Lords Sitting of 5 June 2003

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

Communications Bill
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 Cornmittee.—(Baroness Blackstone.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Lord Puttnammoved Amendment No. 280A:
Before Clause 340, insert the following new clause—
"MEDIA PLURALITY PUBLIC INTEREST CONSIDERATION
(1) Section 58 of the Enterprise Act 2002 (c. 40) (specified considerations) shall be amended as follows.
(2) After subsection (2) there shall be inserted—
"(2C) The public interest in—

(a) the maintenance of a range of media owners and voices sufficient to satisfy a variety of tastes and interests;

(b) the promotion and maintenance of a plurality of broadcast media owners, each of whom demonstrates a commitment to the impartial presentation of news and factual broadcast programming; and

(c) the promotion and maintenance, in all media including newspapers, of a balanced and accurate presentation of news, the free expression of opinion and a clear differentiation between the two;

is specified in this section."
(3) In subsection (3), after the words "any consideration", there shall be inserted "(other than the consideration specified in subsection (2C))"."
The noble Lord said: In moving Amendment No. 280A, I shall also speak to Amendments Nos. 281, 282 and 283. The Government wish to deregulate ownership of the broadcasting industry. This reflects the way in which the technology has developed, with digital broadcasting making many more channels possible within the spectrum previously used for analogue broadcasting, and satellite and cable offering additional ways of getting channels and stations to audiences. The old system, in which a scarcity of spectrum meant controls were needed to determine who could run a limited number of channels, is no longer relevant. The case has also been made that deregulation reduces the constraints on business and allows the consumer to take the prime position in shaping and influencing the way choices and services are developed.
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So far, so good. I think we can all agree on where we do not want deregulation to take us. In fact, in Committee in another place, Dr Howells summed it up quite neatly:
"Our key aim is to ensure that there is a range of competing voices readily available to citizens so that they are free to form their own opinions… If we allow the largest newspaper companies, which are already influential, to buy up Channel 3—the only commercial public service broadcaster that currently—
I stress "currently"—
"has universal access to a mass audience—we risk a significant reduction in the number of voices in play in the media, and there would be a risk that one voice could become much louder than the others. That would represent an unacceptable concentration of the influence in the current circumstances".
The Minister went on to say:
"I believe that such a concentration in one voice would also be harmful to politics, because it could create a media owner so powerful that they could exercise direct influence over political decisions".—[Official Report, Commons Standing Committee E, 30/1/03; col. 860.]
We might not yet agree on the means to avoid this outcome, but we need no reminding that it is a situation we all wish to avoid. Here is the problem—it is the word "currently". The Bill, as the Government have repeatedly stressed, needs to be future-proof.
In a period of rapid economic, technological and ownership change, the one thing we cannot do is even begin to guess at who might or might not attempt to control this or that element of the media. What we can do, however, is refuse to contemplate any broadly unacceptable level of media concentration where each of the component parts is of significant size and reach in its own right.
What we need, therefore, is the ability to identify these concentrations as and when they occur, examine them in an analytical, fact-based way and ask whether they fit our definition of "unacceptable". The drawback of relying on cross-media ownership rules is that they can all too easily be overtaken by changes in market circumstances, as Dr Howells acknowledged in response to a question from Andrew Lansley, the MP for South Cambridgeshire, during the Committee stage. We must also dispel the current fantasy that should unacceptable levels of ownership emerge, regulators can move swiftly to put the genie back in the bottle.
There are two ways of accomplishing what we propose, and we need both of them. One looks from the viewpoint of the consumer; the other from the viewpoint of the citizen. For the consumer, we have competition policy, and that is already built into the Bill. For the citizen, we have the public interest plurality test. Together, they represent a formidable duo, and they are both flexible and future-proof.
Batting for the consumer, we have the Competition Act and the Enterprise Act, and the Bill allows Ofcom to apply both to the broadcasting market. The Competition Act identifies dominant players in markets and looks for abuse of that dominance. The Enterprise Act comes at the issue from a slightly different perspective and aims to prevent unacceptable concentrations of ownership. It is brand-new

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legislation that introduces a new approach to mergers and takeovers. What is attractive is that expert independent bodies will take decisions in a nonpolitical, transparent and predictable manner.
Under both the Competition Act and the Enterprise Act, once the case is proven the remedies available are significant. So you might argue that those powers are all we need to address unacceptable concentrations of media power. But they are designed to look at competition from a purely economic standpoint by asking, for example, whether consumer choice is reduced or too much economic power is given to one supplier. They cannot take account of the very special role the media plays in an informed society. Ofcom might see a problem and wish to address it but competition law simply does not provide the tools to allow it to do so.
So the tools are a part of the solution but not the whole solution. We also need a powerful player on behalf of the citizen, a powerful player already available to us in the Bill—the public interest test. In the case of this amendment, we see a clear public interest in "media plurality", which is defined in three ways: the maintenance of a range of media owners and voices sufficient to satisfy a variety of tastes and interests—that is, many speaking to many; the promotion and maintenance of a plurality of broadcast media owners, each of whom demonstrates a commitment to the impartial presentation of news and factual programming—that is, many broadcasters all abiding by the important impartiality requirements that this Bill and its predecessors set out; and the promotion and maintenance in all media, including newspapers, of a balanced and accurate presentation of the news, the free expression of opinion and a clear differentiation between the two.
There are several things going for this public interest test. The first is that it allows Ofcom and the OFT to carry out a proper analysis of the likely impact of any cross-media merger or take-over, an evidence-based approach that examines the sort of problems that could arise rather than simply asserting that there will not be any. The second is that it already exists in the Bill, as it forms part of the newspaper merger regime, updated from the Fair Trading Act 1973 in order to sit within the new Enterprise Act.
The third aspect, which is very important, is that it could be used to address the knotty issue of religious ownership. Rather than banning all religious bodies from owning licences and then giving them exceptional leave to do so when there is no longer any evidence of spectrum scarcity, each case could be examined on its merits. We might ask the fundamental question, "Would this prejudice the accurate and impartial presentation of news and factual programming or the free expression of opinion?"
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For those competition policy aficionados in the Chamber, adding a media plurality public interest test would align our legislation with the European merger regime, which recognises that individual member states have a special and legitimate interest in mergers that affect public security, prudential rules or the plurality of the media.
The other appealing thing about the media plurality public interest test is that, once included in the Bill and combined with Ofcom's review of the media ownership rules, it could be used as a safety net for a staged withdrawal from those ownership rules that have over time become unnecessary, either because the market has moved on, or because they relate to any channel or service which has become much bigger or smaller, or because Ofcom has carried out the necessary risk analysis to show that it is no longer applicable. I am quite deliberately trailing an impact analysis of Channel 5's cross-media ownership change.
In addition, if there are specific problems associated with any concentration of media ownership—perhaps cross-promotion or editorial influence—especially from the unregulated world of newspapers into the licensed world of broadcasting, this regime would enable the Secretary of State to attach very specific conditions to her approval. Those conditions would otherwise be difficult to apply to unlicensed bodies and certainly could not be applied in advance of agreeing a merger or takeover.
In another place, the Government have argued that this would place a greater degree of uncertainty, or new and unnecessary hurdles, in the face of broadcast media owners. That argument was made in Standing Committee E, on Thursday 6th February (at col. 1004 of the Official Report). If that is the case, it will be so only for that very small number of potential purchasers of newspapers, television channels or radio stations which are already major players in this market. So, not only is it flexible, but it is also targeted at what is clearly the point of greatest need.
I refer Members of the Committee to the entirely unanimous recommendation of the Joint Select Committee and its reasoning, as set out in paragraphs 218 to 224, on pages 59 and 60 of our report. I beg to move.
Lord Thomson of Monifieth: I must begin by apologising for the absence of my noble friend Lord McNally. One consequence of our newfangled family-friendly arrangements in the House is that those Members who have families to be friendly about, by sustaining them through work outside the House, sometimes find that difficult to combine with duties here. Sadly, I must take the place of my noble friend this morning.
I was not a member of the pre-scrutiny committee that did such great work, but I read with great interest the rather Socratic dialogue between the committee and the Government on the important issues of which the noble Lord, Lord Puttnam, has given us such an impressive analysis. The committee reports clearly and

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admirably the Government's starting point on these very big issues. Paragraph 218 of the Joint Committee report states that,
"competition law alone is not sufficient. It can address issues of concentration, efficiency and choice, but it cannot guarantee that a significant number of different media voices will continue to be heard, and it cannot address concerns over editorial freedom or community voice".
The Government repeated their commitment to the principle of plurality in their reply to the committee, and assured us that they considered carefully the committee's recommendation, which is now reflected in the series of amendments that the noble Lord, Lord Puttnam, has moved. As he said, the Government emphasised the unanimous view from business interests, particularly, that they wish the kind of certainty and precision that goes with normal competition law arrangements.
Well, businesses would say that, would they not— and they are right to say that, in their own interests. However, the difficulty that we face with the Bill is that the business of the media is a special kind of business and requires special legislative treatment. Purely mechanistic judgments of market share are not enough. They may he appropriate for baked beans or motor cars or the business, departmentally, of the DTI, but they are not enough for a business so closely associated with an influence on the quality of civil life. That is the business of the DCMS.
We believe and support the amendments on the basis that Ofcom should have a statutory right to intervention on a qualitative basis in terms of merger proposals. The Government have gone some way, I think, to recognising the special case of the media in their commentary on page 26 of their response. However, in our view they should now have second thoughts and should be ready to accept the spirit of this group of amendments tabled by the noble Lord, Lord Puttnam.
Lord Crickhowell: In supporting the noble Lord, Lord Puttnam, I want to make only two points. When we met in the Joint Committee, the guru on competition policy was Mr Andrew Lansley. He was our acknowledged expert. Indeed, he seems to have an almost encyclopaedic knowledge of the subject. With that knowledge he has a great faith in the effectiveness of competition policy. He believes that with the new legislation now in place most of the anxieties voiced in this Committee about possible takeovers and mergers can be covered by competition policy. However, I remain to be completely convinced that it is all going to work out quite like that. I think that we need to see how it works.
I think it worth noting that Mr Lansley, speaking on 30th January in Standing Committee E, actually acknowledged:
"Some of us are in the awkward position of not yet being able to say what the final outcome on how competition policy will be exercised".
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He said that he therefore perfectly understood if there were those who argued that we should leave the current constraints in place and,
"let Ofcom take its first review of media ownership rules, look at the changing scene and bring forward recommendations if it wishes to".—[Official Report, Commons Standing Committee E, 30/1/03; col. 871.]
But he then said:
"My strong personal preference is not to put in ex ante rules, but to have a proper competition test, properly buttressed".
by the kind of proposals that are being put to the Committee by the noble Lord, Lord Puttnam.
In an earlier Standing Committee sitting on the subject, Mr Lansley had said:
"Essentially the Government have said that we do not need a plurality test because we have clear rules. However, in terms of future-proofing, flexibility and requiring businesses to justify themselves within the marketplace and, in the event of mergers, in a fashion that is responsive to whatever circumstances might arrive in years to come, and to respond to a public interest test, it is quite obvious that it would be far better to shift towards the exceptional public interest test and competition policy and, by extension, not keep specific rules".—[Official Report, Commons Standing Committee E, 30/1/03; col. 858.]
So those of us in the Joint Committee who differed on the issue of the total effectiveness of competition policy were absolutely at one on this particular issue.
The other point is simply this. During our discussion, when the noble Lord, Lord Puttnam, sought the views of the committee, I said that I was not an expert in any way about the newspaper business and that I would like to hear the views of the noble Lord, Lord Hussey of North Bradley, who I know cannot be with us in Committee today but supports this amendment. He, after all, knows more about the newspaper business than most of us put together. He came out very strongly in favour of the particular recommendation of the Joint Committee. I took his advice and followed. Afterwards, he told me that he believed that this was one of the most important single recommendations made by the Joint Committee in the whole of its report. So this is an issue that I think unites very different points of view. I therefore warmly support the amendments tabled by the noble Lord, Lord Puttnam.
Lord Borrie: We have heard a most powerful and eloquent speech by the noble Lord, Lord Puttnam, and two further eloquent speeches by the noble Lords, Lord Thomson of Monifieth and Lord Crickhowell. They are all sponsors—the noble Lord, Lord Thomson, by way of being a delegate of the noble Lord, Lord McNally—of the amendment. I do not know how they feel about this, but I feel in a way that it is rather unfortunate that we are debating this matter somewhat prior to debating provisions that come just a little further on in the Bill—we shall get to them later today—dealing with newspaper mergers.
In those provisions dealing with mergers between newspapers, the Bill continues the very longstanding public interest concern in relation to newspaper mergers that have found expression in the law since the 1960s. Concentration of the press into too few hands was of course, before the more significant days of

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television and radio, the important issue for public interest connected with democracy, because concentration of the press into too few hands can of course stifle expression of opinion and argument and distort the presentation of news. It was the Royal Commission on the Press, in 1963, that put it in that way. Since the 1960s newspaper mergers have been subject to a stricter form of control than other mergers and takeovers in this country, with the Monopolies and Mergers Commission, now called the Competition Commission, required to take account not just of economic considerations but of whether a merger would bring about a serious public interest concern relating to the presentation of news and the adequate free expression of opinion.
I believe that the same sort of consideration which influenced people concerned with democracy in the 1960s in relation to the press now justifies a stricter control over cross-media mergers than is applicable to other goods and services. Amendment No. 280A proposes a reporting role by the Office of Fair Trading. It proposes that by amending the Enterprise Act, the Competition Commission, when faced with a reference concerning cross-media ownership, would be concerned not just with economic matters but with the much wider concern for plurality and diversity in the media.
The Government claim, as the noble Lord, Lord Thomson of Monifieth, pointed out a few moments ago, that a Competition Commission involvement in such cross-media mergers would lead to uncertainty. Indeed it would. One cannot deny that during a period of a reference there must be uncertainty as to the outcome—otherwise what is the point of the reference? However, I would suggest that that is a small price to pay for ensuring a free and diverse media. Once ownership is changed, it is exceedingly difficult to revert to square one; the damage may have been done.
I have recently received a letter from News International; others may have received the same letter. The letter wanted to contradict what it called a number of "myths" that were gaining currency about News International. One "myth" the letter mentions is that if foreign and cross-media ownership rules are removed, Rupert Murdoch would be allowed to buy Channel 5. The answer given by News International to that so-called myth is that the competition authorities will still have to examine the issues, and an illustration of this is the ongoing investigation by the Competition Commission into the Carlton/Granada merger and the ownership of ITV. However, as we all know, and certainly News International knows, that investigation is limited to competition or economic matters—that is, will the merger substantially lessen competition? As I understand it, the particular emphasis in the inquiry is being put on the matter of whether it will unduly reduce competition in the advertising market if that merger goes ahead.
There is no power in the Competition Commission or indeed in any other body at present to deal with the matter of whether diversity and plurality in the media will be adversely affected by Granada and Carlton
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coming together, or indeed to consider the matter with which the noble Lord, Lord Puttnam, and the other proposers of the amendment are concerned—a balanced presentation of news and the free expression of opinion.
Further on in its letter to me, News International said that there is a myth that it dominates the newspaper market. Anyone interested in competition policy knows that definitions of market are absolutely vital. It is perfectly true, as News International pointed out, that Trinity Mirror is the biggest newspaper publisher in the UK. As I expect most of us know, that is because Trinity Mirror has a large share in the regional and local newspaper field. In the letter, News International admits that 33 per cent of the national newspaper market is in its hands. To my mind, and in any economic and common-sense judgment, the national newspaper market is the most significant market when it comes to free expression of opinion, accurate presentation of news and the ongoing running of democracy in this country.
I think that everybody agrees that News International has a significant position in the national newspaper market. If it is possible for a merger to take place across the media, whereby that newspaper interest is able to achieve or seek a position of dominance, that should surely be examined from a much broader point of view than purely that of whether it significantly reduces competition. There should be an examination of the wide and accurate presentation of news and the diversity and free expression of opinion. I support the amendment.
11.30 a.m.
Lord Fowler: I agreed with a great deal of what the noble Lord, Lord Borrie, said—right until the end when he asserted the greater importance of the national press over the regional press. As the former chairman of the Birmingham Post group of newspapers and the Yorkshire Post group of newspapers, I strongly deny that. If the noble Lord, Lord Borrie, with his usual analytical method, refers to public opinion surveys, he will find that the regional press—this does not come as much of a surprise—is much more trusted by the public than is the national press. I say that in passing, because I agreed with so much else of what he said.
Lord Borrie: I do not wish to interrupt the noble Lord. The exceptional examples he mentioned may deal with matters of national and political importance in a way that the great run of local newspapers virtually never does, except presumably at election time.
Lord Fowler: We must not pursue the matter, but I profoundly disagree with that point as well. The noble Lord will find that many millions of people in this country regard local and regional news as being of the greatest importance to their lives and place the greatest importance on accurate reporting. The great distinction of the regional and local press is that they live and go back to their public, whereas the national

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press—I too speak as an ex-national press man—comes in, goes out and is not seen again. Perhaps we might have that debate on another occasion.
I strongly support the amendment of the noble Lord, Lord Puttnam. The essential question is whether the media are different from other industries and therefore deserving of any kind of extra provision over and above competition law.
Some people say that the media industry is just like any other industry. That is probably the position of my honourable friend Mr Whittingdale in another place, but it is not one with which I agree. I agree strongly with the view of the noble Lord, Lord Borrie, that newspapers and the media in general raise special issues.
Any additional restriction should be scrutinised very carefully. But the fact that a free-market country such as the United States retains a prohibition on some forms of foreign control of the media—we will shortly come to that issue—at least indicates that there is a case to consider.
The noble Lord, Lord Puttnam, is right in his assessment. That does not mean that media industries are more important than other industries. It certainly does not mean that they are better or worse managed than other industries. News International was mentioned. Mr Murdoch deserves a great deal of credit for what he did to reform the newspaper industry and for taking on some very reactionary forces within it. Without that intervention, I fear that we would not have quite the strength and breadth of newspapers we have today.
Media industries have an impact on the democratic debate that other industries, however important they may be, simply do not have. Most people believe that it would he wrong for any one organisation to have an over-powerful voice in the democratic debate by virtue of owning a disproportionate part of the newspaper industry. or television and radio, or a combination of them. I agree with the noble Lord, Lord Puttnam, that one needs an extra provision to preserve media plurality in some way. I agree with him that the trouble with the current situation is that we rely on existing powers that are designed to look at competition from a purely economic standpoint.
Perhaps I may give an analogy, which is not totally exact but which illustrates my point. I am the chairman of a pharmacy group. We have 1,500 community pharmacies across the country. Some months ago, the Office of Fair Trading published a report on deregulation. I was invited to the meeting just before publication. I asked what consideration had been given not just to the competition issue, but to health policy, given that it is the Government's policy, which I strongly support, that pharmacy and health policy are fully integrated. The reply, in précis, was that no consideration was given to that issue at all because that was not the remit. One needs therefore to spell out exactly what one wants of the competition authorities, and I would suggest that media plurality is part of that.
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The amendment enables us to spell out plainly that when the public interest is being assessed, the question of media plurality should not merely be addressed: there should be a requirement that it must be addressed. If that is the input of the amendment, I am strongly in support of it and I think that the public would be strongly in support of it.
Baroness Jay of Paddington: I, too, support the amendment. The whole Committee will be grateful to the noble Lords, Lord Fowler and Lord Borrie, who got to the nub of the issue. I am particularly grateful to the noble Lord, Lord Borrie, for his forensic analysis of the letter from News International, which I, too, received. The noble Lord, Lord Fowler, put his finger on the point that our discussion about competition law and the media is about a special industrial matter, which is not subject to the same kind of regulation that others may be.
I am grateful to my noble friend Lord Puttnam for drawing attention to the need for an evidence base in looking at the issue. I would add one other requirement to the list of those he defined as being necessary to achieve public interest and media plurality. If I could, I would add that to Amendment No. 280A. I would also add a requirement for broadcast and investment quotas for domestic original production to the public interest consideration. That investment obligation is imposed statutorily in other OECD countries. That has been widely shown by very authoritative studies. I quoted from one review of public broadcast legislation published by the Social Market Foundation when we were last in Committee. I shall not do so again in order to speed proceedings, which I think is in the interests of Members of the Committee today. But I just tell the Committee that after a wide review of the strict regulation of public interest through broadcast investment quotas, this report and others conclude that Britain should be inspired by the examples of other legislatures.
Lord Gordon of Strathblane: I rise to strike a somewhat discordant note. It is not often that I take issue with the conclusions of the committee of my noble friend Lord Puttnam. However, since I have already done so in print on this issue, he will riot be surprised that I do so now. I am slightly concerned that we are making plurality a litmus test of the public interest. I am worried that noble Lords are quoting plurality and diversity as though they go hand in hand. In my view they are frequently in direct opposition to each other.
I confine my remarks solely to the field of broadcasting, not because I do not think that the issue is important in the press, but because in broadcasting we are dealing with organisations which are already bound by rules of impartiality. Therefore, the issue of plurality is not important in ensuring impartiality. That is done by regulation. I fully concede that that is not true in the press and so a different argument applies.
The reason we have Ofcom and are bringing all these different fields together is precisely because regulation of programme content, technical means of delivering

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programmes, finance and sources of funding and ownership converge and intertwine. I sometimes feel that there has almost been a naïve assumption in some of our earlier debates about regulation that, provided we put it in an Act of Parliament that is great; it will happen.
I take a reductio ab absurdum: if one halves the BBC licence fee, it will not produce such good programmes. That might be accepted. Let us transfer that to the commercial sector: if one wants a Granada company that can produce "Jewel in the Crown" and "Brideshead Revisited", frankly, one will not do it with this kind of legislation because market forces dictate that resources are less available for the making of programmes than they were previously. Some of that is due to a decline in advertising. No one can do anything about that matter; hopefully it will return. Furthermore, I do not say that there should be no competition. That would be a backward step, which is not to be welcomed.
However, I do say that if we place Ofcom in a situation where a television or radio owner wishes to introduce a new service and a new entrant also wants to introduce a service, there should not be an automaticity of decision-making in favour of the new entrant. This will become a box-ticking exercise, rather like the Higgs committee report on non-executive directors. There is a very real danger here. I realise that if one has the same owner one will undoubtedly have more diversity because it is in his own self-interests to produce diversity. Not only that, but he will save the overheads of administration, sales and so on and therefore have more money for programming. He will also not be spending money marketing against his opposition.
I do not go in for marketing a great deal, but the amount of money that has been spent marketing rival radio services in London could have gone into programming. It is having to be spent fighting competition for the same territory. I do not say that there should be no competition but that one should not always assume that competition is a good thing. So I wholeheartedly agree with speakers such as the noble Lord, Lord Fowler, who say that media are different. I also agree that we need an extra provision other than simply competition law, but I argue that that extra provision may lead us away from plurality if the public interest looks for diversity. That is a more important consideration than ownership from the viewer's point of view.
11.45 a.m.
Baroness Oppenheim-Barnes: I intervene very briefly. I apologise for having missed the first 50 seconds of the opening remarks of the noble Lord, Lord Puttnam. I wholeheartedly support these amendments. However, even if they are agreed there will still be difficulties.
The noble Lord, Lord Gordon, with whom I do not entirely agree, has raised an important point. Interpretation of public interest has always been one of
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the most difficult aspects of competition policy. As the noble Lord, Lord Borrie, said, the Competition Commission at present would not have those powers in judging the kind of case that the amendment addresses. But it is very important to consider the question of quality, which is the point that I believe the noble Lord, Lord Gordon, was making: that the public interest test in cases in particular with broadcasting are very much more difficult to make than in any other sector. I do not know to what extent quality would even enter into them. However, the fact remains that I believe these amendments are extremely necessary.
I should just like to tweak the nose of the noble Lord, Lord Bragg, who is in his place. A number of years ago he and I appeared on one of these "Any Question?" programmes at South Hampstead High School where his children were, I believe, educated, as were my grandchildren. The question was put as to whether it would be fair to allow newspapers to produce magazines in competition with the Radio Times. He was greatly alarmed at that thought. He said that it could not possibly be anything other than most dangerous to allow the Radio Times to be undermined in that way; that it would not be able to plan its programming in competition with other magazines; and that all the aspects of it would be extremely dangerous.
So we have moved on. We have made progress. Evolution has taken place. I hope that with the passage of these amendments it will go even further.
Lord Bragg: Perhaps I may rise to say that with the greatest of respect the noble Baroness has the wrong man. I am very sorry indeed, but I am afraid she will have to produce better evidence than that. There is no way in which I could possibly have said anything like that on any occasion. However, that is life. We get quoted and sometimes we get misquoted. I am quite happy to take both.
I shall be brief. I support the amendments of my noble friend Lord Puttnam. I have found common ground with many speakers, in particular my noble friend Lord Borrie and the noble Lords, Lord Thomson and Lord Crickhowell. The amendment anchors the Bill to public service and public interest. As I, and many other noble Lords, said at the beginning of the debates in Committee, that is where a lot of us start from and to where we want to return. It is the core of, we hope, this excellent Bill, which many of us are trying to make just a little bit better and—to borrow an expression, correctly quoted—to "tweak" it a little. That is what we seek to do. The amendments help that task massively.
I find myself in the strange position of disagreeing with my noble friend Lord Gordon. I think that plurality is different from diversity, but that diversity depends upon plurality. We can discuss that issue much further. We can play the matter either way, depending on the size of the groups concerned. We have seen that plurality can come in very small areas, such as the regionality which has been referred to. It can come from single owners because of the inevitable

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effect—as the noble Lord said—of one owner having to be divergent in order to maintain his position. Plurality can also come from competition.
I do not think the issue is clear cut. I think that plurality will do. The wording in the amendment would meet the noble Lord's case. Proposed new subsection (2C)(a) requires,
"the maintenance of a range of media owners and voices sufficient to satisfy a variety of tastes and interests".
I think that meets the noble Lord's case.
Plurality is the key to this entire Bill and to our broadcasting. It is why we have the broadcasting we have. We must keep returning to that point. It is why the other day several of us strongly made the point that ITN should be allowed to be as powerful as other news services—to have that kind of plurality which is also diversity. There is also the plurality in our constitution, over which many people have fought very hard for a long time. That should be reflected in the Bill, because, as has been said, we are talking about matters which affect our lives very deeply. They affect what influences our lives, what forms our lives and the way in which we challenge other people in our lives. The matter goes to the heart of our society and our daily exchange of views and opinions in that society. It is a difficult and cumbersome democratic society but one which is, many of us think, better than any other around and worth not only keeping but improving. The amendment would go some way to improving it.
I said that I would be brief, so I conclude on this note. If the amendment is adopted it will send a clear signal that the core of the Bill is public service; it is gathered around the way in which we have done broadcasting. We are pleased to have done it, and we wish to continue doing it.
I heartily support the amendments.
Baroness O'Neill of Bengarve: I wish to speak briefly, not to plurality and diversity, on which Members of the Committee have been so eloquent, but to the proposed subsection (2C), which goes beyond plurality and diversity, requiring,
"the promotion and maintenance, in all media including newspapers, of a balanced and accurate presentation of news, the free expression of opinion and a clear differentiation between the two".
Too frequently people imagine that freedom of the press is to be equated with freedom of expression. I know of no argument in the long tradition of political philosophy which suggests that freedom of expression is for corporations, let alone conglomerates. Freedom of expression is for individuals.
What individuals also need if they are citizens is a balanced and accurate presentation of news. We know from the regular MORI polls that there is a great differentiation between the way in which the public view newspapers and the way in which they view the broadcast media. The trust of newspaper journalists is generally very much lower. In fact, they are less trusted than the politicians. On the other hand, the television news is trusted much more than politicians.
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The proposed clause would do a great deal to support democracy by securing not only the requirement that there be diversity and plurality in our media, but in particular that there be an obligation to provide balanced and accurate representation of the news, as is already required of broadcast media. That would be splendid.
We have not yet succeeded in writing into Clause 3 any public interest duty upon Ofcom. The proposed clause would go some way to remedying that deficiency. The noble Lord, Lord Crickhowell, spoke very eloquently to the insufficiencies of competition policy alone to deal with this matter. Sometimes there is a very good case for having a belt and braces. If competition law will riot be sufficient to secure these other objectives, we would do well to accept the new clause.
The Lord Bishop of Chester: When the Committee discussed possible appeal procedures on earlier amendments, the inability of competition law to cover satisfactorily complaints about, for example, content was raised several times. Clearly, competition law offers strong protection for the consumer, but it cannot always protect the interests of the citizen.
A media plurality public interest test of the kind proposed by the noble Lord, Lord Puttnam, would offer a similar degree of protection for the citizen and hence support Ofcom's principal duty to protect the interests of both the consumer and the citizen.
I am grateful to the noble Lord for his interesting point about religious ownership, which is very helpful as the Committee approaches the debate on Amendments Nos. 287 to 289.
Lord Phillips of Sudbury: I take up the point argued by Lord Gordon of Strathblane. It is interesting that he quoted "The Jewel in the Crown" as one of the finest examples of what commercial television has done I have been discussing the main strands of the Bill with Sir Denis Forman, who, I am sure, the noble Lord will accept is one of the jewels in our broadcasting crown. He is fiercely in favour of this set of amendments, largely because he believes that the economic imperatives of media ownership these days tend to work inexorably more in the direction of profit than anything else, that there are tendencies in the mass media market place for standards to fall rather than rise, and that a great deal of leadership, courage and determination is required of owners and their chief executives to pull standards up.
As several speakers have said, this set of amendments supports that latter strand, balancing the brute economic one. It is a question of the cultural rather than the economic, of values rather than prices, or, as the noble Lord, Lord Puttnam, and the right reverend Prelate said, of the citizen rather than the consumer.
I am not at all convinced by the argument that the noble Lord advanced, which is part of the Government's case, quoted in paragraph 223 of the Puttnam report, that liberalisation can
"provide a more diverse output in order to avoid competition for audiences with other stations that they own."

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That is a wonderfully head-over-heels argument. Taken to its conclusion, there would be one newspaper owner, so that there could be fierce competition within its ranks between all the thousands of stations and papers that it owned. That argument must be rubbish.
For that reason, I conclude with an extraordinarily premonitory quotation from Abraham Lincoln, speaking in the 1850s:
"The legitimate object of government is to do for the people what needs to be done but which they cannot by individual effort do at all—or so well—for themselves."
Surely that is exactly what this is about.
Lord Harris of High Cross: I was hesitant to intervene and would normally persist in my disciplined silence. I was for 12 years an independent national director of The Times, which ensured that ears were closed against anything I said. But, behold, I stand before the Committee as a new man. I resigned from The Times and am now two years into recovery, so I can draw on my experience during that period.
I stand in awe in the presence of so many self-appointed experts and authorities on competition, taste, truth, balance and all the rest. If one is involved in a newspaper one is reading other newspapers and also watching the media. I find astounding and hilarious the notion that the fearsome hand of Rupert Murdoch reaches out from Australia, America, China or wherever he currently is to regulate, rule and influence. It is a complete myth. Even within The Times, his flagship paper, there is great diversity and variety of presentation—infuriating diversity—on politics, art and all the other matters that papers deal with.
Therefore, I am very uneasy about the notion of a public interest clause to be administered in the way that the noble Lord, Lord Puttnam, thinks appropriate. The public interest, I was taught as an economist at Cambridge some decades ago, is frequently a refuge for every kind of special interest that can present itself with a fine face by a well appointed PR machine.
I am particularly anxious that we do not get Ofcom embroiled in the matter. Ofcom has no experience or knowledge of newspapers. It brings together regulators in the electronic media. I have great confidence in the noble Lord, Lord Currie of Marylebone, who is building up his team partly of former regulators and partly of quite new brooms. But the notion that we can go on loading Ofcom with ever more detailed interventionist responsibilities is misguided. It is also unnecessary.
I am very depressed to find here so little confidence in the work of our variety of newspapers, which is far better than in America or on the Continent, based upon consumer preference, the consumers voting with their money and changing their minds when they wish to do so. We have a press to be proud of and should not go poking around all the time looking for some pretext to close in and tighten regulation.
Noon
Baroness Buscombe: I have listened to the very good debate on these amendments with considerable care. Although we really want to see our media ownership rules liberalised to encourage market entry and to promote competition and diversity of ownership, I see also the merit of having some form of public interest test to act as a backstop to ensure a plurality of voices and, as the noble Lord, Lord Puttnam, said, voices sufficient to satisfy a variety of tastes and interests, with many speaking to many. The noble Lord referred to the remarks of the Minister Kim Howells in another place, who said we know what we do not want. But it is how we achieve that.
I also hear what the noble Lord, Lord Puttnam, says when he talks about letting the genie out of the bottle. Liberalisation of ownership, which, I stress, we wholly support, may lead to consolidation, or ownership may venture in the opposite direction, and a thousand flowers may bloom. But, in any event, a plurality of voices, with many speaking to many, is what matters. It is about real choice for the viewer and the listener. That said, I am reluctant to support any move that adds a layer or a further barrier to entry to the market for commercial operators in this already extremely tough environment, particularly given the existence of an already very dominant player—the BBC.
Members of the Committee have expressed concern as to whether competition rules would be sufficient. As the noble Lord, Lord Thomson, said, we are not talking about a can of beans; we are debating the future of a very precious, unpredictable commodity. It is no more important than any other industry, as my noble friend Lord Fowler said, but it is an unpredictable, living thing. I see what the noble Lord, Lord Puttnam, is saying when he talks about future-proofing the Bill. That is a good point. I worry about the lifeline of the Bill.
I was fortunate enough to come into your Lordships' House to listen to a debate yesterday on a Motion to take note of the report of the Select Committee on Economic Affairs on globalisation. Although the Select Committee concluded that the opportunities created by globalisation outweigh the dangers, my ears also pricked up at the quote of Ken Tynan, who was concerned that we should not,
"sell our souls for a pot of message".
We want to be sure that, whatever the future, we want to protect the multiplicity of messages. I hear what the noble Lord, Lord Gordon of Strathblane, says. Plurality of providers is not necessarily the panacea; it is a plurality of voices that we want to protect, to encourage and to enhance.
I am concerned with particular amendments, including the reference in the proposed subsection (2C)(c) of Amendment No. 280A to the presentation of news and,
"the free expression of opinion and a clear differentiation between the two".

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It sounds too much like editorial instruction, which we could not support. But I am in serious listening mode on this matter and I look forward to the Government's response.
Lord McIntosh of Haringey: I agree with so much of what has been said in the past hour. I agree entirely about the importance of media and how the industry is different from other markets, such as baked beans, as the noble Lord, Lord Thomson, said. I could put up quite a good case for the importance of baked beans, actually, but let that pass. There is a great deal of common ground on all these issues. The maintenance of plurality and the public interest test is essential to the consideration of the Bill.
But it is my unpleasant duty to bring the debate back to the actual amendments, the effect that they would have on the Bill and what the legislation does. I am sorry to say that much of what has been said seems to assume that the Government are determined to demolish the public interest test and plurality rules. The noble Lord, Lord Puttnam, quoted Kim Howells speaking in the Commons with approval about plurality. I echo what Kim Howells said—it would be more than my job's worth to disagree, would it not? Surely, it is clear from what is said, and from a study of the Bill, that our policy is to set clear, specific limits on ownership through key rules. We set media ownership rules. We see that as the best method of guaranteeing adequate plurality.
The amendment would allow a new public interest consideration relating to media plurality, including newspapers, to be included in the Enterprise Act. It would enable the Secretary of State to intervene in mergers that raise that consideration. That means that, where there is a merger of television or radio companies and the Secretary of State thinks that it gives rise to public interest considerations, she could give an intervention notice and call the OFT and Ofcom to make a report. In the light of that report, she could refer the merger to the Competition Commission for consideration both of competition aspects and the plurality issues. The amendments are applying to broadcast media the same rules as apply to newspapers now.
I suggest to the Committee that we are in no way weakening the rules as they apply to newspapers. Any comments about newspaper variety, plurality, diversity and all those aspects are legitimate, but they do not relate to the Bill as it does not change provision for newspaper mergers. We have not provided what the amendments would provide because the broadcast media are different from newspapers. Newspapers are free in this country; no licence is required to publish a newspaper. But, because of spectrum scarcity over many years, there has been in place a system of licensing for broadcast media. It is under that system, ever since plurality of broadcasting started—with Radio Luxembourg before the war and ITV in 1995—that governments have exercised the public interest criterion through the licensing procedure. That is what the Bill provides to continue. There is no
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abandonment of public interest in the Bill; it is just that in broadcast media it is to be exercised through licensing rather than through the Enterprise Act procedures.
Of course I acknowledge that that may not be the case in future. With technological change and the potential for the abolition of spectrum scarcity, licensing may no longer become necessary. That is why the Bill provides that, at such a time, the Government can, without primary legislation, under the Enterprise Act, extend the public interest criterion in competition law to the broadcast media.
There has been reference to belt and braces. We have such provision. We have a protection of the test in addition to economic tests, and we have protection of the public interest in broadcasting through the licensing procedure. If, and when, that no longer applies, we have the capability, which we will assuredly use, to implement the public interest test through merger law into the broadcast media.
My noble friend Lord Puttnam raised the serious issue of cross-media rules. He pointed out that there is always a difficulty with them, as there is with all merger legislation. That can be triggered only by a merger. In other words, if there is a change in market share by some newspapers or some channels becoming more popular and having a larger audience, there is no way in which the existing restrictions can be triggered. However, that is also true of the amendment of my noble friend Lord Puttnam, because he does not seek to introduce a regime whereby media owners will be required to divest themselves of assets because they are being successful. That is the only way in which one can deal with that progressive change, that creeping change, as it were. So I am sorry, but the amendments do not solve the problem that he identifies.
The other issue is over who should be responsible for protecting the interests of the citizen. The amendments provide that the Secretary of State and Ofcom should be responsible for doing that. We provide in the Bill, and the existing regime provides, a licensing regime which allows the certainty and stability which is not possible in the newspaper industry. Parliament can agree the licence-based limits for media ownership and will have to agree to any changes of the rules. That is how the interests of the citizen are protected. They are not protected in the same way in the amendments.
There was scepticism about the industry's dislike for uncertainty. My noble friend Lord Borrie in particular, and the noble Lord, Lord Thomson, dismissed that consideration by saying "well, they would say that wouldn't they?" However, I hope that I have shown that if we can protect the public interest without uncertainty, surely it is better not to have that uncertainty. It is not the uncertainty to which the noble Lord, Lord Borrie, was referring of what happens when a reference is made. The uncertainty that would arise if the amendments were agreed to is that two parallel regimes would exist at the same time for broadcast media. One would be for licensing and one of competition policy. That might not last forever, but to propose that change would be an unnecessary addition to regulation.

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In summary, the amendments would be more regulatory. They would be an additional requirement to the existing provisions for protecting the public interests. They are not wanted. They are not wanted by the broadcasting industry for legitimate reasons, not just to protect its own interest. The amendments also are not necessary. We have a plurality test for newspapers because there are no licences, and we have to ensure the accurate expression of news and the free expression of opinion—although not within a single newspaper. I disagree with the noble Baroness, Lady O'Neill, about that. If we started to say that individual newspapers had to be balanced we would be transforming our view of the relationships between Government and a free press. In broadcasting the licensing regime makes it possible to set simple rules, based on licence holdings, and there are already statutory requirements for accurate and impartial news and the prominence that can be given to any particular viewpoint. I believe that, although the motivation behind the amendments is admirable, and although the opinions expressed in their favour all around the Committee are sincere and given with the highest motives, they are based on a profound misconception.
12.15 p.m.
Lord Puttnam: I thank all noble Lords who have spoken. I do not think that 11–2 is a bad result, although my noble friend Lord Gordon would concede that that is something they are more used to in Scotland than we are in England when one is on the losing side.
Noble Lords: Oh!
Lord Puttnam: Never bring soccer into the Chamber. I shall run through one or two points. I listened to the Minster with great interest. His arguments were very wide-ranging. I did not think that he laid a glove on the amendment—not a glove. I shall also take up one point. I thought that it was wrong of him deliberately to misinterpret the reference to plurality by the noble Baroness, Lady O'Neill. It does not do the Government much justice deliberately to attempt to inflate her sensible and thoughtful position. I was enormously influenced, as I am sure that many other noble Lords have been, by her Reith Lectures 18 months ago. Maybe the Minister could do himself a favour by sitting down and listening to them. They were extraordinarily instructive.
Lord McIntosh of Haringey: I did listen to them.
Lord Puttnam: Clearly, I was much more influenced by them than was my noble friend. I am grateful for the position taken by my noble friend Lord Borrie. There is an absolute need—I wrote down "need" at first and then crossed it out—an obligation in the 21st century to look right across the issue of media ownership—to look across the whole of the media. It is absurd in the 21st century to attempt to segment the media and to imagine that one could come to correct judgments regarding influence and plurality of voice.
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I was also grateful to the noble Baroness, Lady Buscombe. I agree with her. Optimising the media voice is at the core of the issue. I look forward to sitting down with her, because I have no intention of wrecking the amendment by one or two items of wording with which she is not happy. They shall go, but I am sure that we shall march happily through any Lobby together.
My noble friend Lord Gordon mentioned concentration of ownership. I suggest to him that concentration does not result in diversity. Every scrap of evidence that I have been able to adduce suggests that in the vast majority of cases the exact reverse is true.
The noble Lord, Lord Harris, of High Cross, is a reformed character. My heart leapt when I heard him begin to speak. I suggest that as part of his cure he chats to the EU Commissioner Chris Patten about the circumstances under which Harper Collins withdrew from his book on China, and whether the proprietor had any say in that extraordinarily aberrant decision. The noble Lord might also like to circle the world and find out why 274 out of 275 editors of Newscorp newspapers came to exactly the same conclusion as their proprietor on the war in Iraq. Interestingly, the only one that did not was I believe in Borneo, where that opinion would have resulted in a catastrophic drop in circulation in a Muslim country. Presumably that editor was given leave to desist. The noble Lord, Lord Harris, seems to have made more of an impact on the Government's position than all the rest of us put together. That is interesting.
My noble friend Lord Bragg was right to say that our lives are affected by the legislation. I would say that not only our lives are affected, but our children's lives and in my case our grandchildren's lives. The issues go far, far beyond this Chamber, and far, far beyond the interest that the Government appear to be taking in their breadth and seriousness. We shall undoubtedly return to this at Report stage when, unless the Government are prepared seriously to reconsider their position, I cannot imagine us not dividing on the issue. For now, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 281 to 283 not moved.]
Lord Crickhowellmoved Amendment No. 284:
Before Clause 340. insert the following new clause—
"INTERIM RETENTION OF CERTAIN RESTRICTIONS ON NON-EEA OWNERSHIP
(1) For paragraph 1(2) and (3) of Part 2 of Schedule 2 to the 1990 Act, there shall be substituted—
"(2) Sub-paragraph (1) shall apply in relation to any Broadcasting Act licence other than a licence to provide a Channel 3 service and a Channel 5 licence as if paragraphs (a) and (b) (and the reference to those paragraphs in paragraph (i)) were omitted."
(2) OFCOM shall, within a year of the coming into force of this section and from time to time thereafter, carry out a review for the purposes of this section.
(3) Such a review shall consider whether, in the opinion of OFCOM—

(a) the provisions of sections 273, 274 and 280 to 284 are operating in such a manner as to provide for a fair and transparent programme supply market with respect to Channels 3 and 5;

(b) the relevant provisions of Chapter 4 of this Part are operating in such a manner as to provide for effective content regulation of Channel 3 and Channel 5 services;

(c) the provisions of sections 260 to 267 are operating in such a manner as to provide for a continuing significant contribution by Channel 3 and Channel 5 services towards the achievement of the purposes of public service television broadcasting in the United Kingdom specified in section 260;

(d) the provisions of sections 344 to 349 provide adequate additional safeguards in case of change of control of Channel 3 services or Channel 5; and

(e) the powers available to OFCOM under the Competition Act 1998 (c. 41), Part 4 of the Enterprise Act 2002 (c. 40) and sections 309 to 311 of this Act are adequate to promote effective competition in the broadcasting market in the United Kingdom.

(4) When, as a result of a review carried out in accordance with subsection (2), OFCOM considers that each condition specified in subsection (3) has been met, it shall make a report to that effect to the Secretary of State, giving reasons.
(5) The Secretary of State shall lay any report made to him under subsection (4) before Parliament.
(6) When a report has been laid before Parliament in accordance with subsection (5), the Secretary of State may by order repeal paragraph 1(1)(a) and (b) of Part 2 of Schedule 2 to the 1990 Act and make such consequential amendments to that Part of that Schedule and to this Act as he thinks fit.
(7) No order is to be made containing provision authorised by subsection ( 6) unless a draft of the order has been laid before Parliament and approved by a resolution of each House."
The noble Lord said: The purpose of this group of amendments is to provide an opportunity to debate Recommendation 86 of the Joint Committee, relating to non-EEA ownership of certain broadcast licences. Amendments Nos. 308, 322A and 322B remove the existing provisions to repeal such ownership restrictions. Amendment No. 284 permits removal of those restrictions by means of secondary legislation, but makes such removal contingent upon Ofcom expressing satisfaction with the effectiveness of the controls introduced under the Bill. The amendment therefore seeks to reflect the additional controls proposed in the Bill compared with the draft Bill, and the Government's desire for flexibility, while reflecting the Joint Committee's concern about the timing of the removal of the restrictions.
I have to say to those who favour the opening up of the market in certain broadcast licences to non-EEA ownership—they include my own Front Bench—that they sometimes display charming innocence and naivety in which the splendid principles that they espouse of open competitive markets and free trade, bear little relationship with the real and sometimes nasty world
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outside described in evidence given to the Joint Scrutiny Committee by, among others, Mark Thompson, the chief executive—
Baroness Buscombe: I take great exception to being referred to as naive and innocent. I hope that my noble friend will withdraw that remark.
Lord Crickhowell: I hate to upset my noble friend, but I am going to continue with my speech. Innocence is perhaps the word. I believe that the evidence I shall put to the Committee rather justifies the comments that I make. But I was going much wider than my own Front Bench. I was addressing my remarks to a far wider group of people and indeed to some of the Ministers who take this view.
I turn to the evidence given to the Joint Scrutiny Committee by, among others, Mark Thompson, the chief executive at Channel 4, and Greg Dyke. Mark Thompson did not think that there would be new factories of British production paid for by US majors. He thought it much more likely that they would see ways of exploiting US-created, globally valuable intellectual content in this market. In its written evidence Channel 4 told us:
"It is difficult to imagine a scenario in which consolidation and foreign ownership would not lead to a reduction in employment in the production industry unless there were specific safeguards with regard to content originated by UK producers".
The trouble is that at best quotas will only give partial protection. I again quote from the Channel 4 evidence:
"The UK production focus of US parents is also likely to change, with greater priority being placed on formats which can be exploited globally, rather than simply in the UK. The potential loss of content with local relevance and diversity, let alone the loss of minority interest programmes, is therefore also of real concern".
Greg Dyke said that he failed,
"to understand why Britain would want to allow American media companies to own our largest commercial broadcasters, while no European one is going to own a station in Cincinnati".
Referring to his own experience at Pearson, building up what was probably the biggest independent production company in the world, he found that,
"there are only two sorts of television products around the world, American and indigenous, and American dominates the world, and what you were always trying to do in America was to find some guaranteed markets because the deposits on production in America being sold to NBC or ABC are so large that what you wanted was some guaranteed markets, and therefore the real danger is that you will get a significant amount of dumping if you allow large American broadcasters who are also production companies having a studio… So I am not at all convinced of the arguments for changing the ownership rules in the way that is proposed".
Nor am I.
All this evidence demolishes, if I may use the phrase without causing offence, another naivety that because European companies do not move into our markets in this way, there is no reason to believe that Americans will. The Europeans do not have the American product so easily sold around the world; they do not have the very substantial libraries of audio visual content in English which they can place in the UK to drive down

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costs as well as increasing their value in secondary markets such as video, DVD, merchandising and publishing.
During a discussion meeting held by the Joint Committee on 4th July—covered in Annex 4—one witness who had been employed for many years by Disney confirmed the Greg Dyke view that the economics of the television business in the US necessitates the exploitation of content across as many international distribution points as possible. Where distribution points are owned and operated by a US major, the pattern is for an increasing percentage of content to be sourced in-house. Production quotas would be an inadequate protection because they would safeguard the quantity of independent productions shown but not the quality of them. There was a strong probability that independents would be granted access for cheaper programme slots, but would lose access relating to more valuable forms of programming, with these slots being preserved for in-house productions from a US studio.
The US majors have to be seen as huge international production and distribution machines in which the US market is critical and all other markets are peripheral. In the face of the argument that US investors would bring inward investment, expansion and job creation, we heard how when Disney brought ABC it quickly cut costs and merged operations. ABC's international programme sales operation was quickly reduced from 200 to two. The same would happen, I suggest, to the sales operations of UK companies.
We summed up much of this evidence in paragraph 243 of our report, and in particular we drew attention to the,
"cultural loss, with greater priority given to American programmes and less regard being had to the genuine commitment to public service broadcasting that had informed content production and made effective content regulation possible".
It is argued that the system of regulation being established by this Bill and the regulatory measures that have already been put in place will prevent all this. I have to say that my confidence that this might be so was considerably undermined by some agreeable homework that I gave myself while we were gathering our evidence. I read the remarkable history of the film industry by the noble Lord, Lord Puttnam. There is one overwhelming message that emerges from that history which is that for almost 100 years the countries of Europe have attempted by regulation to protect and preserve their own film industries from domination or, worse, destruction by the American giants and they have completely failed.
I have spoken of naivety and I am sorry that it has caused offence. I believe that there is naivety in the oft-repeated claim that there is no need to worry because British audiences, particularly regional audiences, will want familiar British programmes and American owners will not risk losing their advertising revenue by changing the character of what they place in the British market. The claim is made that they will maintain UK production and regional production, not because they are told to, but in their own self-interest.
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I admit that I would never call my friend and former colleague, Clive Jones of Carlton, naive about anything, but in perfectly properly considering the commercial interests of his company, I think that, like others before him in similar situations, he may have misjudged what is the likely outcome. In his evidence he said that he was relaxed about possible take-over, that regulation would be safeguard enough and that American companies would not come and destroy the business that they had just bought. His co-witness, Mr Mick Desmond, added:
"I think anyone coming in and fundamentally changing that shape and mix of programming would have a huge financial horror show".
As they gave their evidence, I was reminded of so many who were employed in the City at the time of the "Big Bang" who made very similar comments and whose complacency was quickly dissipated. In many cases they were very soon out of their jobs.
Paul Farrelly MP put it to Clive Jones that perhaps he was relaxed because the owners of existing companies could see an opportunity to realise their investments. Certainly, there are owners and those holding underwater options who might welcome a foreign take-over in current conditions. For my part I simply ask the question: would a US company buy with the object of acquiring declining advertising revenue or might it not be that the real motives would be those described by Channel 4 and by Greg Dyke to which I have already referred?
I am deeply sceptical of the view that audiences would fade away confronted by more US material. The American experience provides a stark warning. I suggest that those members who have not yet done so to read two recent contributions to the debate: the first was published on 1st February this year by Professor Michael Tracey; the second is Barry Diller's keynote speech to the National Association of Broadcasters in Las Vegas on 7th April.
Barry Diller is one of the great pros of the industry. He argues that what happened in America was an unintended consequence of the US Administration's programme of deregulation:
"Five corporations, with their broadcast and cable networks, are now on the verge of controlling the same number of households as the big three did 40 years ago. We didn't think that was such a healthy situation back then, but back then there was this real, scary regulation—they may have controlled 90% of what people saw, but they operated with a sense of public responsibility that simply doesn't exist for these vertically integrated giant media conglomerates, driven only to fit the next piece in their puzzle for world media dominance".
He asks, "Why should we care?" and answers that we should care for the same three reasons that the head of the federal communication commission cares. He quotes the chairman:
"the public interest is about promoting diversity, localism and competition".
Should we not care about the risk involved in selling control of British companies with a sense of public responsibility to those seeking world media dominance and in the process losing diversity, localism and competition? I suppose I shall be told that that is all in

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America, but it is the American conglomerates and practices that the Government seem to be eager to have here.
Professor Tracey is British, but he has lived for many years in America. Since 1988 he has been professor at the University of Colorado, where he is director of the Centre for Mass Media Research. He makes an eloquent plea for the values of public sector broadcasting: quality, integrity, democratic purpose, creativity, education and diversity. He believes that the legislation we are discussing threatens all of them. So back to the naïve belief that the British public will reject what is put before them or that American owners of British television will not risk putting it before them for fear of losing advertising or respect from the regulators.
Fear of losing advertising! It is the demand of the advertisers always to maximise audiences that is driving what is happening in the US with a huge reduction in real news broadcasting, the decimation of children's broadcasting, the extraordinary success of reality TV and the inexorable conclusion reached by executives that the audience is never wrong.
The remarkable collapse of quality news and comment programmes in the US, which Professor Tracey analyses in much detail, with its uncomfortable implications for democracy, is leading, he says, to,
"a crisis of journalism, nurtured and sustained by the dominance of the market".
He suggests that,
"the basic problem lies in treating communications as commerce rather than as an essential and necessary aspect of the public realm, that space in which exists public discourse, civic and democratic values, and in seeing audiences as consumers rather than citizens".
We have a situation where it is proposed that casually we should open up our industry to that quantitative change with just a few huge players that now co-direct all of America's media, which has brought about enormous qualitative changes. It has led Ted Turner, the legendary founder of CNN and former deputy chairman of AOL Time Warner to say,
"It's sad we're losing so much diversity of thought".
Professor Tracey observes,
"The assumption inside the Blair Government's proposals for, in effect, a free market in ownership should therefore be troubling because of the delusion, or is it a lie, that lurks at the heart of the policy".
He suggests that the policy does not adequately allow for,
"the fact that it is the natural instinct of corporate capital, left to its own devices, to control the market… and to cut costs whatever the price".
Against those warnings and the background of the American experience, the question that confronts us as we consider the amendments is: first, can we be confident that we can protect the crown jewels of British television by regulation? Secondly, is there any need to endanger the crown jewels by rushing the decision? In moving the amendment I am not taking a final and irrevocable stand on the arguments any more than we did in the Joint Committee. Our stance then and my stance now is rational and reasonable. It is
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based on the one unarguable fact: if we are to protect what is best in British commercial television there has to be effective regulation.
The Joint Scrutiny Committee was worried about the enormous range of challenges that Ofcom will face after it assumes its regulatory functions. We thought that it should be allowed to establish itself as an authoritative regulator of commercial public sector broadcasting before taking on the tasks that would arise from the lifting of restrictions on non-EEA ownership. Ofcom would then be able to facilitate a decision by Parliament based on evidence rather than on expectations.
The Joint Committee recommended that legislation to lift the restrictions on non-EEA ownership should not be brought forward until Ofcom recommended such a change, should it do so, following any of its formal periodic reviews of media ownership. Our parallel recommendation that there should he a review of the programme supply market in British broadcasting produced a two-and-a-half month review carried out by the ITC. That goes some way to giving comfort to those who support the change now proposed in that it notes majority support among the submissions received for it and recommends further regulations to provide what it calls an "insurance policy" to cover the supply risks associated with the change.
It also mentions the downside that I have addressed. By no means does it represent the comprehensive analysis that is surely needed of the likely impact on the strength and quality of public sector broadcasting in this country—what I referred to as the crown jewels. Some new investment and skills and additional worldwide sales of some types of production will be no substitute if the price is the destruction of one of the great glories of British television. I do not in that respect want to follow the American example because British public sector broadcasting must be defended. I beg to move.
Lord Lipsey: That sounded pretty final and irrevocable to me. I rise with great temerity, because if the noble Lord can call the noble Baroness, Lady Buscombe, naïve, I hesitate to think what he will say to me after my remarks. If we are talking about naivety, it is strange to cite in evidence of the horrors of this proposal Mr Mark Thompson and Mr Greg Dyke, who, great though their skills and talents are, are of course competitors of the people about whom we are talking. So, unsurprisingly, they do not want them strengthened. But we will let that pass.
I want to make some brief points, because I do not support the amendment. First, we must separate issues concerned with cross-media ownership from those concerned with foreign ownership per se. I have grave concerns about cross-media ownership, to which we shall come. Foreign ownership is a different matter altogether. It does not raise, for example, questions of cross-promotion distorting policy. One can he for foreign ownership and against cross-media ownership.

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Secondly—this is such a naïve point I hardly dare make it—if we were just Britain and we could just have British television and companies could be owned only by the British I could support the noble Lord's point. But European companies under the EU can own companies. I am no raving Eurosceptic, but why is it fine for European companies to own them and not for American companies? We will come to one of the reasons cited in a minute. It is not in America that the head of the government owns and controls the broadcasting in this country. However strong the American broadcasters are, they are not yet Prime Minister or President. That argument has to be weighed.
Lord Fowler: Is not one of the points that the noble Lord should address that there should be some form of reciprocal arrangement? Is not that exactly the distinction that he is seeking? Members of the European Union do have that right. What the United States is doing is refusing to make reciprocal arrangements.
Lord Lipsey: I take the point made by the noble Lord. I should like to see reciprocity. However, the noble Lord will forgive me for saying that that is a rather plausible red herring, so to speak, because there is not the least possibility that Granada and Carlton are going to go to the United States and take over NBC; it is not conceivable to put that on the list. No British company would want to do it. While of course I should like to see reciprocity, I am not sure whether that would be advanced by keeping this restriction.
I turn now to what I think is the nub of the argument, which is the one advanced on dumping. It is said that they will send over all their lousy programmes on the cheap. Murdoch tried that in Asia and it failed. His take-over in Asia was in extreme danger until he introduced local presenters, local programming, and stopped dumping, whereupon he has enjoyed enormous success. That is the final and conclusive response to the argument.
Finally, if you want to deal with these issues, the right way to do so is through competition law. If competition law seems inadequate for the media—in some ways I think that it is, and I agree with my noble friend Lord Puttnam here—then competition law should be changed. But an arbitrary, anti-American ban, which is what is being proposed in the amendment moved by the noble Lord, Lord Crickhowell, then it seems to be a gross error in terms of finding a way of dealing with the matter. I think that we can find better ways and I hope that the Government and this House will do so.
Lord Gordon of Strathblane: I rise to speak to Amendment No. 285A, tabled in my name, which is much more modest and addresses the simple issue of reciprocity. Regrettably I disagree with what has been said by both the noble Lord, Lord Crickhowell, and my noble friend Lord Lipsey. I shall not give a full answer to the noble Lord, Lord Crickhowell, except briefly to refer him to Clause 260 of the Bill. If Ofcom
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implements that clause, none of the things he fears could possibly come about. My noble friend Lord Lipsey thinks that competition policy would sort this out; it would not. Competition policy will not sort out anything. Regulation will deal with it, and we have very strong regulation.
I have already indicated that I am broadly agnostic about ownership; therefore I am not anti-American. I do not think that the Americans should be kept out for ever. In fact, they cannot be kept out for ever. Let us be realistic. Quite a number of the most popular programmes in this country are made in Australia and the United States. It is programmes that influence people, not the chief executive's office. I repeat, the programmes matter. So we are already receiving that input and, to be frank, with the increase in satellite traffic, programmes will come from all over the globe whether we like it or not. If they are popular then people will watch them.
This reminds me of the days of my youth when I listened to the American Forces Network to hear "big band" music at a time when the BBC thought it was far too jazzy for us. Today, satellite is the equivalent. We can access programmes from all over the world, so I am certainly not anti-American.
However, I do argue that we should have reciprocity. For my noble friend Lord Lipsey to dismiss that as a red herring is, if I may say, to fly in the face of a normal principle of trade. Some misleading statements have been made, I am sure unintentionally, by certain Ministers in another place. In rising order of objectionableness, the phrase, "It makes no sense that French, Italian or German companies can own television and radio stations when American companies cannot do so". The noble Lord, Lord Fowler, made the point: it is at the least relevant that there is reciprocity in the EU.
I shall quote from the Independent Broadcasting Authority Act 1973. At that point, a "disqualified person" was anyone who was
"not ordinarily resident in the United Kingdom",
and was not a British citizen. Everyone was banned bar Britons. By the time of the 1981 Act, that had been changed to a "national of a member state", because we were bound by treaty not to keep EU nationals out. Using reciprocity is the way in which we have dealt with this.
I hope that the Government will accept my amendment. It is fully in keeping with the traditions of British broadcasting. What the Government are currently proposing in the Bill marks a major departure from the traditions of British broadcasting.
The next mistake—I say that because, to be frank, it is not simply misleading, it is plain wrong—was made by the Secretary of State for Trade and Industry in giving evidence to the committee chaired by my noble friend Lord Puttnam. She said that there was no restriction on the foreign ownership of radio. Since no one in the committee picked her up on that point, she warmed to the task and said that we would not have had Classic FM if we had placed any restrictions on foreign ownership. However, while Warner was

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allowed to make a minority investment in Classic FM, it would not have been allowed to make a majority investment. The Secretary of State was wrong, there is a restriction on the foreign ownership of radio stations in this country, and rightly so.
Undoubtedly things will change, but let us be clear about this. If the most powerful nation in the world, with a huge internal market and a dominant position in the wider international English-speaking market, will not allow any nation to own more than 20 per cent of an American media enterprise, why should we unilaterally give in and say, "Oh, please, you can come into our house. It may be ridiculous that we are not allowed inside your house, but do come into ours". That is nonsense and it is not the correct way to protect British interests. Furthermore, to say that no British company could possibly move into the United States is equally nonsensical.
12.45 p.m.
Lord Lipsey: Could my noble friend explain why we should forgo the advantages of having American investment over here just because the Americans choose to forgo the advantages they would enjoy by having British programming and investment there?
Lord Gordon of Strathblane: I heard that argument raised when my noble friend and I attended the same Westminster Media Forum. The response to that is that just because they are behaving stupidly does not mean that we should behave stupidly.
Let us return to the principle of reciprocity. I take it that noble Lords think that reciprocity is a good idea. However, this could he a close call, so would noble Lords please concentrate closely: Do noble Lords think that we are more liable to get the Americans to agree to reciprocity if unilaterally we give in first, or—this is the tricky one—if we say, "Only if you let us in".? Answers on a postcard, please.
I repeat, let us be realistic. At present the Americans are saying no. I think that the Secretary of State was pessimistic when she said that there was no likelihood of it happening in the near future. I understand that the matter is presently under consideration in the United States because, like everyone else, the US recognises that people can receive services by satellite and that much of the regulation is out of date. All I can say is that I think the British national interest would be best served if we secured reciprocity and the ability, not for British companies to acquire ABC, but for them to be able to set up a service in Chicago or wherever. At the moment, that is not allowed.
Do not let us forget that one of our most distinguished Commonwealth citizens in the media field was forced to go through the humiliation of having to renounce his Australian citizenship, take a primary school test in American history, and apply for American citizenship in order to own anything in the United States. I do not think that he should have been put through that humiliation; I happen to admire Mr Rupert Murdoch a great deal. All I say is that if
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the Americans will not let us in over there, I see no reason for letting them in over here until they offer to change.
Lord Thomson of Monifieth: Noble Lords on these Benches support the amendment moved by the noble Lord, Lord Crickhowell, although I cannot hope to match him in his Welsh eloquence. I want to begin by taking up the points made on EC companies which have been raised by a number of noble Lords. The Government's position on this—stated baldly hut, I hesitate to say, also naïvely—makes no sense at all. It is set out in paragraph 239 of the Joint Committee report:
"The Government considers that 'it makes no sense that a French, German or Italian company can buy any TV or radio licence in the United Kingdom, but that American, Australian or Canadian companies, for example, cannot do so".
That point was taken up by the noble Lord, Lord Lipsey.
There is a distinction to be made between European investment in British broadcasting and American investment. Broadcasting is very much more than a commercial business. It is in a real sense a reflection of national culture and the character of our society. The influence of broadcasting on the whole climate of opinion in our society is beyond argument. In that sense, the character of British broadcasting has infinitely more in common, in important ways, with the broadcasting systems of our partners and neighbours in the European Union than with our American neighbours. In Europe, Britain has one of the best broadcasting systems and it is so regarded around the world.
I have a vivid recollection of arranging, when I was chairman of the Independent Broadcasting Authority, a dinner for the chief of one of the great American networks to meet ITV chairmen and managing directors. It was an interesting dinner because, although we shared a common language and had some common interests, we were deeply divided by our fundamentally different broadcasting cultures—which is not to say that American broadcasters do not produce very high-quality programmes that we all enjoy. I totally agree with the noble Lord, Lord Gordon, that high-quality programmes are produced all over the world. However, the Bill deals with something much more fundamental than simply buying good programmes from anywhere in the world in a global market place. It deals with the character, quality and organisation of our broadcasting system; the purposes for which it is organised; and the ethos that lies behind it.
At the dinner to which I have referred, the distinguished American executive responsible for many highly entertaining programmes considered himself first and foremost a business man who had become a programme maker, whereas the ITV executives saw themselves as programme makers who had become business men. For our American guest, ratings ruled. Although the ITV executives needed to pay due regard

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to their companies' shareholders, dividends and commercial success, they equally paid due regard to the great regulator in those days—the IBA. That is the big difference between the broadcasting culture in this country and Europe, in the main, and that of the United States. As the noble Lord, Lord Crickhowell, pointed out, that difference is vividly set out in the book by Professor Michael Tracey.
The globalisation of communications has a major impact on national broadcasting systems, to which all have to adapt in one way or another, but the Government are being over-optimistic about the benefits of foreign—mainly American—ownership and investment and underestimate the dangers. The Government should pause for thought and he ready for a review of the balance of considerations by Ofcom once it has settled in. The Government seriously underestimate the difficulties that Ofcom will face in preserving programme quality simply by regulation, in the face of pressure from the great American corporations—especially when the going gets tough.
Does anyone seriously believe that if Mr. Rupert Murdoch, a major newspaper owner in this country, becomes the owner of Channel 5, Ofcom and its admirable regulators will, in the last resort, be able to prevent the kind of influence that would be brought to bear on a British national television channel by a man who is famous for defining public service broadcasting in terms of such contempt that he is alien to the broadcasting ethos in this country?
Those are the realities, so I regard reciprocity in a slightly different light from the noble Lord, Lord Gordon. His is a principled position. Mine is more tactical. I regard it as very unsatisfactory and a little humiliating that we should not approach this aspect of international trade relations on the normal basis of reciprocity. But I am keen on preserving reciprocity on the basis that it will be an additional barrier to allowing the domination of American investment in the UK. As there is a total imbalance and not the same appeal, there are fewer chances of Britain being able to enjoy equal opportunities in America.
I am genuinely puzzled by the Government's position on reciprocity. Paragraph 244 of the Joint Committee's report shows that in November 2001, the Government were very robust:
"Without reciprocal arrangements with other nations that would allow our own companies to expand into their markets, we do not feel that we could justify lifting our ban at the present time".
At paragraph 245, the Secretary of State is quoted as characterising reciprocity as
"a negotiation in train".
In the same sentence, she is also reported as saying that she saw
"no case for holding out for reciprocal agreement"—
in part, because no change in US policy appeared in prospect. Against that background, I fail to understand the Government's reasons for abandoning their
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November 2001 position and flying in the face of the all-party unanimity that was declared in a particularly forceful way in the report of the pre-legislative scrutiny committee.
Ownership is one of the Bill's biggest issues. If we do not have a positive response from the Government today, I shall echo the noble Lord, Lord Puttnam, when speaking to a previous amendment, in saying that we shall need to return to the matter on Report. Your Lordships have an all-party view that has resonance in the nation.
Baroness Jay of Paddington: In the context of everyone declaring their personal position. I hope that I am not being naive or innocent. I certainly declare that I am not anti-American but have worked happily in the United States for public broadcasters and commercial television networks.
It is worth making two simple economic points in response to my noble friend Lord Lipsey because they may also be deployed by my noble friend the Minister. The first is whether ownership should be confused with investment. In my view, it is extremely likely that in any ownership decisions about the takeover of ITV, over-the-top market prices would probably be paid for ITV companies. Simple economics would suggest that the owners would probably be more likely to wish to take money out of those companies than invest in them.
The second economic point concerns the so-called dumping of programmes. This is not an issue about the quality of imported programmes; it is about economics and the supply of those programmes. I am sure my noble friend Lord Lipsey is right. Most people viewing television in this country would prefer to see home-grown programmes rather than what they might see as low-quality American ones. The dumping issue is not about quality. US broadcasters would be able to screen their American products in this country at marginal cost. This would be greatly advantageous to them, particularly in the situation where they might find themselves making an initial investment beyond inflation.
That might lead to audience share loss but it would generate an increase in profits. My concern is one that has been expressed by Members on all sides of the Committee. American companies would see this investment as an investment in an industry they would equate with baked beans. We discussed this on the previous amendment about the particular qualities of the media. Their interest would be maximising their profits. Their share of audience in this country would be less important than that. They would maximise their profits by using the opportunity to show, at marginal cost, programmes originating in America. This brings the debate back to the question that I raised on the previous group of amendments about trying to ensure the quality of television through domestic origination of programmes and original programming. The noble Lord, Lord Fowler, and other noble Lords raised fundamental points on the previous group about the special nature of the media industry, global or not.
1 p.m.
Baroness Howe of Idlicote: I commend particularly the way that the noble Lord, Lord Crickhowell, expressed very important views that need to be decided today. I support this group of amendments for three reasons. The first is that, like many Members of the Committee who have spoken, I cannot see any justification for the United Kingdom to open up opportunities for the media barons of the United States or any other country to buy into the British communications industry on a non-reciprocal basis. If what has been said today is correct and the intention of the US is to drop its own barriers to foreign ownership, we should wait until that has happened. Even then, the conditions and regulations under which such change in ownership would take place need to be stringent. I share the doubts already expressed about the stringency of existing conditions.
Although that would he my own approach, like many other noble Lords who have spoken I would support a logical compromise suggestion by the pre-legislative committee that any decision on foreign ownership be delayed until Ofcom was in place. Ofcom will he a very large organisation. It will have wide, possibly conflicting, responsibilities. We should give it time to settle in before expecting it to take on board this potential Trojan horse.
The second reason—even more important—is the short or long-term effect that opening up our broadcasting industry may well have on the public service broadcasting requirement expected from all British terrestrial broadcasters. The debate on the previous group of amendments pointed to the worries that existed when aspects of cross-media ownership come to the fore. The worst case scenario is having one media baron, possibly Murdoch, owning a near monopoly of local and national radio, television and print media. There has been rather gloomy news this week that the United States plans to go even further down this particular liberalising free-market media ownership road. The effect on plurality, the range, the quality and possibly impartiality of what the average citizen would be able to see or hear, would be worrying. Diversity of thought was mentioned. I believe that to be crucial.
Many speakers have mentioned recent research by Professor Michael Tracey. He is someone versed in the broadcasting cultures of both the UK and the US. His findings show how little attention is given to programming unlikely to make money for American shareholders. Public service broadcasting does exist in the States and the small amount of it is sometimes better than in this country. However, there the market reigns supreme. Broadcasting is not seen as a public good. The warnings that have been given are stark indeed. One Commonwealth country, New Zealand, which started with a UK public service broadcasting regulated model, changed to a US liberal market model when new technology came in. It is now so dismayed by low-quality programmes that it is seriously considering a return to the current UK approach.
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My third reason is that my experience, when chairman of the Broadcasting Standards Commission, confirms the ruthlessness of approach described so graphically by Professor Tracey. While I was in the United States, I had a number of meetings over some years with media academics at Stanford and other universities. They briefed me on how their industry operated. I asked about the weight given to research on issues such as the portrayal of violence and the reactions when this research was shared with broadcasters. Unlike in the UK, where broadcasters, academics and regulators take a keen interest in such findings, American broadcasters do not even bother to attend. They send their public relations people to rubbish such findings.
I hope therefore that the Minister will accept the proposed amendment. If our regulation ensures that high standards and quality of broadcasting are maintained, we should wait until Ofcom has settled down and America has removed its own restrictions on ownership by non-Americans.
Lord Fowler: I should like to speak briefly to the amendment of the noble Lord, Lord Gordon of Strathblane, of which I am a co-signatory. I agree strongly with everything the noble Lord said. I make my position clear. I am not opposed to foreign ownership in the media or in other areas. We take some pride in inward investment. Both Front Benches and political parties compete on how much inward investment has been brought into the United Kingdom. One benefit in the media area was the entry of Mr Murdoch into newspapers. He took on the reactionary practices of the then print unions. Therefore, I am not opposed to foreign ownership. Sometimes it has done some good. The noble Lord, Lord Gordon of Strathblane, and I have one requirement. If we are to have free competition without restriction, then the competition has to be free. One country should have the same rules as the other. Access to one market should be matched with access to the other. We are talking about a level playing field. With great respect to the noble Lord, Lord Lipsey, it has nothing to do with anti-Americanism; that is an absurd point to make. It is a sensible question of trade negotiation.
However, the proposals of this Government have nothing whatever to do with a level playing field. In future, they propose that United States companies will be able to take over ITV, but that British companies will be excluded from doing the same in the United States—and that applies not just to NBC but also to all the other American television companies.
I find it both strange, and, frankly, unacceptable that the position that I have just been putting was the position of Her Majesty's Government a few months ago. It is not a position that has suddenly been invented on the Back Benches on both sides of the Chamber. As the noble Lord, Lord Thomson, rightly said, it was the Government's position in November 2001, when they said:
"Without reciprocal arrangements with other nations that would allow our own companies to expand into their markets, we do not feel we could justify lifting our ban at the present lime".

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Therefore, the Government have a certain amount of explaining to do in this regard. They have conducted what I can only describe as a most amazing U-turn on their policy. We want to know why they have done so. Why have they changed their policy?
I have listened to quite a few debates on the issue and have taken note of several ministerial replies. But, so far, I have not heard any sensible explanation of why the Government have changed their policy from what it was 18 months ago to the one that they hold today. There is no mystery about the view of those like my honourable friend Mr Whittingdale in another place who simply want the destruction of any barriers. That is a perfectly consistent case, although I do not happen to agree with it. However, the position of the Government is not remotely consistent with the position that they have held up until this time.
Can the Minister tell the Committee how the Government got from where they once were to where they are today? Why has the policy gone from where it was to where it is today? What is the motivation? I notice that the Secretary of State, Tessa Jowell, says that the Government are opening negotiations to secure reciprocal arrangements with the Americans, but this is after the policy has changed. Like the noble Lord, Lord Gordon, I find that statement pretty astonishing. It seems to be the strangest form of negotiation to give away your main negotiating card before such negotiations begin. I do not see the sense in the Government's proposals.
If the Government were saying, "We don't want reciprocal arrangements-, that would be fine. I could then at least understand the case that they were making. However, that is not the case that they are making. The Government are saying, "We do want reciprocal arrangements; and, incidentally, just to encourage the negotiation along, we are giving away our position at the start". I do not believe that they will get very far with that approach.
Alternatively, are we to be told that it was the force of public argument and public debate, together with the pressure of public opinion, that forced the Government into this change of policy? I imagine that the boards of the ITV companies may well support the move because, self-evidently, it will increase the value of their companies. It would mean a bigger market for their companies and. therefore, the price of such companies would increase—provided that they are sold. Judging by the letters and telephone calls that I have received on the matter, it does not seem to me that there is a great deal of evidence of general public opinion to the effect that the Government must take this step. Indeed, I suggest that it is rather the reverse.
Frankly, as I said, the Minister has some explaining to do. The very least that the noble Baroness can do at the end of the debate will be to tell us why the policy has changed in such a dramatic way. Further, given that the Government's aim is still to get those reciprocal arrangements, can she say how that change of policy at this stage will help the Government in their negotiations? That is what the Government have to explain.
1.15 p.m.
Lord Ashley of Stoke: I have been greatly impressed by the speeches and the writing of the noble Lord, Lord Puttnam, on these issues. I am especially glad that he has tabled Amendment No. 285. I do not have the noble Lord's breadth of experience, but I was a BBC television producer for some eight years. Therefore, in a sense, I have been brought up on the public service broadcasting ethic. Frankly, in the face of the opposition expressed throughout the country, I am staggered that the Government intend to go ahead with these proposals.
The fact that they are trying to push through these proposals by way of the Bill means that this Chamber is faced with a very serious issue. We, and we alone—another place has not really inspected the Bill—can do something about the situation. I am sure that the amendment will not be put to the vote today, but it is most important that it should be carried when it comes to the proper stage. If we create the opportunity for News International to dominate, and to do so even more than is the case at present, such proposals will allow this vast corporation to take even more power. I am absolutely convinced that it could become a media octopus, spreading its tentacles all over television, including the take-over of Channel 5. This would mean repercussions for all the channels, especially for the BBC.
We are talking about grave perils for British broadcasting that will emerge as a result of the enactment of this Bill. The Government may say, "All right, if such perils emerge, we can deal with the problem: we shall impose a requirement on Ofcom to review the situation". If that is the case, what will happen? Ofcom will be directed to look at regional broadcasting, news, and so on. But those concerned will simply patch things up. Patching of any kind is, by definition, second rate: it cannot be as good as the original. It would be disastrous to allow this situation to develop.
A few days ago, in the Guardian, Tessa Jowell accused the sponsors of these amendments of "demonisation". It is actually a good word, but that represents yet another error on the part of Ministers, especially Tessa Jowell, for whom I have a very high regard. If anything characterises the noble Lord, Lord Puttnam, apart from his brilliance of presentation, it is his moderation. Throughout all of these debates, his moderation has been the key note of his proposals. It beats me how anyone could accuse him of demonisation. The fact that they would seek to denigrate the sponsors of these amendments shows the level and the measure of the Government's concern, though I am sure that my noble friend the Minister on the Front Bench today will not indulge in anything of the sort. I believe that move to be both foolish and unjustified. Indeed, I should like to see that word withdrawn. One can use the word "naive", and so on, but "demonisation" is in a different category.
I have tried to be brief because I know that other noble Lords wish to speak, and I wish to hear again from the noble Lord, Lord Puttnam. I support this group of amendments, especially Amendment No. 285. I know

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that my noble friend the Minister on the Front Bench will do all that she can to ensure that careful consideration is given to all the comments made during the debate. I hope that she will be able to do something about the situation at a later stage.
Lord Bernstein of Craigweil: I do not regard television companies in the United States as bogeymen. When I worked for Granada Television, we embarked upon a number of co-productions with American companies. On the whole, we had a very constructive relationship with them. Indeed, we sold "Brideshead Revisited" and "Jewel in the Crown" to the US, which were extremely successful. However, that does not mean that we should give ownership to American companies.
The point of an American television company buying an English company is not to invest in it. American companies have two very valuable/ expensive assets—the first is their production facilities, and the second is their programme library. It is important for them to maximise the revenue from those two facilities.
In the television world, the whole point of acquiring another company is distribution. If it increases distribution, it increases profit, as my noble friend Lady Jay of Paddington pointed out. If American companies bought English companies, we would get not greater inward investment but the sale of American programmes in this country.
Lord Brooke of Sutton Mandeville: Four of my family's six Members of Parliament in the past 170 years were Liberal MPs, so I have a strong genetic prejudice in favour of free trade. We are a maritime nation, and we should have an open seas policy. I recall getting into trouble with constituents in central London for arguing against legislation to prevent foreigners from buying houses and flats there, so I have suffered for my principles.
In principle, therefore, I support my Front Bench in both Houses on their general thesis, but on American ownership of the media, which is the subject of the amendments tabled by my noble friend Lord Crickhowell, and on the issue of reciprocity, which is the subject of the amendment tabled by the noble Lord, Lord Gordon of Strathblane, I am influenced by experience in two other areas of the communications industries. The first is the film industry, with which the noble Lord, Lord Puttnam, is very familiar. Any Minister who has wrestled with the problem of the future of the British film industry is ineluctably brought back to the control of distribution by the Americans—that control was surrendered in past years—and the consequences that that has. He will find himself persistently in the position of the Irishman who, on being asked the way, said, "If I wanted to get there, I wouldn't start from here".
The second example from the communications industries is air transportation. I recently read the biography of the first Earl Swinton, for reasons that are not relevant to the debate. I followed him through the series of conferences that he held with the
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Americans before and after the war on the subject of transatlantic air transportation. Reciprocity played a crucial role in those negotiations.
I conclude with a decent relative scepticism about American ownership of our media and an absolute attachment to the principle of reciprocity.
Lord Bragg: I support the amendment tabled by the noble Lord, Lord Crickhowell. Until the past three or four weeks, when more evidence came to light and I thought harder about it, I used to think that foreign ownership could be accepted and protected in this country and in our industry. I speak as someone who, as has been pointed out, is part of a company—Granada—that could, perhaps, benefit commercially from foreign ownership.
My views have been modified for three reasons. The first is the forceful representations made over the weeks—expressed privately, publicly and in the House—about reciprocity. I take the argument made by my noble friend Lord Gordon of Strathblane and by the noble Lord, Lord Thomson of Monifieth. They made powerful arguments, as did anyone else who talked about reciprocity. To go in without some sort of reciprocal agreement would be foolish, in the sense that we would have to fight for it—if we were to get it at all—for years afterwards.
The word that I have picked out most from what was said so eloquently by other noble Lords is "dignity". It would be deeply undignified for a massive broadcasting country such as ours, which is still tremendous on the world stage, to roll over. That is how it would be seen, and it would, in that way, be rolling over. That has become a powerful issue for me.
I can express the same admiration for a great deal of American television as my noble friend Lady Jay of Paddington expressed. I have worked with American television, and I have co-produced programmes with American television. I used to co-produce arts programmes with the American PSB television station. When I started, it did about 21 hours of arts programmes a year, as did ITV1. It now does six arts programmes a year, and they must all be American. They do not always fit our bill, so the co-productions have ceased. That is a digression, but it is not irrelevant.
Two other things have also made me change my mind. The first is the quotas that are supposed to protect the British interest, when foreign investment comes in. I am disturbed by the fact that there do not seem to be any ways of measurement laid out. How do we decide about the quotas? Do the companies that supply programmes for, say, ITV, have to be staffed by British people? Must those people be British-born? Must they be British residents? What percentage must be British? Must the companies do British subjects? Must they use British locations? Must they use British back-up in all the infrastructure? How are the quotas measured? Are quotas of people really involved?
What about the quotas in regulation? What regulation can we bring to bear, for instance. on areas of television that matter throughout the world? We can

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take news as an example. As has been said in the House several times, the ITN coverage of the war in Iraq was exemplary. It was very expensive. Had an American company been in charge of ITV and owned that news company, would it have doubled up and used its own people? That would have saved a lot of money. They had some good people out there and some good cameras. I was in America filming for three weeks while the war was on. I was filming for "The Adventure of English"—there is a bit of a paradox there. I watched American television news coverage every night for at least two or three hours. It is wholly different from ours. I do not want to go any further than that at the moment, but it is completely different from ours. If we doubled up with them, they could make a tremendous case. They have Pulitzer prizewinning reporters and wonderful cameramen, and I intend no irony in that. But, it is nothing like the way in which we do it. How do we judge that?
In ITV, for instance, we do programmes in drama, which is the mainstay of British television. Recently, there was "Dr Zhivago", which was very expensive. Why should anyone do that, unless he has come from a tradition that believes that, having had "The Jewel in the Crown" and "Brideshead Revisited", that is what he should do, because his peers—peers outside the House, that is—did it? That is the way that we went on. ITV took risks on major television with "Queer as Folk". That was an advanced, difficult drama. Such programmes would never have got on to American television. Why should anyone take such huge financial risks? "Dr Zhivago" was never going to get a mega-audience; it was going to get about half as much as "Coronation Street", if it was lucky. Why should anyone take a risk with subject matter, as with "Queer as Folk"? Who judges? How do we regulate for that sort of quality?
I can give personal examples. I could do arts programmes for about a fifth of the price that I do them now. Eventually, we would be found out, but we could toddle along for a while. I could buy from the mass of arts programmes circulating the world or the mass of cheap concerts. I could pull them down any time that I wanted. I could do cheap arts programmes any time that I wanted. They would look all right in the brochure, but they would not be what we have been doing for so many years. Such things worry me very much. There are benefits to be had from inward investment. I would welcome it but under the right terms.
I also think that Ofcom is heavily burdened. That matter could wait. It could be examined. Some of the questions that I have raised—they are only a beginning—could be answered. In that spirit, I support the amendment.
Lord Harris of High Cross: I hope that, even at this late hour, the Committee will be patient. There has been a well developed and orchestrated campaign in favour of the amendments. I can see some force in some parts of the argument. Emotionally, I often feel drawn, in the words of the noble Lord, Lord Bragg, to
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reconsider my position, although that is largely theatrical. Essentially, the amendments are born of fear. They are negative and nationalistic, and they end up being restrictionist. That is my view of them. The noble Lord, Lord Lipsey, would come some way with me on that, but we are opposed by a mighty army of unreason.
It is regrettable and deplorable that the Americans perpetuate restrictions on the ownership of television and so forth by foreign nationals. It is unforgivable. However, we should not indulge in what. in student days, was called beggar-my-neighbour restrictionism. People think that because they are doing us down, we must try to do them down and that good will emerge from that. Reciprocity is, of course, an ideal to be aimed at, but, in the last resort, we must decide which way to go. Traditionally, the way that we have gone, in goods and services, has been in the direction of freedom of commerce and so on. There are down-to-earth, practical reasons for that, as well as reasons of high principle.
The case against following the Americans, if they will not agree with us, is that we would be denying ourselves access to some parts of the trade that would be in our favour. We would be excluding investment, know-how, challenge, stimulus and the other consequences of a competitive regime.
The anxious tendency—the nervous tendency—that we detect around the House ignores the two safeguards that foreign companies will still be subject to the same content control and other programme requirements as British broadcasters. Secondly, whatever the noble Baroness, Lady Jay, says, all experience confirms that local content is generally the best way to win and retain audience interest.
If we come to lofty principle, I simply assert that the maximum freedom of trade in goods, services and capital is the universal, global route to interdependence, mutual understanding, peace and prosperity in the long run. The noble Lord, Lord Crickhowell, quoted examples of American companies coming in and sacking various people. He referred to the big bang that led to sackings and redundancies in the City. That may be the short-term impact, but the inevitable long-term consequences of this global spread of interests and investment is the expansion of competition, output and choice.
I wish the Americans would open up their market; I think in the long run—not the very long run—they will be compelled to open up their broadcasting frontiers. Unlike many other speakers who are nervous, I believe that now is the time to set an example and display confidence in our own culture and industry to stand up to competition from all corners. To talk about it being undignified to continue to accept rival competition from abroad seems to be stretching it a good deal.
Despite the absence of the noble Lord, Lord McNally, whom I miss very much, I repeat my appeal to the Liberal Democrat Benches. So much of their view on these issues is restrictionist, backward-looking and conservative—it is actually Tory. This is restrictionism, protectionist—it is nothing to do with liberalism and not an awful lot to do with democracy.
1.30 p.m.
Lord Puttnam: I support the amendment put down by my noble friend Lord Crickhowell, of which I am a co-sponsor. I shall try to be brief. There is not a little Englander bone in my body. I spent 22 very happy years of my 30 years in the film industry contracted to the largest media organisation in the world—Time Warner. So I certainly do not come to this from the perspective of a little Englander's sense of what is right. But I have two things to say. To my noble friend Lord Lipsey, I say this is not a rejectionist amendment. Were I the Secretary of State, I think I would be looking back 10 months to the time when our Joint Scrutiny Committee report first came out and thinking, "Why on earth didn't I embrace its sensible suggestion to pause, to think, to gather evidence and to ask Ofcom for a sensible recommendation?". It is pretty galling for us. The sub-theme from the Front Bench is, "We're not allowing Ofcom to get on with things". Yet here we are asking Ofcom to get cracking. In a number of amendments coming up, we suggest leaving it to Ofcom, taking its advice and allowing it to gather evidence. The Government, in this sense, appear to want it both ways.
Let me add a little factual background to the excellent amendment put down by the noble Lords, Lord Gordon and Lord Fowler. I believe that 2001 was a very bizarre year for the Government to change their mind, for it was the year in which the first intimations came out of the United States that with the on-rush of the next round of GATT talks, the Americans would have to start making some concessions if they were to win the concessions they sought. I agree with all noble Lords who have said that entering negotiations knowing the other side has already decided that it has to move a bit to get a bit, and hobbling our negotiators with the sense that we have already given up, is pretty bizarre. I get the sense that the left hand may not know what the right hand is doing. Right now, some poor devil at the DTI is engaged in the detail of the next round of GATT negotiations and we are pulling the rug from under his chair. This is not a particularly sensible position for the Government to be in.
I sincerely support the amendment despite the fact that the Government's initial response to content regulation as a way of dealing with much of the problem was admirable, prompt and entirely satisfactory. I commend them on that, but I do not think their present position is sustainable.
Lord Phillips of Sudbury: One reason that the debate on this amendment has gone on for over an hour is because the matter was not debated at all in the House of Commons. To give this crucial issue a good airing is our duty rather than merely our choice.
I associate myself entirely with those who have looked at this from a cultural point of view. I believe that one cannot emphasise too strongly that in talking about broadcasting and the media, it is wholly different, as "Monty Python" said, from looking at cans of beans, to use the example of my noble friend Lord Thomson. I would say the same if we were
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talking about not allowing in European control of our media, but that pass has been sold. En passant, it might waken us all up if Signor Berlusconi's empire were suddenly to become hyperactive in taking over the jewels of our own broadcasting empire. How many of us then would be sanguine and share with the good and noble Lord, Lord Harris, that absolute faith in the long-term beneficence of indiscriminate capitalism that is so much a hallmark of his position? I would not.
There are particular dangers in confining the debate to the United States, for which I have the greatest admiration and against which I have not the slightest innate anti feeling. But there are dangers in allowing the massive purchasing power of a comparable culture to come into our own much smaller patch without let or hindrance. An owner from California will not have the same cultural commitment and identification with our great television presences, and that is already weak, as we have. The tyros of American media are not influencable in the same way as our own leaders. They are beyond touch or reach, personally and socially, to a high degree. They do not breathe the same cultural and geographical air.
Ownership is wholly different from regulation. Some may be tempted to believe that it is a matter of indifference to have regulation in the Bill. I think the noble Lord, Lord Gordon of Strathblane, referred to the public sector remit requirements of Clause 260, which we debated on Tuesday. The Government assurance, then given, that Clause 260 would apply to Channels 3, 4 and 5 was inaccurate and incorrect. It is not the case that if any of the great American beasts came into our small wood they would be subject to all the controls of Clause 260. But regulation, in any event, is a much weaker vessel. Regulation on the page is often very different from regulation on the street. That is partly a function of the complexity of the regulation we are talking about, partly of the legalisation of regulation and the fact that the privateer will always have at its beck and call a much greater army of legal power than ever the bureaucrats will.
I had one direct example of this when I was legal adviser to the independent directors of the Observer when it was owned by Tiny Rowland of Lonrho. Subsequently, I became a proprietor when the Scott Trust purchased the Observer from Lonrho. I have therefore seen this from both sides of the fence.
Those who are not used to dealing with such situations might take too much solace from the protections supposedly afforded by such as the independent director arrangements that prevailed for the Observer. Those arrangements did very little to restrict the rather sad effects of Tiny Rowland's influence on the paper that he owned—his influence via his appointments of the chief of staff, the editor, control of remunerations, control of funding for the paper and the rest of it. I beg those who are relatively indifferent to Amendment No. 285, on the grounds that there is plenty of regulation, to think again.

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Lastly, I refer again to Sir Denis Forman, because I believe his views to be of interest to the Committee. It was very interesting and warming to hear the noble Lord, Lord Bernstein, refer to his long partnership and experience with Sir Denis in Granada. He has absolutely no doubt about the importance of the amendment, and nor does Sir Jeremy Isaacs, with whom I have spoken. Sir Denis Forman said that,
"the impact of the United States on British television has been minimal and yet our television services have acquired the reputation of 'the least worst in the world'. Would it be sensible to open the one field in which we have international supremacy to the risk of a takeover by Hollywood, which already, God knows, has power enough?"
I close by reminding the Committee that at the beginning of this week the relevant Congress committee decided to dismantle the already weak cross-ownership controls within the United States, so that the four big groups will shortly have even greater and titanic force.
Baroness Buscombe: I have, after a lot of consideration, decided that I will, unusually, support the Government on this issue.
Lord Grocott: I am conscious of the fact that we are going beyond the time at which we would normally break on a Thursday. However, if I judge the mood of the Chamber correctly, we are having an extremely important debate on what everyone recognised right at the start was one of the key issues in the Bill. It would be sensible if, with the agreement of Members of the Committee, we completed this group of amendments, even if that means us running on longer than we normally would at this time on a Thursday. I hope that that is the feeling of the Committee.
Baroness Blackstone: I am very aware that noble Lords want their lunch. I am particularly grateful to the noble Baroness, Lady Buscombe, for simply saying, with short and sweet brevity, that she supports the Government. I shall try to be short, sweet and to the point as well, so that we can all have a break and have something to eat.
I begin by addressing Amendments Nos. 285, 308, 322A and 322B. The starting point of our policy is that we believe that the existing rules are inconsistent and outdated. As every speaker in the debate knows, there is nothing at present to prevent persons from EEA states from holding any type of UK licence. There are a number of different kinds of broadcasting licences that non-EEA states can already own.
For the record, I should say briefly to the noble Lord, Lord Crickhowell, that my right honourable friend the Secretary of State for Trade and Industry
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wrote to my noble friend Lord Puttnam to correct the comments that she made on this matter in July 2002. Perhaps he never saw that letter.
Lord Crickhowell: I do not know to what the noble Baroness is referring. I was not aware that I quoted the Minister in another place or took up that point, but perhaps I did.
Lord Gordon of Strathblane: I believe the reference may be to a remark that I made, rather than one made by the noble Lord, Lord Crickhowell.
Baroness Blackstone: I am so sorry—I meant to refer to the noble Lord, Lord Gordon. I do apologise. I hope that he takes the point, however. He may not have seen the letter to which I referred.
As a result of existing rules, American companies already have a presence in UK media markets. They have helped build our satellite, cable and magazine industries. However, the current rules mean that Bertelsmann, a huge German company, could buy anything that it wanted, but that similar global firms such as Disney or Viacom cannot. That distinction is inconsistent and has no clear justification. We believe that opening up the UK broadcasting industry to foreign ownership should lead to increased investment, productivity and efficiency, and the introduction of new management skills and ideas. That, in turn, should mean better programmes for viewers.
Inevitably, debates on this subject turn to the question of American ownership and the fear that content quality will be eroded. That is what Members of the Committee have said in the debate today. The Government wholeheartedly understand and sympathise with that view. It is an entirely proper concern to look at the experience of countries like the US and New Zealand and say, "Not here, thank you". I associate myself personally with that view. However, we are not the US or anyone else. It is not the Government's intention to introduce a US-type market in the UK, and that is not what this Bill does. One must not be tempted to draw misleading comparisons with American TV. The fact is that the UK has strong content regulations which will maintain the quality and impartiality of our programming. The United States have no such content rules. In television, the Bill sets out for the first time the overall public service broadcasting remit, which requires the broadcast of a wide range of programme forms and genres. US broadcasters have no comparable public service remits.
Let me outline how the regulatory and public service provisions work. There will be demanding obligations for EU production, original production for UK screens, regional production and independent production. Under Clause 274, which concerns original productions, the Secretary of State defines what is an original production. The definition can be amended and the quota itself can be increased. Ofcom will be able to review licence commitments for regional programming and production, original production and news and current affairs programmes on a change of control of a Channel 3 or Channel 5 licence, and to

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vary the new licence to ensure that the new owner does not cut back on what the old owner actually delivered. Ofcom can also amend licence requirements, including those regarding regional programming and production, original production and news and current affairs programmes.
In relation to local radio, Ofcom will be subject to a new duty to carry out its functions so as to protect and promote local content. When a local licence changes hands, Ofcom will he able to vary the licence conditions in order to maintain the existing local character of the service and the quality and range of programmes included in it.
There are strict rules to prevent anyone from using UK broadcasting companies to further their own political agenda. For example, all broadcast news must be presented and reported with due accuracy and impartiality, and owners are prevented from using radio or TV stations to broadcast their own views on matters of political or industrial controversy or relating to current public policy. These extensive provisions will act as a guarantee of quality and diversity, regardless of who owns the channels.
In the Second Reading debate, my noble friend Baroness Cohen of Pimlico expressed concern that the content provisions would be bulldozed over by the financial muscle of American broadcasting companies. However, I am confident that we have robust provisions in place to prevent any evasion of the content rules. Ofcom will have sufficient power to ensure that any change in ownership does not dilute the UK's strong production base, its heritage of regional production or the thriving independent production sector. Broadcasters could be fined or ultimately have their licences revoked if they do not abide by their licence conditions.
The market also has its role to play in programme quality. That point was raised—on this occasion I am sure—by the noble Lord, Lord Crickhowell. It would make no commercial sense for US companies simply to "dump" their content on UK screens even if they could. British viewers and listeners demand quality and British content, and if they do not get it they will simply go elsewhere.
I say to my noble friend Lady Jay that I find it rather hard to believe that a US owner would not care at all about audience figures. I believe that they would have to take them into account for the very reasons that I have suggested. In the end, it would make rather little commercial sense for them completely to ignore them.
Baroness Jay of Paddington: My noble friend has very kindly referred to the point, on which I think that we will have to disagree. The problem that I was trying to raise was that the interests of the American broadcast companies would be very different from the public interest concerns that she has very rightly said are important in our regulation.
However, perhaps I may go back. I hope that she completed that point—I did not want to interrupt her in the middle of it. It is not correct that the Federal Communications Commission in the United States
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has no control over the quality of programmes in its licence regulation. It does have a public interest requirement. The problem and the issue to which the noble Lord, Lord Phillips, referred—perhaps incorrectly, referring to a congressional committee when in fact it was the Federal Communications Commission that ruled this week on cross-media ownership—is that the enforcement by the FCC of that public interest requirement in the licence operation has diminished vastly over the years and is now in practice almost abrogated. That is the problem that we foresee.
Baroness Blackstone: I know that my noble friend is absolutely right in what she says about the FCC. The point that I was trying to make and which I think she has just endorsed is that the US system does not have the same degree of control over content as we have in the UK. ITV has a quota of 65 per cent original production. It actually achieved 81 per cent. Channel 4 and Channel 5 also exceeded their quotas in original production. Those channels are surpassing their targets because it makes commercial sense to do so, because high-quality original production aimed at UK audiences is quite rightly what viewers want to see.
Any non-European company that fails to take note of those facts and fails to deliver high quality original UK productions will suffer in terms of ratings and therefore advertising revenues. UK viewers want high-quality original production. There is no reason why American companies would be more likely to ignore that fact than the big European companies that are already entitled to buy into our market. Many European countries already have no restrictions on foreign ownership. The arrival or threat of arrival of non-European investors in those countries has not had an apparently detrimental effect. For example, in Germany, RTL, like the BBC and ITV, shows about 30 per cent non-European content.
There are those who say that it will he in the economic interest of large—particularly US—companies to buy UK companies and run them as cheaply as possible. It is true that it will be in the interest of any inward investor to run his or her operations as efficiently as possible, but that does not necessarily mean the same as running them as cheaply as possible. "Cheaply" implies for the lowest input cost possible. "Efficiently" means maximising profit. However, that can mean significant up-front investment in order to attract large audiences. Channels that have tried to treat broadcasting as just another commodity have had to change their business plans to reflect local demand.
Let us not forget that other huge differences between the American market and the UK market—the BBC. A well-resourced BBC will continue to be a tough competitor to commercial broadcasters, offering audiences alternatives if those broadcasters do not get it right.

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It is not just the Government who think that it makes sense to remove the foreign ownership rules. The ITC's independent review of programme supply, which reported in November, stated that most contributors to its review,
"felt that the combined forces of audience preference, economic logic and strong regulation would ensure that any American owner of broadcasting and production assets would focus on investment within the local market for the local market".
We share that conclusion.
I turn to Amendment No. 284, which we do not think is necessary. We are convinced of the robustness of the regulatory and public service provisions set out in the Bill regardless of who owns broadcasting licences. We think that the potential benefits of foreign ownership are worthwhile, and the ITC's independent review of programme supply generally agrees with the proposed changes. The report said that,
"the balance of analysis we have seen supports the Government's proposed change to the non EEA ownership rules, which would create an environment in which more expertise and capital could be attracted to the UK".
We therefore do not want to delay the benefits of investment, skills and management which we expect foreign ownership to bring.
Amendment No. 285A, tabled by my noble friend Lord Gordon, proposes that we open up broadcasting licences to foreign ownership only where we secure reciprocal arrangements with the country concerned. Noble Lords will remember that the committee of the noble Lord, Lord Puttnam, concluded that reciprocity was "not pivotal—a point that I do not think the noble Lord, Lord Thomson of Monifieth, mentioned when referring to the committee.
We in the UK are not alone in this respect. As I have already mentioned, a number of other countries have already taken the same step, including Germany, the Netherlands, Portugal, Spain, Denmark, Ireland, Finland, Belgium and Luxembourg. Moreover, we believe that the removal of foreign ownership restrictions in the UK are beneficial in their own right. I say to the noble Lord, Lord Fowler, that that is the key point here. We have changed our position on reciprocity because we have assessed our position and looked at the ITC's report. We believe that the benefits of allowing foreign ownership are considerable and that they outweigh any advantages to be derived from pursuing reciprocity.
I know that there are those who differ on this issue, but we believe that we have the balance right. Across the Bill, we are trying wherever possible to remove the specific regulatory barriers to investment—I think that my noble friend Lord Lipsey pointed that out very clearly—while at the same time enhancing our protection for content.
Lord Fowler: Does it therefore remain the Government's policy that they want to get reciprocal arrangements with the United States? If it does, do they think that the action they have taken strengthens or weakens their hand?
Baroness Blackstone: If we were able to obtain reciprocity it would of course be an advantage, although I am not sure—as again my noble friend Lord Lipsey pointed out—how many British companies would in fact wish or be able to buy into the American market.
I think that I have answered most of the issues raised in the debate. We are certainly not prepared to do anything to risk either quality or content. Where safeguards are in place they are being strengthened. In the light of what I have said I hope that the noble Lord, Lord Crickhowell, will withdraw his amendment.
Lord Crickhowell: I should like, first, to thank all those who have taken part in this long and important debate. I am extremely sorry and upset that my noble friend on the Front Bench, Lady Buscombe, was angered by my opening remarks. I am so innocent and naïve about a huge range of matters discussed in this House, in relation to which I bow in awe to the expertise of others, that it never occurred to me that my words could cause offence. Clearly she was brought up in a much gentler world than that in which I have pursued my political career. But I shall try to do better on another occasion.
My noble friend has at least given one of a number of reasons why we have to come back to this matter on Report. As she has not explained the reason for my Front Bench's policy, clearly there has to be an opportunity on Report for her to do so.
Baroness Buscombe: I hate to intervene as we all wish to have something to eat. However, I made my position very clear on Second Reading. We have had an awful lot of Second Reading debates this morning, somewhat repetitiously. May I also say that the noble Lord knows little about my career before I came to this House, not least my involvement in the media?
2 p.m.
Lord Crickhowell: Clearly, we will have to return to the issue, first, because some of us—those behind the noble Baroness, at least—want the position of our Front Bench to be set out and secondly, because, as the noble Lord, Lord Ashley of Stoke, and others said, there is very strong feeling across the Chamber about this issue.
I need not give a lengthy response to the noble Baroness, if only because I anticipated in my opening speech almost all the points that she made. I say to the noble Lord, Lord Lipsey, that it is always a little irritating when one has just sat down to hear a noble Lord entirely ignore the words that one has just

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uttered, as he did on the question of European companies and the comparison with American companies. I pointed out that the real reason for the difference is that the Europeans do not have that American product that is so easily sold around the world. They do not have those large libraries of English language content.
The noble Lord's argument that we should ignore the remarks of Mark Thompson and Greg Dyke on the grounds that they have an interest was a little unworthy. I disagree with Greg Dyke on many issues, but I would bow to his experience in the American production market and take slightly more note of it than the views of the noble Lord, Lord Lipsey, on that subject. If the noble Lord, Lord Lipsey, is not prepared to listen to Greg Dyke, I hope that he will listen to his noble friend Lord Bernstein and to his noble friend Lady Jay, both of whom have experience and supported the arguments that I advanced in relation to the real reason why American companies would want to invest here.
The noble Baroness, Lady Howe, questioned the adequacy of the reasons given for the urgent need for inward investment. They were just touched on by the Minister. My noble friend Lord Fowler also referred to the value of inward investment. I do not need to be told of the value of inward investment. During my eight years as Secretary of State for Wales, I spent an immense amount of time in the Far East, America and Scandinavia. During that period, we in Wales attracted rather more than 20 per cent of all the inward investment to the UK year after year with 5 per cent of the population. Inward investment can be valuable, but the question is whether it will be valuable in this case or whether there is an urgent need for it.
It is clear that this issue causes considerable concern. We have had a long debate. The issues have been well aired and I will withdraw the amendment in the confident expectation that we will return to it on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 340 [Modification of disqualification provisions]:
[Amendments Nos. 285 and 285A not moved.]
Lord Davies of Oldham: I judge that this might be a convenient moment for the Committee to adjourn until after Starred Questions. I beg to move that the House do now resume.
Moved accordingly and, on Question, Motion agreed to.
House resumed.
Lord Davies of Oldham: My Lords, I beg to move that the House do now adjourn during pleasure until 3 p.m.
Moved accordingly and, on Question, Motion agreed to.
[The Sitting was suspended from 2.3 to 3 p.m.]

Water Resources
Baroness Byfordasked Her Majesty's Government:
What plans they have to promote the sustainable use of the world's water resources.
The Secretary of State for International Development (Baroness Amos): My Lords, the Department for International Development recognises the key role that water plays in poverty reduction. We are working with developing countries, other development agencies and financial institutions to ensure that support is provided to develop integrated water resources management and water efficiency plans by 2005 and that commitments to improved access to water and sanitation are kept. Our work includes bilateral programmes in many countries in the developing world, including Bangladesh, Pakistan, Nepal, India, South Africa, Uganda and Nigeria.
Baroness Byford: My Lords, I thank the Minister for her response. Indeed, she will know that yesterday was National Drink Water Day, so it is something that is very close to our hearts. From the Minister's Answer, she obviously knows very well that we need to note the conservation of water, particularly in some of the areas that are so dry. Is she therefore not slightly concerned that the Water Bill, which is presently being taken through Parliament, does not have on its face the duty to conserve water in the United Kingdom? I feel that that is a wasted opportunity. It is one that we should be taking because we should be giving a prominent lead to other countries to show that we who are blessed with more water actually look to use our water wisely as well.
Baroness Amos: My Lords, I thank the noble Baroness for reminding the House about National Drink Water Day. She is quite right that. if we are promoting the sustainable use of water resources across the world, it is important that we look at these issues as well. I understand from my noble friend that these issues are currently being discussed during the Report stage of the Water Bill.
Baroness Miller of Chilthorne Domer: My Lords, I have spent an enjoyable morning at the Environment Agency Water Efficiency Awards. Will the Minister make sure that officials from her department have a chance to look at the excellent efforts made by both individuals and business in this country with regard to improving their water efficiency? I am sure that many of their practices could be very helpful in the cases to which she referred.
Baroness Amos: My Lords, of course we are very keen to promote learning between countries, riot just north-south, but also south-south, so I am N. ery happy to take up the noble Baroness's suggestion.
Lord Jenkin of Roding: My Lords, perhaps I may add to that by asking the noble Baroness to look very closely at some of the projects which were opened up

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at this awards ceremony this morning, at which I was also present. On discussing the issue afterwards, many of the people who had won or came close to winning awards said that they felt quite desperate about how to get this wisdom across to a wider section of people. That applies not only in this country, but abroad as well. Her Majesty's Government have a role to help publicise really good practice. We heard much about that this morning.
Baroness Amos: My Lords, I entirely agree with the noble Lord. Publishing and promoting good practice is very important indeed. As I said in response to the noble Baroness, I am very happy to ask my officials to look at the proposals and the awards given this morning.
The Earl of Sandwich: My Lords, does the noble Baroness agree that the real problem in developing countries is the maintenance of water supplies and how the local community can become involved? Does that mean that her department now has a new policy, which—on the worse scenario—would perhaps lead to privatisation in those local communities?
Baroness Amos: My Lords, we do not promote privatisation. We work to ensure that water and sanitation are key elements in the national development plans in the countries in which we work. We have been concerned to find that many countries, despite having serious water and sanitation problems, do not prioritise these issues. If a country chooses to go down the privatisation route, using public/private partnerships for example, we will assist in terms of technical assistance, support and so on. We aim to ensure that the right kind of technical assistance is available to those countries.
It is important for the House to recognise that it is important that local authorities in developing countries have the right kind of experience and expertise. Where they do not, bringing in the private sector is very often the only way to go.
The Earl of Listowel: My Lords, will the Minister allow me to communicate to her the concerns I heard from children in Angola recently, that they were obliged to drink from river water, and that they would come down with illnesses such as diarrhoea, which is such an important killer of young children? I therefore welcome what she said about taking steps towards improving access to decent sanitation and safe water. I also express my appreciation for the £8 million that the British Government provides to the Luanda urban poverty project. One of its functions is to obtain suitable safe drinking water for the many people in shanty towns in Luanda.
Baroness Amos: My Lords, I thank the noble Earl for his comments about our programme in Luanda. I have seen what lack of access to clean water can do in countries such as Angola. We are trying to make sure that the poor benefit from improved water and
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sanitation services through effective regulations and appropriate tariff structures, including subsidies for the poorest if those are required.
Lord Roberts of Conwy: My Lords, do we give any priority in our aid programmes to water and sanitation programmes?
Baroness Amos: My Lords, we have prioritised working on the policy aspects of water and sanitation. There are a number of other donors—the Japanese for example—that give considerably more than we do in terms of direct service delivery. Much of our aid is managed through direct budgetary support to governments where we have agreed a programme of reform. That is why the work that we are trying to do to encourage those governments to put water and sanitation at the centre of their priority list is so important.
Lord Rea: My Lords, is my noble friend aware of the reports of arsenical contamination of quite a number of water points in Bangladesh, which has recently become apparent and which has had a very bad effect on the population's health? Is the Department for International Development concerned about that and doing anything about it?
Baroness Amos: My Lords, we have bilateral programmes in Bangladesh. They are focused around water resource management, looking principally at the sustainable use of water for land, agriculture and sanitation water. I am aware of the issues with respect to contamination. I am quite happy to write to my noble friend with the details of our programme in Bangladesh.

Flats over Shops
3.9 p.m.
Baroness Maddockasked Her Majesty's Government:
Whether they have any proposals to help bring back into use flats over shops that are lying empty.
The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): My Lords, the Government recognise the potential contribution to housing supply that unused space above commercial premises could provide if converted to residential use. We have already introduced tax allowances to encourage such conversions. Only last week, we published guidance on unlocking the potential of empty properties.
Late last year, I asked the British Property Federation to advise me on the barriers that it sees that exist to prevent more residential accommodation over

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shops being made available. I shall certainly consider what further measures might be appropriate in the light of the BPF's findings.
Baroness Maddock: My Lords, I begin by wishing the noble Lord a very happy birthday.
Noble Lords: Hear! hear!
Baroness Maddock: My Lords, I declare an interest as patron of the Empty Houses Agency.
I thank the Minister for an update as regards his department's position on this issue. I seek two reassurances. There is a scheme called Living Over the Shop, which has been helping to restore properties for a number of years. I understand that it is running into difficulties over money. First, can the Minister reassure me that a lack of finance will not mean that the scheme fails? Secondly, bringing back properties often requires refurbishment on which 17.5 per cent VAT is imposed at the moment. Is the Minister lobbying the Treasury to back him on this matter?
Lord Rooker: My Lords, I thank the noble Baroness for her good wishes. I was trying to keep quiet about the matter. I also thank her for her welcome. As I said, the department has published a document relating to the unlocking of the potential of empty property only last week, which is a valuable practical guide.
The project concerning living over shops has made a valuable contribution. I have met Ann Petherick on at least two occasions. She is part of the task force of the British Property Federation. At a meeting late last year I asked it to look into the issue. There has been previous funding from my department, but we have no plans for funding at the moment. However, I understand that one of the recommendations which will be brought forward by the task force is for a national programme. I hope that we shall be able to discuss that with our colleagues in the Treasury. More information needs to be available. There is so much potential for extra revenue let alone for the extra homes for commercial properties. About£ 18 billion a year could be saved and be available to UK businesses through the improved use of their own property. So there is an enormous economic and social potential. But as regards a particular project I cannot give a commitment in advance of the recommendations from the Property Federation task force.
Lord Hanningfield: My Lords, I, too, congratulate the noble Lord on his birthday. I believe that everyday is a birthday at the moment when dealing with the Local Government Bill. I add my support for further action on flats above shops. A great many towns in my own county have vacant flats above shops. With the new effort to provide much more affordable housing, it seems that many communities could add to the number, particularly for young people. It would also regenerate our cities and towns.
I was pleased to hear what the Minister said, but could not the Government do more? The task force suggested that flats could be built above the properties.
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The Government could do more to encourage the use and the building of flats above commercial properties in towns where we need more housing.
Lord Rooker: My Lords, the policy is mixed-use development because that keeps the city centres alive, cuts down crime and reduces car use. There are a host of advantages. Building over shops is one thing, but there is a potential for 300,000 homes in existing empty spaces above commercial promises. Originally, it was living space, but in many cases that was not so. I have had my ears bent about this matter: there are some legal problems. The major property owners do not want to become landlords other than of the retail outlet which has the premises. The outlet does not wish to become the landlord. That is why the lessons from the project for living above shops should be taken on board on a national level. It is recognised that there is a need for an intermediary to deal with the landlord arrangements so that neither the retail tenant nor the property owner is involved in that aspect because it is not their business and they wish to do other things. We want to encourage them to make better use of the properties. Building above retail units and building mixed developments are part of the policy which we are trying to pursue.
Lord Ezra: My Lords, the noble Lord referred to the potential for 300,000 homes to be recovered from empty premises above shops. Taking empty properties as a whole, can the Minister indicate what their contribution could be if they were brought hack into use for future housing needs?
Lord Rooker: My Lords, I was referring to empty properties in terms of empty dwellings. There are at least 80,000 in London. There are probably a few hundred thousand in the country as a whole. One must be very careful about the figures one gives because the snapshot taken of empty dwellings includes dwellings which are being bought and sold and all kinds of other arrangements. There may be as many as 400,000 empty dwellings, 80,000 of which are in London. We have proposals as regards dwellings left deliberately empty—I am not speaking about second homes or anything of that kind—not to confiscate them. but to do what we can to encourage their return to use. We shall be producing proposals on that in due course.

Fly Tipping
3.15 p.m.
Baroness Gardner of Parkesasked Her Majesty's Government:
What proposals they have for dealing with the increase in fly tipping.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, The Government are committed to dealing with the serious and growing problem of fly tipping. The Anti-Social Behaviour Bill

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currently before another place, includes measures which will help the Environment Agency and local authorities to trace and prosecute those responsible for fly tipping. The Government are also considering a wide range of other measures, details of which will be published later this year and brought forward at the nearest legislative opportunity.
Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply. All of us are aware of seeing the countryside being despoiled by fly tipping, but is the Minister aware of the very real concerns of the charity shops in towns which are suffering from fly tipping by stealth because they are given up to 15 million sacks of textiles and other materials each year? The shops recycle this material but exclude items of no use. That converts what was domestic waste into commercial waste and the charity shops are charged at the full rate for disposing of such items. Does the Minister believe that, as is the situation with some local authorities, there is a case for making a partial allowance for the very major recycling of wasted goods necessary in a year? Can he encourage his department to ensure that more local authorities look at that possibility?
Lord Whitty: My Lords, there are various recycling schemes with which local authorities are being encouraged to deal. In some case that would include some of the waste recycled by charities. It is a more difficult concept to take as a matter of principle that the charities' unwanted goods, however originally deposited, can be regarded other than as waste and therefore charged as waste either at the collection point or at the civic amenity. Some quite difficult issues are involved here.
Lord Hardy of Wath: My Lords, will my noble friend express the hope that the House welcomes the Bill to which he referred, but can we be sure that the penalties for this grossly unsocial and often evil behaviour will be sufficiently severe to deter it?
Lord Whitty: My Lord, the current maximum penalty for fly tipping is already pretty severe. For ordinary fly tipping it is up to £ 20,000 or two years' imprisonment. For hazardous waste the penalties are unlimited. The problem is that the actual level of fines is substantially lower than that. I see that the noble and learned Lord the Lord Chancellor is not seated on the Woolsack at the moment, but I do not want anything I say to be interpreted as an attack on the courts. The importance of this and other environmental crimes deserves better recognition from the magistrates.
Baroness Miller of Chilthorne Domer: My Lords, the Minister has just mentioned hazardous waste. I am sure that he is aware that in July next year the number of landfill sites which will take such waste will be reduced from about 180 to about 14. What guidance will the Minister's department give to industry about
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what it should do with hazardous waste? Such a drastic reduction is likely to result in a greatly increased level of fly tipping of hazardous waste.
Lord Whitty: My Lords, I disagree. I do not recognise the precise figures, but clearly the number of hazardous waste sites under the new regulations will be considerably limited. The problem at the moment is that hazardous waste is deposited with non-hazardous materials in what have hitherto been legal landfills. The whole point of the new regulations is to ensure that hazardous waste is separated and dealt with in a more managed way. I believe that the new regulations will provide for that. Therefore, I am less worried about any regression in dealing with hazardous waste; indeed, I believe that the situation will improve. The volume of non-hazardous waste and where it is tipped is the main cause of greater anxiety about fly tipping.
Baroness Sharpies: My Lords, is the Minister aware that the Environment Agency sometimes takes many months to produce an enforcement order; and that after its issue it still takes a long time to deal with the situation?
Lord Whitty: Yes, my Lords, I am aware that there has been delay in the system. That is partly because the Environment Agency has not hitherto had the powers to trace the vehicles or individuals concerned, either through the business—whereas it now has powers as a result of our changing the regulations earlier this year—or under the new powers in the Anti-Social Behaviour Bill if Parliament accepts it.
Lord Brookman: My Lords, most of the fly tipping I notice is building material. It is offensive to all communities. The Minister said the punishment that currently inveighs is quite severe. What are the figures for prosecutions and how many people have been to gaol, for example, for this offensive situation?
Lord Whitty: My Lords, my noble friend is right that a large proportion of the problem in the nonhazardous sector is building materials. The volume makes the problem significantly worse. I do not have figures for the total number of prosecutions by local authorities. The number of prosecutions by the Environment Agency—some of which are for hazardous waste—is about 350 per year. Fines average between £ 2,000 and £ 3,000, while the maximum, as I have said, is £ 20,000 or two years imprisonment. The actual level of sanction is therefore much less than the law allows.
Lord Dixon-Smith: My Lords, I revert to the question of £ 20,000 or two years. That is all very well, and we hear a great deal about the notorious cases. But in fact the most infuriating fly tipping is usually relatively small-scale and unidentifiable. In the majority of cases, the person who tips has a reasonable certainty that he will not be traced. Local authorities now have targets in this area. Will the Minister assure

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me that they are adequately resourced both to deal with the problem and, most importantly, to trace the offenders?
Lord Whitty: My Lords, local authorities allocate their own resources. The noble Lord will not be advocating greater direction than already exists in that regard. Additional powers on tracing and the ability to seize vehicles are covered by both the regulatory change we made earlier and in the proposals under the Anti-Social Behaviour Bill.
Lord Marlesford: My Lords, does the Minister agree that fly-tippers are only litter-bugs on a bigger scale— I agree that it is often a much bigger scale? Does he agree that until his department and local authorities give a leading example by keeping the roads for which they are responsible much cleaner, we will not be likely to change the deplorable culture of the British people in the matter?
Lord Whitty: My Lords, I agree that it is the same psychology and, in some cases, the same people engaging in substantial fly tipping as in the disposal of smaller amounts of litter. It is probably a greater problem in this country than in many others. Nevertheless, we should register that in recent years there has been significant improvement in the performance of many local authorities on the prevention and clean-up of litter. It is important to register at least some success on that front, while I agree with the noble Lord that more needs to be achieved.

Zimbabwe: Passports
3.23 p.m.
Lord Dixon-Smithasked Her Majesty's Government:
Whether they consider it right that a person born in Zimbabwe who has lived and worked in the United Kingdom and subsequently served in the British Armed Forces in the war in Iraq should be denied a British passport.
Lord Bassam of Brighton: My Lords, British passports are issued to persons who hold British nationality as defined by the British Nationality Act 1981. A person born in Zimbabwe before 1st January 1983 will be a British citizen if his or her father was born in the United Kingdom. All that the Passport Agency requires is the necessary documentary evidence to support an application. Residence in the United Kingdom or service in the Armed Forces are not relevant to the question of nationality and eligibility for a passport.
Lord Dixon-Smith: My Lords, I am grateful to the Minister for that response. It indicates that the Government have looked with some care at the case that was reported recently in the press. It appears that an application for a passport has not been rejected. If
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the Minister gives me that assurance I am most grateful. In view of the fact that it is so easy now for almost anyone to obtain a passport—I understand from the Nationality Group of his department that a successful asylum seeker can achieve a passport within nine months—is he sure that the case was handled with sufficient care when the initial inquiry was made?
Lord Bassam of Brighton: My Lords, the Passport Agency takes particular care with all cases. In the case to which the Question refers, the House will appreciate that it would be inappropriate for me to reveal personal details. If the individual concerned submits a formal application and also provides written consent to the Passport Agency it will be able to undertake a check on Army records, which I would confidently expect to provide the information for the applicant to make a successful passport application.
I have been assured that as long as written consent is given, a speedy resolution to the application can be achieved. Noble Lords can be confident that the Passport Agency wants to be helpful, and I am more than happy to assist in that process.
Lord Burnham: My Lords, the Minister said that service in Her Majesty's Armed Forces does not qualify one for a passport. Why not?
Lord Bassam of Brighton: My Lords, it is not necessarily a relevant piece of information to the passport application. In this instance we are trying to get the right documentary evidence in place so that a successful application can be made.
Lord Dholakia: My Lords, will the Minister confirm whether the Secretary of State has discretion in certain exceptional cases to authorise the issue of British passports; and, if that is the case will he ensure not only in this case but in similar cases that such discretion is exercised, so that people can contribute positively to the social, economic and political life of this country? More importantly, in the case of Zimbabwe, will he ensure that such citizens are treated with fairness because, once the evil regime of Robert Mugabe has been removed, I am sure that many people will return to Zimbabwe?
Lord Bassam of Brighton: My Lords, discretion is limited. In passport applications we are talking essentially about conforming with the process and the criteria. That has to be the case, because it has to be an entirely proper process. I am sure the noble Lord will appreciate that.
Lord Bridges: My Lords, have the Government lately considered preparing a Bill defining the circumstances in which a passport may be issued, withheld or cancelled? Is it not strange that that right, which many people regard as fundamental, is still, as far as I know, determined under the Royal

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Prerogative? Or is it the case that the European Court of Human Rights has effectively superseded the Royal Prerogative in that regard?
Lord Bassam of Brighton: My Lords, I am not aware of any consideration of a change in policy.
Baroness Gardner of Parkes: My Lords, will the Minister tell me whether there are two separate processes to apply for British nationality and a passport, or whether those two things are linked? Not being a British national I do not know.
Lord Bassam of Brighton: My Lords, the processes are separate.

Communications Bill
3.30 p.m.
House again in Committee on Clause 340.
Lord Puttnammoved Amendment No. 286:
Page 295, line 9, leave out paragraph (b).
The noble Lord said: In moving Amendment No. 286 I shall speak also to Amendment No. 322C. If our debates this morning could quite reasonably be described as sublime, we are moving swiftly here to the gorblimey. I and others have worked extremely hard to try to find out where on earth this proposal from the Government came from. It certainly was not sought by any advertising agency and does not appear to have been sought by any media owner. It may be the work of some mad teenaged deregulator. I have to ask that deregulator: whose interests did they believe, for one moment, they might serve?
For any agency to take advantage of the offer being made by the Government here, it would have to withdraw from its own industry body. That cannot be sensible. Having discussed this with media owners and advertising agents, no one knows where the proposal came from and I very much hope that the Government will move business along swiftly this afternoon by disavowing it and passing on to the next amendment. I beg to move.
Lord Davies of Oldham: I have been caught unawares by the brevity of the speech of my noble friend in moving the amendment. It was somewhat out of keeping with our proceedings before lunch, but if it sets a pattern for the remainder of the day, I can only say how much I rejoice in it. I hope to respond with similar brevity, but with a degree of effectiveness so that my noble friend may feel able to withdraw his amendment after he has listened to my remarks.
The amendments would restore the provisions of the Broadcasting Act 1990 that prevent advertising agencies from holding broadcasting licences. The straightforward point I wish to make is that we do not believe that it is any longer necessary to prohibit the holding of broadcasting licences by advertising agencies. The ban affects a whole
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category of businesses—businesses that make an important contribution to the economy of the United Kingdom—and it is not our policy to maintain such bans unless they are fully justifiable.
In the past the ban was claimed to be necessary to meet the understandable concerns that for an advertising agency also to be a broadcaster could give rise to abuses and distort the market for broadcast advertising. For example, an advertising agency might be able to offer preferential rates for advertisements broadcast on its "in-house" channel, or the broadcaster might refuse to take advertising otherwise than from the in-house agency.
Those would be serious and undesirable developments, but we do not believe that they would arise because other measures are now available that present an effective way of ensuring that they could do so. In particular, the competition law powers that Ofcom will enjoy and will be able to exercise concurrently with the other competition authorities would prevent economic abuses. We therefore propose to lift the ban because we do not want to restrict participation in the broadcasting market unless it is necessary, and we do not believe it is because any abuses identified will be covered by other legislation, in particular, of course, under the powers in the Competition Act 1998.
So I respond to my noble friend by saying that things have moved on since the Broadcasting Act 1990. We now have in place a range of measures that will help to control the situation. Any advertising agency which applied for a broadcasting licence would be all too well aware of the potential challenges under the other legislation. It is that which is designed to secure the public interest.
Lord Thomson of Monifieth: Is the Minister aware that his answer to the noble Lord, Lord Puttnam, makes the matter even more mysterious? We have here a vast Bill which is surrounded by a million representations from different interest groups. I repeat the question put by the Minister's noble friend: which interest group sought this proposal? I hate to sound like an old fogey, but this would trample on much of the sacred history that surrounds the rather unique achievement of Britain to have its public service broadcasting centrally funded in order to ensure a total separation of advertising from ownership.
Lord Davies of Oldham: I understand fully the point made by the noble Lord. If I thought that that aspect in relation to this deregulation measure could give rise to abuses which would threaten what he regards as the historic settlement in terms of the relationship between advertising and broadcasting, then of course I would not oppose the amendment. But I sought to establish that the legislation we now have in place is sufficiently secure to guarantee that any abuses that might arise would fall within its scope and thus we would be able to control the situation without needing to continue with the restriction that obtained in the 1990 Act.
Lord Puttnam: For the time being I shall be happy to withdraw the amendment, but first I wish to make two important points. I was not being glib when I said that I thought honestly that the Government would respond by saying "Oops, sorry, let us move on". There are real ramifications to this. I have talked to a number of people about the matter, among them Sir Martin Sorrel, all of whom have made it clear that if an advertising agency took advantage of this new opportunity—let us call it that—and decided to be prepared to leave its trade associations, how would the other agencies respond? Do they book time and space in the medium which has been bought by the new agency? Is that new agency still an agency? How do you hold together the corpus of interests represented by the industry bodies?
I put this to my noble friend on the Front Bench: please remember that, quite rightly, the advertising industry has been held up time and again during our deliberations in Committee on this Bill as being the one example of a well-regulated, well-organised and thoughtful industry sector. Why fly in the face of that and create legislation which could have the net effect of destroying an industry which until now has been a model of its kind? For the moment I shall withdraw the amendment, but I remain puzzled. I hope that, when we reach Report stage, either the Minister will have changed his mind or he will come back with a clear understanding from the entire sector that it wants this to take place. I ask that because it is the exact reverse of what I have been told. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Buscombemoved Amendment No. 287:
Page 295, line 9, at end insert—
"() paragraph 2 (disqualification for religious bodies);"
The noble Baroness said: In moving Amendment No. 287 1 shall speak also to Amendments Nos. 288 and 289. Together, these amendments would bring to an end the extraordinary situation which currently exists where the Government have singled out religious groups as unfit even to apply for many categories of broadcasting licence. That is ludicrous for many reasons, not least because there is a significant demand for such programmes. To deny the consumer the opportunity to tune in, and religious broadcasters the right to do their job, places a large question mark against this Bill in respect of human rights. Furthermore, even without the blanket disqualification, more than enough regulations are already in place to allay all possible fears about the nature of religious programmes. The United Kingdom has the world's strictest religious content and ownership rules; of that I am sure.
I shall deal first with the impression given to any reader of this Bill. To go to such lengths specifically to identify religious groups as unfit for broadcasting seems at best surprising and at worst highly perverse. How does such disqualification equate with the Government's efforts and copious projects working alongside religious groups—here I want to emphasise that I mean all religious groups—to build community
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values and citizenship? In that role, religious groups are rightly recognised as pillars of society, upstanding members of the community, the vast majority of whom are good, law-abiding and tax-paying citizens. Why on earth do the Government feel the need to go to such great lengths to prevent the advocacy of those values on television or radio?
On a different note, the disqualification of religious groups is damaging to both consumers and broadcasters alike. Consumers should have access to the widest possible choice. To place in legislation an outright disqualification is quite contrary to the welfare of consumers, for there is a significant demand that will remain unfulfilled, for no discernible benefit. Placing such a rigid measure on the statute hook means that even in an area where the overwhelming majority of the people are in favour of having religious programmes, considerable difficulties will be faced by a would-be broadcaster by virtue of the fact that they are formally disqualified.
Even if it is not the vast majority listening to and watching religious programmes, it is not hard to imagine the comfort and support that such programmes can bring to the vulnerable and excluded, as well as those who are unable to get to a place of worship. The Bill deprives them of a choice to which they are entitled. What is to be lost from leaving licence decisions to Ofcom's discretion and having confidence in the considerable number of regulations in place? The Government's policy is damagingly over-cautious.
Whether that aspect of the Bill violates the Human Rights Act 1998 has been queried by a number of bodies—not least the Joint Committee on Human Rights and the pre-legislative scrutiny committee. A case that the European Court of Human Rights deemed inadmissible is now going to the European Court of Justice. The issue remains highly contentious and I fail to understand why the Government are digging their heels in. They claim that the spectrum is too limited to provide space for religious broadcasters but that is absurd logic. Why should such organisations be targeted when other, clearly questionable causes are free to apply without restriction? The rationale for political parties not being able to apply is something else altogether.
Britain is the only country in the world that advances an argument in favour of religious restrictions. Surely it is better to build a little flexibility into the system by allowing Ofcom to judge the merits of each licence application as it arises. Even if only one frequency is available, if people want to listen to a religious programme they should be able to do so without having to work around disqualification.
In the absence of blanket disqualification, three or four safety nets are already in place to prevent religious fanatics broadcasting on television or radio. According to the Broadcasting Act 1990, applicants must satisfy fit and proper ownership provisions. The content of religious programmes must be responsible and not exploitative. Significant regulation is already

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in place to prevent broadcasting by extremist factions or US-style telly evangelists—even if they were granted licences.
In response to questioning in the other place on 7th April 2002 about the content rules imposed on broadcasters, The Secretary of State identified a veritable swathe of regulation covering responsible religious programme content, non-exploitation of audience susceptibilities abuse or incitement to hatred, and blasphemy and obscenity. Countless other aspects must be complied with to broadcast a religious programme. Ofcom will still have the power to refuse licences, fine licensees and/or revoke their licences in the event of a violation.
The Radio Authority's recent reluctance to confirm or deny that UK religious radio stations will be eligible for digital AM licences under the Bill raises a new and important issue. It is becoming clear that DRM—the internationally accepted standard for future AM, long, medium and shortwave broadcasting—involves a complex and comprehensive arrangement of multiplexing and multiplexes. Will the Minister deal with that as a matter of urgency? Will the Minister give the Committee and place on record an absolute and concrete assurance that religious disqualification will not apply under the Bill to individual licences or any combination of licences involving multiplexes; multiplexing; multiplex data systems; multiplex frames; simulcasting of digital services with analogue AM signals; and multiplex configurations and reconfigurations?
That question is not just academic but is asked in light of the country's religious broadcasters being denied access to DAB licence applications due to supposed omissions in legislative draftsmanship repeated in Clauses 5 and 44 of the Broadcasting Act 1996. Religious radio and religious radio companies have been locked out of DAB since 1996. The FM waveband offers limited opportunities for further licensing but DRM AM, long, medium and shortwave represent their practical options for future national and local licence applications.
UK religious radio stations such as Premier need to know for certain whether they can apply for DRM licences without being refused access on the ground of digital multiplexing—thus repeating their experience of exclusion from DAB. If otherwise, they will not play a part in long, medium and shortwave radio broadcasting over the next 10 years and will be forced, as a consequence, to consider whether or not they have a future as broadcasters and employers. I beg to move.
3.45 p.m.
The Lord Bishop of Manchester: My noble friend the right reverend Prelate the Bishop of Chelmsford, who has put his name to the amendments, is unable to be in his place today. As I have spoken to these issues on earlier occasions—particularly on Second Reading— I rise in my friend's stead to support the amendments, in the wake of the strongly argued and eloquent case put by the noble Baroness, Lady Buscombe.
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Restrictions on the holding of licences by religious bodies began with the introduction of commercial radio in the 1970s. The present restrictions date mainly from the Broadcasting Act 1990—and were to some extent understandable in the context of the limited availability of licences. In this digital age, such restrictions do not fit—certainly not into what the Bill is heralding, with its offering of plentiful choice, expressed as diversity and plurality. I welcome the degree of derestriction that is available in the Bill, to allow ownership of a wide range of licence-holding by religious bodies.
The remaining licences subject to a ban are the analogue public service TV licences, national radio licences and—somewhat perversely, given the access offered to other kinds of digital licences—digital multiplex licences. The derestriction provided by the Bill puts independent religious broadcasters a bit nearer where they want to be—competing openly for broadcasting opportunities.
The Government have emphasised several times that the remaining restrictions are justified on the ground of spectrum scarcity but that argument does not find favour with the Christian and other faith communities, who want the ban on religious ownership completely removed. Amendment No. 287 removes religious bodies and their officers from the list of those disqualified from holding licences and Amendment No. 288 consequentially removes the list of licences that religious bodies and their officers are allowed to hold.
It is not just the remaining restrictions that cause concern. The possible unintended consequences of the regime of restrictions on religious ownership are damaging to potential applicants and existing licence holders—not least because investors are discouraged from supporting financially what may appear to them to be an industry with a very uncertain future. The strictures placed on those entering religious broadcasting and those already within it who wish to keep abreast of technological opportunities are severe. If religious bodies are to take advantage of new opportunities beyond the scope of existing licence categories when they are offered, that requires the specific exercise of the Secretary of State's discretion or even primary legislation. Until the Bill becomes law, there will continue to be no religious bodies among the 40 or 50 broadcasters on the various local or national digital multiplexes—the first of which were on air two and a half years ago.
When the Bill is enacted, all the licences with the strongest commercial and technical appeal will already have been allocated. Stigma is felt by various religious broadcasting organisations and individuals because they are considered unacceptable and are banned.
In this morning's debate on Amendments Nos. 280 to 283, the noble Lord, Lord Puttnam, suggested that other conditions could be set in a way that would allow religious bodies to be freed from the shackles of disqualification. It may well be that in considering whether or not applicants are fit and proper the regulator would be able to take the point of the noble Lord, Lord Puttnam, into account.

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Another, perhaps even simpler, way forward is this. At present—I am speaking now to Amendment No. 289—the Secretary of State is given discretion to modify the list of licences that religious bodies are permitted to apply for. If instead the Secretary of State's discretion were a negative one, to exclude licences from those for which religious bodies could apply, that would alleviate at least one, if not more, of the severe consequences that I have described.
I return to the vexed issue of spectrum scarcity. Although the amendments would remove the remaining restrictions on religious bodies, that would not—to follow the Government's argument—make more spectrum available. So if the restrictions are not to be lifted, or if their effects are not to be alleviated, it would be helpful to know from the Government that more categories of licence would become available to religious owners as more spectrum was made available.
I would be the first to acknowledge that the Government have already done that in offering digital national sound programme licences in the Bill. In fact, I understand from a report in The RADIO Magazine of 19 April this year that the Radiocommunications Agency has already drawn up extensive proposals outlining new ways to measure FM reception, which to date has been based on legislation passed in 1904 and tests made in 1947. It may be possible to free additional spectrum in the FM hand, the magazine says,
"if a more relaxed approach is taken to planning standards."
I also understand that one of Ofcom's first targets will he clamp down on the overspill of both BBC and ILR local radio transmitters, and that there will be scrutiny of the BBC's national FM allocations. Such changes would enable more spectrum to be made available for all broadcasters, including religious ones. In France, Reims, for example, has 28 radio services. A similar sized city in the United Kingdom—for example, Gloucester—has about 15. Such a system of revised FM standards is already in use in many European and North American countries, allowing for better use of analogue FM spectrum. Taken together, the revised FM standards and, for example, more use of local AM plus new DAB licences should remove for ever the argument of spectrum shortage. I was grateful to the noble Baroness, Lady Buscombe, for emphasising these issues in relation to spectrum shortage.
If the Government wished to stop religious broadcasters from operating Channel 3, Channel 5 and the three analogue INR licences, it would be possible to do so specifically in legislation. They could then allow Ofcom to regulate religious broadcasters for all the other licences on the same basis as all other broadcasters in this digital age.
A further benefit would be that instead of religious broadcasters seeking licences abroad for broadcasting into the United Kingdom, and therefore evading Ofcom's regulation, they would be brought under Ofcom. That surely would be desirable.
Even if these arguments do not prevail now, these restrictions cannot be retained for much longer. In saying that, I want to make it clear, because several
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Members of the Committee have asked me about this, that I am not aware of any denomination that wishes to hold such a licence. However, there is a sizeable and growing independent Christian broadcasting industry, to which I have already referred, which is willing and waiting to play its full part.
I welcome the proposed lifting of some restrictions, and I am grateful to the Government for that. But I remain disappointed that other restrictions will still be in place. I hear the reasons that have been given in previous debates. Nevertheless, I look forward to the day when all these restrictions are removed, and pray that it will be soon. For religious broadcasting has a full part to play in our nation's life, both within the public service remit and within the range of new opportunities which the Bill now begins to make possible.
Baroness Howe of Idlicote: I too support the amendment, which was so succinctly and technically competently moved by the noble Baroness, Lady Buscombe. The very clear way in which the right reverend Prelate the Bishop of Manchester put his point makes the case even more unanswerable.
Clearly, too, the Government are to be warmly congratulated on moving some way to remove the existing statutory disqualifications. There is a question as to the reason for their ever being there in the first place. The removal already proposed—I join other speakers in emphasising that what we say on this matter applies to all faiths, and not only the Christian faith—will be a tremendous benefit, even if the benefit of the changes already agreed will be quite a little while delayed. The right reverend Prelate explained that, and I will not go into it.
However, the concession makes it even more mysterious that the Government have not gone the whole hog and removed all such restrictions on those with a religious background. I look to the noble Baroness the Minister for a full explanation. What possible justification can there be in today's world for not treating applications for any licence, whether analogue or digital, in exactly the same way, by asking "Do the applicants fulfil the financial and other requirements for that particular licence?" and "Are they, in the objective view of those granting the licence, the best candidate?"
That central point remains unanswered and requires an unequivocally clear, and above all convincing, answer from the noble Baroness, if the Government will not accept the amendment. The explanations so far about current spectrum scarcity simply do not stand up. There can surely be no logical reason why this one group should be excluded from consideration and citizens be deprived of their programmes.
Not only did the pre-legislative scrutiny committee raise the issue, but there are serious questions, which have already been mentioned, as to whether current human rights legislation is infringed by continuing such a discriminatory policy.
Lastly, the Government argue on the subject of foreign ownership that the UK's unique regulatory system will prevent the kind of abuse and monopolistic

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misbehaviour that concerns many Members of the Committee. One understands that concern. If the Government are right about that, surely the same argument should apply to the protection from any real or imagined abuse by those with a religious background holding licences.
In an age when radio and TV licences are granted to those providing so-called adult entertainment, and when an increasing quantity of violence, sex and bad language is tolerated in mainstream programmes, it becomes increasingly ludicrous that the risk of some kind of religious contamination—not vice, but religion—remains the one area which has to be subjected to this absolute taboo.
As I have said, the Committee will require an unequivocal and convincing reply, or—much better—a straightforward acceptance of the amendments in the face of the arguments, which are literally unanswerable.
4 p.m.
Lord Brennan: The Bill seeks, among its objectives, to make provision for the regulation of television and radio broadcasting. Such a statutory objective is of democratic import; therefore, if we find in its terms a provision that a significant proportion of society shall not be allowed even to apply for a radio/TV licence, nationally as well as locally, our democratic antennae should very carefully be switched on to find out why.
The history of the legislation, which I have looked at in detail, gives no clear, democratic indication as to why, in 1990, 1996 or now, the restriction is required. When the Government were taken to the European Court of Human Rights in 2000, their lawyers, presumably on the Government's instructions, accepted that the present restriction was a breach of Article 10 of the Convention on Human Rights—a restriction on the freedom of religious expression. Their case had to rely upon the second paragraph of Article 10, which allows such a restriction to be applied if, and only if, it is a response to a pressing social need so as to be necessary in a democratic society. A pressing social need necessary for democracy—that is serious stuff.
The only explanation that I can gauge from the Government's arguments in 2000 to justify that exception relied on the practical question of whether there was sufficient frequency availability. Then, their argument was accepted by the Commission, and the case did not go further, while now it might. The critical question is: if the Government have determined that frequency is the justification for restricting the democratic right, and if otherwise that democratic right should be given force, explanations about frequency availability must be forthcoming and convincing. From my present investigation, I fear that that is unlikely to happen.
I shall explain why. On VHF frequency, which we use for local and national stations, as I understand it, Ofcom is about to look at resetting UK standards currently based on tests made in 1947. That may
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explain the reference by the right reverend Prelate to the fact that in Reims there are 25 more stations than the three available in Gloucester. So one expects that the argument that there cannot be any more frequency for VHF falls immediately.
Since the Government went to court in Strasbourg in 2000, provision has been made for 50 local digital audio multiplexes. According to my calculations, within each multiplex, there are 10 subdivisions and 500 frequencies opportunities. On medium wave, in certain parts of the country, regional frequencies can be made available subject to certain power factors without interfering with the general availability of main stations on medium wave. On long wave unused capacity has now been cleared in Scotland and will be used by stations there. Finally, we can expect digital radio mondial in the near future, with yet new standards. The result may be a doubling or tripling of availability—it matters not.
The result of what I have briefly summarised is that the argument that there is no available frequency is simply unacceptable. It begins to concern me democratically. The Human Rights Committee of the House has asked the Government for a reasoned explanation, so the Government must give an answer. I have not seen one; the Explanatory Notes are silent on the question. Is not an answer sufficiently given by just a detailed résumé of current thinking about frequency availability? The first step in the argument is the democratic right; the second is why the Government are justified in restricting it.
Members of the Committee may note that in subsections (5),(6) and (7) of Clause 340 the Secretary of State has the right reserved to him or her to revoke a disqualification by laying before the House appropriate delegated legislation. It must follow, therefore, that the Government must anticipate circumstances in which the democratic right will become exercisable. We can look to two answers. If it is frequency, justify it—not just now, but in the long term, as the Bill may stand for years to come. If it is not frequency in a convincing way, the amendment must be carried.
These proposals do not come before the Committee on behalf of religiously inclined citizens of this country, but from me as a democrat. I do not understand why those who would wish to tune into religious broadcasting in this country should find themselves in the same legislative slot as politicians or advertising agencies. The citizens of the nation would think it ludicrous. I do, too, subject to what the Minister may say, but I can assure him that this important democratic issue will not go away.
Lord Avebury: I hesitate to cross swords with the noble Lord, Lord Brennan, who obviously knows a great deal more about human rights than most Members of the Committee. However, without knowing the details of the case that he mentioned, surely it does not lead to the exclusion of the religious views in question from the broadcasting arena. The provisions simply exclude certain classes of persons from the ownership of broadcasts. That does not mean

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that you cannot listen to religious broadcasts of all kinds on public service broadcasting channels. Freedom of expression is preserved, therefore, as those who want to air their views have every opportunity to do so—except for humanists, who are systematically excluded from religious broadcasting on the BBC. Every other system of belief has the opportunity of appearing on "Thought for the Day" and the many other excellent religious programmes that the BBC puts on.
But the supporters of this amendment ask for something more: the right to own stations. If the noble Lord, Lord Brennan, represents those views accurately, they are saying that it is a democratic right. It is not my right to own a newspaper. I would like to own The Times, but I do not have the money to do that. Rationing will be by cash. If the right were extended to certain people to bid for religious broadcasting channels, it would not necessarily involve the kind of religion that the noble Lord, Lord Brennan, or I would approve of. It is rationing by the purse.
Lord Brennan: I thought that the noble Lord was asking a question, but he appeared to proceed into a speech. I am sure that it was a question, and I would like to take the opportunity to respond.
Lord Avebury: I apologise; I thought that the noble Lord had finished his speech.
Lord Brennan: We are not engaged in democratic patronage. We are engaged in the involvement of peoples' rights. The matter is not a question of ownership. The ownership of a radio station will be determined by Ofcom on the principles set out in their approach to the provision of radio station licences. The question to which I referred was the refusal to allow part of our society to apply to become owners. The factors that the noble Lord, Lord Avebury, has raised may well play their part in an Ofcom decision, but I do not find -Thought for the Day", "Sunday Morning" and one local broadcasting station in London to provide the same democratic benefit as the 650 that are available throughout Europe.
Lord Avebury: The noble Lord, Lord Brennan, is not giving the full picture when he mentioned a couple a programmes that are on the BBC. The level and quality of religious broadcasting is infinitely greater than the few that have been mentioned. They include the "Moral Maze", "Beyond Belief", "Good Morning Sunday" and many other programmes that could be cited. I want to ask the noble Lord and the Committee whether they have considered the implications of opening up that field to people who want to broadcast their particular brand of religion in this country? Do noble Lords really think that the matter is confined to a few Christians, or do they think that, once the opportunity was there, the floodgates would open and one would have every religious denomination under the sun, provided that they could rake the money together, and apply to Ofcom for a licence?
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The noble Lord, Lord Brennan, is shaking his head. He does not believe that that would happen. I am sure that there is a strong likelihood of that happening. Why should Sikhs, Hindus, Muslims and the many different varieties of those religions—because there is not just one denomination—not want their own point of view on the air? The noble Lord is asking us to open up Pandora's Box. That is not a job that I would be happy to undertake if I was in the seat at Ofcom. If there was a competing series of demands for religious broadcasting from all of the various denominations in this country, I do not see how a fair and equal choice could be made between them. How would Ofcom take into account the human rights implications—to follow the noble Lord's train of thinking—of choosing one religion rather than another as having the right to broadcast to the people of the United Kingdom?
Lord Crickhowell: I thought that the closing remarks of the noble Lord, Lord Avebury, were astonishing coming from the Liberal Democrat benches. There must be many Liberals of the old tradition who must be turning in their graves to hear such strikingly illiberal views. I was not planning to comment on his speech until he made those closing remarks.
I wanted to comment on the remarkable and extraordinarily well researched speech of the noble Lord, Lord Brennan. He repeatedly asked for an explanation of the extraordinary attitude of the Government. It so happens that we have had the explanation spelt out in short, sharp terms by the Secretary of State, the right honourable Tessa Jowell, when she was questioned on the subject before the Joint Committee. I shall quote the explanation and then I shall ask the Committee to judge whether that was adequate in the light of the comments made by the noble Lord, Lord Brennan. She said:
"The issue is essentially one of spectrum scarcity, and while we are operating in an environment of spectrum scarcity, we believe that the level of prohibition in relation to national radio licences and terrestrial television licences is right, simply because in practice spectrum scarcity means that we would not be able to provide the opportunity for every religion that might want to have its own channel to be able to have that spectrum space".
That was the explanation. I suggest that in the light of the comprehensive analysis by the noble Lord, Lord Brennan, about spectrum availability and about the general principles involved, it is an extraordinarily inadequate explanation by the Government. For that reason I am happy on this occasion to support the amendment of my noble friend on the Front Bench.
4.15 p.m.
Lord Brennan: Was the noble Lord here the other day when we were arguing about whether there was space for two local television stations? We were told that we could not have that because there was not enough spectrum. If there are not enough for two local television stations, how can there be enough for the multitude of religions which now wish to broadcast?
Lord Crickhowell: I simply repeat the arguments of the noble Lord, Lord Brennan. One cannot have a general exclusion of the kind that is applied to religious

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broadcasting units, and does not apply to others, without an extraordinary breach of principle. It is extraordinary as we move into a multi-spectrum age that again and again the only real explanation offered by the Government is one of spectrum scarcity. It is time to move on. That is what we felt in the Joint Committee. We felt that it was an inadequate response. Having heard what I thought was a deeply impressive speech from the noble Lord, Lord Brennan, I am now wholly of that view.
Lord Archer of Sandwell: I did not intervene at Second Reading and I have spared your Lordships any previous intervention in the course of your Lordships' debates on the Bill. Noble Lords may find that to be a matter of relief rather than blame. The matter is not a subject on which I pretend to have any expertise, nor even any familiarity with the vocabulary that is used.
I begin with a declaration of interest. I am a practising Christian, but I became involved in the issue when it was pointed out to me that the Bill contains what appears to be a startling denial of human rights. The Bill deprives someone of a licence, not because he lacks merit, but because he does not have the opportunity to have the merits even considered. The merits are not even relevant. I appreciate that the Bill represents a commendable improvement on the position under the 1990 Act. However, it is not clear, as the noble Baroness, Lady Howe, said, why the Government felt it necessary to stop half way. They seem to be saying "we will rectify half of the injustice, but the other half we will leave unjust". I can never quite understand why governments of all complexions, when they occasionally appear on the side of the angels, always give the impression that they wish that they were somewhere else.
As I understand the matter, some propositions are common ground. Of course there should be a structure for regulating broadcasting. There is such a structure. As many noble Lords have said, there is ample machinery to ensure that a licence is granted only to a fit and proper person. If a licensee ceases to be a fit and proper person the licence may be revoked. In addition there are the specific requirements under Sections 6 and 90 of the 1990 Act to ensure that the licensee observes the proper standards. There is also regulation under the published programme code. As the right reverend Prelate pointed out, the effect of the provision that the amendment would seek to rectify is that we would drive potential programme owners abroad to broadcast into the United Kingdom and they would not be part of the structure at all.
If the applicant does not comply with the requirements, the licence should be refused. That is common ground. If the holder of a licence ceases to comply with the requirements, the licence should be revoked. That is common ground. That cannot justify taking a whole category of applicants and saying that their applications should not even be considered. The question whether they comply with the requirements does not even arise.
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I am already on ground on which I am not competent to speak, but it appears that the real thing is to do with the limited spectrum. We just heard that from the noble Lord who has a place on the Human Rights Committee. I do not claim the expertise to comment on that, and, in any event, I would not attempt to improve on the demolition job that my noble friend Lord Brennan has just carried out. However, even if it is true that there is very limited spectrum accommodation, the answer is to examine the various applications according to whatever criteria are deemed appropriate and allocate the available space to applicants who most nearly comply with the criteria. We cannot justify picking on one category—apparently arbitrarily—and excluding it from the race before it even begins.
Usually, the noble Lord. Lord Avebury, and I are on the same side, but obviously there will be moments when we disagree. A few moments ago he said that there were likely to be applicants for religious programmes from different traditions and that granting the facility to one would, in some way, give it an unfair advantage over the others. I follow the logic, and it might be persuasive, if it applied to the real world. However, history suggests that neither within the Christian faith nor between it and other faiths is there any such conflict. To my knowledge, there have been no such problems in the past. If there is only one channel available, it would be relatively easy to construct a consortium that would allocate time among the various members. The noble Lord must agree that, judged purely as a question of human rights, it would be grossly unjust to say to one group of applicants that they will not be entitled even to have their applications considered.
The question provoked an intervention from the United Nations Association, not a notoriously hymn-singing body. It is true that it was dealt with by the UNA's religious advisory committee. It was moved to write to the Secretary of State citing a list of the international human rights that were in danger of being infringed. It dealt with the European convention. It talked about Article 2—no distinction; about Article 18—freedom of thought; Article 19—freedom of opinion and expression; and Article 27—the right to participate in the cultural life of the community. It went on to the Universal Declaration of Human Rights. It referred to the right to hold opinions and the right to freedom of expression and the need for respect for the rights and reputations of others. That was all set out in some detail. Then it turned its attention to the United Nations convention on discrimination. I shall not go through all of it, but it was a long, complicated and well constructed letter.
In reply, the UNA committee received a letter of three paragraphs. The first thanked it for its letter. The last said that a list of present provisions was attached showing which could be applied for and which could not. The paragraph in between set out, in eight and a half lines, what is said to be the present policy of the Government, which it knew already. Not surprisingly, it was so incensed that the chairman wrote to the United Nations High Commissioner for Human

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Rights, inviting him to place it on the agenda of the Human Rights Commission. I do not know what emerged from that. For a Government who have earned a high international reputation for leadership in international human rights, that is a saddening story.
Lord Avebury: As the noble Lord knows, the Human Rights Commission has, among its instruments, a rapporteur on religious freedom, Mr Abdelfattah Amor. Is the noble Lord aware of any representations by Mr Abdelfattah Amor to the British Government on the subject? If so, does he not think that, with all the furore that the United Nations Association and others have raised, Mr Abdelfattah Amor would have noticed and would have done something about it, if he thought that the representations were valid?
Lord Archer of Sandwell: Sometimes, those who are on the side of the angels miss a trick. Even if someone has written to Mr Abdelfattah Amor—I agree that it would he a good idea, and I am glad that the noble Lord has suggested it—we do not know at the moment what his response will be. No doubt, we can all wait, and, in due course, we will see.
There is another aspect that raises another issue of justice and human rights. The exclusion is to apply not only to a body whose objects are of a religious nature but to an individual who is an officer of such a body. So far as I am aware, nowhere is the term "officer" defined. Is a layperson with a career independent of the Church or of his or her religious beliefs excluded because he or she is a Sunday school teacher on a Sunday afternoon? If the Broadcasting Act 1990 means what it says, that Sunday school teacher is disqualified from applying for a licence to broadcast on Wednesday evenings in order to talk about football. Such people are blanked out from all broadcasting for all purposes. What about the choirmaster or the caretaker? Who is in the net of people who will be silenced? It would be helpful if my noble friend could offer us some guidance as to the construction that has been placed on the term "officer".
There are further questions relating not only to freedom of speech or discrimination. There are people who have invested years of their life in this area of broadcasting. Are they to be deprived of the opportunity to deploy those talents? Are their potential listeners to be deprived of the opportunity of listening to them? It is almost as though the Government have said, "How many different human rights can we infringe with one provision?"
I know that my noble friend is capable of recognising the anomalies to which the provision gives rise. She and I have fought many human rights battles together, shoulder-to-shoulder. Now is the time to listen and to earn the credit for listening. She may even find it an enjoyable experience.
Lord Phillips of Sudbury: The noble Lord, Lord Crickhowell, made some jocularly slighting remarks about the extent of the liberalism of my noble
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friend Lord Avebury on the matter. There is no more liberal Liberal than my noble friend, although, on this issue, I think that he is— I nearly used an Anglo-Saxon expression—head over heels. It is not humanists or atheists who are being excluded from applying for ownership of the media channels; they can do it endlessly, and they do. I dare say that Mr Desmond, the porn king extraordinaire, may represent one of the non-religious groups for which my noble friend Lord Avebury has particular concern. It has not got in the way of his getting his way with the regulators.
Baroness Whitaker: Does the noble Lord accept that to link Mr Desmond the porn king with the humanists and atheists of the western world is to make one of the more invidious comparisons that we have heard?
Lord Phillips of Sudbury: I do not know whether he is or is not. He could be a good practising Christian for all I know. The only point that I make is that my noble friend Lord Avebury got it precisely back-to-front. Anybody who is not of a religion can own one of the media outlets. It is only religious folk who cannot be owners. That must be discriminatory.
It is also like something from Alice in Wonderland that, as the House of Lords, we start with Prayers every day. What is the logic of us then writing into a Bill that the ethics by which we conduct our affairs are somehow inimical to the public interest? Why should the right reverend Prelate be prejudiced in ownership of a television channel? If there was a public interest that gave any credence to this provision, then many of us would be sympathetic to it. Is religion, as practised in modern-day Britain, whether Muslim, Christian or anything else, dangerous to the public peace or subversive of morality? Are we at risk of being drowned in the clash and clamour of religious fervour? The right reverend Prelate might wish that it were so. It is religious apathy that we are in danger of drowning in.
I suggest that we use common sense in considering this amendment. The Government should take the same constructive view that they did of the amendment in the name of the right reverend Prelate, the noble Baroness, Lady Howe of Idlicote and myself earlier in the debate. We sought a higher profile for religions, spirituality and faith, referred to by the noble Baroness, Lady Whitaker, in Section 260 of the Bill which is the public service remit.
4.30 p.m.
Baroness Whitaker: I apologise for interrupting the noble Lord again. It was not faith that I referred to, it was belief—a term of art which refers to non-faith.
Lord Phillips of Sudbury: I am corrected. I meant to represent the noble Baroness correctly. Our amendment refers to religion and spirituality. The noble Baroness referred to the possible addition of belief as the third limb. We are wholly sympathetic to that. I hope that the Government will be as sympathetic to this amendment as they were to that.
Lord Elton: Having been for three years the Minister responsible for the radio regulatory service at the Home Office, I am intrigued by the arguments about frequency and spectrum scarcity. I found the arguments of the noble Lord, Lord Brennan, extremely persuasive. It surprised me when my noble friend Lord Crickhowell made it clear that the government case hitherto has rested entirely on the argument of spectrum scarcity. I rise to ask the Minister to explain the extraordinary juxtaposition in those circumstances of subsection (1)(b) which provides freedom of application to advertising agencies. According to the noble Lord, Lord Puttnam, they do not want it. We are now considering paragraphs which exclude the small number of religious bodies who do want it. This seems to me totally crazy.
Lord McNally: It falls to me to indicate to the House how these Benches would vote if these amendments were put to the test. The noble Lord, Lord Crickhowell, said that old Liberals would be spinning in their graves at some of the things they heard. If Lloyd George and Asquith are looking down from that great National Liberal Club in the sky and heard my noble friends, Lord Avebury and Lord Phillips of Sudbury, they would probably think that nothing much has changed in the old party. I should indicate that we would support the amendments if they were pressed to a vote on Report. Lord Crickhowell pointed to the discussions we had in the Joint Committee. I draw the attention of the Committee to a second part of our recommendation where:
"We recommend that the Government consider the case for permitting Ofcom, in consultation with religious organisations, to impose licence conditions on religious owners of a kind not applying to other licences, as an additional assurance against breach of licence conditions."
What has not been mentioned yet but which is one of the reasons for concern, is that so much of our broadcasting is influenced by the United States. That country has experienced so much disreputable and corrupt religious broadcasting that this should be a matter for concern. If noble Lords are convinced that Ofcom has all the powers to protect us from that kind of broadcasting, perhaps it is safe to let this go through. However, there is that underlying concern. Religious broadcasting has not always been as benign as has been suggested from some speeches of support. We do not want to creep into Britain the kind of Elmer Gantry broadcasting that has caused such disrepute in the United States. I hope that religious broadcasting—I was just about to say something nice about the right reverend Prelate.
The Lord Bishop of Manchester: I am in eager anticipation. I share with the noble Lord, Lord McNally, concerns about certain types of broadcasting, not least Christian broadcasting. The truth is that it is possible to do that outside this country and for it to be beamed in now. If we were able to bring this within the constraints
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imposed by the Bill, it would control broadcasting in a way which will not happen if there is free rein for people to broadcast from abroad.
Lord McNally: I take that point although there are protections, as was seen in pirate radio, to make it non-profitable. I do not wish to see religion and religious broadcasting placed in a ghetto. I was going to return the compliment when the right reverend Prelate supported me earlier in the Committee on political broadcasting. I hope that our public service broadcasters see it as part of their public service remit to continue to reflect what is still a country that considers itself overwhelmingly Christian. That belongs in public service broadcasting, as well as the reflection of other faiths and beliefs.
I also take the point that was graphically pointed out that the publisher of Asian Babes can apply for a licence but the Archbishop of Canterbury cannot. It is that kind of absurdity that jars against the defenders of individual rights. But I return to an underlying concern: the qualitative nature of some religious broadcasting. I draw the attention of the Committee to that other recommendation that Ofcom might be empowered to ask for clearer and further assurances of religious broadcasters, if this amendment were carried.
Baroness Blackstone: Let me begin by saying that after this debate, which has gone on for just over an hour, I may not manage to answer all the questions that were raised. I shall write to noble Lords where I fail to do so. The first and most important point I wish to make is that the Government support and encourage religious broadcasting. From some contributions this afternoon, one would not get the impression that that is the case. Anyone who suggests that is being grotesquely unfair.
We recognise that religious programming is an important part of public service broadcasting. Noble Lords will recall that in amendments tabled by the right reverend Prelate, the Bishop of Manchester, the noble Lord, Lord Phillips of Sudbury, the noble Baroness, Lady Howe of Idlicote, I undertook to look at how that can better be reflected in the definition of a remit of public service broadcasting. Where possible, we have removed unnecessary restrictions on religious bodies holding licences. That has not been reflected in what has been said in the debate this afternoon.
Once the Bill comes into effect religious bodies will be able to hold a wide range of licences, including local analogue radio licences, national and local digital radio licences, digital terrestrial television programme licences, radio and television restricted service licences, and licences for radio and television cable and satellite services. The changes proposed in the Bill have been widely welcomed outside the Chamber. Again, that fact was not reflected in this afternoon's debate.
The only remaining significant restrictions on religious bodies holding licences relate to Channel 3 and Channel 5 licences, national analogue radio licences and multiplex licences. I should clear up one issue here that has arisen during the debate. As the noble Lord, Lord Avebury, rightly said—I support

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him strongly in this respect—there is nothing in this legislation to prevent religious broadcasters from broadcasting on multiplexes and, hence, using multiplex technology. The only constraint is on holding a multiplex licence; that is to say, a licence to operate a multiplex. However, if the noble Baroness requires even more detail on some of the issues that she raised and as regards the long list that she gave, I shall, as I said, write to her accordingly.
We want as few restrictions as possible. Our policy is to allow religious bodies to hold broadcasting licences wherever that is consistent with satisfying as many viewers and listeners as possible, and giving equal respect to everyone's beliefs; in other words, we want to avoid a situation where, through scarcity of spectrum, some religions achieve access to the airwaves but others do not.
Where there is no spectrum scarcity —such as with cable and satellite there are no restrictions. It follows from this that restrictions could be removed in the event that significant new spectrum became available. There has already been a concrete example of this, where the introduction of additional digital radio capacity on Freeview led us to remove the restriction on national digital sound programme service licences.
I should also make it clear that in the event of any new types of licences being introduced, we would carefully consider whether religious organisations should be able to hold them. There will not be a presumption that they cannot do so. The decision will turn, as now, on questions of spectrum scarcity.
I believe my noble friend Lord Brennan slightly implied that there is no issue as regards spectrum scarcity. I should point out to him that there is. Moreover, my noble friend listed a comprehensive range of frequencies and associated licences in an effort to demonstrate that our argument of spectrum scarcity did not apply. I shall study most carefully the list outlined by my noble friend when it is printed in the Official Report, but I believe that every type of licence that he mentioned is already open to religious ownership precisely because there is no spectrum scarcity in those cases.
Let us take the case for the continuing restriction on national analogue radio licences. At present, there are only three national analogue licences, which are currently held by talk SPORT, Classic FM and Virgin 1215. Given the limited spectrum availability in this area, we have taken the view that it would be inappropriate for one of those licences to go to a religious organisation. We take that view because we do not believe that a religious radio service would have sufficient appeal to justify it having one of only three national licences. To the latter we add our concern that it would he invidious for just one religion to have a national station, while the others would not. This could be perceived as extremely divisive and most unfair.
Some people have responded by suggesting that we lift the ban for multi-faith broadcasters. That could be said to address the second problem of not wishing to disadvantage specific religions. However, it does not
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address the first problem. Even a multi-faith channel is unlikely to have the level of support in terms of listenership that would justify it having one of only three national licences. I know that existing religious services have loyal listeners and viewers, but the viewing and listening figures support the view that the level of national support would not justify one of only three national licences being held by a religious body.
I hope that I have persuaded the Committee—
Lord Archer of Sandwell: I thank my noble friend for giving way. I wish to question two points that she has just made. First, my noble friend said that there would not be a sufficient listenership to justify the award of a licence to a religious broadcaster. But is that not a matter that should be assessed on the strength of the evidence, if and when an application is made? My noble friend also made a separate point; namely, that there would be competition among Christians and between Christians and people of other faiths. Has she any evidence to suggest that that would be the case?
4.45 p.m.
Baroness Blackstone: Given that we are talking about only three national licences, all I can say in response to my noble and learned friend's first question is that I believe all the evidence available would support what the Government are saying; namely, that viewing and listening figures would not justify inviting a large number of religious organisations to make applications that would be bound to fail. We believe that it is more honest to make it clear at this stage that there would not be spectrum availability, rather than invite religious organisations to carry out a lot of work in preparing applications that would be bound to fail at the first hurdle. I wish to continue with my response, so I shall write to my noble and learned friend on his second question.
I hope that I have persuaded Members of the Committee that the restrictions are made necessary by reason of spectrum scarcity.
Officers in religious bodies are "disqualified persons" under this clause for the purposes of holding certain broadcasting licences. I know that some people are unhappy about this, as outlined in this afternoon's debate. They believe that that unfairly stigmatises people with religious beliefs. I can assure noble Lords that this is not the intention. Given that restrictions remain on religious bodies holding licences, it is important that the remaining restrictions are effective. In order to be effective, it is important that the restrictions not only apply to religious bodies, but also extend to office holders in such bodies. If that were not the case, it would be a simple matter for a religious body to put the licence in the hands of one of its officers and thus defeat the purpose of the restriction. The position is not unique to religious bodies; similar arrangements apply in respect of political bodies, whose office holders are also prevented from holding broadcasting licences. In short, restrictions on office holders are simply a necessary anti-avoidance device.

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My noble and learned friend Lord Archer asked me about the definition of "office holder" in this context. There is no definition of the word "officer" in the legislation. It would be impossible to list exhaustively all the possibilities, because all organisations have different structures. Therefore, the word has its ordinary meaning. It is a question of fact whether or not a person is an officer. Ofcom will have to consider all the relevant circumstances and make a decision. In particular, Ofcom will take into account whether the person has a formal position and what his role or function in the organisation might be. It seems to me that it is a matter of using common sense.
It is also important to recognise the nature and extent of the restriction. Religious office holders are prevented from holding broadcasting licences only to the same extent as religious bodies. They can hold all other licences in their own name. That fact does not seem to have been fully understood by speakers in this debate. I hope that Members of the Committee will agree that this is a necessary evil rather than any deliberate intention to stigmatise religious office holders. Of course that is not the case.
The restrictions on local and national digital radio will be lifted as soon as the broadcasting parts of the Bill come into force—which should be by the end of the year. As soon as that happens, there will be plenty of new opportunities: local digital radio multiplexes are still being licensed, so religious broadcasters can seek to obtain some of these new slots. In the case of existing radio multiplexes, there should still be chances for religious bodies to get slots on these multiplexes that are currently unfilled, or become vacant in the future. There are also opportunities to take up radio slots on Freeview.
I understand from Ofcom that it will use its best endeavours to process any applications as soon as possible after the restrictions on religious bodies are lifted by the Bill. It is also proposing to review the existing guidance on religious ownership before the ownership provisions come into effect.
Let me turn to the human rights aspect, which a number of speakers mentioned. I repeat once again that we place restrictions on religious bodies holding licences only where there is spectrum scarcity. We have sought legal advice and are confident that the continuing restrictions are fully compatible with our obligations under the ECHR. Moreover, the Joint Committee on Human Rights has concluded that it considers the position in the Bill is likely to be compatible with ECHR.
While we remain convinced that for the present there is a case for some restrictions, we also believe that the Bill offers enormous possibilities for religious broadcasters. In the light of what I have said, I very much hope the noble Baroness will feel able to withdraw her amendment.
Baroness Buscombe: I thank the Minister for her extremely full response, but, with great respect, I feel that she has entirely missed the point. We are addressing in these amendments a point of principle.
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Mr. Kerridge of Premier Christian Radio said recently:
"The changes in the Bill are a bit like being invited to a wedding that took place last year. Faith groups are being asked to help the authorities in other areas of society for the social good, but are excluded when it comes to communication".
I hear what the Minister said about certain areas in which it is possible for religious broadcasters to be on air. That said, we are talking about discrimination against one particular class, one particular sector, of society, and that cannot be right.
I am extremely grateful to all noble Lords who have spoken in support of this amendment, most particularly those who added their names to my amendment. The right reverend Prelate the Bishop of Chelmsford is sadly not in his place, but the right reverend Prelate the Bishop of Manchester spoke so eloquently in his place. I particularly appreciate the support of the noble Lord, Lord Brennan, and the noble Baroness, Lady Howe, for the amendment. I also want to thank my noble friends Lord Crickhowell and Lord Elton. The noble and learned Lord, Lord Archer of Sandwell, almost apologised for not being here to intervene at Second Reading. He has missed quite a lot thus far. We have had an extraordinary number of interesting and sometimes, if not always, amusing debates. I encourage him to stay with us for the remainder of the Bill's scrutiny. I also thank the noble Lord, Lord Phillips of Sudbury, and the noble Lord, Lord McNally, whose support for the amendment I greatly appreciate. He said that he would vote for it if we were to put it to a vote, which we will not do this evening. However, following the Minister's reply, I have every intention of putting it to a vote on Report.
The noble Lord, Lord Brennan, made a particularly eloquent speech. As he said, history gives no clear democratic indication as to why this restriction is required. We need an answer or an acceptance from the Minister that this disqualification should he lifted, and we have not received that this evening. This is a question of choice. I hear what the noble Lord, Lord Avebury, said—there are opportunities for those who represent different religious bodies to speak on radio. "Thought for the Day" was one example. I am sure if I rang up and asked to speak I would not get a slot—my name is not Anne Atkins. I have always wondered who Anne Atkins is.
It is interesting that the Government are working so hard to reassure us that strong content rules, coupled with a strong competition law regime, are enough to ensure that we can retain quality broadcasting. Yet when it comes to religious broadcasting we are not in a safe position. I think that is what it is—I cannot believe it is anything to do with spectrum scarcity. I simply will not accept that vacuous argument.
The noble Lord, Lord McNally, pointed out that religious broadcasting has not always been benign. I entirely agree. He used the example of some extraordinarily aggressive broadcasting on American television. I have often listened to it and it is extremely

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disturbing. I think that is the main reason why the Government are concerned. There may be a strong lobby stressing that concern, but the Government cannot rest upon that argument if, at the same time, they want us to be assured that we have strong content rules in place.
We on these Benches are not satisfied. Noble Lords have asked the Minister to give us clear reasons. As I have stressed, it is ultimately a question of principle.
It has been suggested to me that this proposal to discriminate against one particular sector, which happens to be religious broadcasters, by preventing them even from making an application—as the noble and learned Lord, Lord Archer of Sandwell, said, we should let the merits be decided by Ofcom—makes the Bill hybrid. I will have to research this to be sure, but the ruling on hybridity applies to a piece of legislation that treats one class of persons differently from others. This religious disqualification seems to do this and if the Bill is hybrid in this way, it is in real trouble. This is really worth investigating and I ask the Government to consider that between now and Report.
I am grateful to the Minister, who has offered to write to me about my rather technical questions on multiplexes in particular. But this is really a question of choice and democracy—it is a question of principle. I am so grateful to all noble Lords who have supported the amendment. For now, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 288 and 289 not moved.]
Lord McNallymoved Amendment No. 290:
Page 296, line 32, leave out subsection (6) and insert—
"(6) No order is to be made under subsection (5) other than one that is confined to giving effect to recommendations made by OFCOM in a report of a review under section 384."
The noble Lord said: The amendment would provide an opportunity to discuss the recommendation of the Joint Committee that there should be no powers to amend primary legislation on media ownership by means of secondary legislation. Unfortunately, I was absent this morning when the Committee discussed media ownership. Briefly, the Joint Committee felt that the Government were rushing their fences in terms of taking this power to secondary legislation in the area of media ownership.
We have in the past two or three years put some powerful organisations into being with the Competition Act, the Enterprise Act and now with Ofcom, but we are not yet sure how in practice they will operate. There is a great deal of proper concern about how media ownership will shake out under the new regime. Parliament should rightly keep control of media ownership matters through primary legislation. As the pre-legislative committee said, in due course Parliament may well be happy at the way in which the new bodies and the new Acts are working, but media ownership is too important to entrust, at this stage, to secondary legislation, and we ask the Government to draw back from that.
5 p.m.
Lord Puttnam: I support the amendment tabled by my noble friend Lord McNally. There is no reason to debate this matter in too much detail, but for us this was very much a power too far. We have spent some time in Committee discussing the pros and cons of the Secretary of State having the ability through secondary legislation to vary licence conditions. This is a far more serious and important matter, and by raising it we are helping the Secretary of State to pause and think about the implications of this power.
The power would mean that, in the run-up to an election, the Secretary of State of the day—it may well not be the current Secretary of State—can be lobbied by media owners anticipating that they may well he able to receive improved levels of access or favours in a postelection period. That would not be true of the Secretary of State alone; it would be true also of Front-Bench spokespersons from other parties. Surely, the best possible protection would be if the Secretary of State would make such a recommendation only following the advice of Ofcom. That would protect her and any other person finding themselves in the position of being lobbied by media companies. That is a sensible way forward, and I urge the Government to resist the grab for power, as on this occasion it could well turn round and bite them.
Lord Davies of Oldham: I am grateful for the way in which the mover and my noble friend have contributed to this short debate. The issues as we see them are these. In the Bill, there is a balance between the powers of Ofcom and the Secretary of State to ensure that neither body has too much power in relation to change in ownership rules.
The Bill distributes different roles in the change process to different bodies. Ofcom has the responsibility of carrying out the reviews under Clause 384 and recommending changes. The Bill puts the order-making powers in the hands of the Secretary of State, who must consult Ofcom before exercising her powers, except where Ofcom has itself recommended the changes that she is making. Then, of course, Parliament has the opportunity to scrutinise any proposed changes before they become law and, if it so chooses, to reject them.
The intention of the order-making powers is that the Secretary of State should have the flexibility to respond to changing circumstances. In that way, it future-proofs the Bill as far as possible. Consistent with that, we believe that the Secretary of State should be able to take the initiative if she feels that changes are warranted. Ofcom will have the opportunity to make recommendations, which is right and proper. However, we would not want to be in a position where the Secretary of State could not act because Ofcom had no plans to review part of the legislation that was ripe for change.
I am somewhat surprised that the noble Lord, Lord McNally, spoke as he did to the amendments. It has caused me to think further about the position,

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which we thought was much more in line with the case put forward by my noble friend Lord Puttnam—namely, the question of balance and how often such an event would occur. We are seeking to have balancing factors between the two actors in the position and Parliament's right to decide on the matter in the final instance with an affirmative resolution.
I hear what the noble Lord, Lord McNally, says about primary legislation, but he will know how difficult it is and how long-term primary legislation needs to be. We recognise that ownership rules are an important part of the Bill, but we also recognise that this legislation is meant to obtain for a considerable period of time. There are bound to be changes in what, after all, is probably the most rapidly changing area of economic and technological development. We believed that we should assure the Committee that there is a balance within the legislation that guarantees that the two primary actors—the Secretary of State and Ofcom—work in consort, and that Parliament has the final say in terms of an affirmative resolution.
I hear what both noble Lords said. I hope that I have responded as fully as I can in reassuring my noble friend Puttnam. As for the noble Lord, Lord McNally, I can say only that the particular thrust that he put on the amendment would really suggest that the legislation and the issues of ownership ought not to be subject to change at all except by a fresh Broadcasting Bill. We have seen the processes involved with regard to this Bill. I do not believe that we have it in mind to introduce another Bill in the next two or three years, but ownership issues could certainly occur in a more limited time than that in which we could hope to bring back a piece of legislation of this magnitude. It is on that basis that I hope that the noble Lord will recognise that we have a balance and proper safeguards in the Bill and that he will withdraw the amendment.
Lord McNally: I do not believe that I have heard anyone deliver assurances in such emollient tones since I used to listen to Dr Charles Hill as the radio doctor. How could one doubt the Minister when he gives us such assurances?
Whether this was the time to future-proof and give flexibility caused a question mark in the mind of the pre-legislative scrutiny committee. I shall consult my noble friends who co-sponsored the amendment and read the Minister's assurances. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 340 agreed to.
Clause 341 [Licence holding by local authorities]:
[Amendment No. 290A not moved.]
Clause 341 agreed to.
Clause 342 [Relaxation of licence-holding restrictions]:
[Amendments Nos. 290B and 290C not moved.]
Clause 342 agreed to.
Schedule 14 [Media ownership rules]:
[Amendments Nos. 290CA and 290CB had been withdrawn from the Marshalled List.]
[Amendments Nos. 290D and 291 not moved.]
Lord Puttnammoved Amendment No. 292:
Page 430, line 23, at end insert—
"PART 1A CHANNEL 5 LICENCES
Ban on newspaper proprietors holding a Channel 5 licence
6A (1) A person is not to hold a Channel 5 licence if—

(a) he runs a national newspaper which for the time being has a national market share of 20 per cent or more; or

(b) he runs national newspapers which for the time being together have a national market share of 20 per cent or more.

(2) For the purposes of this paragraph, each of the following shall be treated as holding a Channel 5 licence—

(a) the actual licence holder; and

(b) every person connected with the actual licence holder.

(3) The provisions of paragraphs 2 to 4 of this Schedule shall apply for the purposes of this Part of this Schedule insofar as they relate to national newspapers as if a Channel 5 licence were a licence to provide a Channel 3 service."
The noble Lord said: The amendment gives the Committee an opportunity to debate Recommendation 89 from the Joint Select Committee that the prohibition of joint ownership of Channel 5 and of a major national newspaper group should be retained. When moving Amendment No. 280 this morning, I honestly believed—perhaps naively—that we were offering the Government an alternative way forward on these vexed ownership issues. As the Committee will remember, that offer was rebuffed, somewhat to my surprise, albeit that Members of the Committee will surely find it hard to follow the logic of the Government's argument when they study it in Hansard prior to regrouping their forces for Report stage.
The Government have chosen their ground for battle, which is fine by me. I signalled my intention to the Government at the end of our Committee sitting on 22nd May that I would seek evidence-based responses in justification of their policy proposals, especially in the area of ownership changes. Given the nature of the responses that we have received so far from the Government Front Bench, and for the sake of brevity, I have decided to hold my fire on my own evidence-based objections, as it strikes me that they will he better used, and that we should avoid repetition, if I made them on Report. That would give an opportunity to seek the opinion of the House.
So I shall instead restrict myself to this observation. Today in Committee we have listened to, or had access to, two dozen noble Lords all of whom have direct and specific experience of the broadcasting industry or its regulation. I had the enormous privilege of chairing the Joint Scrutiny Committee which over a 10-week period was able to review literally hundreds of pieces of evidence and talk to hundreds of concerned individuals, and we reported accordingly. However the Government know better. Or, as Mark Twain once said,
"Every dogma has its day".

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In conversation with some of the officials who prepared the Bill, they agreed that this particular clause was a "judgment call"—their words, not mine. I would ask whose judgment and based on what expertise that is unavailable to the rest of us. It is quite clear to me that the two dozen expert voices that we have heard just in this House disagree with the Government's position. Before sitting down, therefore, I shall offer the Government three more bits of evidence—or assertions, as they certainly seem to prefer assertions—for them to chew over between now and Report stage.
The first one is from FCC Commissioner Michael Copps. It is significant because, as the Committee will know, on Monday of this week the FCC voted, along party lines, by three votes to two, to add significantly to the deregulation of the American broadcasting industry. Mr Copps said:
"I see centralisation, not localism. I see uniformity, not diversity. I see monopoly and oligopoly, not competition. This is a huge and foolhardy gamble with the future. Every American's future. This issue is not Republican or Democratic, it is not liberal or conservative, it is not north or south, not young nor old".
He quoted Judge Learned Hand, who reminded us that the hand that rules the press, the radio, the screen and the fast-spread magazines rules the country. Mr Copps concluded:
"The largest company owned less than 75 radio stations before deregulation. Today, one company, Clear Channel, owns more than 1,200 stations, eight stations in many cities, and in some towns virtually all the stations available. In fact the number of radio station owners has decreased by an incredible 34 per cent since 1996".
As Mr Copps said, this is not an issue of right or left. So I offer the views of the respected conservative columnist, William Safire, in the New York Times of 22nd May. He said:
"The overwhelming amount of news and entertainment comes via broadcast and print. Putting these outlets in fewer and bigger hands profits the few at the cost of the many. Does that sound unconservative? Not to me. The concentration of power—political, corporate, media, cultural—should be anathema to all conservatives. The diffusion of power through local control is the greatest expression of democracy".
To those on my own Benches I would say that there is tremendous resonance in the notion of power being given to the many, not the few. That is something to which certainly I signed up in 1997.
The Committee will forgive me if, as a movie producer, I finish with a quote from the film "Network". Noble Lords may remember that Peter Finch played, and won the Oscar for, the role of a type of Walter Cronkite figure who had just had enough. I think that he was called Howard Beale. He said:
"You people and 62 million other Americans are listening to me right now because less than 3 per cent of you read books, because less than 15 per cent of you read newspapers, because the only truth you know is what you get over this tube. Right now there is a whole generation that never knew anything that did not come out of this tube. The tube is the gospel, the ultimate revelation. The tube can make or break presidents, popes, prime ministers. This tube is the most awesome force in the whole godless world and woe to us if it ever falls into the hands of the wrong people".
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I hope that the Government will explain how this particular part of their policy makes it absolutely certain that this extraordinary power will never fall into the hands of the wrong people. I beg to move.
5.15 p.m.
Lord Glentoran: What the noble Lord, Lord Puttnam, just said has tremendous truth. I support what he said completely. I was talking to none other than Floella Benjamin along that line yesterday.
I support the amendment. The Government's decision to relax the existing restrictions on Channel 5 is based on the premise that in comparison with Channel 3, Channel 5 is a much smaller enterprise. That premise then leads to the conclusion, so we understand, that there is no need for there to be any restriction as to who can hold a Channel 5 licence. The Government therefore propose that anyone who runs a national newspaper, however large its market share, will be entitled to hold a Channel 5 licence.
The logic is unfortunately flawed. It ignores the future. It is possible that in a few years' time Channel 5 will be a more substantial concern than Channel 3. Indeed, without restriction on the holder of a Channel 3 licence, it is more likely than not that Channel 5 will develop considerably in the future. It is almost inevitable that a newspaper group will come to control Channel 5 and will exploit that opportunity in a way that would not be possible with Channel 3.
Channel 5 presents a wonderful opportunity to a newspaper proprietor. It would be sitting there waiting to be exploited. It will inevitably develop a far greater market share than Channel 3 if in the hands of a national newspaper proprietor with significant market share. The result will be that the mischief that the Government intend or wish to avoid as regards Channel 3 will be achieved as regards Channel 5. We must stop that. I support the amendment.
Lord Lipsey: I am very sympathetic to the objective which my noble friend Lord Puttnam seeks to obtain, but I am not necessarily wholly convinced that this is the best method.
Before dealing with that, however, I should like to say that there has been a lot of talk today about Murdoch buying Channel 5 and the consequences. We should not think that just because something is possible it is certain to happen. An awful lot of hoops would have to be gone through before that happened. First, he would have to want to buy it. I shall return to that point. Next, the existing owners would have to want to sell it—that is, be convinced that he could get more value out of it than they could. They would then have to agree a price. The change would have to be approved by the competition authority. He would then have to invest huge sums in it and that investment would have to pay off. Not all his investments pay off although many of them do. It could happen of course, but it will not necessarily happen. I do not think that we should always be totally diverted by a single possibility. There are other newspaper proprietors and other people. We should try to look at the wider picture.

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The second and perhaps more important point is that if Murdoch does want to establish a strong presence here, it is not true that his only route is to buy Channel 5. Another possibility—which becomes more of a possibility as we get more and more digital homes; and we will of course all be digital homes when we get to switch-off—would be to make one of the existing Sky channels a heavily promoted, free-to-air channel funded through advertising. If we block the route of buying Channel 5, it would make that route more attractive. It might be just as dangerous. There is no lasting miracle to being a terrestrial broadcaster. It is a distinction that with time will mean ever less.
I do not think that there is a perfect solution here, but there is a three-legged approach that might offer an alternative to the approach in the amendment. The three legs are as follows. The first—we debated it earlier—is a much stronger public interest test for the competition authorities to bear in mind. The second is protection against the very specific abuses that can occur in cross-media ownership. The great fear in respect of cross-media ownership is that one uses the Sun to advertise one's TV channel. If there were in the Bill a set of cleverly devised measures that would prevent that kind of abuse of cross-media ownership, that might be more effective than simply banning such ownership.
The third leg—and this is the great difference with the United States—is stronger appropriate content regulation. The Government have already moved some way in that direction for Channel 5. It would be possible, as the Secretary of State said recently, for that content regulation to become stiffer as the channel grows, so I would not want anything as crude a simple ceiling ratchet, but there could be a device of that kind.
The philosophy of the Bill, which I broadly share, is that control of ownership is not the best way to regulate content. I hope I have spoken in a constructive spirit in seeking almost exactly the same objectives as my noble friend Lord Puttnam. I hope that I have set out a more constructive approach towards achieving the result that we all want, without the crude kind of control that is implicit in the amendment.
Lord Razzall: I support the amendment from these Benches. I will not delay your Lordships by repeating the arguments put forward by the noble Lord, Lord Puttnam, and the Tory Front Bench, but I would like to add two or three points which have not been made so far.
It is important to indicate why there has always been concern about newspaper proprietors owning television stations in this country. That does not amount to an attack on Sky. I take the point that was made by the noble Lord, Lord Lipsey, that there is no indication as to whether Sky and Rupert Murdoch wish to acquire Channel 5. The underlying concern that one has about newspaper proprietors owning TV stations or broadcasting media is that, by and large—and it is more large than by—newspaper proprietors
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and people who buy newspapers tend to have something of a political agenda. We have only to look at our media and newspapers run by Members of your Lordships' House to realise that there is a significant political agenda behind newspapers. There is a significant political motive, quite often, among people who own newspapers. It was for that reason that, in the past, governments of both political persuasions have not been convinced that it is a good thing for newspaper owners also to own television stations.
My second point relates to the comments of the noble Lord, Lord Lipsey—and this argument has raged significantly in the run-up to the Bill. As I understand it, the Government's position is that, these days, ownership does not really matter, because what really matters is regulation. I suspect that that is the argument that the Minister will make against the amendment. I have heard people extremely close to the Prime Minister ask why so many people bother about the idea that Mr Murdoch and Sky can control a television station, because, after all, that can always be dealt with by regulation and ownership does not matter. The concern that we on these Benches, as well as the movers of the amendment, have is that that is a pretty big risk to take, bearing in mind the known motivation of newspaper proprietors with regard to the ownership of their newspapers.
Finally, once governments cross the threshold of allowing newspaper proprietors to acquire Channel 5, the intellectual argument will be lost that ownership matters in relation to TV stations. If, as is perfectly possible, we end up in a world in which the BBC is on one side, Sky TV on the other, and a failing ITV as a result of a collapse in advertising revenues, what will be the argument against allowing Sky then to say, "We can buy ITV"? I know that there will be competition and regulatory issues, and great hoops that will have to be jumped through, but once the intellectual step is taken to accept that a newspaper proprietor can own Channel 5, what will stop the same argument being used for that newspaper proprietor also to own Channel 3?
Lord Bragg: I rise to support the amendment of my noble friend Lord Puttnam and much of what other noble Lords have said. Like many other noble Lords, I seem to have been talking about this all day, every day, so I shall be as brief as I can.
There are two reasons why I fear this part of the Bill if it is not amended. The first reason involves the domino effect, which works in British television. We can give instance after instance of that. Basically, various channels are competing for a single, finite market, and one gains at the expense of the others. As has been pointed out, if Channel 5 has very few obligations and regulations compared with the other main terrestrial channels, and money and influence are pumped in by what could be called a cross- media owner, there is no doubt whatever that it could and would grow like a rocket. Judging by the stuff that has been shown, which is not expensively made—some of

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it is okay—Channel 5 could grow comparatively cheaply and bring in audiences. That would seriously disturb the current balance.
Does that matter? I believe that it does. Can that be stopped by putting in a ratchet? Would all the regulations come in if the service got 10 per cent? That is like trying to put the genie back in the bottle. I do not know how one does that or when 10 per cent would have been reached. People could say, "In August, we were at 8.2 per cent. We managed to get 11.5 per cent in November, but that was only because of what we showed. We should not forget the situation back in January". They could play around like that for years. I do not believe that the ratchet effect would work at all. It will take all of Ofcom's efforts just to put a ratchet effect on someone who was determined to make Channel 5 grow and had the power to keep it growing. I do not believe that a ratchet will work; it is a non-starter.
What I believe will happen—my noble friend Lord Puttnam referred to those of us with some experience in this regard—is the domino effect. Channel 5 will grow and grab audiences. It will go head to head with Channel 3, which is where it will try to get its audiences. It will get those audiences, and Channel 3 will have to fight hack. The way to do that is to do two things: one makes things more cheaply and one offloads the cumbersome and expensive programmes, which, by and large, are one's public service responsibilities—classic dramas and programmes that take a lot of money. One can always make them more cheaply, as I said earlier. One can make drama and documentary cheaply but one then gets a cheap system. Channel 3 will have to fight back in relation to the new Channel 5. BBC 1 will have to follow Channel 3. Channel 3 must get its money; that is its obligation to shareholders. BBC1 must get sufficient viewers for a sufficient amount of time to justify everyone in this country paying a licence fee. It has very little room for manoeuvre in that regard and will have to fight back in the same coin. Those three bodies will compete for the same market and the audiences will drop on Channel 3 and BBC1. Moreover—I said that I should be brief and I will be—Channel 4 and BBC2 will suffer even more. I make that assertion and am quite prepared to discuss it at greater length if noble Lords want to do so. I hope that noble Lords follow me in that regard.
Secondly, I began by talking much earlier in our debate about where I started from, and where most people in this country start from; that is, the public service interest. We have developed broadcasting from its radio days as a system that is public service based. It has been a quite remarkable—an extraordinary—story. We have a commercial system, ITV, which is public service. When we invented a second commercial channel, Channel 4, we made it public service. We are a public service system and, by and large, it works. When people are required to put their hands up to vote for it, they do so. That is what we want. This approach will not serve that. I cannot see how this procedure will make the public system stronger, how it will make it more valuable and how it will enrich it. I fail to see how
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it would add value in any way to what is central and important to our system, which is currently under threat all over the place. The system has to manage very carefully without unleashing a massive competitor that would undoubtedly and inevitably go for the throat of the audiences. I think that would result in a great diminution of the public service content of our main terrestrial channels.
5.30 p.m.
Lord Bernstein of Craigweil: I also support the amendment tabled by my noble friend Lord Puttnam. I was about to make a speech very much along the same lines as my noble friend Lord Bragg. However, first, he got in ahead of me; and, secondly, he made it much more fluently than I could. All I can say is that I support exactly what he said. ITV would suffer from a multi-media ownership competitor. One may say that that is no great problem because it is a commercial operation. That is true. But it also performs a great deal of public service broadcasting, which is bound to suffer.
As my noble friend Lord Bragg also said, Channel 4 is given the licence to be distinctive. If its advertising base is attacked, it too will have to drop distinctiveness for popularity. This is a very dangerous issue. I hope that the Government will think again before the Report stage, because it is an issue upon which many of us feel we cannot support the Government.
Lord Judd: I hesitate to intervene. I must apologise to the Committee because previous deliberations on the Bill have coincided with my responsibilities al the Council of Europe and Western European Union. But it is a Bill about which I feel very strongly indeed. I believe that the amendment comes to the centre of much public anxiety about the Bill and what is being proposed.
My noble friend Lord Puttnam, in speaking to his excellent amendment, talked about the experts who have spoken in the debate. Certainly, impressive experts with a great deal of experience have spoken in Committee. I cannot in any way claim to be an expert, but I can claim to be a person who cares about the quality of democracy. That quality of democracy depends upon the quality of information available to the electorate; the quality of commentary; and the quality of the stimulation of debate in society. The Bill deals directly and indirectly with all that.
As an ordinary layman, it seems that the danger of a concentration of power in the hands of wilful people with their own agendas is a threat to the quality of democracy. Therefore, I would say, "We cannot take this issue too seriously".
To my noble friend Lord Lipsey I would say only this: I have always had a high regard and a liking for him, because he is an utterly reasonable person. However, I think that he falls into a pit by his own reasonableness because he tempts himself to believe that he is dealing with other people who are equally reasonable and who do not in effect have ruthless agendas in which once an opening is made, that

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opening will be pursued through to a conclusion which may not at first be on the surface. But to pretend that that conclusion is not already in the minds of some of those people is—and I hope my noble friend will forgive me using the word, because I actually think it can be quite complimentary to some people in the cynical age in which we live—rather naïve.
Therefore, I want to put on record, again stressing the fact that I am not an expert in any way, that I think this amendment is absolutely essential, and that unless the Government move their position very considerably, I hope it will be pursued to a vote on Report.
Baroness O'Neill of Bengarve: The amendment lies at the core of what is needed to improve the Bill. It would be nice to think that we know now how to mitigate the power that ownership gives and that we have reached a stage where the perfection of regulation is such that we can relax and allow ownership to fall where it will.
Those of us who have lived in heavily regulated sectors of our society have a tiny degree of scepticism about the perfectibility of regulation. That is why I spoke earlier today about the importance of belt and braces, and why I support the amendment.
Lord Gordon of Strathblane: I intervene briefly, simply to say that I can see no grounds for making any distinction between Channel 3 and Channel 5, except in one small respect, which is remediable: both were licensed by the Independent Broadcasting Authority. The fact that one is a larger body than the other is very much a temporary factor of the programmes produced by it. With the effect of cross-promotion, which would be available, I would agree with all noble Lords who have pointed out that that is easily changed.
There are two respects in which there are differences between the two channels at the moment. First, the ITC let Channel 5 get away with murder, frankly, in its first few years. Its licence should have been taken away because it breached every pledge it made when applying for the licence, with the result that we have reached the conclusion that it no longer has public service obligations. We can easily give it exactly the same public service obligations as Channel 3, and in my view we should. Secondly, at the moment it does not reach the whole of the country. That with time is changeable, in which case there is no ground for any distinction between the two.
Baroness Jay of Paddington: We have spoken often in the course of today's debates on various amendments about the example of the United States and whether or not that is relevant to the Bill. I support the amendment. I would say in that context that I wonder whether the Minister was able during the very truncated lunch-hour we had, to see the reports from Washington from yesterday, in which the Senate has moved to try to redress what it sees as the impact of the Federal Communications Commission's decision of Tuesday, about which we spoke earlier in the day. The
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Federal Communications Commission has now decided to relax still further the cross-media ownership rules in the United States and all the potential outcomes, to which various noble Lords who have taken part in this most recent debate on Amendment No. 292, have referred.
The Senate has now decided that it must try to introduce legislation to redress some of that in the face of the FCC's decision. I simply say to the Minister that I very much hope that as a Parliament we will not seek to do that kind of thing ourselves in a few years' time because when, as people have said, the genie is let out of the bottle by the relaxation of these cross-media rules we shall be faced with the kind of deregulation to be found in the United States. All of us have spoken about this at length and I certainly do not intend to do so again.
Echoing my noble friend who spoke about the relevance or otherwise of individual owners, we have to accept that this Bill, in the words of the Government repeated several times, is "proprietor neutral". I draw attention to the useful quotation from Mr Rupert Murdoch, to which my noble friend referred to in an earlier speech, but not in this House. When challenged on the question of regulation having an impact on the rules of ownership, he said, leaving out the expletives,
"You can tell these politicians whatever they want to hear, but once the deal is done you don't worry about it. They are not going to chase after you later".
Baroness Blackstone: I am going to disappoint my noble friends. I believe that every speaker in this debate is on this side of the House with the exception of the two Front Bench speakers for the Opposition and the Liberal Democrats.
We are convinced that our policy of freeing Channel 5 from ownership restrictions is the right one. I shall explain our reasons for reaching that conclusion, which, I readily concede to my noble friend Lord Puttnam, include judgment in difficult decisions of this kind.
One aim of this Bill, which I believe it achieves, is to strike the right balance between the interests of viewers on the one hand and growth and investment in the broadcasting industry on the other. I believe that removing the ownership rules from Channel 5 will be in the interests of both. Channel 5 is small. Opening the market to as many investors as possible will bring in new investment, which in turn should lead to better programming for viewers. Higher standards of programming on Channel 5 will in turn cause other terrestrial channels to raise their game as well.
I cannot agree entirely with what my noble friend Lord Bragg said in this respect and neither can I see that there is anything wrong in Channel 5 growing. We hope and expect ITV to grow. What is there to fear from a strong Channel 5 competing for audiences with programmes that viewers want to see?
When we embarked on the thorough and wide-ranging consultation on media ownership that preceded the draft Bill, we made it clear that we wanted

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to promote competition and investment because we believe that it will in turn lead to higher quality broadcasting for viewers. At the same time we were certain that we wanted to protect plurality and diversity. We recognise that competition law will not always safeguard those elements and in order to ensure that different viewpoints are heard in the media we need to keep some media ownership rules. But with just over 6 per cent of the audience and a reach of only 80 per cent of the country, we do not believe that Channel 5 is large enough to need protecting in the same way as ITV, yet these amendments would apply much the same rules to both channels.
We believe in the importance of plurality, as I have said, but let us not forget the presence of the BBC and Channel 4. Even if Channels 3 and 5 were in the same hands there would still be three separately controlled free-to-air public service broadcasters. With an ever-expanding number of digital channels, our proposals for Channel 5 do not present any threat to plurality in the television market. Indeed, the development of the market, the growth in the number of digital channels and digital TV audience figures means that plurality is becoming integral to our broadcasting ecology.
An important safeguard of equality which applies to Channel 5, regardless of ownership, is provided by content regulation. The Bill maintains and strengthens that as Members of the Committee know. There is a quota for independent production. Channel 5 news will have to be of high quality and cover both national and international matters. Channel 5 must fulfil the quotas for original productions and 50 per cent of its content must originate in the EU.
A suitable proportion and range of Channel 5 programmes must he made outside the M25 area and a suitable proportion of its budget must be spent there too in a range of production centres. These requirements are not fixed. If the respective audience share of Channel 5 and ITV changes so that they are more or less comparable, the Bill will allow changes to the public service broadcast obligations of Channel 3 and Channel 5 licences. For example, Ofcom could alter the channel's original programme requirements or the quota for independent programmes could be changed by order of the Secretary of State.
If Channel 5's audience share—
Lord Gordon of Strathblane: I thank the Minister for giving way. I and various other Members of the Committee toyed for a while with some form of ratchet arrangement which would bring about a change only if the audience increased. But I have been successfully persuaded that that would be a bad idea, because if people know that doing better means Ofcom heaping more obligations on them, they will simply limbo-dance under whatever threshold of comfort.
Baroness Blackstone: What I am going on to say may answer my noble friend's point. If Channel 5's audience share becomes broadly equivalent to that of ITV, the Secretary of State may introduce, for example, the equivalent of nominated news provider arrangements for Channel 5 or change those
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obligations for Channel 3. However, we do not think it practical to set out in advance precise audience or other targets that would in turn trigger precise new obligations. It involves too much double-guessing future market circumstances and it could produce perverse incentives if licence holders sought to remain just below the threshold.
Following the ITC's review of the television programme supply market, the Bill introduces a new requirement that Ofcom should review the effect on regional independent and original production and news and current affairs programmes when Channel 5's licences change hands. Ofcom will be empowered to introduce licence variations to prevent existing standards from slipping. We have an opportunity to offer a quality boost to Channel 5 and to provide the beneficial stimulus of more competition to the other free to air channels. That will encourage higher quality across the board and the end beneficiary of the changes will be the viewers.
5.45 p.m.
Lord Puttnam: I thank all noble Lords who have spoken. They have all added some air to an important and difficult issue. My noble friend Lady Jay sent me the article on the US Senate moving to tighten limits on media ownership. I want to make the point that this has nothing to do with Mr Murdoch. I have spoken little about Mr Murdoch and it insults the intelligence and argument of those moving these amendments constantly to pin things back on Mr Murdoch. I have enormous respect for him. If I did not respect him I probably would not be nearly as concerned about what the future may bring. It has nothing to do with Mr Murdoch.
Ironically—perhaps this is the good Lord helping me—immediately below the article on the US Senate is a headline that states:
"Berlusconi nearer to immunity after vote".
It goes on to record that Mr Berlusconi, who is far and away the largest media owner in Italy—and who also just happens to be the Prime Minister—has organised his troops in such a way to get immunity not just for himself, because he is a generous man, but for the entire Italian Senate. I wonder if that has anything to do with them voting with him.
That is clearly absurd. We sit in a democratic Chamber, thank God, still in a democratic country, and this is risible. The problem is that it is happening in a nation that will in a few days' time take on the presidency of the European Union. That is essentially what Amendment No. 292 and other similar amendments are about.
It has been said more than once today that we all know what we do not want. We certainly do not want the Berlusconi-isation of British politics. I suggest that we insufficiently value what we have. A former Conservative Minister wrote to me recently expressing his concern. Interestingly, he ended his letter:
"It seems to me that the Government is demonstrating no sense of history and is instead sleepwalking towards disaster".

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I will of course withdraw the amendment today because time in my judgment will give force to the arguments that have been made from all parts of the Committee. But I say to the Minister that it will be one or the other: an enthusiastic embracing of Amendment No. 280A, which we debated at great length; or some similar amendments along the lines of this one. The Government will lose on one or the other. The only person who will look foolish if I am wrong will be me. I urge the Government to choose intelligently and thoughtfully. They have a couple of weeks to ponder the matter, but their present position is unacceptable in every respect. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Eatwellmoved Amendment No. 292A:
Page 430, line 30, at beginning insert "Subject to paragraph (1A),"
The noble Lord said: In moving the amendment, I shall speak also to Amendment No. 292B. Before doing so, I declare an interest as chairman of the Commercial Radio Companies Association. The amendments are of a more technical nature than the important debate to which we have listened. However, they correct what I am sure is a mistake in Schedule 14, in so far as it refers to the ownership of local radio digital multiplexes.
It is worth reflecting that commercial radio, urged on by the Government, has invested over £ 100 million of shareholders' funds in the development of the digital radio network. These funds are not expected to yield a return in the near future. They are an expression of confidence in the future and in the Government's commitment to digital broadcasting.
Unfortunately, the schedule as drafted would introduce investment controls on digital multiplexes that are far more restrictive than is currently the case, making a mockery of the Government's commitment.
The schedule would prevent a company from owning two overlapping digital multiplex services. The problem arises because that fails to take account of what in the trade are deemed to be "accidental overlaps". For example, if the schedule were to stand, Capital Radio would be prohibited from co-owning digital radio multiplexes in London and in Kent because the Kent and the London multiplexes overlap. I am sure that everyone would agree, when looking at the case in hand, that that would impact negatively on the provision of digital radio in Kent, where Capital Radio owns the heritage commercial radio service.
My amendment corrects this anomaly, which I am sure is a mistake, while still preventing undesirable concentrations of multiplex ownership. The simple consequence of my amendment would be that in an area with two or more overlapping digital multiplexes, there should be at least two multiplex owners. I stress that. This would not create monopolies because there should be at least two multiplex owners.
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Not only would the amendment remove the new restrictions inherent in the current schedule, it would also be consistent with the two-plus-one approach to local radio ownership elsewhere in the Bill. I beg to move.
Baroness Buscombe: I rise briefly to support the amendment tabled by the noble Lord, Lord Eatwell. As the noble Lord has said, the amendments aim to provide a more practical framework within which the requirements for restrictions on holding national multiplex licences can operate. The Bill provides that:
"A person may not hold any two multiplex licences at the same time where the coverage area of one…overlaps with… the other in a way that means that the potential audience for one of them is or includes at least half the potential audience of the other".
As drafted, the paragraph disallows any company from holding two overlapping digital multiplex services. This would implement a more restrictive regime for the future of digital radio than exists in current legislation. The amendments therefore take account of any accidental overlap while ensuring that no detrimental concentration of ownership could occur.
This can be illustrated by example. If the Bill were enacted now, Capital Radio would be prohibited from co-owning digital radio multiplexes in London and Kent because the London and Kent multiplex coverage areas overlap. But in a Bill that purportedly future-proofs the development of multimedia and claims to be largely deregulatory in nature, is it not inappropriate to implement a measure that would discourage much-needed investment in this sector? The amendment provides the appropriate balance needed to prevent ownership concentration while allowing continued industry growth.
Viscount Falkland: I rise simply to say that we on these Benches agree with the amendments. I have nothing further to add because they have been so admirably explained by both the noble Lord, Lord Eatwell, and the noble Baroness, Lady Buscombe.
Lord Davies of Oldham: It would be easier to respond if I could agree with my noble friend that this is a mistake in Schedule 14, but unfortunately that is not the case for the reasons that I shall seek to explain. The amendments would change the proposed ownership rules on local radio multiplex licences. The present rules set out in the schedule provide that no person would be able to hold any two local radio multiplexes where the coverage area of one of the services overlaps with the other by 50 per cent or more of the potential audience. The amendment would provide that where there are three such overlapping licences, the proposed rules should be relaxed so that, instead of three separate owners, one owner could hold two of those licences.
Local radio multiplexes are the means by which terrestrial digital radio services are delivered to a locality. Each multiplex holds eight to 10 programme

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services, and therefore the multiplex owner plays a crucial gatekeeping role. The multiplex holder is entirely responsible for which services the multiplex carries, subject only to the requirement not to discriminate between service providers. As noble Lords will recognise, that provides the multiplex holder with considerable influence.
The media ownership rules are concerned with plurality and the need to avoid too much influence falling into too few hands. Nevertheless, we have taken the view that there should no limit to the number of multiplexes that anyone can hold, subject to the single restriction that they cannot hold two overlapping multiplexes, an overlap being where one multiplex includes at least half the potential audience of the other.
My noble friend clearly identified Kent as an area of difficulty, where the situation in London has created an anomaly. We do neither expect nor intend that anomaly to repeat itself and appear elsewhere.
The restrictions are not onerous and only affect London. From the point of view of plurality, London is such a large and important market that it is entirely reasonable to ensure that no one multiplex licence holder should be able to determine two thirds of London's digital radio stations, so the restrictions in Schedule 14 should be retained.
The Bill provides for the ownership rules to be revised as circumstances change. There will be no more clusters of three multiplexes licensed during the remainder of the first phase of the digital rollout. If more spectrum is made available for digital radio, that will not be until 2007 at the earliest. The introduction of the new spectrum will be the appropriate time to consider relaxing the multiplex ownership rules.
Meanwhile, with the proviso that I entered with regard to Kent, it is proper to preserve plurality. The issue affects the London situation overwhelmingly and there are good reasons for seeking plurality in those terms. I hope that my noble friend will feel able to withdraw his amendment.
Lord Gordon of Strathblane: Before my noble friend sits down, as he recognises the anomaly but does not accept the amendment, how does he intend to resolve the anomaly?
Lord Davies of Oldham: I am not in a position to resolve the matter directly. The Radio Authority is seeking to deal with the situation in Kent but there is the problem of overlap with London. That unique situation is a product of the times and is unlikely to be repeated. It is a genuine difficulty but it is not likely that it will be resolved in the short term. I seek to defend that which we want to see obtaining across the country and to prevent the Kent situation recurring.
Lord Eatwell: I can advise my noble friend the Minister that the way to address the anomaly right away is to accept my amendment. I am astonished at my noble friend's reply. Over several years, the Government have encouraged the commercial radio industry to invest enormous sums of money in digital broadcasting. To kick that industry in the teeth when it has been encouraged to invest significantly in advance of any return is not the way for a Government decently to behave. I assure the Government that we shall return to this matter on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 292B not moved.]
Schedule 14 agreed to.
6 p.m.
Clause 343 [Restrictions relating to nominated news providers]:
[Amendment No. 293 not moved.]
Clause 343 agreed to.
Clause 344 [Changes of control of Channel 3 services]:
Lord Evans of Temple Guitingmoved Amendment No. 294:
Page 301, line 13, leave out from beginning to "in" in line 14 and insert—
"(ii) is involved, to a substantial extent, in the provision of the programmes included"
The noble Lord said: I wish also to speak to the other amendments in the group: Amendments Nos. 295 to 299 and 303 to 306.
This group of amendments narrows the definition of the "relevant change of control" that triggers a review by Ofcom of various public service broadcasting requirements of Channel 3, Channel 5 and local broadcasting licensees. The aim is to reduce burdens on Ofcom and licence holders and focus efforts on the changes of control that really matter.
Clauses 344 and 345 apply in cases where there is a change in the persons who have control over a company holding a licence to provide a Channel 3 service. The clauses require Ofcom to review the effect of a "relevant change of control" on various public service broadcasting requirements—including original and regional productions and news and current affairs programming—and to vary the Channel 3 licence if necessary to ensure that the new owner does not deliver less than the old.
Clauses 346, 347, 348 and 349 set out corresponding provisions for Channel 5 and local sound broadcasting services respectively.
A "relevant change of control" is defined in Clauses 344, 346 and 348. As drafted, the expression includes a change of control over any body which is "connected" with the licence holder and is involved to any extent in the provision of the programmes for inclusion in the

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relevant service. The circumstances in which one body is connected with another are in turn defined in Schedule 2 to the Broadcasting Act 1990. They include, for example, the case where a programme maker is controlled by the licence holder, or where both the licence holder and the programme maker are controlled by the same holding company.
We believe that the net effect of these provisions is that the definition of a relevant change of control is too widely drawn. As things stand, Ofcom would be required to undertake a review every time there was a change of control of a connected body—for example, a production company in shared ownership with the licence holder—involved in even the most minor way in the provision of programmes for inclusion in the licence holder's service. This would cause a burden both for Ofcom, in carrying out really unnecessary reviews, and licence holders, in notifying Ofcom of irrelevant changes of control.
We therefore propose amendments to Clauses 344, 346 and 348 to make it clear that connected bodies must be involved to a substantial extent in the provision of programmes for inclusion in the service. This will ensure that efforts are focused on those cases that really matter, where the change of control has a genuine potential to affect the existing quality of the service.
For consistency of approach, corresponding amendments are also proposed in Schedule 15 to make changes to Sections 21 and 103 of the Broadcasting Act 1990, where similar definitions are used in the context of changes of control over Channel 3 or Channel 5 licences or national analogue radio licences soon after they are awarded, or within a year of the service commencing.
I beg to move.
On Question, amendment agreed to.
Lord Evans of Temple Guitingmoved Amendment No. 295:
Page 301, line 15, leave out "to be likely to be" and insert "is likely to become"
On Question, amendment agreed to.
Clause 344, as amended, agreed to.
Clause 345 agreed to.
Clause 346 [Changes of control of Channel 5]:
Lord Evans of Temple Guitingmoved Amendments Nos. 296 and 297:
Page 303, line 34, leave out from beginning to "in" in line 35 and insert—
"(ii) is involved, to a substantial extent, in the provision of the programmes included"
Page 303, line 36, leave out "to be likely to be" and insert "is likely to become"
On Question, amendments agreed to.
Clause 346, as amended, agreed to.
Clause 347 agreed to.
Clause 348 [Variation of local licence following change of control]:
Lord Evans of Temple Guitingmoved Amendment Nos. 298 and 299:
Page 305, line 20, leave out from beginning to "in" in line 21 and insert—
"(ii) is involved, to a substantial extent, in the provision of the programmes included"
Page 305, line 22, leave out "to be likely to be" and insert "is likely to become"
On Question, amendments agreed to.
Clause 348, as amended, agreed to.
Clause 349 agreed to.
Baroness Buscombemoved Amendment No. 299A:
Before Clause 350, insert the following new clause—
"MEANING OF "CONTROL"
(1) Paragraph 1 of Part I of Schedule 2 to the 1990 Act shall have effect subject to the following amendments.
(2) For sub-paragraphs (3) and (3A) there shall be substituted—
"(3) For the purposes of this Schedule a person has control of a body corporate if that person is able, or it is reasonable to expect that person to be able, directly or indirectly to ensure that the affairs of a body are conducted in accordance with that person's wishes.
(3A) In determining whether a person controls a body corporate all relevant circumstances shall be taken into account including the level of participation in the body corporate of that person and the level of participation of other participants in the body.
(3B) Without prejudice to the generality of sub-paragraph (3)—

(a) a person has control of a body corporate if that person is beneficially entitled to more than 50 per cent of the equity share capital in the body or possesses more than 50 per cent of the voting power in it, and

(b) a person has control of a body corporate if that person is beneficially entitled to 50 per cent of the equity share capital in the body or possesses 50 per cent of the voting power in it, and is party to an arrangement with another participant in the body corporate under which they agree to exercise their voting power or any of it in a particular way either generally or in relation to any particular issue or not to exercise their voting power or any of it in relation to any particular issue."

(3) After paragraph 3 there shall be inserted—
"3A (1) In this paragraph "guidance on control" means guidance on the matters which OFCOM consider should be taken into account in determining whether any person controls a body corporate within the meaning of paragraph 1(3) to (3A) above.
(2) In determining the question whether a person has control of a body corporate account shall be taken of any published guidance on control.
(3) OFCOM shall prepare guidance on control and shall publish a draft of the guidance in such manner as they consider appropriate for bringing it to the attention of persons who in OFCOM's opinion are likely to be affected by such guidance.
(4) OFCOM shall also publish, together with the draft, a notice that any person may make representations to OFCOM on the draft within such period as may be specified in the notice, not being less than one month from the date of publication.
(5) OFCOM shall take account of the representations made within the specified time in preparing the guidance on control and shall publish the guidance, not later than 3 months from the last day on which representations may be made under sub-paragraph

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(4), in such manner as they consider appropriate for bringing it to the attention of persons who in OFCOM's opinion are likely to be affected by such guidance.
(6) OFCOM shall keep the guidance on control under review and may publish revised guidance from time to time; and subparagraphs (3) to (5) above shall apply to any such revised guidance as they apply to the original guidance, with any necessary modifications.""
The noble Baroness said: I shall speak to Amendments Nos. 299A and 300 and the Question whether Clause 350 should stand part of the Bill.
In relation to Amendments Nos. 299A and 300, on Report in another place similar amendments were tabled by my honourable friend Mr John Greenway. Although there was time to hear the reason for tabling the amendments, there was no time available for the Minister's reply. Therefore I return to the issue. I shall begin with the Government's introduction in Clause 350(2) of' a presumption of control in relation to any person with a holding of 20 per cent or more of shares or voting rights. As has been made clear in another place, there are significant concerns that the provision places on companies undue obligations that do not exist at present and that the 20 per cent figure is arbitrary and unjustified.
Starting at the level of general principle, it seems wrong to require companies to prove that they do not have control when they have an interest of between 20 and 50 per cent, rather than for the regulator to prove that they do, as is the case at present. It runs against the tried and tested principle that a person is innocent until proved guilty. For the principle to be reversed, some extremely important issue must be at stake, which we do not believe exists in this case.
The Government have already presented their justification for the change. In Committee in another place they argued that the 20 per cent figure was consistent with the application of the 20/20 cross-media ownership rule, and that it was in the range of shareholdings that the OFT and Competition Commission are likely to scrutinise as constituting a possible material influence under the mergers legislation of the Enterprise Act 2002. They also pointed out that, in the United States, persons with more than a 5 per cent stake in companies without a majority shareholder are deemed to have control.
However, those justifications are unconvincing. We have already debated today the 20/20 cross-media ownership rule, which in itself is arbitrary and unjustified. It is true that under the Enterprise Act 2002, there is the ability for the OFT to take into account more than a 20 per cent interest in deciding whether control exists, but it is still for the OFT to prove that it exists. In that respect, it is no different from the approach that the ITC can apply today. In neither case, however, is there a statutory presumption, which has to be proved to the contrary, that control exists at more than 20 per cent. The Government must explain why the difference in approach is justified. It is also true that in the US a 5 per cent presumption of control exists where companies do not have a major stakeholder. But that
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is hardly a justification for a rigid 20 per cent threshold in the UK, regardless of whether there is a major stakeholder.
We should be clear that we are not arguing that control should never be shown to exist at 20 per cent, or even at 5 per cent. We argue that a system of regulation is needed whereby Ofcom investigates each case on its particular merits and has the onus of demonstrating such control where it concludes that it exists. On that point, I shall give an example of government ownership regulation that is inconsistent with the 20 per cent presumption. The intention to increase the limit on ITN ownership from 20 per cent to 40 per cent indicates in this instance that the Government believe that 40 per cent ownership will not give control. They have argued that a 40 per cent limit is still necessary because they do not want to see a single body in control of ITN. That contradicts the Government's position on Clause 350. I hope that the Minister will be able to provide clarification in that regard. It all seems so arbitrary; it does not make sense.
The second area of concern that my new clause seeks to address relates to the changes to the meaning of "control" introduced under Clause 350(1). Part I of Schedule 2 to the 1990 Act currently defines "control" as,
"having regard to all the circumstances, to expect that he will be able, by whatever means and whether directly or indirectly, to achieve the result that the affairs of the body are conducted in accordance with his wishes".
That is, at 50 per cent. Clause 350(1)(a) changes that to the following:
"although he does have such an interest in the body, it is reasonable, having regard to all the circumstances, to expect that he would (if he chose to) be able in most cases or in significant respects, by whatever means whether directly or indirectly, to achieve the result that affairs of the body are conducted in accordance with his wishes".
Our concern is that those changes give Ofcom much greater latitude in deciding whether a person controls a body. The phrase, "would (if he chose to)" would allow Ofcom to second-guess the behaviour of the person. "In most cases" could allow it to dismiss arguments that disprove a particular conclusion and in significant respects. Moreover, "affairs" (as opposed to "the affairs") would allow Ofcom to make judgments on only parts of a company's business. What is meant by the word "significant", for example? What will happen if individuals take a genuine view that something is not significant, but Ofcom takes the view that it is significant?
The much looser definition could, for example, mean that a chief financial officer or chairman of an audit committee was deemed to control a business simply because he would be able to expect that, in "significant respects", the company would do as he said. Indeed, any director with specific managerial responsibilities is likely to be able to make the company carry out his wishes so far as they relate to those responsibilities. Can that director be described seriously as controlling the company just because he has that kind of influence? We do not believe that such

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a significant loosening of the definition, and the greater degree of uncertainty in decision-making that it will cause, is either justified or proportionate.
As I noted previously, the Government claim that the revisions are justified because the previous definition was "insufficiently robust" and would,
"make it too easy for people to set up arrangements that, under the rules, would not be deemed to give them control, even though in practice it would be clear that they had control".
Yet no evidence of such avoidance practices has been presented to justify those claims. Yes, the Government have reduced the number of ownership rules, as they pointed out during the debate on the issue in Committee in another place, but that is not on its own sufficient justification for the proposed changes. Such changes should be proportionate to the identified need, which has not up to now been identified. I hope that the Minister will be able to shed further light on the area, and not just repeat the arguments made in previous debates.
I have also tabled Amendment No. 300 in order to probe the Minister further on a point raised previously in Committee in another place. Rather than the Government's proposed changes to the meaning of control, the amendment proposes that the words,
"to achieve the result that the affairs of the body are conducted in accordance with his wishes",
are replaced with,
"to control or materially to influence the policy of the body".
That wording is the same as that used in Section 26(3) of the Enterprise Act 2002, which defines enterprises ceasing to be distinct enterprises.
Finally, I wish to press the Minister on the question of consultation on matters that will be taken into account by Ofcom when determining whether a person has control of a body. As drafted, Clause 350(4) simply requires Ofcom to publish guidance setting out its intentions in that area, which I think is insufficient. My new clause seeks to ensure that, before Ofcom publishes any guidance, or revised guidance, it issues that for consultation. That guidance will be of great importance, reflecting Ofcom's policy towards control and the factors that it will take into account when assessing whether there is control. In order to ensure that such guidance is appropriate and encompasses all relevant factors, and so that it has the support and understanding of those likely to be affected by it, their views should be considered prior to Ofcom's publication of such guidance.
The Government's reasons for rejecting the proposal in Committee in another place were unconvincing. I agree, as was argued, that the need for consultation depends on the importance of the issues at hand, but that is no reason why there should be no consultation at all on what is by any standards an important area of policy. Furthermore, just because the principles of better regulatory practice encourage consultation, they do not require it, and there is no certainty that such a route will be adopted in that area when the time comes—that is, unless we can change that on Report.
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Finally, I would say that it verges on the paranoid to argue, as the Government have, that consultation will allow less scrupulous operators the opportunity of staying one step ahead of the game in respect of the new arrangements to get around the ownership rules. Such an argument could surely be applied to any form of consultation, which would be ludicrous. I urge the Government to think again on the proposal. The additional burden on the regulatory process would be entirely justified in this instance by gains in transparency and confidence in the regulatory process. I beg to move.
6.15 p.m.
Lord Gordon of Strathblane: I shall speak briefly to Amendment No. 300A, which is grouped with the noble Baroness's amendment.
I agree with the "innocent until proved guilty" point. I also think that 20 per cent is the wrong figure and could produce a degree of confusion. After all, the City regards 30 per cent as the trigger for requiring a full takeover bid. In other words, control lies at about 30 per cent. Likewise, over the years, the Radio Authority has regarded 30 per cent as the figure for control. There is a history of dealing with the 30 per cent figure, and I cannot see why we are suddenly reducing it to 20 per cent.
Lord Eatwell: I speak to Amendment No. 300B, which is also in the group. I remind the Committee of the declaration of interest that I made a few moments ago.
The amendment addresses the Government's position on minority shareholdings that act as a trigger for consideration of control. My amendment would correct what I thought was an unfortunate slip in the drafting, but, given the experience that I had with the amendment that I moved a few moments ago, it may not have been a mistake after all. The amendment would correct an error in the drafting as to the use and effect of the trigger. Most importantly, the clause, as drafted, lies entirely outwith UK regulatory practice. It is, for example, inconsistent with practice under the Financial Services and Markets Act 2000.
Clause 350 amends Schedule 2 to the Broadcasting Act 1990 to enable Ofcom to treat a person as having control of a company if he or she has a minority shareholding of only 20 per cent. Ofcom would not have to provide any evidence that the person had such control. The burden of proof is placed on the minority shareholder to prove that he or she does not have control of the company. Not only is that offensive to our standards of natural justice and contrary to British regulatory practice; it is also economically inefficient. It discourages investment in the industry and could clog up Ofcom with requests for prior clearance of investment decisions.
My amendment would remove those distortions from the process by requiring Ofcom to advance some reasonable grounds for believing that the possession of

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a minority shareholding of one fifth of a company's share capital provided a person with control of the company, as is, for example, typical in the Financial Services and Markets Act. There must be reasonable grounds, rather than a simple assumption that that is the case. The person would then be given the opportunity to consider those grounds and, if they can, rebut them.
Clause 350 provides the regulator with a power that is open to abuse. The amendment would correct the position as regards the issue of control.
Lord Razzall: I shall add one comment to those that have been made, but I shall not detain the Committee long.
Several pertinent questions have been asked of the noble Baroness. I look forward to her answer. I shall add one more: is she happy that the definition of control—either amended in the various ways proposed or unamended—deals with something that is a concern in other jurisdictions, of which I would pick out Australia as being typical, where it has been the practice for control of media companies to be disguised by the use of offshore trusts? Is she satisfied that, under the provisions in the Bill as it stands or amended as proposed by the noble Baroness and the noble Lord, such questions will be dealt with by the definition of control?
Lord Crickhowell: I shall not speak for long but this is an important matter. It was not a subject for consultation by the Government. It came as a surprise to most of those involved and reverses the onus of proof. I entirely agree with the point made by the noble Lord, Lord Eatwell. It is likely to have a potentially damaging impact on investment, particularly at a crucial moment when companies are developing from a small base. Coming from a government who have always said they wish to encourage investment, this seems perverse. I agree with the points made by my noble friend Lady Buscombe.
As to which amendment I would pick, I admit to not having very strong views. I like the amendment of the noble Lord, Lord Eatwell, for its simplicity and because it switches the onus of proof. That has some virtues. This is a clear case where the Government can come forward with a workable solution. Throughout the day the Minister has been unresponsive. She has found a reason to deny almost every suggestion that has been made. She is piling up an enormous raft of trouble for Report stage. I suggest that this is an occasion when she should understand that it would be perfectly possible for the Government to come forward with a more acceptable solution. If they do, they will remove that subject from lengthy debate at Report.
Baroness Blackstone: The 1990 Act, as amended by Clause 350, supplies a definition of where a person has control over a body even though they do not hold more than a 50 per cent interest. The intention is to allow the regulators to consider cases where a person has substantial control over a body without that being
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reflected fully in formal or legal terms, such as in a minority shareholding. The regulator is to look at all the circumstances to determine whether that person is reasonably to be regarded as having such control of that body.
I shall start with Amendments Nos. 300A, 300B and the first part of new Clause 229A. An amendment to Schedule 2 to the 1990 Act made by Clause 350(2) means there would be a presumption of control in relation to any person with a holding of 20 per cent or more of shares and voting rights. I am aware that there are many objections to this presumption of guilt. Having considered the arguments—the noble Lord, Lord Crickhowell, always poses his question at the right point—I am prepared to consider this further with a view to bringing forward amendments at Report stage to remove this presumption. They will place those with an interest in a media company in a similar position to those with a holding in any other enterprise. I therefore hope that Amendments Nos. 300A, 300B and the first part of 299A will not be pressed. I hope this meets the point raised by my noble friends Lord Eatwell and Lord Gordon of Strathblane.
Turning to Amendment No. 300, spoken to by the noble Baroness, Lady Buscombe, it is important to recognise that the Enterprise Act and the Broadcasting Act are different acts with different purposes. The relevant provisions of the Enterprise Act are concerned with merger control, while the Broadcasting Act provisions are concerned with safeguarding plurality. There is no necessary reason why their definitions of control should be expressed in the same way. That is the answer to the question asked by the noble Baroness.
I am quite sure that the words in the Enterprise Act were carefully chosen and that they achieved the required result in that context. That does not mean that they should be adopted in the different context of media plurality. The provisions in the Broadcasting Act have worked effectively since 1996. Those who operate them and on whom they operate, know how to interpret them. The purpose of Clause 350 is not to make any substantial change in those provisions, but simply to clarify them. Therefore, I can see no reason to abandon an established form of words in one context for a different form of words from a different context. Both formulations do the job for which they were intended: if something is not broken, you do not fix it.
I return to the rest of the proposed new clause in Amendment No. 299A. As the Committee will be aware, Clause 350 already requires Ofcom to publish and, from time to time, revise guidance on the matters that will be taken into account when considering questions of control. Subsection (3) onwards of the new clause would also require Ofcom to consult on the guidance in draft and give a timetable in that respect.
I recognise that Ofcom is required in some cases to consult on draft guidance. However, that is not always the case. It depends upon the importance of the issue.Further, Clause 3 requires Ofcom to adopt "best regulatory practice". Therefore, even where the Bill

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does not require it, I should imagine that Ofcom will choose to consult on guidance in many cases. In my view, it is really a question that can both safely and sensibly be left to Ofcom to decide. After all, we are talking about pretty technical issues. It is not obvious that consultation would always be of real benefit.
The proposed clause would also make the guidance much more prescriptive by making it include the factors that Ofcom consider,
"should be taken into account".
Clause 350 deliberately makes it clear that the factors in the guidance need not be exhaustive. This is because companies will constantly bring forward new arrangements for avoiding control. No one blames them for that; it is the nature of the game. But it is important that Ofcom should not have its hands tied by over-prescriptive guidance that would prevent it from reaching correct decisions on these new arrangements just because it had not included them in the guidance. The test that matters is whether the person in question could be said to control a body, not whether the arrangements are already set out in the guidance.
As for the specific question raised by the noble Lord, Lord Razzall, I should have thought that matters like offshore trusts would be taken into account. However, I shall check the position and write to the noble Lord to confirm that information.
In the light of my response, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Buscombe: I shall be brief. I thank the Minister for her reply, with which I am somewhat disappointed. As my noble friend Lord Crickhowell said, we are discussing important issues. That is especially so as they were not properly aired in another place. I shall consider with care the Minister's response to all these amendments. Unlike my noble friend, I like all the amendments in the group. I am certainly supportive of the noble Lords, Lord Eatwell and Lord Gordon of Strathblane. Their amendments simply approach the matter from a different angle in an effort to face this most important subject. We are concerned about any proposal in the Bill that would in any way deter investment. That point is tremendously important.
As I said, I shall read and carefully consider the Minister's response in the Official Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 350 [Meaning of "control"]:
[Amendment No. 300 not moved.]
The Deputy Chairman of Committees (Lord Geddes): Before calling Amendment No. 300A, I must advise the Committee that if it is agreed to I shall not call Amendment No. 300B due to pre-emption.
[Amendment No. 300A not moved.]
Lord Eatwellhad given notice of his intention to move Amendment No. 300B:
Page 306, line 38, leave out from "be" to end of line 41 and insert "taken to have control of a body corporate as mentioned in subparagraph (3)(b) if—

(a) he is a participant with a 20 per cent interest in that body or is one with more than a 20 per cent interest in that body;

(b) OFCOM has reasonable grounds to believe that he has such control; and

(c) having been given the opportunity to consider those grounds, he is unable to show to the contrary."

The noble Lord said: I am very grateful for my noble friend's reaction to the remarks that I made. I shall get it right this time: amendment not moved.
[Amendment No. 300B not moved.]
Clause 350 agreed to.
6.30 p.m.
Clause 351 [Annual factual and statistical report]:
Baroness Whitakermoved Amendment No. 301:
Page 308, line 18, at end insert—
"(1) the extent to which news and current affairs programmes included during the period are serving all groups within the community and such international and national coverage is relevant to their interests."
The noble Baroness said: I declare both my interest as the deputy chair of the ITC and its support for the amendment. The amendment echoes the one tabled previously by the noble Baronesses, Lady Howe and Lady Prashar, to Clause 331, for which my noble friend on the Front Bench at the time offered some support.
The amendment is directed at a perceived, serious failing in our news and current affairs programmes. Recent authoritative research by Professor Ian Hargreaves on news and by the BBC, the BSC, the ITC and the Radio Authority, shows that broadcasting content simply does not reflect the world and the interests of minority parts of our multicultural society. The news research shows that less than half think TV news represents all sections of society fairly. It shows that black and Asian viewers trust the impartiality of TV news significantly less than white viewers and that it is often felt to be not relevant to their interests.
The joint research shows a widespread perception of tokenism, negative stereotyping, unrealistic and simplistic portrayals of particular communities and negative or nonexistent images of countries or areas of origin. The reasons people wanted proper and more sensitive coverage were, principally, three: to demonstrate a sense of belonging within our society; to foster a better understanding of minority cultures; and—very important—to allow children to identify with positive representatives of people from their communities.
These are important social objectives. To abandon them to the inertia of the status quo would contribute to undermining both order and a sense of freedom. It will be an easy matter for Ofcom to include among its annual reporting obligations regular research of the

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kind I have referred to on how far news and current affairs programmes met the needs of all our communities. I beg to move.
Viscount Falkland: We on these Benches broadly support the noble Baroness's amendment, particularly with regard to the young in ethnic communities in this country and, beyond that, in the way that she has described. We particularly support her desire to avoid the inertia of the status quo. That is always a danger, and I am sure the regulatory body will be well aware of it. We support the sentiments behind the amendment.
The Lord Bishop of Manchester: As Members of the Committee will know, I serve in an area of the country where there are very many different ethnic communities. I warm to the point that the noble Baroness, Lady Whitaker, has made. I imagine it would be easy to include this proposal, and I hope that it gets a favourable response from the Minister.
Lord Evans of Temple Guiting: This amendment would require Ofcom, in its annual statistical and factual review, to consider whether news and current affairs programming is serving,
"all groups within the community and such international and national coverage is relevant to their interests".
This annual statistical review, which is essentially quantitative, is the wrong vehicle to get at this more qualitative judgment. We believe the intention behind the amendment is entirely admirable, but this is not the best way to achieve what my noble friend wants. It would not be in keeping with the general purpose of this clause to require Ofcom to review a qualitative issue such as whether news and current affairs programming is relevant to the interests of all communities. The general purpose of Clause 351 is to produce a statistical and factual review of the whole television and radio market.
The factors to be considered by Ofcom are on the whole quantitative and objective, such as the size and behaviour of audiences and the financial condition of the market, rather than qualitative issues. However, we believe that the Bill requires all public service broadcasters to provide programmes which,
"reflect the lives and concerns of different communities and cultural interests and traditions"
in the UK.
In addition, one of the overall purposes of public service broadcasting is the provision of services which are properly balanced and meet the needs and satisfy the interests of as many different audiences as practicable. These provisions, which reflect the aims of the amendment, fall within Ofcom's review and report on public service broadcasting under Clause 260. The review would take place no less frequently than every five years.
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I hope that, for the reasons that I set out, my noble friend Lady Whitaker will feel able to withdraw her amendment.
Baroness Whitaker: I am grateful to the right reverend Prelate and to the noble Viscount, Lord Falkland, for their enlightened support of the amendment.
I must tell my noble friend on the Front Bench that the research to which I referred was in large part quantitative, and I am not entirely sure that I follow him in the split that he made in how Ofcom should account for broadcasters. However, I shall read carefully what he said in Hansard. In the mean time I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 351 agreed to.
Clause 352 [Grants to access radio providers]:
[Amendment No. 302 not moved.]
Clause 352 agreed to. Clause 353 agreed to.
Schedule 15 [Amendments of Broadcasting Acts]:
Baroness Blackstonemoved Amendments Nos. 303 to 306:
Page 440, line 19, leave out "In"
Page 440, line 20, after "licence)" insert "shall be amended as follows.
(2)" Page 440, line 21, at end insert—
"(3) In subsection (2), in the definition of "associated programme provider", for the words from "appears" to "inclusion" there shall be substituted "is or is likely to be involved, to a substantial extent, in the provision of the programmes included"."
Page 450, line 12, after "interpretation)" insert—

"(a) in the definition of "associated programme provider", for the words from "appears" to "inclusion" there shall be substituted "is or is likely to be involved, to a substantial extent, in the provision of the programmes included"; and

(b) in the words after the definition of "the relevant period","

On Question, amendments agreed to.
[Amendments Nos. 307 and 308 not moved.]
Schedule 15, as amended, agreed to.
Clause 354 agreed to.
Clause 355 [Interpretation of Part 3]:
[Amendment No. 309 not moved.]
Clause 355 agreed to.
Clause 356 [Licence required for use of TV receiver]:
[Amendments Nos. 309A to 309C not moved.]
Clause 356 agreed to.
Clauses 357 and 358 agreed to.
Clause 359 [Powers to enforce TV licensing]:
[Amendment No. 309D not moved.]
Clause 359 agreed to.
Clauses 360 and 361 agreed to.
Clause 362 [Matters in relation to which OFCOM have competition functions]:
[Amendments Nos. 310 and 310ZA not moved.]
Clause 362 agreed to.
Clauses 363 to 365 agreed to.
[Amendment No. 310A not moved.]
Clauses 366 to 368 agreed to.
Clause 369 [Adaptation of role of OFT in initial investigations and reports]:
Lord Wakehammoved Amendment No. 310B:
Page 324, line 33, leave out from "daily" to "newspaper" in line 34 and insert "or Sunday"
The noble Lord said: I get the impression that we are moving on rather fast. I shall therefore be as quick as I can. In moving Amendment No. 310B, I shall also speak to my other four amendments in this group. Although the amendments are perhaps out of the wide range of the debate which we have been having all day and arc relatively small in some senses, they are pretty important to the newspaper industry. I should like to say a word or two about them.
Four of the amendments seek to restrict the way in which the public interest regime would be operated in the case of small and local newspapers, a regime which is in my view quite unnecessary for those small and local newspapers. Amendment No. 310F seeks clarification from the Government on exactly what they meant by a concession which they made in another place.
Amendments Nos. 310B and 310C effectively remove from the newspapers that are subject to this regime the weekly newspapers and the smaller newspapers, leaving in fact only daily newspapers. That is very much in line with what the Joint Committee which considered the draft Bill recommended: that there should be a substantial deregulatory outcome for the newspaper industry, whereas I think the Bill as drafted unnecessarily increases the burden on newspapers. The Bill would, for example, put a burden on newspapers with a circulation of fewer than 50,000, including I note with some horror a newspaper that is circulated in my old constituency of Malden which has a circulation of 8.000 copies. I think that that is a very heavy weapon to employ.
There are many reasons why that burden should not fall on local newspapers. The Competition Commission has never found that an acquisition of purely local newspapers raises issues that are against the public interest. The editorial content of local newspapers has to be driven by the views of the local population—otherwise they do not survive—and the burden of compliance on these newspapers is both onerous and in my view unnecessary.
Amendments Nos. 310D and 310E are concerned with restricting the Secretary of State's discretion to intervene in regional and local newspaper transfers to those where the acquiring newspaper owns a 25 per cent share of all newspapers in the United Kingdom or
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the acquiring publisher is to acquire newspapers in some substantial part of the United Kingdom where the publisher already owns a 25 per cent share. So again it is an attempt to restrict the interventions of the Secretary of State in the regulatory regime to those that I think will be of public concern and will avoid unnecessary complications for the smaller newspapers and where there is no public interest likely to arise.
Amendment No. 310F follows a helpful government amendment to the Bill in another place to remove the supply of the newspaper advertising from the criteria that allow intervention on special public interest grounds when examining plurality interests. Despite this change, the industry feels that the width of the interpretive direction given to the decision-making authority by this clause could still enable newspaper advertising share to remain a trigger as a backdoor option under Section 59(6) of the Enterprise Act. Indeed, the illustrative draft of statutory guidance for the operation of the new regime refers to the newspaper advertising. The amendment seeks simply to clarify the Bill and to avoid any future ambiguity in its intentions and applications. I beg to move.
6.45 p.m.
Lord Fowler: I support my noble friend, particularly in Amendments Nos. 310B and 310C. The noble Lord, Lord Borrie, and I debated earlier today the rival merits of the regional and local press. It is worth underlining what my noble friend Lord Wakeham said. Although the amendment appears not to raise some of the profound issues we discussed today under some of the broadcasting amendments, a strong regional and local press is vital to this country. As I suggested earlier, there is no question that public support for and trust in the regional press is very great indeed. All the surveys suggest that it is rather greater than trust in national newspapers. We would be well advised to pay careful attention to that and certainly not to change the rules in any way that would act against the interests of local newspapers.
My concern, as has also been set out in Amendments Nos. 310B and 310C, is that the Government seem to be moving backwards. The Joint Committee on the draft Communications Bill recommended that the Government should have full regard to the need for a substantially deregulatory outcome for the newspaper industry, especially as regards local newspapers. However, far from deregulating the industry, the new regime, in some respects, is rather more restrictive than the present one. The practical implications for the Bill as it is now drafted mean that the transfer of smaller, free and paid-for local newspapers, which would not be subject to the special merger regime under the Fair Trading Act 1973, would be exposed to extended discretionary scrutiny on plurality grounds alone under a new exceptional public interest regime. The proposed regime would increase the scope of discretionary ministerial involvement in newspaper transfers where the newspapers in question have an average daily circulation of under 50,000. That would lead to the anomalous situation in which the transfer of a newspaper with a circulation of 8,000, 9,000 or

1543
10.000 could be treated with the vigour of the special controls together with mergers that threaten national security. That seems frankly to be out of proportion.
The amendments address that issue. To someone such as myself who, in my old days, was a chairman of regional newspapers, the process of going before the Competition Commission, putting forward the evidence and setting it out seems to place a tremendous time and financial burden on any newspaper company that has ever sought to do that. Therefore, the burden of compliance under the new regime would be onerous for smaller weekly and free newspapers. The direct costs that arise can be unduly onerous as well.
I hope that the Minister will listen to the points that have been made, particularly by the Newspaper Society, which is well respected in the regional newspaper industry. It has represented the regional newspaper industry for a long time. I hope that she will listen to it and make some movement towards the amendments proposed by my noble friend.
Baroness Buscombe: I rise briefly to say that I fully support my noble friend's amendments, which would tighten the definition of newspapers so that smaller newspapers are not caught by the special public interest regime. They would also reduce the scope of the Secretary of State's discretion to intervene in cases in which editorial plurality problems are not raised without removing altogether the possibility of intervention. It would be otiose of me even to begin to repeat the words of my noble friends Lord Wakeham and Lord Fowler, who have considerable experience in this area. I hope that the Minister will look favourably on the amendments.
Lord Davies of Oldham: I am grateful for the celerity with which the noble Lord moved this important amendment, and for the succinctness with which the subsequent contributions have been made.
I defer to the vast knowledge of the noble Lords, Lord Wakeham and Lord Fowler, in terms of the newspaper industry but I will not defer to them in signifying my interest in and commitment to the local press; none of us could have served in another place without having a particular relationship with our local newspapers. We know that many criticisms voiced about the national press are singularly inappropriate in relation to local newspapers; they conduct themselves with a degree of partiality and effectiveness, which their bigger brothers and sisters often should take note of in relation to national journalism. We are aware of the reasons for the differences between them.
Amendment No. 310B amends Clause 269, as the noble Lord, Lord Wakeham, said, by deleting references to local newspapers that are published on other than a daily or Sunday basis. Although we believe that our definition could be more elegant, it was drafted in this way to ensure that only local periodicals were subject to the special newspaper merger regime, and not national periodicals, such as the Economist.
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Local periodical titles were included in the definition of a newspaper at the insistence of Parliament during the passage of the Monopolies and Mergers Act 1965, which was the precursor to the Fair Trading Act 1973. That was in recognition of the importance of local newspaper titles and of the fact that the vast majority of such local titles are weekly.
I consider it appropriate that local newspapers should be included in the special newspaper merger regime. I listened carefully to the arguments advanced by the noble Lord. There have been cases under the Fair Trading Act regime where transfers involving local weekly papers have given rise to an adverse public interest finding and it is important that the Secretary of State should continue to be able to address those cases in which public interest issues are raised.
Although previous cases involving local weekly titles have also involved a local daily, it is entirely possible that public interest concerns could arise in a case involving only local weekly titles and the regime should surely have sufficient flexibility to permit scrutiny of such cases where relevant.
Noble Lords will be aware of examples of previous cases involving local weekly titles; they include the DMGT/T Bailey Forman transaction, which the Competition Commission found gave rise to plurality concerns in the East Midlands, and David Sul livan's proposed acquisition of the Bristol Evening Post plc, where the proposed acquisition of a number of weekly titles was blocked on plurality grounds. Issues arise infrequently. We are dealing with powers that would be triggered only on rare occasions but they should. however, be available.
The jurisdictional tests proposed for newspaper mergers are the same as those for the standard Enterprise Act merger regime. The only exception to that is that where there is an existing 25 per cent share of supply of newspapers in at least a substantial part of the UK, plurality issues may be taken into account although there is no increase in the share of supply. I hope that the noble Lord recognises the importance of that. That ability to intervene in newspaper mergers where there is no direct overlap has been introduced because consolidation may not be directly relevant to plurality assessments.
Also, under the proposals set out in the Bill, the very smallest newspapers will be taken out of the regime altogether. The noble Lord, Lord Fowler, emphasised that point. The enterprise acquired needs to have a turnover in the UK in excess of £ 70 million or it must have a 25 per cent supply threshold. So we have a framework which takes out some of the smaller positions.
Amendment No. 310C seeks to amend Clause 369. It would introduce the concept of "substantial". Although the term,
"substantial part of the United Kingdom".
is used elsewhere in the Bill, in relation to t he share of supply test, its omission from this part of the Bill is deliberate. The two tests are intentionally different as they serve different purposes.

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The phrase,
"circulating wholly or mainly in the UK or in a part of the UK",
in the Clause 369 definition of "newspaper" is designed to exclude titles that are predominantly overseas publications but which have some circulation in the UK—for example, the Wall Street Journal or Le Monde. After all, this is only the first step in applying the any jurisdictional test that might be so applied.
However, the share of supply test ensures that having established that a given title is essentially a UK publication, it is only where the newspaper merger involves a share of supply of at least 25 per cent in a substantial part of the UK that the newspaper public interest regime may apply.
Amendments Nos. 310D and 310E are intended to restrict the scope of the special public interest regime for newspaper mergers in such a way that the 25 per cent share of supply must apply to the acquiring company and must be satisfied in the same area as that in which the daily newspapers, if any, of the target circulate.
These amendments would undermine the purpose behind the special public interest regime. This aspect of the regime is intended to enable scrutiny of acquisitions of newspaper titles where there is no overlap in share of supply in the UK or a substantial part of the UK, but where at least one of the parties has a significant presence in at least a substantial part of the United Kingdom.
The amendments would mean that a number of types of acquisition would not be caught by the special public interest regime, even if the track record of the acquirer suggested that the acquisition would be likely to have an adverse effect on accurate presentation of news, freedom of expression of opinion, or plurality of views in newspapers in the UK.
In effect, the amendments would prevent scrutiny under the special public interest regime of acquisitions concerning only local weekly newspapers, acquisitions of a local monopoly, involving daily and weekly titles, if the acquirer does not itself have a 25 per cent share of supply in the same area, and acquisitions of newspapers with a significant share of supply in at least a substantial part of the UK by an overseas purchaser.
I believe that it is important that the Secretary of State should be able to intervene in acquisitions such as these, if it appears that, having regard to the newspaper public interest considerations, such an acquisition may operate against the public interest.
As I have already indicated, we consider that local weekly newspapers play an important part in the communities they serve. To exclude such titles from the ambit of the special public interest regime surely would undermine that role. I stress that the Government are committed to sustaining the role emphasised in terms of the beneficial effect by noble Lords who have contributed to the debate.
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I turn finally to Amendment No. 310F. It seeks to prevent the OFT using newspaper advertising or newspaper advertising revenue when assessing whether or not the share of supply test is satisfied for the purposes of the special public interest regime. The Bill as originally drafted expressly specified that newspaper advertising could be used as a basis for establishing whether the share of supply test was satisfied.
The Opposition in another place tabled amendments to remove express references to newspaper advertising. The amendments caused the Government to reflect further with the OFT as to how it might operate the share of supply tests in the extended jurisdiction regime.
Following discussions with the OFT, we are satisfied that it is not necessary to include an express reference to newspaper advertising in the provisions dealing with the special newspaper public interest regime. Accordingly, in order to avoid any confusion that might be caused by having express reference to newspaper advertising in the special newspaper public interest regime, amendments were tabled by the Government at Report in another place to delete this superfluous wording. Unfortunately, it did not have time to consider these beneficial government changes and as a result we are picking up the consequences, as is so often the case. We consider that it would be inappropriate to require the OFT to use two different methodologies to assess whether or not the share of supply test is satisfied depending on whether the merger falls within the standard merger regime or the special public interest regime. Moreover, that would be contrary to the aim of streamlining procedures between the standard merger regime and the public interest regime, as far as it is possible to do so.
We consider that share of the supply of newspaper advertising or newspaper advertising revenue may be an appropriate measure of economic strength in relation to free newspapers where circulation and distribution figures may not be available or may not be a true indication of the economic strength of the titles in question. We also consider it important that the OFT should be free to use the measure of share of supply that it considers appropriate having regard to the relevant circumstances and regardless of whether the acquisition leads to an overlap in share of supply.
I have dealt at somewhat greater length with the amendments out of deference to the fact that the noble Lord moving them had truncated his remarks and gone to the heart of the issue. I also believed that it was obligatory for me to present the Government's defence of the present situation as fully as I was able to do, within the time constraints under which we are all operating. On the basis of the reply I hope that the noble Lord will be able to withdraw his amendment.
7 p.m.
Lord Wakeham: I am grateful to the Minister for his response. As regards Amendment No. 310F I am happy with his reply, but I am not quite so happy as regards others. because it is overkill, too bureaucratic

1547
and expensive for the industry. The right thing for me to do is to read Hansard and reflect on what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 310C not moved.]
Clause 369 agreed to.
On Question, Whether Clause 370 shall stand part of the Bill?
Lord Wakeham: This probably reveals me in my true colours. As regards my earlier remarks on a previous amendment, I was very supportive of the Bill. I listened to a great deal today and as the debate continued I tended to be more and more supportive of it and less supportive of some of the amendments which were moved. I may find myself in the rather unique position at Report of voting with the Government and against many of my colleagues in the House. I know that it is not normal for a former Chief Whip to say things like that.
Having said that, I agree with the Minister in particular as regards what he said in response to the first debate this morning on Amendment No. 280A. I do not believe that there is any serious dispute about the need to take the public interest into account. The Minister set out the logic of this Bill in a very clear way. Certain parts of the media, television and radio need licences and, quite rightly, the public interest is controlled by the granting, withdrawing or the modifying of such licences.
The Bill is about that important issue. I have not addressed the Committee on that subject at all because I am concerned about the newspaper industry. The newspaper industry does not need licences. Anyone can start one up, but there is still a public interest which has been and continues to be dealt with by competition law. The Bill does not change that and I am happy with that position.
My concern is that the logic set out by the Government is not followed in the Bill in the way that it should be. The Bill gives Ofcom some responsibility for newspapers. I would like to see Ofcom removed from the responsibility of the newspaper industry entirely. I do not think it is wise for a regulator with a primary role in the statutory oversight of broadcasting content and licensing of the electronic media to be involved also in newspaper mergers. There is a danger that Ofcom will become involved in the editorial content of newspapers and indeed in editorial personnel. That is a slippery slope down which we should not tread.
There is no justification for a number of things I heard in today's debate; for example, that newspapers must be unbiased—accurate and truthful, yes, but partisan and prejudiced are in my view the essential stuff of a free press and I wish to preserve those qualities. For that reason, logic indicates that newspapers and their control should be removed from the Bill. 1 am therefore unhappy about Clause 370. My remarks could be repeated about Clauses 373, 375,
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377, 378 and parts of Clause 384. My noble friend Lord Peyton, if he were here, would not be happy with those parts of the Bill.
I suspect that my proposals would make Ofcom a better organisation and that some people who think this is the right way forth are not in a position to say much about it. It is a dangerous slope to seek to bring the newspaper industry into the Bill, with which I have a great deal of sympathy. The Government are handling the television and radio side of it better than perhaps the debate has given them credit for. But I am still very concerned about the effect on the newspaper industry.
Baroness Buscombe: I support my noble friend Lord Wakeham and have added my name to his on all the amendments in this group. As he said, we want to remove Ofcom entirely from responsibility for newspapers. We oppose the clauses concerning newspaper mergers for a number of reasons. I hope that the Minister will look on our arguments favourably, not least because there is a great deal of concern in the industry surrounding the Government's proposals. I believe that the Government are fully aware of that.
The new regime presented in the Bill will mean that four regulators will be involved in making references in investigating the merger and determining what measures should be taken following any reference: the OFT, Ofcom, the Secretary of State and the Competition Commission. We are concerned that a newspaper wishing to become involved in a merger would be required to negotiate with all four regulators on exactly the same matters. Surely that is overly bureaucratic and burdensome for all those involved, not to mention time-consuming for Ofcom.
We therefore propose that Ofcom be taken out of the regime entirely. I appreciate that this may seem to be a drastic measure, but for the reasons I am about to give, we believe that it would be beneficial for newspapers and for the regulators involved.
Concerns have been expressed beyond your Lordships' House that Ofcom's capacity for content regulation might impinge on its activities in other areas. Ofcom will be dealing with sectors in which there has been spectrum scarcity and in which some content regulation has been justified. We would appreciate some reassurance from the Government that Ofcom's content powers will have no bearing on its role in newspaper mergers, and how will they ensure that that is the case. Alternatively, would the Government consider removing Ofcom from the mergers regime entirely?
Does the Minister agree that it is a regressive step to grant a body with a powerful content arm a say in newspaper matters, a body which, with all due respect, is completely out of touch with our tradition of a free press? Does the Minister further agree that the OFT is perfectly well equipped to deal with newspaper mergers in the same way as any competition issue is

1549
dealt with? In fact, does it make sense to leave those who have previously advised the Secretary of State on such matters to continue to do so in the future?
Baroness Blackstone: I am aware of the concerns in the newspaper industry about Ofcom's role in this area. However, the role will be advisory and limited to the specified newspaper public interest considerations set out in the legislation. It will take no decisions and will have no role in newspaper mergers unless the Secretary of State intervenes in a particular case. Furthermore, unlike the OFT's competition analysis, Ofcom's advice on plurality will not be binding on Ministers.
It has been suggested that the advisory role contemplated for Ofcom should instead be carried out by the OFT, which I believe lies behind the remarks of the noble Lord, Lord Wakeham, and the noble Baroness, Lady Buscombe. However, that would be contrary to the thrust of the reforms of merger control set out in the Bill and in the Enterprise Act 2002, which is to establish and empower the OFT as a specialist competition authority.
I should also make it clear that, under the current regime, the OFT has no track record in advising on public interest issues relating to the accurate presentation of the news, freedom of expression of opinion or plurality of views in newspapers in relation to mergers. Instead DTI officials have responsibility for this advisory function under the current special newspaper merger regime, which I think answers the question put to me by the noble Baroness, Lady Buscombe.
As the independent media and communications regulator, Ofcom is the body best placed to advise the Secretary of State on the specified newspaper public interest considerations so as to help her decide whether to make a reference or, following a Competition Commission report, to implement the remedial action required. DTI know-how and expertise in this area can be shared with Ofcom as part of the transitional arrangements for the introduction of the new regime and, over time, Ofcom's expertise in this area will develop.
Ofcom's involvement will also help to make sure that it can comment on the newspaper merger regime when it carries out its triennial review. Such reviews may cover ways in which the regime could be improved and, indeed, whether there continues to be a need for such a regime.
We have also seen repeated assertions in the press that the provisions of the Bill will lead inexorably to regulation of the press. Contrary to those reports, the proposals set out in the Bill do not give Ofcom any role in content regulation. I want to assure the noble Lord, Lord Wakeham, that the Government are not bringing in statutory regulation of the newspaper industry through the back door.
I agree that Ofcom, the Competition Commission and Ministers will be able, indeed will need, to look at the range of views currently available in newspapers in
1550
a relevant market and to consider the track record of the parties to a newspaper merger against the specified newspaper public interest considerations. Similar consideration takes place under the current special newspaper merger regime. I could give the Committee a recent example from Northern Ireland but will not take up time doing that now.
It should also be borne in mind that the merger control regime assesses the impact of structural changes. Assessing whether or not a purchaser is likely to have an impact on accurate presentation of news, freedom of expression of opinion, the plurality of views available in newspapers given the purchaser's track record and, if necessary, imposing remedies to ensure that the public interest is protected following such structural changes is clearly different from ongoing monitoring of content.
The newspaper public interest considerations are only relevant to assessing the impact of a given merger on the public interest and have no relevance outside that context. As a result, Ofcom's advisory role on such issues cannot lead to the sort of creeping regulation feared. It is significant that an advisory role for Ofcom was supported by the pre-legislative scrutiny committee.
Clause 370 agreed to.
Clause 371 [Extension of special public interest regime for certain newspaper mergers]:
[Amendment Nos. 310D to 310F not moved.]
Clause 371 agreed to.
Clauses 372 to 375 agreed to.
Clause 376 [Advice and information in relation to newspaper mergers]:
[Amendment No. 310G not moved.]
Clause 376 agreed to.
Clauses 377 to 382 agreed to.
Schedule 16 agreed to.
Clause 383 [Annual Report on the Secretary of State's functions]:
[Amendments Nos. 311 and 312 not moved.]
Clause 383 agreed to.
Clause 384 [Review of media ownership]:
[Amendments Nos. 313 to 313B not moved.]
Clause 384 agreed to. Clause 385 agreed to.
Clause 386 [General restrictions on disclosure of information]:
Lord Evans of Temple Guitingmoved Amendment No. 314:
Page 335, line 8, at end insert "of the United Kingdom"
The noble Lord said: In moving Amendment No. 314, I shall also speak to the other amendments in the group. They correct minor drafting errors, or make small technical amendments to the Bill. Amendment No. 314 makes clear that the words in Clause 386 should be read in accordance with the definitions in Clause 398. Amendment No. 322AZA simply

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translates a number of terms in the Broadcasting Act 1990 that relate to existing telecoms legislation into the language used in Part 2 of the Bill.
Amendment No. 323 is a consequential amendment missed from an earlier amendment made in another place to Schedule 17 (160). Amendment No. 324 brings the language used in the European Parliament (Representation) Act into line with the Bill. Amendment No. 328A is a drafting correction that removes an erroneous "or". Given the lateness of the hour I have been brief, but if any noble Lords would like more details, I would be happy to write to them. I beg to move.
On Question, amendment agreed to.
Clause 386, as amended, agreed to.
Clauses 387 to 397 agreed to.
Clause 398 [General interpretation]:
[Amendments Nos. 315 and 316 not moved.]
Viscount Falklandmoved Amendment No. 316A:
Page 348, line 8, after "or insert ", or in connection with,"
The noble Viscount said: I speak behalf of my noble friend Lord Razzall who is not in the Chamber. This is a minor, drafting amendment to amplify the existing definition of consumers in a market for a service. I have some optimism that the Government will be sympathetic to the amendment. I beg to move.
Lord Evans of Temple GuitingThe Government are sympathetic to the amendment and are most grateful to the noble Viscount.
On Question, amendment agreed to.
Clause 398, as amended, agreed to.
Clause 399 agreed to.
Schedule 17 [Minor and Consequential Amendments]:
[Amendment No. 317 not moved]
Schedule 17 agreed to.
Schedule 18 [Transitional Provisions]:
Lord Crickhowellmoved Amendment No. 317A:
Page 529, line 32, at end insert "or
(c) for any right or obligation to arise,"
The noble Lord said: In moving this amendment, I shall speak also to Amendments Nos. 317B and 317C. These have been prompted by the advice of a very distinguished group of lawyers. Many thousands of commercial agreements have been entered into where there is the provision that in the event of a party losing its telecoms licence, that agreement may be terminated or may even come to an end automatically. Obviously, when they entered into the agreement, the parties did not have in mind the circumstances of licence loss now being created by the Bill, which is abolishing the licence regime and replacing it with something else.
To avoid problems arising and many agreements being unintentionally terminated or revoked, the Government have inserted a provision to the effect
1552
that the loss of licence created by the implementation of the directives by the Bill shall not be effective to trigger such clauses in commercial agreements—
Lord Davies of Oldham: In the interests of time, we see merit in these amendments and will consider them. Perhaps that may help the noble Lord.
Lord Crickhowell: I wondered whether the Minister might rise to curtail this debate. These are important amendments with a very good pedigree behind them. I am grateful to the Minster and look forward to seeing the emergence of what he referred to. I beg to move.
Lord Avebury: As the Minister is in such a good mood, I hope that he will say something nice about my amendment, which follows on from an earlier debate. The Minister is nodding his head so I know he is aware of what I am about to say. The noble Lord, Lord McIntosh of Haringey, had written to me saying that he hoped to have some good news for me. Therefore I will not make the speech that I had prepared. I shall listen to the noble Lord instead.
Lord Davies of Oldham: The noble Lord will not have to listen to me for very long. I was merely going to say that my noble friend Lord McIntosh of Haringey had indeed written. We did not think we had given the appropriate reply to the earlier debate on this issue and the amendments of the noble Lord. I would like to assure him that we will consider his amendment in the same vein as those of the noble Lord, Lord Crickhowell. I hope both noble Lords will not press their amendments.
Lord Crickhowell: I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 317B to 318 not moved]
Lord Davies of Oldhammoved Amendment No. 318A.
Page 531, line 39, leave out from "applies" to end of line 40 and insert "where OFCOM give a continuation notice to the holder of a licence granted under section 7 of the 1984 Act."
The noble Lord said: I beg to move Amendment No. 318A and to speak to Amendments Nos. 318B to 318F, 319A to 319E and also to comment on Amendment No. 319.
As far as Amendment No. 319 is concerned, the Government agree in principle with the intention behind that amendment. These are government amendments meant to address this issue, we hope satisfactorily as far as Amendment No. 319 is concerned. This aims to secure that where the conclusion of the relevant market review is that it would not be appropriate to impose an SMP condition on the relevant person, Ofcom should then terminate the continued obligation. We agree that this is appropriate. I confirm that this will be one of the effects of the government amendments which I now move on behalf of the Government.

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This has arisen because we have some difficulties with regard to time in relation to European directives and our compliance with them. If we are not to have an unacceptable lacuna in important existing regulatory requirements—including the BT price cap—it becomes necessary to provide for the transitional continuation of a wider class of existing licence conditions. This does however have the advantage that it eases the timetable constraints for the market review process, thus meeting a significant concern on the part of the industry.
Amendments Nos. 319D and 319E are merely consequential on the amendments which I sought to move. We think that these are appropriate and necessary modifications to meet the new timing constraints impacting particularly on the process of market review which is required by the EC directives. I beg to move this amendment and hope that the noble Lord, Lord Avebury, will not press Amendment No. 319.
Lord Avebury: I am grateful to the Minister for what he said about Amendment No. 319. However, do I gather that the Government do not contemplate adding any particular words into the Bill such as those we propose in this amendment? If that is the case, we are not clear that the clause is to be construed as if the words in the amendment were added. Would it be able to take account of a case where Ofcom has decided not to apply SMP conditions? In such a case, if Ofcom, having made that decision, does not serve a notice, then can the Minister confirm that the failure to do so would be subject to appeal, and where is that to be found in the Bill?
Such an appeal would be bound to succeed, thus effectively placing Ofcom under an obligation to issue the notice. It would surely be more straightforward and kinder to those who have to understand what is already a horrendously complicated piece of legislation to spell that out in plain English.
7.30 p.m.
Lord Davies of Oldham: I understand the noble Lord's point. He will recognise that we are seeking to address that issue by way of amendment. However, we have a little time left to us as far as concerns the passage of the Bill. I shall happily write to the noble Lord with such reassurance, and shall fill in the details as regards the matter he raised.
Baroness Buscombe: I rise to seek some reassurances from the Government on the issue. I make it quite clear at the outset that I find the whole area reasonably technical and quite difficult. However, we are discussing important amendments. There is no question of our being unhappy with the amendments. In the same sense expressed by the noble Lord, Lord Avebury, we, too, have concerns about interpretation. Therefore, we are looking to the Government for assurances.
As we understand it, the Government's amendments to Schedule 18 seek to provide the Director General of Telecommunications with the
1554
power to issue notices to continue certain licence conditions beyond 25th July 2003, once the Telecommunications Act licences have been abolished, as is required by the EC electronic communications directives. The four GSM mobile operators—O2, Orange, T-Mobile, and Vodafone—are looking to us for assistance to obtain confirmation from the Government that there will be circumstances where Amendments Nos. 318A to 318F will not allow continuation notices to be issued for licence conditions that are in place on 24th July 2003.
Article 7(1) of the access directive is clear that national regulatory authorities are obliged to maintain obligations that,
"were in force prior to the date of entry of this Directive".
The directive came into force on 24th April 2002. The corollary of that obligation is that national regulatory authorities should not issue continuation notices for any conditions that have been imposed after that date. A particular example that concerns the four mobile operators is,
"the control of interconnection charges"—
a condition introduced by Oftel on 4th April 2003, after a review by the Competition Commission—nearly a full year after the access directive came into force.
Amendments Nos. 318A to 318F should not alter Oftel's position, as described in its submission to the Competition Commission in June 2002. Oftel stated then that a,
"licence condition proposed by the Competition Commission and imposed by the Director General. will fall away on 25th July 2003".
Oftel also said that it,
"can impose a 'replacement' condition to take effect from 25th July 2003, following a market review".
Oftel has commenced such a review, and the initial consultation period will end on 24th July 2003. If appropriate, any replacement condition should flow from the review within the next few months.
In addition, the four mobile operators to which I referred seek further clarification that this is what the Government believe should happen, and that no continuation notice for this condition will be issued on the basis of Article 7(6) of the framework directive—that is, where it is an exceptional and urgent case. We believe that that would not be appropriate or proportionate, bearing in mind that the due process is already in train.
Lord Davies of Oldham: As I indicated to the noble Lord, Lord Avebury, when he moved Amendment No. 319, these are very technical and complex matters. We have a little time before we need to reach a definitive position on the Bill, so if the noble Baroness will allow me, I shall write to her before Report with our response to the very important position that she has adopted and the points she has made in her contribution to this debate.
Baroness Buscombe: I am grateful to the Minister, and hope that he will write to us before Report, as he says, so that we can review the situation then.

1555
On Question, amendment agreed to.
Lord Davies of Oldhammoved Amendments Nos. 318B to 318F:
Page 531, line 41, leave out from first "that" to "has" in line 15 on page 532 and insert "a provision contained in a condition of the licence is to have effect, after the abolition of licensing—

(a) to the extent specified in the notice; and

(b) subject to such modifications (if any) as may be so specified.

(2A) OFCOM are not to give a continuation notice except to the extent that they consider that provision to which it will give effect, as modified by the notice, ("the continued provision") corresponds to provision of one or more of the following descriptions—

(a) provision that they have power to include in SMP conditions;

(b) provision authorised by section 70(2) or (4) for inclusion in access-related conditions;

(c) provision relating to matters mentioned in Article 16 of the Universal Service Directive or Article 7 of the Access Directive.

(2B) A continuation notice relating to provision corresponding to anything that OFCOM have power to include in SMP conditions—

(a) may identify the market by reference to which an SMP condition replacing the provision would have to be set; and

(b) in so far as the provision corresponds to anything that OFCOM have power to include only in SMP apparatus conditions, must do so.

(2C) OFCOM arc not to give a continuation notice relating to provision corresponding to anything that OFCOM have power to include only in SMP apparatus conditions except to the extent that it"
Page 532, line 18, leave out "that condition" and insert "the continued provision"
Page 532, line 18, at end insert—
"(2D) The modifications for which a continuation notice may provide—

(a) must be confined to modifications for the purpose of securing that the provision to which they relate continues to have effect for so long as the notice is in force; but

(b) in the case of provision which is expressed to impose a requirement to be met before the abolition of licensing, may include a modification under which that requirement must continue to be met for so long as the notice remains in force."

Page 532, line 20, leave out from beginning to "remain" in line 24 and insert—

"(a) the continued provision,

(b) every provision made by a direction, determination or consent given or made for the purposes of the continued provision, and

(c) so far as necessary for giving effect to anything mentioned in paragraph (a) or (b), every provision made by or under the licence under the 1984 Act that is not so mentioned,

are to"
Page 532, line 27, leave out sub-paragraphs (8) to (10) and insert—
"(7A) Where the continued provision is one that OFCOM have power to include only in an SMP apparatus condition, it shall be their duty, as soon as reasonably practicable after giving the continuation notice—

(a) to carry out an analysis of the market which, under subparagraph (2B), is identified in that notice;

1556

(b) to take all other steps necessary for enabling them to decide whether or not to set an SMP apparatus condition by reference to that market for the purpose of replacing the continued provision; and

(c) to decide whether or not to exercise their power to set such a condition for that purpose.

(7B) In the case of every other continued provision, it shall be OFCOM's duty, as soon as reasonably practicable after giving the continuation notice—

(a) to take all steps necessary for enabling them to decide whether or not to set a condition of any other description under Chapter 1 of Part 2 of this Act for the purpose of replacing the continued provision; and

(b) to decide whether or not to exercise their power to set a condition under that Chapter for that purpose.

(7C) It shall be the duty of OFCOM—

(a) as soon as reasonably practicable after making a decision required by sub-paragraph (7A) or (7B), but

(b) in a case where that decision is a decision to set a condition, not before the coming into force of that condition,

to give a notice under sub-paragraph (7) with respect to the continuation notice.
(7D) The duties imposed by sub-paragraphs (7A) to (7C) apply only where OFCOM have not previously given a notice under subparagraph (7) with respect to the continuation notice in question.
(7E) This paragraph has effect in the case of a licence granted under section 7 of the 1984 Act to persons of a particular class as if—

(a) references to the holder of that licence were references to the members of that class; and

(b) the manner in which a continuation notice or notice under sub-paragraph (7) is to be given to members of that class were by its publication in such manner as, in OFCOM's opinion, is appropriate for bringing it to the attention of the members of that class who are affected by the notice."

On Question, amendments agreed to.
[Amendment No. 319 not moved.]
Lord Davies of Oldhammoved Amendments Nos. 319A to 319E:
Page 533, line 8, at beginning insert "Sub-paragraph (1A) has effect"
Page 533, line 14, leave out from "2003/330)" to "in" in line 15 and insert
"(1A) If, at any time after the commencement of section 42. OFCOM—

(a) are satisfied that a procedure has been followed in relation to the proposal that satisfies the requirements of Article 7 of the Framework Directive, and

(b) publish a notification to that effect in such manner as they consider appropriate for bringing it to the attention of the persons who, in their opinion, arc likely to be affected by the proposal,

the proposal (with such modifications, if any, as are specified in the notification) is to have effect, from the publication of the notification,"
Page 533, line 45, at end insert—
"( ) Section 189 applies to a decision by OFCOM to publish a notification under this paragraph as it applies to a decision by them under Part 2 of this Act.
() In this paragraph "the Framework Directive" has the same meaning as in Chapter I of Part 2 of this Act."
Page 534, leave out line 39 and insert—
"(a) any provision to which effect is given, after the abolition of licensing, by a continuation notice"

1557
Page 535, line 4, leave out "the conditions" and insert "anything"
On Question, amendments agreed to.
[Amendment No. 320 not moved.]
Lord Evans of Temple Guitingmoved Amendment No. 320A:
Page 540, line 2, at end insert—
"(1A) Where a dispute—

(a) has arisen or arises about anything occurring or existing before the time when the revocation of those regulations comes into force ("the relevant time"),

(b) relates to matters disputes about which would (before that time) have been referable to the Director under regulation 6,

(c) is neither a dispute which was referred to him before that time nor a dispute arising after that time which is referable to OFCOM under section 182, and

(d) is referred to OFCOM after that time either during the transitional period or in a case in which OFCOM are satisfied that the circumstances that prevented the making of a reference before the end of that period are exceptional,

sub-paragraph (1) is to have effect as if the dispute were a dispute arising before the relevant time in the case of which a reference to the Director had been made under regulation 6 before that time."
The noble Lord said: What I have to say now is known as the Pepper v. Hart statement—that is, a statement about the meaning of the Bill which is intended to be relied upon in courts if there is any doubt about its correct interpretation.
Doubts have been expressed in this House, in another place and elsewhere as to whether the Bill clearly provides that decisions taken by the Secretary of State or by Oftel in exercising any Ofcom function in the transitional period envisaged by Clause 401 is subject to appeal under Clause 189—that is, to a full appeal on the merits. Our view is that this is indeed the effect of Clause 401. Subsection (2) provides that in relation to any such exercise of Ofcom's functions, references in the Bill to Ofcom are to have effect as references to the Director General of Telecommunications or to the Secretary of State, as the case may be. This is as much in respect of references to Ofcom in Clause 189 as in respect of any other references in Part 2 of the Bill.
I hope that noble Lords will find this statement helpful and will not press Amendment No. 320AA. I beg to move.
[Amendment No. 320AA, as an amendment to Amendment No. 320A, not moved.]
On Question, Amendment No. 320A agreed to.
Lord Davies of Oldhammoved Amendments Nos. 320B to 320G:
Page 540, line 4, after "(1)" insert or "or (1A)"
Page 540, line 16, at end insert—
"( ) But OFCOM are not to give a direction by virtue of subparagraph (2)(a) containing provision which they would have no power to include in—

(a) a condition set under Chapter 1 of Part 2 of this Act; or

(b) a direction under section 187."

1558
Page 540, line 25, leave out from "consider" to end of line 27 and insert "that the direction makes provision corresponding to that which they have power to include in—

(a) conditions set under Chapter 1 of Part 2 of this Act; or

(b) directions under section 187."

Page 540, line 29, leave out from beginning to end of line 30 and insert "(in whole or in part) a direction which—

(a) was given by virtue of sub-paragraph (2)(a); or

(b) is a direction to which a notice under sub-paragraph (4) relates."

Page 540, line 30, at end insert—
"(6A) Where a direction which OFCOM have power to revoke under sub-paragraph (6) makes provision corresponding to anything that OFCOM have power to include in a condition set under Chapter 1 of Part 2 of this Act, it shall be their duty, as soon as reasonably practicable after giving the direction or as the case may be the notice under sub-paragraph (4)—

(a) to take all steps necessary for enabling them to decide whether or not to set such a condition for the purpose of replacing the direction; and

(b) to decide whether or not to exercise their power to set a condition under that Chapter for that purpose.

(6B) It shall be the duty of OFCOM—

(a) as soon as reasonably practicable after making a decision required by sub-paragraph (6A), but

(b) in a case where that decision is a decision to set a condition, not before the coming into force of that condition,

to give a notice under sub-paragraph (6) revoking the direction in question.
(6C) The duties imposed by sub-paragraphs (6A) and (6B) apply only where OFCOM have not previously revoked the direction in question."
Page 540, line 32, at end insert—
"( ) In this paragraph "transitional period" means the period which is the transitional period (within the meaning of section 401) in relation to this paragraph."
On Question, amendments agreed to.
[Amendments Nos. 321 and 322 not moved]
Lord Davies of Oldhammoved Amendment No. 322AZA:
Page 542, line 12, at end insert—
"Transitory amendments to telecommunications terms in Broadcasting Act 1990
23A (1) This paragraph has effect, in the case of each of the provisions of the 1990 Act to which it applies, in relation to times between—

(a) the commencement of Chapter I of Part 2 of this Act; and

(b) the commencement of so much of this Act (apart from this paragraph) as amends or repeals that provision.

(2) The provisions of the 1990 Act set out in sub-paragraph (3) shall have effect (subject to sub-paragraph (4)) as if—

(a) for every reference to a telecommunication system there were substituted a reference to an electronic communications network; and

(b) for references to running such a system there were substituted references to providing it.

(3) Those provisions of the 1990 Act are—

(a) section 46 (licensable programme services);

(b) section 51(1)(a) (procedures for consideration of applications for additional services licences);

(c) section 72 (local delivery services);

(d) section 75 (procedures for consideration of applications for local delivery licences);

1559

(e) section 112 (licensable sound programme services);

(f) section 117(1)(a) (procedures for consideration of applications for additional services licences);

(g) section 181 (apparatus deemed to be apparatus for wireless telegraphy).

(4) Sections 46(2) (licensable programme services), 112(2) (licensable sound programme services) and 201(2) (programme services) of the 1990 Act shall each have effect as if for paragraph (b) there were substituted—
"(b) a service which satisfies the conditions in section 230(5) of the Communications Act 2003;".
(5) In sections 48 and 114 of the 1990 Act (additional services), references to electronic signals shall have effect as references to signals within the meaning of section 29 of this Act.
(6) Section 75(2) of the 1990 Act (consultation with relevant licensing authorities) shall have effect as if in paragraph (b) for the words "would be required to be licensed" there were substituted "is a system which (but for repeals made by the Communications Act 2003) would have been required to be licensed".
(7) In section 181 of the 1990 Act (apparatus deemed to be apparatus for wireless telegraphy), "connected"—

(a) shall continue to be construed in accordance (notwithstanding its repeal) with section 4 of the 1984 Act; but

(b) shall be so construed as if, in that section of the 1984 Act, a reference to an electronic communications network were substituted for every reference to a telecommunication system.

(8) Part 5 of Schedule 2 to the 1990 Act (restriction on holding of licences by operators of public telecommunication systems) and the Broadcasting (Restrictions on the Holding of Licences) Order 1991 (S. I.1991/1176) shall have effect as if references to a national public telecommunications operator were references to a person who provides an electronic communications network so as to make it available for use by members of the public in the whole, or substantially the whole, of the United Kingdom."
On Question, amendment agreed to.
[Amendment No. 322ZA not moved.]
Schedule 18, as amended, agreed to.
Schedule 19 [Repeals]:
[Amendments Nos. 322A to 322C not moved.]
Lord Evans of TempleGuiting moved Amendments Nos. 323 and 324:
Page 567, leave out lines 43 and 44.
Page 569, line 25, at end insert—

"European Parliament

In section 12(4), in the

(Representation) Act 2003

definition of "programme

(c. 7)

services", the words from

"(including" to "local delivery

services"."

On Question, amendments agreed to.
[Amendments Nos. 325 to 327 had been withdrawn from the Marshalled List.]
Schedule 19, as amended, agreed to.
Clause 400 agreed to.
Clause 401 [Transitional provision for anticipatory carrying out of functions]:
Lord Aveburymoved Amendment No. 328:
Page 351, line 10, at end insert—
"and where in pursuance of such an order under section 403 any such function as is referred to in paragraph (a) or (b) is carried out by that Director or the Secretary of State, references in section 189
1560
to OFCOM shall in relation to anything referred to in that section have effect as if they were references to that Director or the Secretary of State as the case may be."
The noble Lord said: In Committee in another place, Stephen Timms, the Minister, agreed that only decisions made by Oftel or the Secretary of State after the Bill comes into force but before Ofcom takes up its powers—which is likely to be somewhere near the end of this year—should be subject to appeals, including appeals on merit, under Clause 189. The wording of the Bill does not specify that, and the Minister said in Committee in another place that it needed to be changed.
No amendment was made on Report. We were told that it was the Government's intention that the Minister would make a statement on Report in another place, but that did not happen either, perhaps because debate of the relevant parts of the Bill was curtailed by the fall of the guillotine. In view of what the Minister said about the last group of amendments that we debated, we do not believe that there is an ambiguity in the Bill in relation to which a Pepper v Hart would be appropriate in this instance. On contrary, we would like the right of appeal to be in the Bill, in accordance with the Minister's undertaking. I beg to move.
Baroness Buscombe: We support the amendment.
Lord Evans of Temple Gutting: I must apologise to the House. In the rush to get through before the next debate, I inadvertently spoke to the wrong amendment a few minutes ago. I hear what the noble Lord, Lord Avebury, is saying. The Government's view is that the Pepper v Hart statement is actually watertight. I shall take away his points and return later, but certainly before Report stage. I apologise again for my mistake.
Lord Avebury: I am grateful for that assurance and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 401 agreed to.
Clause 402 [Application of enactments to territorial sea and other waters]:
Lord Evans of Temple Guitingmoved Amendment No. 328A:
Page 352, line 39, leave out "or"
On Question, amendment agreed to.
Clause 402, as amended, agreed to.
Clause 403 [Short title, commencement and extent]:
[Amendment No. 329 not moved.]
The Earl of Northeskmoved Amendment No. 330:
Page 353, line 5, at end insert—
"( ) The Secretary of State shall not make an order under subsection (2) until the requirements of Directive 98/34/EC (as amended by Directive 98/48/EC), including any relevant notifications and standstill periods, have been complied with in relation to the provisions to be brought into force by the order."

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The noble Lord said: I assure the Committee that this is not one of my "techie" amendments—rather it is procedural. I should also emphasise that my purpose here is simply to seek reassurance from the Government.
As the Committee will be aware, Directive 98/48/EC requires parliaments of member states to notify the Commission of future national legislative initiatives that specifically pertain to information society services. By way of reassurance to the Government, I know that radio and television broadcasting services and telecommunications services are specifically excluded from the requirement to notify. So far, so good. But electronic communications networks are not so excluded. None the less, national legislative instruments implementing EC directives are also excluded. One could perhaps conclude therefore that even Chapter 1 of the Bill is, as it were, "safe".
Someone of a churlish frame of mind might be tempted to ask why I am therefore wasting the Committee's time, but I am concerned that matters may not be quite as straightforward as all that. Members of the Committee will recall the passage of the Tobacco Advertising and Promotion Bill. During the proceedings my noble friend Lord Skelmersdale raised the issue of the technical standards directive. The Government's position was rock solid. With unshakeable conviction, it was maintained that the Bill was not notifiable. I do not doubt the sincerity with which that view was held, but in the event the Commission disagreed and maintained that that Bill was indeed notifiable. The rest, as they say, is history and the Bill was duly notified.
I have no doubt that the Minister will rise shortly to tell me that my amendment is unnecessary because the directive does not apply, but that was precisely the approach adopted by the Government in respect of the tobacco Bill. I hope, therefore, that he will also be able to give me an assurance that the Government are not relying solely on their own interpretation of the directive in this matter. In other words, have they consulted the Commission to ascertain its opinion on the status of the Bill?
We should bear in mind that, on the free admission of the Minister, the Bill is explicitly inconsistent with the Human Rights Act and thereby European law. I leave aside the considerable concerns that exist about the religious disqualification. While I admit that that may not be of immediate relevance to the technical standards directive, it is the first and so far only Bill where it has proved impossible for the Secretary of State to attach a Section 19 statement, albeit, in the Government's view, only in respect of Clause 314. We all know the reasons why. Nor, judging from the Committee's deliberations on Amendment No. 260, is the Government's stance on the issue a matter of dispute. But if I can put it this way, that may make the Bill a target, the more so because one of the primary aims of the technical standards regime is to achieve
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consistency of regulation throughout the single market. Indeed, the noble Lord, Lord Lipsey, put this rather more robustly, arguing:
"It is barely an exaggeration to say that a sword of Damocles hangs over us in this matter".—[Official Report, 3/6/03, col. 1306]
The Committee may feel that this is an unduly narrow issue, that I am fretting unnecessarily. But it is worth reminding ourselves that, should the Bill be enacted without notification and it subsequently transpires that it should have been notified, it will be open to anyone, on simple application to the court, to strike the Bill down in its entirety. Observing the passage of most of the Bill from afar, I have been struck by the enlightened, non-partisan and tireless way in which Members of the Committee have toiled to improve it. I have no doubt that that will continue through remaining stages. It is testament to the worth of the excellent work of the pre-legislative scrutiny committee of the noble Lord, Lord Puttnam, as a complement to rather than a substitute for this House's deliberations.
If I may say so, your Lordships deserve a collective pat on the back even if, as we come to the end of Committee stage, many of us could wish that a corresponding enlightenment had emanated from the Government Front Bench more often. However remote the possibility, I should hate to see such sterling work come to naught for want of being absolutely certain about the Bill's status with the technical standards regime. I beg to move.
7.45 p.m.
Lord Evans of Temple Guiting: I hope to persuade the noble Earl that his amendment is in substance unnecessary. Quite simply, the amendment is unnecessary because it merely restates a requirement of European law which is already in place. The Bill is quite long enough already—some may say far too long—and there is certainly no need to make it any longer by duplicating existing requirements which need no such support. We believe that that would be bad legislative process.
Of course the Government will meet the requirements of the directive. We will notify any provision of the Bill that is necessary. I can assure the noble Earl that any such provisions will not be commenced until the requirements of the directive, including any stand-still periods, are complied with. That will be no very demanding matter because the overwhelming mass of the Bill is in any case not notifiable. Parts 1 and 5 are not notifiable because they impose obligations only on Ofcom and not any other person. Part 3 and Part 4 are not notifiable because broadcasting services are excluded from the scope of the directives. As laws which merely implement Community obligations are not notifiable, that takes out most of Part 2 since it is largely taken up with implementation of the EC electronic communications directives. There are indeed some provisions that do not implement the directives. Those mostly carry forward existing requirements. So again they do not introduce new technical standards. However, we do

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see a possible case for notifying Clauses 117 to 121 on regulation of premium rate services and Clauses 125 to 128 on persistent misuse of a network or service.
The provisions, although not altogether new, carry forward to a considerable extent aspects of current telecommunications regulation rather than impose new burdens, but they do so in a different and explicit statutory form, which did not exist previously. We are inclined to think that it would be appropriate to notify them at the appropriate time. I hope that the noble Earl will agree that his amendment is in this light unnecessary and that he will feel able to withdraw it.
The Earl of Northesk: I am grateful to the Minister for that reply. As I hope that I made plain in my introductory remarks, I was fairly certain that the Minister would advise me that the amendment was unnecessary, but the substantive question to which I really wanted an answer was whether the Government had consulted the commission on its interpretation of the status of the Bill. There is no need for the Minister to reply to that issue at this time, but if he could write to me about it, I would be grateful. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 403 agreed to.
Title agreed to.
House resumed: Bill reported with amendments.

European Union (Accessions) Bill
Brought from the Commons; read a first time, and ordered to be printed.

Gypsies and Travellers
7.52 p.m.
Lord Aveburyrose to ask Her Majesty's Government what they intend to do to address the social deprivation of gypsies and travellers.
The noble Lord said: My Lords, I am extremely grateful to your Lordships who stayed until this late hour to discuss a subject which is of great importance, but which receives little attention. Travelling people are the most socially deprived of all the minorities in England, but their needs receive comparatively little attention. Their accommodation, educational attainment, health and job opportunities are all inferior to those of the rest of the population, and the disadvantages they suffer, which are handed down from one generation to the next, are compounded by neglect.
We are not immediately concerned with travellers in Wales, but I would like to draw attention to the Welsh Assembly's work, because it has conducted a survey and concluded that there can be no doubt that, in many respects, gypsies and travellers are one of the most discriminated-against groups in Wales. The Assembly has made a series of recommendations which are intended to deliver equality in service
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provision for travellers. From now on, I shall refer to "travellers" as meaning gypsies and travellers for the sake of conciseness.
I wanted to mention the work of the Welsh Assembly because many of the recommendations it makes read across to England; for example, that in referring to gypsies and travellers, public authorities should capitalise the word, which they do not always do, even in your Lordships' House. I am sorry to say that the Minute Room insists on putting small T for travellers whenever I write large T. I hope that that can be corrected.
Most importantly of all, the Welsh Assembly recommends that there should be a duty to provide accommodation for travellers. That is a point that I shall return to later on.
When I asked the Prime Minister to refer the needs of travellers to the Social Exclusion Unit, he said that he would make sure that my suggestion was borne in mind, but that competition for new projects was very strong. Three years down the line, nothing has happened. The Deputy Prime Minister's housing Green Paper, Quality and Choice: A Decent Home for All, did not mention gypsies once, and the policy statement which followed contained one paragraph about the refurbishment of their sites, but nothing about new homes. Not one penny of the £22 billion announced by the Deputy Prime Minister for sustainable communities in February is to be spent on accommodation or facilities for travellers. They are to be fobbed off with £16 million over the next two years, part of which may be spent on transit sites but none on permanent sites.
The Human Rights Act was intended to promote equality between different ethnic groups but only just over one in three local authorities have reviewed their policies in relation to travellers to see which of them is Strasbourg compatible. 'The noble Lord, Lord Rooker, told me in a Written Answer that any person claiming to be a victim of a local authority's failure to comply with the Act had a right to bring proceedings. Noble Lords will agree that that will not be too easy for someone who is homeless on the roadside.
As the Minister knows, however, there has been one important case in which the High Court found that a local authority was in breach of its duty because respect for private and family life meant that there is a positive obligation to facilitate the gypsy way of life. Can the Minister confirm that the homeless code of guidance is being revised to take that judgment into account?
The Homelessness Act requires housing authorities to produce a strategy for dealing with homelessness by the end of July, and that must set out how the authority is going to prevent homelessness and provide enough accommodation for people who are homeless or likely to become homeless. Since there are 2,500 traveller caravans on unauthorised sites, and the people living in them are by definition homeless, according to the definition in the Housing Act 1996, one would have expected to see vigorous action to provide sites as the deadline approaches. Not a single extra pitch has been provided, to my knowledge.

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The Race Relations (Amendment) Act requires all public authorities to assess the way that their policies affect minorities and to take remedial action to correct inequalities. They must publish a race equality statement and monitor their own performance. I am not aware of any steps that are taken by councils to remove the gross disadvantages experienced by travellers.
Now, perhaps, there is a new opportunity, if the Government accept the recommendations by Pat Niner that there should be a clear, widely understood policy on accommodation, so that travellers have a secure base to which they can return if they are nomadic, and where they can remain permanently if they wish to settle down. That is the key to attacking the problem of social deprivation among travellers, as we have known for the past 40 years; it is the principle underlying the Traveller Law Reform Bill, which was reintroduced by Mr David Atkinson in another place, and the Early-Day Motion in the name of Mr Kevin McNamara. It is the goal of the new Parliamentary Travellers Group, which has just been formed, and it is the theme of the Liberal Democrat policy development paper, Gypsies and other Travellers, on which the Minister in another place, Mr Tony McNulty, commented favourably in the past few weeks.
There is also widespread recognition of the fact that friction between travellers and the rest of the population arises largely in relation to unauthorised sites, on which the lack of clean water, sanitation and refuse disposal inevitably generate problems.
The Government say that they are committed to improving the lives of travellers—but they have yet to respond to the Niner report after seven months—and to aiming for,
"sustainable solutions that are agreeable to all",
to use the Minister's words. That means waiting for ever. Over the years since the 1968 Act, the problem was always to get agreement between counties and districts on where to put sites, and local residents would always fight proposals for a site in their neighbourhood. In the end, decisions must be made that will not be popular with everybody, and the sensible way forward is to reinstate the duty of local authorities to provide enough accommodation for gypsies,
"residing in or resorting to their area",
to use the phraseology of the 1968 Act, and at the same time to get an agreement between the Government and local authorities on the numbers to be put in each area, as Sir John Cripps suggested as long ago as 1977.
What Ministers have proposed so far is grossly inadequate. The £17 million refurbishment grant over three years may be compared with Pat Niner's estimate that £123 million over 30 years is needed merely to maintain the 308 sites that were in use in early 2002. That is not even to reinstate the remaining 16 sites which had degenerated to the point of being unusable. If spending continued at that rate, it might be just enough to prevent further losses, but in the next two years, 2004–05 and 2005–06, they plan to spend
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£16 million on refurbishment and the provision of transit sites. So the money has to be split between the two.
The policy of leaving the provision of sites entirely to the private sector is failing, as we have repeatedly told Ministers since 1994, when the 1968 Act was repealed. Between January 2002 and January 2003—the figures for which have just been announced—the number of pitches on private sites went up by 44, but at the same time the number on council sites decreased by 92. The effect of all that is that the number on unauthorised sites shot up by 351. That follows an increase the previous year of 327. So in two years one has 680 more caravans parked on unauthorised sites as a result of the policy of Fenéantisme that we have had from the Government.
The effect of the 1994 repeal was masked for a few years, because council sites were still in the pipeline being constructed, and because there was an unexplained fall in the total number of traveller caravans in the first two years after 1994. But now the chickens are coming home to roost. It is a scandal that traveller homelessness is on the increase, with two out of every 10 families already with nowhere to go. It is unjust and unacceptable for the Government to be offering local authorities increased powers to manage unauthorised encampments when it is their own failure to do anything about providing accommodation for the last six years that has brought about the present crisis.
At the very least, the Government should allow the Housing Corporation to lend money on traveller sites so that registered social landlords can play some part. They should also promote a few pilot schemes for the provision of group housing as in the Republic of Ireland, which the Housing Corporation could already fund. The Government could invite local authorities to make land available for this purpose, and thus to meet their obligations under the Homelessness Act.
No one pretends that these are simple problems, but we shall not solve any of them until there is, as Pat Niner says, a clear, widely understood policy for accommodation, to which has to be integrated properly resourced programmes for equality in education, health and social welfare. We want the Government to set out their goals and how they are to be achieved. They have done a lot for minorities; now it is the time for travellers to enjoy some of the fruits of equality that are the right and prerogative of us all.
8.3 p.m.
The Earl of Listowel: My Lords. I thank the noble Lord, Lord Avebury, for securing the time for this important debate. I declare my interest as a landowner. I regret that the only experience I have of directly working with a gypsy traveller child was several years ago and spanned six weeks at one afternoon a week. However, I worked last year on the passage of the Education Bill, focusing on issues surrounding access to education for looked-after children. Some of the issues we discussed then are germane to this debate.

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There is a well recognised history of deprivation of education as regards traveller children, stretching back at least 40 years, which began with the Plowden report in 1996. An Ofsted report, The Education of Travelling Children, stated:
"Access to the curriculum for secondary-aged children remains a matter of grave concern. There are possibly as many as 10,000 children at this phase who are not even registered with a school".
There are issues about registration; the attendance of secondary schoolchildren, which averages about 75 per cent and is markedly lower than that of any other ethnic group; and lower levels of achievement than other groups.
Clearly, there are problems in engaging a semi-nomadic community and settled society. There is also distrust by the gypsy traveller community of settled society which one can understand, given the history of persecution in this country over several centuries, including during the Second World War on the Continent. There are other examples.
We must do more to address the issue of the failure to allow access to secondary school education for possibly 10,000 or more children. I should like to concentrate on this issue and ask the Government what they are doing seriously to address this problem. Indeed, they are already doing much and I pay tribute to their policy of inclusion generally which impacts on this group of people. Sure Start is a very important programme which has involved large investment for the early years. That is repeatedly emphasised in the literature as being an important way of engaging gypsy traveller children in mainstream education. If one can ensure that their families have a good experience of pre-school education they are more likely to continue to primary and, one hopes, to secondary education.
The additional funding made available to schools in difficult areas through education action zones and for those in areas of urban deprivation through the Excellence in Cities initiative have an important part to play in improving access to education for gypsy traveller children. I visited the Star primary school in Newham a few months back, headed by Marion Rosen. It is a school with a majority of asylum-seeking children. It is well recognised as being in an area of high deprivation. The school was under special measures for about two years, but with the introduction of Marion Rosen and her inspiring leadership, it is now described in the latest Ofsted inspection report as being a good school and as especially good at including asylum-seeking children and those with special educational needs.
The Government have recognised the need for leadership in this area and have established a centre of excellence for the training of head teachers. Again, the literature in this area emphasises the importance of good leadership to increasing inclusion, including of gypsy traveller children. In the Education Bill, more leeway was allowed to schools in terms of the application of the national curriculum so that the best and most appropriate teaching was provided to children who did not necessarily fit in with the mainstream. It is a constant theme of the literature that gypsy traveller children and their families often find
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that the national curriculum is not relevant to their own culture. But when that is reviewed by schools, and when elements of gypsy history and culture are introduced, it is an important way of encouraging confidence and engagement in the school.
Last year Ofsted reported that we now have the best teachers in our schools since it started its work. That is a key part of being more inclusive. We need to have high expectations of traveller children. Good teachers have high expectations of all their children.
I also welcome the work of the group for school inclusion. I welcome, too, the £155 million the Government invest through the Ethnic Minority Achievement Grant for all those children from ethnic minorities. But we have to recognise that more investment is needed. These children suffer from cultural impoverishment if they do not receive their secondary school education. They do not meet Pythagoras or Aristotle; they never get to know Romeo and Juliet. They are deprived of their rights to a decent, broad education.
In the House we now have a large representation of women. We have some people from the Afro-Caribbean, Chinese and Asian communities. As far as I know, we have no representation from the gypsy traveller community. The gypsy traveller community is unlikely to have a voice. They are likely to be neglected. Their important deprivation is likely to be ignored as long as we fail to ensure that many of their children have a full education.
Other consequences of being under-educated are a higher likelihood of involvement in criminality, as we all know; and a higher likelihood of pregnancy at a young age, which is likely to lead to lower life chances for their children—and so continue the cycle of deprivation. I ask Her Majesty's Government what their aspirations are for those children. What do they hope for for the future? What is the role in particular of the Traveller Education Service? How have the Government improved the service since 1997 and what are their plans for its further development?
As Ministers will be aware, the service has an essential role to play in terms of, for instance, admissions. If a child arrives at a school in the middle of a school year, having perhaps moved frequently before, the Traveller Education Service will help the child to obtain a school uniform; perhaps secondhand, by one means or another. In the transition from primary to secondary school, when so many children are lost, the Traveller Education Service, with its good relationship with the traveller community, is able to work to ensure a good transition. The Traveller Education Service works in partnership with education welfare offices to ensure that children do not absent themselves from school.
There have clearly been improvements in attendance and achievement. That was noted in the Ofsted report and must be attributed largely to the achievements of the Traveller Education Service. How are the Government building on that success? Are they increasing resources to that essential service, and how are they targeting the available resources?

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The helpful Department for Education and Employment research report RR238 points out that the schools with the most effective practice invest significant management resources in the establishment of good relationships with parents and pupils. It gives an example of what that means in practice. A teacher assigned to working with those communities says:
"I know the families very well. I have known them for 13 years and they know me. I have signed their passport forms, driving licences and sometimes a parent will come into school with a letter or something they don't understand and I try and help them with that. The school is a place where they know they can get help".
That kind of long-term investment by those staff is necessary, but obviously it is resource-intensive. The time of the staff is an important and limited resource. Can the Minister give an assurance that every school with gypsy traveller children on its roll has a designated, named person of the kind I have just described? Are Her Majesty's Government ensuring that adequate management resources are provided to ensure good relationships with parents and pupils?
We cannot afford to have perhaps over 10,000 gypsy traveller children missing out on their education. I urge the Minister and his colleagues to consider targeting more resources on the Traveller Education Service. I would also urge the Minister to consider how he can ensure that schools are sufficiently resourced to allow staff to develop essential relationships with traveller parents and communities. I look forward to the Minister's response.
8.16 p.m.
The Lord Bishop of Chester: My Lords, I, too, congratulate the noble Lord, Lord Avebury, on bringing this debate to the House. I confess with a measure of guilt that I was not as aware as I should have been of the distinctive contribution of the travelling communities to our society, and their particular needs. In researching the background to the debate, I have been glad to be able to take the opportunity to remedy that a little. I am particularly grateful for the briefing I have received from some of those most involved in supporting the travelling communities and drawing attention to their needs.
Speaking only for the Church of England for the moment, the diocese of Salisbury among our dioceses deserves special mention as having a priest who is particularly dedicated to this work. I was also pleased to access research undertaken on behalf of the Welsh and Scottish Assemblies, in part already referred to, as well as to receive briefing from some of the statutory and voluntary agencies.
Perhaps I may start a little further afield. The diocese of Chester has a special link with the Anglican Province of Melanesia, which comprises the Solomon Islands and Manuatu in the Pacific, amounting to seven dioceses in total. I am pleased that a predecessor of mine linked us with that part of the world rather than the Arctic or one or two other places that one could think of.
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It was both a privilege and pleasure for me to make an extensive visit to the province and to visit all the main centres of population. The people there have very little money, but I never encountered anyone begging or suffering from malnutrition. It seemed that everyone had someone to look after them. In the local pidgin English, each person is someone else's wantok or relative. Life is lived in large, extended families, although within those extended families there is still a particular concentration on the nuclear family.
When I returned to the United Kingdom and to my house in Chester, I was struck by the many contrasts. The most obvious one was that of our wealth and sophistication, but alongside I was also struck by people who live in the streets and who would come up and beg; people sleeping rough and who had nowhere to go. Quite soon after I got back, two lads, both in their late teens or early 20s and quite well spoken, called at my door and asked politely whether they could borrow a tin opener to open their tins of baked beans for their evening meal. They were two of a stream of people who call at my house. I contrasted that with the fact that I witnessed no homelessness or such activity in the Solomons.
Other contrasts would include, for example, the basis on which land is held or owned. We are used to property rights of a fairly absolute kind, with the ability to possess and to sell freehold. In the Solomons, land is held on a custom basis; that is, it belongs to a given village or family and is allocated as required to everyone living in the village or belonging to the family. The one Anglo-Saxon bishop still serving in the Solomons—he has been there for 30 years—emphasised to me the value of this way of relating people and communities to the land. Indeed, in those Solomon Islands where modern western ways have been tried, largely around the capital of Honiara, it has tended to produce unrest and conflict. I say that to illustrate the different ways in which cultural groups can organise their lives. For all their differences, I have been struck by the similarities between the traditional ways of life in the Solomons that I encountered and those of the travelling communities in this country that should be allowed to continue.
This debate is intended to draw attention to social deprivation among the travelling communities, which is entirely right. As our society has progressively become more organised and regulated, the traditional way of life of the travelling communities has come under increasing and inevitable pressure. For reasons that the noble Lord, Lord Avebury, outlined, that has impacted in a particular way on their ability to travel with some security as to where they can exist from time to time.
Our challenge is to offer the travelling communities access to employment opportunities, welfare and education. I endorse entirely the words of the noble Earl, Lord Listowel. I have been deeply impressed by the ability of many schools in the diocese of Chester to rise to the challenge of educating travelling children and to see them as an enrichment of the school community.

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That access needs to be in a form that respects the rights of travelling communities to continue their traditional lifestyles but also enriches society. We can too easily become patronising and speak about "us" and "them", as though it were a one-way traffic. I will refer later to the reverse process.
There are ample statistics to demonstrate that members of the travelling communities suffer from various disadvantages to their health, compared with the average. Life expectancy in the travelling communities is as much as 10 years lower for a man and 12 years for a woman—a stark statistic indeed. A report in the British Medical Journal on maternal deaths from 1997 to 1999 suggested that deaths among women in the travelling communities were
"quite possibly at the highest rate among all ethnic groups".
On the broader health front, an article in the Journal of Public Health Medicine in 2001, based on extensive research in the traveller community in and around Sheffield, concluded that
"the health status of gypsy travellers is significantly poorer than in the lowest socio-economic UK population group".
It is interesting to note that health statistics were similar for travellers who still live in caravans and move around to some degree and those who were more traditionally housed.
I will not rehearse the precise statistics in the health papers but the key question is why the statistics for the travelling communities, even when they are accommodated in relatively fixed dwellings, is so low. The answer is paradoxical. Either it is harder for the travelling communities to access healthcare because they tend to be on the move and do not conform to the norms for accessing healthcare or they are reluctant to do so because of distrust.
On the other hand, there is clear evidence that the reduced opportunities that many travellers have to follow their traditional lifestyle when accommodated in conventional housing is itself a major cause of stress and ill health. Our response must correspondingly be two-sided. We should make it easier for the travelling communities to access healthcare in sensitive ways adapted to their culture. We should as far as possible honour the aspirations of the travelling communities to continue their lifestyles, which will undoubtedly evolve in a dialogue with the sophisticated world around them.
In seeking to make it easier for the travelling communities to access healthcare, we need to encourage and perhaps even to require health trusts to have strategies that focus on the needs of their ethnic minorities. That suggests the use of healthcare professionals who understand the culture of the travelling communities and can relate to them and other ethnic groups as well, and gain their confidence. I am aware that that is already happening and no doubt the Minister will give me further information, but I sense that the matter needs to go further. The statistics for life expectancy speak for themselves.
The second strand is equally important—to honour the aspirations of the travelling communities as far as possible to continue their distinctive lifestyles and to
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permit their distinctive cultures to evolve. That is what they want unequivocally to do. That has been true across the generations. I was interested to read a research project by Save the Children relating to younger members of the travelling communities in Scotland. When the young people were asked what was the best thing about belonging to their communities, the overwhelming answer was, "Our freedom and nomadic way of life". We need to recognise that that will not go away. I add that I find my own life rather too nomadic, but that illustrates the differences that exist. As previous speakers have made clear, in recent years the travelling communities have found it much harder to achieve that in a non-stressful way.
I shall conclude with some remarks on why we should seek to honour that desire to maintain traveller and gypsy traditions. We should not do so grudgingly or by concession, or merely on the grounds of individual rights, but with a deep sense of respect and gratitude for the contribution to the wider riches of society that the traveller culture can make. Their history in this country has been one of discrimination from Henry VIII onwards—and often of abuse, including, relating to children, much bullying when they have been in mainstream schools. However, because of the great stress on anti-bullying policies in schools today, that is improving.
I do not doubt that at times there have been genuine problems which should be addressed by the authorities in a proper way. The law applies to us all, although when we make law in this Chamber I sometimes think that we should bend over backwards a little more to take account of the proper needs and aspirations of the minority groups that those laws will influence.
I do not wish to romanticise traveller or gypsy communities. There is no doubt a great deal that can be gained by an interaction of those communities with modern society in this country. However, we need to open up those channels in a way that is genuinely mutual, reciprocal and non-threatening.
Let me return to our experience as a diocese in our links with the Solomons. It has deeply enriched us to have clergy from the Solomons working in our parishes. In particular, one priest, who is in Episcopal orders, has been working in a parish in the diocese for six years. His ministry has been a breath of fresh air—just because he comes out of, and represents, a culture which in some deep respect is very different from our own. When he was asked to take his first funeral at a crematorium, he was simply astonished at our casual, almost throwaway, quasi-supermarket-inspired ritual of death with a 20-minute slot on the crematorium conveyor belt. Back home a funeral would have taken a full day as the family gathered with the whole community to mark, mourn and signify the passing of one of their members.
That is just how the travelling communities tend to mark the death of one of their members. They do it with elaborate ritual; someone stays with the body of the deceased in a specially-furnished caravan until the body has been reverently buried, with their close

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possessions being carefully distributed or buried with them. I do not wish to endorse details of the ceremony, but the respect for human life which that ceremony reflects is something that I often think we could learn from in wider society.
The Chief Rabbi. Dr Jonathan Sachs, recently published an important book, The Dignity of Difference. One of the key challenges of the 21st century will be to learn how to live alongside other communities with different traditions, and to allow those traditions, as far as possible in a non-threatening and non-stressful way, to evolve in an inevitable dialogue with the modern world. That is true both across the globe as a whole, as we saw in yesterday's debate on globalisation—as that shrinks international distances—and within countries—and perhaps especially in Britain after all the immigration of the past 50 years and the ongoing movement of peoples.
Traveller communities represent some of the oldest, perhaps the oldest ethnic minority group in our midst. How we learn to treat them better and indeed to learn from them, may well have wider consequences for the overall stability and richness of our country than we often realise.
8.30 p.m.
Baroness Sharp of Guildford: My Lords, I too would like to thank my noble friend Lord Avebury for initiating this very important debate. The right reverend Prelate is absolutely right. Few of us realise how deprived this group in our society have been, nor that they have been part of our society for a very long time. Like the right reverend Prelate, I have not had a great deal of involvement with the gypsy or traveller community.
Two issues came to mind when I came to face this debate. As an aspiring Member of the other place, I got involved with a gypsy site in the south of the Guildford constituency I worked in. The problem was one of disenfranchisement. We were anxious to make sure that those on this permanent site benefited. It was a permanent site that had been in dispute for 17 years. It was owned by the gypsy families concerned but their right to establish a permanent caravan site had been disputed by local residents for 17 years. In the end, a high profile High Court case, with the local authorities supporting the gypsies, solved the issue. They are still there and they are a group of extended families who now live very much in harmony with the local community.
The other picture that came to mind was that I spent the last 20 years as an academic at the University of Sussex. I lived in Guildford and commuted quite frequently. Beside the new Brighton bypass there is a site that is constantly used by travellers as an unauthorised site. One saw this regular routine of a number of caravans and lorries building up. Then one would see the big pick-up trucks sitting on the top of the hill, ready to go down and take them away. The next day one saw some of the caravans being hauled out and they would be gone. Then within three or four weeks the constant movement would start all over again.
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These two events probably epitomise some of the problems that we face in what is a very sorry story of racism and prejudice. We have flouted our own race discrimination and human rights legislation.
The noble Earl, Lord Listowel, mentioned that he doubted that there was any member of this ethnic minority in this House. There are probably no members of that ethnic minority who are magistrates, school governors or policemen, even though we put such emphasis on having ethnic minority representation in all those spheres of life. This process of moving them on and moving them on creates problems and the social deprivation seen in their communities today.
I was interested in the statistics given by my noble friend, Lord Avebury. At the last count there were 13,612 gypsy caravans and 13,058 sites. But of those sites, at least 1,000 and probably closer to 2,000 are actually unusable and unused. I understand that 8,000 or so are local authority sites, while 4,500 are private sites. Twenty-six per cent of the sites are situated next to motorways, 13 per cent are next to runways, 8 per cent are next to commercial and industrial sites, 12 per cent are next to rubbish tips, and 4 per cent are next to sewage farms. Very frequently, the latter are noisy and dirty sites. Therefore, it is not very surprising that we find that the health of this group is affected by the conditions of these sites.
Similarly, given the constant process of moving on because of the use of unauthorised sites, it is not surprising that we see such deprivation in the education of these children. Like the noble Earl, Lord Listowel, I am wearing my hat as the spokesman for education. I was especially interested in considering the question of education. Indeed, it is extraordinary that the Education Act 1996 sought to protect parents from prosecution if they could prove that their children were kept away from school by the need to travel. Therefore, we obliged them only to attend school on 100 days of the year—that is, 200 sessions a year, instead of the normal 400 sessions on almost 200 days that is generally required for our children.
We accept that those children need only attend school for half the number of days normally required. Local authorities are obliged to find places for traveller children; and, indeed, they run traveller education services. I fully agree with both the noble Earl, Lord Listowel, and the right reverend Prelate in this respect. There are often very good examples of what is done for travellers, given the circumstances. Under Section 488, the Education Act 1996 provided funding for such services. However, I am not sure whether local authorities would provide those services if they were not funded.
Nevertheless, we have had a series of Ofsted reports that have condemned the quality of education provided for traveller children. We know that those children are not high achievers; that they are disproportionately absent from school; and disproportionately likely to be excluded from school. In fact, 80 per cent of those who leave school are

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regarded as being functionally illiterate; in other words, 80 per cent of those children flunk key stage 4 in our schools. It is quite a thought. As a nation, we are ashamed that 20 per cent of our adult population are functionally illiterate and are not able to look up a plumber in the Yellow Pages. However, among the traveller community, the figure is 80 per cent. It is a shocking statistic.
The latest Ofsted report, Managing Support for the Attainment of Pupils from Minority Ethnic Groups, noted that there had been very little improvement, although it did note very positive efforts by the traveller education services, which were often at odds with the practice of the eviction of families and the constant moving on from unauthorised sites. However, as the noble Earl, Lord Listowel, mentioned, there are a number of good examples of practice. I noticed one example from the Oxford Experience, where a teacher said:
"We made a big map of the British Isles and all the children put down and moved model cars to all the places that they had visited. All the Gypsy Traveller children were able to speak about the places they had visited and then we started talking about travelling. All the children in the class enjoyed this and learnt [a lot] from it".
As the right reverend Prelate mentioned, it is an enriching experience to have people from a different culture; and, indeed, a very important one.
In its report of October 2001, Managing Support for the Attainment of Pupils from Ethnic Minority Groups, Ofsted mentioned:
"When time was devoted to joint planning and teaching about Gypsy Traveller history and culture… [this] added much to the knowledge and understanding of all the pupils in the class and made a marked contribution to the self-esteem of pupils from Gypsy Traveller families and to their general attainment".
We have quite a large number of gypsy families in Surrey—we have a long tradition of gypsies there. A good feature has been the establishment in the past two years of the Surrey community travellers' forum, in which travellers participate and talk with the local authority about developments. This has begun to open up a new development for the travelling community in Surrey and has helped to ease relationships with some of the local authorities there.
The right reverend Prelate spoke about deprivation and health. To my mind, it is not the slightest bit surprising that infant mortality rates, the prevalence of coronary heart disease, respiratory diseases, and so forth, are so much higher, given the sites that many travelling communities have to occupy.
The question then arises: what do we need to do about this? My noble friend Lord Avebury mentioned the Traveller Law Reform Bill. If it had become law, it would have improved matters. Nevertheless, as he said, we need to go further than just facilitate site provision by local authorities. We probably need to go back to the 1968 Act so that there is a much more positive duty on local authorities to do something about the situation.
Similarly, rather than just establishing a gypsy and traveller accommodation agency, the Government need a strategy, something we have not seen from
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them. The Niner report contains some very important conclusions, but, as always, the Government have used this piece of research in order to procrastinate yet further. In October last year, the noble Lord, Lord Rooker, said:
"Ministers will need some time to consider the implications of the sites research and how it will inform future policy development".—[Official Report, 30/10/02; col. 197.]
In all conscience, have they not had enough time to think about policy development? It is time that the Government, who put such great store by social inclusion, come up with a much more positive policy towards this community.
I should like to end by quoting a piece from the United Nations Committee on the Rights of' the Child and its findings about the UK, which were not very complimentary. It noted:
"The Committee is concerned at the discrimination against children belonging to the Irish and Roma Travellers which is reflected among others by the higher rate of mortality among these children, their segregated education, the conditions of their accommodation and attitudes towards them. The Committee is also concerned at the existing gap between policy and effective delivery of services. In line with its previous recommendations, the Committee recommends that the State party devise—in a consultative and participatory process with these groups and their children—a comprehensive and constructive plan of action to effectively target the obstacles in the enjoyment of rights by these groups".
These are very necessary words, and I hope we shall hear something positive from the Minister this evening.
8.44 p.m.
Lord Hanningfield: I, too, thank the noble Lord. Lord Avebury, for bringing this issue to the attention of the House. That gypsies and travellers suffer from social deprivation—or social exclusion, as it is often called—is beyond doubt. We have already heard some statistics that demonstrate this from the noble Lord, Lord Avebury, and the right reverend Prelate the Bishop of Chester has referred to health aspects.
I should like to reiterate a few of these statistics. Some 98 per cent of gypsies and travellers die before the age of 65, and infant mortality is three times the national average. I wish to add some statistics to complement those given by the noble Earl, Lord Listowel. On education, attainment at the secondary level is disastrously below national averages. As many as 10,000 children are not registered for secondary education at all, and only 12 gypsy or traveller children are likely to be in further or higher education at any time. We are particularly proud that in Essex we have some girls from traveller families doing A-levels, which is most unusual. Normally, it is the boys who stay on in continuing education.
Those statistics should be of concern not only to traveller communities but to all of us. You cannot build a decent society on foundations of systematic social exclusion. Social deprivation and social exclusion cause problems for the whole of society, not

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just that part of it directly affected. That is why the issue raised today by the noble Lord, Lord Avebury, is important and worthy of our attention.
Before going on to talk about specific areas of social deprivation, I should like to reflect on the history of prejudice towards gypsies and travellers, as it puts our debate today in context. Several noble Lords have already touched on the matter, but I should like to add my comments, as these are important issues and I believe that it is helpful to restate them. As an aside, I should say that several gypsy families have married into farming communities over the centuries, so there may be more gypsy blood in this House than we might imagine.
There are currently something in the region of 200,000 to 300,000 gypsies or travellers living in this country. Since they arrived in the 16th century, they have been subject to prejudice and persecution. Legislation over the past 150 years has sought increasingly to restrict the ability of gypsies to pursue their traditional mode of living. Anyone who has travelled extensively in eastern Europe, as I have done, will recognise that this attitude towards gypsies is not localised but is prevalent across the Continent. In fact, the prejudice that undoubtedly exists in this country towards gypsies does not compare in any way to the prejudice, persecution and stark deprivation that these communities suffer in some parts of eastern Europe.
Deploring the prejudice to which gypsies are subject is one thing, but what we cannot do is simply pretend that it does not exist. It is a part of human nature to be suspicious of what is different. Gypsies, partly as a result of social deprivation, but also partly as a result of lifestyle choices, exist on the margins of modern society. There is no doubt that a minority of gypsies engage in criminal or anti-social activity, which tends to reinforce the social exclusion of all gypsies, who are then tarred with the same brush. It is a vicious circle.
The solution to this problem is twofold. We must tackle the social exclusion to which gypsies are subject—and I look forward to hearing from the Minister today how the Government intend to do that. But we must also deal with those gypsies or travellers who are engaged in illegal or anti-social behaviour, as we would with anyone engaged in such activity. Those pockets of troublemakers actually do more damage to their communities than anyone else, and local citizens have a right to expect that action will be taken against them when problems arise.
I turn now to some of the specific causes of social exclusion. Let us start with education. The 1999 Ofsted report, Raising the Attainment of Minority Ethnic Pupils, found that gypsy children have the lowest results of any ethnic minority group and are the sector most at risk of exclusion in the education system. We cannot tackle social exclusion unless we tackle educational exclusion, as the noble Earl, Lord Listowel, said. Education is the key to integrating minority communities into the wider society. If we are to deal properly with the problems social exclusion causes, it is vital that we get access to education right. The difficulty with educating children of communities who traditionally are itinerant is clear.
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However, there is evidence that access to education has improved over the past few years. Much of the improvement can be attributed to the work of local authorities. We have heard some criticism of local authorities today, but I should like to talk a bit about what they do.
In Essex, the county that I lead, we have an excellent traveller education service which is at the leading edge of good practice. We offer traveller parents support to access school places for their children and we offer schools the support they need to help maintain and raise the achievement of gypsy and traveller children. We do so because we take seriously our responsibility to lead our community. We recognise that tackling the anti-social behaviour sometimes associated with social exclusion can best be done through education. In the long run that will benefit the health and vitality of our community.
Health is the other dimension of the social exclusion of gypsies and travellers on which I want to touch. As the right reverend Prelate the Bishop of Chester said, there is no doubt but that gypsies and travellers suffer impaired access to health and social care. As a result, the general health and life expectancy of the gypsy and traveller population is, as I said, well below that of the rest of society.
Social services departments play an important part in addressing these problems by working closely with gypsies and travellers to provide them with the support they need. For example, in some areas of Essex we have dedicated community development nurses for gypsies and travellers who help to ensure access to GPs. Also, on one of our permanent sites in Essex we facilitate an afternoon clinic attended by a health visitor on a fortnightly basis. If we could afford it we would do more. These initiatives are vitally important for tackling a key component of social deprivation. I would he interested to hear from the Minister whether the Government have any plans to provide further support to local authorities who provide such services.
I turn to the issue of site provision and accommodation for gypsies and travellers. This is not a marginal issue in the context of this debate. It is at the heart of what we are discussing, because it is often problems arising from inadequate or inappropriate site provision that reinforce the problems of social exclusion. As I understand the present legal position, the Caravan Sites Act 1968 placed a duty on local authorities in England and Wales to provide static sites for gypsies, as I think the noble Baroness, Lady Sharp, said. That requirement was removed by the then Conservative government in 1994 through the Criminal Justice and Public Order Act. The objective of that legislation was to make it easier for local authorities to move on gypsies and travellers where they were causing a nuisance.
It seems to me that that policy objective could have been right. No one should have to tolerate anti-social or criminal behaviour from any section of the community, and local authorities should be empowered to take the swift and effective action that is necessary to tackle these disturbances as quickly as possible. I believe that that is

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in the interests both of local communities and the majority of gypsies and travellers who inevitably suffer because of the infractions of the minority.
Clearly, however, the 1994 legislation has not in practice proved effective. For a number of reasons local authorities have been reluctant to use it to effect evictions. But the problem of anti-social behaviour and illegal sites has not abated. In many parts of the country it has got worse. For example, in my own county of Essex we have recently seen examples of illegal encampments on green-belt land. That has caused a great deal of concern in local communities and led to the honourable Member for Billericay introducing in another place a Bill designed to enable local authorities to respond more quickly and effectively to that kind of activity. At the same time, the Bill recognised that those problems could not be solved unless there was adequate site provision for gypsies and travellers who genuinely want to abide by the law.
It seems to me sensible that we recognise that these two things go hand in hand. First, we have a right to expect that all sectors of the community abide by the same laws and regulations. Secondly, we have a duty to make sure that people are not excluded from the possibility of complying with the law. At the moment we have a situation in which some local authorities do not recognise any responsibility for making any provision for gypsies and travellers available. That causes problems. It means that gypsies and travellers are forced to camp illegally or they are moved on to those areas that do make provision.
In Essex, we have 12 sites for gypsies and travellers. Sometimes, those sites are created in the teeth of local opposition, as we have heard. It is of the utmost importance, when dealing with local opposition, that we are able to explain why official sites are beneficial.
If we do not have the power properly to ensure that those sites are not abused or our provision of sites does not lead to a reduction in the incidence of illegal encampments, we are likely, quite rightly, to lose the confidence and trust of the communities. I would be interested to learn of the Government's latest thinking about strengthening that dimension to encourage local authorities again to create sites across the country.
I hope that my remarks this evening have made clear where we on this side of the House stand on this issue. We fully support measures that promote the social integration of gypsies and travellers. We recognise the very real difficulties and hardships that those communities face.
At the same time, the settled community has rights, too. Local council tax payers are entitled to expect protection from illegal or anti-social behaviour of the kind that took place on the road to Brighton. I have friends in Brighton and I know how many people complained about that. The noble Baroness, Lady Sharp, spoke about that. The perpetrators of such behaviour must be tackled. Local authorities must be empowered to intervene quickly and effectively, but also to provide sites for gypsies and travellers. When planning regulations are flouted
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and damage is caused, effective action by local authorities to nip the problems in the bud will benefit both local communities and gypsy and traveller groups alike.
We support the sentiment expressed in the Question of the noble Lord, Lord Avebury. I again emphasise the importance of education as the key to breaking down barriers of social exclusion, but we would also wish the very real concerns of local communities to be taken into account in the consideration of these matters. I again thank the noble Lord. Lord Avebury, for his Question this evening.
8.57 p.m.
Lord Evans of Temple Gutting: My Lords, this has been for me, and I hope for everybody else, an informative, vivid and fascinating debate. Perhaps I may begin on a personal note. I was brought up in Suffolk. My father was an oral historian with a particular interest in gypsies. As a child, I remember gypsies visiting our house frequently and I still have a number of gifts given to me by them. For me, therefore, the word "gypsy" has always been spelt with an upper case "G" and always will be.
The noble Lord, Lord Avebury, was very constructive, but cogent, in his criticism of government policy and 1 hope to discuss that in a moment. The noble Earl, Lord Listowel, mentioned the importance of education. The right reverend Prelate referred to health and the position of gypsies in our society; and the noble Baroness, Lady Sharp, spoke movingly about prejudice and racism and drew attention to the paradox that while the Government believe in ethnic representation, we look around and ask where that gypsy representation is in our society.
I was particularly interested in the contribution of the noble Lord, Lord Hanningfield, because, as chief executive of Essex, he is, as it were, at the coal face. As on many issues, he shared his practical experience with us and referred to the problems of social exclusion and health, producing some devastating statistics on mortality rates and education. Crucially, he touched on that extraordinarily important relationship between central and local government in this matter.
I cannot hope to answer every point made in this short debate. I regret that it is such a short debate, because the subject should be given a great deal of air. I shall ensure that noble Lords get a written response to any points that I do not deal with.
I stress at the outset how grateful we are—all noble Lords said this—to the noble Lord, Lord Avebury, for securing this debate. He has been at the forefront of this issue for many years. We all remember that, as Eric Lubbock MP, he introduced the Caravan Sites Act 1968, as a Private Member's Bill. That was the first piece of legislation that fully recognised the accommodation needs of gypsies and travellers.
As noble Lords have said, gypsies and travellers represent one of our oldest communities, yet—this is another paradox—they have long been one of the most excluded groups in this country. The Government are committed to improving their quality of life and are

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keen to see more social inclusion, as noble Lords have stressed. That can happen only with government engagement and when people look past the stereotypes of gypsies and travellers and recognise that they are an integral part of society and deserve a fair deal like everyone else. There obviously must be a government role in the process. The Government of course acknowledge that gypsies and travellers have a right to pursue a nomadic lifestyle and to enjoy the existence that they have chosen, within the boundaries of the law. The fact that I have to say that suggests how much work needs to be done by all of us to make gypsies and travellers part of our society. We also acknowledge their absolute right to access essential services such as healthcare and education—noble Lords stressed the importance of that; I will discuss that at some length because it is a key issue.
The noble Lord, Lord Avebury, was very critical of government policy. I am delighted to say that the Government are actively trying to make a step change in their policies on gypsies and travellers. Some fairly profound criticisms were made of the Government by the noble Lord, Lord Avebury. He referred to the slowness with which we have done things. I stress that I have made an unambiguous statement and I will follow it through.
We have made some progress in effecting that change by commissioning research on the provision and condition of local authority gypsy/traveller sites in England; introducing the gypsy sites refurbishment grant, which is not enough but is a significant start; and consulting on guidance on the management of unauthorised camping.
The Government continue to develop policy in conjunction with key players such as representatives from the gypsy and traveller community, the Institute of Public Policy and Research and the Commission for Racial Equality. In addition, the Government are reviewing planning procedures, and gypsy and traveller provision will be looked at as part of that review.
The noble Lord, Lord Avebury, and the noble Baroness, Lady Sharp, mentioned the extraordinarily important Pat Niner research which was commissioned. I am pleased that that research revealed, as we all know, that a widely understood policy is badly needed. The Government are working on that with key players, including the research groups I mentioned and gypsy and traveller representatives to ensure that we have a sustainable policy, for which noble Lords were asking. That is a positive step forward. I do not know the timescale but I shall find out and let noble Lords know about that important matter.
The Government introduced the gypsy sites refurbishment grant in 2001 and over the past three years have provided £17 million worth of funding to assist with the upkeep of those sites. As the noble Lord, Lord Avebury, says, that is not a great deal of money, but it is a significant start and something to build on.
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The current network of 324 local authority authorised sites provides a much needed resource for gypsies and travellers. We are certainly conscious of the need to keep these sites open and available for use; and we are fully aware of many of the problems that have to be dealt with.
Round 3 of the grant has been extended to provide funding for temporary sites and emergency stopping places, as well as to continue to refurbish existing sites. That further injection of funding will, we hope, persuade local authorities to ensure adequate provision in their areas.
Furthermore, on 27th March, my honourable friend, the Member for Harrow East announced at the Local Government Association conference that further funding of £16 million will be made available over the next two years—£8 million per year in 2004–05 and 2005–06 to continue to improve and upgrade existing sites and to establish temporary sites and emergency stopping places.
Lord Avebury: My Lords, before the noble Lord sits down, is he in a position to calculate how many temporary stopping places will be provided out of this money, and whether he will compare that with the 2,000 places which Pat Niner said had to be provided?
Lord Evans of Temple Guiting: My Lords, I regret that I do not have that statistic in this document. I shall certainly find out and let the noble Lord know. However, it is important to return to the point I made about the Pat Niner research: that the Government understand that the research is needed and will use this to develop a sustainable policy. With such a significant statistic as the one mentioned by the noble Lord, Lord Avebury, it will be very difficult to ignore.
The ultimate answer to homelessness is to have an adequate number of authorised sites for gypsies and travellers in which to camp. We have gone some way to improve the situation through the gypsy site refurbishment grant. However, central Government can only go so far. We must therefore have the input and co-operation of local authorities in order to provide these sites for the gypsy and traveller community. That touches on an important point made by the noble Lord, Lord Hanningfield, about the relationship between central and local government in this matter. That is an extremely interesting issue.
The Government continue to issue clear guidelines to local authorities of their need to provide both permanent and temporary site provision and to give gypsies and travellers, who either reside in or pass through their areas, proper sites to live in. Obviously these sites should have the basic amenities. Such provision would help reduce the level of unauthorised camping and encourage good practice and social inclusion by local authorities.
Until an adequate number of authorised sites are made available, gypsies and travellers have little choice but to camp in undesirable/unauthorised locations. So this problem is fully understood.

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I have been asked where the Government stand in regard to our new guidance on managing unauthorised camping. I am pleased to announce that the Government are on track to issue this document later in the summer. I would like to take this opportunity to assure noble Lords that the new guide is not just about local authorities and police services evicting gypsies and travellers from unauthorised sites, it is about understanding the causes of unauthorised camping and developing effective strategies and identifying proportionate responses to them. The guide has been informed by those agencies that have experience of unauthorised camping at the local level and includes the views of gypsy and traveller representative groups.
While the new guide is geared towards addressing the small number of disruptive and unsettling encampments that impede upon the lives of other gypsies, travellers and local residents, it will also set out good practice standards to enable local authorities—obviously that good practice is not needed in Essex—and police services to be more aware of the needs of gypsies and travellers.
The guide will strive to address the wider issues of unauthorised camping and adequate site provision, and the need for local authorities to put in place integrated, balanced and consistent policies and strategies. Local authorities, in implementing such policies, will have a better understanding of the gypsy and traveller way of life and the needs of the local community.
Before moving on to education, I would like to say a few words about homelessness legislation. As I have just two minutes left, they will be a very few words. The Government are committed to tackling homelessness. That is why we are taking forward a challenging new approach which focuses as much on the problems homeless people face as the places they live. This approach was set out in our March 2002 publication More Than A Roof.
One aspect of this is a strengthening of the homelessness safety net, including implementation of the homelessness provisions of the Homelessness Act. One of the most important provisions of the 2002 Act is the new requirement for local housing authorities to adopt a homelessness strategy based on a review of homelessness in their district. This must be a strategy for preventing homelessness and ensuring that accommodation and support are available for people who are homeless or likely to become homeless.
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So among other things they will need to take into account the needs of gypsies and travellers who are likely to become homeless in the district and include an analysis of whether existing site provision is adequate.
In the final minute I wish to move on to education. I am really sorry that I do not have more time. I agree with everyone who said that this is an absolutely crucial area. As we know, the Department for Education and Skills has, since 1997, continued to fund the Traveller Education Service. From April the grant was merged with other small grants to form the Vulnerable Children Grant; a funding increase from £31 million to £84 million, for which all LEAs are eligible. It is to support a coherent strategy for a range of locally identified vulnerable children including those from gypsy and traveller families.
There is a matter of good practice which has already been mentioned that all schools should be following. Many schools are doing that, particularly those with minority ethnic pupils, including gypsy travellers. All schools under the specific duties outlined in the Race Relations (Amendment) Act 2000 are required to have in place a written race equality policy. Schools are also required to have arrangements to assess the impact of their policies on pupils, parents and the staff with different racial backgrounds, including the gypsies, Roma and travellers of Irish heritage.
Resources are being allocated in one important area: better data on school registration, attendance and achievements of gypsy and traveller children. We are recognising the importance of collecting this data as the key to addressing school attendance issues. The DfES has invested £11.25 million for electronic registration systems in secondary schools with higher rates of unauthorised absence.
I conclude on education by stressing again that we feel, as do other noble Lords, that investment in education for the gypsy and traveller community is an absolutely key issue of the highest importance. I am sure that this Government are committed to interesting and exciting initiatives in this area.
I thank everyone who has taken part in this debate. I have found it extraordinarily interesting. I hope that some of what I have said will enable your Lordships to leave the Chamber encouraged that this Government are determined to help the disadvantaged people we have been talking about this evening.
House adjourned at a quarter past nine o'clock.