HL Deb 25 June 2004 vol 662 cc1463-9

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey) rose to move, That the draft order laid before the House on 10 May be approved [19th Report from the Joint Committee].

The noble Lord said: My Lords, requirements for original production, together with quotas for independent production and regional production, form an important part of the broadcasting landscape, as they help to maintain the variety and quality of UK public service television.

The overall health of the programme supply market depends to a considerable extent on a vibrant, innovative, domestic production industry. But this is not the only reason why original production is important. It is also clear that UK viewers are discerning, and demand high quality television programmes.

These requirements are not new. Licensed public broadcasters currently have licence conditions requiring their channel or service to include an agreed percentage of original productions in each calendar year. Broadcasters have consistently met their targets in previous years, and we see no reason why this should not continue.

Similar licence conditions to comply with original productions quotas will continue, but this will in future be based on a statutory requirement under the 2003 Act. This instrument will define original productions under powers in the Communications Act 2003. However, it is Ofcom's role to set the actual quotas for original productions. Any financial impact will be as a result of the quotas set or agreed by the regulator.

I am satisfied that this draft order is compatible with convention rights.

Under Section 278(6) of the Communications Act 2003 and paragraph 8(6) of Schedule 12 to the Act, the Secretary of State may by order define the programmes that are to be original productions for the purposes of Section 278 and paragraph 8 of Schedule 12 to the Act. Furthermore, under Section 278(7) of the Act and paragraph 8(7) of Schedule 12 to it, the Secretary of State may confer such discretions on Ofcom as she thinks fit.

This order is made in exercise of those powers and has been laid before Parliament in accordance with Section 278(9) of the Communications Act 2003 and paragraph 8(9) of Schedule 12 to that Act.

The original productions quota was introduced as a statutory obligation, along with other production quotas, to maintain the high quality of television programmes as well as to provide a balance to more relaxed foreign ownership legislation. Original productions was one of the many aspects of the Communications Act that were improved through pre-legislative scrutiny of the draft Bill. The Joint Scrutiny Committee recommended that the definition of original productions be tightened and that Ofcom be given a duty to establish specified levels for original productions in peak viewing times.

Rather than have a definition set in stone in primary legislation, we felt that defining original productions by affirmative resolution order would ensure that there was sufficient flexibility to refine the definition in response to changing audience expectation and market conditions. So we introduced amendments to enable the Secretary of State to determine, by affirmative resolution order, the precise definition of what should count as an original production. Amendments were also made requiring Ofcom to ensure that an appropriate amount of time is allocated to the broadcasting of original productions in peak viewing times.

On 20 January 2003, an indicative draft order was made available during the Commons Committee stage of the Bill to assist the Committee with its consideration of the relevant provisions of the Communications Act 2003 as it progressed through Parliament.

Section 278 of the 2003 Act places a duty on Ofcom to include conditions in the licences of all licensed public service channels requiring them to ensure that an appropriate amount of airtime, in each year, is allocated to the broadcasting of original productions. The licensed public service channels are Channel 3, Channel 4 and Channel 5. The time allocated to original productions is to be split in a manner that Ofcom considers appropriate between peak viewing times and other times. Before including such a condition for an original production quota and before deciding what constitutes a peak viewing time for a channel, Ofcom must consult the licence holder on whom it is to be imposed.

Similarly, under paragraph 8 of Schedule 12 to the 2003 Act, the Welsh Authority has a duty to secure that an appropriate amount of airtime is allocated to original productions, including in peak viewing times, in relation to their designated public services (taken together). For the time being, the designated public services of the Welsh Authority are S4C and S4C Digital. The Welsh Authority is to agree with Ofcom the proportions of time allocated to original productions and the manner of its split between peak viewing and other times. Ultimately, if they cannot reach agreement, Ofcom can give a direction to the Welsh Authority.

This instrument does not apply directly to the BBC, but noble Lords may be aware that there was some discussion in another place about how it operates on the separate quota requirements for original productions which apply to the BBC. The position is that, under the amended agreement between the Secretary of State and the BBC of 25 January 1996 (amended by an agreement dated 4 December 2003), the corporation, in relation to each of its public television services, is required to comply with arrangements agreed with Ofcom for securing that an appropriate proportion of the broadcasting time is allocated to original productions, and that it is split in an appropriate manner between peak viewing times and other times.

Furthermore, under the amended agreement, "original productions" in relation to the BBC's public television services taken together, has the same meaning as that specified in relation to a licensed public service channel by order under Section 278(6) of the 2003 Act—that is, this order. The Minister in another place has written a letter explaining our view that this arrangement translates to the BBC in such a way that a repeat of any of its public television services would count as an original production for the purposes of the quotas agreed under the agreement, regardless of which of those services it was originally commissioned for or shown on. That letter has been placed in the Library of both Houses.

A programme has to meet a number of criteria in order to qualify as an original production. First, in the case of a licensed public service channel, the programme must be commissioned with a view to its first showing on television in the UK being on that channel or, in the case of a Channel 3 service on that service or another Channel 3 service. The different arrangements for Channel 3 reflect the fact that it is a regional service. So, for example, if Yorkshire Television commissioned a programme that was first shown on Anglia Television, it would still be counted for the purposes of the original productions quota. Similar arrangements are made for the Welsh Authority: the programme must be commissioned for showing on one of its designated services; that is, either S4C or S4C Digital.

Secondly, it must be a European programme. European programmes that are qualifying "European works" will count in full towards the quota. European works are defined in paragraphs 1 to 4 of Article 6 of the Television Without Frontiers Directive and the text from this directive is set out in the schedule to the order for ease of reference. Broadcasters will in any case already be familiar with the definition of "European works", since it has been in existence since 1989.

Additionally, if a programme does not qualify fully as a European work we have introduced a means by which a programme may part-qualify. Programmes that meet the criteria under Article 6(5) of the directive—that is, programmes made mainly with authors or workers residing in one or more member states—will part-qualify towards the quota. In addition, programmes in which a Community producer or producers have made what appears to Ofcom to be a significant contribution to the production of the programmes will also part-qualify. The proportion of a part-qualifying work that can be treated as a European programme by Ofcom shall be calculated on the basis of the proportion of the contribution of the Community producer to the total costs of the part-qualifying work, applied as a proportion of the duration of the programme. In assessing whether a contribution is significant, Ofcom must have particular regard to the contribution of Community producers to the total cost of the programme and to the degree of editorial control.

A formal consultation is required under Section 278(8) and paragraph 8(8) of Schedule 12 to the Communications Act 2003. In accordance with these requirements Ofcom, the BBC and the Welsh Authority were consulted during the preparation of this instrument. We also consulted Channel 3 licence holders, Channel 4 and Channel 5. All those who were consulted responded and their views were considered and taken on board.

One of the points we considered during the consultation was whether repeats of qualifying original productions should count towards the quota. We decided that the draft order should not exclude repeats. We came to this decision because the original production requirements are important for a number of reasons, in particular to maintain the high quality and character of each of the public service channels and to maintain an appropriate balance between first-run programmes, which help to support a healthy and innovative programme supply market, and repeats. Both of these objectives are important and we explored with Ofcom how the second could be achieved.

Ofcom has responded by including in its recently issued public service broadcasting consultation document its view that the mix of first-run programmes and repeats is one of the most important elements of the character of a public service channel and any significant change that would make the service, as a whole, materially different would have to be approved by Ofcom. Ofcom has told us that, subject to further consultation with broadcasters, it intends to use its powers under Sections 266, 267 and 358 of the Act to ensure that sufficient safeguards are in place. I beg to move.

Moved, That the draft order laid before the House on 10 May be approved [19th Report from the Joint Committee].—(Lord McIntosh of Haringey.)

Baroness Buscombe

My Lords, I am grateful to the Minister for the comprehensive explanation of the provisions specified in this order. As the noble Lord has said, the purpose of the order is to establish the definition of an "original production" for the purpose of Section 278 of and paragraph 8 of Schedule 12 to the Communications Act 2003.

As the Minister has said, Section 278 will come into force on 1 July 2004 and requires that programming quotas are imposed on licensed public service channels—that is, Channels 3, 4 or 5 and the Welsh Authority—for original productions. At present, all licensed public service broadcasters are subject to licence conditions requiring that a percentage of their programming output in each calendar year is original. Comparable licence conditions are to be imposed on licensed public service broadcasters by virtue of this order. However, the new requirements are to be based on the statutory obligations established by the Communications Act 2003. Furthermore, Ofcom is required to consult each licence holder prior to the imposition of an original production quota.

The new statutory regime is intended to ensure that the programming output of the commercial public service broadcasters remains vibrant and diverse. Indeed, the Government have conferred powers on Ofcom, through the statutory provisions implemented by the Communications Act, to ensure that the programming quota is set and adhered to. Acting in conjunction with the programming quotas for independent and regional production, the order will sustain growth and innovation within our broadcasting industry.

A programme will be classed as original if it satisfies a number of necessary criteria. First, the programme must be commissioned with a view to its first broadcast being on television in the UK on a licensed public service channel. These arrangements apply equally to the Welsh Authority, which must commission the original production for broadcast on one of its designated services. Secondly, the programme must qualify as a European work, as defined by the Television Without Frontiers Directive. If a work fails to satisfy the requisite criteria, it may be classified as a part-qualifying work under Article 6, paragraph 5 of the directive.

While we welcome the general thrust of this order—the need to secure originality and diversity in our broadcasting industry—I have one concern, to which the Minister has already referred and which was debated in another place. The Minister has made the point that the order does not apply to the BBC. The BBC is subject to similar requirements under the amended agreement between the Secretary of State and the BBC. The agreement denotes that the term "original production" has the same meaning as the term specified in this order and that comparable programme quota requirements are applicable.

However, I find this regulatory anomaly both complicated and unnecessary. The obligations placed on all public service broadcasters are remarkably similar and the dual regulatory regime through which these quota obligations are assessed must be reconsidered during the forthcoming charter renewal period. Although the issue of BBC compliance is not strictly within the scope of this debate, it is inextricably linked. I think the Minister will agree that it is imperative that all broadcasters comply with their quota obligations.

Viscount Falkland

My Lords, we on these Benches thank the Minister for explaining complex material in, I believe, just inside 10 minutes. I do not think that any of us would benefit from probing into that any further other than to ask one or two brief questions.

In common with, I believe, the BBC and others involved in broadcasting, we welcome the order. It makes appropriate provision for the definition of original production which will help ensure the strong United Kingdom domestic flavour of public service channels in the future.

As the Minister intimated, repeats have an important role in bringing forward the transfer from analogue to digital, encouraging people to take up digital television facilities as quickly as possible. As regards repeats, I have a question that concerns the BBC in particular. Why are repeats of original programming not allowed on BBC3 or BBC4? During the passage of the Communications Bill we understood that it was intended that the digital channels would provide new material to attract new audiences, although we would not like to see those channels dedicated solely to that kind of programming.

Will the Minister assure the House that the calculations which refer to part-qualifying original programming as set out in Article 5 of the order will be done with the collaboration of the broadcasters themselves? The criteria are clear; namely, the cost of production, the degree of editorial control and the origins of authorship. However, my honourable friend the Member for Bath drew my attention to two instances that give rise to questions. Five's children's TV schedule includes a number of programmes that were made on location in New Zealand—for example, "Don't Tell the Koalas"—in collaboration with overseas broadcasters but were originally commissioned and financed by Five 5. If these programmes are not adequately represented in the original productions quota, that could undermine children's programming in the future. I hope that the Minister will respond to that point.

My honourable friend in another place also referred to Formula 1 racing that is produced by all three media. Where Grand Prix events that take place outside Britain are broadcast, the event coverage is provided by a domestic producer and supplied to all three media which then add on the all-British commentary, the links, the graphics and so on. Such programmes will need to be produced with sensitivity and with a recognition of the unique problems that arise regarding the coverage of sports and events. My honourable friend has raised an important point to which I hope the Minister will respond.

Will the Minister guarantee that the timescale for the 2005 original production quotas will be agreed with the public service broadcasters to enable them to meet that timescale? I believe that the BBC and Five 5 have complained of the dangers of a poorly planned timetable. Having said that, I welcome the order and thank the Government for it.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Baroness and to the noble Viscount for responding to the order. I believe I can give all the assurances that are sought.

The noble Baroness, Lady Buscombe, asked why there was a rather different regime for the BBC than for the other public service broadcasters. That is what is set out and required in the Communications Act 2003. Clearly, that is one of the issues that can legitimately be considered in the BBC charter review, and it will be. I make no judgment on the outcome of that; we have not yet published the results of our consultation. However, I can certainly say that if the outcome is that the BBC's regime for original productions should be more closely aligned with that of other broadcasters, that will be provided for in the charter and the agreement.

The noble Viscount, Lord Falkland, asked me why repeats on BBC3 and BBC4 were not included. A review of the BBC's digital output is being conducted by Professor Patrick Barwise of the London Business School. He will consider exactly that kind of issue. If we were to allow original productions by stations other than public service broadcasting stations, that would drive a coach and horses through the original production quota. If we were to allow material to be reused indefinitely between BBC channels or between Channel 4, Five 5 and Channel 3, that would also drive a coach and horses through the quota. We have to be cautious about that. It is better to leave that matter for Professor Barwise's review and subsequently for the charter review process.

The noble Viscount asked how the calculation for part-qualifying productions is arrived at and whether it is done with the collaboration of broadcasters. It could not be done any other way. The broadcasters who have an interest in their programmes being included in the quota of original productions, and those who produce them, whether internally or independently, will have to tell Ofcom the details. They will have to tell Ofcom about the budgets and the degree of participation. In my opening remarks I used the phrase, "make a significant contribution to the production". That can apply whether the actual shooting takes place in New Zealand or at a Formula 1 race track outside Europe. A calculation will have to be made regarding the contribution of European producers. Similarly, the timescale for the introduction of the detailed orders by Ofcom will have to be included in the consultation, to which I have already referred, which it has to undertake before it implements the quotas under this order.

On Question, Motion agreed to.

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