind the latest developments.

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Amendment No. 239 seeks to ensure that Ofcom takes an active role in raising awareness about subtitles and other services. I find it absolutely remarkable that many deaf people are unaware of the availability of subtitles, which could solve many of their problems in relation to television. They simply do not know about them.
This is illustrated by the fact that a little while ago a noble Lord approached me and asked how his wife could receive subtitles. I said, "With analogue, it is very simple. You press the text button, 888, and there they are. You are guaranteed them nearly all the time at peak hours. It is even easier on digital television". A little while later he came back to me and said, "It is miraculous. My wife's life is transformed. She can now watch television and understand it, which she could not do without subtitles". It is a simple thing but, before that conversation, this man's wife was unable to watch television and enjoy it. That was last year in 2002.
Equally remarkable is that there is virtually no publicity about which satellite programmes are subtitled. On all five analogue channels it is indicated very clearly which programmes are subtitled. That is not the case with digital television. So the many millions of people who rely on subtitles have to wait for the broadcast and switch on to see whether the programme is subtitled. If it is not, they simply lack comprehension of what it is all about. That is not good enough. People are entitled to know which programmes are subtitled and which are not to enable them to choose in good time.
The RNID estimates that nearly half a million elderly deaf and hard-of-hearing people are missing out on the benefits of subtitles—an astonishing figure. Undoubtedly Ofcom should take an active role in raising awareness. I hope that the amendment will be acceptable to the Government.
The proposal in the Bill to extend the requirements for subtitling, signing and audio description are welcome and marvellous as far as they go, but in the small print there is the absurd provision that the companies should be allowed 10 years to introduce them. Ten years? We can start a war and finish it in a couple of months. I hope that the Committee will find 10 years totally unacceptable.
Amendment No. 240 seeks to reduce this period to five years. I believe that we are being far too modest—five years is also an exorbitant and outrageously long period—but because we are reasonable and try all the time to accommodate the Government we have suggested five years.
I appreciate that the "relevant date" referred to in the clause is not necessarily the date on which the Bill will become operative, but it could be an earlier date. For example, for Channel 5 the date is 1st January 1998. Five years on, it is 1st January 2003. But Channel 5 is already subtitling 54 per cent of its output. In view of the remarkable developments in subtitle production, it would certainly be possible for Channel 5 to reach a figure of 80 per cent by the conclusion of the Bill.
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The amendments' main targets are digital and satellite channels, which should never have been excluded from the Broadcasting Act 1996. It would be indefensible to give them a further 10 years before they are required to provide a comprehensive service to deaf and visually impaired viewers.
I suspect, although I have no proof, that cable and satellite lobbyists have been hard at work on department officials. That is just my own sense of what might have happened. Officials talk to Ministers and the word goes around I can image the lobbyists pleading poverty, saying "Our profits will be damaged. Profits will be slashed if we have to subtitle programs. We will have to sell our grannies' jewellery. Even worse, we will have to send our wives out to work. That would be a disaster. Please don't insist on subtitling for all our programmes."
I hope that Ministers will see through those nonsensical claims of poverty and expense. The costs are relatively small—typically less than £400 for one hour of television, which is peanuts. Millions of pounds are spent on programmes, so £400 an hour is nothing.
Subtitling costs have fallen in recent years and are set to fall even further. Subtitling companies are using new software that significantly increases staff productivity, which is vital to bringing costs down and making it easier for companies. I saw voice recognition technology demonstrated five years ago. It worked then and it certainly works now. It is developing quickly and is already being used by some subtitling companies and the BBC.
Subtitling has become an intensely competitive business, so companies have been forced to reduce their charges to broadcasters. I was amused the other week to receive a letter from a subtitling company executive asking me to help him to find new markets. He wrote, "The reduction in subtitling charges has been brutal". Maybe brutal to him but I warmly welcome that cut. If I could, I would make it even more brutal.
Films are routinely subtitled at the time of their cinema release. Broadcasters can merely acquire the subtitling file so that the film can be shown with subtitles on television.
Those factors are all important and, in aggregate, they make providing subtitles a very easy option. I hope that Ministers will set their faces firmly against the lobbying and arguments made by company representatives.
Cable and satellite companies have greatly exaggerated the costs. If they want to maximise the audience for their programmes, why not use subtitles? By refusing to subtitle adequately, they are excluding deaf viewers. The pathetic subtitling currently offered discourages many deaf people. There are 8 million deaf and hard-of-hearing people. Not all of them use subtitling but many have an interest in it and should he catered for.
The BBC is committed to 100 per cent subtitling by 2008. The Federal Communications Commission in the US has stated that all English-language

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programmes first shown in 1998 onwards must be subtitled by 2006. Why should deaf and sight-impaired British viewers be the poor relations? It would be outrageous if the provision of full and adequate subtitling had to wait until 2013. It can and should be done earlier. I look to Ministers to accept what is a modest and reasonable amendment.
Amendment No. 241 seeks to buttress the two previous amendments and to ensure that more people know how to access subtitles on both analogue and digital television and should know in advance which programmes are subtitled. Amendment No. 244 seeks to reduce the number of exemptions for subtitling or signing or audio description by ensuring that a large broadcasting company is prevented from obtaining too many exemptions for some of its channels.
This is a complicated issue. Like the subtitling amendment, the amendment on exemptions is of profound importance to us. These are the two key amendments and I hope that the Government will be willing to accept them because they will be pursued at all stages of the Bill. The amendment seeks to try to stop Ofcom providing too many exemptions. Often, when people subscribe to digital, cable and satellite television, they have to buy a package of channels. It is therefore wrong and misleading for broadcasters to be able to plead that it is technically very difficult and that they cannot afford subtitling, signing or audio descriptions of one of their specific channels.
It is really a concern that the Government are considering exempting a large number of channels. They should think again because if exemption were granted to all channels with an audience share of below 0.05 per cent it is estimated that fewer than half, that is, 66 of the total 150 channels, would be faced with the requirements. I believe that such a high figure is unacceptable. The case for very few exemptions is strengthened by the low cost of subtitling, which I mentioned a moment ago.
I am glad that Kim Howells in another place said that he sympathised with the spirit of the amendment. But we do not want sympathy for the spirit; we want support for the content. He argued that it would be at best burdensome and impossible in many cases for Ofcom to investigate the details of each establishment and the funding arrangements to determine whether exclusion was appropriate. Of course, it is not impossible. And it is hardly burdensome. Every commercial broadcaster has financial accounts and other information which is publicly available. It is impossible to accept the Government's excuses to exempt these channels. It would be burdensome on deaf and hard of hearing people if they do so. I hope that they will think again. The amendments are of profound importance.
Amendment No. 245 seeks to ensure that information which Ofcom already collects is placed in the public domain. The Bill will extend subtitling, signing and audio description requirements to some 150 channels, digital, cable and satellite. With so many it is likely that Ofcom will have to take on trust a great deal of information provided by the broadcasters. It
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will have to do that because there is no way round taking the matter on trust. Allowing this information to be publicly inspected would ensure that the public knew about it and would ensure full compliance with the legislation.
Finally, I refer to Amendments Nos. 247, 248 and 249. They deal with the omission of people who are deaf and blind from the provision for Ofcom to review the code giving guidance to deaf, blind and partially sighted people. Having one of these sensory disabilities inevitably creates problems. I know from personal experience how devastating total deafness can be. But total deafness and blindness to some measure must be unbelievably difficult. For those who are totally deaf and totally blind, clearly television has little to offer.
But many deaf blind people have the use of one of these faculties, which they should be able to maximise. It is for them that these amendments are intended. The amendments are put forward in good faith. If they are brushed aside by the Government a great number of people will suffer. If accepted by the Government, especially the amendments about subtitling and exemptions, millions of deaf, hard of hearing and sight-impaired people will be helped. I beg to move.
9 p.m.
Baroness Wilcox: I support the amendments proposed by the noble Lord, Lord Ashley, in general and Amendment No. 236 in particular. I am amazed at the audacity of the civil servants that they have put this classic, this old chestnut, this out of "Yes Minister" wording of "from time to time" when referring to the frequency that Ofcom should review the code on the provisions for the deaf and visually impaired. That is surely too loose.
In such a rapidly changing industry, would it not be sensible to have a maximum period of time between reviews to ensure that the code does not fall out of date? As we have heard, as new technology becomes available, it is important that the code is regularly altered to reflect the situation on the ground. The cost of failing to alter the wording of the Bill in this way may well be that as Ofcom is stretched in different directions, it begins to interpret "from time to time" as "whenever it suits us" or "very rarely indeed" to the detriment of the disabled consumers who have much to gain from new technology, if only they were able to take advantage of it.
Lord Addington: This is a group of amendments to which I have been waiting to speak for a long time. The noble Lord, Lord Ashley, has done a magnificent job of going through them all individually and explaining what is behind them. He has actually touched on a series of subjects which we in the disability lobby have all been talking around for a long time. The fact is that we should try to enact what we can on this issue and do it now.
The points about audio-description and subtitling are based on, shall we say, what we are capable of doing. What is the technology there for? The primary point of a 10-year wait is that it is a long term project,

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but it will not be dealt with or even thought about until it is a medium term project. Finally, it is panicked about in the short term and done badly. That tends to be my experience of these matters. However, we can do it now for under £400 per hour. That figure has been constantly quoted to me for the past three years. In real terms, the cost is falling.
That is a tiny percentage of the cost for virtually any television programme. On the issue of exemptions, I am grateful to the noble Lord, Lord Ashley, for tabling this amendment and for allowing me to add my name to it. This issue has been a bugbear of mine for a while. Within a huge package of channels designed for the age of multi-channels—effectively anorak TV—those who are hard of hearing should be allowed to indulge their passion for, say, programmes about World War II produced from old newsreels and using a voice over. They are cheap to make with possibly a very low audience. The same programmes are repeated again and again. giving hours of broadcasting, and they could be dealt with easily by one small package of subtitles.
What runs through this series of amendments is that they are all technically achievable now. If the Government reject the amendments, not only will they be picking a fight, but they will be saying that they will not do what is easily achievable.
I shall now do the reverse of common parliamentary practice by congratulating the department on including a clause in the Bill relating to provision for the deaf and visually impaired. But you cannot go to this party without taking more than one bottle with you; you must be there for the long haul. We must get the matter right now or we shall have to return to it again and again.
As regards the first amendment in the group, the noble Baroness, Lady Buscombe, hit the matter squarely on the head—the code must be reviewed regularly. Perhaps the expression "from time to time" has a wonderful legal precedent of which we have never heard which means that the code will be reviewed every two years and three months. But unless the expression means precisely that, the suggestion of a review every three years seems a valid one.
We are not talking about the cutting edge of technology. We know what we can achieve with the technology that is available. I hope that the Government will be prepared to take the amendment on board. They do not have to adopt its wording. I do not care who is carrying the standard so long as we win the battle. We want to get the provision into the Bill so that we do not waste time returning again and again to half measures. We can do it now. Let us do so and then forget about the matter and turn to something else. I support the comments made about the deaf-blind.
The Lord Bishop of Manchester: We on these Benches always listen with the greatest respect to the points that the noble Lord, Lord Ashley, makes. He spoke eloquently and movingly on behalf of the profoundly deaf, the hard of hearing and the blind. He also emphasised the other needs of the disabled which
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this part of the Bill appears to misunderstand. I join the support given to the amendments by the noble Baroness, Lady Wilcox, and the noble Lord, Lord Addington. I hope very much that the Minister will respond not only with sympathy but also with practical suggestions.
Lord Puttnam: I hope that I may refer to a slightly unusual angle in supporting the noble Lord, Lord Ashley. I have spent the past six years visiting schools, particularly primary schools, looking at the way in which technology, when used well and with determination, can transform the lives of people who up until now have been excluded completely from society. The notion that for commercial reasons technology that is available is not being used to change people's lives is a very worrying comment on our society.
Baroness Wilkins: I support this set of amendments. When 5 million people regularly use subtitles and it appears from NOP research of January this year that another half a million deaf and hard of hearing elderly people could use them if they knew how to access them, the case for this set of amendments seems very strong. Cable and satellite channels have already been given three years' notice of the 80 per cent subtitling target, making the 10-year lead-in time appear excessive. As we have already heard, the cost of subtitling is cheap. It is getting cheaper and easier all the time so the case for exemptions seems unnecessary. As the noble Lord, Lord Addington, so ably said, it is possible to adopt the provision now. Let us do it. I beg the Government to support the amendments.
Baroness Howe of Idlicote: I support this group of amendments. I congratulate the noble Lord, Lord Ashley, not only on the way in which he presented the amendments but also on the way in which he has conducted his own life and, indeed, on the way in which he has done so much for the disabled generally.
I agree entirely with the comments that have been made. It is a far too modest suggestion that we reduce from 10 to five years the time for digital, cable and satellite channels to reach the subtitling target. We have heard mention of Channel 5 which I believe has managed voluntarily to reach a figure of 54 per cent in five years. Sky News has made a successful attempt in that regard.
The noble Lord, Lord Ashley, pointed out that the costs are reducing. They seem fairly low already. The price continues to fall due to significant advances in subtitling technology.
I got to grips the other day with DVDs. I was given for Christmas—that is probably the way to get me to get to grips with something—a collection of Audrey Hepburn films. I put my favourite, "Breakfast at Tiffany's", into the slot. Immediately appeared not only the title, but the possibility of seeing and hearing the film in about 20 different languages. It was amazing. If that is possible, it is clearly more than possible that the same will happen as subtitling technology speeds up.

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Quite apart from the amendments helping the Government's "inclusive" agenda, there are surely bottom-line advantages to communications companies in attracting wider audiences. We have heard already the figure of 5 million regular users of subtitling. That is a considerable potential audience to attract to channels. An even more significant figure from NOP research this year is that the use of subtitling does not, as one would surely expect, increase with age.
As most Members of the Committee know, those with hearing impediments are already the largest group of disabled in the UK. As we are all living longer, and some deafness will almost inevitably appear the older one gets, those overall numbers will clearly grow. There is a potential market to be exploited.
It is sensible to ask that Ofcom's duties include ensuring that likely users of subtitling services, both analogue and digital, have adequate information promoted by all channels, that the services exist and—at least as important—how to find and access them. That is somewhat more difficult for the elderly, given the complex systems we all now try to grapple with, than for the younger generation.
To help ensure that we know how the policy is progressing, I suggest that Amendment No. 245, which proposes that Ofcom collate and publish information on subtitling on a yearly basis, makes sense. Even if I have made the case for the amendment mainly on economic grounds, it is of course a primary duty of all governments to ensure that we all have equal access to the everyday means of gaining information, education and entertainment. The RNID estimates that there are as many as 500,000 elderly people who are deaf and hard of hearing, and there are the visually impaired as well. They all miss out on the benefits of subtitling. As the RNID states:
"This represents a huge number of people who are experiencing a reduced quality of life—missing out on news, documentaries, sport and all the other information and enjoyment that television can bring".
I very much hope that the Government will be able to accept what I think are, in a way, far too modest proposed changes, and reassure many who fear that that group of disadvantaged citizens will continue to be sidelined.
9.15 p.m.
Baroness Blackstone: My noble friend Lord Ashley of Stoke knows how much I sympathise with him and the issues that he has raised. I shall start with Amendment No. 236 and work through each amendment, as they are all rather different.
We would expect Ofcom to review and revise the code regularly, particularly as technical developments in the area can sometimes move quite fast. I would like to say to the noble Baroness, Lady Wilcox, that her attack on civil servants was completely inappropriate. However, the decisions as to the frequency of any reviews and revisions should ultimately be left to
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Ofcom, which will have the experience and expertise to judge when such reviews and revisions might be necessary. Giving Ofcom a duty to review and revise the code at least once every three years could put an unnecessary burden on it and I doubt that it would lead to a substantially different result. We should trust Ofcom. I believe that it will be committed to carrying out regular reviews in that area.
I turn to Amendment No. 239. The current duty is to give guidance as to the means by which the services should be promoted. I cannot see that the word "extensively" adds much to Ofcom's requirement. There is already a substantive obligation in Clause 298(1)(a) for Ofcom to provide guidance on the extent to which relevant services should promote the understanding and enjoyment of programmes in their service. The amendment would undermine it.
We have considerable sympathy with Amendment No. 241. It is in the service provider's best interests actively to promote the services they offer to hearing impaired and visually impaired people as these groups make up an important part of their audience over 10.5 million people. However, I am aware that that does not always happen and that large numbers of sensory-impaired people, particularly the elderly, are unaware of the existence of subtitling, signing and audio-description and are therefore unable to benefit from them.
In complying with the code, Ofcom will have to give guidance on the extent to which services should promote understanding and enjoyment by people with sensory impairments. It is right for this guidance specifically to cover the need for service providers to make users aware of subtitling, signing and audio-description and of how to access them, and we will consider whether an amendment is necessary to the Bill to make this absolutely clear.
I have some sympathy with the underlying aim of Amendment No. 244, but it would be rather difficult to put into practice. First, the fact remains that the obligation to provide assistance to disabled people, and with it Ofcom's only lever, is on the licence holder, even if the service forms part of a family of channels. By the same token, the costs of providing the subtitling, signing and audio-description would fall on the licence holder rather than on the parent company.
Secondly, it would be extremely difficult and resource-intensive on a practical level for Ofcom to investigate the establishment and funding arrangements of each channel in order to consider the impact of its relationship with a parent company on any case for exclusion from the obligations. I must therefore disagree with my noble friend Lord Ashley of Stoke. I cannot accept this amendment.
I turn to Amendment No. 240. Following the review of the statutory requirements for subtitling, signing and audio-description, the report of which was published in January 2001, we believe that a 10-year period in which to satisfy these obligations is a target which for some will be quite challenging. But it is achievable. This target will give those services with new obligations, like digital, cable and satellite

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services, enough time to plan for their introduction. The time-scale does not mean that there will be no subtitling on those channels until the end of the 10-year period. Ofcom will have the ability to set interim targets on the way to meeting 10-year targets, as the ITC currently does, so provision of subtitling, signing and audio-description will grow year by year.
We do, however, understand concerns expressed that 10 years is a long time and that early progress should be expected. The arguments are particularly strong in relation to subtitling, which is a well established technology that can already be provided at a relatively low cost—I agree with what was said about that—and which is likely to become cheaper to provide as new developments such as voice-recognition come on stream. Again, I accept the arguments in that regard.
We do not believe that it would be right to reduce the overall 10-year timetable for the reasons that I have already given. However, we will consider amending the Bill to set out a fixed, interim five-year target for subtitling, which would apply to broadcasters with new requirements to provide subtitling rather than leave the matter to Ofcom. A challenging five-year target would allow progress on providing subtitling to be accelerated in the early years. That would ensure that those broadcasters with new requirements in that area could catch up as quickly as possible with those already providing subtitling, and it should help to lead to a dramatic increase in the amounts of subtitling available over the period. We will consider the details further and come back with an amendment on Report.
As the Bill now stands, Ofcom must consider the extent to which codes made under this part of the Bill have been complied with in carrying out its annual factual and statistical report under Clause 351. It will be for Ofcom to decide the appropriate level of detail that should be included in its report, and I am sure it will consider the arguments for providing as much information as possible so that people with sensory impairments can properly assess the levels of provision on different services. I am not therefore persuaded that an amendment to the Bill is necessary.
I turn to the remaining amendments in the group. I know that people with a dual sensory impairment can have sight and hearing loss to such a degree that it leads to problems with accessing information. Specialised means of communication, such as the "deafblind manual alphabet", have been developed for people who have significant impairments to both their sight and hearing. Those means are not particularly well suited to television and realistically, as my noble friend Lord Ashley said, a person would need to have some form of hearing or visual ability in order to enjoy or understand that medium. In such a case, the current duty to promote understanding and enjoyment for people who are hearing impaired and visually impaired should satisfy any need in that respect, as should the existing duty on Ofcom to ensure that the code drawn up under Clause 298, or any revision to it, is accessible to persons who are deaf or hard of hearing and blind or partially sighted.
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Those people with a more serious dual sensory impairment clearly have specific needs. 1 am aware that the talking teletext service is particularly useful for them and I wonder whether concerns about the future of that service after digital switchover may lie behind the amendments. We had a full discussion of that issue at a previous sitting and I shall not repeat what was said then.
We have taken into consideration the needs of people with disabilities throughout the development of the Bill, including in relation to the provisions on television services for the deaf and visually impaired, and I believe that the measures that we have introduced represent a significant improvement. I hope that my comments have reassured noble Lords that we take these issues seriously and that we are willing to consider changes to the Bill.
Lord Ashley of Stoke: I must say how much I appreciate all of the contributions from the Back Benches. To have unanimous support for the amendments from all sides of the Chamber is very significant. I am sure that my noble friend the Minister will have taken note of that, particularly because we have seen only a very small sample of our actual support. I am very grateful; there were some marvellous speeches.
I greatly appreciate the tone of my noble friend's answer. She is obviously sympathetic but there are limitations within the department. She presented the Chamber with a mixed bag. Some proposals were very welcome. I was so glad to hear them they were heart-warming. I was sorry to hear an apparent determination to dig in heels on exemptions because that is one of the arguments we must win. We simply cannot have such exemptions; that is out of the question. I am afraid that, much as I respect and appreciate the difficulties of my noble friend in the department, this issue will be pursued at the proper time at every possible level and I may test the opinion of the House. In the mean time, I appreciate the Minister's difficulties and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 237 to 241 not moved.]
Lord Cartermoved Amendment No. 242:
Page 265, line 16, leave out "10" and insert "50"
The noble Lord said: In moving Amendment No. 242 I shall also speak to Amendments Nos. 243 and 250. It is a small group of amendments which deals with the particular problem of audio-description. It is a crucial service for the blind and the visually-impaired. For them it is a necessity not a luxury if they are to enjoy television.
The present situation is that the BBC, ITV and Channels 4 and 5 are producing audio-description and transmissions over the digital terrestrial platform, Freeview, which were received at the last count in 65 homes. An enormous amount of money has been spent by the BBC internally, and externally by the RNIB, yet

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audio-description is only available in 65 homes. I understand that they are trial modules, but that means that the uptake is derisory.
There is no requirement for an expensive module. We do not need a module to receive audio-description. We should compare and contrast the situation that I have just described with that of Sky TV. I understand that in later debates the owner of Sky may be coming in for a certain amount of mention. However, in the area that we are discussing we should acknowledge the efforts that Sky has made. Entirely on its own initiative it is providing audio-description on the digital satellite D-sat without the need for a module. Seven million Sky homes have that capability and 3,000 hours a year of audio-described programmes are provided on Sky One, Sky Sports 1, 2 and 3, Sky Movies Max and Sky Premier.
Why do not the other channels use that function on the satellite platform? If they did they would increase access from 65 homes to a very substantial number. The reason for not doing that seems to be the cost of providing the additional audio bandwidth required to simulcast their existing audio-description on satellite. I understand the problems and I understand that, for example, the BBC might need 18 channels because of all its regional output. It is hard to find out the cost of that extra provision, but even if it were some hundreds of thousands of pounds per annum, how would that figure compare with over £2.5 billion of licence fee, £100 million on BBC 3 and £50 million on BBC News 24, which are both watched by audiences of a tenth of I per cent of UK TV viewers?
However, I understand that things are moving—or could move—on the module front quite rapidly. It seems that the marginal cost of adapting set-top boxes to accommodate the functionality for audio-description is coming down extremely rapidly. I have heard a figure of under £10 for the marginal cost of adaptation. The ideal situation would be for all set-top boxes, whether for satellite, digital or whatever, to include the chip to generate audio-description. The uptake would quickly make it apparent which form of audio-description the visually-impaired audience prefers. I have a simple question to ask the Minister at this stage. Does the Bill as drafted permit Ofcom to lean heavily on the manufacturers and the broadcasters to ensure that the solution that I have described can he obtained, so that there is a real service for visually-impaired viewers?
I understand that there is a commercial problem in that the BBC has spent a great deal of money internally on its system. Of course, as I have described, Sky has its channel for narrative. All this needs a catalyst—or someone—to kick-start the process. I should like to know whether Ofcom would have the power to do that. We lead the world in this area of technology and there should be a commercial opportunity, if only we can get things started.
Finally, there is an important factor to be taken into account by Ofcom; namely, the measurement of audio description. Let us take as an example an episode of "Midsomer Murders" on ITV 1. The most important
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fact is that broadcasters must concentrate on producing new material for audio description, not simply regurgitating the same few programmes again and again. So if an episode of "Midsomer Murders" is audio described on ITV 1, that counts towards its quota. When it is repeated on ITV 2, that also counts towards the quota. When it is sold to UK Gold, that also counts towards the quota. Therefore, in a short period one programme, audio described, becomes three.
The percentage therefore—whether it be 10 or 50—must relate to each channel. Each channel must generate its own individual quota. Any programme which already has audio description on it must by law be broadcast but not count towards the quota. Ofcom must introduce a licensing system that acknowledges which programmes have been audio described and then which channel can count against the quota. Finally, Ofcom must check with blind people and their organisations about the programmes they choose to describe. I am told that Granada chose as one of the two shows it audio describes what was coming up on Granada this week. It audio describes to the visually impaired all the programmes they cannot enjoy—it lists them but they are not audio described.
Amendment No. 242, which leaves out "10" and inserts "50", is a probing amendment. The figures would be a reasonable target for the main broadcast channels, but I accept that there would have to be a lower figure for the smaller channels. That should be at the discretion of Ofcom.
I want to comment briefly on Amendment No. 250, standing in the name of the noble Lord, Lord Addington, who I am sure will want to speak about it in detail. It would require Ofcom to include the minimum access requirements for disabled people and the best practice guidelines in the proposed code of practice for electronic programme guides. Easy access to electronic programme guides is essential if disabled people, and the millions more who struggle to navigate digital TV, are to be equal participants in the digital revolution and not be put off from switching to digital. I beg to move.
9.30 p.m.
Baroness Wilcox: I support the principle behind the amendment but suggest that some sort of compromise position should be reached. The cost of audio description at £700 an hour cannot altogether be removed from the equation, although in an ideal world all programmes would be accessible to disabled people in a wide number of formats. A requirement that it should apply to 50 per cent of every service would be crippling to smaller channels.
On the other hand, it is clear that many large national and international channels can and should fork out such sums. The positive example set by Sky with respect to disabled access, warmly referred to by the noble Lord, Lord Carter, shows that in the case of large broadcasters where there is a will there is a way. During the course of our debates on the Bill we have constantly been made aware of the fast-pace progress

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that is typical of the industry. A target for audio description as low as 10 per cent from the 10th anniversary of the relevant date is too low.
I would therefore encourage Ofcom to take into consideration the ability of different broadcasters to afford to pay for audio description when issuing the code on the provision for the deaf and visually impaired.
Baroness Darcy de Knayth: I want briefly but warmly to support this group of amendments. I well remember the frustration of failing to get the target of 50 per cent written into the Broadcasting Bill seven years ago. The Minister says that 10 years is a long time—incidentally, I greatly welcome what she said about subtitling—and seven years is long enough. Is it not disgraceful that if seven years ago we felt that 10 per cent was an inadequate target, it should still be only 10 per cent? I believe that we should be aiming for 50 per cent in this Bill. It is not just 2 million visually-impaired people who would benefit from this. The ITC research shows that many older people with cognitive problems or younger people with learning difficulties would benefit. I support what the noble Lord, Lord Carter, said about Sky TV and the audio description programmes.
The current wording in the Bill leaves the inclusion of access requirements in the code to the discretion of the regulator. Given that the electronic programming guide is the key to digital TV, it must be made accessible to visually-impaired, disabled and elderly people. I very much hope that the Minister will have a change of heart on this point. If Ofcom left access standards out of the code, it would then be difficult to challenge on it. I hope that the Minister will look sympathetically on this group of amendments.
Lord Addington: After watching us wield clubs, the noble Lord, Lord Carter, has come forward holding an olive branch. Once again we come down to the fact that the technology in audio description is well-established. There has been a monumental cock-up in actually getting access to the service. To offer kisses as opposed to kicks to Sky is rare on these Benches but here I freely do it. Sky has shown it can be done. As the noble Lord said, we just have not got ourselves together. The technology is there but we have not had the will or the co-ordination to make sure that a perfectly well-understood service has not been accessed. It is an absurd situation. If something has to be done to address this issue in primary legislation, we should do it. We cannot allow this state of affairs to continue. I have heard that everyone thinks that the position will improve. Why did we get into this mess in the first place? There are thousands of hours of broadcast audio description but nobody can receive it. That really is Gormenghast and Alice in Wonderland and wasting money with it. I do not know how we got there.
The noble Baroness, Lady Darcy de Knayth, has given a wonderful description of why the subject matter of my amendment has to be included somewhere. If people do not know about it, there is no
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point in having it. Audio description fits the present situation. I hope that the Minister can at least meet half of the problems, as she was able to do with regard to the previous group of amendments. The Government should take a firm lead or appoint someone who will. This situation is absurd. We have a chance to solve it and I hope that the Government seize that opportunity.
Lord Ashley of Stoke: I rise briefly to give my warm support to my noble friend Lord Carter. I thought he moved his amendment wonderfully well. The Committee will be struck by the similarity between the arguments for subtitling and audio description. The question of cost is crucial. While I understand the reservations of the noble Baroness, Lady Wilcox, I would not place great store on that. Relatively speaking, the costs are low. My noble friend Lord Carter is quite right in his contention, especially taking into account the billions of pounds involved. The noble Baroness, Lady Darcy de Knayth, mentioned the previous Broadcasting Bill which in many ways was botched. There were far too many omissions. The Government say that we should discuss those at some other time. That is not good enough. It is time to act. We can correct at least one of the shortcomings of the previous Bill.
The argument for modules sounds quite convincing. I cannot claim to be an expert on this subject but my impression is that it is a red herring. There is no significance in the module argument but that is a matter for the Committee to decide.
My final point is that what we decide tonight, on Report and at Third Reading will affect people who are sight impaired. They want audio-description because it means so much. They cannot see the programmes. They need a voice to explain and to put things in context. There has been an enormous advance. If we do not accept the amendments they will just keep doing without. If we accept the amendments we can take a really good step forward for them. I hope that with her usual care and consideration the Mi sister will be able to go some way towards understanding and will accept the amendments.
The Lord Bishop of Manchester: Through the amendments we have the opportunity to be imaginative in using available technology for the benefit of those of all ages who have disabilities. The noble Lord, Lord Carter, has been fair in drawing attention to the potential costs of doing that. The noble Lord, Lord Addington, and the noble Baroness, Lady Darcy de Knayth, have expressed reasonable and understandable frustration. The general thrust of the amendments is supported from these Benches. I hope that the Minister will find a way to accommodate some of the points the amendments express.
Baroness Blackstone: My noble friend Lord Carter will know that, just as with the previous group of amendments, I have much sympathy with the issues raised in this group.

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As regards Amendment No. 242, as I am sure my noble friend is aware, the 10 per cent target for audio description was considered as part of the review of the statutory requirements for the provisions of subtitling, signing and audio-description. Having considered all the issues and arguments during the review we concluded that the 10 per cent target should be maintained.
The decision recognised the unresolved production and distribution difficulties with the audio-description modules needed to receive the service. The Government have been working with the RNIB, broadcasters and manufacturers to help identify possible solutions to the problems. We are disappointed that the current problems have not yet been solved.
My noble friend Lord Carter asked in particular about audio-description systems currently offered by BSkyB on satellite. BSkyB currently provides a limited number of audio-description on some of the 300 channels broadcast via satellite but uses a different transmission system which is suitable only for high bandwidth delivery platforms, such as digital satellite. I do not entirely understand this technology. However, I understand that requiring broadcasters to transfer their existing audio-description to a pre-mix audio description system as used on digital satellite for terrestrial transmission would reduce the number of programme services which could be transmitted. It would also be very expensive and would hinder the development of the receiver-mixed audio-description system which has many advantages and could be applied to all digital platforms. So there are technical problems about the question raised by my noble friend Lord Carter.
My noble friend also asked whether the Bill as drafted would allow Ofcom to lean on manufacturers. As we debated earlier in Committee, the Government have agreed to consider the question of how we might strengthen Ofcom's responsibilities in regard to access to systems. We are actively considering that at present and shall return to it on Report. I hope that that is helpful.
I return to the question of targets. Clause 301 allows the Secretary of State, after consultation with Ofcom, to vary the target percentage for audio-description by order. So, even though the target is currently only 10 per cent, if there were the significant advances that we all want to see in the technology and more widespread take-up of the modules, targets could be increased. I very much hope that that will be the case.
In the same way as the ITC code currently does, we expect that Ofcom's code relating to provision for the deaf and visually impaired will include guidelines on the technical standards to be attained for audio-description, as well as the subtitling and signing, in order to meet the current standards. Amendment No. 243, therefore, would not really appear to lead to any different result.
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I turn to Amendment No. 250. As we have said before, EPGs can make both the selection and recording of programmes much easier, enhancing the viewing experience in the process. This is just as true for people with disabilities as it is for anyone else, provided they can use the EPG.
Having considered the amendment quite carefully, I can understand the concerns of those who would like Ofcom to be under a more specific duty here, and I should like to return with some suggestions on Report.
I hope that in the light of what I have said my noble friend will be able to withdraw his amendment.
9.45 p.m.
Lord Carter: I am sure that after all our years of working together my noble friend the Minister would be extremely surprised if I sought to divide the Committee. There is time between the Committee and Report stages for reconsideration, and then we can decide what to do on Report.
I should like to pick up the point made by the noble Baroness, Lady Wilcox. I said that 50 per cent would be crippling for some broadcasters, but not for others, and there would have to be some discretion. There seem to be two systems on offer; there is almost a technical battle going on. We must be sure that the best is not made the enemy of the good. Ofcom should have the power to try to resolve the problem.
My noble friend the Minister referred to the unresolved production difficulty. I hear that this is on the verge of resolution. It should be possible for a very low cost—I am told as little as £10—to put the chip into new boxes so that they would all then become available. There is the lift-off problem in getting the number of modules out in order to have the production run and bring the cost down. This is just the area where Ofcom should be working.
I am extremely grateful to my noble friend for her helpful reply, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 243 to 246 not moved.]
Clause 298 agreed to.
Clause 299 [Procedure for issuing and revising code under s.298]:
[Amendments Nos. 247 to 249 not moved.]
Clause 299 agreed to.
Clauses 300 to 303 agreed to.
Clause 304 [Code of practice for electronic programme guides]:
Lord Addingtonhad given notice of his intention to move Amendment No. 250:
Page 269, line 11, at end insert—
"( ) The code must include minimum requirements and best practice guidance on making electronic programme guides accessible to people who are blind, partially sighted or have other disabilities."

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The noble Lord said: I wish briefly to thank the Minister and anybody else in the department who helped her to give the favourable response that we received.
[Amendment No. 250 not moved.]
Lord Aveburymoved Amendment No. 250A:
Page 269, line 11, at end insert—
"(2A) The practices required by the code must include, where there is more than one version of a public service channel available on an electronic programme guide—
(a) compliance with a request from the provider of a public service channel to substitute either—

(i) the appropriate version of that public service channel as designated by the provider of the channel; or

(ii) the version of that channel selected by the viewer for substitution;

for the most prominent listing of that public service channel in the relevant electronic programme guide;
(b) ensuring that, where the provider of the public service channel consents, the consumer can perform the type of selection described in paragraph (a)(ii).
(2B) In assessing the degree of prominence for the purpose of subsection (2), OFCOM must ensure that—

(a) such prominence amounts to a degree that is greater than it would have been without the giving of such guidance; and

(b) the degree of prominence at least matches the degree of prominence in existence at the date of the commencement of the Office of Communications Act 2002 (c. 11).

(2C) For the purposes of this section there is more than one version of a public service channel available if, in the service of television programmes provided, there are different programmes being broadcast or distributed at the same time for audiences in different areas, regions or nations of the United Kingdom in the same service.
(2D) OFCOM shall perform its duty to draw up a code under subsection (1) within six months at the latest of the commencement of this section."
The noble Lord said: In moving this amendment, I wish also to speak to Amendments Nos. 250B, 250C and 250D.
The amendments together have a straightforward but crucial purpose of ensuring that viewers have easy access to their public service channels on digital platforms. They would tighten up the definition of "due prominence" to ensure that when, for example, a viewer in Scotland switches on BBC1, he gets the Scottish version.
Throughout the debate on the Bill, your Lordships have stated your strong support for the UK's public service broadcasters and the role they play in British society. Parliament and the viewers expect special things from their public service channels—the BBC, ITV, Channel 4, Channel 5 and S4C. They require them, as we have heard, to broadcast impartial news, high quality drama, documentaries, arts programmes and minority interest programmes. That is because as a society we believe there is public value in such programmes being easily available and free at the point of consumption.
On the previous amendment to be debated, we heard of the importance for people who are partially sighted or hard of hearing of accessing those channels via the electronic programme guides. The concession that the Minister made was an important one, because she agreed that their use was essential to enhancing the experience of viewers who want to access digital channels. They are the navigation systems for digital television—a combination of the Radio Times and a channel selector. The owners of those guides control where the channels are listed. That has a crucial bearing on viewers' ability to find the programmes that they want. If they cannot find them, they cannot watch them.
As Members of the Committee will have heard in previous debates, every digital platform has its own monopoly EPG. As the UK moves towards all-digital television, it is essential that those monopolies are regulated in the wider public interest. That is a particularly important requirement in the case of the satellite EPG operator Sky, which has its own pay-TV channels. It cannot be allowed to dictate how easily viewers can find the PSB channels that Parliament has established. It would be like allowing newsagents controlled by the Sun to put broadsheets on the top shelf.
Subsection (2A) of the amendment provides that, where a public service broadcaster has regional versions available on an electronic programme guide—for example, BBC Scotland or BBC Wales—at the public service broadcaster's request, the provider of that guide would have to place either the regional version chosen by the broadcaster or the version selected by the viewer at that broadcaster's most prominent slot on the guide. It would also ensure that, where a PSB has approved the principle of viewer selection—for example, a viewer in London wishing to view his regional news—the provider of the electronic programme guide must provide him with the means to do so.
Subsection (2B) would set a minimum standard of prominence for PSB channels on an EPG so that it is not set lower than the current slots allocated to them. For example, BBC1 would be located at 101. BBC2 at 102, and ITV at 103. That would prevent the PSB channels being buried many pages down the guide among lifestyle channels, pay channels or even worse, as suggested previously by one Member of the Committee.
Subsection (2C) provides a technical definition of a regional service. Subsection (2D) would set a six-month deadline for Ofcom to produce a code of practice for EPGs.
In summary, the amendments seek to ensure that the great British creation of public service broadcasting is maintained for new generations of television viewers. We can do that only by ensuring that viewers can find the programmes that they want to watch. People expect to find BBC1 at 101 and ITV at 103. Scots expect to find BBC Scotland or STV on those channels.
I hope that Members of the Committee will agree to put the due prominence requirements into the code, not to give PSBs any advantage over other channels, but for the benefit of viewers all over the United Kingdom. I beg to move.
Baroness Howe of Idlicote: I have put my name to these amendments because I believe that we must ensure that viewers can get easy access to their public service channels on digital television, and, in particular, that citizens have easy access to their local, regional and national programmes.
We have heard a lot about the importance of EPGs. For the future, I stress that their importance cannot be over-stated. It is the navigation system for digital TV—a combination of the Radio Times and a channel selector. Owners of EPGs control where channels are listed. That affects viewers' ability to find the programmes that they want. If they cannot find it, they cannot watch it.
In the Broadcasting Act 1996, Parliament regulated EPGs by giving public service broadcasters "due prominence" in their guides, but did not specify what that means. As the noble Lord, Lord Avebury, has explained, the amendments will tighten up what is meant by due prominence of public service channels and extend the principle of due prominence to include regional and local variants of public service channels.
Can the Minister confirm that the obligation of due prominence for public service channels applies independently of the purchase of any other service? In other words, would it be unacceptable to insist on the purchase of any other service, whether conditional access or anything else, as a condition of meeting the obligation to provide viewers with access to the appropriate regional version of their public service channel through a duly prominent position?
If allowed, this kind of bundling of services would appear to frustrate the purpose of the Bill's provisions on EPG due prominence and would not be permitted, I hope, either by the ITC or under the new code that will be devised by Ofcom. Can the Minister clarify that point? Can the Government confirm that the obligation of due prominence of public service channels applies independently of the purchase of any other service?
During debate on the 1996 Broadcasting Bill, both Government and Opposition sought guarantees that control of a monopoly EPG could not be used to deny viewers their traditional easy access to PSBs. The then Minister, the noble Lord, Lord Inglewood, said:
"Let me once again state unequivocally that the Government arc concerned to ensure that electronic programme guides are not used to distort competition between broadcasters. It therefore seems eminently sensible for the Bill to establish certain principles as it does".
He went on to say:
"Nevertheless, as I made clear in Committee, the Government intend to monitor the situation carefully. And should EPGs in the digital market develop in a way which makes further regulation necessary we shall introduce it".
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Clearly recent developments demonstrate that as both the market and technology have evolved, greater clarity over the will of Parliament is indeed necessary. The ITC's regulatory code requires "due prominence" without, as we have already heard, specifying what that means and in the case of the current dispute between the BBC and Sky has not been able to rule, despite the complaint being made by the BBC on 7th April. Nor does the Act or the ITC code deal with the different regional and national versions of PSB programming. Yet surely Parliament, when creating due prominence, intended that it would mean that viewers in Scotland could get BBC Scotland, viewers in Wales BBC Wales, and so forth. Where PSB channels are available with national or regional versions, viewers' easy access to those channels must surely be the right version for them.
I suggest that the amendment strikes the right balance between the role of Parliament in determining public policy and the discretion of Ofcom, the independent regulator, in implementing the policy set out by Parliament. Amendment No. 250A makes it clear that "due prominence" means the level of prominence at the enactment of the Ofcom enabling Act, safeguarding the position of the PSBs, and requires EPG providers to provide regionalised services.
It does not fetter Ofcom's discretion over the prices or the technical mechanisms which will be applied. These detailed regulatory matters are properly matters for Ofcom. But it is essential that Ofcom considers these detailed issues against the backdrop of clear public policy. Parliament has determined that EPGs should be regulated. It now needs to make sure that the new regulator, Ofcom, has a clear understanding of its intent behind that decision.
I hope that the Minister will be able to respond positively to the amendments and will be able to confirm my specific point about bundling of services.
Lord Lipsey: I think that we are in complete agreement about the objective that we all seek: that is, a proper prominence. "Due prominence" is a term of art for public service channels, in particular the BBC on EPGs.
Having said that, one has to be alarmed that when we talk about balance we are also talking here about a set of amendments put down by one of the two parties to the present dispute which is raging—the BBC. I have considerable reservations about the route it has gone down. At least in this amendment, unlike the one proposed earlier, it is not trying to fix the price paid—
Lord Avebury: Will the noble Lord give way? The parties to this dispute do not put down amendments; noble Lords put them down.
10 p.m.
Lord Lipsey: I should have said that they have been inspired to put down these amendments by a briefing from the BBC, which we have all seen. Of course noble

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Lords are quite entitled strongly to agree with that. I have done so myself on many occasions. I was merely explaining—
Baroness Jay of Paddington: As a matter of information, I have had a similar briefing on this matter from Channel 4, for example, and from other public service providers.
Lord Lipsey: I have absolutely no criticism of that. But, if there is a dispute and one party wishes you to put down amendments, you should look at that carefully, just as you should look at the arguments of the other side.
I believe that these amendments go too far in seeking Parliament to resolve technical issues which are highly disputed between the parties. Whether or not one party is right I am not qualified to judge, but the amendments go very far in determining the precise detail of what should be done.
I have a lot of sympathy with the amendments—I am in danger of getting into a polarised position—but I disagree with the noble Baroness, Lady Howe, that they strike a proper balance between what Parliament should do and what the regulator should do. Mostly this should be a matter for the regulator's expertise and knowledge. However, there is a case for bringing forward amendments which do not go quite as far as these but give the regulator a further nudge in the direction in which the noble Lord, Lord Avebury, and the noble Baroness wish to go.
At this time of night my final remark may be felt to be holding matters up, but I cannot understand why everyone believes that it is so horrifying to find themselves on a EPG next to the Playboy channel. My own experience suggests that they are much more likely to be found in that position than in most others.
Lord Crickhowell: I rise, I fear, to be accused of introducing a patent note into the discussions in that I suspect I am, in part at least, going to say something similar to what the noble Baroness may say from the Front Bench. That is because on this occasion I am not sure that we want to add to the difficulties that will face Ofcom by defining the matter quite as it is defined in the amendment. I have recently had a conversation with the chairman of Ofcom. I said that I hoped we were not adding too greatly to his difficulties by being too precise about all the things that he has to do in the first months of his responsibilities.
Having said that, I should emphasise that this is an extremely important issue because of the principles involved and, as has been alluded to, because those providing the service can effectively do great damage to individual broadcasters if they do not identify very clearly where the broadcasts can be found. It may be that there is a very simple answer, or the beginnings of a simple answer, by adding "Public Service Broadcasting" to the list that appears on one's screen—"Sport", "Music", "Entertainment" and so on—so that when you press the button for "Public Sector Broadcasting" you get a list of all the public sector broadcasts and where they appear.
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If I rise at all today it is because I have already some practical experience of the difficulties involved, living as I do in Wales and receiving my television, in the only way I can in my valley, through my Sky dish. It is not quite as simple as some noble Lords have indicated. It has been suggested that those who live in Wales or Scotland simply have to have the appropriate programme for Wales or Scotland, but if you live in Wales you get S4C and if you do not speak Welsh you have to find an alternative.
I know now that by going to 184 I can receive English language television and not Welsh language television. But even then it is not all that simple because, if you turn on the regional programme at particular times, in Wales you frequently get Welsh club rugby on BBC. I watch it from time to time but it is not my greatest passion. If I want the alternative, I have to find my way to a channel in the 400s, which broadcasts the programmes that viewers elsewhere in the United Kingdom can watch—or switch to Ulster, where I can often find the kind of programme I want. All those channels are scattered throughout the system and their number is growing ever bigger.
I am entirely with the noble Lord, Lord Avebury, as regards the importance of the issue. I hope we can start with my suggestion of listing public service broadcasts with their channel numbers, which viewers can display on their TV screens and access relatively simply. However, the amendment may have shortcomings. We could be making Ofcom's job more difficult. This is one occasion when I would prefer to leave it to the wisdom of Ofcom to interpret Clauses 304 and 305, which create the code and the means of enforcing it. If Ofcom is as efficient at regulating as I hope it will be, the problem will be solved.
On this occasion, I take the risk of agreeing with the Minister. I do not go with the amendment but strongly support the important issue that it raises.
Lord Borrie: It seems a growing tendency in the Committee to consider what my noble friend the Minister is going to say before she has said a word. I have no idea what she will say but fully agree with the noble Lord, Lord Crickhowell, about the importance of the subject. I am slightly anxious, because of the hovering of Chief Whips, that we may be reaching the close of today's debate.
Noble Lords: No chance.
Lord Borrie: I am glad that that is the case and that we may reach other important matters in due course. I shall not delay the Committee unduly.
The purpose of Clause 304 is clearly to require of electronic programme guides that they give appropriate prominence to listing public service channels. Clause 304 implicitly accepts that the owners of EPGs may have good commercial reasons for giving favourable positioning to non-public service channels but in its reference to gibing due prominence to public service channels the clause is not very precise. The noble Lord, Lord Crickhowell, says that the matter can be left to Ofcom. It will be a body of men and

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women, all good and true, who will do their best—but they will be guided by the Act. Is there any harm in giving it more precision than the little now offered by the Bill?
I find myself favourably disposed towards the amendments. Their value is in giving some precision where none exists and covering regional or local variants of public service channels so that they are easier to find. I do not see that as being over-prescriptive or over-precise but as giving precision where there is precious little now. I give no particular credence to the precise wording and I am sure that the government draftsman can do better. Nevertheless, the attempt by the noble Lord, Lord Avebury, and the noble Baroness, Lady Howe, to give precision where little currently exists is worth commending.
Lord Roberts of Conwy: We all agree that the problem arises because of a lack of definition of due prominence and because of the difficulty of finding the channels in question even now.
I have a particular concern at the possibility that digital satellite viewers in Wales may not be able to receive, for example, BBC] and BBC2 Wales through the electronic programme guides 101 and 102. It is for that reason that I believe the Bill requires amendment both to tighten the definition of due prominence on the EPG and also to extend it to national and regional variations of public service channels.
I make no apology for speaking about Wales in particular because its television audience is quite complex and diverse. Its take-up of digital television is higher than the United Kingdom average. Within the digital audience there is a particularly high proportion of digital satellite viewers, not least because of the difficult topography. Without being able to access BBC Wales on 101 or 102, instead viewers have to rummage around among the bottom rungs of the EPG, as the noble Lord, Lord Lipsey, has said, and only slots away, I am told, from the pornography channel, which may distract them.
Viewers may opt for non-Wales services for a host of reasons. That could result in large parts of the population having minimal access to information and news from and about Wales. We heard earlier today that a healthy democracy depends on people having many sources of information, which is a matter of great concern in post-devolution Wales where the BBC and HTV are one of the few providers of Wales-based news and so forth. So we may not be surprised at the 38.2 per cent turn out in the Assembly election, which has implications for democratic credibility. Therefore. it is vitally important that people should be able to access these services.
In an age when we are encouraged increasingly to view on the global level, it is vital that we still look to the local. The Bill has a duty not only to promote diversity and creativity, but also to safeguard the needs and interests of its many different audiences. In my view it is essential that we continue to connect with our
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communities by ensuring that they have proper access to the programmes and services which have most relevance and resonance in their lives.
These are some of the reasons why I am seeking reassurance from the Government that all efforts will be made to find a solution that ensures that viewers in Wales, and in the rest of the UK for that matter, have access to their correct national or regional variations of the BBC and ITV services on digital satellite. I urge the Government to support the amendment to Clause 304 that would ensure that that is made possible.
10.15 p.m.
Baroness Jay of Paddington: Having been accused earlier of being a supporter of British vagueness, perhaps I may say on this amendment that I support my noble friend Lord Borrie and the movers of the amendment in wishing to see a degree of prescription about due prominence and about the regional aspects of access which were discussed earlier by other noble Lords.
I hope that this is not introducing a particularly aggressive or antagonistic note, but my feeling is that some of this is about things other than the mechanical ability to be able to find a public service channel in a complicated technology. The noble Lord, Lord Lipsey, identified this as a BBC amendment—which is, as I said in my intervention to his point, unfair—but the prominence of this issue has come about because of the BBC's decision to use non-encryption for its digital services and to use a new satellite for that transmission.
Reference was made earlier today to there perhaps being some rather sinister point behind the fact that the BBC has not adhered to its original date of 1st June to stop encrypting its services. From making inquiries, I understand that this is because, far from being in some terrible war, as it were, with BSkyB on this subject, it is trying to negotiate an arrangement for the placing of its programmes on the EPG. At its May meeting, the ITC has not been able to deal with this issue and has asked that it be postponed in order that the rolling contract that the BBC has with BSkyB is continued until July. I think that reveals something about the inability of the regulator exclusively to deal with the matter at least in any urgent fashion.
There is a real issue here about the value that we place on public service broadcasting. We have all usefully spent a great deal of time in Committee today and on previous occasions trying to define what we most value in the public service remit and the qualities that we look for in public service broadcasting. We must be aware that there could be some form of retaliation in a public service broadcaster seeking to use other technical means to distribute its digital programmes by a commercially-operated, profit-driven satellite owner. It would be ridiculous if we did not acknowledge that.
We have said that we value public service broadcasting. That has been the consistent and universal view of Members of the Committee who have spoken today. We have given great attention to

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what we value in it, how we seek to describe it and how we recognise it. We must also recognise that in this global world, with satellite access often being in the hands of those who perhaps do not have the vision of public service broadcasting that we have discussed today, we must not only value it and enable it to be seen mechanically, but we must also protect it. Otherwise, I fear that we are perhaps in danger, by a process of unforeseen consequences, of agreeing with, or at least accepting, the view of Mr Rupert Murdoch which has been put before me recently, in which he said that he had,
"never heard a convincing definition of what public service television really is. My own view is that anybody who provides a service which the public wants at a price it can afford is providing a public service".
On the basis of the contributions made in Committee today, I do not think that that is the view of Members of the Committee. That is something from which we must seek to protect our television services.
Baroness Buscombe: I want to be brief. I have two very powerful briefs in front of me—one from the BBC and one from Sky. In a sense, I have tried to take a few steps back from two sides of a very powerful argument. My noble friend Lord Crickhowell and the noble Lord. Lord Borrie, have said that this is a very important issue because some important principles are involved. I rather like the idea proposed by my noble friend Lord Crickhowell that we should perhaps move towards a list of public service broadcasting channels so that we can easily find them. Perhaps we could do that when we have decided what public service broadcasting means.
On that point, we know that the BBC has been threatened with demotion on the EPG from 101 and 102 to 214 and 215. When I mentioned this to my teenage children, they knew immediately where that would put them on the EPG. To some extent, this is almost a generational problem. Young people do not consider this an issue. As far as they are concerned, it is all accessible, it is all more choice and it is all easy to access. However, I have enormous sympathy with the principle behind the amendments. We on these Benches have already made clear that we support the principle of due prominence. I agree that it is worthwhile nudging Parliament to give us a clearer definition of due prominence.
My understanding is that the proposed amendments to Clause 304 would tighten up what is meant by due prominence for public service channels so that EPG owners could not interpret that in any way that suited them. I also understand that the proposed amendments would also extend the principle of due prominence to include regional and local variants of public service channels so that EPG providers had an obligation to make them easy to find. I have every sympathy with that. Several Members of the Committee, particularly my noble friend Lord Roberts, explained eloquently why that is so important.
However, I wish to raise one concern. If we are talking about having due prominence for public service channels, that is all well and good at the
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moment but what happens as we move into the future? Amendment No. 250A concerns me as it seems that it would require that the prominence given to the BBC services, or public service broadcasting services, would be greater than it would have been without the giving of such guidance as is to be specified in Ofcom's code, and that the degree of prominence at least matches the degree of prominence in existence at the date of the commencement of the Office of Communications Act 2002.
Does that mean that public service broadcasters could claim that a code requirement for greater prominence entitles, for example, the BBC's new digital services such as I3BC3 and BBC4 to be placed ahead of competitors such as E4 and Arts World which were given fair, reasonable and non-discriminatory listings in the EPG? I believe that that could cause concern not just among those who are passionate believers—as are the Committee and myself—in public service broadcasting but also among viewers. At the end of the day we have to think of the viewers. How are they supposed to discriminate between what we think of as public service broadcasters and something like Arts World which has all the character—if I can put it that way—of public service broadcasting? In that sense perhaps this approach could prove—certainly in the future as more channels become available—unfair, unreasonable and discriminatory.
I have real concern about how one would set the parameters in terms of easy access as we move into the future and have more and more choice. I am also concerned that we find ourselves being drawn into an argument between two particular parties at the moment. I have great sympathy with what the noble Lord, Lord Borrie, said; namely, that perhaps this question gives us an opportunity to nudge matters in the right direction and to obtain more clarity in Parliament with regard to what we mean by due prominence.
Baroness Blackstone: My noble friend Lord Borrie teased the noble Lord, Lord Crickhowell, and suggested that he predicted what I would say some time before I spoke. However, the noble Lord. Lord Crickhowell, was absolutely spot on. He predicted perfectly what position I would adopt. The matter raises a lot of important issues but the noble Lord is absolutely right that it has to be a matter for Ofcom.
I turn to the amendments that we are discussing. The proposed new subsections (2A) and (2C), which Amendment No. 250A seeks to introduce to Clause 304, relate to the provision of regional versions of some public service channels. As the Committee will be aware, the broadcasters that provide such regional versions have numerous listings on EPGs but which version of a channel is accessed through a broadcaster's primary listing is currently dictated by where in the country it Is viewed. Hence in Scotland what the viewer simply selects as BBC I is actually the regional variation BBC Scotland, whereas in London it is BBC London. That is no accident, nor is it

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inevitable. Rather it is an agreed arrangement borne of free commercial negotiations between the broadcasters and the providers of EPGs.
The intention behind proposed new subsections (2A) and (2C) appears to be to allow a broadcaster, or in some cases its viewers, to choose which version of the broadcaster's channel is accessed through the primary listing of that channel. That seems a perfectly reasonable goal, and I am not aware of any reason why it cannot be achieved at the moment. Indeed, if Ofcom saw fit to do so, Clause 304 would already allow it to set requirements as to the presentational aspects of EPGs to make sure that that was the case.
Therefore, my objection to the proposal lies not so much in the end result that it seeks to achieve, which seems perfectly legitimate, as in the means by which it seeks to do so. It would seek to set in stone something that should be left either to free negotiation or to Ofcom's discretion to resolve. Moreover, it would constitute a perfect example of the type of over-regulation that we have made great efforts to avoid in drafting the Bill. In my view, it would constitute a totally inappropriate use of statute.
My objections as regards proposed new subsection (2B) are broadly similar. In short, the provision would seek to determine through statute something that ought to be left to the discretion of the parties or at least the regulator. I have a further objection. What is proposed in paragraph (a) does not seem feasible. Members of the Committee need only apply the wording of the paragraph to BBC1 to see what I mean. It already appears as the 101 listing at the head of the most commonly used EPGs, and I am not aware of any 100 listing, so I fail to see how Ofcom could ensure it greater prominence than it has at the moment.
If those behind the amendment seek confirmation that we want to make it possible for public service channels to be given more prominent places on EPGs than might be the case if matters were simply left to negotiation, let me assure them that that is certainly our intention. It is the purpose of Clause 304(2). However, as I said, it is equally our intention to leave it to Ofcom to decide what prominence a given channel should be afforded. It will have to take lots of factors into account, such as the degree to which the removal of a channel to a new part of the listing might inconvenience viewers. Ultimately, however, we want to leave the matter to its discretion.
I shall answer the question posed by the noble Baroness, Lady Howe. EPGs are now regulated by Oftel and the ITC. It will be for Ofcom to draw up a new single code on EPGs. However, I do not expect that the current provisions she mentioned, which basically seem useful, will be significantly amended.
I am afraid that proposed new subsection (2D) is unacceptable, too. Although it is natural that the affected parties want to know what lies in store for them, the regulation of EPGs seems set to be a pretty technical and complex matter. If it turns out that Ofcom is able to draft, consult and finally publish the code required by Clause 304, all within six months of
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the commencement of the clause, all will be well and good. Given the importance of getting the matter right, however, I see no reason to set what may well turn out to be an unrealistically short period for the accomplishment of what is, as has been said around the Committee, a very important task.
Amendments Nos. 250B and 250D are related. To date, the only services to which we have wanted to give the benefit of due prominence have been television services. Amendment No. 250B aims to extend that benefit to BBC digital radio services by adding them to the list of public service channels in Clause 304. That seems misguided. In contrast to television, there are no public service channels on radio other than those provided by the BBC. Affording those channels due prominence would create an imbalance between the BBC and commercial radio services. We do not believe that that would be appropriate when digital radio is still in its infancy.
Amendment No. 250D also relates to radio services. It aims to extend the scope of the clause to cover EPGs on radio. Since its effects would therefore be felt more generally, it would not create the sort of imbalance that it seems would result from Amendment No. 250B. I would be happy to take it away for consideration.
I now return to Amendment No. 250C, which would extend the list of services to be given due prominence to any of those provided by the Welsh Authority and not just S4C Digital. I agree that if the listing position given on an EPG is significant in attracting an audience, it is quite important for S4C that its viewers have easy access to the channel wherever they are in the UK. But I believe that the amendment is superfluous, as, if a new service is provided by the Welsh Authority, under Clause 202, subsection (4) of Clause 304 would allow the Secretary of State to add it to the list of channels benefiting from due prominence.
In light of my response to all of the amendments, I hope that the noble Lord will withdraw his amendment.
Lord Avebury: I thank all those who have spoken in the debate, particularly the noble Baroness, Lady Howe. I thank the noble Baroness, Lady Jay, for clarifying something which caused a little concern at earlier stages in the debate. I am sure that all your Lordships will be pleased to learn that there is a prospect of an agreement and that the reason why the BBC has not gone free to air for the time being is simply that it is allowing extra time in which an agreement can be reached in the dispute over EPG and that by July a solution will have been reached that will satisfy all concerned. We very much hope that that will occur.
I accept that it would be impossible for us to design a solution along those lines. What we have put forward is only an attempt at what all your Lordships said ought to be done; that is, to clarify further what we mean by due prominence. To that extent, I am disappointed by the Minister's reply and I can only comfort myself with the thought that, from everything that your Lordships have said, the Committee does

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believe that due prominence should include many of the elements that we have tried to insert into the amendment. When Ofcom considers the code, whether it takes longer than six months or not, presumably it will look at Hansard and, in the absence of any other guidance, see what your Lordships have said. That will help Ofcom to arrive at what it thinks the code should say about due prominence. For that reason, I am pleased that we have had the debate and I hope that it will have been of some service to those who will have to consider the issue in the future. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 250B to 250D not moved.]
Clause 304 agreed to.
Clause 305 agreed to.
Clause 306 [Character and coverage of sound broadcasting services]:
Lord Dubsmoved Amendment No. 250E:
Page 270. line 5, leave out "the words from "except" onwards shall be omitted" and insert "for the words from "except" onwards there is substituted "and, in the case of a local licence, that an appropriate amount of local material is broadcast, of which an appropriate amount is locally made""
The noble Lord said: My noble friend Lord Eatwell apologises to the Committee for the fact that he is not able to be here this evening and he has asked me to introduce the amendments on his behalf, which is something I am very happy to do.
I wish to move Amendment 250E and I shall also speak in support of Amendments Nos. 252A and 252B. I also wish to oppose the Question that Clause 307 stand part of the Bill.
We are discussing local radio. Both Clause 306 and Clause 307 reflect the Government's desire to strengthen and sustain localness in local radio, which is something that would command widespread support. That is an objective which I believe is well served by Clause 306, but is ill served by Clause 307.
At Second Reading, my noble friend Lord Eatwell argued that Clause 307 was notable for the fact that it was injected into the Bill without any consultation whatever with those whom it was intended to regulate. He also said that it was damaging for a number of reasons. It creates a "one size fits all" regulatory code that will be irrelevant and damaging. I do not believe that anyone can say that one code can capture what localness means in relation to, for example, Capital Radio in London, which broadcasts to 10 million potential listeners, and Oban FM, which broadcasts to 15,000.
The thinking behind Clause 307 involves excessive micro-regulation of inputs into radio programmes but nothing for the outputs. It is ridiculous for Ofcom to be charged with ascertaining for every radio station in the country where their employees live. Surely it is unreasonable to ask Ofcom to do that, and reflects not a light touch but a heavy-handed approach. It is equally ridiculous that Ofcom should, for every radio station in the country, be required to regulate the amount of local advertising. That is surely best left to
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commercial pressures arid skills. I cannot believe that the Government intend to persuade a radio station to turn away advertising. For example, would they want a large metropolitan station to turn away major national brands simply because it did not have that local element? That is not necessarily how advertising works and it would be inappropriate in this case. Is specifying exactly how a station should run its sales business what the Minister meant at Second Reading when she referred to light-touch regulation?
The simple point is that if localness means anything, it must mean diversity and variety. Clause 307 would work as much more of a straitjacket and should not stand part of the Bill. Fortunately, we already have a solution at hand in the Bill; that is, in Clause 306. The outstanding virtue of the approach to localness in Clause 306 is that it achieves its goals via the specification of format in the award of the licence. In other words, the specification of localness is tailored to local conditions. Instead of the straitjacket of a "one size squeezes all" code, Ofcom can secure and protect the local characteristic—the individual characteristic of each station.
Moreover, Clause 306 places the weight of concern where it should be: with the listener. Clause 306 does that as it stands. However, my noble friend Lord Eatwell, who has had discussions with some DCMS officials, identified various concerns that are dealt with in Amendments Nos. 250E, 252A and 252B. Those amendments strengthen significantly the ability of Ofcom to specify local characteristics in a licence format. Amendment No. 250E makes localness a licence requirement. Amendments Nos. 252A and 252B ensure local production by requiring that an appropriate amount of material is made locally.
Amendment No. 252B also broadens the definition of what is "local material". At present, Clause 306 characterises that as material including news that is of particular interest to local people. The amendment broadens the definition of "local material" to include, "news, information or entertainment". I suggest that that far better reflects the diversity of the different ways in which different stations can be local. News is not the only way in which stations connect with their locality. They do so through the provision of local information about charities and events, as we all hear on our local stations, and through tailored provision of, for example, musical outlets, reflecting live music in the region, or discussion programmes and so on. I emphasise that the crucial power of Clause 306 strengthened by the amendments is that Ofcom may determine localness on a case-by-case basis. The use of the word "appropriate" in Amendment No. 250E permits different localness requirements to be set for different types of station. Those that serve a geographical community, such as Tower FM in Bolton and Bury, should be treated differently from those that primarily serve a community of interests, such as Jazz FM.

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Localness is important. That is why people listen to their local station; and Clause 306, as amended, would allow radio to celebrate the diversity of localness. I beg to move.
Baroness Buscombe: I rise to speak to Amendment No. 254 and to oppose the Question that Clause 307 stand part of the Bill. Furthermore I support the amendment tabled by the noble Lord, Lord Eatwell, and spoken to by the noble Lord, Lord Dubs.
Clause 306 relates to the character and coverage of sound broadcasting services and amends Section 106 of the Broadcasting Act 1990. Clause 307 seeks to define localness for commercial radio purposes. It requires Ofcom to draw up a code and identify a substantive input requirement that could be covered with a view to maintaining and establishing connections between local sound broadcasting services and the relevant localities. The UK radio industry has enjoyed fantastic growth in the past 10 years. We need to provide a regulatory structure that will encourage growth and innovation in that fast-moving, converging media environment.
The regulatory regime proposed by the Bill for local radio places an onerous burden on the local stations within its remit. Clause 307 was not included in the draft Bill, and as a result was not considered by the draft scrutiny committee. The policy behind the additional clause concerns me greatly. If implemented, Clause 307 would grant Ofcom the power to micro-manage the day-to-day running of local radio stations. The clause is so prescriptive that it requires the local radio station to maintain premises within the area of locality, provide local training and development and employ local people. Surely the ability to perform a job should be a consideration when deciding to employ a person, not merely where that person lives. I emphasise that we are not questioning the validity of the overriding legislative objective that local radio stations should provide a local service. However, we do not believe that it is necessary to impose such prescriptive obligations on the local stations affected. Indeed, the concept of localness is entirely subjective. Perceptions of locality may vary for a number of reasons—language and culture for example.
Our philosophy is simple. A local radio station has to take into account the requirements and needs of local listeners. Commercial radio is not vastly profitable. The stations have to ensure that they are successful. If they fail to do that effectively they will not survive. The localness of a particular station will not depend on whether the employees live just inside or just outside the area in question.
The Bill is largely deregulatory in its approach. The general principle that underpins the Bill is self-regulation or co-regulation where possible, and only to impose a regulatory regime where necessary. Do the Government believe that the clause will advance that general policy? Do they not agree that the clause intimately defines how a local radio station should be run rather than setting out the purpose that should be
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achieved? The Government have failed to appreciate that localness would result from commercial demands alone and that a co-regulatory approach would provide a more efficient local radio broadcasting service that does not measure its success on input requirements.
We oppose the Question that Clause 307 stand part of the Bill. The Government have stated that Ofcom can choose whether or not to include the input requirements in the code, as imposed by the clause. That begs the question—why have a legislative obligation to compile a code at all? That is an area where self-regulation or co-regulation would be a more appropriate alternative. The service provider would be in a more suitable position to determine how best to further local interests and local culture.
Amendment No. 254 requires Ofcom to have regard to the extent to which the various requirements of Clause 307 are being satisfied by self-regulation prior to drawing up or revising a code. That would encourage local radio stations to comply with the spirit underpinning Clause 307 through self-regulation. The inevitable result would be substantial compliance, where appropriate, with various conditions set out by the legislation. In addition self-regulation or co-regulation would place less of a financial burden on Ofcom, and I urge the Government to consider the significant advantages that a less prescriptive regime would demand.
I turn to support the amendments in the name of the noble Lord, Lord Eatwell. Amendment No. 250E recognises the importance of local broadcasting without listing input requirements. It would effectively ensure that the services remained locally focused without detailing how that objective was to be achieved. The focus would be on content rather than input and it omits the need for a legally enforceable code detailing the locality requirements set out in Clause 307. The amendment would thus ensure that the local character and coverage of a service is maintained through the condition requiring that an appropriate amount of local material is broadcast of which an appropriate amount is locally made. The amendment also ensures that the locality element is maintained, even if the terms of the licence are varied.
Amendment No. 252A complements Amendment No. 250E by defining the phrases "local material" and "locally made". We support this proposal to limit unnecessary control and to encourage industry participation in the regulatory structure.
I also support in principle Amendments Nos. 253 and 255. The importance of the music industry cannot be underestimated. That is why we wish to encourage its continued growth. We do not believe that the correct place to include a reference to music is Clause 307. I raised this issue earlier in Committee when we debated Amendments Nos. 251 and 252 to Clause 306. We want to achieve the appropriate balance. We believe that Clause 306 is the only clause where these issues can be comprehensively addressed.
10.45 p.m.
Lord Gordon of Strathblane: I support the amendments in the name of my noble friend Lord Eatwell and I support the noble Baroness, Lady Buscombe, in opposing the Question that Clause 307 shall stand part of the Bill.
As my noble friend Lord Dubs indicated, one year ago the draft Bill gave Ofcom a duty to promote and protect the local content and character of local radio. No one quarrels with that. The correct way forward is perhaps to leave it at that and say to Ofcom, "Right, it is up to you how you go about this". I hope that it would consult with the industry and with other people who know something about it and come forward with a code which it would then enforce.
I was shocked to find that there had been no consultation with the industry about Clause 307. It possibly stops short of describing what colour the wallpaper will be at various local radio stations, but not by much. It goes into a ridiculous amount of detail and can have been drafted only by people who know little about local radio. I take one example. What is a local advertisement? Is it an advertisement for a local product or service? If it is not, why would it be on the local radio station? Ultimately, everything is delivered locally, whether it is from Marks and Spencer, Safeway or Jaguar. Products are purchased in a locality and therefore the advertisements are for local products and services.
Is the product locally made? That is not a restriction on the radio station; it is a restriction on the advertiser. If I operate the local garage, is it being said, "Sorry, you cannot go to a London advertising agency. Saatchi and Saatchi may be all right for people down there, but how dare you use them? You must use a local agency". There may not be one in many localities. It is daft.
As the noble Baroness, Lady Buscombe, pointed out, it is not only news that defines a local radio station. If a tune is played as a request for someone's granny in the area, it has a local flavour to it. That is who local radio plays to. It is why independent local radio has successful audiences. It is not because they are more professional than the BBC presenters, as I have said previously—of course they are not—but they are more locally based. They are anchored in their communities.
As regards advertising, one cannot define proportions because it depends on the size of the radio station. I mentioned previously that I am still chairman of Scottish Radio Holdings but no longer have any hands-on executive responsibility. Within that comparatively small group of radio stations, we have a station like Radio Clyde, which with a very large audience is clearly attractive to national advertisers and too expensive for local plumbers. Why would a local plumber advertise on a station with a catchment area as large as ours and waste many of his bullets? By contrast, a station like Borders or South West or Moray Firth in Inverness is not particularly attractive to national advertisers because of their comparatively small populations. But the local
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plumber might well want to advertise on these because he does not waste money on an audience that cannot use his product.
The idea that one can put forward a one-size-fits-all certain percentage of local advertising frankly does not bear scrutiny by anyone who knows anything about the way local radio or the advertising industry work. I favour the route that operated while I was involved. An application—
Baroness Blackstone: I wonder if I may intervene. I am a little surprised that my noble friend Lord Eatwell did not make it clear to my noble friends Lord Dubs and Lord Gordon of Strathblane that we are going to take away these amendments and come back at Report. I made that clear to my noble friend Lord Eatwell, so I think it would be helpful before we go further—
Lord Gordon of Strathblane: If Clause 307 is being withdrawn, I can sit down very quickly. If Clause 307 is going, I am delighted.
I should like to come back to Clause 306 which is staying and about which I should like to say a word. A bid is put forward to run a licence. If successful, a licence is awarded and it is up to the regulatory body which in my day was the IBA, then the Radio Authority and now Ofcom—to ensure the licensee sticks to that promise. That promise will include a degree of localness. That is the way forward. I am delighted to hear that Clause 307 is coming out.
Baroness Buscombe: I should like to intervene. My name is at the top of the statement that:
"The above-named Lords give notice of their intention to oppose the Question that Clause 307 stand part of the Bill."
I have had no prior notice that that clause was going to be withdrawn. That was why I spoke at length.
Lord Brooke of Sutton Mandeville: I shall be extremely—
Baroness Blackstone: I wonder whether I could respond to what has been said. If the noble Lord, Lord Brooke, does want to come in, I will sit down again.
I did not actually say to my noble friend, Lord Gordon of Strathblane, that I would withdraw Clause 307. I want to make it clear that extensive discussions have taken place between the noble Lord, Lord Eatwell, and his representatives and officials of my department. We have conceded that we have not got this right. We do want to come back at Report with amendments which will resolve the problems that noble Lords have pointed out. If the noble Lord, Lord Brooke, still wants to speak, I shall sit down, otherwise I should like to explain the position of the Government.
It would be simplest if I dealt first with Amendments Nos. 250E, 252A, 252B and 254 since they all deal with the means by which the local content and character of local radio should be protected. I will then go on to Amendments Nos. 252C, 253 and 255 which deal with the more detailed but no less important questions of

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whether the provisions relating to localness need to refer specifically to music, musicians or local talent. The Government have agreed a significant relaxation of the ownership rules for local radio, so that there could be as few as two owners in each area. On a national level, the ownership rules would, by extension, permit the UK radio industry to be dominated by two major groups.
Clearly, we believe that these new ownership rules are right or we would not be proposing them. However, we also recognise that there is a possible risk that greater consolidation could lead to a loss of localness in local radio. We do not say that this will inevitably happen, merely that it could happen. We therefore want to establish a structure that avoids any damaging effects on local radio.
Clause 307 therefore requires Ofcom to draw up guidance on localness. There has, however, been concern in the radio industry that this could lead to the micro-management of the industry, as my noble friend Lord Dubs expressed earlier in this debate and as my noble friend Lord Eatwell expressed at Second Reading. The radio industry has made a number of constructive suggestions to change the Bill which we very much welcome. Those suggestions are given effect to in the amendments before us. We very much welcome those suggestions. As I said just now, my officials have discussed them in some detail with the industry. We are persuaded that we should make changes to the Bill which retain protection for the local character of radio stations while addressing the issue of micro-management. I should like to consider the options and bring back amendments on Report.
I have some sympathy with the thinking behind Amendment No. 254 but I do not think that the amendment is acceptable. We believe—the industry recognises that in its amendments—that there is a case for strengthening Ofcom's responsibilities for securing the broadcast of local material, of which an appropriate amount is locally made. In other words, I believe that the case is already made for taking action now.
However, I would remind noble Lords that this duty of Ofcom's will have to be interpreted by it in the context of its general duties. That will ensure, among other things, that its regulation is proportionate and targeted only at cases in which action is needed. I believe that that, along with the amendments I hope to table on Report, should be sufficient to ensure that Ofcom does not adopt an over-regulatory approach to that duty.
I have much sympathy with the thinking behind Amendments Nos. 252C, 253 and 255. We recognise and value the British music industry and recognise also the importance of the relationship between the radio industry and the music industry. I have already indicated that I should like to consider the amendments tabled to Clauses 306 and 307 with a view to tabling government amendments on Report. I want to ensure that the amendments adequately cover the central notion of "local material, of which an appropriate amount is locally made". However, in
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doing so I shall take careful account of the points made about the importance of music, particularly in local radio, and shall consider whether that can be better reflected in the wording of the Bill. In doing so, we shall be helped by the imaginative and constructive amendments we have debated tonight.
Lord Thomson of Monifieth: The Minister has made an important statement and created a new situation. I was to speak purely to Amendments Nos. 253 and 255 on the importance of music to local sound broadcasting. Therefore, I am grateful for the very positive mentions the Minister made about that and her rethinking of the situation.
On a general point, one of the matters which interested me in preparing for this part of the debate was what was said by the Minister in another place, Dr Kim Howells. He stated frankly that the Government's proposal represented,
"an enormous liberalisation so as to allow for the possibility—I hope that it does not come to pass—of two large radio groups dominating the UK market. If we do not take steps to prevent it, that level of concentration could lead to a drift away from localness".—[Official Report, Commons, 25/02/03; col. 163.]
The knowledge we have of what happened in the United States, where legislation led to huge changes in concentration of ownership, leads us to feel that we very much welcome the fundamental reconsideration mentioned by the Minister. I hope that as well as continuing to respond positively on the importance of music in local sound broadcasting, the Government will be able to reassure us on the wider implications of the liberalisation of their ownership policy in terms of retaining a local sound broadcasting industry which really shows local character and identity.
Lord Dubs: I am extremely grateful to my noble friend for her handsome response. We look forward to seeing what the Government come up with on Report. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 251 to 252B not moved.]
Clause 306 agreed to.
Clause 307 [Local content and character of local sound broadcasting services]:
[Amendments No. 252C to 255 not moved.]
Clause 307 agreed to.
Clause 308 agreed to.
Clause 309 [Conditions relating to competition matters]:
[Amendments Nos. 255ZA to 255ZC not moved.]
Clause 309 agreed to.
11 p.m.
Clause 310 [Exercise of Broadcasting Act powers for a competition purpose]:
Baroness Buscombemoved Amendment No. 255A:
Page 273, line 34, at end insert "; and

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(e) every power of theirs to issue a code of practice or guidance to holders of such a licence"
The noble Baroness said: I shall also speak to Amendments Nos. 256, 257, 258ZCA and 258ZE to 258ZH.
The amendments address an extremely important issue relating to the economic regulation of broadcasters, which was extensively debated in Committee in another place. The answers provided by the Government at the time were unsatisfactory, and we have therefore decided to return to the issue to press the Government further.
The Bill gives Ofcom sector-specific competition powers relating to broadcasting, which allow it to include a general fair trading condition in Broadcasting Act licences, and also the ability to exercise concurrent powers under the Competition Act 1998. There are significant concerns, however, over the Bill's provisions which enable Ofcom to undertake economic regulation of broadcasting through broadcasters' licences under the Broadcasting Act in addition to these two groups.
Part 3 gives Ofcom overall power to regulate the broadcasting sector via broadcasting licences issued pursuant to the Broadcasting Acts of 1990 and 1996. This gives Ofcom the power to impose licence conditions on licensees and issue directions pursuant to the fulfilment of Ofcom's duties. However, Part 3 provides no guidance on how or indeed whether Ofcom should undertake the economic regulation of broadcasting, using its Broadcasting Act powers as opposed to its Competition Act powers or its sector-specific competition powers.
The key point here is that clearly not all conceivable matters of economic regulation will be matters of competition. Some will be matters of consumer interest, which have no or little competition element. For example, could Ofcom impose conditions on broadcasting licensees relating to the packaging and pricing of their channels and services, pursuant to its duties to further the interests of consumers in relevant markets, or to secure the availability of a wide range of TV and radio services?
It is important to note that decisions under the Competition Act or for a competition purpose under subsection (4) provide for a full right of appeal to the Competition Appeal Tribunal. However, decisions made pursuant to Ofcom's broadcasting powers exercised other than for a competition purpose would not attract a right of appeal to the Competition Appeals Tribunal.
It should also be noted that even if a decision of Ofcom is partly made for a competition purpose the clause provides that no appeal to the Competition Appeal Tribunal will be forthcoming. An appeal would be possible only if the decision was made by Ofcom where the only or main reason was a competition purpose.
As 1 said in an earlier debate on Part 2, there is serious concern that this lack of appeal right fails to provide broadcasters with the same rights as, say, telephony providers and providers of other electronic
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communications networks and services when they find themselves subject to economic regulation by Ofcom. That is the background to the amendment.
The first point on which I should like to seek the Minister's confirmation is whether it is the intention to task Ofcom with undertaking economic regulation of broadcasters outside the realm of competition matters. The answer to this question is important and may well determine whether my amendments are necessary, as they are designed to give a right of appeal to broadcaster licensees in circumstances in which Ofcom exercises such powers through the vehicle of television licensable content service licences.
Relevant to this analysis is the fact that cable operators who are retailers of pay television will escape regulation of their pay TV retail activities, as they may not hold TLCS licences unless they themselves operate channels. In those circumstances, it would seem disproportionate to seek to regulate identical retail activities of satellite broadcasters simply because the satellite broadcaster happens to hold TLCS licences for channels that he operates himself. The Minister's response to that disparity in another place did not address the situation in practice. The fact remains that cable operators will be unregulated and satellite broadcasters regulated in relation to the same activities simply because the models under which each operates differ.
We still have not heard an explanation of the Government's position on whether it is intended that Ofcom should seek to undertake economic regulation through the backdoor or TLCS licences in the way that we have described. The Bill does not expressly preclude that type of regulation. Can the Minister, therefore, provide such an assurance to the Committee today? If so, my amendments to these clauses may be redundant. Broadcasters will have the assurance that they are seeking; that is, they will not face economic regulation through their licences for reasons other than a competition purpose. Therefore, the question of whether they have a proper right of appeal in those circumstances becomes irrelevant.
Given that such assurances may not be forthcoming, I shall explain the reasons for my amendments. As I mentioned in my initial overview, one major concern of broadcasters is that decisions of an economic nature not taken for a competition purpose will riot, as currently proposed in the Bill, have a right of appeal to the Competition Appeals Tribunal. To clarify a concern raised in another place, we do not suggest that an appeal to the Competition Appeals Tribunal be available on all decisions of Ofcom under its Broadcasting Act powers. Most decisions will have some economic impact, however small, and we accept that they would attract no more than a right of judicial review.
The key point, however, is that decisions in the nature of the examples that I have given, such as those relating to retail pricing and packaging of television services, would attract a right of appeal to the Competition Appeals Tribunal. I have heard no rational argument as to why that should not be the case in any of the debates.

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That is to be contrasted with, for example, price regulation of a mobile telephone operator under Part 2, which attracts full rights of appeal to the Competition Appeals Tribunal. Unless the Government have a compelling reason why, say, potential price regulation of Artsworld, FilmFour or digital radio services must not have a full right of appeal, this is surely the discrepancy that they need to address.
Let me explain how my amendments seek to address the matter. Amendments Nos. 258ZA, 258ZB and 258ZC are the key. As I indicated, Clause 310(4) currently allows any persons affected by a decision by Ofcom to exercise any of its Broadcasting Act powers for a competition purpose to appeal to the Competition Appeals Tribunal. Amendments Nos. 258ZA and 258ZB seek to ensure also that any person affected by a decision by Ofcom to exercise any of its Broadcasting Act powers in the fulfilment of general duties under Section 3 may appeal to the Competition Appeals Tribunal. That would ensure that any form of economic regulation, whether taken for a competition purpose or pursuant to any of Ofcom's general duties under Clause 3, would be subject to appeal to the Competition Appeals Tribunal.
The two amendments on their own would mean that all Ofcom regulation, including content regulation, would become subject to the Competition Appeals Tribunal. That is not my intention with these amendments. Amendment No. 258ZC would amend Clause 310(8) to ensure that the right of appeal to the Competition Appeals Tribunal is disapplied in relation to all Ofcom's content regulation functions. That would be the case unless any such decision were made for a competition purpose as reflected in Amendment No. 258ZCA.
Amendments Nos. 258ZE to 258ZH to Clause 311 are consequential to these amendments and widen the scope of any future Ofcom review of its codes, guidance, directions and, as proposed in Amendment No. 258ZF, conditions. I look forward to the Minister's response to these amendments. They are a rather elegant solution to the problem and appear to resolve concern on both sides of the argument. Clearly, it is a point on which we need reassurance from the Minister.
While we are looking at the provisions regarding rights of appeal, I will, with the leave of the Committee, broaden the discussion to rights of appeal under Part 3 in relation to content. It is a matter on which I gave prior notice to the noble Lord, Lord McIntosh.
It has been drawn to my attention—I know that there is considerable concern beyond your Lordships' House, for example in the CBI—that no right of appeal exists under Part 3 with regard to content. So broadcast consumers affected by Ofcom's decision under Part 3 will have only judicial review as their appeal route. I am suggesting that that is unsatisfactory, primarily because of the limited grounds on which decisions can be reviewed.
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Unlike appeals to the Competition Appeals Tribunal under Part 2, which can revisit the merits of the decision, judicial review only looks at the way in which decisions were made. All that is despite the communications White Paper promise of appropriate review procedures within the regulator.
In its fourth report, for 2002–03, the Joint Committee on Human Rights expressed reservations about possible breaches of Article 6 of the ECHR in the procedures set out under Part 3. It also stated that judicial review is unlikely to be an effective remedy because the subjective nature of Ofcom's judgment would make it difficult to assess the quality of the decision.
I should be enormously grateful if the Minister could allay my concerns, and the concerns of those beyond your Lordships' House, by explaining how the Government envisage the appeals process under Part 3 working in practice. For example, does the Minister envisage the establishment of an internal review procedure for dealing with appeals?
I turn briefly to other amendments. Clause 310(1) identifies the powers of Ofcom to which the clause applies. It appears to me that Ofcom's powers listed here should also include its powers to issue codes of practice or guidance to holders of licences. That is reflected in Amendment No. 255A.
Clause 310(2) requires Ofcom,
"Before exercising any of their Broadcasting Act powers for a competition purpose",
to,
"consider whether a more appropriate way of proceeding in some or all of the matters in question would be under the Competition Act 1998",
Clause 310(3) requires that,
"If Ofcom decides that a more appropriate way of proceeding would be under the Competition Act 1998, they are not, to the extent of that decision, to exercise their Broadcasting Act powers in relation to that matter".
I believe this to be an unsatisfactory situation, with the Bill failing to require or even encourage Ofcom to use its concurrent competition powers in preference to its sector-specific powers.
Amendments Nos. 256 and 257 seek to introduce a less ambiguous position by requiring Ofcom not to use its Broadcasting Act powers on any matter where that matter is capable of being dealt with under the Competition Act. I am aware that this matter was addressed in Committee in another place. At the time the Minister said that the current formulation acknowledges that regulators of a range of sectors, not only of communications, are best placed to determine whether to use competition law or sector-specific powers. He also said that the parties who considered that Ofcom had taken the wrong route could apply for judicial review. This is clearly not the case. Given that Ofcom has discretion as to which route to follow I cannot imagine a scenario where a party would be able to argue successfully that Ofcom had exceeded its powers by choosing one route or the other.

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My new clause, Amendment No. 258ZD, seeks to introduce some additional procedural safeguards into this part of the Bill. I believe that the introduction of and changes to licence conditions and directions should be governed by a set of tests for their introduction and modification similar to the tests for setting or modifying conditions in Clause 44 of Part 2 which apply to electronic communications networks and services. It would be helpful if the Minister could explain why the Government have chosen not to adopt such measures in Part 3 of the Bill. I beg to move.
11.15 p.m.
Lord Razzall: Perhaps I should apologise to the Committee for intruding on private grief by intervening for the first time on Clause 309 on the sixth day in Committee. However, it falls to me to speak on competition matters in relation to amendments to the Bill.
I support the noble Baroness's requirement of various undertakings. A number of the questions she posed can easily be answered and the undertakings given. However, I find myself in some difficulty over two fundamental questions she asks. I do not see anywhere in Clauses 309, 310 and 311, to which the noble Baroness's amendments relate, any express or implied implication that the clauses give Ofcom the power to impose conditions or regulations that do not relate to competition matters. There is much in what she said about concerns that the Bill will give Ofcom powers to produce regulations that affect economic performance and economic-related issues, but nowhere in the three clauses do I find any express or implied concerns. I am sure that the Minister—who was nodding as I was speaking—could give her the confirmation she requests in regard to that issue.
I part company with the noble Baroness over the question of judicial review. Clause 310(2) is very specific:
"Before exercising any of their Broadcasting Act powers for a competition purpose, OFCOM must consider whether a more appropriate way of proceeding in relation to some or all of the matters in question would be under the Competition Act 1998".
In the event of a dispute over whether those powers have been exercised, I see no better remedy than judicial review. I disagree with the noble Baroness that judicial review on that issue is an inappropriate mechanism. Any other appeal mechanism would be much more prescriptive and restrictive. Judicial review has been developed over the years to deal with the exercise of government powers of this nature and has been rather radically honed in recent years.
The Lord Bishop of Manchester: I support the issues raised by the noble Baroness, Lady Buscombe, particularly in relation to Amendment No. 258ZCA.
In the Church of England we have spent considerable time recently looking very carefully into these matters. I support fully the view that the rights of appeal from decisions of Ofcom need to be extended to licensing and content matters covered in Part 3 of the Bill.
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I know that Ofcorn will continue the existing roles of bodies such as the Broadcasting Standards Commission, but it would greatly increase Ofcom's transparency and accountability if its decisions could be scrutinised in the manner that we on these Benches are currently exploring.
I have heard the points made from the Liberal Democrat Benches and I shall be interested to explore them further. Certainly in terms of the advice that we have been receiving in the Church of England it would seem that leaving judicial review as the only route available for redress is neither adequate nor appropriate. I may return to the issue at a later stage.
Baroness Howe of Idlicote: I have only recently heard about this possibility. I, too, am intrigued to know whether there is a likelihood of appeals, particularly on content matters. It has worried me from the beginning that Ofcom or the content board, or a combination of the two, would not be sufficiently independent—and transparently so—in cases brought against them, particularly on fairness and privacy issues. If there was a hope of a process other than judicial review—which, as we have heard, is fairly limited in what it can do for a complainant—it would relieve the minds of many people. I was particularly struck by the range of appeals and appeals upon appeals available in respect of the Bill's technical and economic provisions, which contrasts with the lack of appeal available against any of Ofcom's decisions. It will be interesting to hear more about that from the Minister. I gather that there is legal backing for the amendment and even if it is not possible, such a provision should be written into the Bill.
Lord Davies of Oldham: The noble Baronesses, Lady Buscombe and Lady Howe, and the right reverend Prelate asked about the right of appeal. Which is the right route of appeal on the decisions that Ofcom will make? In Part 3, Ofcom is asked to make subjective content judgments, with safeguards. Ofcom is required to give broadcasters a reasonable opportunity to make representations before imposing sanctions. In the event that a dissatisfied broadcaster alleges that it has been unfairly treated, it may bring judicial review proceedings against Ofcom. The noble Lord, Lord Razzall, emphasised that that is exactly the right approach. The subjective judgment on content is made by the specialist regulator under the supervision of the High Court.
The approach in Part 2 is different because there are no content judgments to be made there. Where Ofcom uses its Broadcasting Act powers for competition purpose, there is of course a right of appeal to the Competition Appeals Tribunal.
Baroness Buscombe: Does not the Minister accept that judicial review is not necessarily appropriate in this instance, given that it can only examine the methodology of a decision, not its merits?
Lord Davies of Oldham: I am inclined to follow the noble Lord, Lord Razzall. We have substantial experience of the process in terms of competition policy, and there is reasonable satisfaction with it.
Baroness Buscombe: We are talking not about competition but about aggrieved licence applicants

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and content questions—as opposed to competition matters—where judicial review would be seriously inappropriate.
Lord Davies of Oldham: With decisions involving subjective judgment, I agree with the noble Lord, Lord Razzall. that the matter should be resolved in the High Court under judicial review. Where Ofcom is involved in other types of judgment, there is the right of appeal to the Competition Appeals Tribunal, which seems an entirely justified strategy for dealing with such issues.
The noble Baroness, Lady Buscombe, suggested that there was some unfairness in the proposals in terms of the relative positions of satellite and cable. As retailers of channels, neither is licensed. Therefore, cable packages do not require a licence under Part 3 of the Bill, but neither does Sky as a package of satellite channels. Since Sky operates a vertically integrated platform in which it both packages channels and owns Broadcasting Act licences to provide content for its own channels, it considers that it is singled out from cable operators. However, if a cable operator were to own its own channel, it would be treated in precisely the same way as any other licence holder. So it is not the case that there is unfair discrimination to one provider against another.
The noble Baroness raised the issue of economic regulation. I will come to the detailed comments which she made about her amendments. Ofcom does not have a duty to regulate the economics of broadcasting per se. Ofcom has two objectives for regulating broadcasting economics; namely, competition and consumer interests. Intervention, such as economic regulation in pricing and in the packaging of channels made in the interests of consumers, should be treated in the same way in terms of route of appeal as a competition intervention.
For example, Ofcom may wish to intervene in Sky's packaging of channels so that consumers could have more choice of packages without having to buy a lot of unwanted channels as a minimum. I recognise what the noble Baroness is saying that such an intervention would have a significant economic impact on Sky. But the purpose of the intervention would be a subjective question of what represented an acceptable amount of consumer choice.
Ofcom's duty to further the interests of consumers is qualified by the parameter, where appropriate, of promoting competition. It is therefore difficult to see that Ofcom could justify intervening in the packaging of channels in the consumer interest without being able to show that it was not appropriate, via the extended general and sectoral competition powers that Ofcom will have, to resolve the issue by encouraging more competition in the pay TV market. If Sky thought that Ofcom had not properly evaluated these options it could challenge Ofcom under judicial review that it had not used its powers properly.
I turn to the amendments. I am seeking to obtain from the noble Baroness withdrawal of most of the amendments although I have some good news as
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regards one amendment. Amendment No. 256 is similar to one which first appeared in another place. It would limit Ofcom's ability to determine the most appropriate route for intervening in a competition matter. The amendment would replace the requirement on Ofcom in Clause 310(2) to choose the,
"more appropriate way of proceeding",
which is the choice between the Competition Act powers and the Broadcasting Act competition powers, with a prohibition on the use of Broadcasting Act competition powers where a matter was "capable" of being dealt with under the Competition Act.
We believe that the "more appropriate" test is in line with the treatment of other regulators with concurrent powers in relation to competition issues. Therefore, we would defend that position as enshrined in the Bill.
This formulation acknowledges that the regulators in a range of sectors, not just communications, are best placed to determine whether to use general competition law or sector-specific competition powers in a given case. We regard that as the entirely correct approach.
Conduct amounting to a breach of a competition rule made under the Broadcasting Act may also constitute a breach of the prohibitions in the Competition Act. However, depending on the circumstances, it may be more appropriate for Ofcom to act under the Broadcasting Act powers. Amendment No. 256 would hinder Ofcom's ability to make that decision.
I think that the noble Baroness would regard Amendment No. 257 as consequential and linked to Amendment No. 256. Therefore, if I am able to persuade her to withdraw Amendment No. 256, I foresee little difficulty with regard to Amendment No. 257.
Amendment No. 255A seeks to broaden the range of powers that Ofcom cannot exercise if its Competition Act powers are more appropriate, and provides for an appeal to the Competition Appeal Tribunal against the exercise of those powers. As I indicated earlier, we do not agree with this approach. It is unnecessary because sufficient safeguards are provided by Clause 310, as drafted. In particular, subsection (1)(d) ensures that Ofcom has to consider whether it would be more appropriate to proceed under the Competition Act before it decides to enforce an obligation imposed by licence conditions. That would include any obligation arising out of a code of practice or guidance issued by Ofcom to amplify those licence conditions.
Amendments Nos. 258ZA, 258ZB and 258ZC seek to give a route of appeal to the Competition Appeal Tribunal to a wider range of interventions by Ofcom. As I indicated in my more general comments before coming to the specific amendments, we do not think that would be appropriate. The Bill, taken with what will remain of existing legislation, gives Ofcom a wide range of specific functions for the regulation of broadcasting. We do not envisage it relying on general duties in Clause 3 to a substantial extent: it will use the specific powers that we have created.

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Where, however, Ofcom decides that it cannot otherwise adequately perform its general duties, it might decide to impose a licence condition that is not otherwise specifically provided for. Where it does so, that intervention will be made in pursuance of a much broader range of public policy reasons than competition alone—involving, for example, furthering the interests of consumers.
We have listened to the concerns about the exercise of Ofcom's Broadcasting Act competition powers and, in particular, that Clause 3 could be used as the basis of conditions amounting to what it terms "economic regulation", without a route of appeal to the CAT. I have sought to make clear the differentiation between the two roles of Ofcom in that respect.
Amendment No. 258ZCA appears to recognise that, in theory, Ofcom could use non-competition powers under Part 3 of the Bill—that is, Clauses 259 to 308 and Clauses 312 to 339—to intervene for a competition purpose. This rightly recognises that such an intervention should have a route of appeal to the Competition Appeals Tribunal if it was proved that the intervention was for a competition purpose. We entirely agree with this principle which, once again, I sought to emphasise earlier, and have already allowed for this in the Bill.
Amendment No. 285ZD seeks to ensure that Ofcom carries out its functions according to best regulatory practice. We do not disagree with the principle behind this. Indeed, that is the requirement of Articles 6 and 7 of the framework directive; namely, that Ofcom should adopt appropriate, fair and transparent processes for applying its powers. However, we believe that the Bill contains sufficient provisions to ensure that that is delivered. Although such a provision is made in Part 2 as a requirement of implementing the directive, there is no need to repeat the principles here. To do so would require the numerous repetitions of this text throughout Part 3.
We consider that Amendments Nos. 258ZE, 285ZF and 258ZH are unnecessary as we have ensured that provision for Ofcom to review its codes and consult on those reviews is already made in the relevant sections of the legislation. We would maintain that these amendments would therefore create much duplication. I do not see what they would add to the Bill.
Amendment No. 258ZF would require Ofcom to review every licence condition imposed on licensed broadcasters and to consult on that review. That is unnecessary since Ofcom is already under a duty under Clause 6 to review all its functions and remove those burdens that are no longer necessary.
Finally, I come to Amendment No. 258. This amendment seeks to ensure that Ofcom carries out its functions according to best regulatory practice by requiring it to inform any person affected that it has used its Broadcasting Act powers for a competition purpose. Under this amendment such a notification would include informing those affected that they may appeal to the Competition Appeal Tribunal against the intervention.
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We do not disagree with what we take to be the core principle behind this amendment—transparency and fairness of the regulatory process—and we therefore agree to consider further the possibility of tabling a suitable amendment at Report stage. I hope that the noble Baroness will feel able to withdraw that amendment on the basis that we shall act positively in future and that she will not press the other amendments in the light of the response that I have given.
Baroness Buscombe: I thank the Minister for his response. I am smiling to myself because I believe that we are about to discuss amendments which concern the concept of unsuitable versus suitable. I am disappointed that the Minister says that the Government accept the principle behind Amendment No. 258 but clearly it is unsuitable in its current form. However, I am grateful that the Minister assured me that the Government will table a suitable amendment at Report stage that we shall, I hope, be able to support.
I shall not detain the Committee at this late hour. I am clearly disappointed in relation to the Minister's response with regard to Part 3. As I say that, I look firmly towards the right reverend Prelate the Bishop of Manchester and the noble Baroness, Lady Howe. I thank them for their support for what I considered was a reasonable suggestion; namely, that, as stated in the White Paper, an appropriate review procedure within the regulator would look after the interests of those aggrieved by the provisions of Part 3. I urge the Government—I cannot put that strongly enough—to take that point away and reconsider what Members of the Committee including myself have said on that matter.
I depart most strongly from what the noble Lord, Lord Razzall, said with regard to judicial review in that instance. There are instances where judicial review is entirely appropriate but I believe that in the instance we are discussing it is not appropriate.
I thank the Minister for his extensive reply. There are a number of issues that I shall want to read with care in Hansard. I hope that the Government will bring forward an amendment that we can support. I am pleased that there are a number of principles in relation to other amendments where the Minister feels that there is some consensus. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 256 to 258ZCC not moved.]
Clause 310 agreed to.
[Amendment No. 258ZD not moved.]
Clause 311 [Review of powers exercised for competition purposes]:
[Amendments Nos. 258ZE to 258ZH not moved.]
Clause 311 agreed to.
Clause 312 [OFCOM's standards code]:
[Amendment No. 258A not moved.]
Lord Gordon of Strathblanemoved Amendment No. 259:
Page 275, line 37, leave out "unsuitable" and insert "misleading, harmful or offensive"
The noble Lord said: I rise with some hesitation to speak to this amendment in the presence of the current chairman of the Advertising Standards Authority and in the presence of a former distinguished chairman of the same body.
Clause 312 gives objectives for Ofcom to set in its codes for programmes and advertising. My amendment seeks to replace the word "unsuitable", which appears to be a lovely portmanteau word which has been very popular today, with the terms "misleading, harmful or offensive". The merit that I claim for the words in my amendment is that they have the advantage of being concepts that already form the basis of the current ITC and Radio Authority codes of advertising standards and practice. Continuity and clarity will be very important.
Advertising is fairly well regulated in this country. It is done by a system of pre-clearance in broadcasting, because clearly advertisers do not want to go to the sometimes considerable expense of making an advert only to find that the basic concept will fall foul of the regulator. In television, we have the Broadcasting Advertising Clearance Centre, and in radio, we have the Radio Advertising Clearance Centre. Advertisers can come forward with an idea, clear it informally with the regulator, and go ahead and make the advert. In the case of television, that can be very expensive. In the case of radio, a commercial can be considerably less expensive.
Clearly it is very important that people know what they are taking about. "Misleading, harmful or offensive" are words that they have grown up with over the past 20 years. "Unsuitable" is a portmanteau word that is much wider than that, and will make for a lack of clarity, legal actions right, left and centre, and uncertainty. It is a bad idea, and we would be much better including the words in the amendment. I repeat that. if they were in the Bill, they would give Ofcom exactly the same powers as the ITC has at the moment. I beg to move.
Lord Borrie: I added my name to the amendment because I strongly feel that when Ofcom, under its duties in the Bill, is setting out standards and objectives under Clause 312, those objectives need to he more precisely stated in relation to advertising than the prevention of "unsuitable" advertising under subsection (2)(g).
At the end of the Second Reading debate on the Bill on 25th March, when the problems had been raised by one or two speakers, the noble Lord, Lord McIntosh of Haringey, said that "unsuitable" simply meant that advertising could be unsuitable for certain times or certain audiences, and was similar to the Independent Television Commission's current powers. However,
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"unsuitable" is capable of very wide interpretation and, if I may suggest it, misinterpretation. "Misleading, harmful or offensive" are more appropriate and precise words. Indeed, as my noble friend Lord Gordon of Strathblane said, they are concepts that are already in the ITC and Radio Authority codes.
I have a special interest as chairman of the Advertising Standards Authority, which is the self-regulatory body responsible for non-broadcast advertising. The code of advertising practice that we operate, like the codes of the Independent Television Commission and the Radio Authority, has precise criteria that give the much greater certainty appropriate for a creative business such as advertising than that of "unsuitable".
Furthermore, I should be most concerned if the broadcasting codes incorporated such a catch-all word. Surely we all understand that many advertising campaigns are increasingly run across several different platforms simultaneously. There would be extreme incoherence between broadcast and non-broadcast codes if "unsuitable" were used instead of something more precise, as the excellent amendment suggests.
Lord Thomson of Monifieth: I strongly support the amendment. I endorse the fact that "unsuitable" is very seriously unsuitable as a tool of advertising regulation. As the noble Lord, Lord Gordon, was kind enough to say, I speak from the experience of twice being an advertising regulator, once with the Advertising Standards Authority and once with the IBA. Although the backgrounds were a little different, the job of regulation of advertising was very much the same. I learnt in both roles that self-regulation was a great deal better than statutory regulation, provided that certain conditions can be fulfilled. Those are not necessarily always easy conditions. They were admirably set out by the noble Lord, Lord Currie, the chairman of Ofcom, in a speech to the Advertising Association's annual lunch. One critical condition for any self-regulatory system is that a sanction as fair and effective as possible should be attached to the regulation. In the old days, the ASA and the IBA had that. For that, as the noble Lord, Lord Borrie, has said, one needs clear, credible and precise language. The words "misleading", "harmful" and "offensive" are part of the dictionary of advertising regulation and are well held and well understood by those who have to operate them. They have a long history of use. "Unsuitable" is a very vague and inappropriate term to apply to advertising. It is not a good regulatory tool and it is so imprecise that is certainly susceptible to an immense amount of misinterpretation, leading to a great deal of confusion among the various interest groups concerned.
11.45 p.m.
Baroness Whitaker: As deputy chairman of the ITC, I would like to add my support to the amendment. As regulators, we agree that "unsuitable" is too vague and broad. We understand that the industry far prefers the

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wording before us. It is clear, unambiguous, effective and easy to administer, so I hope that the Government will accept the amendment.
Baroness Howe of Idlicote: I rise briefly to support the amendment. "Unsuitable" is a very vague word. "Misleading, harmful or offensive" can be interpreted in a number of different ways, but they are a little sharper than the vague "unsuitable". "Misleading" is fairly clear. The timing of the broadcast and its audience are the criteria we took into account when I was at the Broadcasting Standards Commission and when we were considering any of the adverts which caused complaints—and there were quite a number of them. If they appeared during children's programmes and might have been perfectly acceptable for a slightly older audience, that was regarded as unacceptable. I am sure that the amendment is an improvement and I willingly support it.
Lord Puttnam: I rise briefly to support the amendment. It is correct. In order to be entirely evenhanded, having attacked the use of the word "suitable" in Amendment No. 207, it seems entirely fair that I also attack the use of the word "unsuitable".
Baroness Buscombe: I rise more briefly than I had proposed to speak to the amendment but only because it has been so eloquently spoken to and supported by a number of noble Lords. My name and that of my noble friend Lord Saatchi have been added to it. We feel very strongly about the amendment. At the risk of some repetition, it may appear a small and inconsequential amendment, but it is regarded by the advertising industry as extremely important. It is surely significant that broadcasters and staff at the existing advertising regulators, the ITC and Radio Authority, also support the amendment.
The Government have not so far supported it. While the issue was briefly debated in Committee in another place and again at Second Reading in your Lordships' House, the reasons given for opposing the amendment have been questioned by the advertising industry again and again. I know that it has remained in touch with the Department for Culture, Media and Sport to try and make a difference. The argument that "unsuitable" is needed to give Ofcom the same wide-ranging powers that the ITC had under the 1990 Act is highly spurious. A comparison of the 1990 Act and the 2003 Bill demonstrates that Sections 8 and 9 of the 1990 Act are already separately and individually replicated in various clauses of the Bill—I refer to Clauses 312, 314 and 315. In other words, with or without the word "unsuitable", the Bill already gives Ofcom exactly the same powers as the ITC was given by the 1990 Act.
The advertising industry believes that this is an important issue; the word "unsuitable" goes much further than existing regulatory powers. It is vague and inappropriate wording to apply to advertising and is not a good regulatory tool. The fact that it is so sweeping and imprecise a word means that it is capable of misinterpretation by interest groups in future. In contrast, as noble Lords have already said,
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"misleading, harmful or offensive" have the advantage of being concepts that already form the basis of the current ITC and radio authority codes.
I have an interest in this regard. It is a very outdated interest but I was involved in the advertising industry back in the 1980s. The words "misleading, harmful and offensive" were well known and understood by everyone then, so why change it? It "ain't broke", so why try and fix it? I have been waiting a long time to declare a vested interest, albeit an outdated one, to join so many other noble Lords who have already done so. We urge the Government to support the amendment. It is important to the industry. If we do not receive a satisfactory reply this evening, we will return to the issue on Report, divide on it and win.
Lord Davies of Oldham: The noble Baroness, Lady Buscombe, was somewhat dismissive of the response of the Minister in another place when he defended the position in the Bill because the drafting was designed to maintain the current wide scope of protection provided by the Broadcasting Act 1990, which, I stress to the Committee, contains no qualification limiting the scope of the code governing standards and practice in advertising.
I listened carefully to all contributions to this short debate, not least because it was moved so forcefully by my noble friend. No one made any comment on the nature of broadcasting and the concept of the watershed. The noble Lord. Lord Borrie, indicated that such advertising campaigns go across a range of media. Broadcasting has a specific consideration to take into account: a particular target audience and a particular time of the day at which audiences are influenced and open to—
Lord Borrie: I do not like to interrupt the noble Lord but the phrase in Clause 312(2)(g) is very broad. It refers to,
"the inclusion of unsuitable advertising in television and radio services".
Surely that means not just matters relating to timing and audience but the words and images presented by the advertising.
Lord Davies of Oldham: Of course the phrase is broad. It must be broad so that control of broadcasting can take account of different times of the day and different audiences who are being approached by the advertisers.
Lord Gordon of Strathblane: I apologise for interrupting again so quickly. is the Minister suggesting that the present legislation, which does not contain the word "unsuitable" but merely goes for the words for which I am seeking, is somehow deficient? How have we got by for the past 20 years?
Lord Davies of Oldham: I am arguing that we need some breadth to the position. Limitations are being identified and words and concepts that give some precision are being specified. I recognise the value of precision. I stress that the problem with regard to the

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Bill is that it deals with the media. For example, the concept "harmful" might apply quite strongly at certain times of the day with a very young audience but have no application at all at 11.30 p.m. when only adults are watching.
So what the Minister said in another place, and what we are defending in the Bill at the present time, is that there is a proper reason for retaining the concept of "unsuitable". It gives a breadth, which I recognise that my noble friends object to, which improves the position. That is against the background that the codes will be established on the basis of the fullest consultation with those affected in the industry. No one is suggesting that the concepts will be handed down as the laws of the Medes and the Persians. In fact they will be working codes on the basis of consultation. I am merely indicating that the underlying concept that we work into the Bill should have some breadth to it. That is why the phrase "unsuitable" is used. It is broader than the concepts that my noble friend seeks to introduce with his amendment.
Baroness Howe of Idlicote: I thank the Minister for giving way. I want to question what he said. In my reply I clearly indicated the differing times of the day when advertisements would be shown—I meant, without spelling it out, the watershed. The words "harmful or offensive" are clearer than "unsuitable". They are more specific, and even though both of them are interpreted in the eye of the beholder, it is the circumstances in which they are interpreted, I would have thought, that is what matters, with the greatest respect. "Unsuitable" is pretty vague.
Lord Davies of Oldham: The noble Baroness has merely emphasised the nub of the discussion. I object to my noble friend's amendment, which introduces wording that is more specific in terms of how the codes would operate. I am seeking greater breadth, because I believe that broadcasting has different obligations from other advertising media. We have had breadth with regard to the way in which broadcasting has been controlled since the 1990 Act, when the three concepts were built into the Act. We are merely sustaining the position that we ought to have that breadth as the basis for the codes that will control advertising for broadcasting, because of the different nature of broadcasting and the different audiences at which it is targeted at different times of the day. That is the basis of the Government's contention.
I hear that I am far from persuading both my noble friends and other contributors to this debate. However, let me make the obvious point—it is not for me to judge what should or should not be allowed, but it is right that the advertising codes are developed like the general standards code to reflect public attitudes as to what is acceptable in the specific medium of broadcasting. The Bill is concerned with the broadcasting media and it is a specific aspect that we need to deal with. So I hear what my noble friend has said, but I ask him to reflect on the issues. We are at Committee stage. I recognise that there are later stages
1302
of the Bill, but we regard the position adopted by my honourable friend in another place, which I am seeking to sustain today, as the best means of providing the necessary protection for broadcasting, which is different from advertising in other media.
Lord Gordon of Strathblane: I thank the Minister for his reply. At the lateness of the hour I am in danger of becoming short-tempered. I am extremely disappointed that on yet another matter on which every single speaker representing a wide range of interests, and every possible body that Ofcom would consult with, expresses one view. The Government opt obdurately for another and cling to a rather poor defence put up by the Minister in another place.
However, it would be wrong to press the amendment at this stage and I shall not do so. We are taking a long time in Committee and we shall take even longer on Report if we are to have Divisions on amendment after amendment which the Government have refused to accept at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Buscombemoved Amendment No. 260:
Page 276, line 2, at end insert—
"( ) Before drawing up or revising the codes, OFCOM shall have regard to the extent to which matters they arc required to secure under this section are, or may be, secured by effective self-regulation; and, in the light of that, to consider to what extent it would be appropriate not to draw up, modify or withdraw a code under this section.
( ) In determining for the purposes of this section whether procedures for self-regulation are effective, OFCOM may take account not only of self-regulation independent of those to whom it applies, but also of the extent to which the matters to be secured under this section are being, and are likely to be, secured without the further imposition of a code."
The noble Baroness said: In moving Amendment No. 260, I shall speak also to Amendment No. 261.
Subsection (3) of Clause 312 requires that:
"The standards set by OFCOM under this section must be contained in one or more codes".
The purpose of the amendment is to make it clear that as regards its codes Ofcom has the option of, first, drawing up or revising its own codes; secondly, contracting them out to an effective self-regulatory system, as Ofcom may do with any of its functions under Clauses 1(7) and 6(2); or, thirdly, reviewing the possibility of removing or reducing regulatory burdens under Clause 6(1) where they are no longer necessary.
Both contracting out and the explicit duty to review and reduce regulatory burdens where possible are an important change of regulatory approach and it would be helpful to make both principles explicit in relation to Clause 312.
A similar amendment was proposed by my honourable friend Andrew Lansley during the Commons Committee stage. In the discussions in Grand Committee Eon 28th January (at col. 785 of the Official Report), he said that it was important to clarify not only that Ofcom could contract out codes for self-regulation, but to require that Ofcom keep the scope

1303
of its codes under consideration. The Minister in his response was not entirely clear that the ownership of codes could be contracted out to self-regulatory bodies, but unless this is achieved—with Ofcom retaining backstop powers—there is little meaning to the "self' in "self-regulation".
By way of example, as has already been mentioned in previous debates, an Advertising Association task force representing broadcasters and the advertising business has recently put forward a proposal to Ofcom to contract out broadcasting advertising to a self-regulatory system, using the tried and tested model of the Advertising Standards Authority.
One of the objectives of the advertising industry in so doing is to address the challenges of media convergence which will increasingly reduce the rationale for entirely separate systems of advertising regulation—self-regulation for non-broadcast advertising and statutory regulation for broadcast advertising. Another objective is to provide consumers with a one-stop shop for complaints about advertising across all media.
Part of the proposal is that Ofcom should contract out to an agreed self-regulatory system the ownership of the broadcast advertising codes. Again, this is modelled on the much-respected ASA/CAP system for non-broadcast advertising in which CAP—the industry Committee of Advertising Practice—owns, administers and enforces the codes. Unlike the current self-regulatory system for non-broadcast advertising, the proposal envisages that Ofcom would have to approve any code changes as it is recognised that, in accordance with the Bill, a co-regulatory relationship with Ofcom would exist.
This amendment would make it clear that codes could be contracted out. The second part of the amendment reinforces the principle of Clause 6(1) which requires Ofcom to review regulatory burdens and lift them where appropriate.
Clause 317 sets out Ofcom's duties in relation to the publication of, and consultation on, draft codes. Amendment No. 261 replaces "after publishing" the draft code in line 14, subsection (3) with "in the preparation of any" code, Ofcom must consult. The purpose of the amendment is not, as the Minister, Dr Kim Howells, in another place assumed during Commons Committee stage on 28th January, to place difficulties in the way of Ofcom acting expeditiously to undertake its regulatory functions, but instead to reflect recent regulatory working practices and to ensure maximum transparency.
We do not think this places a statutory obligation on Ofcom to go through two stages of consultation before setting standards, as suggested by the Minister, Dr Kim Howells. It just creates maximum flexibility, allowing Ofcom to take soundings as it develops its thinking.
There is some concern in the advertising industry that the current wording of subsection (3)—
"after publishing the draft code"—
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could reverse the transparency that has been introduced in recent years; for example, at the ITC. Previously the advertising business found that, unlike broadcast licensees, it was rarely alerted to the likelihood of a code being changed until the draft code was published. By then it was difficult to change views, which meant that advertisers were no more than passive spectators, a position they found unreasonable since without their funding commercial broadcasting would not exist.
It is important to ensure that Ofcom works transparently in relation to the advertising industry as well as its licensees by involving this sector in formal and informal discussions about codes at all stages, rather than only giving this sector the opportunity to comment at the formal consultation stage when views are already set out on the overall direction to be taken. The purpose of this amendment is therefore to establish that the advertising sector would be party, like licensees, to the ongoing discussions which regulators have as a matter of course with the various parts of the industry and with consumer groups. I beg to move.
Lord Davies of Oldham: The Government want standards to be maintained in television and radio that ensure citizens are protected from harm. The Bill secures this protection by ensuring that Ofcom is properly charged with maintaining standards. This is among its general duties in Clause 3. Then there are specific responsibilities in the Bill, notably at Clause 312, which provide for Ofcom to ensure that there are codes for content standards. These are underpinned by high-level principles in the Bill and backed by sanctions.
We consider that Amendment No. 260 is unnecessary in encouraging Ofcom to operate through self-regulatory systems where those will effectively deliver the protections required. Ofcom is already encouraged to do that by way of Clause 6. The amendment also seems aimed at allowing regulation without any code. Whether Ofcom itself draws up a code, or, for example, endorses an industry code which achieves the required result, I find it hard to imagine an effective system that does not have a code of some kind telling broadcasters what they can or cannot do. Codes are a fundamental part of the regulatory structure for broadcasting and are almost infinitely malleable. They can be very detailed or very high level. But a code of some kind. backed up by sanctions, is an effective means to securing transparent regulation.
I am disappointed by the comments of the noble Baroness, Lady Buscombe, on Amendment No. 261. This issue was addressed in another place and we had thought that the Opposition seemed to be reasonably satisfied with our response. The Government maintain that Ofcom is required to consult on its draft code. It is not precluded from taking soundings prior to drafting the code and I expect it would want to do so. A change in that code may be proposed as a result of it becoming apparent from a number of sources over a number of years that a change might be needed. That can all continue to happen.

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However, the formal consultation is best undertaken on a draft code. Many consultees would find it difficult to form a view in the abstract and a draft code is the best way of stimulating debate, both on the principles and on the detail of their proposed implementation. A statutory requirement for a two-stage process of consultation would work directly contrary to the aims of efficient and effective regulation which we are aiming for.
As I indicated, we hoped that we had succeeded in making this case in the other place. I hope that on mature consideration the noble Baroness may feel that she can accept the case on this occasion and is prepared to withdraw this amendment.
Baroness Buscombe: I thank the Minister for his response. I shall not say much more than that at this late hour. In some ways I am disappointed by what he has said. I will read with care what he has to say in Hansard but for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 312 agreed to.
Clause 313 agreed to.
Clause 314 [Objectives for advertisements and sponsorship]:
Lord McIntosh of Haringeymoved Amendments Nos. 260A and 260B:
Page 278, line 44, leave out from beginning to "the" in line 46 and insert—
"(7) Provision included by virtue of this section in standards set under section 312 is not to apply to, or to be construed as prohibiting"
Page 279, line 1, leave out from "political" to "paragraph" in line 5 and insert "or referendum campaign broadcast the inclusion of which is required by a condition imposed under section 326 or by"
On Question, amendments agreed to.
Clause 314, as amended, agreed to.
Clauses 315 and 316 agreed to.
Clause 317 [Setting and publication of standards]:
[Amendment No. 261 not moved.]
Clause 317 agreed to.
Clauses 318 to 325 agreed to.
Clause 326 [Party political broadcasts]:
Lord Lipseymoved Amendment No. 262:
Page 287, line 20, at end insert—
"(1A) The regulatory regime for every television licensable content service licence and every radio licensable content service licence shall include—

(a) conditions requiring the inclusion in that service of party political broadcasts and of referendum campaign broadcasts, if so prescribed under this section; and

(b) conditions requiring that licence holder to observe such rules with respect to party political broadcasts and referendum campaign broadcasts as may be made by OFCOM."

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The noble Lord said: To detain the Committee at this hour of the morning, it has to be good. This is an important matter and I am grateful to those noble Lords who put their names to this clutch of amendments referring to party political broadcasts.
It is barely an exaggeration to say that a sword of Damocles hangs over us in this matter, not only on the Bill but about something even more important; that is, the integrity of our political system. I believe that most noble Lords would agree that one of the great advantages of our system over some others, in particular the American system, is the fact that it does not allow paid advertising by political parties. That is the crucial fact that makes our politics affordable, stops us becoming not a democracy so much as a plutocracy, and keeps corruption at bay. In the United States of America there would be nothing more popular than that among everyone except politicians and those who fund them.
The problem that we have is signalled on the front of the Bill where my noble friend Lady Blackstone has had to state,
"I am unable (but only because of clause 314) to make a statement that, in my view, the provisions of the Communications Bill are compatible with the Convention rights".
The fear is that because we do not permit political advertising, that will be seen under the European Convention to be a breach. The case I make is set out in considerable detail and very well by the Electoral Commission in its publication entitled Party Political Broadcasting (the Electoral Commission 2003). The core of the argument is that our best defence for the human rights court is that we have a perfectly good, robust, established system of party political broadcasts which enables substantial minorities to have their say and therefore does not require paid advertising.
I have been connected with the system of party political broadcasting for some time. The noble Lord, Lord McNally, looks at me. He and I were responsible for some of the Labour Party's greatest party politicals. In those days Ministers often spoke straight to camera but things have moved on.
The point here is that this is a very ramshackle system. There is not a proper process. There is no real way to determine who gets what. At the end of the day, the broadcasters decide and you either grumble or take them to court. There is inadequate consultation. It is a mess. That will no longer do if we are trying to set this up as a system that is a defence in front of the European Court. I do not want to go seriatim through the amendments, which speak for themselves. Broadly speaking, we want to have Ofcom set up a system for party politicals under an independent chair which can bring order to this chaos. We want to extend its remit in this regard only to the BBC and S4C. We want to encapsulate in legislation, rather than as something that is just done by ad hoc negotiation, the entitlement of parties to party political broadcasts based on objective criteria. And we want Ofcom to be able to extend PPBs to other broadcasters if in time they become more important.

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Those are the amendments in a nutshell. I very much hope that Ministers will have something positive to say about them, sooner rather than later. There is a case that they have come in rather late in the Bill's progress, and perhaps it will take rather longer before the Government are ready to legislate them into effect. But we need words of comfort; otherwise, we shall leave the Bill only with the very uncomfortable words of my noble friend, Lady Blackstone, on the front page of the Bill and with nothing to assure us that the threat which I perceive, and which the Electoral Commission in its wisdom takes very seriously, will not materialise.
12.15 a.m.
Baroness Buscombe: I rise to support the amendments tabled by the noble Lord, Lord Lipsey, to which my name and that of my noble friend, Lady Wilcox, have been added.
The amendments largely reflect the recommendations of the Electoral Commission's report published in January 2003. As the Bill stands, as the noble Lord said, the ban on political advertising is maintained, reflecting the provisions of the Broadcasting Act 1990, a policy which we support.
The reasoning behind the ban is simple. If the prohibition was removed and political parties were permitted to pay for advertising through the broadcast media, only the wealthiest candidates with access to financial resources would be able to advertise frequently. Other smaller or less affluent parties would fail to secure the necessary media coverage to participate fully in the democratic process. This is contrary to the interests of the electorate; success would be judged on pecuniary advantage alone. Furthermore, it would be impossible to maintain a balance between each political party and the level of media coverage it enjoyed individually.
I believe that the amendments are pretty much identical to those tabled by my honourable friend the Member for South Cambridgeshire, Andrew Lansley, in another place. I am pleased that the noble Lord has put them down for us to debate in the Committee.
Lord McNally: We are perhaps fortunate that the amendment is coming up at this time of night. I can imagine that if it had come up early in the day, with the Chamber full and everybody feeling fresh and bushy-tailed, we could have had a good couple of hours on party political broadcasts.
As the noble Lord, Lord Lipsey, said, some of us go back a long time on this matter. I still wake up in cold sweats having been a young, junior official accompanying George Brown to the BBC's studios to be told that we had only two takes to get the broadcasts right and trying to convince George that he had to stick to the script.
The noble Lord is quite right. When we consider the time and energy we have in recent times put into legislation to try to put a cap on party political spending, we can see that to allow this backdoor blast below the waterline would be very dangerous. We have only to look at the United States to see the dangers. I
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do not want to go any further than the noble Lord and the noble Baroness, Lady Buscombe, hut, to borrow a phrase, it is a real and present danger to our democracy if we are left unprotected in this matter.
The party politicals may not be the most loved of television broadcasts, but they are infinitely preferable to bought advertising by politicians and political organisations. I hope that the Minister will be able to give us some words of comfort.
Baroness Blackstone: The Government propose to resist the amendments. not because we necessarily object to all of them, but because we intend to consult on our response to the Electoral Commission recommendations and to bring forward proposals that take account of its report. Members of the Committee will be aware of the commission's report Voting for Change, which brings together recommendations from a number of its reviews, including that on party political broadcasts. The Government will seek views on PPBs shortly so that we are in a position to introduce any necessary legislation as soon as parliamentary time allows in conjunction with other changes in electoral law.
I am aware that deliberation about the future arrangements of PPBs has already been extensive. The commission published a wide-ranging discussion paper in December 2001. A consultation paper was published in June 2002 and the commission's final report in January 2003. By then, the extensive consultation on the Communications Bill had been completed and it was already in Committee in the House of Commons. We do not believe it right to accept the principles and to seek to implement them without putting forward the Government's own proposals for comment and proper scrutiny.
The amendments would give Ofcom much discretion on the allocation of PPBs as well as establishing certain criteria for that allocation. That may or may not be the right way forward, but it is right that stakeholders and Parliament are given an opportunity to consider the issues more fully before we give Ofcom such powers.
Notably, some of the commission's recommendations refer to the need to ensure that the PPB arrangements provided for in the Communications Bill comply with the Human Rights Act and the European Convention. The Government do not share the commission's view about the supposed deficiencies of the Bill. if we did, that would have been evident from the statement that I laid before the House under Section 19 of the Human Rights Act. So those changes may be unnecessary.
On the other hand, the Government fully support the commission's intention to involve a much wider audience with the democratic process. It suggests that one way of doing that is to extend the PPB obligations to all broadcasters. That is a programme on which we will welcome views and supportive evidence, with some assessment of the costs and benefits to political parties, broadcasters and the public. It may be a proposal that we will want to take forward. but we

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need to assess the evidence on the implications. There is no immediate urgency, as my noble friend Lord Lipsey implied, given that the terrestrial channels that already have PPB obligations retain nearly 80 per cent of the audience share. As the Electoral Commission states, it is better to get it right than to fail through haste.
The Government will seek views so that we are in a position to introduce any necessary legislation as soon as parliamentary time allows, along with other changes to electoral law. In the light of that, I hope that my noble friend will feel able to withdraw his amendment.
Lord Lipsey: I thank the Minister for that reply. The consultation process for PPBs is chaotic. It would be foolish to cavil at the perfectly sensible process of carrying it forward with the full consultation that the Minister has set out. I am delighted by the tone of her response and the fact that the Government are so awake to the need to do something here. The Minister has set a very good example for the consideration of the rest of the Bill. I thank her very much and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 263 to 265 not moved.]
Clause 326 agreed to.
Clause 327 [Retention and production of recordings]:
[Amendments Nos. 266 to 267 not moved.]
Clause 327 agreed to.
Clause 328 agreed to.
Clause 329 [Government requirements for licensed services]:
[Amendment No. 268 not moved.]
Lord McNallymoved Amendment No. 269:
Page 289, line 10, after "functions," insert "and to be necessary on grounds of national security or for the safety of the public,"
The noble Lord said: The basis of the amendment is to take account of evidence that the pre-legislative scrutiny committee received that the powers to constrain broadcast content should be limited on the face of the Bill to those of national security or public safety. The amendment proposes that that restriction on government and ministerial powers to censor broadcasts should be on the face of the Bill. I beg to move.
Baroness Whitaker: As a member of the Joint Committee on Human Rights, which also came to the same conclusions, I should just like to say that, unamended, these clauses are an assault on the right to freedom of expression and it is perfectly reasonable for the Government to circumscribe their own powers in the way that the amendment does.
Baroness Buscombe: I support the amendment.
Lord McIntosh of Haringey: I am glad that Amendment No. 268 was not moved; I could not understand it.
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Amendments Nos. 269 and 270 seek to limit the grounds on which Ministers can direct broadcasters to carry an announcement or to refrain from broadcasting specified material. These powers have existed since the beginning of broadcasting. The examples that I have go back to 1927 and they have been only rarely used. However, the Joint Committee on Human Rights recommended that the grounds on which the power could be used should be specified on the face of the legislation. The committee of the noble Lord, Lord Puttnam, agreed with that.
We have considered the matter very carefully in the light of all the comments made. We take our human rights responsibilities very seriously. But we remain of the view that it would not be wise to delimit the power in the way proposed.
Let me explain. What we have discovered in research is that there have been a number of occasions on which these powers have been used over the past three-quarters of a century. On some occasions the restrictions which have been imposed by the Secretary of State have been included in the BBC agreement. On some occasions they have been patently absurd in modern terms and they have been withdrawn. We have decided to write to the Joint Committee on Human Rights to set out the whole history on that point; and I hope that that will be done within the next few days.
The difficulty is that the amendments restrict the powers of the Secretary of State to matters of national security or the safety of the public whereas in fact the European Convention on Human Rights is much more widespread. It states:
"The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary".
It is clear that that is a much wider protection than that provided by the amendments. I can give the Committee the absolute assurance that since the passage of the Human Rights Act, Ministers, and the Secretary of State as referred to in the amendments and in this part of the Bill, are constrained by the Human Rights Act and by the European Convention on Human Rights. Therefore, the protection of human rights which is provided by the Bill and by the constraints on Ministers by the European convention are wider than those provided in the amendments. On that basis, I hope that Amendment No. 269 will not be pressed.
12.30 a.m.
Lord McNally: Clearly the amendments will not be pressed this evening. What the Minister said is so significant that I should like to read it in Hansard and compare it with the amendment before looking at the issue again at Report stage. At the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment No. 270 not moved.]
Clause 329 agreed to.
Clause 330 [Promotion of equal opportunities and training]:
[Amendment No. 270A not moved.]
[Amendment No. 270AA had been withdrawn from the Marshalled List.]
[Amendments Nos. 270B to 271A not moved.]
Clause 330 agreed to.
Clause 331 agreed to.
Schedule 12 [Corresponding obligations of the BBC and Welsh Authority]:
[Amendments Nos. 272 to 276 not moved.]
Lord Crickhowellmoved Amendment No. 277:
Page 404. line 25, at end insert—
"(5A)No order may be made under sub-paragraph (5) modifying sub-paragraph (2) unless the order relates to a conclusion contained in a report published under section 332(6)."
The noble Lord said: I am not grateful to the Government for giving me the last amendment of the evening to move, but I am grateful to them for deciding not to take two very important sets of amendments at this hour in the middle of the night. I add only one other comment in that connection. I hope that we shall not make a general practice of sitting long after 10 o'clock, which is what the House decided in its wisdom and after proper debate earlier in the year. However, in the light of the circumstances tonight, sensible arrangements have been made and I, for one, am grateful for that.
I can be quite brief. This is a very simple amendment which takes up a recommendation of the Joint Committee to connect this sub-paragraph with what is now Clause 332(6). The amendment draws attention to the fact that the Secretary of State may by order alter the public service remit of S4C, but the earlier Clause 332(6) gives the Secretary of State the right to review the performance of the Welsh Authority in dealing with these matters and then to produce a report.
It seems strange to have a clause that allows the Secretary of State to produce a change in the remit without requiring a reference to the publication of the previous report. My amendment seeks to bring those two matters together.
Baroness Buscombe: We support my noble friend's amendment.
Lord McNally: As do we.
Lord Evans of Temple Guiting: The point has been made that the amendment is intended to bring the Secretary of State's power to amend S4C's public
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service remit into line with her order-making powers relating to the remits of the other public service channels laid out in Clause 267. We feel that this is to pursue the wrong analogy. The correct analogy is with the BBC. Like the BBC, S4C is both a public service broadcaster and an independent broadcasting authority funded by government grant. It is therefore quite different from the other licensed public service broadcasters referred to in Clause 267. Just as for the BBC, we do not consider it appropriate to link in the legislation a former review mechanism to any change to the remit. As we said when the pre-legislative scrutiny committee first recommended the change, an amendment to the remit may arise from a range of factors—not least a request from the authority itself.
If the concern behind the amendment is that the Secretary of State has too much power, under Schedule 12(3)(8) no change to the remit can be made without the approval of both Houses.
The review in Clause :332 is essentially permissive. It may happen but it does not have to happen. If it does not happen, any subsequent review must be at least five years later, if at all. It is very much a backstop power for the Secretary of State.
The reviews under Clause 260, by contrast, will include an examination of the fulfilment of S4C's public service remit. They will be presented to the Secretary of State and must happen at least every five years—more frequently if Ofcom believes that is appropriate or necessary.
I hope that the Committee feels reassured that S4C's remit will be changed only as a result of appropriate consultation. The Government believe that it is better to recognise the status of S4C that way, so I hope that the noble Lord will withdraw his amendment.
Lord Crickhowell: For once, I do not intend to say that I want to consider the Minister's reply carefully and might want to return to the matter. On this occasion, the noble Lord has given a convincing and reassuring explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 278 and 279 not moved]
Schedule 12 agreed to. Clauses 332 to 338 agreed to.
Schedule 13 agreed to. Clause 339 agreed to.
Lord Grocott: I beg to move that the House do now resume.
Moved accordingly, and, on Question. Motion agreed to.
House resumed.
House adjourned at twenty-two minutes before one o'clock.