Communications Bill

Public Bill Committee, 16 January 2003.

Standing Committee E

Communications Bill

Roger Gale (Conservative, North Thanet)

Before we start, I have had a conversation with Mr. Atkinson about progress on the Bill in general and S4C in particular. My understanding, which is confirmed by the Official Report, is that we have had a wide-ranging debate about S4C. Therefore, hon. Members should not be surprised if I confine debate tightly to the amendments this morning. I do not propose to allow a re-run of Tuesday's debate.

Michael Fabricant (Conservative, Lichfield)

On a point of order, Mr. Gale. Last night, the Secretary of State for Culture, Media and Sport said in Oxford that she wishes the BBC to be under tighter controls than at present and that an independent body should conduct a full review of the value for money of the licence fee. Given that the Government rejected the Opposition's suggestions that the BBC should come under Ofcom—just such an independent body—can we revisit the issue?

Roger Gale (Conservative, North Thanet)

Matters arising from the Bill and amendments tabled to it are a subject for the ingenuity of the Committee not the Chair.

Andrew Robathan (Conservative, Blaby)

On a point of order, Mr. Gale. Together, I suspect, with other hon. Members, I have received a communication from the Electoral Commission about party political broadcasting. We do not operate in a vacuum. The commission recommends changes to legislation. It states:

''We recommend that the proposed duty on OFCOM to determine rules should also include a requirement to establish a committee composed of the broadcasters and sitting under a chairperson who is independent of broadcasters.

We recommend that regulation of the obligation to carry PPBs should be the same for all broadcasters, and that the BBC and the Welsh Authority (S4C) be brought within the scope of OFCOM for this purpose.''

I understand that the matter is not one for you to rule on, Mr. Gale, but have you heard whether the Government are likely to make a statement on the recommendation, which is germane to our debate on this part of the Bill?

Roger Gale (Conservative, North Thanet)

The straight answer is no, I have had no such information. We shall debate clauses and amendments relating to the matter later in the Bill.Clause 199 Welsh Authority's function of providing S4C and S4C Digital

Clause 199 - Welsh Authority's function of providing S4C and S4C Digital

John Whittingdale (Conservative, Maldon and East Chelmsford)

I beg to move amendment No. 283 in

clause 199, page 174, line 11, leave out from 'Authority' to end of line 14 and insert 'must use part of the signals carrying S4C to provide subtitling in relation to programmes included in the service

and may use part of those signals to provide other services which are ancillary to programmes included in S4C and which are directly related to their contents.'.

I hope that we can begin in the spirit in which we will continue this morning and dispatch this matter swiftly. The amendment deals with subtitling on S4C. Although the Royal National Institute for Deaf People has done a lot of work to promote subtitling and make it easier for deaf people to enjoy television programmes, the institute tells me that it is not necessary to press the amendment, so I wish to make it clear that I am willing to withdraw it.

The amendment, however, gives me an opportunity to put on record my tribute to S4C for its work. S4C exceeded its target for 2002 of 73 per cent. subtitling for Welsh language programmes—the actual outcome was 75 per cent. The target has been increased to 76 per cent. for this year and 80 per cent. by 2004. In addition, 10 hours of programmes a week are subtitled in simplified Welsh, specifically for those who want to learn the language. Even simplified Welsh may be a little ambitious for me if I ever find myself watching S4C on digital television, but it is nevertheless a beneficial addition to help with the take-up and understanding of the Welsh language.

S4C has worked with the RNID to ensure that all those with hearing difficulties in Wales are able to access Welsh language programmes. It is worth putting on record that S4C has done a great deal of work on the matter, which is why the amendment is unnecessary.

Simon Thomas (Plaid Cymru, Ceredigion)

I am grateful to the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) for tabling the amendment because it allows the Committee to reflect on what S4C has achieved and its future objectives. As he said, S4C has its own target of 73 per cent. of subtitling on its programmes, a target that it has exceeded to date. This month the figure will be 76 per cent., and it has set a target of 80 per cent. by 2004. The broadcaster is to be congratulated on that.

We are discussing access to subtitling for deaf people in Wales. The Committee needs to reflect that most subtitling on S4C is from the Welsh language into the English language. There is also specialist subtitling from the Welsh as spoken on the screen to the simplified Welsh to which the hon. Gentleman referred. One of the difficulties faced by Welsh-speaking deaf people in Wales in the past is that they have not been able to receive the S4C programmes in their own language; Welsh-speaking deaf people in Wales have had subtitles in English and have had to access S4C through the medium of English, which undermines the reason for the existence of S4C.

As the hon. Gentleman mentioned, S4C has worked hard with the RNID to overcome the problem. Next year, the 889 service—the service he referred to on teletext—that takes viewers from the spoken Welsh on the screen to the simplified written Welsh will become more widely available. I regret to tell him that there will be less simplification and a more standard Welsh version of what is happening on the screen will be used. Deaf people will welcome the fact that they will

have greater access to S4C programmes in their own language.

Such matters have been raised by one of my constituents, the Reverend Mort, who is a member of the Wales Council for the Deaf, another active organisation in Wales. He has also said that we have a copyright problem in Wales: many programmes that he and a lot of people in Wales enjoy watching on S4C, such as broadcasts of Eisteddfodau or choral singing, have a copyright problem to do with putting the lyrics on screen as subtitles. Deaf people can watch a subtitled programme up to a certain point, but when the music kicks in there are no subtitles. Now is an opportunity for the Minister to explain how S4C may be assisted to overcome its difficulties with subtitling and subtitling costs.

We need to go back to where we were on Tuesday and consider the expansion of S4C's services, particularly in the digital age, and how it might be better funded to meet some of the challenges. I support the hon. Gentleman's praise for S4C. I note that improvements are already happening and more significant improvements are planned within the next year. I hope that S4C, the RNID and other deaf organisations in Wales will continue to work together to ensure the best possible access to both English and Welsh through the medium of subtitling into Welsh-language programmes.

It is not only deaf people who benefit from subtitling on S4C; for some reason, my daughter always watches programmes through subtitling—English or Welsh. It is a service that is available and it obviously enhances the enjoyment of S4C programmes for many people in Wales.

Kim Howells (Labour, Pontypridd)

Before I speak to the amendment, Mr. Gale, would it be in order for me to answer some of the issues that were raised on Thursday on the clause?

Roger Gale (Conservative, North Thanet)

The hon. Gentleman puts me in a slight quandary because I was intending, exceptionally, to permit a stand part debate because an hon. Member has already said he wishes to speak on a stand part debate. I am fairly relaxed about the matter.

Michael Fabricant rose—

Roger Gale (Conservative, North Thanet)

One moment!

Michael Fabricant (Conservative, Lichfield)

I am trying to be helpful.

Roger Gale (Conservative, North Thanet)

Please do not.

If the Minister will deal with the issues now, I am willing to call the hon. Gentleman as well. Perhaps we can deal with the matter in that way and without a stand part debate.

Kim Howells (Labour, Pontypridd)

I shall be brief.

On Thursday, we had a hybrid but useful debate that ranged across several clauses. I shall refer to a point raised by my hon. Friend the Member for Ogmore (Huw Irranca-Davies), who is not present. Our approach has been that the obligations placed on the Welsh authority by the Bill should be broadly comparable to those placed on the BBC in part by the

Bill but mainly by the BBC agreement. We have departed from that approach only when the nature and functions of the Welsh authority made that necessary or desirable. One example in which we have done so is subtitling, which is the subject of amendment No. 283, to which I shall return.

On Thursday afternoon, the hon. Member for Ceredigion (Mr. Thomas) asked what the regulatory position of S4C would be in relation to Ofcom. As I explained on Tuesday, the authority, like the BBC, will remain self-regulating on matters such as impartiality and the fulfilment of its tier 3 remits. However, like the BBC, the authority will be subject to Ofcom regulation in respect of negative content requirements and industry-wide quotas and obligations.

The hon. Gentleman also asked whether clause 200 would enable the Welsh authority to launch new services in response to changes in technology. The new services that clause 200 will enable the authority to provide are not restricted to existing technology. As long as the authority provides public services of high quality for the dissemination of information, education or entertainment wholly or mainly to the members of the public in Wales, and provided that the Secretary of State has approved those services, clause 200 will permit the authority to provide them by any means that it thinks fit. There is one exception, which I shall mention.

Under clause 200, the Welsh authority may not provide radio services. If it wishes to offer such services, it will be able to provide them as licence services via an S4C company set up under clause 201. We have excluded some services from clause 200 because, as the hon. Gentleman knows, Welsh language public service is already well provided for by the BBC, and we do not think that it would be appropriate for the Welsh authority to divert funds from its existing public services to provide competing publicly funded radio services.

The hon. Gentleman asked about S4C funding several times. The Government recognise the financial pressures faced by the Welsh authority and the steps that it has taken to improve efficiency, and I pay tribute to the authority for that. We have given careful consideration to the authority's bid for additional funding in the recent spending review. However, because of the many competing bids that the Department receives, and the pressures on our budget, it was not possible to meet that bid. The Welsh authority's funding arrangements bring advantages as well as the perceived disadvantages. Of course, there will always be constraints on Government expenditure, but Government funding for S4C and the annual increases in relation to the retail prices index have largely protected the authority from the sharp downturn in advertising revenue that commercial broadcasters have recently experienced.

I am grateful for the helpful way in which the hon. Member for Maldon and East Chelmsford presented amendment No. 283. I recognise the force of his argument as well as the point made by the hon. Member for Ceredigion about the Welsh authority providing subtitling on S4C. However, the effect of the amendment, as the hon. Member for Maldon and East

Chelmsford hinted, would be to require all programmes included in the S4C service to be subtitled from the date on which clause 199 comes into force. That is in contrast to clause No. 293, which makes provision for interim targets to be met by other television services. We are working towards 90 per cent. for Channel 3 and Channel 4, and 80 per cent. for other services, by January 2010. Clause 293 also provides for specified programmes to be excluded from those targets. The amendment would therefore impose substantially tougher targets on S4C than on any other channel.

The Welsh authority already provides subtitling on a voluntary basis. When drafting the Bill, we took the view that it should continue to do so on its analogue television service. The authority faces special challenges in the provision of subtitling. As Michael Caine might say, ''Not a lot of people know that.'' The authority caters not only for hearing impaired Welsh speakers but for Welsh learners and for English-speaking viewers like me. The provision of subtitles in two languages creates additional burdens and requires the authority to make judgments that are not required of other broadcasters. The Government believe that the authority has shown itself able to balance the subtitling needs of different audiences and to do so well. We are not therefore persuaded that statutory subtitling targets are the best way forward for the S4C analogue service. I am glad to hear that the hon. Member for Maldon and East Chelmsford has decided not to press his amendment.

Simon Thomas (Plaid Cymru, Ceredigion)

The Minister says, rightly, that S4C should continue with the voluntary way in which it deals with things at the moment. However, if there is a problem in future, will Ofcom have any role in either regulating or reporting on any perceived failure by S4C to subtitle its programmes adequately?

Kim Howells (Labour, Pontypridd)

I expect Ofcom to hold constant discussions with the Welsh authority on subtitling. Access is a central issue, as is strengthening the function of S4C in protecting and promoting the Welsh language. Subtitling will be an important element of that.

I forgot to answer the hon. Gentleman's question on copyright. As somebody who dealt with this issue at the Department of Trade and Industry, I know that it is an issue for the Patent Office. The question of copyright is difficult. In Wales, many authors depend on the revenue that they receive from copyrighted material. That material belongs to them and may be their only means of earning money. The issue is delicate and will have to be discussed with S4C and broadcasters in general.

Chris Bryant (Labour, Rhondda)

Would not this matter be dealt with by the incorporation of the copyright directive?

Kim Howells (Labour, Pontypridd)

Partly—but the copyright directive is a large and blunt instrument. In cases such as that raised by the hon. Member for Ceredigion, programmes and subjects that have traditionally been the fare of a service such as S4C could run into difficulty because of

interpretation or implementation. We have to get things right. My hon. Friend is right to suggest that things are changing quickly on the copyright front and, more generally, on the intellectual property front.

I hope that the hon. Gentleman will withdraw his amendment.

Michael Fabricant (Conservative, Lichfield)

I want to speak not so much on subtitling but more on the main part of the Bill. My point is a straightforward one on the provision of digital services.

In earlier debates, hon. Members have mentioned the problems of the topology of Wales and the means by which digital transmissions can be disseminated to viewers. People in valleys—especially valleys with south-facing hills—cannot receive satellite access. As the hon. Member for Rhondda (Mr. Bryant) has said on numerous occasions, cable services are not widespread in rural areas of Wales or the rest of the United Kingdom. One practical way in which a digital service can be provided in Wales is by the use of relay transmitters, which, at present, do not carry digital terrestrial broadcasting. The Minister will be aware that that is currently licensed by the Independent Television Commission to Freeview.

Clause 199 is concerned with the provision of S4C digital. So far, the entire discussion has been around programme content. Will the Welsh authority have the power to provide funding for digital terrestrial television transmitters and antennae to be added to the relay transmitters? What is the Government's view on the funding of such services by the Welsh authority, because without the provision of digital terrestrial television, many areas will have no form of digital television for S4C or any other service available for many viewers in Wales?

Roger Gale (Conservative, North Thanet)

Order. We have discussed the fact that these issues are complicated and interrelated. In fact, the transmission issue is not directly related to clause 199 and the duties of S4C but rather to the transmission company. However, the hon. Gentleman has raised the point and I am perfectly happy to allow the Minister to respond.

Kim Howells (Labour, Pontypridd)

First, Ofcom will not have the funding to embark on upgrading relay stations. May I disabuse the hon. Gentleman on one thing? Those of us who live on the south-facing slopes of the Welsh hills are not without satellite signals. I have received Sky satellite signals for the past 12 years, as has everybody else I know in Pontypridd, which is in a south-facing valley.

Michael Fabricant (Conservative, Lichfield)

Will the Minister give way?

Kim Howells (Labour, Pontypridd)

No, I will not, because the hon. Gentleman has had enough time.

I remind the hon. Gentleman that we Welsh do not live in some cultural backwater. He should remember that a higher proportion of people have digital reception in Wales than in any other part of Great Britain. That might be due to satellite coverage, but Wales was the testing ground in the 1950s for cable coverage, and my own village had cable. The coverage

was stopped and cable did not develop for 30 years—that is absolutely true.

John Whittingdale (Conservative, Maldon and East Chelmsford)

This has been a useful brief debate. Given that S4C has demonstrated a commitment to subtitling and that, on that basis, RNID does not consider the amendment to be necessary, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 199 ordered to stand part of the Bill.

Clause 200 - Powers to provide other services

Simon Thomas (Plaid Cymru, Ceredigion)

Will the Minister say a little about the new services that S4C will be empowered to provide? When he responded to clause 199, he kindly responded to comments that I made on Tuesday afternoon, which I shall not repeat. What is the meaning of the word ''substantial'' in clause 200(5)? The clause provides that a substantial proportion of any new services provided by the Welsh authority, which may include such things as internet services—everything but radio—must be in Welsh. If a substantial proportion must be in Welsh, what will be the language of the remainder? S4C is a Welsh-language broadcaster, not an English-language broadcaster.

There is debate in Wales about the amount of English that is sometimes included on S4C and BBC Radio Cymru programmes. Those arguments are often generational because the older generation is a little unhappy about the way in which youth-orientated programmes mix languages, although that is perhaps a more natural reflection of the way in which the language develops, especially in areas where there is bilingual education. However, there is a question whether clause 200 would empower S4C to produce wholly English-language programmes, or programmes in any other language, such as German. That might bring S4C into conflict with other broadcasters in Wales.

Two points should be emphasised for the Committee. S4C does not produce programmes itself; it commissions programmes. S4C is a commissioning body and consequently the independent sector—ITV in Wales and the BBC—produces the programmes that S4C broadcasts. S4C is a hugely important part of the Welsh broadcasting industry.

The second point reflects the debate on Tuesday afternoon when the hon. Member for Rhondda said that many people in Wales want to receive Channel 4 and English-language programmes, not Welsh-language programmes. It must be emphasised that from the point of view of English-language public service broadcasting in Wales, we have two BBC channels, Channel 3, Channel 4 and Channel Five. Those are also public service broadcasters for Wales, and they have an obligation, which would be greater if some later amendments were passed, to reflect through

their public service remits the nature of the regions and nations of the United Kingdom.

There does not seem to be a clear role for S4C in making anything other than Welsh-language programmes. There may, however, be an element of English in such programmes. For example, if the Minister were to be interviewed on S4C about the Pontyprydd crags, or something like that, he would have to give his views in English. S4C has always included programmes with English speakers, because that is how the language and culture can be shared with everyone in Wales. That is not, however, the same thing as saying that programmes made by S4C should be in any other language than Welsh. Will the Minister explain the thinking behind the term ''substantial''? What would that mean in future for broadcasting and other services in Wales?

Chris Bryant (Labour, Rhondda)

The hon. Member for Ceredigion has raised an important point. We will, during the next five or 10 years, be moving towards a fully digital Wales, in which everyone would receive both Channel 4 and S4C.

Michael Fabricant (Conservative, Lichfield)

How?

Chris Bryant (Labour, Rhondda)

Through Sky, which is received by some 55 per cent. of my constituents—the dishes can be counted when driving up the valleys—or perhaps through digital terrestrial television. However it is that those two channels are received, we must aim to ensure that, during the next 10 years, everyone in Wales can receive both.

S4C digital is wholly in Welsh, whereas S4C, the traditional analogue service, is a mixture of English and Welsh language programmes. In a sense, S4C is a channel for the whole of Wales, rather than just for the Welsh-speaking population. How shall we ensure that, when the moment comes for S4C digital to replace the traditional, analogue S4C, with its Welsh and English language mixture, S4C is still a channel for Wales and not just for the Welsh-language population? I am concerned about the fact that at the moment Channel 4 feels that it has no remit to cover Welsh issues, or to transmit in Wales. For example, it rarely covers Welsh political issues and the National Assembly because it has no remit to transmit directly in Wales. How does the Minister see that transition progressing during the next 10 years?

Simon Thomas (Plaid Cymru, Ceredigion)

It is important to get this right. The hon. Gentleman is wrong to say that Channel 4 has no remit to transmit in Wales. Channel 4 is carried by S4C. The hon. Gentleman is correct in what he says about Channel 4 programmes, but that does not mean that it does not have the remit. Channel 4 has turned its back on English-language programmes that reflect the Welsh issues that he mentioned.

Chris Bryant (Labour, Rhondda)

The hon. Member for Ceredigion is entirely right. It would be nice if there came a time when S4C felt that it was within its remit to report and use the views of Welsh people in Wales who speak English. Similarly, Channel 4 should use its remit more robustly in respect of showing life in Wales.

Kim Howells (Labour, Pontypridd)

Under subsection (1), the authority may not provide any other television programme

service, unless the provision of the service has been approved by an order issued by the Secretary of State and it meets the additional tests that are set out in the clause. The authority must be satisfied that that is a high quality public service for the dissemination of information, education or entertainment wholly, or mainly, to the public in Wales. The provision of the service must broaden the range of television broadcasting services that are available in Wales. In response to the point that was made by the hon. Member for Ceredigion, I would say that the authority must also ensure that a substantial proportion of the programmes included in the service are in Welsh—that is what it was set up for. That is a matter of judgment for the authority. We believe that it has exercised that judgment properly and very well.

Under subsection (2), the Welsh authority may also provide services that are neither television nor sound services, provided that they are approved, by order, by the Secretary of State. Such services must also be provided for reception wholly or mainly by members of the public in Wales and be a public service of high quality for the dissemination of information, education or entertainment. An order that approves the provision of a new service under the clause must set out the nature and characteristics of the service and, if it were a television programme service, must set out its public service remit.

Subsection (7) enables the authority to provide programme-related assistance for disabled people, other services ancillary to programmes and directly related to their contents and in relation to any part of a digital service or any other ancillary service. The Welsh authority's remit—[Interruption.]

Roger Gale (Conservative, North Thanet)

Order. I appreciate that members of the Committee need to communicate with each other, but that practice has been going on for a long time.

Kim Howells (Labour, Pontypridd)

The Welsh authority's remit is to provide on S4C digital a broad range of high-quality and diverse programming. The remit will enable the authority to provide programming for everyone in Wales. The points raised by my hon. Friend the Member for Rhondda are important. Until he spoke a moment ago, I have always understood that the remit of Channel 4 included me and everyone else in Wales in what it produces. It is not only Channel 4 that has problems with the coverage of news in Wales, but almost every newspaper. I never see reports in national newspapers about the finest rugby team in Wales, Pontypridd. That is a widely held gripe.

It is often the curse of Welsh television and film that we believe that we can make films and programmes only about Wales or Welsh people in Patagonia, a point raised initially by the hon. Member for Ceredigion. That is extremely limiting, but one of the great achievements of S4C, especially over the past five years or so, is that it has realised that it can make films about anywhere in the world on any subject. That has been a big step forward for the Welsh media.

Question put and agreed to.

Clause 200 ordered to stand part of the Bill.

Clause 201 - Other activities of the Welsh Authority

Michael Fabricant (Conservative, Lichfield)

The Minister, who seems incapable of speaking unless he receives a briefing note from his officials, gave no sensible response to my sensible question about digital terrestrial television. Under the clause, according to the explanatory notes to the Bill,

''the Welsh Authority must obtain the approval of the Secretary of State under subsection (2). The types of activities that may be approved by her under subsection (2) include those needed to secure, and those in connection with, the provision of licensable services''.

I shall clarify the point that the Minister chose to misunderstand. If someone's home faces a south-facing hill, he or she will not be able to receive a satellite transmission. The hon. Gentleman will be aware that a geostationary satellite has to sit in a geostationary position over the equator. As we live in the northern hemisphere, satellite dishes have to face south. If someone were living at the base of a high hill or mountain, there will be no line-of-sight access to a geostationary satellite. As low earth orbit satellite constellations are not currently used for the provision of digital television, it follows that many people living in that position—indeed, all people living there—will not, because of the basic laws of physics, be able to receive satellite transmission. It has frequently been pointed out—by the hon. Members for Rhondda and for Ogmore, and by many other hon. Members both in this Committee and during Welsh questions—that although this Government and the previous Government have made valiant efforts to provide cable services throughout Wales, 100 per cent. provision is impossible to achieve.

Nevertheless, Crown Castle Ltd. and NTL provide analogue television to about 97 per cent. of the population of Wales. However, most of that reception capability is provided by relay transmitters that do not at present have digital terrestrial television. As any form of digital television can be provided to those people only by digital terrestrial television, would the Welsh authority be in a position to fund the placing of digital television transmitters and the relevant antennae on top of relay transmitters? If that were the case, under clause 201, would the Minister be minded to give it the power to do that?

As the Minister sat down after answering my previous question, the officials handed him a note. Perhaps he will now be more polite, informative and helpful to the Welsh people by answering that question.

Roger Gale (Conservative, North Thanet)

Minister?

Kim Howells (Labour, Pontypridd)

Well, all right.

Roger Gale (Conservative, North Thanet)

The Minister is not compelled to respond.

Kim Howells (Labour, Pontypridd)

I will answer the hon. Member for Lichfield (Michael Fabricant) because I was brought up properly. I do not know what he had for breakfast, but it has clearly upset him. [Interruption.]

Roger Gale (Conservative, North Thanet)

Order.

Kim Howells (Labour, Pontypridd)

Subsection (7) amends section 61 of the Broadcasting Act 1990 so that the Secretary of State may increase the annual grant that is paid to the Welsh authority by more than the rate of inflation—as that is measured by the RPI—if she is satisfied that additional funding is appropriate in the light of the cost that it incurs in providing its public services and broadcasting and distributing such services. At present, the Secretary of State may take into account only the cost of transmitting S4C and S4C digital when considering such an increase.

Michael Fabricant (Conservative, Lichfield)

On a point of order, Mr. Gale. The Minister has still not answered the question, and I do not know why he refuses to do so. I simply want to know whether there is capability for the provision of this. All I can do is continue—when it is in order—to ask the same question. All I want is a simple yes or no, and to know what the Government think about Freeview. It is not unreasonable to want that.

Roger Gale (Conservative, North Thanet)

First and foremost it is not the responsibility of the Chair to promote ministerial answers—it is for the Minister to decide whether he wishes to respond. The hon. Gentleman has made his point forcefully—and, on occasions, not entirely in parliamentary language. I have stretched a point because the matter is not, strictly speaking, covered by clause 201. Transmission is not the responsibility of the Welsh authority. If the Minister chooses not to respond, that is up to him. We have looked carefully at the Bill, and I cannot find anywhere else in the Bill where this is covered, so it might be helpful if the hon. Gentleman were to put his concerns to the Minister in writing; I am sure that the Minister will then seek to respond courteously.

Question put and agreed to.

Clause 201 ordered to stand part of the Bill.

Clause 202 - Welsh authority finances

Simon Thomas (Plaid Cymru, Ceredigion)

I wish to ask a couple of questions that relate to the finances of the Welsh authority—of S Pedwar C.

Subsection (1) makes it clear that the Welsh authority must not impose charges on persons for receiving its services in Wales. That leads me to ask an interesting question: can it impose charges on persons for receiving its services outside Wales? At present, there is a problem: people in London, for example, can get S4C via satellite by putting in a postcode that is different from their London postcode, and S4C has to pay each time someone subscribes in that way. In future, S4C may wish to recoup some of those payments to enhance its financial position and avoid making a loss. Would it be in order for S4C to charge for services received outside Wales? It would open an interesting box of tricks for the company.

On the issue of funding for S Pedwar C, the Minister responded earlier to comments that I made on Tuesday about how the Government had examined

S4C's finances. I accept his point that S4C has a certainty of funding that other independent broadcasters do not have because it is a public sector funded body that is not completely reliant on advertising revenue, selling its programmes abroad or co-working. Its position is different from that of Channel 4, although Channel 4 started in the same way.

The real comparison, however, is with the BBC because S4C is a unique public sector broadcaster in Wales, specifically established by statute to provide public service programmes in the Welsh language. That is not a commercial activity, or one from which it is possible to make money or even be commercially efficient, otherwise Harlech Television would have done so many years ago—it tried and failed. It is important to emphasise that we are funding S Pedwar C for reasons of cultural diversity—to support further use of the Welsh language—not simply as a television broadcaster, which would be silly.

As a public service broadcaster, the BBC is funded in a similar way to meet needs that are not provided for by commercial broadcasters, although we discussed whether the BBC actually did that. We will shortly be debating broadcasting in Gaelic in Scotland, which has similar implications. I would like the Minister to reflect on this matter in the future—he does not have to reply now. The BBC has had a considerable increase in the licence fee to pay for its expansion of digital broadcasting—rightly so, in my opinion. S4C is in a similar position. Should it not receive some recognition for the considerable expansion that it has undertaken in digital broadcasting?

S4C does not have a licence fee as such, but everyone in Wales pays the licence fee and gets S4C as well as the Channel 4 parts of S4C included in that deal. On the whole, together with subtitling, people get a good service for their money. There are broadcasts in both languages and S4C makes a contribution to the cultural diversity of Wales—and the United Kingdom.

We should remember that S4C contributes to the cultural diversity of the UK. We should all be proud of its support for broadcasting in a less well-used language. Our standing is good on that issue within Europe. To be fair, over the years all Governments have reflected the need to continue such support. When asked what the Government do for cultural diversity in the UK as a whole, it is one good thing to which the Department of Culture, Media and Sport can point.

I would not like to see services decline as a result of lack of funding and I hope that the Minister will keep an open mind on future funding of S Pedwar C, especially as clause 202 allows the Secretary of State to make extra payments in advance of the RPI to reflect new services. As those services come on stream, and as S4C shows that those services are wanted and used by people in Wales, the Government may be inclined to give sufficient support to allow those services to be sustained and expanded.

Michael Fabricant (Conservative, Lichfield)

Clauses 200 and 201, which we have already discussed, refer to the provision of

services including digital services. There are three ways to provide a service: by using a satellite platform, through cable or through transmission of digital terrestrial services, which was specifically said when we debated those clauses.

Clause 202 concerns the financing of such services. Subsection (1) deals with the fact that the Welsh authority must not charge individuals for the provision of those services, and I am sure that we all agree with that. As I think the Minister has said, some 50 per cent. of the population already receive digital television. Some 97 per cent. can receive analogue and digital. That leaves about 40 per cent. who do not currently receive digital transmission. Part of that can be rectified when cable expands its services. As the hon. Member for Rhondda points out, there are people in his constituency—he can count them—who have satellite dishes. There is no reason why, if some in a given road or area can receive satellite, others could not, if they got satellite dishes. However, there will be those who for technical reasons will never be able to receive a geostationary satellite transmission and, perhaps for financial reasons, cable television will not be expanded throughout Wales.

Chris Bryant (Labour, Rhondda)

I am sorry to delay the hon. Gentleman, but he has prayed me in aid about four times in discussions on digital terrestrial television. Although I wholeheartedly want digital terrestrial television to sweep across the south Wales valleys, the hon. Gentleman is making a mistake in his analysis of the availability of satellite. I have yet to find a single house in the Rhondda that is not able to receive a satellite signal. The topography of the Rhondda is swerving, and many people live at the bottom of north-facing hills, but they are perfectly able to receive satellite. The issue, then, is choice. The hon. Gentleman should not mislead the Committee into thinking that large chunks of Wales cannot receive digital satellite.

Michael Fabricant rose—

Roger Gale (Conservative, North Thanet)

Order. I appreciate the importance of the issue, particularly to certain hon. Members whose constituents are affected. However, the matter does not come under clause 202, and I must hold the Committee to order. The hon. Member for Lichfield must either address himself to Welsh authority finances, or resume his seat.

Michael Fabricant (Conservative, Lichfield)

Thank you, Mr. Gale. I will not—I am not allowed to—respond to the intervention of the hon. Member for Rhondda. The Rhondda is a south-facing valley, so the case does not apply, anyway. I have already explained basic physics at some length to the Committee, and if any hon. Members care to speak to me outside the Committee, I will explain the matter further. I never tried to mislead the Committee or imply that large areas of Wales were unable to receive a satellite signal. However, I have said that some people will never be able to receive a geostationary satellite signal.

Roger Gale (Conservative, North Thanet)

Order. I am having some difficulty communicating with the hon. Gentleman this

morning; I do not know why. I have instructed him either to refer to Welsh authority finances or resume his seat. I cannot put it plainer than that.

Michael Fabricant (Conservative, Lichfield)

Subsection (1) provides for the Welsh authority not to charge for the provision of services including digital terrestrial services. Subsection (2) says that it shall also

''be unlawful to impose a charge in contravention of subsection (1)'',

and that is quite right. However, subsection (3) says:

''The power of the Welsh Authority to do anything that appears to them to be conducive or incidental to the carrying out of their functions includes power, subject to subsection (4), to borrow money.''

Subsection (4) says:

''The Welsh Authority are not to borrow money except with the approval of the Secretary of State.''

Clauses 200 and 201 deal with the provision of services, including digital services. I accept that the Minister will not give—no one should expect him to—any sort of blanket approval in advance of any application by the Welsh authority. However, what is the view of the Department for Culture, Media and Sport on the provision of digital terrestrial television? If the Welsh authority were to ask, under subsection (4), to borrow money—perhaps in conjunction with Crown Castle—to help fund the provision of digital terrestrial transmitters in those areas where satellite reception is not possible and where the choice mentioned by the hon. Member for Rhondda is not available, how would the Department for Culture, Media and Sport feel about such an application?

Kim Howells (Labour, Pontypridd)

I will turn first to the questions raised by the hon. Member for Ceredigion. He makes a valuable statement when he says that S4C is part of the ecology of broadcasting in the United Kingdom, as the jargon now has it. I think that we will see a proliferation of more regionally and locally based systems, which will change the face of broadcasting and fundamentally change its ecology in future.

S4C is not prohibited from charging for the reception of S4C services outside Wales, as the hon. Gentleman knows. I understand his argument that S4C's funding should be compared with that of the BBC rather than with that of commercial broadcasters. He is quite right. However, the difference—and it is a horribly political difference—is that S4C is funded directly by the Government and not by the licence fee, which is a kind of arm's-length source of funding. As I said earlier, funding bids for S4C have to compete directly with other DCMS funding bids.

Under paragraph 5 of schedule 12, S4C has must-offer obligations. As the hon. Member for Lichfield told us a moment ago, and it is absolutely true, the Secretary of State has a power to consider the level of S4C funding in the light of the costs of providing the service. Those costs include transmission costs.

Subsections (1) and (2) will prohibit the authority from charging people in Wales for the reception or use of any of its public services, for any assistance that is provided to disabled persons for programmes included

in those services, or for any of the ancillary services that it provides in digital form. The intention is to ensure that all these publicly funded services are available to the general public in Wales free of charge. As I have said, the restriction on charging does not apply outside Wales because the Government believe that decisions on the extension of S4C services to the rest of the United Kingdom, and on how to fund such provision, should be for the authority to determine. I fully understand the point that the hon. Member for Ceredigion made about the funding implications of that statement.

The authority will continue to have the power to borrow money—and this point was raised by the hon. Member for Lichfield—where this is incidental or conducive to the carrying out of its statutory functions. Borrowings, of course, will need to be approved by the Secretary of State, with the consent of the Treasury.

Clause 202 also requires the authority to pay Ofcom a contribution covering the cost of its functions in relation to the authority. The amount to be paid will be agreed between the authority and Ofcom. If they are unable to agree, the amount will be fixed by the Secretary of State.

The clause includes provision to extend the matters that the Secretary of State can take into consideration in assessing the case for an increase in the authority's grant. That provision is very important. At present, under section 61 of the Broadcasting Act 1990, she may increase the amount of the grant in real terms only if satisfied that it is appropriate to do so having regard to the cost to the authority of transmitting S4C and S4C digital. Subsection (7) of the clause will enable the Secretary of State to have regard to the cost to the authority of providing not only S4C and S4C digital but any additional public services approved by, or under, clause 200, as well as to the cost of broadcasting or otherwise distributing those services.

Subsection (8) amends section 61A of the Broadcasting Act 1990 and ring-fences the Welsh authority's public service fund. The amendment is necessary as a consequence of the arrangements for the approval of new public services introduced by clause 200. As well as S4C and S4C digital, any additional public service approved by or under clause 200 may be funded from the public service fund.

Finally, subsection (8) requires that all programmes that are wholly or partly funded from the public service fund must first be broadcast on one of the authority's public services in order to ensure that there is the widest possible audience for such programmes.

Question put and agreed to.

Clause 202 ordered to stand part of the Bill.

Clause 203 - The Gaelic Media Service

Calum MacDonald (Labour, Na h-Eileanan an Iar)

I beg to move amendment No. 384, in

clause 203, page 178, line 19, at end insert—

'(d) the holding of licences to provide a service of Gaelic television and sound programmes so as to be available to persons in Scotland and elsewhere.'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Amendment No. 385, in

clause 203, page 178, line 27, at end insert—

'(4C) For the purpose of enabling the Service to carry out its functions, it shall be the duty of each of the persons mentioned in subsection (4D) to provide the Service, free of charge (including any charge arising from royalty payments), with at least 52 hours of new Gaelic programmes per year, with material from their archives, and, in the case of the BBC, with no less than 30 hours of new Gaelic radio programmes per week.

(4D) The persons referred to in subsection (4C) are—

(a) the BBC,

(b) any holder of a Channel 3 licence to provide a regional Channel 3 service for reception wholly in Scotland, and

(c) such other persons providing television broadcasting services as may be specified by order by the Secretary of State.'.

Amendment No. 386, in

clause 203, page 179, line 2, at end add—

'(5) The Gaelic Television Fund shall be linked to the retail prices index.'.

Amendment No. 390, in

schedule 15, page 447, line 27, leave out 'In'.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

Many of the comments that we heard during last Tuesday's debate on Welsh broadcasting about the achievements and the success of minority-language broadcasting are applicable to Gaelic-language broadcasting. It is important to emphasise that the success and achievement of Gaelic-language broadcasting happens in a different context. The Gaelic broadcasting fund is just over 10 years old, while the Welsh equivalent is 20 years old. The fund receives less cash than its equivalent, and I shall address that while speaking to one of the amendments. There is no Gaelic television channel so Scotland has no counterpart to S4C. However, we hope that the Bill will open the way for a digital Gaelic channel. The Gaelic-speaking community in Scotland is smaller than the Welsh-speaking community in Wales.

Nevertheless, Gaelic broadcasting during the past 10 years has shared many of the achievements and successes of Welsh broadcasting. We cannot claim an Oscar nomination, which we heard about on Tuesday, but Gaelic programmes have won BAFTAs. I pay tribute to the BBC and Channel 3 in Scotland and to independent producers, which make many of the programmes, for their success over the past decade.

Gaelic-language programmes shown on the BBC and Channel 3 in Scotland enjoy audiences that are much larger than the number of Gaelic speakers recorded by the census. It was said on Tuesday that S4C has average audiences of 700,000. Gaelic-language programmes in Scotland get average audiences of more than 300,000. That is a smaller figure that the Welsh average, but it is three times greater than the pool of Gaelic speakers in Scotland. That demonstrates that Gaelic-language programmes have developed a resonance that goes beyond the pool

of native speakers and that they have penetrated the mainstream of Scottish broadcasting.

Before the sitting started, my hon. Friend the Member for Glasgow, Anniesland (John Robertson) asked me whether I could produce specific figures to illustrate the success of Gaelic programming in Scotland. I have several figures that he will find especially interesting. My fellow Scots will be aware that there are three current affairs programmes on Thursday nights on BBC2 in Scotland. One is ''Eorpa'', which is a Gaelic programme that examines current affairs from throughout Europe in a distinctive way that has gained a lot of praise. ''Newsnight'' is also broadcast in Scotland. The UK programme goes out at 10.30 pm, but non-Scots on the Committee may not be aware that there is also a Scottish ''Newsnight'' opt-out that clocks in at around 11.00 pm. The audience figures for the various programmes show that the Gaelic media programme ''Eorpa'', regularly does better than the Scottish ''Newsnight'' opt-out.

If one takes one week in November last year at random, the audience for ''Eorpa'' was 86,000, ''Newsnight'' UK's was 71,000 and for the Scottish ''Newsnight'' it was 35,000. I emphasise that those figures are taken from one week at random and figures for programmes vary, but ''Eorpa'' regularly does better than the Scottish ''Newsnight'' and the Sunday ''Holyrood'' programme. That is testimony to the success of Gaelic-medium broadcasting in establishing itself in the Scottish broadcasting world. In doing so, it has been an essential support bulwark for the language, just as S4C has been in Wales. Moreover, I echo the point previously made by the hon. Member for Ceredigion: minority language broadcasting enhances and embellishes the whole of the UK's broadcasting provision.

Clause 203 establishes the Gaelic Media Service and represents what I believe will be a major step forward in Gaelic broadcasting, as significant in its way as the establishment of the first Gaelic television fund in 1991. I hope and believe that the clause opens a way for the creation of a dedicated Gaelic digital channel to provide, for the first time on television, a comprehensive and integrated service. It can be scheduled to meet its audience's needs in a way that, unfortunately, the Gaelic programmes currently on the BBC and Channel 3 cannot always achieve.

The wording of the clause, however, does not make the establishment of such a service explicit, which is why I tabled amendment No. 384. It is a probing amendment that invites the Minister to put on record what the new Gaelic Media Service can do. The clause describes at some length what it cannot do, especially in subsection (4B), but is less explicit about what it can do.

Amendment 384 would make explicit the power of the service to apply to Ofcom for a broadcasting licence to broadcast a television service on whatever platform turns out to be feasible and cost-effective. After the word ''Scotland'' in the amendment, I have added ''elsewhere'' to take up a point previously made

about Welsh language broadcasting. New technology makes possible the delivery of Gaelic programmes elsewhere in the UK wherever there is an interest and potential audience—there is an ancient and honourable Gaelic Society in London, which takes an active interest in such issues. The Minister should clarify whether the Gaelic Media Service would be acting within its remit in satisfying that wider audience in the UK, if it were feasible and cost-effective.

Will the Minister confirm whether the new service will also be able to distribute programmes via the internet? Mention was made of the potential importance of that in the debate on Welsh. There is a vibrant and live Scottish diaspora across the world. I lived in the United States from 1978 to 1984, and every Saturday evening I could access a programme called ''The Thistle and Shamrock'', broadcast from North Carolina, on the national public service radio. Every Saturday evening I could hear the music and songs of the Hebrides, wherever I was in the United States. The presence of that programme on a national, federally funded radio channel shows the degree of interest in Gaelic music and culture. Perhaps by using the internet and broadband we will can tap into that interest in future. It would be useful for the Minister to confirm that doing so would be within the service's remit.

Chris Bryant (Labour, Rhondda)

I rise on a point of information. My hon. Friend may be interested to know that the Finnish broadcasting service, YLE, provides a news service in Latin every day.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

There is no doubt that radio programmes are increasingly being accessed by people using the internet on personal computers. One imagines that in future television programmes will be increasingly accessed that way, too. If the Bill is to be future-proof, as the Government hope, it is important that we allow such possibilities to the Gaelic Media Service.

There is an apparent ban in subsection (4B) on the service providing a radio broadcast. I am not quite clear on what the subsection prohibits the service from doing, but I would like the Minister to confirm that the ban would not prevent the Gaelic Media Service from using its licence to transmit certain graphic-only programmes on a digital channel. If the service is to be able to provide a digital channel in future, it is unrealistic to think that there will be a full morning-to-midnight service. There will be times when programmes need to be bulked out by sound programmes or still pictures. It is important to make sure that subsection (4B) does not prevent the service from doing that.

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman will recall that in our debate on S4C, the reason that the Minister gave as to why S4C should not get involved in broadcasting sound programmes or radio programmes was that there was more than adequate public service provision in Wales, as Radio Cymru, a dedicated Welsh radio station broadcasting in Welsh, is provided by the BBC. Does the BBC provide a dedicated Gaelic radio service in Scotland?

Calum MacDonald (Labour, Na h-Eileanan an Iar)

Yes, and so I am not challenging the prohibition as such. I am asking that the prohibition not be interpreted so strictly as to prevent the use of radio programmes to fill out downtime on a digital channel.

If we are to move towards delivering a digital channel, the new service that is being established by the clause will need additional resources. I tabled amendments Nos. 385 and 386 to cover the two most important kinds of resources. Of course, the most important is cash, and that is the subject of amendment No. 386. I do not expect the Under-Secretary to plonk a bag of cash down on the table. I looked carefully when she came into Committee, and she did not seem to have a particularly heavy handbag. The purpose of the amendment is to flag up the seriousness of the financial squeeze currently hitting Gaelic broadcasting, and the need for the Government to address it soon.

When the television fund was set up in 1991, it was given £9.5 million a year. It is fair to pay tribute to the Conservative Government, although that may be controversial for my hon. Friends, for setting up the first Gaelic television fund and the Gaelic Broadcasting Committee, which manages it, and for their commitment, which they demonstrated by giving the fund what was then a very respectable sum. The Government must have been feeling flush back in 1991.

If the value of the fund had been maintained from 1991 onwards—if it had been index linked or protected in the way that Welsh language broadcasting has been protected—it would be worth £12.5 million today. That sum would go a long way towards achieving the digital television channel to which we aspire. Instead, the fund is down to £8.5 million, which is a reduction of £1 million in nominal terms and 33 per cent. in real terms.

As a consequence, the television hours that are financed from the fund have dropped from 195 in 1991 to 150 today. Quantity has been falling for a number of years, but I pay tribute to the Gaelic Broadcasting Committee and the various programme makers for maintaining the quality. Welsh language broadcasting has not been subject to such a squeeze, and I believe that the Gaelic television fund deserves similar protection in principle, hence the wording of amendment No. 386. The fund must be increased in real terms, not just restored or protected, if it is to fulfil the potential of the clause and if it is to deliver a Gaelic digital channel.

Donald Dewar, then Secretary of State, followed my suggestion and commissioned a report into the cost of a Gaelic channel from Alistair Milne, the ex-director-general of the BBC. Milne reported to the Government two years ago and suggested that a fund of £44 million a year would be required. There is a huge gap between the current position and the fund proposed by Milne. Since then, recent research commissioned by the Gaelic Broadcasting Committee has suggested that a channel could be delivered for £15 million per annum through the use of new technology and by reducing the cost to the minimum feasible sum.

That is a significant saving on the Milne figure, but it is still not within the reach of the present fund. I know that the Under-Secretary will be limited in what she can say today about the funding problem, and I know that the Treasury is the major player in all the discussions, but I hope that she is mindful of the problem and I hope that the Government will engage with the issue when resources allow that to happen.

The other resource that is necessary to deliver a channel is as important as cash, and it is one over which the Under-Secretary has real, immediate influence and power. That resource is access to programmes for rebroadcast on a dedicated Gaelic channel which have already been broadcast by the BBC and Channel 3. I have suggested, in amendment No. 385, that an hour a week of new Gaelic television programmes and 30 hours a week of new Gaelic radio programmes be made available for rebroadcast on a digital channel.

There is a precedent for that requirement—it already happens in Wales. The hon. Member for Ceredigion would concede that, in order to deliver S4C, programmes must be available for rebroadcast. Likewise, under the Broadcasting Act 1996, both the BBC and the Scottish Media Group, the Channel 3 broadcaster in Scotland, are currently obliged to provide 30 hours of programmes a year for rebroadcast in an existing daily slot on multiplex A that is run by STL. An increase from 30 to 52 hours, as I suggested, should be manageable for both the BBC and Channel 3.

I have tried to make it clear in the amendment that ''free of charge'', as stated in the 1996 Act, should mean exactly that. I put that in because unfortunately there is a history of arguments and difficulties between BBC and Channel 3 and the provider of the Gaelic slot multiplex A about royalties and so on. Consequently, the requirement in the 1996 Act has never been properly fulfilled. I ask the Government not only to legislate for the number of hours set out in the amendment but, if necessary, to ensure that the provision is delivered. It costs very little for the BBC and Channel 3 to provide programmes for rebroadcast, but it would cost the taxpayer an enormous amount if the Gaelic broadcasting fund had to pay. I hope that the Minister will respond positively and strongly to the amendment.

Amendment No. 390 relates simply to a typo that I discovered when reading the Bill, which I thought that I would pass on to the Minister.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I begin by thanking the hon. Member for Western Isles (Mr. MacDonald) for the generous words with which he paid tribute to the previous Conservative Government—without which Gaelic broadcasting would never have got off the ground. We were disappointed that the Scottish people did not show the appreciation for which we had hoped at the subsequent general election but never mind; it was a noble enterprise anyway.

I shall say a few words about amendment No. 385 because I am slightly worried that it could represent a burden on the commercial television sector. Channel 3 licence holders are already obliged to supply archive

material to any Gaelic multiplex holder. That obligation is currently complied with and relates to

''such programmes in Gaelic which have been broadcast by the supplier''—

presumably Channel 3 or the BBC—

''as the holder may request.''

The amendment addresses the supply of programmes to the Gaelic media service. At present, the obligation is not owed to the CCG—I shall not even try to say what that stands for, although the hon. Gentleman could—but to the multiplex holder. It does not make sense for the obligation to be owed to the service, especially because the Bill prohibits it from providing a multiplex service.

The supplier is also currently not obliged to provide that the material should be supplied free of any royalty charges in respect of clearance costs, which is the point that the hon. Gentleman addressed through the amendment. It is more appropriate for the clearance costs to be borne by the multiplex holder, rather than the supplier. It is rather unfair that the supplier is obliged to make additional payments for further broadcasts on the multiplex after handing the programme to the multiplex holder. Most material has probably been purchased on the basis that it can then be transmitted as the owner chooses. There would therefore be no additional charge if there were further transmissions on the multiplex. However, that will not always apply. There are cases in which additional charges would be paid for music royalties. It seems unnecessary that that charge should be imposed on the supplier of the material, especially if it is Channel 3.

The amendment seeks to increase the number of hours of Gaelic programmes to 52. In the case of the BBC, I have no particular difficulty with that. The BBC has a lot of money at the moment—almost more than it knows what to do with—and such a use of the BBC's licence fee billions would meet the requirements of the public service remit and would be worth while. However, all the Channel 3 licence holders in Scotland are under considerable financial pressure, and the amendment would represent a significant additional burden on them. There are grounds for concern.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

I appreciate what the hon. Gentleman is saying. However, he may not be aware that it is a condition of holding a Channel 3 licence in Scotland that a certain number of Gaelic programmes be broadcast. The hon. Gentleman may remember that Scottish Television was able to pick up the licence for a song. It was able to do so because it expressed a willingness to embrace the Gaelic obligation. Arguably, there has been a positive monetary value to the Channel 3 licence holder in Scotland because of the obligation.

The hon. Gentleman may not be aware that the Channel 3 provider in Scotland is now negotiating with the Independent Television Commission to try to reduce the obligation on them from 66 hours to 33 hours.

John Whittingdale (Conservative, Maldon and East Chelmsford)

As I understand it, under the current licence obligations, the licence holder is obliged to provide 33 hours of Gaelic programming. Obviously, the hon. Gentleman's amendment would increase that figure, representing an extra burden. That burden may not be enormous, but this may not be the most opportune moment to impose it. I therefore have some reservations about amendment No. 385. However, we remain wedded to the concept of the promotion of Gaelic broadcasting.

Simon Thomas (Plaid Cymru, Ceredigion)

I rise to support the principles behind the amendments of the hon. Member for Western Isles. As he says, many of them reflect the experience that we have had in Wales. Had we not established Sianel Pedwar Cymru, S4C, 20 years ago, we would no doubt be where the Gaelic Media Service is now—trying to provide a channel by collecting together the different elements of Gaelic broadcasting that already exist. I sympathise with the hon. Gentleman's task in his amendments. He is trying to improve the Bill as far as possible and to empower the new Gaelic Media Service to provide a dedicated channel, albeit through digital means. Everyone in the United Kingdom should welcome that because, as the hon. Gentleman said at the outset—reflecting our debate on S4C—these publicly funded lesser-used language channels reflect the cultural diversity of the United Kingdom. They are owned by everyone in the United Kingdom—Gaelic speakers, Welsh speakers, English speakers. Everyone has the right to access those programmes and to support them.

What we are trying to achieve in this Bill and through the ecology of broadcasting, to use the jargon, is to reflect all the languages of the United Kingdom. We would hope to see more digital channels dedicated to, for example, Asian languages. That would reflect the position that has been established for the Celtic languages.

The amendments tabled by the hon. Member for Western Isles are important for the future of the Gaelic Media Service. I note that the reduction in funding to which he referred is real term, because S4C has not benefited from ring-fencing.

Despite studying Irish for one year, I would not attempt to pronounce the name of the Gaelic Broadcasting Committee, given that the two languages separated some time ago. At one time, I would have replicated the pronunciation. The committee said that there has been a reduction in the hours that are broadcast in Gaelic from 195 a year to about 115 a year. That reflects the reality of the situation and, I hope, undermines the negative argument of the hon. Member for Maldon and East Chelmsford. Given the fact that the Conservative Government can pat themselves on the back for establishing S4C and the Gaelic Broadcasting Committee, surely they should be giving a little more support to ensuring that such services are enriched for the future.

The hon. Member for Western Isles raised an interesting point about radio. He suggested that rebroadcast BBC programmes in Gaelic, Channel 3 programmes in Gaelic in Scotland and rebroadcast BBC Radio Scotland Gaelic programmes could be put

together as a package in one digital channel. He raised an interesting point when he said that the Bill, as drafted, may stop that happening because of the ban, which also affects S4C, on producing and broadcasting radio programmes. The opportunity to repackage in one channel what is already available, so that Gaelic speakers throughout the world, and certainly in the United Kingdom, know how to receive it is extremely attractive. I note what the hon. Gentleman said about the Milne committee report, but the Gaelic Broadcasting Committee estimated that it could set up such a package for about £15 million a year. That is a different kettle of fish from £44 million.

If we can achieve a dedicated Gaelic Media Service, broadcast on digital, for about £15 million, that is not a huge price to pay. I know that the Department would rightly say that it had other demands on its time and money, and resist such a proposal, but when we consider it in the round, given that it would support about 100,000 Gaelic speakers and many others who are learning the language, the price of £15 million seems reasonable. We should not try to stop that happening by using the Bill to ban certain measures that the Gaelic Media Service can undertake if, by putting together such programmes, a much better service can be produced.

I hope that the Under-Secretary will bear in mind the comments of the hon. Member for Western Isles. He raised an interesting concept of how, without establishing an authority for Gaelic broadcasting and another S4C in Scotland, we could achieve a dedicated channel in Gaelic that provided a range of both sound and visual services. I am sure that that will attract many people in the United Kingdom, as will the fact that we all support a diverse, cultural ecology in broadcasting.

Anne McGuire (Labour, Stirling)

Thank you, Mr. Gale. I am delighted that we have at last reached this part of the Bill, and that is not only because I thought that I had given up the vow of silence when I left the Whips Office.

I offer my sincere congratulations to my hon. Friend the Member for Western Isles, who has dedicated himself to ensuring that the clauses would be as helpful as possible to the development of Gaelic broadcasting. Although the Gaelic community is small, it is fair to say that there is a high concentration of Gaelic speakers in his constituency. When the language was assailed by those of us who live in other parts of Scotland, Gaelic speakers kept to their traditions and culture. The Committee may not know that the Gaels say that Gaelic is the language of the angels. When most members of the Committee go to heaven—if they ever get there—they will not be able to understand a word that God says.

I also echo the comments of my hon. Friend the Member for Western Isles. There is a high-quality programming output from Gaelic broadcasting services. My hon. Friend the Member for Eastwood (Mr. Murphy) tells me that his children watch Gaelic television because they love the cartoons and Gaelic children's programmes. I am sure that he will ensure

that his children grow up bilingual and reclaim their Gaelic language tradition.

I despair, however, about the leisure pursuits of my hon. Friend the Member for Rhondda. I have a vision of him scouring the internet to pick up Finnish radio so that he can listen to programmes in Latin. I assure him that, as far as I am aware, there are no Latin-medium schools in Scotland, but Gaelic-medium education in Scotland is expanding at a rate that has taken many people by surprise. It is even expanding among non-Gaelic speakers. Having taxed you enough, Mr. Gale, in my opening remarks, I will answer the specifics of the debate.

As my hon. Friend the Member for Western Isles said, amendment No. 384 would add a new provision to enable the Gaelic Media Service to hold a licence

''to provide a service of Gaelic television and sound programmes so as to be available to persons in Scotland and elsewhere.''

We certainly believe that it is right for the Gaelic Media Service to broadcast a dedicated channel utilising cable, satellite or digital terrestrial television. The service will be able to hold the relevant licences from Ofcom to do that.

The Gaelic Media Service will also be able to use the internet, or sound and graphic only programmes as part of a continuous segment of scheduled programming in carrying out its functions. Furthermore, there is no specific need to extend the services beyond audiences in Scotland. New subsection (3B) of section 183 of the 1990 Act would give the service the function of securing the broadcast or transmission of programmes in Gaelic

''so as to be available to persons in Scotland.''

and new subsection (9) of that section makes it clear that a reference to being available to persons in Scotland includes

''a reference to being available both to persons in Scotland and to others.''

We therefore think that amendment No. 384 is unnecessary. The Gaelic Media Service may already hold any Ofcom licence, unless it is one specified in the new subsection (4B) that clause 203(3) would insert into section 183 of the 1990 Act. There is no need to include further provision. In the light of those comments, I hope that my hon. Friend will feel able to withdraw the amendment.

Amendment No. 385 would include new requirements for Channel 3 licence holders in Scotland and the BBC to provide a specific amount of new Gaelic programmes free of charge to the Gaelic Media Service. The Channel 3 licence holders in Scotland already have obligations under the Broadcasting Act 1990 to fund and broadcast Gaelic programmes. Their licence must require them to include in their services a suitable proportion of Gaelic programmes that are not funded out of the Gaelic television fund, and also to include programmes that are paid for out of that fund. A suitable proportion of the funded programmes must be of high quality, and a suitable proportion must be shown at peak times. Overall, their services must include a wide range of services in Gaelic. The actual targets are set by the ITC in the licences.

The BBC has no formal obligations, but spends about £3 million a year of its own resources on Gaelic programmes, broadcasting about 130 hours of material on BBC 1 and BBC 2 in Scotland and around 2,500 hours of radio programming on its dedicated Gaelic radio station, Radio nan Gaidheal.

In addition, under the Broadcasting Act 1996, the holder of the multiplex licence under which Channel 5 and S4C digital are broadcast—SDN—is required to broadcast at least 30 minutes of Gaelic programming every day in Scotland during peak viewing times. In complying with that requirement, SDN must broadcast at least 30 hours of Gaelic programmes a year, supplied by the BBC and the Channel 3 licence holders. The broadcasters are required to provide SDN, free of charge, with programmes in Gaelic from their archives.

I appreciate the point made by my hon. Friend and by the hon. Member for Maldon and East Chelmsford—a constituency that sounds like a BBC sitcom. I apologise to the hon. Gentleman's constituents. We acknowledge the difficulty and we are willing to see whether we can offer any assistance to ensure that the free-of-charge issue is clarified.

The amendment would impose on broadcasters an increase in their obligations, which has not been subject to any consultation or negotiation. It would also risk intruding into detailed commercial aspects of trading between broadcasters and the Gaelic Media Service, which would not be appropriate in primary legislation.

The Bill ensures the availability of a substantial amount of Gaelic medium broadcasting. With the structural changes that we are making in the Bill, that will provide a sound basis for the provision and development of broadcasting in the Gaelic language. In light of what I have said, I hope that my hon. Friend will not press amendment No. 385.

Amendment No. 386 seeks to link the Gaelic television fund with the retail prices index. We do not believe that it is acceptable for the Bill to provide for a guaranteed level of funding, whether measured against the RPI or any other indicator. Any comparison with S4C is unhelpful as the Welsh authority service was set up on a distinct basis to provide a fully fledged channel. The formula approach to funding was therefore a basic element in its construction.

In the case of Gaelic, we are dealing with a funding mechanism that, in my hon. Friend's words, reflects a more limited service of up to 200 hours financed by CCG grant. I hope that my hon. Friend will not press the amendment. I have said both inside and outside this House that I hope that we and the Scottish Executive can consider the case for new investment in the next spending round. The Scottish Executive have an input as part of the issue is within their competence.

Finally, I wish to congratulate my hon. Friend on his proofreading skills. He is correct to point out that

there is a typographical error, so we are more than willing to accept amendment No. 390.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

That is a small victory. I welcome what the Minister said about amendment No. 384 clarifying and putting on record the much enhanced powers of the Gaelic Media Service over the current arrangements. That will be warmly welcomed in the Gaelic-speaking world.

On amendment No. 385, I welcome the Minister's commitment to help to sort out the ongoing arguments between the providers of the programmes and SDN, who are obliged to broadcast the programmes. The hon. Member for Maldon and East Chelmsford seemed to spend some time talking about Channel 3 but I am not sure whether he had the same opportunity to talk to SDN or the Gaelic Broadcasting Committee about the matter.

I was careful not to place any blame on any of the parties in the dispute or to take sides. Arguments are going back and forth but it is welcome that the Government have offered to try to solve the dispute. In my view, free of charge, as set down in legislation by the Conservative Government of the time, ought to mean exactly that, especially given the limited resources of the Gaelic television fund and the difficult commercial position of multiplex A, which has to compete in the commercial world.

I acknowledge what the Minister said about it being inappropriate to put in the Bill the obligations set out in the amendment. The original obligation of 30 hours was set out in secondary legislation in 1996, and that is probably the most appropriate way forward.

I appreciate what the Minister said about the Government examining funding in future spending rounds. Of course, she tried to say that the situation of Gaelic is different from that of Welsh, but the question is whether all the differences can be justified. The difference that has caused the reduction in Gaelic funding over the past decade cannot be justified. I welcome her acknowledgement of the problem and although I am not sure whether she wants me to withdraw amendment No. 390, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Roger Gale (Conservative, North Thanet)

Just to set the hon. Gentleman's mind at rest, amendment No. 390 has not been moved. We shall move it at the appropriate time during our consideration of the Bill.

The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendment proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill.

Question agreed to.

Clause 203 ordered to stand part of the Bill.

Clause 204 - Membership of the Service

Calum MacDonald (Labour, Na h-Eileanan an Iar)

I beg to move amendment No. 387, in

clause 204, page 179, line 13, leave out subsection (5).

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Amendment No. 388, in

clause 204, page 179, line 17, at end insert—

'(d) a member nominated by SDN'.

Amendment No. 389, in

clause 205, page 180, line 21, after 'Service', insert

'or of any organisation which receives funding from the Service'.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

The clause and the amendments relate to the membership of the board that will oversee the Gaelic media service. Amendment No. 387 relates to subsection (5), which says that the members of the service—the board, as it were—must include members nominated by the BBC, Highlands and Islands Enterprise and Bòrd Gàidhlig na h-Alba—the Gaelic development agency.

The amendment would delete subsection (5). That is not because I object to members of those organisations nominating members of the board, but because it is not sensible for the Bill to be so prescriptive about the composition of the Gaelic Media Service. Circumstances and organisations may change in future and guidance issued by the Secretary of State under subsection (6)(b) would sufficiently allow the Secretary of State to influence the shape and composition of the board. That would be a more flexible way of handling things that could deal with different circumstances in future.

If the Minister is not inclined to accept the logic behind amendment No. 387, I hope that she will consider the merit of amendment No. 388. If she insists that it is a good idea to list specific organisations that would be entitled to nominate members, the organisations responsible for the current daily output on multiplex A should be included. SDN carries an hour of Gaelic a day and contributes a significant sum each year for logistical and technical support for Gaelic broadcasting. It has done that willingly, and that should be properly acknowledged, along with the contributions of the BBC in Scotland. I therefore suggest that SDN, TeleG or an appropriate part of the multiplex provision be entitled to nominate a member to the board, too.

Amendment No. 389 takes up the prohibition, in subsection (3), on a member of the service becoming a member of the board. That is presumably to avoid a conflict of interest. The point of the amendment is that employees from organisations such as the BBC, the Scottish Media Group, the Channel 3 broadcaster and, from time to time, employees from the independent sector may also be subject to a conflict of interest, as those organisations will be competing for grants and funding from the Gaelic Media Service. I believe that serving members from those organisations should be subject to the same prohibition as employees from the service itself.

John Whittingdale (Conservative, Maldon and East Chelmsford)

On that point, is the hon. Gentleman saying that the BBC should not have any members on the board of the service?

Calum MacDonald (Labour, Na h-Eileanan an Iar)

No, I am not saying that at all.

The BBC will have the right to nominate someone to sit on the board. I am suggesting that if the BBC nominates an existing employee—probably someone involved in Gaelic broadcasting—to sit on the board of the Gaelic Media Service, which funds programmes and takes bids from the BBC funding of programmes, there is an obvious conflict of interests. The solution would be for the BBC not to nominate serving employees involved in Gaelic production, and likewise for other organisations that take funding from the Gaelic Media Service. There is a genuine problem, and the Government will have to consider it.

I hope that the Under-Secretary will say that she does not expect Ofcom to nominate employees who would potentially have a conflict of interest. That still leaves plenty of scope for the BBC and other organisations to nominate people who will genuinely contribute to the Gaelic Media Service board, but who will not have a conflict of interest. I hope that the Under-Secretary will consider the merits of the amendments, particularly Nos. 388 and 389.

Anne McGuire (Labour, Stirling)

I shall deal with amendments Nos. 387 and 389 first. In our opinion, they would negate the Government's basic aim of increasing the broadcasting expertise of the Gaelic Media Service board for the benefit and oversight of the service. In essence, they would remove from the Bill any obligation on the part of Ofcom to seek and secure representation on the board of the Gaelic Media Service from the BBC, the Gaelic Development Agency and Highlands and Islands Enterprise, which are all key players. However, the amendments would leave Ofcom with specific obligations to secure representation from Channel 3 licence holders and others, as provided for in clause 204(7).

The Government's objective is to strengthen the representative base of the new body in a way that ensures that key players in the broadcasting and media fields are fully involved in helping to develop and oversee the service. It is right to involve the organisations that the amendment would exclude. They bring a wealth of expertise and knowledge to the table. On the specific point concerning the conflict of interest raised by my hon. Friend, we think that part of that will be covered by schedule 19, but we agree to cover some of it, particularly the exact status of nominees from those nominating bodies, in guidance. I hope that that assurance will give my hon. Friend some confidence and allow him to withdraw amendment No. 387, and I hope that he will not press amendment No. 389.

Amendment No. 388 would ensure that a member of the Gaelic Media Service board was nominated by SDN, the current holder of the multiplex licence which has an obligation to broadcast Gaelic programmes each day in Scotland.

It would clearly not be right to accept the amendment, because there is no guarantee that SDN will continue to hold the relevant multiplex licence. We sympathise with the aim of the amendment to recognise the role of SDN, which, as my hon. Friend

has said, makes a significant contribution to Gaelic broadcasting through logistical and technical support. I assure my hon. Friend that in the guidance about appointments to the board of the Gaelic Media Service issued by the Secretary of State to Ofcom, we will seek to ensure that the correct balance is struck between consumer and expert interest in broadcasting matters. At the end of the day, that is the core policy objective in setting up a new board to take the service forward for a 21st century delivery of broadcasting services in Gaelic. Therefore, I ask my hon. Friend to withdraw his amendment.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

I am encouraged by what my hon. Friend the Under-Secretary of State for Scotland has to say about recognising the contribution of SDN. I acknowledge that that will be taken into account when it comes to forming a board and in discussions with the Secretary of State to ensure that the role of SDN is fully and properly acknowledged. The contribution of SDN in providing the prototype of a future Gaelic digital service is critical. It is important that it is able to sit alongside the other broadcasters—the BBC, Channel 3 and so on—in the decision-making process concerning the Gaelic Media Service. I welcome the fact that my hon. Friend the Minister has taken that on board.

I also welcome her recognition that there is a problem with the conflict of interest that I have outlined. It could be easily managed—it is not a showstopper of a problem—but the Secretary of State and Ofcom will have to bear it in mind when it comes to the nomination of members to the board. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 204 ordered to stand part of the Bill.

Clauses 205 to 208 ordered to stand part of the Bill.

Clause 209 - Digital Channel 3 and Channel 5 licences

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Government amendments Nos. 361 to 367.

Amendment No.391, in

clause 219, page 192, line 11, leave out from 'begins' to 'and' and insert

'on the date on which the replacement licence comes into force'.

Government amendments Nos. 368 to 380.

Government new clause 28—Meaning of 'initial expiry date'.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I should like to raise a couple of points. The explanatory letter that the Minister for Tourism, Film and Broadcasting helpfully sent to the Committee set out why the Government felt it necessary to move the amendments. He stressed the

existing arrangement that the replacement licence is due to expire on 31 December 2014, which is based on the prediction that digital switchover will take place between 2006 and 2010. The Government have now said that it is necessary to move amendments because

''it is not certain that switchover will in fact take place then.''

The Government go on to say:

''There is a concern that the present provisions could prove too inflexible if switchover is delayed''.

We talked about digital switchover earlier in the proceedings and the Minister for E-Commerce and Competitiveness, the hon. Member for East Ham (Mr. Timms) expressed his confidence that the timetable for achieving digital switchover would be met. The explanatory letter slightly goes against that confidence. I shall be interested to know the views of the Minister for Tourism, Film and Broadcasting on whether that is an entirely theoretical possibility or whether it demonstrates that there is some unease in his Department about meeting the timetable.

I now turn to amendment No. 391. Under the proposals as they stand, the new digital licences will be imposed on existing licensees, who will have no opportunity to apply for the financial terms to be amended. The Government have stressed that that is simply a continuation of the existing arrangements. However, the new digital licences include several new obligations, which are set out in forthcoming clauses. If licensees are to meet those new obligations under an entirely new regulatory regime, it is unreasonable to require existing licensees to take up those new licences without at least an opportunity to assess the appropriateness of the financial terms. Therefore, the amendment's purpose is to allow licensees to ask that the financial terms be looked at again.

John Greenway (Conservative, Ryedale)

I shall be brief because I know that we want to make progress, but the amendments are very important. Notwithstanding what my hon. Friend has said, ITV—Channel 3—was uncomfortable with the wording of the clause. It is reflected in the explanatory letter that it has made representations to which the Government have responded.

Like my hon. Friend the Member for Maldon and East Chelmsford, I hope that there will be opportunity to refer to that issue again. However, we are at a point in our proceedings at which it would be appropriate to begin to register concerns about Channel 3's financial health. Although the Minister will undoubtedly wish to proceed with the Bill as drafted, I hope that there will be opportunity, as we consider the provisions related to public service broadcasting obligations placed on Channel 3, particularly its regional obligations, to keep in mind some of warnings that have been given in recent months.

The excellent ITC publication, ''Television in the Nations and Regions'', from as recently as October 2002, states:

''The ITV Charter for Broadcasting in the Nations and Regions is a serious attempt to address these pressures, but the current contrast between the financial health of the BBC and ITV's relative impoverishment means that concerns remain about ITV's ability to maintain its regional heritage.''

One need only add that the purpose of raising that point now is that these are the relevant clauses for which opportunities to renegotiate some of the licence payments are either there or they are not there. At present, as my hon. Friend the Member for Maldon and East Chelmsford has said, they are not there.

Unless there is some unforeseen reversal in Channel 3's advertising income—and for that of Channel 4, as my hon. Friend mentioned the other day—Channel 3, as well as Channel 4 and Channel Five, will be continuously squeezed between a mammoth organisation such as the BBC, which is extremely well funded at present, and the growing strength of BSkyB. I hope that as our deliberations progress there will be an opportunity to return to this issue, notwithstanding that this is the clause where, if the Government wished to signal their ability and willingness to reconsider the financial elements of the licensed payments, such a change would be made.

Kim Howells (Labour, Pontypridd)

I agree with the hon. Gentleman. I panicked at the start because I thought we were not going to have a debate on this issue, which is why I leapt up rather quickly. I will speak first to the Government amendments and will address amendment No. 391 towards the end. The future of broadcasting is clearly digital—at least, I believe so at the moment; they may be famous last words. The hon. Member for Lichfield once told a Committee where I was present that the greatest number of sales of old-fashioned valves for radios was in the week before they were suddenly wiped out by solid state technology; a bit like the Canadian Tory party.

With 40 per cent. of households in this country and more than 50 per cent. of the population now able to receive digital television, we lead the world. We should be proud of that. We are in an increasingly strong position to meet our target timetable for digital switchover and we are committed to ensuring that public service broadcasting continues after switchover.

The Bill contains several clauses that ensure that commercial public service broadcasting will continue until after switchover. Then we will be in a different market, with everyone enjoying the benefits of multi-channel television and interactive services, and we may wish to review the way public service broadcasting is delivered to adapt it to the new needs and expectations of our citizens. Clause 209 creates a new breed of licences—digital Channel 3 and Channel Five licences—that will require the licensed service to be broadcast primarily in a digital form.

Clause 209 provides for the first such replacement licences to expire on 31 December 2014, a date based on the prediction that digital switchover will take place in the period from 2006 to 2010, to answer the hon. Member for Ryedale (Mr. Greenway). That is the Government's target. The Bill provides that the licence holders will have the right to apply to renew their licences as from that date unless the Secretary of State, by order, withdraws that right.

Following further extensive discussions with stakeholders—to which the hon. Member for Ryedale is right to draw our attention—it appears that it would be better to provide greater flexibility as

to the expiry date and the date when decisions about licensing after switchover are taken. While we are in a good position to meet our target timetable for switchover—especially with the launch of Freeview, the vitality of BSkyB and a better future for cable operators—we cannot be certain that switchover will have been completed before 2014. I would be the last person to say with certainty that it will, but we are on target.

There is a concern that the present provisions could prove too inflexible if switchover is delayed and could be a disincentive to investment in digital take-up and the delivery of public service remits. Thus, we believe that the Bill should provide for a more flexible approach in or around 2014. In particular, we wish to provide that the Secretary of State cannot withdraw the right of renewal until after she has determined the timetable for switchover. We do not think it appropriate for the licences to expire before switchover is completed and we have a better view of the new post-switchover environment.

Amendment No. 377 will insert in clause 224 subsection (3A) which provides that the power to prevent the renewal of licences from the end of the initial licensing period can be exercised only if a date for switchover has been fixed that falls before the end of that period. That is the crux of the amendment.

Subsection (3B) provides that if the Secretary of State postpones the switchover date after she has made an order preventing the renewal of licences, that order will not have effect if the new date for switchover falls before the end of that period. Subsection (3C) makes it clear that in such a case, the Secretary of State will be able to make another order preventing the renewal of licences. However, that power will be subject to the requirement, under subsection (5) of new clause 28, that she must postpone the initial expiry date of the licences when that date falls during the 18-month period following switchover.

Amendment No. 378 defines

''the date for digital switchover''

by reference to new clause 28. That will be what appears to the Secretary of State to be the date after which Channel 3 and Channel Five services are no longer broadcast to any significant extent in analogue form. Under clause 209(3), she will give directions to Ofcom to ensure that there are conditions in the licenses to maintain analogue broadcasts until then.

If switchover is delayed, however, we do not want to be in the position that licences will have to be renewed in 2014 for 10 more years. That would be too inflexible, although we do not want to exclude the possibility of renewal, because a very good job might be being done. We therefore propose to introduce new clause 28, which will allow the term of replacement licences to be extended. The power is drafted so that the licences will continue for at least 18 months after switchover. New clause 28 defines the ''initial expiry date'' as either 31 December 2014 or any later date fixed by order by the Secretary of State. Amendments Nos. 360, 361, 365, 366, 373, 376, 379 and 380 provide for consequential wording changes.

Amendments Nos. 367, 368, 369 and 370 modify clause 219, which allows the holder of a digital Channel 3, digital Channel Five or digital public teletext licence to apply for a review of the financial terms of that licence at the time that he would have been allowed to do so had the existing legislation still been in force. Under the Broadcasting Act 1990, licensees are allowed to apply at any time on or before the sixth anniversary of the beginning of the licensing period. The Bill aims broadly to perpetuate that system.

As a result of the actual dates on which existing licensees have renewed their licences, none would have had more than two financial reviews under the Bill as drafted, with an expiry date for the licences of 31 December 2014. I think that the hon. Member for Ryedale pointed that out. Now that the licences may be extended, some licensees may have more than two opportunities for a review if that power is exercised. Amendments Nos. 367 to 372 and 374 alter clause 219. Amendment No. 368 defines a ''subsequent review period'' instead of a ''second review period'' and amendments Nos. 367, 369 to 372 and 374 provide for consequential changes.

Clause 223 gives Ofcom a duty to report to the Secretary of State on the advisability of renewing the licences of the public service broadcasters' licensees or making any other changes, such as altering the public service remits of any channel. Before the Government decide whether to allow Ofcom to renew the licences if it considers appropriate, they will need to take account of all the changes that have already occurred, as well as any foreseeable developments. There will, no doubt, be much discussion and consultation, both formal and informal, but we believe that a report made by Ofcom on the state of the market will be a very useful tool by which the Government can make their decision. The clause provides for that report to be given no later than 30 months before the end of a licensing period. Amendment No. 375 ensures that, if it appears to be appropriate to update that report when the Secretary of State has made an order extending the licences, after the report was submitted, she has the power to require a supplementary report.

The Bill also deals with the public teletext service, which I am sure that all Committee members will agree is a highly valued part of public service broadcasting. It provides that the public teletext service can be licensed through switchover on similar terms to those offered to other commercial public service broadcasters. Therefore, clause 213 requires Ofcom to secure the provision of a nationwide public teletext service that is broadcast in a digital form on a television multiplex and the current analogue service, which broadcasts on the spare capacity on which Channel 3, Channel 4 and S4C are broadcast in analogue form, until the switchover to digital.

If services switch from analogue to digital at different times, subsection (2)(b) as it is currently drafted would mean that for as long as one or more Channel 3 services, Channel 4 or S4C is or are being

broadcast in analogue form, an accompanying analogue public teletext service will also be broadcast.

Amendment No. 362 provides that an analogue public teletext service is required to be provided only until the first of Channel 3, Channel 4 or S4C ceases to be provided in analogue form. Amendments Nos. 363 and 364 give the public teletext licence holder the option of continuing to provide an analogue teletext service even when Ofcom no longer requires it to do so. As the analogue text service broadcasts on the spare capacity that Channel 3, Channel 4 and S4C are broadcast on, if one of the services switches to digital there will be insufficient capacity for the full nationwide analogue service to be delivered. However, giving the public teletext licensee the option of providing an analogue public teletext service on the remaining available capacity if he or she wishes to do so would mean that analogue viewers might continue to have access to the public teletext service—albeit a less comprehensive one.

On amendment No. 391, in the existing legislation, the commercial public service broadcasters are allowed to apply for a review of the financial terms of their licence four years before its term ends. Under clause 210, they will be granted new digital licences that will be valid until the end of 2014. However, we thought that it would not be fair for them to lose the possibility of having their licence payments reviewed by Ofcom every six years. Therefore, clause 219 gives the commercial public service broadcasters the opportunity to apply for a re-determination of their licence payments at broadly the same time that they would have been allowed to do so with their current analogue licences.

That amendment would allow Channel 3, Channel Five and the public teletext licensees to apply for a review of their financial terms as soon as they got their new digital licences. We believe that that is inappropriate. Generally, we do not believe that the new provisions will have a significant negative financial impact on the licensees; therefore, there is no reason why the conditions should be changed. After all—this is the hard bit—the licensees get the benefit of a new deregulatory system and of an extension of their licences until at least 2014 or 18 months after switchover. The exception to that general rule is that we recognise that the ''must offer'' obligations in clauses 264 and 265 and the ''must provide'' obligation in clause 266 could impose financial costs on the broadcasters that are subject to them if they were brought into force. However, in that event, a special right to have the financial terms reviewed will arise under the next clause—clause 220.

Of course, the licensees might argue that they had been faced with a serious advertising downturn—that has certainly been the case. That is a different issue, however, which has nothing to do with the fact that they get new digital licences. As far as I know, licensees do not come to us—not to the previous Government or to this Government—and ask for a revaluation of their financial terms when the benefits are better than were foreseen. They will harvest the profits. In any case, their licence payments, which are calculated partly as a percentage of their revenue, already take

into account their actual income. I hope that, in the light of that explanation, the hon. Gentleman will see fit to withdraw the amendment.

Roger Gale (Conservative, North Thanet)

The amendment cannot be withdrawn, as it has not been moved.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I hear what the Minister said. The benefits of the deregulatory regime are not quite as apparent to the Channel 3 companies as the Minister seems to think. In fact, the Bill imposes new obligations on them and they feel that it is only fair that they should be able to apply. I do not, however, want to prolong the debate, because I want to move on.

Amendment agreed to.

Clause 209, as amended, ordered to stand part of the Bill.

Clause 210 - Replacement of existing Channel 3

Michael Fabricant (Conservative, Lichfield)

I have only a brief query. The clause, as I understand it, concerns the transfer of existing ITC licences to an Ofcom licence. Subsection (5), however, is causing some minor concern in the industry—so minor in fact that it did not require an amendment—and a little explanation is required. The clause concerns a simple transfer of the licence, although the Minister might correct me. Subsection (5) states:

''the grant of a licence to provide a service for an area or at times which, though substantially the same as in the case of the existing licence, are not identical.''

I suppose that the concern arises because that could be a blank cheque to alter the existing licence. Will the Minister provide some explanation to give comfort to existing ITV licence holders? They will receive a licence that is ''substantially the same'', as is stated in subsection (5), but what changes are likely to take place and what was in the Minister's mind when the subsection was drafted?

Kim Howells (Labour, Pontypridd)

I am grateful to the hon. Gentleman for raising that matter, but it is a minor quibble and I am sure that he would not want to blow it out of proportion. It is a simple technical issue; the area covered by digital from a transmitter can be changed. We must have that degree of flexibility to ensure that the existing licence does not limit the ability of the licence holder to operate in a slightly different way.

Question put and agreed to.

Clause 210 ordered to stand part of the Bill.

Clause 211 - Renewal of Channel 3 and Channel 5 licences

Clause 213 - Duty to secure the provision of a public

Clause 214 - Licensing of the public teletext service

Clause 217 - Renewal of public teletext licence

Clause 219 - Application for review of financial terms of replacement licences

Clause 222 - Giving effect to reviews under ss 219 and 220

Clause 223 - Review in anticipation of new licensing round

Clause 224 - Orders suspending rights of renewal

Andrew Lansley (Conservative, South Cambridgeshire)

I beg to move amendment No. 304, in

clause 224, page 196, line 33, leave out from 'section' to end of line 35.

Having just passed clause 223, we have established that the right of renewal of licences for channels 3, 5 and public teletext is nevertheless subject to a review by Ofcom at a specified time. The clause sets out what has to be taken into account and how Ofcom will undertake the review before making a report to the Secretary of State. I have no quarrel with any of that.

I quarrel with clause 224, under which Ofcom can, in making the report, recommend that the current licence should not be renewed. It then goes on to say that even where Ofcom does not make such a recommendation, the Secretary of State can make an order to the same effect. No subsequent explanation of the basis on which the Secretary of State can do so is provided. Why is it tenable for the Secretary of State to refuse to allow channels 3, 5 and teletext licences to be renewed where Ofcom did not take that view? The discontinuity between the role of Ofcom and the Secretary of State is both transparent and undesirable. It would be better if a licence were not renewed only on Ofcom's recommendation.

Kim Howells (Labour, Pontypridd)

I understand what the hon. Gentleman is saying, but what will broadcasting look like in a decade? What will be the public's expectations about television services? What sort of public service will we need, and how can we best deliver it? I am sure that the hon. Gentleman would agree that, at present, he can no more answer that question than I can.

We must have the flexibility to change the licensing system if we need to. It might not be necessary: we could continue with the same system, or use the Bill's powers to amend the public service remit. Perhaps it will be necessary, however, and we will have to prevent existing licences from continuing. The clause enables the Government to keep all options open. We have already discussed amendments Nos. 360 to 380 on the conditions for using that power. I hope that I explained them adequately to the Committee. I must resist the amendment.

Andrew Lansley (Conservative, South Cambridgeshire)

I am afraid that the Minister simply has not answered the point of the amendment. It is not that we know what will be the state of broadcasting in 10 years' time, whether it will be right for the licences to be renewed or that there is no case for amending the public service remit. The point is that we are establishing a regulator—Ofcom—whose task it will be to examine those issues. We have just agreed that it should do so under clause 223. The point of the amendment is not to deny flexibility in future, but to say that the flexibility relating to the renewal of licences should be exercised on the recommendation of Ofcom, not on the basis of the whim, arbitrary or otherwise, of the Secretary of State. The legislation will set out no criteria by which the Secretary of State

would have a power to refuse the renewal of licenses in circumstances where Ofcom has not made such a recommendation. The Minister has simply not answered the point. I will not press this, but only for reasons of time. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: No. 377, in

clause 224, page 196, line 41, at end insert—

'(3A) The Secretary of State is not to make an order under this section preventing the renewal of licences from the end of the initial licensing period unless he has fixed a date before the end of that period as the date for digital switchover.

(3B) Where the Secretary of State postpones the date for digital switchover after making an order under this section preventing the renewal of licences from the end of the initial licensing period, the order shall have effect only if the date to which digital switchover is postponed falls before the end of that period.

(3C) Subsection (3B) does not affect the power of the Secretary of State to make another order under this section after postponing the date for digital switchover.'.

No. 378, in

clause 224, page 197, line 12, at end insert—

'(6A) Subsection (8) of section [Meaning of ''initial expiry date''] applies for construing references in this section to the date for digital switchover as it applies for the purposes of that section.'.

No. 379, in

clause 224, page 197, line 13, after first 'section' insert—

' ''initial licensing period'' means the licensing period ending with the initial expiry date; and'.—[Dr. Howells.]

Clause 224, as amended, ordered to stand part of the Bill.

Clause 225 ordered to stand part of the Bill.

Clause 226 - Meaning of ''television licensable content service''

John Whittingdale (Conservative, Maldon and East Chelmsford)

I beg to move amendment No. 410, in

clause 226, page 198, line 36, after 'public', insert

'in any of the EEA States'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Amendment No. 411, in

clause 226, page 198, leave out line 42.

Amendment No. 412, in

clause 226, page 198, line 43, leave out 'if it' and insert

'to the extent that it'.

Amendment No. 17, in

clause 347, page 296, line 38, leave out 'three' and insert 'two'.

Amendment No. 18, in

clause 347, page 296, line 38, leave out 'to (5)' and insert 'and (4)'.

Amendment No. 19, in

clause 347, page 296, line 43, leave out 'a selection' and insert

'a sequence of at least two selections'.

Amendment No. 16, in

clause 347, page 297, line 3, leave out subsection (5).

John Whittingdale (Conservative, Maldon and East Chelmsford)

We have now come finally to television licensable content services, which is an

important part of the Bill. We have four minutes left in which to deal with it. The Minister will see that we have at least five different groups of amendments, which clearly we will not reach. Could I therefore ask him to write to us giving the Government's response to each group of amendments, as they raise questions that are important to the industry? If we cannot get a response from the Minister this morning on record, it would help if could give it in writing.

Kim Howells (Labour, Pontypridd)

I was going to be very amenable on this group of amendments. I will be delighted to write to the hon. Gentleman to ensure that he gets a substantive answer.

Andrew Lansley (Conservative, South Cambridgeshire)

When the Minister addresses some of these issues in writing, will he also take account of the amendments to clause 347 in my name, as they were a specific aspect of the Joint Committee's recommendation to which the Government effectively did not respond? The way in which we defined the scope of the licensable sector needs to be considered very carefully.

Kim Howells (Labour, Pontypridd)

I shall certainly undertake to do that. I understand the hon. Gentleman's insistence that he gets an answer on that. It is an important clause. This is a group of technical amendments. They are aimed at clarifying the definition of a television licensable content service. I am grateful to the hon. Gentleman and his colleagues who have raised these points. Although I am unable to accept the amendments as drafted, I propose to give further consideration to some of the points that we might have made in the debate had it occurred. I will undertake to write to both hon. Gentlemen about the amendments.

John Whittingdale (Conservative, Maldon and East Chelmsford)

On that basis, I await the Minister's letter with eager anticipation and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn

John Whittingdale (Conservative, Maldon and East Chelmsford)

I beg to move amendment No. 413, in

clause 226, page 199, line 4, after 'which', insert 'is provided by means of television and'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Amendment No. 414, in

clause 226, page 199, line 6, after 'the', insert 'television'.

Amendment No. 415, in

clause 226, page 199, line 6, at end insert 'television'.

Amendment No. 416, in

clause 226, page 199, line 9, at end insert 'television'.

Amendment No. 417, in

clause 226, page 199, line 16, at end insert 'are provided by means of television and'.

Amendment No. 418 in

clause 226, page 199, line 17, after 'such', insert 'television'.

Amendment No. 419, in

clause 226, page 199, line 17, leave out 'relate' and insert 'the principal feature of which relates'.

Amendment No. 420, in

clause 226, page 199, line 19, after 'such', insert 'television'.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Perhaps the Minister would like to write me an equally helpful letter about these amendments.

Andrew Lansley (Conservative, South Cambridgeshire)

On a point of order, Mr. Gale.

Roger Gale (Conservative, North Thanet)

I am not in a position to take a point of order. I will take any points of order arising out of this morning's business at 2.30 pm.

It being twenty-five minutes past Eleven o'clock, The Chairman proceeded, pursuant to Sessional Order C relating to programming [29 October 2002] and the Order of the Committee [10 December 2002] to put forthwith the Questions necessary to dispose of the business to be concluded at that time.

Clauses 226 and 227 ordered to stand part of the Bill.

Clause 228 - Modification of ss. 226 and 227

Clause 172 - ''Relevant amount of gross revenue'' for the purposes of s. 171

Standing Committee E

Communications Bill

Andrew Lansley (Conservative, South Cambridgeshire)

On a point of order, Mr. Gale. It will not have escaped your notice that we have lost the opportunity to debate 16 clauses, as well as groups of amendments relating to local television services and the handling of complaints about contravention of conditions on television licensable content services licences. In effect, we lost the chance to debate clause 226 and amendments Nos. 16 to 19, which stand in my name. I raise this point of order not to whinge about that—although I am doing so—but because amendments Nos. 16 to 19 relate to clause No. 347, which we shall come to considerably later. Technically speaking, I could raise the issues on a clause stand part debate on that clause, but I could not move the amendments, because they were grouped for discussion at an earlier point.

I understand the merit of the amendments being grouped as they are, because they relate to similar subjects, but that has had the perverse effect of their not being debated. I wonder whether, in those circumstances, you have discretion to reconsider the selection of amendments, Mr. Gale, so that my amendments can be grouped and debated under clause 347?

Roger Gale (Conservative, North Thanet)

So far as the grouping of amendments is concerned, I do not have discretion—I have total power. Not many in this place can say that. The hon. Gentleman will appreciate that the Chairman is bound by the sittings motion, but what happened this morning is unfortunate and the hon. Gentleman makes a fair point, so I shall consider the matter. As he rightly says, there is a short time before we come to clause 347. We shall see whether it is possible to accommodate his request on this occasion, but I must emphasise that I will not regard this as a precedent. Amendments are grouped, extremely skilfully, not by the Chairman but by the Clerk—albeit, obviously, with my approval. However, we will take another look at the matter.Clause 239 Regulation of independent radio services

Clause 239 - Regulation of independent radio services

John Whittingdale (Conservative, Maldon and East Chelmsford)

We have now come to a clause dealing with the regulation of independent radio. Whenever broadcasting is discussed, there is a tendency for attention to focus 99 per cent. of the time on television broadcasting, and for radio to get very little attention. I would be sad if that were the case in our proceedings, and I want to ensure that it does not happen.

It is worth pausing and saying something about radio and the way in which the Bill proposes that it should be regulated. When Ofcom was first mooted as a single regulator bringing together five existing regulators, some were slightly concerned that, under Ofcom, the Radio Authority's role might only occupy Ofcom's time from 4 o'clock onwards on a Friday afternoon. I am sure that that will not be the case, but it is important that the Committee sends the message that we consider the role of radio to be important, and that Ofcom's responsibilities towards the radio sector are crucial.

It is arguable that the justification for the creation of Ofcom—the gradual convergence of various communications and media industries—may well, in time, embrace radio. However, radio currently lags behind in some respects. It has several distinct advantages that make it different from other communications industries. Its two greatest advantages are its transportability—one can carry a radio around or have one in the car—and the fact that one can do other things while the radio is on in the background. I suspect that every hon. Member will have had the experience that I have regularly. People say to me, ''I heard you on the radio this morning,'' and I say, ''Gosh, what was I talking about?'' and they say, ''I've absolutely no idea but I know you were on.''

John Greenway (Conservative, Ryedale)

No—they say, ''You were good!'' [Laughter.]

John Whittingdale (Conservative, Maldon and East Chelmsford)

I thank my hon. Friend. Such experiences are typical of radio. It is there as a sort of wallpaper and every now and again one perks up when something comes on that sounds interesting. However, radio plays an important role. When considering this part of the Bill, I turned up the submission that was made by the Radio Authority to the Department for Culture, Media and Sport and the Department of Trade and Industry when this matter was first considered. The Radio Authority was right to say that

''The radio medium will remain distinct for the foreseeable future, and that distinctiveness will be more evident over the coming years as other media, including television, are more swiftly affected by the implications of technical convergence.''

Ofcom will have a separate radio responsibility that is slightly different from its responsibility for other communications industries, but the radio industry feels that it is important that radio interests should not occupy the corner of one floor of the Ofcom building. Radio should be integrated into all of Ofcom's activities. The Minister may wish to address the fact that people in the radio industry are slightly concerned that they may be relegated to a second division in Ofcom's priorities. For many of us, radio is extremely important and we want Ofcom to acknowledge that.

It is impossible to consider the role of the regulation of independent radio without taking account of the fact that radio has one hugely dominant player. You will be relieved to hear, Mr. Gale, that I do not intend to repeat my speech of Tuesday morning, but when considering the regulatory regime for independent radio as set out in the clause, one should at least bear in mind the fact that the biggest radio broadcaster is not covered by it. The Radio Authority said in its submission:

''The Radio Authority is concerned at the anomalous position into which the BBC is being forced in respect of its public service remit. Many of the activities of the BBC, while not in themselves driven by commercial imperatives, have a direct impact on the commercial radio industry. Thus commercial radio's main competitor operates without constraints from comparable regulation, distorting the market.''

It went on to say:

''We believe that the best way of achieving this regulation without compromising the BBC's essential independence is to place the BBC under the over-arching, converged regulator.''

John Robertson (Labour, Glasgow Anniesland)

Does the hon. Gentleman agree whether we were talking about a large radio company or a very small one, it would have an effect on independent radio?

John Whittingdale (Conservative, Maldon and East Chelmsford)

If the hon. Gentleman is saying that the BBC's activities impact on all radio broadcasters, big or small, I entirely agree with him. I therefore hope that he accepts that the argument for subjecting the BBC to the regulatory regime is thereby strengthened. I said that I would not go over that argument again; suffice it to say that the organisation set up by the Government and given responsibility for the regulation of independent radio clearly believes that, because the main radio broadcaster is outside its scope and will be outside Ofcom's scope, the market is distorted. It believes that that distortion should be corrected. However, after failing to persuade the Minister of that on Tuesday, I do not expect him to change his mind suddenly this afternoon.

Digital audio broadcasting is another aspect that will dominate much of the consideration of the regulation of radio, especially the question of licences—they are covered by later clauses but this seems an appropriate point at which to deal with them because we are considering the introductory clause of the chapter that deals with the regulation of independent radio. DAB has been a disappointment so far to those of us who think that it is an exciting technological development. We are not disappointed by the number of stations broadcasting digitally, because any number of stations do that. The disappointment is that nobody is listening to them. I suspect that that is not because people do not want to listen, but because it is incredibly difficult to find a digital radio receiver.

The biggest obstacle to the switchover to digital audio broadcasting is the apparent determination of retailers and manufacturers to make it as difficult as possible for people to purchase a product to enable them to listen. I visited Dixons on Victoria street just before Christmas. I saw an array of radio receivers—big ones, small ones, ones with digital displays, and ones with normal dials—and asked whether the shop stocked a digital radio receiver. There was a long pause and the assistant went off to find somebody else. On his return, he said, ''I think we have one. It's in the storeroom, if you want me to go and get it out.'' That is absolutely typical.

There is now an affordable digital radio receiver on the market. It is a little more expensive than old-fashioned radio receivers, but the Pure Evoke radio costs about £100, which brings it in reach of many

people. One would have thought that, now that there is a product for which there is huge demand, manufacturers would go out of their way to promote it. Ralph Bernard, who talked to the Westminster media forum a few weeks ago, said that the Pure Evoke radio receiver was this year's equivalent of the Thunderbirds Tracy Island, although I recall that it was much easier to get a Tracey Island than any of the radio receivers. There was a hope that they would take off this Christmas, but I have seen no evidence of that.

Andrew Robathan (Conservative, Blaby)

Will my hon. Friend give way?

Michael Fabricant (Conservative, Lichfield)

Will my hon. Friend give way?

John Whittingdale (Conservative, Maldon and East Chelmsford)

I give way to my hon. Friend the Member for Blaby (Mr. Robathan) first.

Andrew Robathan (Conservative, Blaby)

Seven years ago, in 1996, when we considered the Broadcasting Bill, we were told about—and I heard—digital audio broadcasting. We were told that it was about to take off and that it would be fantastic, yet seven years down the line, receivers are still rare.

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend and I are veterans of that Bill. We spent much time discussing the exciting possibilities of digital audio broadcasting, and he is right to day that at that time, we could have expected that seven years later most of the population would have at least one digital radio receiver. However, we are a long way short of that.

Michael Fabricant (Conservative, Lichfield)

I can offer some hope. I can lend—not give—my hon. Friend a copy of a Radio Guide ''Listeners'' edition, which details the digital radios available. I understand that Peter Jones has such a radio in stock. The good news is that such radios were the great thing to buy this Christmas, and I am sure that that was not solely due to the Minister's eloquence. Three months from now, I gather that many receivers will be back in stock. The problem is not lack of interest from individuals, but that suppliers have been unable to meet demand.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am grateful to my hon. Friend, and I shall bear in mind his recommendation of Peter Jones when I next go through Sloane square. He has given me a rather attractive picture of an Evoke radio.

All the evidence to date shows that there is considerable demand for the product. Part of the problem is that many people still do not know about digital audio broadcasting. Those who discover it are aware of its advantages—one has access to many more channels and can receive them with almost perfect clarity of sound. Once people learn that, the demand for digital audio broadcasting becomes greater, but only a few people are aware of it, and the vast majority of them find that it is impossible to purchase a receiver. Until we change that, digital audio broadcasting will not take off.

One of the biggest drivers—which is an unfortunate choice of word because of what I am about to say—of take-up would be the car companies, if they could be persuaded to fit digital radio receivers as an additional item in their vehicles.

Mark Hoban (Conservative, Fareham)

My hon. Friend may not be aware that the Ford Motor Company is planning to fit digital radios as standard in all of its vehicles in the near future.

John Whittingdale (Conservative, Maldon and East Chelmsford)

That is a very important development, but I wonder whether they will be fitted in only top-of-the-range vehicles.

Mr. Hoban indicated dissent.

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend is indicating to me that all vehicles will be fitted with digital radio. If that is the case, that will make a major impact, and very high numbers of people might take it up.

This matter is of importance in everything that we will debate this afternoon, because all the conditions regarding licence renewal are predicated on the assumption that the commercial companies will continue to invest in digital radio. In the main, they have done so. They have expressed confidence in digital radio, and it is possible to get not only the BBC's many stations on digital radio, but commercial stations as well. However, commercial companies are in business to make a profit, so unless take-up increases fairly soon, there must be a slight danger that there may come a time when their shareholders will begin to ask questions about when they will see a return on the investment that they have made in digital radio.

Because of the operation of the knives, we were unable to debate the activities of the Radiocommunications Agency. I recognise that the opportunity to make the case has passed to some extent, and I do not seek to revisit that matter, but it is very important for the successful operation of independent radio companies that action is taken against piracy. If we had been given the opportunity to discuss that matter, I would have said a lot about piracy, and I wish to put on the record that we consider it to be a considerable threat to legitimate radio stations, and that we therefore regard Ofcom's role in enforcing legislation and taking action against illegal broadcasters as very important. [Laughter.]

It is also important in relation to the regulation of independent radio stations that radio receivers—either the traditional analogue receivers, or even a Pure Evoke radio, if one can find one—are no longer the only means by which one can receive radio stations. In recent years, there has been a dramatic growth in the number of stations that are first available via satellite. When reading the Bill, I noticed that radio stations that are purely broadcast from satellite do not come under the remit of Ofcom. Most radio stations will broadcast both on satellite and terrestrially. I accept that it is difficult to regulate a radio station that is only available via satellite, but I am curious to hear the Minister's views on that, because the growth in such stations is likely to continue in the coming years.

Many people now access the radio via the internet. A surprisingly high number of people now use their personal computers to listen to it.

Kim Howells (Labour, Pontypridd)

I do.

John Whittingdale (Conservative, Maldon and East Chelmsford)

The Minister listens to the radio through his personal computer?

Andrew Miller (Labour, Ellesmere Port and Neston)

Digitally.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Indeed.

Although it is clear that the Bill does not seek to regulate the internet, we are seeing the coming together of different technologies in this area. It is curious that in the field of radio regulation, some platforms and delivery mechanisms are within Ofcom's remit and some are outside it. Perhaps the Minister could say word about that aspect.

Radio is used for a variety of purposes, not all of which involve broadcasting programmes for a listener's entertainment or information. I have in my car a satellite navigation system, which is extremely valuable in my work as a Member of Parliament.

Andrew Robathan (Conservative, Blaby)

Why?

John Whittingdale (Conservative, Maldon and East Chelmsford)

I will explain. One reason why that system is so valuable is because it has a mechanism that tells me when there is a large traffic jam on the A12. Since I seem to spend a lot of my life on the A12, advance warning about traffic jams is useful. That system finds out about traffic jams through Trafficmaster, which uses the Classic FM radio band to talk to the computer in the back of my car. I am told that there is bit of space on that band that is not used for broadcasting Mozart which can be used to talk about the location of traffic jams. That is a different kind of broadcast radio service. I think that I am correct in saying that it would fall under the definition of additional radio services.

I am interested to know how Ofcom would regard its role, if that were to extend into an area that most people would not regard as traditional for the regulation of broadcast media. The rapid development of technology in radio raises many interesting questions. I wanted, therefore, to take this opportunity at the beginning of the debate on this set of clauses to raise some of those questions and ask the Minister to respond.

Roger Gale (Conservative, North Thanet)

Order. The hon. Gentleman has made the point fairly that this is the start of the debate on radio. On that basis, I am prepared to allow a fairly wide-ranging debate on the first clause in this set of clauses, should hon. Members wish to take advantage of that.

I would like to place on the record and make it plain, in view of the ribaldry coming from the Government Back Benches, that my offshore broadcasting career took place prior to the passage of the Marine, &c, Broadcasting (Offences) Act 1967, that it was entirely legal, and that it was in the finest spirit of free enterprise.

Michael Fabricant (Conservative, Lichfield)

It was not my intention to speak at length, but since my background is in radio broadcasting, I could not do anything other than support what my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) has said.

You and I were involved in independent local radio, Mr. Gale, and we both recall the old Independent

Broadcasting Authority. One reason why the IBA was discontinued and split into the Independent Television Commission and the Radio Authority was because the view at that time was that radio was getting a bad deal from the IBA and that it was always sidelined in favour of television.

John Greenway (Conservative, Ryedale)

I am grateful to my hon. Friend for allowing me to intervene, as it will probably save the Committee time if I make this point now. You will recall, Mr. Gale, that in the Broadcasting Act 1990, and prior to that in the report of the Select Committee on Home Affairs on which you and I served, the view was taken that a special regulator for radio was needed. The Radio Authority has done an outstanding job during the past 13 years. I share the concerns of my hon. Friends the Members for Maldon and East Chelmsford and for Lichfield (Michael Fabricant). I, too, think that there should be a strong voice for radio in Ofcom.

Michael Fabricant (Conservative, Lichfield)

I thank my hon. Friend for that intervention, to which the only possible response is to say, yes.

I raised that little bit of history because—for reasons that we understand and do not oppose—radio and television regulation, with the Office of Telecommunications and other agencies, are being recombined. One of the most useful things that the Minister could do this afternoon is to reassure the radio industry that radio will not again be sidelined within a large organisation.

I wish to play a quick game of ''Trivial Pursuit''. This is an interesting time because this year we celebrate two great anniversaries: the 80th anniversary of the old British Broadcasting Company, which started broadcasting in 1923 and got its royal charter and became the British Broadcasting Corporation in 1926; and the 30th anniversary of independent local radio. My ''Trivial Pursuit'' question is, ''What was the name of the first legal independent radio station in the United Kingdom?''

Jim Murphy (Labour, East Renfrewshire)

It was on the Isle of Man.

Michael Fabricant (Conservative, Lichfield)

The hon. Gentleman is right. Manx radio did precede independent local radio, because it operated under a different statutory regime. Most people think that Capital Radio, which started on 14 October, was the first independent radio station to get a licence. In fact, it was the London Broadcasting Company, LBC, which did so on 7 October.

I am not planning to speak at length. My hon. Friend the Member for Maldon and East Chelmsford described very well the points about the BBC. In fairness, I know of no other broadcasting organisation in the world that can compete in talk radio with Radio 4—or the Home Service, as some of us prefer to call it. Radio 4 performs so well not only because of the artistic strength within the company, but because of its large budget, which could not easily be funded by commercial broadcasting.

The hon. Member for Western Isles (Mr. MacDonald) said that he worked in America for some time and listened to its public service broadcasting radio station—National Public Radio. He should compare NPR's ''Morning Edition'' with its Radio 4 counterpart, the ''Today'' programme—one can listen to NPR on the internet. Surprisingly, the pace of ''Morning Edition'' is much slower than that of Britain's own ''Today'' programme.

I hope that the Minister will be able to reassure me that radio will not be sidelined under the new arrangements.

Kim Howells (Labour, Pontypridd)

I had been forewarned about the very early, flourishing days of the hon. Gentleman's career. I will say nothing about them.

I am glad that the hon. Member for Maldon and East Chelmsford raised the issue of the place of radio in the new Ofcom regime. I assure him and the hon. Member for Lichfield that in no circumstances will Ofcom relegate radio to some Friday afternoon position. I get virtually all my news and most of my entertainment from the radio, and I am determined to ensure that radio receives the consideration that it deserves.

The hon. Member for Maldon and East Chelmsford asked about the availability of digital radios. Although that is not covered by the clause, it is an important point. All too often, we are disappointed by the availability of units of the type that he mentioned. For the hon. Gentleman's information, over Christmas, digital radios were the product that people were trying to get hold of, but, as he said, it was easier to buy children's toys that were themselves regarded as scarce than digital radios, which is a great shame. BSkyB has done a great job in providing a platform for digital radio broadcasts and those are available everywhere, and I frequently use the service.

Simon Thomas (Plaid Cymru, Ceredigion)

I accept that digital radio signals are available by satellite. That is how I receive radio in my office in Aberaeron, but in the rest of Wales there is very little digital radio service. The only coverage is in the north-east of Wales. In many other areas—part of the central belt in Scotland, for example—there is no digital radio service. Will the Minister comment on the roll-out of digital radio services and say some encouraging words about how the rest of the United Kingdom population will soon have access to the service, if not to the radio element?

Kim Howells (Labour, Pontypridd)

Yes, it is a real push-and-pull situation. I suspect that if demand were seen to be greater, much faster roll-out of the services would begin. We are reviewing the matter carefully. I am keen that we should all receive those enhanced services. The hon. Member for Maldon and East Chelmsford who remarked on the difference in quality that digital provides. When one receives a good signal, the effect is quite staggering, and it is something that I would love everybody in this country to enjoy—although I am not sure that they ever will.

Simon Thomas (Plaid Cymru, Ceredigion)

The Minister said that he was keeping the matter under review. Will he say specifically whether the review that the Secretary of State for Culture, Media and Sport announced last night in Oxford, which will consider the licence fee and its payment for digital services, will include digital radio? That tends to be overlooked in debate about digital services in general.

Kim Howells (Labour, Pontypridd)

I am sure that every aspect of the BBC's operations will be reviewed and I expect that the reception that people receive in their part of the country will be an important consideration in relation to the licence fee that they pay. I will try to ensure that the issue is brought to the attention of whoever carries out that review.

I shall try to answer some of the questions raised by the hon. Member for Maldon and East Chelmsford. BBC radio is regulated by Ofcom under tier 1. There are no radio requirements under tier 2. Ofcom's licensing responsibilities cover only commercial radio, just as in the case of television. BBC radio will make statements of programme policy for each of its radio services, which will have exactly the same status as its statements for TV services. The hon. Gentleman suggested that pure satellite radio is not being regulated under the Bill. That is not entirely correct. Satellite radio that is provided from a place in the United Kingdom and is not otherwise authorised under the law of another European Economic Area state is covered as a radio licensable contents service.

Michael Fabricant (Conservative, Lichfield)

The Minister is not right to say that because there is no practical way that we could regulate outside the United Kingdom anyway.

Kim Howells (Labour, Pontypridd)

That may well be the case but I am saying it anyway.

I shall talk for a moment about additional radio services which the hon. Member for Maldon and East Chelmsford mentioned in relation to his routemaster service, which he is very pleased with. I do not have one in my car, but his advice seems to be that I should get one. Additional radio services such as traffic services are regulated by the Radio Authority and will continue to be regulated by Ofcom. At the moment they do not seem to be raising any particular problems, but I will touch wood on that front.

The hon. Member for Ceredigion (Mr. Thomas) asked about the rate of digital radio roll-out. I hate that word, but he knows what I am talking about. The commercial sector already covers 80 per cent. of the country and the Radio Authority licenses new multiplexes at the rate of about one a month, so it is making progress. Having said that, I sympathise as one who gets very frustrated at not being able to get digital radio reception.

Michael Fabricant (Conservative, Lichfield)

At the risk of angering the Minister, is he aware that six digital radio transmissions are also carried by Freeview?

Kim Howells (Labour, Pontypridd)

I am very pleased to hear that. I commend the clause to the Committee.

Question put and agreed to.

Clause 239 ordered to stand part of the Bill.

Clause 240 ordered to stand part of the Bill.

Clause 241 - Meaning of ''radio licensable content services''

Andrew Lansley (Conservative, South Cambridgeshire)

I do not want to hold up proceedings, but some of what I was planning to say about clause 226 is technically part of the subject covered by clause 241. Clause 226 covered the meaning of television licensable content service, and we are dealing now with radio licensable content service. Under clause 241, the meaning of radio licensable content service is qualified by reference to

''its availability for reception by members of the public'',

which is defined under clause 347. We will, in effect, debate such matters again, although we do not have the benefit of amendments being tabled to the clause, so I want to put down a marker.

The Minister will recall that, during the discussions of the Joint Committee, substantial effort was directed at the scope of the licensed sector for television and radio, on the basis that we must try to define or specify the boundary between broadcasting and the internet, without the intention of seeking to regulate the internet. If members of the Committee have not read paragraphs 286 to 298 of the Joint Committee's report, I hope that they will take the trouble to do so. The issues involved are well set out there.

As for not seeking to regulate the internet, I am not saying that certain aspects of it should not be subject to scrutiny. The principle of the argument is that what is illegal offline should be illegal online. In recent years, much legislation has gone through the House to try to achieve those objectives. Through a process of self-regulation, the internet has evolved beyond that which is generally illegal. In any case, the internet is international, and therefore difficult to regulate on a purely national basis. Its use by individuals is based on the fact that internet material is, in effect, pulled off the system by them, rather than pushed to them in the manner of broadcasting.

Can we find a description that defines more accurately the distinction between people drawing down material from the internet at their discretion and material pushed towards the public simultaneously by way of broadcasting? To help the discussion, I draw attention to the Joint Committee's report and evidence taken from the Secretary of State for Culture, Media and Sport. The example I give is that of ''Big Brother'', which could be seen on Channel 4, seen more extensively on E4, and seen online live—a fact to which my hon. Friend the Member for Maldon and East Chelmsford referred. In the Secretary of State's view, the material on Channel 4 would be subject to all the broadcast regulatory applications, so it would be subject fully to public service obligations. Transmission on E4 would be licensable content subject to tier 1 regulation, and the material on the internet would not be subject to regulation because it would not be a licensable content service.

There is a problem with the definitions. Clause 347 is headed ''Meaning of 'available for reception by members of the public''' However, services will not be regarded as available for reception by members of the public if three conditions are met. The third of those conditions is:

''that the individual selections . . . do not include any that are limited to electing to be one of the recipients of material . . . offered for reception on the basis''

that it has been

''selected by the provider . . . for broadcasting or distribution simultaneously, or virtually so''.

In the case of ''Big Brother'', the material presented on the internet was specifically designed to be received simultaneously by members of the public. It could hardly be otherwise.

Simon Thomas (Plaid Cymru, Ceredigion)

I listened to what the hon. Gentleman said earlier about the difference between a broadcast and the internet—he said that, in one, the service was sent to the individual and, in the other, the individual reached out to receive it. However, in the example that he is giving now, a key concern must be the cross-promotion of the different media. When people watched ''Big Brother'', they were encouraged to go online to see it live. As the hon. Gentleman has said, such live service is not controlled and does not have a watershed. That leads to consideration of the fact that, increasingly, broadcasts will be available with a click on the right web address. That seems to be a different type of internet broadcast to the one that the hon. Gentleman is referring to.

Roger Gale (Conservative, North Thanet)

Order. The flow of the hon. Member for South Cambridgeshire (Mr. Lansley) has been interrupted, so it is a good time to point out that although we have been more or less in order when discussing clause 241, and although I do not yet propose to let my judgment be coloured when considering the hon. Gentleman's requests, he is coming perilously close to trying to have his cake and eat it, too.

Andrew Lansley (Conservative, South Cambridgeshire)

I quite understand, Mr. Gale. I am using this opportunity to put an argument to the Minister. We will come to clause 347 later. The Minister will decide to what extent he wishes to engage in the debate and perhaps accept some of the arguments that the Joint Committee and I made—arguments that the Government have not taken up and responded to.

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend is raising an interesting argument that develops one that I raised during discussion on an earlier clause. He cited ''Big Brother'', which is obviously a television programme rather than a radio programme. However, what has happened with ''Big Brother'' could equally happen with a radio programme. A programme could go out in one format that is subject to regulation and in another format that is not. While ''Big Brother'' was being broadcast on E4, during the live transmission late at night, a discussion among remaining members of the house was blanked by the broadcaster. Only visual images were broadcast, not sound. I do not

know why that was done, although I have heard speculation about the subject that was being discussed and why it was felt inappropriate to broadcast it on television.

At the time, the matter came under the ITC or the Broadcasting Standards Commission; in future, such a matter will come under Ofcom. However, there will be no equivalent regulation of the internet broadcasts. The problem applies to radio content as well as to television content.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend is right. If one were broadcasting live on the internet and on the radio, in a licensable content service, one might have to block material in the regulated sector. If one had to block material because it might give rise to civil action, it would not follow that one should be able to broadcast it with impunity on the internet. Exactly the same considerations apply.

The intention is that the tier 1 obligations, of which that might be an example, do not flow on to internet material. The question is whether, under the Bill, we can set up a structure for the longer term that genuinely distinguishes between radio licensable content services, which should be regulated to the extent that the Bill intends them to be, and other material that happens to be on the internet. I am working towards the push-and-pull distinction. The problem is that the Bill cannot simply say that material that is pulled, not pushed, is internet material and therefore not to be regulated.

I shall not trespass on your patience, Mr. Gale, by dwelling on the structure of the amendments, but I am trying to say that a sequence of selections is the closest that we can get to that. The question is what kind of sequence and selections constitute pulled, not pushed, material. We all know that we press a button to turn a television on: that is not a selection; it is merely activating a network. We then choose a channel, but that should not be regarded as pulling material, because the material is pre-packaged. However, as the hon. Member for Ceredigion implied, if one is listening to a radio programme and presses a red button on the digital radio to get a running commentary or additional service, that might be regarded as internet material that is pulled down.

Perhaps we should not get so hung up on defining the internet and should instead define circumstances in which we do not need long-term highly regulatory structures that are designed to frustrate people receiving legal material provided by others. That is quite distinct from broadcasting, which is, in effect, the prior packaging and accumulation of material that is to be received by large numbers of people simultaneously. I hope that the Minister will explain how that can be accomplished under the Bill, but I think it more likely that he will say that we need further amendments if the Bill is genuinely to achieve that objective.

Kim Howells (Labour, Pontypridd)

That was a fascinating description of how quickly things are moving. Whenever I try to describe the distinction between what we are covering in the Bill and what the internet provides, I say that

there is between the two a very wobbly frontier that keeps moving and will continue to change quickly.

This morning, I offered to write to the hon. Gentleman about the amendments grouped under clause 226 on television licensable comment services. I shall certainly do that, but I shall now try to ensure that the letter also gives a full response on the issues that he has just raised. I shall now try to stick more closely to clause 241. I am confused by the way that we moved from clause to clause in the last sitting and this one, although it is important that we have broader debates such as this, because the clauses are linked all the way through the Bill.

Clause 241 defines radio licensable content services so as to include all sound programmes broadcast primarily for reception by members of the public from a satellite or through an electronic communications network to places in the EEA, whether in analogue or digital form. As the hon. Gentleman told us, the term

''available for reception by members of the public''

is defined in clause 347 so as to exclude one-to-one services on cable, satellite or multiplex services. The effect is that radio on demand, for example, will not require licensing as an RLCS service. In the past, satellite and cable services have required different licences. Under the Bill, both types of service will be subject to one type of licence. That is why the clause should be added to the Bill.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am familiar with the concept of video on demand, but less familiar with the concept of radio on demand. Simply for my own information, what is radio on demand and how does it work?

Kim Howells (Labour, Pontypridd)

I shall explain how I understand it. When I am working on my computer, I often tune in via the internet to a jazz station, albeit not Jazz FM because all too often that does not play jazz anymore.

Chris Bryant (Labour, Rhondda)

That is by the by.

Kim Howells (Labour, Pontypridd)

It is indeed. As a consequence, I can access radio via the internet, although it might not be radio that is broadcast in this country.

John Whittingdale (Conservative, Maldon and East Chelmsford)

That is a very different concept to video on demand. I can choose what I watch if I use video on demand: for example, I can choose to watch a specific film, which will be sent down to me. From the Minister's explanation of radio on demand, I could not choose to listen to a specific piece of music, but would simply receive a radio station.

Kim Howells (Labour, Pontypridd)

The hon. Gentleman will have heard many adverts on the BBC suggesting that if people want to hear a programme again, it can be pulled down at any time from the web. The system is in its infancy but it is available because the BBC offers the service at the moment.

John Greenway (Conservative, Ryedale)

Does that mean that we could get the radio programme ''Dead Ringers'' on demand via the internet? If so, could we get a computer in the Room in order to entertain us throughout the afternoon?

Kim Howells (Labour, Pontypridd)

Almost certainly.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Now I know what the phrase refers to, I confirm to my hon. Friend the Member for

Ryedale (Mr. Greenway) that the programme is available on the BBC website.

Question put and agreed to.

Clause 241 ordered to stand part of the Bill.

Clause 242 ordered to stand part of the Bill.

Clause 243 - Modification of ss. 241 and 242

Clause 247 - Extension and modification of existing licences

Kim Howells (Labour, Pontypridd)

I beg to move amendment No. 434, in

clause 247, page 216, line 12, at end insert—

'(2A) An application under subsection (1) may only be made in the period which—

(a) begins three years before the date on which the licence would otherwise expire; and

(b) ends three months before the day that OFCOM have determined to be the day by which they would need to publish a notice under section 98(1) or 104(1) of the 1990 Act if they were proposing to grant a fresh licence to take effect from that date.

(2B) A determination for the purposes of subsection (2A)(b)—

(a) must be made at least one year before the day determined; and

(b) must be notified by OFCOM to the person who holds the licence in question.'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss Government amendments Nos. 435 to 450.

Kim Howells (Labour, Pontypridd)

The amendments will put time limits on applications for the extension of local or national analogue radio licences. That will correct an omission in the Bill. The intention to include such a provision was set out in paragraph 8.4.1.3 of the policy document that accompanied the draft Bill in May. Regrettably, the necessary provisions were omitted from the Bill. The amendments put the omission right and extend the same provision to related provisions.

The clause gives the holder of a national or local analogue radio licence the right to make an application for the extension of the licence by four years, meaning that the duration changes from eight years to 12 years.

Amendment agreed to.

Clause 247, as amended, ordered to stand part of the Bill.

Clause 248 - Renewal of local licences

Michael Fabricant (Conservative, Lichfield)

The clause follows on not only numerically, but logically, from clause 247. It amends the Broadcasting Act 1990 in respect of the renewal of digital licences. Pressure is growing among radio

operators who hold digital licences to have licences extended automatically. A current radio licence for a digital service is currently of between 20 and 24 years' duration, depending on the type of licence, and the clause would extend the licence to between 32 and 36 years if there were an automatic licence extension.

I share the Radio Authority's view 20 to 24 years is long enough to regain one's original investment. I realise that additional equipment, including transmission equipment, has to be purchased, but such factors would have been taken into account when the digital licence was originally awarded. Will the Minister give a steer to the industry? Does he share my view and that of the Radio Authority that a 20 or 24-year licence is long enough to regain the original costs of setting up a digital radio service?

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend touches on an important question. As he said, the Radio Authority accepted the case for a 12-year extension of analogue licences, and the Government included that in the Bill. However, when the matter was originally debated, the industry asked for an extension of 15 years.

As my hon. Friend said, it has been suggested that the extension should be decided on a rolling process. The original justification for the extension of licences was based on the investment in digital. In return for the commitment made by commercial stations to a digital future—incurring the costs involved in investing in digital broadcasting—they should get some recompense in the form of a licence extension. However, the speed with which the take-up of digital is occurring has been disappointingly slow. If that continues, although the extension is welcome, it may not be sufficient. Will the Minister tell us why 12, rather than the 15 years originally suggested by the commercial radio companies, is an appropriate extension?

Kim Howells (Labour, Pontypridd)

Twelve years was judged to be an appropriate period for extension partly on the same grounds as those mentioned by the hon. Member for Lichfield. There was a feeling that 24 years is a lengthy period of time to hold a licence. I can offer no more explanation than that. The ways in which figures are decided are often matters of judgment. However, he was correct in saying that a further extension—if there has already been one—could mean that licences are held for 24 years.

Michael Fabricant (Conservative, Lichfield)

Thirty years.

Kim Howells (Labour, Pontypridd)

Or 30 years, which is a long time for a licence to be held and sufficient time in which to recover costs. When it comes to the provision of services, there is a need to test the market from time to time through a licensing process.

John Whittingdale (Conservative, Maldon and East Chelmsford)

On that point, will the Minister accept that the market can be tested at any time? There is nothing to prevent anybody seeking to acquire an existing licence at any stage.

Kim Howells (Labour, Pontypridd)

I take that point, but it often helps if there is a certain point or focus at which a change in the market is seen to be possible. At such times,

companies have been successful in bringing new blood into the industry—I am sure that we can all think of examples. The judgment is not made on any scientific basis, but through experience.

The clause adds to factors that Ofcom must take into account when agreeing to the renewal of a local analogue licence when a broadcaster has committed to broadcasting on the relevant digital multiplex. At present, Ofcom is required to grant a licence provided it is satisfied that the applicant would provide a local service with any conditions imposed to secure the character of the licensed service. Ofcom must also satisfy itself that the nominated local digital sound programme service that the applicant provides is broadcast by means of a nominated local radio multiplex service and that that is what is needed in the locality.

The clause adds a third factor by requiring Ofcom to satisfy itself that the period and times at which the nominated local digital sound programme service will be available under the renewed licence will not be significantly different, week by week, from those for and at which the licensed local service will be broadcast. It closes a potential loophole in the Bill that would allow the broadcaster to obtain a renewal of his local analogue licence by broadcasting on a digital multiplex for, say, only a few hours a week.

Clearly, we, and listeners generally, would expect broadcasters to broadcast a service that is essentially the same as their analogue service, not just a pared-down version of it. The clause will ensure that that will be the case.

Question put and agreed to.

Clause 248 ordered to stand part of the Bill.

Clauses 249 and 250 ordered to stand part of the Bill.

Clause 251 - Promotion of simulcast radio services

John Greenway (Conservative, Ryedale)

This strikes me as an important clause. My hon. Friend the Member for Maldon and East Chelmsford has already referred to the slow progress in the roll-out and take-up of digital radio. I mentioned the problem earlier and I am sure that the Minister accepts that it is hugely disappointing. The clause provides Ofcom with powers that could be extremely important to the future roll-out of digital radio services. It allows it to award national radio licences to applicants who may not necessarily have made the highest cash bid for the licence if they are, at the same time, proposing to roll out in simulcast the digital signal.

I do not believe that we can speculate—it is difficult to do so—on the trade-off between offering less for the licence and meeting the cost of making the service available through simulcast to digital listeners. Clearly, the funds that the Government have made available to the BBC through the enhanced licence fee have begun to spawn a range of digital radio services. I

referred earlier to ''Dead Ringers''. I am grateful for its transmission last Friday, which was repeated on Saturday; it really poked fun at the scale of the BBC digital radio services that are being rolled out, which apparently no one is listening to. That is partly because of the problem to which my hon. Friend the Member for Maldon and East Chelmsford referred, which is that few people have a digital receiver capable of allowing the listener to tune in to such services. However, that is a separate issue.

I want to raise two points with the Minister. Has Ofcom, on the advice of the Radio Authority, given any thought to the trade-off? I am trying desperately to recall an earlier clause that gave rise to discussions about Ofcom being able to make grants to licence holders. It was probably when we debated radio spectrum, when I asked the hon. Gentleman whether the grants would encourage digital roll-out. I was told that that was a possible area where they may be available. It would be helpful if, in due course, not only the Committee but the commercial radio industry as a whole knew what the trade-off might be between the value to public policy of encouraging digital radio roll-out, through lower licence fees to enable companies to be reassured that they would benefit by simulcasting the programme.

In a sense, that reflects the difficulty that we discussed at length in relation to the provisions in the Broadcasting Act 1990 on the trade-off between the quality of the service and the highest price. I specifically recall having an argument with Labour Members about whether the Bill should not prescribe what these new national radio stations should be, because the industry was more capable of determining what would be successful. The end result of all that was Classic FM, which we would not have got had the 1990 Act prescribed free radio stations because a classical music service was never even on its agenda. In the end the Radio Authority accepted Classic FM's bid although it was not the highest bid for that national FM frequency.

If for no other reason, this is a valuable intervention in that it reminds the Committee of that fact. The other difficulty that we had was in recognising that the amount of FM spectrum was limited, whereas medium wave—that is my preferred definition, but it is known generally as AM spectrum—was more widely available but the quality of reception, as we all know, is by no means as good, particularly in the hours of darkness. If I drive home to Yorkshire on a Thursday night and I try to listen to Radio Five Live, I am tuning in and out and I am never quite sure which is the right frequency to be on—909 or 693. We do not have that difficulty with digital. The clause is a good point at which to pause and ask the Minister to reflect on the extent to which the Government seriously want to promote digital radio, because it is a mechanism by which the whole venture could be encouraged and furthered.

The next question that I would like the Minister to address will almost certainly be in his speaking notes. Subsection 6 tries to anticipate the possibility that, in order to secure a licence for less than the highest bid, a successful licence applicant may think to himself, ''I'll

offer, and promise to do, the simple tasks,'' but if in the fulness of time no-one is listening to the service because so few people have got digital receivers as they are prohibitively expensive, he may think ''I'll switch off the simulcast and just continue broadcasting on the FM or AM signal.''

The draftsmen of the Bill appear to have tried to anticipate that problem by saying in subsection 6 that Ofcom will require the licence holder

''to do all that he can to secure the broadcasting of that service''—

presumably in simulcast fashion. Does that include the threat of withdrawing the licence? That would in one sense be an understandable proposition, but one that would be fraught with difficulty in that such a service may have already accumulated a significant body of listeners through the normal, non-digital spectrum—whether FM or AM—so there is not a great deal of interest in listening to the programme digitally, especially if it was on a station that mainly broadcast speech programmes.

It is not easy to resolve that matter, and I am not trying to score a cheap point. This is a genuinely important issue.

Chris Bryant (Labour, Rhondda)

I think that either the hon. Gentleman is mistaken or I have misunderstood what he said.

John Greenway (Conservative, Ryedale)

Or it could be both.

Chris Bryant (Labour, Rhondda)

Indeed. The hon. Gentleman seems to suggest that the only way in which a radio service can be simulcast—it is a portmanteau word—is if it is simultaneously broadcast on analogue and digital services using digital audio. In the industry, however, the most common understanding of the word ''simulcast'' refers to a broadcast radio channel that is simultaneously put online. My hon. Friend the Minister referred to that earlier in respect of his jazz channel in the United States. Does the Minister think that that is included?

John Greenway (Conservative, Ryedale)

I will try desperately to remember part III of the 1990 Act, because it was some years since we passed that. I rely on the definition in clause 250(1), which will change section 41(2) of the 1996 Act, whereby

''a 'simulcast radio service' means a service provided by a person for broadcasting in digital form and corresponding to a service which is a national service within the meaning of Part 3 of the 1990 Act.''

I conclude from that that—

Chris Bryant (Labour, Rhondda)

Online is excluded.

John Greenway (Conservative, Ryedale)

Yes. I do not remember discussing online radio services during the progress of the 1990 Act. I do not claim to be an expert in these matters. I simply want to voice the fact that although I do not have an easy solution, I have a deep-seated view about the issue. We rightly tried when we were in office, and the present Government are trying, to promote the concept of the analogue television switch-off in order to get everyone connected to digital television and to promote a public policy that is shared across the political divide, and which I believe is entirely worthy.

Like my hon. Friend the Member for Maldon and East Chelmsford and the Minister, I find myself listening to more radio than I watch television. I

have a sense that we are not promoting the digital radio world with the same degree of enthusiasm as digital television. I think that we ought to do that, because the benefits are immense. I am convinced that when one listens to music, the sound quality is significantly better, although drama can be equally compelling. There is so much high quality content being broadcast using ropey signals that it is difficult to get proper reception half the time, especially on AM in the winter months. The obvious solution is digital. We could, perhaps, have paused and debated the matter. I have tried desperately to remain in order, but from the Minister's reaction I think that he has seized on questions and issues that I have raised. We look forward to his response.

Andrew Lansley (Conservative, South Cambridgeshire)

I shall try not to hold up our progress for too long. I was reminded, not least by what my hon. Friend the Member for Maldon and East Chelmsford said about routemaster—

Andrew Robathan (Conservative, Blaby)

Trafficmaster.

Andrew Lansley (Conservative, South Cambridgeshire)

It is a data service provided through digital broadcasting. That reminded me that during the last Parliament we considered the question of section 54 of the 1996 Act, which required that in respect of a national and local radio multiplex licence, at least 90 per cent. of the digital capacity provided was to be available for the broadcasting of digital sound programme services, simulcast radio services, programme-related services or relevant technical services. If we are now in the business of promoting simulcast radio services, one of the ways of doing that is by examining the extent to which licensees who were required to comply with it are doing so.

I am enough of an anorak in these matters to recall that in May 1998 that figure was reduced from 90 per cent. to 80 per cent. by the Broadcasting (Percentage of Digital Capacity for Radio Multiplex Licence) Order 1998. For my sins, I was a member of the Committee that examined that. We did not discuss it at great length. I think that we still have that 80 per cent. limit. If that is the case, do we need the promotion facility in order to disregard the highest cash bids?

That shift from 90 per cent. to 80 per cent. was intended to stimulate the provision of digital services. Data services were cash-generative in a way that some of the other services were not, and that offered a degree of flexibility that was supposed to bring forward those digital services that would stimulate the market. The risk of going in the opposite direction is that one could create a squeeze on the providers who are looking to provide data services alongside simulcast radio services. One might exclude them when the net effect of providing those data services is to stimulate the market.

Kim Howells (Labour, Pontypridd)

At present, national analogue licences are awarded to the highest bidder, and we want to retain that system, but we also want to create a level playing field for broadcasters.

I wish to deal with some of the points made by the hon. Member for Ryedale because they are important. My hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) told me that 80,000 digital radios were sold in the three weeks before Christmas, and he knows about such things. That is quite a lot of new products, so it is important news.

The hon. Member for Ryedale is about the same age as me so I hope that he will not call me old-fashioned for saying that I believe that content is king. That must be focused on, if digital television and radio are to be driven forward.

Governments should not prop up businesses or industries that cannot hack it, and I am sure that the hon. Gentleman is not suggesting that we should do that. I wonder what would happen in terms of allegations of unfair state aid and so forth if we were to start to dole out money to companies.

People will not buy digital radio just to get analogue simulcasts. We need new series—programmes that people want to listen to—and the hon. Gentleman mentioned a few of them. My hon. Friend the Member for Ellesmere Port and Neston passed me a note that can serve to make an important point about drawing down radio shows on demand. His wife missed the revelation about Brian's love life in ''The Archers''. I heard it and was shocked by what goes on in rural areas—[Laughter.] However, she was able to call down that episode.

As the hon. Gentleman talked about some of the efforts that are being made—some of the drama, and so forth—I wish to pay tribute to the new services that the BBC, for example, is offering. They have been given a bit of a battering in this Committee in one way or another, but some of them are tremendous. They are an important part of what makes digital radios attractive.

The hon. Member for Ryedale asked an important question about whether licences could be withdrawn. The answer is yes. If a broadcaster has not done all that he or she could, Ofcom can revoke or shorten a licence or fine the broadcaster. I hope that that helps him.

My hon. Friend the Member for Rhondda (Mr. Bryant) indirectly asked whether simultaneous internet provision of a service is a simulcast for the purposes of the 1990 Act. I am told that it is not. Simulcasting for these purposes means broadcasting by wireless telegraphy.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Representing a rural area as I do, I was not at all shocked. The Minister said earlier that content is king, and I am sure that he is absolutely right. There is a slight comparison with British Telecom, which tells everyone how wonderful broadband services are. However, people find that they cannot get broadband services. Now that the BBC is promoting its digital channels at every opportunity, people cannot get a receiver to listen to them. The Minister says that 80,000 were sold, and that is a significant figure. However, he should compare that with the sale of millions of DVD players, which are a very recent technological

development. DAB receivers are still a long way behind.

Kim Howells (Labour, Pontypridd)

There is a critical stage in sales. I remember a few years ago thinking ''Why on earth would I want a DVD? I have video.'' I have since bought a DVD, and it is great.

Chris Bryant (Labour, Rhondda)

A simple point is being missed: every house that has digital satellite has a DAB receiver.

Kim Howells (Labour, Pontypridd)

I mentioned that earlier. I am interested in the DVD example because the content and quality are so good. It is a real step-up from video. One can do a great deal with it, and that is probably why it is so popular.

Until such time as there are enough digital radios for broadcasters to be able to recoup some of their costs through advertising revenues, digital broadcasting remains a cost to the industry. That could mean that an applicant for a national licence who did not want to simulcast on the national digital multiplex was at a commercial advantage compared with a broadcaster who was prepared to bear the cost of digital broadcasting.

Clearly, that would not encourage the take-up of digital radio services. To counterbalance that, we propose to allow Ofcom to award a national analogue licence to a low bidder if they propose to simulcast the service on a national digital multiplex. I take the point of the hon. Member for Ryedale that an applicant may make such a promise when bidding only to find out later than their entire audience consisted of four men and a dog. They may then try to get out of that commitment. The Government would certainly expect Ofcom to act decisively in such a situation. We believe that that will help to maintain the encouraging momentum that digital radio is building. I move that this clause stand part of the Bill.

Question put and agreed to.

Clause 251 ordered to stand part of the Bill.

Clauses 252 and 253 ordered to stand part of the Bill.

Clause 254 - Access radio

Brian White (Labour, North East Milton Keynes)

I beg to move amendment No.497, in

clause 254, page 222, leave out lines 7 to 10.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Amendment No.490, in

clause 254, page 222, line 7, leave out from 'services' to 'the' in line 8, and insert 'shall prohibit'.

New clause 32—Community radio—

'—(1) In subsection (2) of section 84 of the 1990 Act, after paragraph (a)(iii) there shall be inserted—

''or

(iv) for the benefit of members of the public in a defined geographical locality or of a particular community and not operated by the BBC or for commercial purposes (a ''community service'').''.

(2) In subsection (6) of section 104 of the 1990 Act, in paragraph (b) after ''satellite'' there shall be inserted '', community''.

(3) After that subsection there shall be inserted—

''(6A) In determining whether or to whom to grant a licence to provide a community service and the duration of such licence OFCOM shall have regard to—

(a) the extent to which the service would confer significant benefits on the public or on the particular community for which it is proposed to be provided;

(b) the extent to which the proposed service is supported by the public or the particular community for which it is proposed to be provided;

(c) the extent to which the proposed service includes provision for public access to training, production and broadcast facilities; and

(d) the extent to which the proposed service includes measures to ensure accountability to and participation by the public or the particular community for which it is proposed to be provided.''

(4) After section 49 of the 1996 Act there shall be inserted—

''49A Reservation of digital capacity for community radio services

(1) In exercising their powers to grant local radio multiplex licences, OFCOM shall reserve such digital capacity as they consider appropriate for digital sound programming and additional services which are operated for the benefit of members of the public in a defined geographical locality or in a particular community and not operated by the BBC or for commercial purposes (''digital community services'').

(2) In performing their duty under subsection (1) OFCOM shall endeavour to ensure that every community radio service which is licensed to broadcast other than in digital form is also able to be received in digital form.

(4) Where a local multiplex licence is granted in respect of a locality in which digital capacity is reserved in pursuance of this section, the licence shall include such conditions as appear to OFCOM to be appropriate for the purpose of securing that the holder of the licence uses such digital capacity for the broadcasting of such services.''

(5) In subsection (2) of section 50 of the 1996 Act, after paragraph (d) there shall be inserted—

''(dd) stating whether in pursuance of a direction under section 49A any digital capacity on the frequency or frequencies in that locality is to be reserved for digital community services''.'.

New clause 34—Development of community media—

(1) The Secretary of State may by order provide for—

(a) any of the provisions of Part 2 or Part 3 (apart from this section), or

(b) any provision of Part 1, Part 2 or Part 3 of the 1990 Act or of Part 1 or Part 2 of the 1996 Act

to have effect, in relation to services of such descriptions as may be set out in an order under this section, with such modifications as he considers necessary or appropriate for services of that description.

(2) The Secretary of State shall not make an order under this section in relation to any description of services unless—

(a) the description is of services to be provided primarily for the benefit of members of the public or of a particular community and not operated by the BBC or for commercial purposes;

(b) he considers that the provision of services of that description confers, or would confer, significant benefits on the public or on the particular community for which they are provided.

(3) The power, by order under this section, to make incidental, supplemental or consequential provision in connection with provision authorised by subsection (1) includes power to make incidental, supplemental or consequential provision modifying provisions of the 1990 Act, the 1996 Act or this Act that are not mentioned in that subsection.

(4) No order is to be made containing provision the making of which is authorised by this section unless a draft of the order has been laid before Parliament and approved by a resolution of each House.'.

New clause 36—Community radio (No.2)—

'—(1) In subsection (2) of section 84 of the 1990 Act after paragraph (a)(iii) there shall be inserted—

''or—

(iv) for the benefit of members of the public in a defined geographical locality or of a particular community and not operated by the BBC or for commercial purposes (a ''community service'')''.

(2) In subsection (6) of section 104 of the 1990 Act in paragraph (b) after ''satellite'' there shall be inserted '', community''.

(3) After that subsection there shall be inserted—

''(6A) In determining whether or to whom to grant a licence to provide a community service and the duration of such licence OFCOM shall have regard to the extent to which—

(a) the service would confer significant benefits on the public or on the particular community for which it is proposed to be provided;

(b) the proposed service demonstrates evidence of support by the public or the particular community for which it is proposed to be provided;

(c) the proposed service includes provision for public access to training, production and broadcast facilities;

(d) the proposed service includes measures to ensure accountability to and participation by the public or the particular community for which it is proposed to be provided; and

(e) the proposed service would be distinctive from local sound broadcasting services licensed to cover over 50 per cent. of the proposed service's coverage area.''.'.

Brian White (Labour, North East Milton Keynes)

Please excuse my voice. I am going down with a cold. [Hon. Members: ''Ah.'']

The title of the clause is ''Access radio'', but we should be talking about community media because the Bill is about convergence. In that context, the title causes problems, and the same applies to clause 153.

Amendments Nos. 497 and 490, and new clauses 34 and 36 result from the fact that I am a member of the all-party community media group and the all-party commercial radio group. They will be holding a joint meeting next week, and, as the advertisements say, all are welcome.

I spoke to members of both groups before Christmas, and they were concerned about several issues. Their concerns were not that far apart, and I brought both groups together to talk about their differences. They agreed that commercial radio recognises that there should be community media—community radio, in this case—and that it is right to promote it. They also agreed that the Bill should set out the factors that determine the licensing of community radio. The purpose of my provisions is to start a debate on those issues in Committee.

The groups also compromised on introducing a replacement for clause 254 that would allow both points of view to be heard. Having agreed on a compromise, however, they went back to their original positions. Amendment No. 490 represents commercial radio's original position. The hon. Member for Sheffield, Hallam (Mr. Allan), who is in Westminster Hall, was going to speak to the amendment that reflected the community media position. The two positions are not that far apart, and there is a way forward. One purpose of my provisions is to get the Minister to address those issues. He will be relieved to

know, however, that I shall not press any of my proposals to a vote.

The key issue is funding. Is advertising the right way forward for community media? What impact would such developments have on small commercial radio stations? I would like the Minister to consider a couple of issues when he responds to amendment No. 490. If we allow advertising, will it distort the character of community radio? How will small community media get advertising? That is a time-consuming process, which will require a lot of effort on the part of many local radio stations. The crux question is whether commercially funded community radio will be nicking advertising from small commercial radio stations. In reality, there will be no danger of that if the two reach agreement, and the purpose of my new clauses is to promote agreement.

Kim Howells (Labour, Pontypridd)

I would like to ask my hon. Friend about an issue in which I am very interested. I saw Southampton local television in operation, and people there were excited about the prospect of harvesting advertising that regional television could not touch. They gave the example of a local Indian restaurant that could not afford to take out regional advertising. Is my hon. Friend suggesting that there is a level of advertising that is not being tapped?

Brian White (Labour, North East Milton Keynes)

As a Tottenham supporter, I do not like the word Southampton at all. However, the Minister is right that there is advertising that does not go to commercial radio and which could be used locally. I agree that that is a way forward.

It is a question of balance, and one can see the arguments at the opposite extreme. However, there must be a way of getting the two sides to agree along a continuum. When there is community media, the principle of mixed funding will be the right one. It is important that there be a mixture of public and private, and that the process be independent. We should recognise the fact that community media are social enterprises and have a different character from commercial radio. In promoting community media we should ensure that we make known the fact that it is about localised services and about reflecting a different demography. In doing so, we should promote different economic ways forward. The economic regeneration of some areas is a key task that community media will play a part in.

One problem is the impact on small commercial radio stations. Will the Minister address the way in which Ofcom will deal with such stations? The Joint Committee considered the problem and made a number of proposals, which the Government accepted. However, the Committee also pointed out the extent to which commercial planning for access radio is compatible with the distinctness of commercial radio, and that that sector would not be undermined. In response, the Government said that they agreed with the Committee's conclusions, although they said nothing about how that key point would be addressed.

The purpose of the amendments is to get the Minister to consider such issues, and to highlight the fact that, although there is a difference of opinion

between the two sides, I do not think that they are that far apart. With effort and the promotion of the Minister, the two sides could be brought together. The Bill could promote a useful community media tier, but one that needs proper funding.

Nick Harvey (Liberal Democrat, North Devon)

In the absence of my hon. Friend the Member for Sheffield, Hallam, who is, as has been explained, debating in Westminster Hall this afternoon, I say a few words. The hon. Member for Milton Keynes, North-East (Brian White) has put his name to two amendments that, on the face of it, have opposite impacts. However, he has rightly explained that he is probing for a response from the Minister.

Community radio should be able to draw on various funding sources. The principle of a mixed funding base will be important to it as it develops. Prohibiting community radio from taking any advertising or commercial sponsorship would be like asking it to operate with one hand tied behind its back. As the hon. Gentleman said, the principle of community radio is broadly that it is non-profit-making and is there to provide a service to the community. Preventing community radio from taking any advertising would restrict unnecessarily and artificially its ability to grow and develop.

However, I am also in favour of the general principle of giving that sector a definition in law. That will be a healthy influence on it, and will help it to develop, find commercial support and raise funds in the private sector. That is recognised in the regulatory regimes of many countries, and it would be helpful to go down the line of the new clauses in trying to do the same thing.

John Whittingdale (Conservative, Maldon and East Chelmsford)

The amendments moved by the hon. Member for Milton Keynes, North-East go to the heart of the debate. The principle of access radio—or community radio, a perhaps better description that I think the hon. Gentleman would prefer—is one that one most of us strongly support. I was interested when the concept was first mooted, and the pilot programme has been successful. Clearly, it is now time to roll it out further.

Financing lies at the heart of the problem. I wish to talk about my constituency, because the experience in the Maldon area absolutely identifies the problem. For the past three years, a tiny radio station has operated on a restricted service licence during the Christmas period. Last year, it broadcasted from about 9 December through to the beginning of January. It operates from, and is part of, the high school, and is run by the children and some of the staff. There is no doubt that it has been helpful in providing an educational opportunity for the pupils who participated in the running of it. It is locally based, broadcasting in Burnham-on-Crouch, which is a relatively small town, and has achieved a phenomenal audience.

I was on the station during each of the three broadcasting periods. The first time, I gave my desert island discs, which were a bit of a shock to people in Burnham who had not heard of Judas Priest. I was a bit surprised by the number of people who later told

me that they were a bit surprised. However, that was an indication of the station's popularity. A survey done afterwards showed that some 4,000 people in Burnham and the neighbouring villages had tuned into the station at some stage. That represents a majority of the population of the area.

There is no doubt that there is a demand for community radio, which is identified as central to the very localised area in which it broadcasts. Based on its experience, Saint FM at St. Peter's high school in Burnham is now very interested in developing into a community radio station. It would be the sort of local organisation that might well attract support should it put in an application to become an access radio station.

Let me turn to the independent local radio sector. We have Essex FM, which is a big station that broadcasts across the whole of the county. To be honest, I do not think that it minds whether Saint FM operates in Burnham. We also have a smaller station, Dream 107, which operates out of Chelmsford. It is owned by a small group called Tindle Radio, which owns some six stations. It is a commercial broadcaster, but part of its ethos is that it closely identifies with the local community.

Tindle has recently taken over Dream 107. Since then, I have encountered the station almost every week. I went to judge the Maldon popstars concert—Tindle was sponsoring it. I went to the Chelmsford spectacular—Tindle was handing out balloons from its stand. I went to the live music festival—Tindle was compèring it. In a very short time, the station has raised its profile in the community. Part of its promotional activity is a strong commitment to the community.

The station is dependent on advertising—in the main, if not almost entirely, local advertising. I refer to a letter that Tindle sent to Professor Everitt, who was commissioned by the Radio Authority to report on the access radio pilot programme. Tindle expressed its fears about the possible effect on it should access radio be granted the right to raise finance from advertising sales:

''Less than 3 per cent. of our revenue is derived from national advertising.''

That indicates how important the local market is to the company. Big national advertisers are not that interested in a radio station that broadcasts only in Chelmsford—they have other ways of reaching people—but a business that operates in Chelmsford would be very interested in a radio station that operates from there. The letter from Tindle continues:

''We rely heavily on the small advertiser, orders of £50 to £100 are commonplace.''

The chief executive, Kevin Stewart, told Professor Everitt that the loss of that stratum of advertising would be the difference between profit and loss.

Michael Fabricant (Conservative, Lichfield)

I am sorry to interrupt my hon. Friend. While he was discussing Dream 107, I have looked up its details. I can make a helpful suggestion that the Minister might like to take on board or at least comment on. I notice that Dream 107 transmits from Church Green, and that it has only a 100 W

transmitter. Although it is too late to table an amendment, I wonder whether the Department might take the view that if a radio station transmits on very low power—one could not heat a kettle on 100 W—it should be protected from an access radio station taking advertising. Much larger radio stations, such as Essex Radio, would not be affected by that.

John Whittingdale (Conservative, Maldon and East Chelmsford)

That is an interesting suggestion. If my hon. Friend is saying that local stations such as Dream 107 should be protected by access radio applications not being granted, it would clearly be bad news for Saint FM, which wants access radio. If he is saying that in those circumstances stations should not be allowed to take advertising, the suggestion is interesting, but I do not know whether it is sensible to differentiate between those access radio stations that operate in the vicinity of small ILRs and those that do not.

The question about advertising goes to the heart of the matter, although it is not the only issue. Indeed, the hon. Gentleman's amendment makes it clear that sponsorship is also important. Mr. Stewart goes on to say:

''Sponsorship forms a large part of our revenue in some cases up to 40 per cent. Our sponsors are all-local and form valuable long-term security of revenue. Again any impact on this revenue . . . would spell financial disaster.''

I am sure that Saint FM and Dream 107 FM are not alone. They illustrate the danger to small commercial broadcasters if access radio is given the freedom to tap into precisely the same advertisers that are currently sustaining small ILRs. I shall quote Mr. Stewart's conclusion because it sums up the position of many ILRs.

''Access Radio should not survive at the expense of existing small time operators. If it is to be radio by the community for the community then it should use community fundraising methods on a similar line to hospital radio stations. Grants, car boot sales and subscriptions should be able to fund a low power, low cost operation. Stations such as those owned by Tindle are very marginal operations yet do a great service for their respective communities''.

I do not know whether those should necessarily be the only sources to which ILRs look in order to find alternative sources of funding.

The Radio Authority's submission discusses access radio and suggests a number of potential sources of revenue that could be used to fund access radio stations. It lists local and central Government funding, which the Treasury might resist, European funding and lottery funding, which would be an attractive source if it were used to promote community involvement. It suggests revenue drawn from cash bids made by independent national radio licensees and a percentage levy of radio advertising of ILR services, which the commercial radio companies would not be keen on. It also makes the interesting suggestion that a percentage of the BBC licence fee could be put into a pot for financing community radio—the hon. Member for Milton Keynes, North-East is vigorously shaking his head. If the licence fee exists to promote public service broadcasting, ILR certainly fits within that definition.

We should consider the other potential sources of revenue. Although I am encouraged by the hon. Member for Milton Keynes, North-East's earlier comment that he can see a middle way, which will satisfy both the advocates of community media and the commercial radio companies, I bear in mind the warnings given by Tindle, which happens to operate in my constituency, but which speaks for a number of smaller ILRs. It says that they have no wish to stop access radio but are concerned that if it finances itself through advertising, that will have serious implications for the viability of the existing ILRs.

Chris Bryant (Labour, Rhondda)

We have talked a great deal about the fact that the different industries that will be covered by Ofcom are converging, and about the internationalisation of the media world that that is bringing about. However, another facet of the new media revolution is undoubtedly people's desire for news and information about their local community. When most people are asked what local means to them, they mean within three, four or five streets, or within their valley. That is one of the reasons why I want to congratulate the Radio Authority on the work that it has done in enabling access radio to come into being at all and, whether it ends up being called community radio or access radio or whatever, trying to promote it.

I am also a member of the all-party commercial radio group and I can trump my hon. Friend by virtue of being its vice-chairman. Some of the representation that I have received from the commercial radio sector on the issue has been overstated and possibly exaggerated. Some figures in the commercial sector have tried to say that the advent of community or access radio, and the way in which the Bill is drafted, will yet again re-jig the market against the commercial sector, which is now thriving across the United Kingdom. They claim that such a move would take advertising revenue from them in two ways; first, if community radio were allowed to take advertising, it would deny that advertising income to the commercial sector. Secondly, if community radio started to take listeners away from the commercial sector, there is the danger that commercial radio companies would find it harder to sell their advertising time to the same set of advertisers. That is an exaggerated complaint. It is more likely that local cinemas will be in competition with community radio because, often—particularly at the older, flea pit-style cinemas—one sees advertisements for the local tandoori and Jones the butcher and so on. That is not my experience of Red Dragon FM, Real Radio or Capital FM in London. My experience is that, although they might be local, they attract big advertisers; not the small, high street advertisers that will want to advertise on very localised community radio stations. I had not anticipated speaking so I am not prepared with the name of the community radio station in Pontypridd—

Kim Howells (Labour, Pontypridd)

I will remind my hon. Friend; it is called GTFM and we have both had a lot of complaints that our constituents in a shared village called Trehafod cannot pick up the signal because it is not powerful enough.

Chris Bryant (Labour, Rhondda)

That is exactly the point that I was going to make. Now that we have come back to the Rhondda, as we are slowly sweeping up the valley, I should point out that the Rhondda is not a south-facing valley but north, east, south and west-facing. It is important to point out that it is difficult to create a community radio station, such as that in Pontypridd, which is unique in that it is so personal and local in the kind of stories that it runs and the kind of music that it plays. I do not think that the whole of south Wales wants to hear ''Delilah'' every day, but it might be that Pontypridd does.

It is certainly true that, if one were going to create a community radio station, one would probably not create one for whole of the Rhondda. One would create a station for the Rhondda Fawr and a station for the Rhondda Fach; partly because of the transmission problems between the two valleys and partly because they are different communities. Therefore, I strongly oppose amendment No. 490 in the name of my hon. Friend the Member for Milton Keynes, North-East. It is too prohibitive. As it stands, the Bill allows the imposition of prohibitions or limitations on the inclusion of advertisements, but the amendment would prohibit advertising, which would be a mistake.

New clause 36, also in my hon. Friend's name, is also far too restrictive, although I accept the point made by the hon. Member for North Devon (Nick Harvey) that it might be useful for the Bill to state precisely what community access radio is, to enable it to grow.

Roger Gale (Conservative, North Thanet)

Before we proceed, I say to hon. Members that I do not intend to call a stand part debate. If hon. Members have anything to say, they should do so fairly swiftly.

Simon Thomas (Plaid Cymru, Ceredigion)

I rise to support the comments made by the hon. Members for North Devon and for Rhondda. About 10 years ago, I helped to establish a community radio station in Ceredigion, called Radio Ceredigion. It was one of the first bilingual community radio stations in Wales, broadcasting in Welsh and English. I could tell the hon. Member for Maldon and East Chelmsford about our difficulty in going round asking for grants and getting resources together. This was before we had objective 1 status, although we did have some European grants even then. It was important to us to establish, very early on, an income stream from local advertisers.

At that time, there was no other independent radio company in west Wales; it is a moot point whether there is one now. Champion FM comes into the north of my constituency and there are other stations to the south. However, the Ceredigion area is still pretty well served by Radio Ceredigion, which inevitably has developed into something that is more like an independent radio station. It has lost some of its community aspects, mainly because of financing.

It would be remiss of this Committee to put any restrictions on access or community radio stations. That might encourage them to give up the ghost early in their development or to sell out to larger local independent radio stations.

There is clearly a level of advertising of which local access or community radio can take advantage. In west Wales, that could be done in the Welsh language. For the first time, we could have radio advertising in Welsh. The BBC has not done much of that in the past. New markets can be created and I am surprised to hear the Conservatives arguing so powerfully against market forces. If a radio station can create a new audience and a new market, it should be able to take advantage of advertising.

The real challenge that access radio offers is probably to the local newspaper. A newspaper has to fill columns with adverts for the local plumber and butcher and so on, so it may see its income stream affected by a community radio station. I do not think that the vast majority of independent radio stations will have anything to fear. Advertisers who cannot meet the expense of independent radio, or who find that those stations broadcast over too wide an area, will see in access and community radio a unique opportunity to sell directly to a local audience. That is to be welcomed.

We should encourage any organisation that has social enterprise at its heart to work as closely as possible with everyone in its community. With any social enterprise, there is a tendency to regard the enterprise as a charity and to look for money in grants all the time. One aspect of community radio that might be developed is a much closer relationship between local businesses and radio stations, whether through sponsorship or advertising. That, in turn, will enhance the social viability of access radio stations, and will increase the social cohesion between local communities and their station. Business has to be part of that. Squeezing community radio into a grant-fixated straitjacket would be an adverse step.

I do not think that the fears that, surprisingly, have been expressed by the Conservatives are real. Nevertheless, the Bill contains a provision that allows Ofcom to take action if things prove uncontrollable. I am not sure that we need that provision, but there we are. It is in the Bill now, and it does at least empower Ofcom.

Kim Howells (Labour, Pontypridd)

I have a great deal of sympathy with what the hon. Gentleman says. God forbid I should ever defend a member of the Conservative party; however, is not the critical issue the general worry about public money subsidising a small radio station that is shedding advertising? That advertising might be vital to a small radio station such as that which the hon. Member for Maldon and East Chelmsford described.

Simon Thomas (Plaid Cymru, Ceredigion)

I certainly accept that the hon. Member for Maldon and East Chelmsford was describing a particular case that might come under the remit of what the Minister was speaking about. I presume that such cases are the reason why Ofcom has the ability to take action under the Bill. I take the Minister's point, but his example would be a worst-case scenario. We should bear in mind that we do not want public money to be constantly drained into an access or community radio service. If that service is perfectly capable of forging links with local businesses and serving local business needs, and is capable of

gaining an income stream from that, we should welcome it, rather than try to restrict it.

From my experience of setting up community radio stations, I know that they are not exactly awash with public finances. It is all that they can do to get lending from a local enterprise agency to buy fixtures and fittings, the transmitter and so forth. It is very unlikely that they would be using money to finance a direct marketing campaign in cut-throat opposition to another local independent radio station. That is why the Bill probably gives Ofcom enough intervention power, and certainly does not need to place more restrictions on community radio.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

I rise to support the last two points. The Western Isles have a vibrant and active community radio station called Isles FM. It does not cover all of the islands, as that would be rather a long distance for any radio station to cover. Isles FM has been enormously successful over the years. The richness of local radio is its ability to cater to the local commercial and business market. There is a huge—even international—demand for Stornoway black pudding, for example, but not many radio stations will carry adverts for it. Isles FM does, and with great success. The kind of businesses that look to community radio for those kinds of outlets are not drained away from more commercially minded stations.

John Robertson (Labour, Glasgow Anniesland)

The problem for smaller radio stations is not so much advertising, but listeners. If we take listeners away from new radio stations that are trying to set themselves up alongside local radio stations, the new stations will go out of business. They have jobs to support and probably put more money into the area than the small community stations.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

I acknowledge the seriousness and sincerity of the hon. Gentleman's point, but that has not been my experience in terms of the islands. When Isles FM was setting up, we had a dedicated Gaelic radio station with an enormous associated audience in the Western Isles, Radio nan Gaidheal, which was delivered by the BBC. However, Isles FM has been able to carve a niche for itself without detracting from the audience share of Radio nan Gaidheal. There is a huge appetite for radio programmes and radio stations that cater for genuine local community interests, and stations that do that successfully will find an audience. I hope that the restrictions that have been talked about will not be implemented.

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman mentioned audiences. Surely one of the most interesting features of the past few years has been the growth of radio audiences while television audiences have declined. There has been more penetration of radio and it could be argued that a wider range of radio programmes, including access and community radio, will cause additional audience growth. The situation is not as simple as suggesting that access radio will necessarily

take audience away from an independent radio station in the same area.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

Yes, my experience is that radio audiences can grow even in a community that is extremely well catered for. My area is well catered for by the BBC Gaelic-medium radio, but Isles FM has carved out a substantial audience. I hope that the points made about leaving Ofcom to judge will be taken on board.

Michael Fabricant (Conservative, Lichfield)

It has been useful to have my radio listeners guide here, because I could look up stations while hon. Members were speaking. The hon. Member for Western Isles talked about Isles FM, but that is not an access radio station in the strict meaning of the term. It is a large radio station with a 4 kW transmitter that covers a wide area. It is not a restricted service licence station either; it is a permanent radio station broadcasting on 103 MHz.

Calum MacDonald (Labour, Na h-Eileanan an Iar)

Isles FM has achieved that success with a lot of financial and public support. The hon. Gentleman says that the station is permanent, but it did go off the air before being re-established. I hope that it will be permanent.

Michael Fabricant (Conservative, Lichfield)

So do I. I spent a pleasant time listening to Isles FM while I was on holiday after finishing the three peaks walk in a record time of 36 hours. After completing Ben Nevis in three and a half hours, instead of returning to London, I visited the Western Isles to do some more climbing—although I was defeated by the midges. [Interruption.]

Roger Gale (Conservative, North Thanet)

Order. There are rather too many private conversations taking place.

Michael Fabricant (Conservative, Lichfield)

Thank you for your protection, as ever, Mr. Gale.

The fact that we are discussing access radio rather than community radio is to the credit of the Radio Authority, which was mentioned briefly by the hon. Member for Rhondda. Way back in the 1960s and 1970s, the Community Radio Association, which was very active, pressed for the introduction of community radio in the United Kingdom.

During the 1980s in my former career, I supplied radio equipment and programming to the radio station Sveriges Riksradion in Stockholm, and I was surprised by the number of community radio stations that existed then. However, it is only the 15 licences issued by the Radio Authority over the past two or three years under the guise of access radio that have allowed access radio to take off in the UK. It has been a success, to my surprise. I say that I am surprised because several formats proposed by community radio stations were so boring that they would not get listeners, let alone advertising. That is not the case with access radio. Wide-ranging audiences and age groups have tuned in. There are stations with different ethnicities and there are religious and secular stations. The stations provide urban and, as the hon. Member for Western Isles pointed out, rural services.

My hon. Friend the Member for Maldon and East Chelmsford made an interesting point and I am glad that the Minister intervened as he did. We are not comparing like with like when comparing access radio

with independent local radio. Although I have no doubt that larger radio stations with bigger audiences and bigger transmitters should operate in a market environment, smaller radio stations such as Dream—which, as I said, is only 100 W compared with the 4 kW—4,000 W—of Isles FM—deserve some protection. I do not agree with the earlier argument that there should be no advertising whatever; I think that that should vary from area to area. Ofcom should have the power to determine whether advertising will be permissible in a given area by a given access radio station. The Minister, I hope, will confirm that it will have that power.

So, full marks to the Radio Authority for introducing access radio, but there should also be a reminder of the important point that there would be more access radio stations if the BBC did not sit on certain frequencies. I mentioned much earlier—perhaps it was even last year—that it is doing just that. At the moment, there is underemployed frequency space within the BBC's FM sub-band. Either the Minister or the Minister for E-Commerce and Competitiveness—I cannot remember which—previously assured me that Ofcom will have the power to allocate frequencies away from the BBC to commercial radio. Can the Minister confirm that Ofcom will also have the power to move frequencies from the BBC to access radio if necessary?

Kim Howells (Labour, Pontypridd)

We have had an interesting debate, which has explored some important and new issues. I shall comment first on the damaging of local commercial radio. We have come to accept local commercial radio, but it is not that old. In many cases it is a fledgling industry, which, as the Bill reflects, is still consolidating and trying to find its optimum size, and how best to provide the services that the people want.

I agree with the hon. Member for Maldon and East Chelmsford about the possibly damaging effects of allowing access radio stations to seek even small-scale advertising. We heard a very interesting contribution from the hon. Member for Ceredigion. Much of what has gone on in Wales since the 1980s, as I am sure he will agree, has been cursed by a kind of benefit culture. It is important to think of ways out of that, and he made some good suggestions. The possible relationship with industry and employers is very interesting, but I would not want that to detract from the possibility of an established, licensed, commercially operating company being able to enjoy the adverts that might be generated by, for example, demand for employment or recruitment in a particular region.

If access radio goes ahead—long-term decisions on that are yet to be made—we certainly expect that Ofcom will have regard to the local radio ecology and will not license access radio stations where that will damage small-scale independent radio. That is important. The hon. Member for Lichfield, too, made important points. We must protect small stations but, with respect, we should not necessarily start including rules in the Bill about the wattage of transmitters. For example, the 100 W transmitter could reach an awful lot of people in some parts of

London but very few in the constituency of my hon. Friend the Member for Western Isles, who spends half his life there on a boat.

Michael Fabricant (Conservative, Lichfield)

The Minister is absolutely right. I do not want to prescribe anything. I was merely testing whether he felt that the frequency allocation and the power were factors to be considered.

The rest of the debate is in Hansard.