Communications Bill

Public Bill Committee, 21 January 2003.

Standing Committee E

Communications Bill

John Whittingdale (Conservative, Maldon and East Chelmsford)

On a point of order, Mr. Gale. I wish to put on record the fact that preparation for this morning's sitting was made extremely difficult by the fact that yesterday Portcullis House was out of communication—the telephones, faxes and e-mail system did not work. The new sitting hours make it hard enough for us to prepare our work, but if we cannot receive information from outside, such preparation becomes almost impossible. I am almost tempted to ask you whether we can revisit clause 3 to insert a new requirement on Ofcom to put a boot up the backside of whoever looks after communications in Portcullis House.

Roger Gale (Conservative, North Thanet)

Happily, in this day of modern communications, that is not a function of the Chairman. However, I am sure that the House authorities will pay attention to the Official Report, which will have recorded the hon. Gentleman's concerns.

I apologise to the Committee for the fact that we do not have a clock that works in the Room. Clearly, we should never have abolished the hourglass. Even in this day and age, I am far from achieving my wish as a member of the Chairmen's Panel to have electronic clocks in front of us. However, we shall press on regardless.

Clause 256 - OFCOM reports on the fulfilment of the public service remit

Nick Harvey (Liberal Democrat, North Devon)

I beg to move amendment No. 465, in

clause 256, page 223, line 38, after 'services' insert 'and related internet information services'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take amendment No. 466, in

clause 256, page 224, line 11, after 'together)' insert 'and related internet information services'.

Nick Harvey (Liberal Democrat, North Devon)

During Thursday afternoon's sitting, some members of the Committee referred several times to websites provided by broadcasters. The two amendments deal with that subject. If the major broadcasters are to develop expensive and high-quality websites and use them to promote their broadcasting stations and vice versa, it makes sense for Ofcom to be able to look at those websites as well as the broadcast services. Without strays greatly into regulation of the internet, Ofcom will be able to look at the production of the websites and the way in which they are used by the broadcast channels.

The amendments deal with the purposes of public service television and the manner of fulfilling those

purposes. They would make it clear to broadcasters that the regulators will consider their online services as an integral part of their overall offerings. We must remember that such services are some of the most visited websites in the United Kingdom and that they benefit from the same privileges as the broadcast channels to which they relate, such as access to advertising markets, public ownership in the case of Channel 4, and the licence fee in the case of the BBC. We should therefore expect that those services will be used to market the brand of the broadcaster and to extend and complement the public service broadcasting role. Yesterday, when I saw the range of services offered by BBCi, it was hard to distinguish between that and television broadcasting. Will the Minister explain the Government's attitude towards extending Ofcom's role?

John Whittingdale (Conservative, Maldon and East Chelmsford)

I give half a cheer to the amendments, but they stray into difficult territory. The Government have made it clear from the start that they do not think it appropriate that Ofcom should attempt to regulate internet content and, on balance, I do not consider it desirable either. Even if I did want that action to be taken, it would be almost impossible.

Clearly, it would be possible to extend Ofcom's remit to cover the internet-based activities of licensed broadcasters, but I am uncomfortable with the idea that commercial broadcasters should be subject to regulation in this instance because they operate in a completely open and competitive market. Commercial broadcasters who produce television programmes do so on the basis of having obtained a licence to operate within a limited spectrum area. The price of that licence should be regulation by Ofcom. However, if they choose to extend their activities to the internet, they move into an area in which anybody can set up. It would be slightly unfair to them to make them subject to intrusive regulation when their competitors are subject to no outside scrutiny at all.

The hon. Member for North Devon (Nick Harvey) is right to say that this subject becomes difficult when television broadcasts and material made available on the internet begin to merge into one. Difficult questions arise when, for example, coverage of ''Big Brother'' on Channel 4 is continued on E4 and on the Channel 4 website. However, I have reservations about subjecting the commercial sector to the type of regulation the hon. Gentleman proposes.

I have no such reservations regarding the BBC. It uses public money and should be subject to much higher standards. I question whether it is appropriate for the BBC to move into certain areas. Commercial broadcasters do not have to produce public service programming all the time—for the large part, they operate on a commercial basis that seeks to attract as many viewers as possible. In my view, with which the Committee is becoming increasingly familiar, the BBC should concentrate on the production of educational, informative, high-quality programming in whatever format it extends into.

If one examines the BBC website, one sees that, occasionally, material is included that stretches the definition of public service broadcasting. A programme was produced recently about the model

Katie Price, who is known as Jordan. The programme was about her background and how she was coping with motherhood. That could, perhaps, be defined as educational or informative—if one stretched a point, it could fall under the public service remit. However, the accompanying internet pages, which were supposedly to promote the documentary, ''Jordan: The Model Mum'', included a large number of pages consisting of pictures of Jordan wearing not very much.

John Whittingdale (Conservative, Maldon and East Chelmsford)

My investigations on behalf of the Committee go a long way.

Michael Fabricant (Conservative, Lichfield)

Would it help my hon. Friend to know that the Parliamentary Communications Directorate, while failing to sort out the telephones at Portcullis House yesterday, is introducing anti-spam software that filters out flesh tones, among other things? The block that will be applied might in future prevent him from viewing such pictures on the internet.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am intrigued to hear that the Parliamentary Communications Directorate is going to start censoring BBC output. I do not wish to prolong the salacious advertisement of the website, but several of the pictures were topless shots, and one headline—I know this because I have talked to the Daily Mail about it referred to taking a trip ''down mammary lane''. That stretches the definition of public service broadcasting. There is a legitimate view that the BBC, as a public service broadcaster funded by the licence payer, should be subject to higher standards than other broadcasters, which may include standards of internet content.

The other concern that I have voiced before about the BBC's internet activities is that in many cases they represent competition with existing commercial companies. The most recent example is the online digital curriculum and the competition that it offers to commercial producers of educational software. I therefore welcome the amendment in so far as it would begin to bring the BBC under some external scrutiny, and I am sorry that the hon. Member for North Devon has not extended that to the logical conclusion of including all the BBC's activities. I am less comfortable with the suggestion that it should extend to all the commercial broadcasters because that would create an unlevel playing field; commercial broadcasters would then be right to complain that they were being regulated when other internet site producers with whom they are in competition were not.

Roger Gale (Conservative, North Thanet)

Order. Before we proceed, I think that it would be helpful if I made it plain to the Committee that I am prepared to allow a fairly wide-ranging debate, as is my custom when there is a series of grouped amendments to a clause, provided that we do not have a clause stand part debate at the end.

I would also like to make it clear that as this is the only clause in this part of the Bill that deals specifically with the BBC in this context, if hon. Members have matters relating to the BBC that they wish to get off

their chests, now is the time to do so. I say that because there will be a further opportunity when we come to schedule 12, probably on Thursday, to debate broader and other matters relating to the BBC. While I expect the Committee to remain in order, I am prepared to tolerate a reasonably wide-ranging debate.

John Whittingdale (Conservative, Maldon and East Chelmsford)

You tempt me to make a much longer speech, Mr. Gale. Three groups of amendments relate to clause 256, each one of which deals with a specific aspect of the public service remit. We are considering the internet, impartiality and regional production. There are more general questions about the public service remit and to bring those into any of the amendments would be to extend the debate a long way beyond the subject.

Roger Gale (Conservative, North Thanet)

The hon. Gentleman is absolutely right—that is why I was careful to say ''in this context''. I would not have the power to preclude proper debate that was in order on other amendments that refer to the BBC—that is a given. In the broader context to which he refers, those matters will more helpfully be debated when we come to schedule 12.

Michael Fabricant (Conservative, Lichfield)

I fully support the amendments. The key phrase is ''related internet . . . services'', specifically dealing with those internet services that are provided by broadcasters. I shall to speak briefly about the BBC. About three years ago, the former chairman of the governors of the BBC and the director general appeared before the Select Committee on Culture, Media and Sport. I asked the chairman whether the BBC's internet site—which, as my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale) said, is the most popular British site—should be funded, not from the licence fee, but by advertising, as are other internet sites and indeed the Radio Times. It was interesting that the answer of the then chairman of the BBC, Gavyn Davies' predecessor, was no, because the internet is an extension of BBC broadcasting. If the BBC regards the internet as an extension of the broadcast media, any controls applying to broadcasting should be extended to the internet.

My hon. Friend suggested that programming, too, should be under the control of Ofcom, but we have already had that debate, which, sadly, we lost. However, if internet services are related to programming, they should be under the same controls. I do not have the same concerns as my hon. Friend about websites run by independent television companies, Channel 4 and Channel Five. I do not believe that the proposed measure would put those companies at a commercial disadvantage because Ofcom will not regulate the services with a heavy touch. As the Minister has said on a number of occasions, a light touch will be the order of the day.

Simon Thomas (Plaid Cymru, Ceredigion)

Another reason why the amendment will not impact on the commercial activities of those broadcasters is that they cross-promote their internet activities through their television programmes. At the beginning and end of the television programmes, viewers are told to log on for additional material. Other internet providers do not have that advantage and they might complain that commercial companies are able to cross-promote and

therefore encourage people of all ages to log on to particular sites. That surely means that those related activities should come under the aegis of Ofcom, as the amendment suggests.

Michael Fabricant (Conservative, Lichfield)

The hon. Gentleman makes an important point. Any disadvantages outlined by my hon. Friend the Member for Maldon and East Chelmsford will be more than balanced by those that the hon. Gentleman mentions.

I support amendments Nos. 465 and 466. They make sense and one flows naturally through the other. Information technology on the internet should be controlled in exactly the same way as other forms of broadcast media.

Nick Palmer (Labour, Broxtowe)

The amendments touch on a basic difficulty for law makers. We are attempting to control something that is out of legislators' control. I am surprised to hear my colleague on the all-party internet group urging greater regulation of part of the internet because, as I am sure he is aware, it is not practical to regulate the rest of it. We could have a small group of internet providers who happen to be broadcasters and are therefore regulated, but who, if they ceased to be broadcasters, would instantly be free of regulation. What sense would that make?

Michael Fabricant (Conservative, Lichfield)

I acknowledge that there cannot be control over the internet as a whole, because most internet sites originate outside the United Kingdom and Ofcom can have no authority over them. However, the key word in the amendments is ''related''. The internet sites referred to are generated in the UK, so they can be regulated. As I have said, if the chairman of the BBC regards its internet site as an extension of the broadcast media, it seems illogical that any rules that apply to radio frequency, or RF, broadcasting should not apply to the internet.

Nick Palmer (Labour, Broxtowe)

I understand that point. Nevertheless, it seems to me that it would be a lawyer's paradise to try to distinguish between different types of media content—services that relate directly to programming, services that are a bit connected to programming, and services that are about something else. I appreciate the motives behind the amendments, but I do not think that they will work in practice.

Kim Howells (Labour, Pontypridd)

Amendment No. 465 would add internet information services related to public service television to one of the purposes of public service television broadcasting. That would create a scenario in which related internet information services—such as the Channel 4 and ITN websites—were encompassed within all the public service television purposes now set out in clause 256. For example, such internet services would have to be balanced in order to meet the needs and interests of available audiences, and Ofcom would be expected to report in its maximum five-yearly review of public service broadcasting on whether the relevant internet services taken together had fulfilled the specified purposes.

As the hon. Member for North Devon explained, amendment No. 466 would add the provision of internet information services that are related to public service television to the matters to be taken into account to fulfil the purposes of the public service broadcasting remit, namely that such services should comprise a public service for the provision of information, education and entertainment. Our view is that, taken as a whole, public service television services should provide information, education and entertainment. I agree with the hon. Gentleman about that. The amendment would add internet services, such as the Channel 4 and ITN websites, to the existing provision. That would require Ofcom to report in its maximum five-yearly reviews on whether such websites had contributed to fulfilling that aspect of the overall public service broadcasting remit.

We have already heard some of the reasons why it would be difficult—I agree with the initial point made by the hon. Member for Maldon and East Chelmsford—to differentiate between the regulation of sites belonging to a small number of broadcasters and those belonging to everyone else. That would create a good niche opportunity for all kinds of people who might decide to move in and fill the vacuum should the broadcasters feel constrained in terms of what they could do in the light of that additional regulation and inspection.

The regulatory framework that we are discussing is concerned with the requirements of public service television broadcasting. It would not be sensible or practicable to extend that framework to cover services that are provided via the internet. That applies even, as we have already heard, to sites that broadcasters choose to provide as an adjunct. Such sites are a useful, but quite separate, adjunct to broadcasters' television services. I hope, therefore, that the hon. Member for North Devon will agree to withdraw the amendments, although I understand the spirit in which they were tabled.

Nick Harvey (Liberal Democrat, North Devon)

The Minister deploys a somewhat technical argument in saying that Ofcom would be obliged to consider such websites in combination and to determine whether they were fulfilling a public service remit. I take the Minister's point, but he has not addressed the main issue. Websites are developed with resources accumulated by parent companies through a privileged market position, which differs in respect of each broadcaster. That raises some interesting questions about what they choose to do with such resources. The hon. Member for Maldon and East Chelmsford touched on that in his remarks. Some issues need further consideration, but I accept that the precise proposal in the amendment might not be the best way in which to proceed, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Roger Gale (Conservative, North Thanet)

Before we proceed, I have reflected on what the hon. Member for Maldon and East Chelmsford said. When I let Committee members off the leash, they usually chase hares in every possible direction, but that does not seem to have happened in

this instance. I take the point that the amendments are finely drawn and, given the nature of the debate so far, I propose to have a stand part debate, provided that it is in order.

Nick Harvey (Liberal Democrat, North Devon)

I beg to move amendment No. 506, in

clause 256, page 224, line 22, at end insert 'that complies with the impartiality requirements of section 308 relating to television broadcasting services and teletext services'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take the following:

Amendment No. 507, in

clause 258, page 226, line 29, leave out 'and'.

Amendment No. 508, in

clause 258, page 226, line 31, and end insert '; and

(c) the provider will comply with the standards set by OFCOM's code under section 307 relating to the impartiality requirements of section 308.'.

Amendment No. 513, in

clause 258, page 226, line 35, at end insert—

'(3A) Every report prepared under subsection (3) shall include—

(a) an account of the handling and resolution of all complaints received by the provider of the channel that are not handled or resolved by procedures established by OFCOM in accordance with section 313(2); and

(b) a particular account of the handling and resolution of complaints specified in paragraph (a) about compliance with the standards set by OFCOM's code under section 307 relating to the impartiality requirements of section 308.'.

Nick Harvey (Liberal Democrat, North Devon)

The amendments are intended to highlight the impartiality, especially political impartiality, that has been part and parcel of British broadcasting since it began. Many people may take it for granted and assume that broadcasting will always be impartial. Let me make it clear from the outset that I wish adamantly that that should always be the case; however, we face a scenario in which broadcasting in the United Kingdom will change very fast.

The Government's proposals to allow non-European ownership might have a significant impact on the nature and culture of British broadcasting. New owners of British broadcasting companies might well be unfamiliar with the rather British view of political impartiality. One can already find signs of that. Columns in various media journals and some of the broadsheets argue that political impartiality on our television stations is one of the causes of voter apathy and a lack of interest in democratic politics. People are beginning to say that opinion-led news and current affairs programmes are a means by which we could boost interest in not only television programmes but the democratic process and politics.

If we were to allow that to happen, it would fundamentally change the nature of British television. Certainly, we will be in a very different situation if such changes are taken in conjunction with the legal challenges that might—although let us hope that they will not—result in our having to allow political advertising on British television. That is why I am keen that we take advantage of the Bill to reinforce and strengthen as much as we can the requirements for political impartiality in British television.

Brian White (Labour, North East Milton Keynes)

The old system whereby political parties deal with every issue is breaking down, and single-issue groups are appearing. How does the hon. Gentleman suggest that single-issue campaigning be dealt with?

Nick Harvey (Liberal Democrat, North Devon)

I am grateful to the hon. Gentleman, because he mentions another important change that is taking place. The nature of democratic politics is changing. Certainly, voter loyalty to parties is far more fluid than it used to be.

Roger Gale (Conservative, North Thanet)

Order. There is an undercurrent of muttering in the Committee this morning, and it is making it difficult for me to hear the hon. Gentleman who has the Floor.

Nick Harvey (Liberal Democrat, North Devon)

British politics is much more fluid than it used to be. Young people in particular are far more inclined to get involved in single-issue politics, whereas in previous generations, people were more inclined to get involved in party politics.

Kim Howells (Labour, Pontypridd)

Will the hon. Gentleman enlighten the Committee on that issue? I am genuinely perplexed, because I hear that claim made time and again, but can find no proof of its truth. Where is the proof that young people are becoming involved in single-issue politics?

Nick Harvey (Liberal Democrat, North Devon)

Is the Minister querying the suggestion that young people are not getting involved in party politics, or the suggestion that they are getting involved in single-issue politics?

Dr. Howells indicated assent.

Nick Harvey (Liberal Democrat, North Devon)

I see that the Minister had the latter point in mind. The sort of campaign groups that we see campaigning, vocally and visibly, seem frequently to be led by young people. [Interruption.] I agree that that has probably always been the case. However, young people are involved in such groups, but not in political parties, at least not in the numbers in which they used to participate. All the political parties are smaller than they were a few years ago. I do not intend to score a political point, but research on the average age of the Conservatives makes it perfectly clear that they are struggling to recruit young members.

Kim Howells (Labour, Pontypridd)

We all are.

Nick Harvey (Liberal Democrat, North Devon)

Indeed.

The hon. Member for Milton Keynes, North-East (Brian White) asked how single-issue campaigning is to be dealt with in the context of political impartiality in television. The BBC, for example, has quite detailed producer guidelines on how to deliver political impartiality, and it attempts to perform according to them. That quite detailed approach needs to be used by all broadcasters. In my view, as time goes on, all broadcasters will need to be monitored.

As I say, there is debate in the broadcasting industry on how to revive audience numbers for political programming, and I think that the overall requirement for balance is absolutely essential for doing that. Quite often, complaints are made about lack of political impartiality. They are sometimes made by the main political parties, all three of whom, from time to time, have grievances against particular

programmes, believing that they are not as impartial as they could be. Complaints are also frequently made by others outside the party framework—perhaps in the fashion that the hon. Member for Milton Keynes, North-East was getting at in his intervention.

One problem is that there are often more than two sides to an issue. To put up two opposing points of view, regardless of whether they are political parties' viewpoints, does not necessarily deliver balance and impartiality of coverage. One might expect a Liberal Democrat to refer to that problem, but I am not raising it entirely in party terms. There must be a more wide-ranging and dispassionate commitment to information and to reporting matters of industrial or political controversy.

The BBC guidelines state that the right weight should be given to matters during the period in which a controversy is active. Producers of television programmes frequently claim that they will deliver balance during the course of a long series: that might prove to be the case if anybody were to perform some sort of laboratory analysis, but the usual viewing patterns mean that a series is unlikely to be balanced for any particular viewer at any particular point in time.

All the political parties complain from time to time about coverage—that is true of both Government and Opposition parties. The current arrangements are only just adequate, and I have grave reservations about whether they will continue to be so as television changes in very significant ways in the future. The proposals in the amendments would go some way to equip us to deal with the problems that we will face, but I do not suggest that they offer a perfect solution. I am simply trying to raise the issues for debate.

If the broadcasters were obliged to give details in their statement of programme policy about how they will deliver impartiality and were then obliged to say how well they think they have done in their own reporting, and if the regulators were then to look at that and, as an appendix to their report, they had to show a digest of the complaints that they had received over the reporting period and how they had dealt with them, that would begin to flush out some of these difficult issues—which might become increasingly difficult.

I am interested in what the Minister and other Committee members have to say about this issue, which has the potential to become extremely important in future.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I agree with the hon. Member for North Devon that the issue is important. We could have a very interesting debate about it. I will restrain myself from launching into a speech about the impartiality of the BBC, because that would take up all morning; I will save myself for clause 308, where some of those issues can be explored at greater length.

I am tempted to respond to some of the hon. Gentleman's remarks. I accept that the public service broadcasters must remain impartial. They enjoy special privileges and they continue to wield huge influence because of their dominance. Although it is decreasing, the market share that they enjoy imposes

the need for much stronger controls, particularly on impartiality and balance.

I have no particular objection to the amendment—although the Minister might well tell us that it is unnecessary because the matters that it addresses are dealt with by clause 308. On whether we should allow expressions of opinion on television, I have a sneaking sympathy with some of the articles to which the hon. Member for North Devon referred, in which it is written that the absence of any form of opinion on our television is leading to blandness.

Nick Harvey (Liberal Democrat, North Devon)

Surely the challenge is to deliver a balance of opinions, not to ban opinion altogether. The hon. Gentleman suggests that impartiality means that no one can express an opinion, but that is not what is suggested.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am sorry—let me express myself better. Newspapers feature news coverage and express many different points of view, but newspapers hold opinions that are expressed through leader columns. There is currently no equivalent of leader columns in any television production. When, in a multi-channel age with more digital take-up, we have a plethora of channels, it might be interesting to have a socialist channel, a Conservative party channel and even—dare I say—a Liberal Democrat channel. I would not object to that in principle, as long as the channels were clearly labelled and people knew exactly what they were watching. I would not want to see opinion disguised as impartial comment.

We are not there yet, but I have seen articles that point to the position in America. Several American news bulletins make no secret of the fact that they are produced with a specific political point of view, which increases the diversity available. That is an interesting and attractive idea. I do not suggest that we are at that point, but I am not persuaded that we can never go down that road.

Chris Bryant (Labour, Rhondda)

There is a tradition in the United Kingdom that people who buy newspapers understand that they are getting heavily editorialised content all the way from the simple reporting through to the op-ed pages. There is an expectation that what is heard on the television and radio is undiluted and raw, and therefore more trustable. Every opinion poll has found that most people in this country would prefer that to the route taken by Italy, where each of the RAI channels has historically been considered to belong to one of the political parties. Is the hon. Gentleman really suggesting that we should have a Labour party channel and a Conservative party channel?

John Whittingdale (Conservative, Maldon and East Chelmsford)

The hon. Gentleman is quite right about everything—viewers want to be able to trust a channel to deliver impartial and balanced news coverage and documentaries, and that should remain a requirement on public service broadcasters. People should know that they can always turn to those broadcasters for such programmes, but that does not necessarily dismiss the idea of allowing clearly branded channels that make no secret of the fact that they express a specific point of view. As long as viewers knew that they would get an undiluted stream of

Government propaganda if they turned on a Labour party channel, I would not necessarily ban it, although I cannot imagine that it would get many viewers—few Labour Members would be likely to watch it. Such a channel would increase the range and diversity of available programmes, and that is good. The argument is theoretical at the moment, but I do not want to rule such things out at this stage.

Eric Joyce (Labour, Falkirk West)

I do not disagree with much of what the hon. Gentleman says. Ian Hargreaves, a professor at Cardiff university who will be a member of the Ofcom board, made precisely that point. He said that channels abroad such as al-Jazeera broadcast to people in the UK who own a suitable satellite dish. Such channels are clearly biased. Unless we allow similar latitude in the UK, we might turn off certain parts of the population. Ian Hargreaves noted a lack of confidence among ethnic minorities about the current lack of bias. That might contribute to future viewing patterns, so it is a legitimate point.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am grateful for the hon. Gentleman's support. I shall not talk about al-Jazeera because that would raise many other questions, especially about the BBC's new arrangement with al-Jazeera, which gives rise to several concerns.

I do not want to prolong the debate but I do not want the amendment to pass by without at least some exploration of whether existing, rigid constraints should necessarily continue.

Kim Howells (Labour, Pontypridd)

I certainly agree with the hon. Member for North Devon about holding the line on impartiality. I have listened with interest to the discussion. On the comments made by the hon. Member for Maldon and East Chelmsford, when I was in the United States last summer, the turnout for political elections was perceived to have reached crisis levels. The various channels available there have not affected turnout because most people to do not watch them. There does not appear to be a magic formula for engaging people in politics, and I would be very reluctant to go down the route that he suggests.

Call me old fashioned, but I also challenge the basic assumptions made by the hon. Member for North Devon. For the past 30 years, I have listened to the cliché about young people flocking to single issues and not being interested in politics. I was extraordinarily active in the anti-Vietnam war movement in 1967–68. I do not perceive a huge move by young people away from formal into informal or street politics. I read the papers and listen to the radio as much as anyone else in the Committee. I understand that Greenpeace has financial difficulties, as has Friends of the Earth, despite the fact that they are businesses that have good career structures these days. I do not see any golden image of a form of politics in which young people are interested. What worries me is the drift away from politics full stop, which is something that we must carefully examine, although the issue is often over-egged.

In many ways, I agree that broadcasters transmitting into the country via satellite, internet or whatever, will change the ecology and culture of broadcasting for ever. However, that phenomenon is not new. For a long time, Radio Moscow pumped stuff into the west in an attempt to undermine the values of social democracy and so on, and we did the same thing to the Russians. I am not sure what effect it had. We probably had a bit more effect than they did because our programmes were more interesting, but I do not speak Russian and so could not swear to that.

We must be careful. Impartiality is a specified objective of Ofcom's standards code, which is provided for by clause 307 and applies to all licensed broadcasters. The clause with which we are dealing relates to the qualitative aspects of public service broadcasting as opposed to the basic standards that should probably be applied to all broadcasters. Amendment No. 506 seeks to incorporate the Ofcom code on impartiality into matters to be taken into account for the overall purposes of public service broadcasting. By adding that to the requirement for public service broadcasters to provide fair and well-informed news and current affairs programming, the amendment confuses the distinction between standards and quality.

Standards in broadcasting, whether provided by licensed public service broadcasters such as the BBC or non-public service broadcasters, will be governed by the Ofcom standards code. That will include standards for impartiality, advertising and protection of the public from offensive and harmful material, which the exception that impartiality will remain the responsibility of the governors in the BBC's case and that S4C will be self-regulating. In contrast, the overall public service broadcast remit set out in the Bill relates to the qualitative aspects of public service broadcasting and aims to ensure high-quality programming across a wide range of subjects. We do not believe that it is necessary or desirable to refer to Ofcom's standards code in the overall PSB remit, because the standards code will apply directly to all broadcasters.

Amendments Nos. 507 and 508 require licensed public service broadcasters to commit to complying with the impartiality aspects of the standards code in their annual statements of programme policy. The statements of programme policy are part of the self-regulatory regime for the qualitative aspects of PSB—that is, tier 3. The inclusion of impartiality standards—part of tier 1—is therefore inappropriate. We believe that broadcasting standards and quality of programming should be distinguished carefully. For all those reasons, we believe it unnecessary to refer to the impartiality code in statements of public programme policy.

Similarly, amendment No. 513 seeks to require licensed public service broadcasters to report in their statements of programme policy on the handling and resolution of all complaints that are not handled under the procedure established for the Ofcom standards code. In addition, broadcasters would have to give an account of the handling and resolution of complaints regarding impartiality that are received under the

Ofcom code. We believe that that is inconsistent with the self-regulatory approach to the qualitative aspects of PSB. Statements of programme policy are intended to encourage self-regulation and improve the quality of programming by allowing broadcasters to innovate. That is a very important consideration that we have not discussed this morning.

Ofcom will be obliged to establish procedures for the handling and resolution of complaints about the observance of the standards code, including its impartiality standards. I therefore ask the hon. Gentleman not to press the amendment.

Nick Harvey (Liberal Democrat, North Devon)

I am grateful to the Minister for putting the Government's view on record. It is a diversion, but I am persuaded by what he said about the myth that young people nowadays are more inclined to go in for single-issue politics than party politics. I was led astray from my original path by the hon. Member for Milton Keynes, North-East.

Coming back to the Minister's points, there are different ways to skin a cat and the ones mentioned so far may not be the best. However, I welcome the Minister's belief that we should adhere to the principle of impartiality. I was scared rigid by the line taken by the hon. Member for Maldon and East Chelmsford. The only thing that I can cling to is his suggestion that we are ''not there yet'', as he put it.

Leaving to one side the BBC—which I hope will always enjoy a strong position, as is likely unless the hon. Member for Maldon and East Chelmsford becomes the Secretary of State any time soon—Channels 3, 4 and Five enjoy a market dominance. However, in the digital era, Channels 3, 4 and Five, although they will still have various market advantages, will cease to be as relevant and will become just three channels among very many. His suggestion that those channels ought to be compelled to observe political impartiality, but that others ought not to have that burden put on them, is one that I find very unattractive indeed. As hon. Members have said, broadcasting in America should serve as a dire warning of what would happen were we to go down that path. I was driving a car the first time I listened to a radio broadcast in America, and I was so astounded by what I heard that I nearly lost control of the vehicle. I only recovered control because I assumed that the programme was satire. It was some minutes before I realised that it was actually a normal programme. We could be going down a very slippery slope.

I rather support the statement that the ban on religious groups having television or radio licences is difficult to justify. However, if I thought for one moment that we were going to allow those groups to use religious broadcasts to stray into politics—as the so-called American moral majority does—I would be filled with horror. I am all for groups having licences to play Christian music, but I would be scared stiff if they started to stray into politics and say that God said we should vote for one party or another. I do not want there to be a broadcasting ecology in the coming years that restricts political impartiality to the public service stations but allows something of an opinion-led free for all in the others. However, I accept the Minister's

point that the amendment might not be the best technical way to bring about the desired ends.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I am surprised to find that I am more liberal than the Liberals on this issue. I, too, find the vision that the hon. Gentleman presents to the Committee unattractive. However, if we were to reach a position in which a station was producing the type of programming that he describes—regardless of whether it was religious—in a multi-channel world, people could switch channels. They do not have to listen to that channel. If someone were such a committed supporter of a certain party—or of whatever—that they wanted to listen to such a channel, I am not yet convinced that they should not be able to do so.

Nick Harvey (Liberal Democrat, North Devon)

The hon. Gentleman is describing the market that we enjoy in newspapers, journals, magazines and so forth. If, in the days of large cross-media holdings, those large groups are to be able to use their television assets to start spreading their messages on to television as well, that will fundamentally change British television, British society and British democracy in ways that would be unhealthy, and I would resist that. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

John Robertson (Labour, Glasgow Anniesland)

I beg to move amendment No. 392, in

clause 256, page 224, line 41, leave out from 'include' to 'proportion' in line 42 and insert

'a wide range and a substantial'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss amendment No. 346, in

clause 256, page 224, leave out lines 42 and 43 and insert

'a wide range and substantial proportion of programmes made in the regions and nations of the United Kingdom outside the M25 area'.

John Robertson (Labour, Glasgow Anniesland)

The public service remit includes a requirement on the range and proportion of programmes that are made outside the M25 area, which is essential for content and regional character. That is to be preserved under Ofcom.

Clause 256 stipulates that, 12 months after the commencement of the Bill and no less than every five years thereafter, Ofcom will prepare a report on the current state of public television broadcasting in order to assess the extent to which broadcasters are satisfying the requirements of the public service broadcasting remit that is laid down in the clause.

Although I am pleased that the Bill makes provision for regular reporting, I am unhappy with the wording of the clause, which stipulates the criteria on which the assessment will be made. Subsection (6)(i) deals with the

''range and proportion of programmes made outside the M25 area.''

I propose that

''what appears to OFCOM to be an appropriate range''

should be replaced by

''a wide range and substantial''

proportion of programmes.

The clause sets no specific minimum level for original production, regional production and regional programming quotas. It simply refers to a level and a range that is ''appropriate'', ''suitable'' or ''sufficient'' in the eyes of Ofcom. That is inadequate. Experience has shown that regulators have felt obliged to alter their views on what is appropriate to fit in with the economic status of the ITV licence holders, and they may be pressurised by licence holders to do so. If that is put against a background of growing concentration of ITV ownership and the continuing depression in advertising revenue, the potential to lower the regional and original production requirements is likely to be acute. Scottish TV's network output fell from 225 hours in 1994 to 136 hours in 2000, which means that the amount of Scottish programming for ITV is just 7 per cent. Five years is a long time and a lot can happen during that period: Ofcom's reporting on the requirements of the public service remit is important, so we must ensure that we get it right now.

Amendment No. 346, which was tabled by the hon. Member for Ceredigion (Mr. Thomas), does not differ very much from the amendment tabled by my hon. Friend the Member for Gloucester (Mr. Dhanda) and I, but I have a concern about it. His amendment adds nothing of substance to our amendment; it simply muddies the waters by adding a nationalist dimension that does nothing to enhance the Bill—just as nationalism does nothing to enhance politics.

The hon. Gentleman should be aware that in Scotland we have three Channel 3 stations. Border Television covers part of England as well as Scotland. There is Scottish TV and Grampian TV, too, so to mention nations is not even accurate, and insisting that the word ''nations'' be included is doing a disservice to the nature of the amendment.

Simon Thomas (Plaid Cymru, Ceredigion)

I was going to support the hon. Gentleman's amendment, but I am not sure whether I will now. He must look for nationalists under his bed every night before he goes to sleep, because if he finds nationalism in amendment No. 346, he can find it in any part of his life.

The hon. Member for Glasgow, Anniesland (John Robertson) responded to my amendment in a strange way. I shall try to persuade him, or at least the hon. Member for Gloucester, who may be slightly more amenable, as it is easier to receive Welsh television programmes in Gloucester. I must tell the hon. Member for Glasgow, Anniesland that we in Wales also have more than one ITV provider. A significant number of Welsh people watch Granada in north Wales; Granada is as much a provider for north Wales as HTV, these days. The thinking behind my amendment is similar to that that behind amendment No. 292.

Perhaps under clause 257 we will have the opportunity to debate in more detail what ''substantial'' means in relation to both protecting regional production and Ofcom. Clause 256 is, in a way, a consequential clause that comes first. We may have a better understanding of what substantial

regional production means after we have considered clause 257. Ofcom will have to be empowered to produce reports on the public service remit of the broadcaster in a way that reflects its new responsibility for ensuring substantial regional or national input.

When I first read the clause, it struck me as being fairly unique. The same provisions turn up in several other places in the Bill, too. I do not know whether we have ever before discussed legislation that defines ''outside the M25'' as a geographical area of the United Kingdom. I do not know whether the M25 is going to turn up in future legislation as some sort of geographical area, whether we will take into account the expansion of the lanes of the M25, or whether all of south-east England will one day be encompassed within the M25 area. Certainly, it is strange to have the area defined in that way.

I must tell the hon. Member for Glasgow, Anniesland and the Committee that my reasoning for specifically putting in ''regions and nations''—''regions'' obviously referring to the different regional ITV areas within England, and ''nations'' referring to Wales, Scotland and Northern Ireland—is that it would be easy for regional production for the whole of the United Kingdom to be located in, say, Reading. That would be outside the M25 area. Or, it could easily be located in the new Llanilid studios proposed for south Wales.

Andrew Lansley (Conservative, South Cambridgeshire)

I do not necessarily endorse the whole of the hon. Gentleman's argument, but does he accept that one does not need to speculate about those engaged in television production just outside the M25? If my recollection is right, Pinewood, Leavesden and Hatfield are all just outside the M25.

Simon Thomas (Plaid Cymru, Ceredigion)

I am grateful to the hon. Gentleman for that information. My knowledge of the geography of the M25 is not as accurate as his. Another example is that of the new studios proposed for Llanilid in south Wales. I believe that that is in the constituency of the hon. Member for Ogmore (Huw Irranca-Davies). That could become a regional production area for the United Kingdom. The fact that the studios will be in Wales and will produce jobs in Wales will not give me great pleasure if they then suck regional production and jobs away from other parts of the United Kingdom. I am trying to put ''regions and nations'' into the Bill is to prevent precisely that. There is no nationalist ghost stalking the corridors of Scottish castles in my amendment; the amendment is a straightforward strengthening of a provision of the Bill. It would ensure that ''outside the M25'' does not just mean Pinewood, to mention the example given by the hon. Member for South Cambridgeshire (Mr. Lansley), or a new facility in Swindon or wherever. The amendment would mean spreading out regional production and ensuring that it remains within the existing ITV areas. We already know that will be one ITV—that which already exists.

Kim Howells (Labour, Pontypridd)

I often get into trouble for throwaway remarks. Swindon is a fair distance from London; it takes an hour on the worst rail service in Britain, First Great Western, and it has different priorities from places within the M25. That part of Wiltshire and the

south midlands is a region in its own sense. The hon. Gentleman will recognise that. It is not just about England; we must not get ethnic about this.

Simon Thomas (Plaid Cymru, Ceredigion)

I do not think that the Minister was listening to what I said.

Kim Howells (Labour, Pontypridd)

I was listening.

Simon Thomas (Plaid Cymru, Ceredigion)

Clearly, he was not. It would not be right for all the regional production in England to be based in Swindon. Every part of the UK must have its ITV regional productions and must be reflected in the BBC. The clause also reflects the BBC's public service remit and, through that, the BBC must reflect its regions.

The argument is not whether one area should produce all the television programmes in the UK, but whether all areas should share in the regional productions of ITV and Channel 3, and whether regions should be reflected in Channel 4, which has its own public service remit, and in the BBC. To a lesser extent, we must bear it in mind that Channel Five viewer numbers are increasing and that it may have a stronger public service remit in future.

We should not just define an area outside the M25. If we do that, that could allow one ITV, or Channel 3, company to pick and choose where to locate most of its regional production. We have already heard about some companies making so-called regional programmes that they want to show in more than one region. I understand that that is already happening and that three or four ITV regions are sharing what are, basically, the same programmes. That is also a diminution of the regional programming that was set out by the hon. Member for Glasgow, Anniesland.

I hope that if the Minister will not accept the wording of the amendments, that he will accept their spirit. I hope that he will take this opportunity to explain how he would ensure, through Ofcom, that strong regional production would not become over-centralised or diminished. All areas of the UK—not just Swindon, South Wales, Pinewood, or Scotland—could share the economic benefits brought to them by television, film and radio production.

Parmjit Dhanda (Labour, Gloucester)

I shall restrict my remarks as I intend to speak in more depth on clause 257, although in many respects the debates overlap.

I pay tribute to the Broadcasting Entertainment Cinematograph and Theatre Union, which has provided some detailed briefs for the clauses. BECTU represents many people in the industry and, as a trade union for skilled people, it has real concerns about redundancies, because many of its members are technical staff who work outside the M25. I take the point that the hon. Member for Ceredigion made about Hatfield and Pinewood being close to, but outside, the M25. Many of the relevant jobs are located in Scotland and Wales and although I will not intervene in the battle between those two countries that is taking place around me about what makes a region and what makes a nation, it is important that we remember that we are talking about skilled jobs.

We should do what we can to protect them. I hope that the clauses and amendments will do that.

John Greenway (Conservative, Ryedale)

This is an important issue. I hinted in an intervention last week that we would want to return to regional issues. This group of amendments and the next address some important issues that the Committee must consider.

The amendments that were moved by the hon. Members for Glasgow, Anniesland and for Ceredigion, relate to clauses on public service purposes and Channel 3 regional programming quotas. The amendments would require Ofcom to ensure that a substantial proportion of regional programming and production is made by Channel 3. I have listened to the hon. Member for Ceredigion's comments about whether that would give guarantees on the regional structure. I do not think that that is necessary, for reasons that I will come to in a moment. The amendments are intended to ensure that a substantial amount of regional programming and production is made by Channel 3. That would replace the existing discretion that the Bill gives Ofcom to decide what proportion would be appropriate in the circumstances. At the outset, we must consider two important points. We welcome subsection (7), which requires Ofcom to consider the costs to persons providing the services and

''the sources of income available to each of them for meeting those costs.''

In other words, it must have regard to what has happened in the real world. Last week, I said that, during the past few years, the financial base of ITV has gradually eroded to an alarming extent. As the hon. Member for Ceredigion said, the clause applies to the BBC, too, and because of the licence fee increase, the BBC's income has grown. Some of its extra money has clearly been directed at regional programming. It is important to have regard to the fact that, in essence, the changes that have been made to ITV's regional output, especially to its news and current affairs programming, to bring it more into a national network only replicate what happens at the BBC.

I have received representations from BECTU. People working at ITV are concerned that we might legislate to provide opportunity for, say, a singly owned ITV company to erode further the regional commitment. I do not believe that those worries are justified. The amendments would unstitch the 2002 ITV agreement with the ITC to standardise the regional outputs of the ITV companies in the regions and overturn that agreement through a statutory requirement under the Bill.

Michael Fabricant (Conservative, Lichfield)

Does my hon. Friend believe that the consolidations within ITV would be affected by the amendments? He will recall, for example, that Carlton Television acquired Central Television. Central Television was split up into various regions, but production is now centred in Nottingham. The programme ''Crossroads'', for example, is made at the major television production centre in Birmingham. That is outside the M25. Surely such consolidations will still continue.

John Greenway (Conservative, Ryedale)

To a degree my hon. Friend is right. The fact remains that the proposal would require Ofcom to impose quotas on ITV companies and unpick the agreement. It is easy to characterise the standardisation that has occurred as cutting regional production by hundreds of hours. The hon. Member for Glasgow, Anniesland has referred to that. However, the development is more complex and positive than it seems. Prior to the agreement, regional hours were a hotch-potch of different requirements, ranging from six to more than 20 hours a week in different regions. That made the planning and promotion of the ITV network as a whole—the programme schedule—an absolute nightmare because holes had to be left within the network for those companies with the highest regional requirement. Schedule coherence in competitive times—not the cost or the cutting of hours—made such a change inevitable.

I shall remind the Committee again that I have worked with ITV for more than 10 years. I have heard such arguments before and I know the difficulties that there are behind the scenes. Balancing the objective of wanting to maintain the original regional dimension of ITV yet having a really competitive Channel 3 competing for audiences with the BBC and other channels, such as subscription channels on Sky, is a nightmare. When we try to impose intentions and objectives on commercial companies, we must have regard for their competitive pressures. We are in the business of not only prescribing what the companies do, but having regard to where the money will come from to pay for it. I remember making that argument in this very Committee Room when you were also present, Mr. Gale, during consideration of the 1990 legislation. The then Opposition wanted to prescribe the new national radio licences. The argument came back, ''Yes, that's fine, but how are you going to pay for the obligations that you place on the broadcasters?''

The BBC is publicly subsidised by £2.5 billion. It is responsible for virtually 40 per cent. of all broadcasting output. I want a Channel 3 regime, with Channel 4 and Channel Five, that provides a strong and vigorous alternative to the BBC. If we impose obligations on those channels, we must have regard to the facts that all their income comes from advertising and that advertising budgets have diminished and are spread wider throughout many other channels. Even a football match that people pay to watch on the Sky Sports premium channel 433—I did that again on Sunday afternoon—carries advertising. We must have regard to what ITV can afford.

John Robertson (Labour, Glasgow Anniesland)

The hon. Gentleman's defence of ITV was as passionate as the way in which he gives the impression of wanting to sell off the BBC—[Interruption.] There is no need to get upset.

If the ideas of the hon. Gentleman and his colleagues about what should happen to the BBC came about, where would the production of television in this country happen? Would everything be done down in England or centralised down in London while the rest of the country was left as it is?

John Greenway (Conservative, Ryedale)

The hon. Gentleman asks me about something that I did not say. I made no comment about the BBC except the fact—

John Robertson (Labour, Glasgow Anniesland)

The hon. Gentleman has not stopped mentioning the BBC for two weeks.

Roger Gale (Conservative, North Thanet)

Order.

John Greenway (Conservative, Ryedale)

I was simply saying that the BBC's financial base has been greatly strengthened and that it has consequently strengthened its regional and local commitments. I do not criticise that. The television regional commitments are networked in the same way as the regional programming arrangements that Channel 3 has had to use. That change was due to the agreement between the Independent Television Commission and ITV on the new regional agenda. I do not see the point of trying to unpick that by using the Bill to make changes that would impose obligations on Ofcom and ITV.

Parmjit Dhanda (Labour, Gloucester)

Will the hon. Gentleman give way?

John Greenway (Conservative, Ryedale)

I promised to give way to the hon. Member for Ceredigion first.

The hon. Member for Glasgow, Anniesland and his colleagues should not think that because I am describing what happened to the BBC, that means that we want to do it down—on the contrary. I am taking the facts as read and telling the Committee that obligations placed on ITV must have regard to what happens with the BBC.

Simon Thomas (Plaid Cymru, Ceredigion)

The hon. Gentleman makes a fair point about the ITC agreement. I accept that there were changes in the agreement that were not the result of a diminution in regional broadcasting but of an evening-out of programming—not including repeats, for example, in the hours specified in the agreement.

Nevertheless, will the hon. Gentleman accept that, rather than unpicking the agreement, the amendment puts it on a firmer footing within the ecology of Ofcom itself? It becomes the agreement on which Ofcom bases its work on what is, I accept, a substantial and wide range of programming. I want to preserve that range.

The hon. Gentleman mentioned the financial problems of the third channel. He should also bear in mind that Channel 3 broadcasts under licence from the Government as the regional broadcaster for the whole of the United Kingdom. That is the basis on which it is granted its licence to broadcast. If that legal dimension is taken away from Channel 3, it should exist on the same basis as Channel 4 or Channel Five. It is our public service regional broadcaster.

John Greenway (Conservative, Ryedale)

If the hon. Gentleman is patient, he will find that I will address some of the issues that he raised in the rest of my remarks. I do not wish to detain the Committee unduly because we have a great deal to cover, so I will get on with them now.

He is right to say that, when the pattern of regional output was re-arranged, the nation's regions and the small ITV regions were provided with new core weekly requirements measured by the hour. The hours lost were, in the main, during daytime television, during the night and repeats, as the hon. Gentleman said. No peak-time regional hours were lost—the changes

resulted in an extra 30 minutes of regional news at peak-time.

The ITC accepted ITV's case, but insisted upon and received additional investment in quality and regional production resources and schedule improvements for regional programmes. The changes resulted in the re-engagement of late-night regional news to ''News at Ten'' three days a week, which increased peak-time regional news by 30 minutes per week.

Parmjit Dhanda (Labour, Gloucester)

Will the hon. Gentleman give way?

John Greenway (Conservative, Ryedale)

No, I want to get on.

The changes also resulted in a £2 million regional production fund open to ITV and independent producers and a new commitment to invest at least 50 per cent. of ITV's total programme budget outside the M25. There were new arrangements for local accountability, with regional advisory groups and non-executive directors on all regional ITV boards, and the ITV charter was published in which the nations and regions could underwrite those and other commitments to the ITV regional service.

The result is a more coherent ITV network and regional service, with safeguarded peak-time slots for regional news and other programmes and a raft of commitments by ITV to its regional future. The hon. Gentleman mentioned BECTU. We understand the worry that the standardisation package has led to redundancies. That is why the Conservatives believe that it would be wrong to unpick the agreement.

It is also wrong for the Bill to impose a substantial proportion of regional programming on Channel 3 via its remit of regional quota obligations. There is a disproportionate burden on Channel 3 to have to meet such an enhanced regulatory requirement when the existing regulator—the ITC—has already approved that standardisation as sensible and current levels of output as acceptable.

The amendment would remove an important discretion allowing Ofcom to assess the market conditions in which licensees operate and then set quotas accordingly, which is a consistent and laudable theme throughout the Bill. However, legislation is surely a bad place to set quotas. It should be for the regulator to determine what is appropriate or suitable in the circumstances. That is why subsection (7) of the clause is so important.

The Bill as drafted gives Ofcom the ability to set the requirements at a substantial level if it so wishes. The amendments would require Ofcom to have an absolute obligation to require consistently high proportions of production even though that may be contrary to prevailing economic, cultural or other circumstances. That is a coherent argument against the amendments.

We ought to get two other things out in the open, and I may return to some of these points when we reach the next group of amendments. The best way of making these points is to refer to an article by Mick Desmond, the managing director of ITV. The article was published in a document by the Westminster Media Forum. I declare an interest as one of the patrons—unpaid—of the forum, along with several other hon. Members, including my hon. Friend the

Member for Maldon and East Chelmsford on the Front Bench, and you, Mr. Gale. The forum published a series of articles during the discussions on the draft Bill. Rather like the ITC document that I referred to earlier, it was a good addition to the debate.

I will read two extracts from Mr. Desmond's article. They will explain—better than my rambling on to the Committee would do—exactly why we can trust the ITC and why we should trust the ITV companies. Mr. Desmond states:

''ITV is the only truly regional television network in Britain, with 15 separate licence areas. ITV is about Britain, not London, broadcasting to Britain. Not only does ITV's total investment in the regions far exceed that of any other broadcaster; it goes much further than our licences require.''

It still does, and that is a key point. In spite of the fact that ITV now, in effect, comes under two groups of ownership, and is likely to come under one single owner, the 15 licences—enshrined in the 1990 legislation and strengthened, not weakened, in the Bill—have stood the test of time. Mr. Desmond is right to say that the investment that ITV makes is

''incredibly valuable—creatively, culturally and economically.''

In Yorkshire alone, Yorkshire Television contributes £55 million to the regional economy. It is the largest media employer in the region, providing 50 per cent. of the jobs in television and radio. It employs more than 1,000 people and supports more than 1,100 jobs in the supply chain. Granada Television contributes £160 million to the economy of the north-west and supports 4,000 jobs. My constituency, like those organisations, is in the north of England, and the contribution that companies such as Yorkshire Television, Granada Television and Tyne Tees Television in Newcastle make to the cultural life of the north is vast. For the life of me, I cannot see that ITV would want to renege on that in future, and that brings me to the crucial point of Mr. Desmond's argument. He says:

''What concerns me is that despite this strong track record, there remains a belief that ITV would get out of the regions like a shot given half a chance.''

In effect, the hon. Member for Ceredigion said that, but Mr. Desmond continues:

''That view completely misunderstands what ITV is about. Regionality is not a paternalistic add-on to our core business—it is one of ITV's greatest assets. Yes, the regions need ITV, but equally ITV needs the regions.''

I urge hon. Members to read pages 94 and 95 of the annexe to the ITC document, which set out ITV's charter for broadcasting in the nations and regions. We are still trying to persuade the Minister that we should go further with tier 3 in regard to the BBC and not simply rely on the agreement with the governors. However, it is fair to put this point to the Committee: if the BBC agreement is good enough to deliver the regional dimension for the BBC, why is the ITV charter for broadcasting in the nations and regions, together with the powers that the Bill will give to Ofcom, not good enough? The Minister believes that it is, and I agree with him.

The intention in Committee is the same. We want a strong ITV to be maintained regionally. All that

divides us is the extent to which we should prescribe in the Bill the quotas that the amendments would require Ofcom to impose. Let us have regard to the track record of ITV over the years. Even if its financial position improved marginally, it will never return to the halcyon days of the 1950s, 1960s and 1970s, when it had so much money that it hardly knew what to do with it. It will always be stretched financially. We should think carefully about what obligations we impose on broadcasters. Indeed, we should trust them more than some of my colleagues are inclined to do.

Roger Gale (Conservative, North Thanet)

Earlier in the debate, the hon. Member for Gloucester was seeking to intervene on the hon. Gentleman. It is not up to me to tell members of the Committee when they should or should not speak. However, it may be appropriate if I remind them that, unlike procedures on the Floor of the House, if an hon. Member, especially a person who has lent his or her name to an amendment, wants to speak more than once in the debate, it is up to the Chair to call that person.

John Greenway (Conservative, Ryedale)

On a point of order, Mr. Gale. I meant no discourtesy to the hon. Gentleman. I sensed that the Committee had much business to get through, and there was much that I wanted to say. I thought that the previous interventions were taking us away from the main arguments that I wanted to deploy.

Roger Gale (Conservative, North Thanet)

I am sure that no discourtesy was intended, but it is helpful at times to remind even those members of the Committee who have been in the House of Commons for a long time that members of a Committee have a facility that they do not have on the Floor of the House.

Nick Harvey (Liberal Democrat, North Devon)

I support the amendments. Amendment No. 346, which was tabled by the hon. Member for Ceredigion, usefully goes further than the simple definition of beyond the M25. The swift geography lesson that was despatched by the hon. Member for South Cambridgeshire should remind us that achieving a substantial proportion of programme-making outside the M25 would not protect what we know ITV to be.

The real debate is between an appropriate or a substantial amount of programming outside. It is right to say that we need to go beyond an appropriate amount to a substantial amount. The hon. Member for Ryedale (Mr. Greenway) urged us to trust broadcasters and to realise that they would not do anything so wicked as to reduce the amount of programming in the regions. That is acceptable, given the current owners of the ITV licences and their track record. However, there will swiftly be a revolution in ownership. The cosy version of events that the hon. Gentleman portrayed is all very well but, if in a short time, Disney or AOL/Time Warner owns a single ITV company, it is rash to assume that it will have the same commitment as that of historical British broadcasters.

Michael Fabricant (Conservative, Lichfield)

Does the hon. Gentleman accept that Ofcom still has powers to ensure that local news is generated locally and that all the fears about the

merger of Carlton Television and Central Television never came about in respect of news programming? Regional television licences will still have to be maintained.

Nick Harvey (Liberal Democrat, North Devon)

I accept that point, but if we leave it to a regulator to consider what is appropriate, such a power is basically susceptible to absolutely any line of argument that highly skilled and highly paid lawyers deployed by the new owner of Channel 3 wish to parade before it. It is bad enough when, for example, ITC allows ITV in certain regions to reduce the number of local variations in the news only to serve the convenience of it being on satellite. We foresee many arguments that a new owner of Channel 3 would parade.

The hon. Member for Ryedale referred to market conditions. We will hear tales of woe and arguments such as, ''Times is tough, guv'nor. We really can't keep doing this any more.'' In the case of a global owner, it will be said, ''The world film market is depressed. We can't afford this any more.'' Highly skilled advocates will advance such arguments to Ofcom, and if it follows the form of its predecessors, it will prove susceptible to them.

John Robertson (Labour, Glasgow Anniesland)

Does the hon. Gentleman agree that the example that I quoted about STV and the reduction in the number of hours illustrates what he is attempting to explain?

Nick Harvey (Liberal Democrat, North Devon)

It is a worrying example, and I think that we would see more and more of the same. That is why I believe that it would be right, through the Bill, to draw some lines in the sand. Channel 3—ITV as we know it—should have a substantial proportion of its programme-making based in the nations and regions of the United Kingdom. That does not mean, as the hon. Member for Ryedale suggested, that Ofcom has no latitude to make judgments from time to time—it would simply make them against a different initial requirement. If ITV—Channel 3—is not a broadcaster that makes a substantial proportion of its programmes in the nations and regions of the United Kingdom, it is not Channel 3 as we know it; it is fundamentally changed into something else.

If there is any purpose in giving ITV the scarce spectrum or the advantages in the licence that it has, it must do something in return for that. We ask for different things from Channel 3, Channel 4 and Channel Five, and what we ask from Channel 3 is a commitment to the regions. That is what it is for. The Bill would be much stronger and would give a much clearer message to any new owner of Channel 3 as to what it had bought if it made it clear that, come what may, the channel will always be required to make a substantial proportion of its programmes in the nations and regions of the United Kingdom. If it does not like the sound of that, it has a straight choice—it does not need to buy it. If it says at some point that it can no longer meet that commitment because ''times is hard'', we can take its licence away and someone else can come in and have a go at running it.

Simply allowing Ofcom to make a decision that is appropriate opens the door to every variety of

argument that cunning lawyers care to put. Adding the word ''substantial'' to the Bill would mean that everybody knows where they are and ITV—Channel 3—would fundamentally remain in character what it is today, and has been through its history.

Kim Howells (Labour, Pontypridd)

We have had a fascinating debate about an important part of the Bill. I have great sympathy with both the amendments and I understand their spirit. I shall explain to the Committee why I do not think that they are appropriate, but I wish to pay tribute to the hon. Gentlemen who tabled them because they cut through to something about which many of us feel passionately.

The hon. Member for Ryedale emphasised the economic importance of ITV production in the regions. My hon. Friend the Member for Glasgow, Anniesland made an interesting point when he commented on the pernicious problem of frontiers. My hon. Friend the Member for Gloucester, who is sitting next to him, could have watched Wales's premier rugby team, Pontypridd, beating Connaught on Saturday night. I do not know why members of the Committee are laughing at that statement—it is the best team in Wales. It beat Connaught—one of those great regional Irish sides to which we are all supposed to aspire—in conditions that resembled the Somme, which is perhaps why we won. As my hon. Friends the Members for Gloucester and for Glasgow, Anniesland informed us, it is very much, if you will excuse the phrase, Mr. Gale, a cross-frontier matter. Broadcasting often has strange boundaries.

I remember, as I am sure that the hon. Member for Ceredigion does, the number of people in south-east Wales who turned their aerials to face transmitters in the west of England. They seemed to know more about what was happening in Bristol than Cardiff—that cannot be a bad thing, sometimes.

Amendment No. 392 would ensure that licensed public service broadcasters would be expected to provide a wide range and substantial proportion of programmes made outside the M25, rather than an appropriate range and proportion of programmes made outside the M25 area, for which the Bill provides. The hon. Member for Ceredigion asked a question about geography rather well. That is already reflected fundamentally. The powerful South East England Development Agency is shaped geographically like a doughnut. The hole in the doughnut is the M25 and everything inside that. I would never refer to London as a hole because I love the city, but that hole is peculiar because about 1 million people go into it every day and then go back out. We are all familiar with that piece of geography.

Simon Thomas (Plaid Cymru, Ceredigion)

We need to know how the jam in the doughnut will be spread.

Kim Howells (Labour, Pontypridd)

Amendment No. 346 would achieve the same end as the amendment tabled by my hon. Friend the Member for Glasgow, Anniesland. It would provide that a wide range and substantial proportion of programming should be made in the nations of the UK outside the M25 area.

Michael Fabricant (Conservative, Lichfield)

For clarity, we are all assuming that ''M25 area'' means everything within the M25. Given the points raised by my hon. Friend the Member for South Cambridgeshire about film studios that are just outside the M25 road, is there a legal definition of the M25 area?

Kim Howells (Labour, Pontypridd)

I do not believe that there is, but that is a good point. The hon. Member for South Cambridgeshire pointed out that at least three, and probably four, of the world's great film production studios are close to, but outside, the M25. [Interruption.] My officials cannot seriously expect me to read the briefing note that has just been passed to me. [Laughter.] The short answer for the hon. Member for Lichfield is that I do not know whether the term is a legal definition. It is a useful form of shorthand. I guess that those of us who are older and saw talent often gravitated towards London because knew what we meant when we talked about London, although it sometimes extended as far as Pinewood and Shepperton.

Andrew Lansley (Conservative, South Cambridgeshire)

I think that the Minister was reaching for clause 348, which is titled ''Interpretation of Part 3''. It states that

'' 'the M25 area' means the area the outer boundary of which is represented by the London Orbital Motorway (M25)''.

By definition, Pinewood, Leavesden and Hatfield are outside the M25.

Kim Howells (Labour, Pontypridd)

There we are. I nevertheless back the analysis of the hon. Member for Lichfield. We refer to the M4 corridor—north and south. That is a rather flimsy geographical description but we know what it means and it is quite useful. Anyway, enough of that.

Parmjit Dhanda (Labour, Gloucester)

It is a good time to raise this point because we are talking about definitions. My hon. Friend mentioned programming. Subsection (6) refers to drama, comedy and music but neglects to mention feature film. Is that included in views about regional programming and production?

Kim Howells (Labour, Pontypridd)

I am sure that somebody will pop up and say that it does, but I do not think that it does. My hon. Friend makes a good point, and I have said before in Committee that there should be a symbiotic reciprocity between film-making and television. I am grateful to him for making the point and I shall consider it.

The amendments would quantify more specifically one—and only one—of the matters to be taken into account for the purpose of fulfilling the general public service remit. So far as the relevant television services include programmes made in the United Kingdom, they should include programmes made outside the M25. Although the clause applies to all public service broadcasters, the Bill makes separate provision for specific quotas for production outside the M25 for Channels 3 and 4, and the agreement places a corresponding obligation on the BBC. The Government have also tabled an amendment to provide a production quota for programmes that are made outside the M25 for Channel Five. Therefore, we believe that it would be inappropriate for the overall public service purpose to specify that a

''wide range and substantial proportion of programmes''

should be made outside the M25 area, as more specific obligations for regional production will apply directly to the public service broadcasters.

The hon. Member for North Devon and other hon. Members advanced strong arguments.

Simon Thomas (Plaid Cymru, Ceredigion)

The Minister mentioned that there will be other quotas and agreements regarding regional programmes, and he specifically mentioned the BBC agreement. The BBC does not come under Ofcom: therefore, when its remit is reviewed by Ofcom, that cannot be done in accordance with what is appropriate in the view of Ofcom because it is conducted under a separate agreement. What is the wording or the import of that agreement? If the answer is that there will be a move towards ''substantial''—as I suspect—that must be reflected with regard to Channel 3 too.

Kim Howells (Labour, Pontypridd)

I cannot state the exact wording of the agreement. I hope that the hon. Gentleman received the letter that I sent to him about revising that agreement. The BBC will come under Ofcom for tier 2 quota purposes; it is important to remember that. It is also worth emphasising that clause 256 is concerned with Ofcom's review and reporting function for the public service broadcasting sector as a whole. It does not provide the basis for Ofcom to impose regional production quotas directly on the broadcasters.

Those quotas are the subject of clause 276, as the hon. Member for North Devon may have mentioned—and if he did not do so, he should have. Clause 276 deals with Channel 3; clause 278 deals with Channel 4; as the hon. Member for Ceredigion has just reminded us, the agreement covers the BBC; and a regional production quota for Channel Five is the subject of an amendment that has recently been tabled. With those reassurances, I hope that my hon. Friend the Member for Glasgow, Anniesland will see fit to withdraw the amendment.

John Robertson (Labour, Glasgow Anniesland)

I thank the Minister for his comments. He has not entirely convinced me but, for the common good, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Brian White (Labour, North East Milton Keynes)

Constituents rarely write to their Members of Parliament about a specific clause. However, Kay McManus wrote to me about the fact that the Broadcasting Act 1990 contained a specific obligation for commercial broadcasters to provide quality indigenous children's television programmes. Clause 256(6)(g) talks about Ofcom's report addressing whether services appear

''to be a suitable quantity of high quality and original programmes for children and young people.''

The standard of television for children and young people is important for our future, and there is increasing concern about it. Will the Minister say whether Ofcom's reports on this will achieve the fulfilment of that public service remit, and whether

what the 1990 Act achieved will continue after the Bill becomes law?

Kim Howells (Labour, Pontypridd)

All licensed broadcasters will be subject to review by Ofcom in its maximum five-yearly review of public service broadcasting. One of the matters to be taken into account for the purposes that are covered in such reviews is that public service broadcasters produce a suitable quantity of high quality and original programmes for children and young people. I am glad that my hon. Friend raised that point, because that is worth putting on the record.

Andrew Lansley (Conservative, South Cambridgeshire)

I am sorry to delay the Committee, Mr. Gale, but I am slightly perplexed by the Minister's answer. Surely, in so far as Ofcom would conduct a review of the purposes of public service broadcasting as a whole, it would not be confined to the activities of licensed broadcasters, but would include the activities of the BBC. The Minister rightly said that the BBC comes under Ofcom for tier 2, but under the clause Ofcom has the capacity to take a view about the extent to which public service broadcasting purposes are being met, if licensed public service channels and the BBC are considered together. We could, quite properly, arrive at a position in which the BBC board of governors had regulated the BBC in relation to some of the tier 3 responsibilities, whereas Ofcom, none the less, took a view in its report that was at odds with the BBC, to which the governors would have to respond.

Kim Howells (Labour, Pontypridd)

Yes. My hon. Friend the Member for Milton Keynes, North-East asked about commercial channels and I answered his point. However, I take the point that the hon. Member for South Cambridgeshire made. The BBC's duty to report on such issues, and the expectation that Ofcom should pay due regard to those reports, would go some way towards meeting some of the hon. Gentleman's concerns.

Question put and agreed to.

Clause 256 ordered to stand part of the Bill.

Clause 257

Andrew Lansley (Conservative, South Cambridgeshire)

I beg to move amendment No. 303, in

clause 257, page 225, line 43, leave out subsection (2) and insert—

'(2) The public service remit for every Channel 3 service is the provision of a range of high quality and diverse programming which, in particular, makes a significant contribution to meeting the need for the licensed public service channels to reflect the tastes and interests of different communities and cultural traditions within nations and regions of the United Kingdom.

(2A) The public service remit for Channel 5 is the provision of a range of high quality and diverse programming.'.

Roger Gale (Conservative, North Thanet)

With this it will be convenient to take the following: Amendment No. 467, in

clause 257, page 225, line 43, leave out subsection (2) and insert—

(2) 'The public service remit for every Channel 3 service is the provision of a broad range of high quality and diverse programming, including factual and entertainment programmes, in a manner which—

(a) satisfies the tastes and interests of the part of the United Kingdom for which that service is licensed, and

(b) reflects the regional diversity of the United Kingdom.'.

Amendment No. 347, in

clause 257, page 225, line 46, at end insert 'including, in respect of Channel 3, a substantial proportion of programmes made in the regions and nations of the United Kingdom outside the M25 area'.

Amendment No. 393, in

clause 257, page 225, line 46, at end insert 'including, in respect of Channel 3, a substantial proportion of programmes made in the regions and nations of the United Kingdom outside the M25 area'.

Amendment No. 528, in

clause 257, page 225, line 46, at end insert—

'(2A) In fulfilling the public service remit under subsection (2), every Channel 3 service shall have regard to the need for Channel 3 services (taken together as a network) to provide distinct regional programming, including regional programme production.'.

Andrew Lansley (Conservative, South Cambridgeshire)

We have already debated some of the same purposes under clause 256, so I will not repeat the arguments, not least because I could not do it as well as most of the hon. Members who have contributed, especially my hon. Friend the Member for Ryedale. I do not want to depart from the points that my hon. Friend made. His remarks were apposite to the issue of trying, under clause 256, to create a structure of quotas—even if those were not technically quotas—in expectation of relatively large requirements that were no longer in balance with the commercial imperatives that fall on the commercial channels. The purpose of clause 257 is subtly different. It does not seek to consider public service broadcasting in the round; it seeks to begin the process of winnowing down to the specific obligations of the individual channels that are licensed for the purpose. I shall refer briefly to other amendments in the group, before returning to why I think that amendment No. 303 has merit.

Amendments Nos. 347 and 393 relate directly to some of the same issues as amendment No. 303 and it seems inappropriate to include those for two reasons. First, as the Minister explained in his conclusion on the last debate, subsequent clauses give Ofcom every opportunity to set out in detail quotas for regional programming outside the M25 for particular channels, and those refer separately to Channels 3, 4 and Five. Indeed, if the amendments are accepted, the clause would provide the opportunity for Ofcom to do that in relation to the quantity of programming and the number of production centres for each of those channels. That would be an acceptable way of dealing with matters subsequently. However, that seems inappropriate, because the clause ought to be about the channels focusing on their public service remit and on what is delivered to viewers.

Considering the matter from the remit of viewers rather than the process of production, amendments Nos. 347 and 393—and others—are better directed to clause 276 and subsequent clauses. Otherwise, they will confuse the issue of the process of production with the nature of the programming received by the viewer, which is what we should be focusing on as the central remit.

Simon Thomas (Plaid Cymru, Ceredigion)

I understand the hon. Gentleman's point, but surely the issue is not quite as simple as that. It is not possible for Channel 3, as the regional broadcaster for the United Kingdom, entirely to

divorce what is delivered to the viewer from the fact that it is a regional production. Its programming must reflect a region to meet the public sector remit. Although I understand the points that the hon. Gentleman makes about the amendments, I do not think that he has encapsulated the reason why they are not relevant to clause 257.

Andrew Lansley (Conservative, South Cambridgeshire)

There is a risk that we will start to dance on pinheads. My point is not that the issues are divorced, but that the Bill addresses them in separate places, and it is better not to consider matters under clause 257 if they are subsequently explicitly addressed under clauses 276 et sequentia. The hon. Gentleman and other hon. Members have tabled amendments that are designed to achieve specific purposes that relate to those clauses. I share with the Minister the view that those amendments would be better dealt with under those clauses than under clauses 256 or 257.

However, I do not depart from the hon. Member for Ceredigion on the underlying point that he might press me on, which is that we need to be aware of how viewers perceive the channels that are licensed for a purpose, and I am glad that the hon. Gentleman is a co-signatory to amendment No. 303. Regional production might well be necessary to secure regional programming; I do not dispute that. However, in considering the remit of Channel 3, we do not want to get into the business of trying to set quotas for regional production. I think that Channel 3's remit should be narrowed down in terms of the nature of the channel that people watch. That is what I am trying to do through amendment No. 303.

I do not know the views of my hon. Friends on the Front Bench on amendment No. 303; I wait to hear it. However, I urge them to find it acceptable, because it is not designed to impose additional burdens on Channel 3. My hon. Friend the Member for Ryedale quoted at length from Mr. Desmond's article in the Westminster Media Forum publication, and from what my hon. Friend says, it seems that Mr. Desmond was speaking of the sense in which Channel 3 is distinctive and has a distinctive remit, but is commercially desirable, and it would want to pursue that direction. My hon. Friend the Member for Ryedale then put this question to us: if it is in the commercial interests of Channel 3 to pursue regional and community diversity, why do we need to specify the need to do so in the Bill? Why do we not simply rest upon what is in the Bill, which mentions

''high quality and diverse programming''?

Why do we need to go further?

The answer is, of course, that the nature of legislation is not optimistic. We do not write legislation on the basis that everyone is going to behave well. We write legislation in the way that people should write contracts: although we may be ashamed that we should have to do so, we write it on the basis that things will break down or go wrong, that people will not do what they are supposed to do, and will not necessarily behave as we anticipate, and that circumstances, including commercial circumstances, can shift.

It is true that Channel 3—and other channels, although I am focusing on Channel 3—receives substantial benefits. We give Channel 3 access to frequency spectrum and specific free-to-air status. We give it must-carry obligations. We give it all those things, and we expect something in return, and it is important that we are clear in the Bill about what that is.

John Greenway (Conservative, Ryedale)

I am fascinated by my hon. Friend's argument, and I think that what he wants in return is the type of commitment demanded in his amendment, about which I have an open mind. I should remind him and the rest of the Committee that there is a substantial licence fee for the spectrum of Channel 3.

Andrew Lansley (Conservative, South Cambridgeshire)

Yes, Channel 3 companies pay for the spectrum among other things when they bid for the franchise. However, that is part of a general obligation. The purpose of clause 257 is not only to reflect what we understand to be the nature of the licence currently enjoyed by the Channel 3 network, but our expectations regarding Channel 3 licences in the future. In the previous debate, the hon. Member for North Devon made it clear that the amount that licence holders are willing to bid in future will be affected. If we were to construct the public service remit in a manner that was flagrantly uncommercial, we would run the risk of inadequate or very low bids for the franchise.

I propose not imposing anything remotely like that burden, but something that is entirely consistent with what Channel 3 may well wish to pursue. The BBC has extended in just such a direction using its advantageous resources. The point is not that it is doing marginal and peripheral things using money that it has to spare, but, in my experience, that the BBC is using the resources available to it to extend market share. It is doing that successfully in relation to some regional and community-based culturally diverse programming.

Amendment No. 528 makes the same point as amendments Nos. 347 and 393 and would add nothing new that cannot be specified in subsequent clauses. It is therefore unnecessary to specify them in the remit. Amendment No. 467 is intended to meet much the same purposes as amendment No. 303. However, I fear that it has the presumably unintended, but perverse, effect of leaving out subsection (2). The amendment refers only to a public service remit for Channel 3, and therefore excludes a public service remit for Channel Five. The amendment should be rejected because it is defective and the debate should be confined to amendment No. 303.

Amendment No. 303, refers to

''provision of a range of high quality and diverse programming''.

Are those the right words, and should they apply equally to Channel 3 and Channel Five? I am surprised by the choice of words because the general duty of Ofcom stated in clause 3(1)(c) is

''to secure the availability throughout the United Kingdom of a wide range of television and radio services which (taken as a whole) are both of high quality''

and

''calculated to appeal to a variety of tastes and interests''.

''High quality'' is included in the definition, but there is no mention of ''diverse''. The public service remit for Channel 4 referred to in clause 257(3)(b) requires Channel 4 to produce programmes that appeal to the

''tastes and interests of a culturally diverse society'',

but there is no reference to the

''variety of tastes and interests''

that are to be met under the remits for Channel 3 and Channel Five. That is a deficiency. I might be proved wrong, but I do not believe that ''diverse'' has been defined elsewhere in the Bill, although I had better check clause 348, just in case—I cannot see it there, which is a relief. If ''diverse'' is not defined in that clause, why is it used in clause 257?

I am not sure whether my recollection is correct, but we have got on to broadcasting and I think that I am the first person to use the word ''genre''. I should get a point for that. One could argue that the ''diverse programming'' referred to in the clause relates to diversity in genres of programming. That may well be a mechanism by which one could appeal to a variety of tastes and interests, but it is not the only one. There is a risk in the definition of ''diverse''. It could mean anything—any combination of programming could be ''diverse programming''.

What do we want Channel 3 and Channel Five to do? The word ''diverse'' in the clause could indeed mean that different genres are required. Channel Five is a national channel, and trying to impose on it other forms of differentiation in order to secure the objective of reflecting a variety of tastes and interests may be inappropriate. Channel 3 is not like Channel Five. It has specific structures and obligations, which must be reflected in a different remit. The first part of amendment No. 303 separates Channel 3 and Channel Five. Leaving the public service remit for Channel Five in the form that the Government propose would then be fine.

If Channel 3 is to have a different remit, what should it look like? Trying to answer that question led me to use, in amendment No. 303. the words:

''to reflect the tastes and interests of different communities and cultural traditions within nations and regions of the United Kingdom.''

It will be obvious to hon. Members that that reference to ''cultural traditions'' could be held to duplicate the words of the remit for Channel 4. However, in so far as we reflect the tastes and interests of different communities, we do so not least to reflect cultural traditions. Doing that in relation to specific regions is quite important.

Channel 4 is a national channel that cannot offer a different service to each region. Cultural traditions in the different regions of the United Kingdom ought to be reflected by Channel 3 as well as by Channel 4. I am not suggesting that we should impose quotas, but it is reasonable that different traditions should be reflected. Amendment No. 303 sets the tastes and interests of different communities and cultural traditions in the context of the nations and regions of the United

Kingdom. That is different from Channel 4, which does so throughout the United Kingdom as a whole.

It would seem useful to steer Channel 3 in the direction of making distinctions among the viewing public. There is nothing in the amendment that would limit the way in which Channel 3 did that. If Ofcom saw Channel 3 as complementary to Channel 4, it would consider the relationship between the two channels, and consider whether, when taken together, they met the obligation to provide a variety of programming that reflected the tastes and interests of different communities and different cultural traditions around the United Kingdom.

Kim Howells (Labour, Pontypridd)

I am sure that the hon. Gentleman will agree with this, because he sort of said it a few moments ago. The difficulty that the Committee will have with amendment No. 303 is the part that states:

''reflect the tastes and interests of different communities and cultural traditions.''

I know what he is getting at, but he reminds me of the discussion that we had about where the M25 region is. The hon. Gentleman understands the commercial sensitivities of running a Channel 3 operation, but does he understand that the wording of his amendment could be interpreted in all sorts of different ways?

Andrew Lansley (Conservative, South Cambridgeshire)

Yes, the amendment could be interpreted in a number of different ways. However, it hinges on the reference to

''nations and regions of the United Kingdom.''

It is possible to say that the reference to different communities and cultural traditions could relate to Wales, which has a different community with a different cultural tradition and which is a nation in the United Kingdom. The amendment hinges on differentiation by nations and regions.

I do not argue that the drafting of the amendment is necessarily perfect, but it cannot be argued that it is defective just because it could be open to different interpretations. The word ''diverse'' can be interpreted in any number of ways and might be equally defective, but narrowing down could make things too precise. There is a point between the word ''diverse'' and the reference to different communities and different nations and regions of the United Kingdom that properly reflects the distinct nature of the public service remit of Channel 3, which is clearly different from that of Channel Five.

Michael Fabricant (Conservative, Lichfield)

I was fairly sympathetic to the amendment until the Minister raised his interesting point. There is a large immigrant community in many parts of the United Kingdom, especially parts of the west midlands. By using the phrase

''different communities and cultural traditions within nations and regions of the United Kingdom''

might not the amendment specifically exclude new immigrant communities? If not, does my hon. Friend think that the amendment would create an obligation to provide substantial amounts of programming for immigrant communities, which might well jeopardise the financial viability of a Channel 3 operator?

Andrew Lansley (Conservative, South Cambridgeshire)

The answer to the first question is no. The amendment would not preclude the provision of programming geared toward specific communities, including recently arrived communities. On the second question, I doubt whether commercial viability would be prejudiced. If one established a public service remit in such a form, there could not be a quota. That could develop only over time as Ofcom examined the way in which statements of programme policy and practice for Channel 3 were followed through. Ofcom would be able to report on that and make recommendations under clause 256—it could say that there was too much or too little programming, or that the right or the wrong balance had been struck. Under clause 256, Ofcom must have regard to costs and commercial implications.

Kim Howells (Labour, Pontypridd)

Will the hon. Gentleman give way?

Andrew Lansley (Conservative, South Cambridgeshire)

Let me respond to my hon. Friend, and then I will give way to the Minister.

Channel 3's present activities illustrate one possible response to the requirement forming part of its remit. Anglia Television is the example that I know best. It is often able to divide the Anglian region and focus on the eastern side of the region, where there is a significant Asian community in and around Luton. That demonstrates the opportunity for a Channel 3 licence holder to target programming, which is probably in its commercial interest.

Michael Fabricant (Conservative, Lichfield)

I understand that, but everything has a cost, especially if one subdivides an ITV region. It is an unfortunate fact that popular programmes—we are not dealing solely with news and current affairs programmes—that star black actors, such as American television soaps shown in the United Kingdom, tend not to attract white audiences. That is a shame, but it is a fact. Would the obligation extend not only to current affairs programming, which I suspect is the programming by Anglia Television to which he referred, but to the production of soaps? My hon. Friend the Member for Ryedale suggested that ''Emmerdale'' and ''Heartbeat'' reflect areas. What about a Bradford-based Asian soap?

Andrew Lansley (Conservative, South Cambridgeshire)

There is a risk that my hon. Friend will take me into ''EastEnders'' territory again, although I have not seen the programme recently and I have not watched it sufficiently to speak about it knowledgably. I understand that there is a debate about the extent to which ''EastEnders'' reflects the circumstances of an Afro-Caribbean family, but that has not, to my knowledge, affected the audience figures, which seem to be around the 14 million mark. The audience exists, so I do not agree entirely with the hon. Gentleman's point—

Jim Murphy (Labour, East Renfrewshire)

Hon. Friend.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend—I thank the silent one.

The theoretical debate about the structure of the amendment is as follows. It is impossible that one could construct an argument saying, ''Because the public service remit of Channel 3 says this, therefore the content of 'Crossroads' should be that.'' The two things are too far apart and there are too many

intermediate stages to be able to relate them directly. Too many proper, subjective, judgments would have to be made by the relevant Channel 3 management and by Ofcom, and those bodies would have to behave in a way that strikes me as irrational.

Parmjit Dhanda (Labour, Gloucester)

I must remind the hon. Member for Lichfield of the quality of many programmes, such as ''The Fresh Prince of Bel-Air'' and ''The Cosby Show'', which were popular across the board. We do not say that British people would not watch American programmes because they feature American people, and I do not think that they would not watch programmes about black or Asian people.

The hon. Member for South Cambridgeshire made an interesting point, but does he not feel that, because an ITV franchise must be aware of what is relevant locally, the amendment is unnecessary? One reason why Anglia aims its programming at the Asian community in Luton and Bedford is because it is aware of what is relevant to the people who live there and aware of that environment. There is no need for such a provision in the Bill.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to the hon. Gentleman, who challenges me on the point that I made earlier. In setting out the remit of Channel 3, the objective should be to reflect its current best practice. I would have drafted the amendment wrongly had I attempted to impose on Channel 3 a structure of programming and activity that was against its commercial interests and contrary to its current best practice. I do not seek to do that. We should not include in the Bill a provision so vague that it has no genuine impact and hope that the other provisions of the Bill, or Ofcom's interpretation of clause 256 over time, will force Channel 3 to do what we want. It would be far better to make clearer our understanding of the nature of Channel 3 and its differentiation.

Kim Howells (Labour, Pontypridd)

I do not want to detain the Committee with too many interventions, but I have written down ''Monarch of the Glen'', which was a series that I enjoyed a lot as I did the ironing on Sunday night. That high-quality production was made, I believe, by a good independent company; it was commissioned by BBC Scotland, but it could have been commissioned by the Channel 3 companies. I am not sure where that programme stands in relation to the hon. Gentleman's desire to see particular cultures reflected in programming. Some might argue that that programme had something to do with the highlands of Scotland and its culture, whereas others would say that it was a complete fantasy and that it perpetuated a wholly inaccurate cultural image of Scotland. Does the hon. Gentleman see what I am getting at? One can start to drift into difficult areas when trying to define what constitutes a real reflection of the culture of a region rather than a producer's fantasy, even though the latter might be massively entertaining.

Andrew Lansley (Conservative, South Cambridgeshire)

That is an interesting question, but it is not strictly relevant. Although Channel 3 could have made that programme, it was the BBC that did so. I suspect that Channel 3, had it made that programme, would have argued that it did reflect the different

cultures of the nations and regions of the United Kingdom, and we could have debated that, but a whole body of programming, rather than a single programme, would be needed to justify that argument. With respect to the Minister, the debate is much more about issues such as the subdivision of channels and the ability to offer programming that is particular to parts of regions, or that reflects the interests of, for example, specific ethnic minority groups within regions. That is a part of Channel 3's responsibility, and Channel 4 simply could not do it.

I have talked for too long, but although I do not want to delay the Committee unduly, I wish to make another point. I do not insist that the wording of amendment No. 303 provides the right way to achieve the desired ends, but I am convinced that it is right to differentiate Channel 3 from Channel Five and to include in the Channel 3 remit the requirement that it should seek to meet a variety of tastes and interests in a way that reflects the diversity of the areas that it serves. I do not think that that requirement is included in the current public service remit for Channel 3, and it ought to be. I want the Minister to say, ''We might not accept this amendment, but we would accept one that moves in that direction.''

Simon Thomas (Plaid Cymru, Ceredigion)

I support amendment No. 303, and I am delighted that the hon. Member for South Cambridgeshire tabled it. However, I wish that the hon. Member for Glasgow, Anniesland were present, so that I could welcome the hon. Member for South Cambridgeshire to the nationalist camp, as the amendment talks of the

''nations and regions of the United Kingdom.''

That is an important phrase; it is reflected in the Independent Television Commission document to which the hon. Member for Ryedale referred, and it is part of the ecology of the broadcasting of Channel 3 in particular.

The hon. Member for South Cambridgeshire made a thoughtful contribution. It set out for the Minister the challenge that is offered by part of the Bill. The Bill is flawed: we cannot treat Channel 3 and Channel Five in the same way. It is clear that the public service remits that should be applied to each of them should be different. The reason for that is partly to do with reach. I am told that Channel 3 has 100 per cent. reach, while Channel Five has about 80 per cent.—it is not very common in west Wales, where it is difficult to receive outside Aberystwyth. The reason for that is also partly to do with audience share: Channel 3 often beats the BBC. It can easily achieve 25 or 33 per cent. of the audience. Although Channel Five has increased its audience share, it is still at about 8 per cent.

They are very different channels: we might recognise that when we come to discuss cross-media ownership later on in our scrutiny the Bill. Therefore, it is important that the Bill includes a specific public service remit for Channel 3 that reflects its role as the regional independent broadcaster for the United Kingdom. The exact wording to achieve that can be argued about, and I listened with interest to the debate between the Minister and the hon. Member for South Cambridgeshire. The Minister made a fair point. I am

also unsure what ''cultural traditions'' means; does it refer to ''How Green Was My Valley'' in Wales and ''Last Of The Summer Wine'' in Yorkshire? Many kinds of stereotypes could be brought under the term ''cultural traditions''.

However, it is important that

''the tastes and interests of different communities''

and the

''nations and regions of the United Kingdom''

are reflected.

Those are the two most important elements that must be addressed in this part of the Bill. That is why I tabled my amendment and supported the Liberal Democrats' amendment—I wanted a belts-and-braces approach on this matter, because I thought that it was very important to get something through. However, the amendment tabled by the hon. Member for South Cambridgeshire is the best of the lot, and if the Minister were minded to agree to it, I would be happy to support it, and not to press my amendment to a Division.

The key point is that Channel Five is currently a niche broadcaster and Channel 3 is our independent regional broadcaster for the entire UK. We will discuss later whether there should be quotas—whether substantial words like that should be used with regard to programming and programme-making. The hon. Gentleman put it well when he said the clause does not cover regional programme-making elements, but only how viewers receive their Channel 3 service. As viewers see it in the round throughout the year, it must reflect their tastes and interests and the particular aspects of their region, such as a particular language community or an Asian or black community. Such interests must be brought across in the service.

I do not have great trust in what may be happening in the ownership of Channel 3. Perhaps I am too much of a sceptic. It is important to put in the Bill our expectations of regional, national and taste aspects of Channel 3. We cannot accept that that will just happen as of right. The hon. Member for North Devon said that a prospective purchaser or new owner of Channel 3 needs to know what he is buying into. Clever lawyers employed by rich people can certainly dance their way through this part of the Bill and say that it is just like Channel 5. Goodness knows what is portrayed after 10 pm on Channel Five, but no doubt it reflects the interests and taste of some people. It certainly does not reflect regional and national interests or tastes.

I hope that the Minister accepts the spirit of amendment No. 303. If the exact wording is not to his taste and does not reflect his regional aspects, perhaps he will return to the matter on Report. We must crack the problem. We cannot let the Bill go through with the same wording for Channel 3 and Channel Five. It will not sufficiently recognise the unique regional position of Channel 3 and the role that it plays in our public life.

Roger Gale (Conservative, North Thanet)

Order. I am seeking properly to construct within the confines of the timetabling that has been agreed circumstances in which the Committee

can properly discuss all the clauses that have to be reached by not only the end of today, but the end of our sitting on next Tuesday morning. The Committee is debating remit at the moment. I expect that standards, which are covered by clauses 307 to 316, will be reached probably late on Thursday afternoon or next Tuesday morning. It is abundantly clear to all of us that those two issues are linked. I also know that hon. Members will wish to raise certain further issues that are relevant to the BBC.

I shall not be in the Chair until after such discussions have taken place on Tuesday afternoon. I therefore propose to tell Mr. Atkinson that I have said to the Committee that, within common sense and good order, such debates shall range reasonably freely. I hope that that will enable members of the Committee, while dealing with individual clauses and amendments, to cover the appropriate issues, and that that will be acceptable to both the Minister and the Opposition.

Parmjit Dhanda (Labour, Gloucester)

Without wanting to revisit all the arguments that were employed during the debate on clause 256, my hon. Friend the Member for Glasgow, Anniesland and I tabled amendment No. 393 on regional programming and the M25. Regional programme production is a defining characteristic of ITV. No one would disagree that its advantages have been enormous. However, the strong heritage of ITV regional production is, in many respects, in decline and, worringly, under further threat. As ownership in ITV has merged, we have seen regional production slowing down, under-investment in regional programming, the withdrawal of some ITV companies from network production and a more narrow range of programme genres—I wanted to slip in that word, even though it is not the first time that it has been used today. Fewer programmes are being produced regionally and decisions and commissioning are increasingly being concentrated in London. There have also been large-scale redundancies and studio closures and, as I mentioned under the previous clause, that is of particular concern to the trade unions involved. The proposed merger of Granada and Carlton and the Bill's loosening of ownership regulations provide a potentially huge impetus for centralisation of production in ITV at the expense of the regions. That is an important point that was not touched on in our debate on the previous clause: four franchises made no programmes for the network in 2000. Tyne Tees TV's output suffered a collapse of 94 per cent. from 92 hours in 1994 to just six hours in 2000. Yorkshire Television's production shrunk from 204 hours to just 156 hours during the same period. In the light of that, ITV's regional production base will be secured only by strong regulatory requirements, hence amendment No. 393. I would argue that the amendment is strongly formulated and is the only one that would take into account the economic, as well as content, value of regional programming by requiring the channel to make a commitment to

''a substantial proportion of programmes made outside the M25''.

We are looking beyond the benefits of viewers at those who work in the industry as well. This extra step would help to sustain jobs, ensure the future security

of skilled labour in the regions and take into account the spin-off effects of keeping jobs in the regions.

The ITC recently commissioned a big study into the value to regional economies of keeping the production of regional programmes in the regions themselves. It demonstrated that for every £1 spent on regional programmes, two-and-a-half times that amount was generated and put back into the local economy. In other words, the multiplier effect leads to ancillary social and economic benefits that the other amendments do not take into account in the same way. I hope that the Minister will give that full and proper consideration.

Nick Harvey (Liberal Democrat, North Devon)

I support the amendments—especially amendment No. 303, because, as the hon. Member for South Cambridgeshire said, amendment No. 467 is flawed in that it would inadvertently remove the remit from Channel Five.

The purpose of amendment No. 528 is to examine Channel 3 as a network, rather than considering it only in terms of individual regional licences. Now that we are going to allow for the possibility of a single ITV company, I would instinctively have been more comfortable if the Bill had started by viewing Channel 3 as an entity. However, of course there is no guarantee that there will be a single ITV company just because it is allowed, so for the time being there is no choice other than for the Bill to be constructed in the way that it is.

Michael Fabricant (Conservative, Lichfield)

Is it not the case that even if ITV becomes a single company—and there is no definite projection that it will be sold, although it is likely—Ofcom will still grant individual licences, which will prevent the 24-hour networking that the hon. Gentleman mentions?

Nick Harvey (Liberal Democrat, North Devon)

I agree entirely. I did not mean to suggest anything different. Nevertheless, in considering the remit, particularly on the basis to which the hon. Member for Ceredigion referred and I mentioned in relation to the previous group of amendments, we should bear in mind that a new American owner would need to understand from the top line what it is buying. That is why Channel 3's remit should include a regional commitment.

I should like to return to the White Paper where the Government said that the ITV companies

''should continue to have a key role in delivering public service broadcasting . . . Obligations will focus on the core requirements: a strong regional focus including regional production and commissioning, a diverse, high quality schedule including news and current affairs and original production, educational programmes, children's programmes, religious programmes and coverage of arts, science and international issues.''

That is laudable stuff but it is a far cry—acres, light years away—from the flimsy little remit that the clause gives to Channel 3. In that respect the clause does not adequately give to the owner—

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee E

Clause 257 - Public service remits of licensed providers

Peter Atkinson (Conservative, Hexham)

I remind the Committee that with this we are discussing the following:

Amendment No. 467, in

clause 257, page 225, line 43, leave out subsection (2) and insert—

'(2) The public service remit for every Channel 3 service is the provision of a broad range of high quality and diverse programming, including factual and entertainment programmes, in a manner which—

(a) satisfies the tastes and interests of the part of the United Kingdom for which that service is licensed, and

(b) reflects the regional diversity of the United Kingdom.'.

Amendment No. 347, in

clause 257, page 225, line 46, at end insert

'including, in respect of Channel 3, a substantial proportion of programmes made in the regions and nations of the United Kingdom outside the M25 area'.

Amendment No. 393, in

clause 257, page 225, line 46, at end insert

'including, in respect of Channel 3, a substantial proportion of programmes made outside the M25 area'.

Amendment No. 528, in

clause 257, page 225, line 46, at end insert—

'(2A) In fulfilling the public service remit under subsection (2), every Channel 3 service shall have regard to the need for Channel 3 services (taken together as a network) to provide distinct regional programming, including regional programme production.'.

Nick Harvey (Liberal Democrat, North Devon)

When we broke, we were discussing the remit for Channel 3, which is very limited in scope compared with the Government's aspirations for the channel in their White Paper. What Channel 3 is and what it does is of critical importance to the future of all public service television. The Government and others have observed many times that we have what is fashionably called a broadcasting ecology, in which developments by one broadcaster affect the behaviour of others. For the time being at least, Channel 3 remains the second biggest UK television channel. It is the principal competitor to

BBC 1, and an advertising competitor to Channels 4 and Five.

It could be argued that the Broadcasting Act 1990 significantly lightened the regulatory grip on Channel 3, and has resulted in what many of us would see as several adverse developments. There has been a retreat from social action programming, the removal of serious factual programming from the evening schedules and a general reduction in the quality of ITV's news and current affairs programmes. During that period, ITV has moved towards being a predominantly, or solely, commercial centralised channel, rather than a strongly public service oriented network of regional production companies, which had been its tradition and history.

The effect of those developments has been felt across the board. As a result of what has happened to ITV, the BBC has retreated from some of the things that it did before that time. Last year, Patricia Hodgson of the Independent Television Commission said:

''The ITC has just published the conclusions of a four year analysis of peak-time schedules on the main British networks. It shows: diversity across all UK terrestrial channels taken as a whole has narrowed; programmes of minority appeal—notably arts and current affairs—are being pushed out of prime time; whilst the share of peak-time occupied by entertainment programmes has increased.''

That is damaging to the overall ecology of public service broadcasting. If we look forward to a situation where an American owner might own a single ITV company, it will be important that such an owner understands what is expected of them from the outset.

It is odd to me that the clause couches the remits for Channels 3 and Five in exactly the same terms. It is absolutely remarkable that anyone should view those two services as being of like nature, or of equal scale and ambition. If Channel 3 is going to operate in the future on so minimal a remit, the prospects for holding the BBC, or Channel 4 for that matter, to its public service mission would be very much reduced. The Government should be held to their commitment in the White Paper:

''ITV companies will continue as the main commercial providers of public service broadcasting, before and after digital switchover''.

That is fundamentally different to the role of Channel Five and it requires a much stronger remit.

The Joint Committee, encouraged by the ITC and ITV, recommended a mildly strengthened Channel 3 remit. The amendments are rightly intended to add somewhat to that remit. The requirement to reflect the diversity of the United Kingdom and the programme making that goes on in the regions and nations indicates that a significant part of the regional programming quota should be used to reflect regional diversity.

Although we must be wary of being too prescriptive and having a Channel 3 remit that runs to great length, I say again that if a new American owner takes over Channel 3, it should understand what it is taking over from the word go and from the first line of the remit. That should apply not only to individual regional licences, but to the network as a whole.

We have continually heard the argument that regional programming does not simply mean programming for the regions, but can, and should, mean programming for the network that is of a regional character. People can point to ''Coronation Street'', or other programmes that are made by regional companies for the network, as being part of ITV's strength. The programmes drawn from regional production bases are valuable to the network as a whole. That is why amendment No. 528 addresses the ITV network and does not simply dwell on the issue of regional licences. I look forward to hearing the Government's stance on the points that my colleagues have made.

Clearly, the remit is not the only part of the weaponry with which the regulator will hold ITV and, in particular, any new American owner of ITV, to account. There are other opportunities provided by clauses to which we will come presently. However, the remit is very important. It is the overall mission statement and the raison d'être for the station. If Channel 3 is going to be as important in the future as it has been in the past, the remit for ITV needs to be a lot stronger and a lot more comprehensive than these few throwaway lines that relegate it to the significance of Channel Five. Surely it is of far greater importance to our broadcasting ecology than that.

John Whittingdale (Conservative, Maldon and East Chelmsford)

We should express our thanks to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), who has attempted to set out a definition of the public service remit for Channel 3. The result is probably about as good as one can get in a few words. I share the surprise, which was expressed on both sides of the Committee, that, under the Bill, public service remits for Channels 3 and Five appear to be the same. I remember the debates that took place when Channel Five was set up and I do not recall that it was intended that it should have the same public service remit as Channel 3. It was a new fledgling channel and its public service obligations were not as strong as those on Channel 3; that was correct. The Bill should reflect the fact that there are expectations on Channel 3 that go beyond those on Channel Five.

Michael Fabricant (Conservative, Lichfield)

Would my hon. Friend agree that, in those debates, it was not just a question of a possible different emphasis in the public service remits of Channels 3 and Five, but of a fundamental difference, given that Channel Five is a national network without regional variation, whereas the whole strength of Channel 3 is its regional variation and ITV licence structure?

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend is entirely right. Some of us attended the reception given by ITV and ITN last night. It was encouraging that ITV saw its regional commitment not as an obligation that had to be met, but as a real strength and advantage. It not only welcomed its obligations to serve the regions, it saw those obligations as fundamental to the whole role of Channel 3. All of us welcomed that acknowledgement.

I want to touch on the issue raised by my hon. Friend the Member for Ryedale (Mr. Greenway) in considering the earlier group of amendments. He mentioned the difficulties under which Channel 3 operates. When Channel 3 was originally launched, with very strong public service obligations, it was a completely different world. We were operating with a limited spectrum and only two, and then three, television channels were available. The fact that it was thought necessary for Channel 3 to be subjected to strong public service obligations was an acknowledgement of that, and I think that we would all agree with it. Since then, we have moved steadily further toward a multichannel world, which is putting great pressure on ITV. Recently published viewing figures for Christmas week showed that ITV's share had fallen below that of the multichannels for the first time. That is a significant development that is indicative of the pressure that ITV is under and the increased competition that it will inevitably face because many more channels are available and there is much greater choice for the viewer.

On top of that, it has been reported that ITV's share of the advertising market from end-of-year deals is down. The advertising market is not exactly robust at present and if ITV takes a smaller share, which is not surprising because so many more channels want to carry advertisements, it will be put in a difficult position. My hon. Friend the Member for Ryedale was right to say that if ITV's public service obligation is strengthened, there is a real danger that it will be subjected to a squeeze with decreasing revenues due to such factors as a smaller share of advertising market but at the same time it will have to spend more on meeting its public service obligations.

John Greenway (Conservative, Ryedale)

My hon. Friend makes a good point, but may I make one point to the Committee, after which I shall not try to catch your eye, Mr. Atkinson? On Sunday night, ITV showed the first episode of a new programme called ''The Royal'', which was born out of the successful ''Heartbeat'' series. The programme received 11.5 million viewers. Without a doubt, part of its success is because it is a programme made by Yorkshire Television reflecting life in north Yorkshire—which covers a large part of my constituency, and with which you will be familiar, Mr. Atkinson—30 years ago. It is not contemporary drama in that sense, but it is contemporary to when we were children at school. Does my hon. Friend agree that the key issue for the Committee is whether that programme exists because a provision in legislation says that making it is something that ITV must do, or because ITV took the view that the programme would be commercially successful and would redress the balance of the problem to which my hon. Friend referred?

John Whittingdale (Conservative, Maldon and East Chelmsford)

My hon. Friend is right. High-quality programmes that fit the public service remit can attract many viewers, but that will not necessarily always be the case.

Will the Minister consider what will happen when we have digital switchover? When that arrives, ITV will no longer operate as one of the few analogue broadcasters with a limited spectrum. It will have to

survive with all the other channels, but it has been suggested that it should still be required to have a public service remit that its competitors do not. It is difficult to justify that after digital switchover. Does the Minister envisage that the public service remit will be relaxed as we get closer to digital switchover?

I draw Committee members' attention to an interview with Greg Dyke that appeared in the Financial Times last week. He made an interesting comment that might surprise Committee members:

''If you are a commercially funded broadcaster and you lose share year-in and year-out, in the end you fall off the cliff unless you change your cost base. And that's the process ITV is going through . . . You reduce your expenditure on regional programming, you reduce your expenditure on children's programming, you reduce your expenditure on serious programmes. This isn't a criticism that's what they've got to do.''

The director-general of the BBC said that ITV would have no choice but to move away from its public service remit. I was surprised to read that, and I am unsure whether I would agree with him that that is what ITV should be doing, but on the other hand it is a recognition of the fact that ITV is now in a difficult position that is unlikely to improve. Therefore, I agree with the points that my hon. Friend made earlier about the need for us to be careful about loading more and more obligations on to ITV at a time when it is struggling if we wish to see the long-term survival of Channel 3 as a major player in British broadcasting.

Kim Howells (Labour, Pontypridd)

First, I wish to agree with something that the hon. Member for South Cambridgeshire said this morning. It seems as if he said it many hours ago now—days even—but it was a very important point. He reminded the Committee of the distinction between regional programme production—for which quotas are provided under clauses 276 and 278, and which were discussed in relation to previous groups of amendments—and regional programming, which is concerned with ensuring the supply of programmes of particular interest to viewers within the individual regions. Regional programming quotas for Channel 3 are provided in clause 277, which we will come to.

I also wish to add my support to statements that were made by hon. Members on both sides of the Committee Room about the fact that ITV regards its regional structure—and, more importantly in a sense, its ability to conceive and make programmes in those regions—as one of its great strengths. I believe that that is the case. Last night, I was privileged to be present at the celebration of the previous launch of the ITV News Channel—as, I think, were other Committee members. It was remarkable that everyone who spoke said that what made this news channel different from others was the fact that it saw itself as very much rooted in the regions, and that it tries to tap the potential of that and turn it into news, especially with regard to breaking news in the regions: that is another cliché, like ''broadcasting ecology''—I am sure that Committee members know what I mean.

Michael Fabricant (Conservative, Lichfield)

To reinforce the Minister's report, it was interesting that the card that was

produced at the launch of the ITV News Channel describes it as ''a specialist regional news programme'' and that it talks about the strength of the ITV network as being founded on the regions—so, there it is in blue and white, if not in black and white.

Kim Howells (Labour, Pontypridd)

I am grateful to the hon. Member for Lichfield (Michael Fabricant) for that: he is very good at coming up with published statements, and long may he thrive—although not necessarily as an hon. Member of this House.

The full remit for each public service broadcaster encompasses both the tier 2 and tier 3 obligations. Therefore, the remit of Channel 3 is determined not just by the tier 3 requirements imposed under clause 257, but by the various requirements under tier 2, including the regional programme obligations under clause 277.

Channel Five has no regional programme obligations; I believe that the hon. Member for South Cambridgeshire mentioned that first, although other hon. Members also reminded us of it. Therefore, the full remits that apply to Channel 3 and to Channel Five are not identical, as I will try to make clear. The most obvious difference is that Channel 3 is subject to the regional programming requirement that is set out in clause 277. That does not apply to Channel Five, which does not have a regional programming function. That apart, both channels are subject to the various tier 2 quotas, which are confirmed by Ofcom.

Simon Thomas (Plaid Cymru, Ceredigion)

I am afraid that the Minister is undermining his own argument. I thought that during his outlining of the case he had more or less accepted the point made by the hon. Member for South Cambridgeshire that there was a material difference in the nature of programming and programme making. In rejecting the hon. Gentleman's amendment, it seems that the Minister is relying on the programme quota once again and is saying that that is another part of the public remit. Surely, if we are to see that programme-making part reflect properly the regional identity of ITV, it needs to be changed in the tier 3 part and in the other parts that he has already mentioned; otherwise, his acceptance of the hon. Gentleman's argument does not hold water.

Kim Howells (Labour, Pontypridd)

I am grateful to the hon. Gentleman for thinking ahead. I have not rejected anything yet, but I will. Perhaps that is what he means.

Ofcom will be able to set different quotas for each broadcaster, taking account of their position within—if I can use that awful term, since it is becoming normal in this Committee—the overall PSB ecology. The distinction between Channel 3 and Channel Five cannot be properly reflected in that way.

My hon. Friend the Member for Gloucester (Mr. Dhanda) and the hon. Member for Ryedale raised the issue of the economic importance of jobs and I would add to that the importance of many other factors. ITV companies have, in my experience, often been at the centre of the development of creative industries and that is the fastest growing sector in employment terms. It is not just that people are directly employed in that sector, the spin-offs and the partnership work relating to that sector often give a

region a creative identity that it might not otherwise have.

Regional production will be a key feature of the new regime. The tier 2 requirements include a provision for Ofcom to determine regional production quotas in consultation with the broadcasters concerned and to enforce those through the licensing regime or, in the case of the BBC, through the agreement. I hope that my hon. Friend the Member for Gloucester accepts that that will give some protection to jobs in that sector.

I suspect that in the end any of the businesses will survive, or fail, depending on how good they are. We have talked many times during Committee sittings about the new competition that is out there, whether that comes via satellite, cable or terrestrial. No company, however much it is regionally based, will be able to carry parts of its organisation that cannot hack it, or pull their weight. That should worry all of us who care about broadcasting in this country. I believe that the companies will survive; I am convinced that there is a huge amount of creative talent out there. That creative talent must, however, manifest itself in imaginative approaches to the programmes that are made and the way in which those are produced, and so on.

By the way, I attended the launch of the new service last night. Regarding that, I remember when BBC Radio Five Live was launched and everyone said, ''Why on earth would anybody want a rolling news programme? No one will listen to it. They only want to hear the news once every two hours.'' There are currently three rolling television news services—for a while we almost had four—and everyone is confident about them. I understand that 3 million people watch the ITV news channel, Sky News is very good and respected and BBC News 24, after its initial teething troubles, also seems to have a big, consistent audience. We must think about that. I sympathise with trade unions and managers who say, ''We must protect the jobs in that region.'' The best way to protect those jobs is to ensure that they produce imaginative, good programmes, which will sell and be watched. If people do not want to watch them, and no one wants to buy them, they will fail. It is as simple as that. We must do whatever we can through the regulatory system to ensure that they have every opportunity to succeed, but we can never guarantee that success.

Amendments Nos. 303 and 467 seek to give Channel 3 services an obligation to reflect cultural and regional diversity in the United Kingdom. Currently, the Channel 3 and Channel Five remits are to provide a range of high-quality and diverse programmes. Only the Channel 4 remit currently includes an obligation to appeal to the tastes and interests of a culturally diverse society. We had a short debate this morning, largely on the back of the contribution of the hon. Member for South Cambridgeshire, on the difficulty of defining such terms. He put up a very convincing argument.

Amendment No. 393, tabled by my hon. Friend the Member for Glasgow, Anniesland (John Robertson),

amendment No. 347, tabled by the hon. Member for Ceredigion (Mr. Thomas) and amendment No. 528, tabled by the hon. Member for Sheffield, Hallam (Mr. Allan) and moved by the hon. Member for North Devon (Nick Harvey) this morning all seek to include in Channel 3's public service remit, in slightly different ways, an obligation to provide distinct regional programming and programmes made outside the M25 area.

Despite the attentions, as the hon. Member for North Devon put it so vividly this morning, of cunning lawyers who would mangle the remit, terms and license conditions of Channel 3 licences, we believe that the remits for Channel 3 and Channel Five are pretty solid and clearly defined. I know that he will disagree but, in principle, we do not think that those remits should single out particular aspects of the overall public service remit. Channel 4's remit includes innovation, cultural diversity and educational programmes because of the channel's historic role and its distinctiveness in the terrible broadcasting ecology, about which we keep talking.

We do not think it right to apply obligations for cultural diversity, production outside the M25 or regional programming to the public service remits of Channels 3 and Five. Our approach to the qualitative aspects of public service broadcasting is to frame the remits for individual broadcasters in a way that reflects a spectrum of obligations, ranging from the BBC at one end to Channel Five at the other. On that basis, the way in which the Bill formulates the remits of Channels 3 and Five seems to us to be right.

It is not an insult to Channel Five to say that it is at one end of the spectrum while BBC 1 is at the other end. For quite a while, there have been rather better arts programmes on Channel Five than I have seen on BBC 1, although I know that BBC 1 has tried to address that recently. I hope that the Committee catches the drift of my remarks.

Michael Fabricant (Conservative, Lichfield)

The Minister referred to the concerns expressed by the hon. Member for North Devon. Can he confirm that if ITV were sold as one group, the individual regional licences would not change in any way? Is that enshrined in the Bill, so that Ofcom could not change those licences even if, to use the example given, AOL/Time Warner said that it wanted to operate everything from one centre?

Kim Howells (Labour, Pontypridd)

Yes, I believe that that is enshrined in the Bill. I am confident of that and think that the conditions imposed on those licences reflect the desire to ensure that the regional presence and character of ITV continue. I can guarantee that that subject will be open to vociferous and public debate if and when ITV has a single owner. The hon. Member for Maldon and East Chelmsford (Mr. Whittingdale) quoted from an article by Greg Dyke. If a new owner starts to tinker with or rationalise production outside the M25 area, there will be vociferous debate and Ofcom will have the power to do something about it.

All broadcasters will be required to contribute to fulfilment of the overall public service broadcasting remit, which includes commitments to reflect the lives

and concerns of different communities and the different cultural interests and traditions within the United Kingdom. Broadcasters will also be obliged to provide an appropriate range and proportion of programmes made outside the M25 area. I realise that I have not addressed all the issues raised by hon. Members.

Andrew Lansley (Conservative, South Cambridgeshire)

The Minister referred to the requirement on local Channel 3 services to reflect cultural interests and traditions in their areas. Where in the clause is that provided for?

Kim Howells (Labour, Pontypridd)

I am sure that I will receive a note telling me the answer to that and we will debate clause 277 later. In the light of what I have said, I hope that the hon. Gentlemen will withdraw their amendments.

Andrew Lansley (Conservative, South Cambridgeshire)

The Minister will be disappointed in his hope that, although he will live long and prosper, my hon. Friend the Member for Lichfield may not necessarily do so in the House of Commons. I suspect that he will see out the rest of us or turn into a national treasure. He is probably already looking forward to the Broadcasting Act 2025.

I am disappointed by the Minister's reply. He seemed to say, ''Channel 3 is distinct from Channel Five because it has regional production and programming. Those two requirements are expressed in clauses 276, 277 and 278. That is part of the remit, so we do not need to have a different remit in clause 257. So, that is all clear''. However, it is clear only to the extent that clauses 276, 277 and 278 do indeed adequately specify additions to the Channel 3 remit that comprehensively explain the differences between Channel 3 and Channel Five. That is satisfactory only to the extent that it is clear in the structure that is being created in the clauses, as distinct from that in the Broadcasting Act 1996.

If there is a special duty or specific requirements and quotas and there does not need to be an intermediate expression of the remit in order to fulfil the proper hierarchy of responsibilities, that begs the question, ''What is the purpose of expressing the remit at all?'' If it were not there, there would still be requirements on Channel 3, and, if the Minister required it, the licence would be able to take such things into account. It feels as though the remit is being driven by clause 256, and that the remits of the channels are being driven by the nature of the reports and the factors to which Ofcom must have regard.

For example, to return to my point about clause 277, in clause 256(6)(h) one of the ways in which the purposes of public service television broadcasting can be fulfilled is

''that those services (taken together) include what appears to OFCOM to be a sufficient quantity of programmes that reflect the lives and concerns of different communities and cultural interests and traditions within the United Kingdom, and locally in different parts of the United Kingdom''

so we are in the same territory as my amendment.

Ofcom will have regard to such factors: they must be taken into account. Is that requirement laid upon Channel 3 in clause 277? I have looked and I do not see it there. In so far as it is not laid on Channel 3, is it comprised in the remit of Channel 4? Yes, to an extent,

as clause 257(3) refers to the cultural diversity and different tastes and interests included in the public service remit for Channel 4, but not necessarily at a regional and local level. Is there a gap, or will it be sufficient that, if Ofcom must have regard to such matters in its report, Channel 3 will have to follow through? That is not satisfactory. If a wide range of programmes reflecting various tastes and interests are expressed as a general duty, in so far as there are not specific quotas, there should be a general remit to translate that into each of the channels.

Channel 4's specific remit has been recognised from the past and will be carried forward. Channel 3's specific remit to reflect diversity at regional and local level because its networks can divide into local services, too, is not reflected sufficiently into the quotas. It should not be delivered only through quotas. It is not sufficient for such matters to be delivered, simply because Ofcom will report on them.

Kim Howells (Labour, Pontypridd)

The hon. Gentleman is right that that form of words is not contained in clause 277. However, clause 277(7)(a) contains words that should go some way to satisfy him.

John Greenway (Conservative, Ryedale)

The words are contained in subsection (1)(a).

Kim Howells (Labour, Pontypridd)

Yes. I missed that.

Andrew Lansley (Conservative, South Cambridgeshire)

The subsection refers to

''a suitable range of programmes . . . of particular interest''.

I accept that, but it does not contain the diversity that is reflected in clause 256(6)(h), which covers Ofcom having regard to

''different communities and cultural interests and traditions'',

which is much closer to the language of amendment No. 303.

Simon Thomas (Plaid Cymru, Ceredigion)

The Minister is trying to say that little bits of obligations are placed on Channel 3, which must be taken together to form a public sector remit, and on which Ofcom will be charged with reporting. Surely, a way in which to achieve a much more robust and sustainable Bill would be if such matters were brought together in one convenient part of it. The bringing together of all the different bits means that Ofcom will have to scrutinise whether Channel 3 has done this bit or that bit right or met certain obligations, and that will be the weakness in the Bill. It still does not outline the difference between Channel 3 and Channel 5.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to my co-signatory to the amendment. We are of one mind. To cut to the chase, our argument is that the subsequent quota requirements are not necessarily sufficient. The purpose of clause 257 is to set out a general remit, a high level statement about the distinctive character of a channel and its public service obligations, of which subsequent aspects may be specified and to which particular requirements may be attached. Otherwise, the risk is that the only extent to which Channel 3 believes that it has regional and local programming obligations is that specified under clause 277.

If such obligations are not specified by Ofcom, they will not be regarded as part of the remit. The remit

should go wider than what is specified by Ofcom under clause 277. The idea that Channel 4 has a distinctive character that has been carried forward from previous legislation—but Channel 3 does not—seems to be contradicted by our knowledge and experience. Under section 16 of the Broadcasting Act 1990, Channel 3 has a range of specific requirements, most of which have been carried forward under the Bill. The implications of the Act were that Channel 5 had a distinct and separate public service character from Channel 3. I have heard no argument that convinces me that there is not every reason for there to be in clause 257 the intermediate expression between the general duty and some factors that must be specified in quotas, and the distinctive character of Channel 3.

I said previously to the Minister and the Committee that I do not want to press amendment No. 303 to a Division because it is too important a matter for me simply to say, ''I wrote it and therefore it is the right thing.'' It should be the basis of further careful consideration. I hope that the Minister will tell us whether he regards the matter as closed, because we do not.

Kim Howells (Labour, Pontypridd)

I would be delighted to say yes to that. I do not think, to paraphrase the hon. Member for Ceredigion, that the proposal is bits and pieces all over the place, but if the hon. Member for South Cambridgeshire would like me to explain in writing where the remit lies, I will certainly do so.

Andrew Lansley (Conservative, South Cambridgeshire)

I am always a seeker after truth and enlightenment so I will not dispute that, but rather than the matter should be explained to me, I hope that it might be reconsidered by the Government.

Michael Fabricant (Conservative, Lichfield)

Will my hon. Friend give way?

Andrew Lansley (Conservative, South Cambridgeshire)

We should move on. There will be further opportunities to discuss this in the course of our proceedings or on Report. I hope that the Government will consider it further. Most Conservative Members reckon that Channel 3 has a distinctive remit and that it ought to be expressed separately. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 257 ordered to stand part of the Bill.

Clauses 258 to 260 ordered to stand part of the Bill.

Clause 261 - Changes of service policy

Michael Fabricant (Conservative, Lichfield)

I want to raise a brief point that harks back to a debate this morning. Clause 261 and indeed previous clauses mentioned Teletext. I should like the Minister to explain why Teletext is included, but the famous related websites produced and promoted by BBC television and radio, and by Channel 4 and Channel Five, are excluded, because in a way they, too, are the text presentation of services that are related to broadcasters. I am aware that

Teletext is also independent of existing broadcasters, but it is provided by BBC and ITV as well as being an independent service. I hope that the Minister follows my drift.

Kim Howells (Labour, Pontypridd)

I did not entirely, no. I am sure that the hon. Gentleman will explain it further to me, but I think that he will admit that Teletext and the internet are very different things. I appreciate his point about what we see on the screen and what people expect from it, but it would cross rather too far over that wobbly frontier about which we have spoken. I would argue that Teletext is within the remit of the Bill, whereas to step that little bit further over would put us outside that remit.

Question accordingly agreed to.

Clause 261 ordered to stand part of the Bill.

Clause 262 - Enforcement of public service remits

Simon Thomas (Plaid Cymru, Ceredigion)

I beg to move amendment No. 348, in

clause 262, page 230, line 24, leave out from 'serious' to 'and' in line 25.

I do not wish to delay the Committee for too long, but we should consider the import of the clause and my amendment. It would remove from clause 262(2)(a) the words:

''Ofcom are of the opinion that the failure of the provider is serious and is not excused by economic or market conditions''.

I do that because I was struck by the force of the get-out clause, which allows Ofcom not to deal with public service remits if certain market or economic conditions apply. Of course, I accept that market conditions are essential considerations in determining whether Channels 3, 4 and Five meet their public service remits. It may be a long way away—the BBC is not funded in that way at present—but there may come a time when the BBC's public service remit might be dependent on the resources that it gets some other system of funding.

The provision in subsection (2)(a) is covered by subsection (3)(e), which says that Ofcom must have regard to

''general economic and market conditions affecting generally the providers of television programme services or the providers of television multiplex services, or both of them.''

There is therefore a tautology in the clause, in that Ofcom must twice have regard to market conditions. To me, the effect is to make market conditions the supreme factor in Ofcom's considerations. We discussed in previous debates the role of Ofcom as an economic regulator and its role in serving public interests, and I certainly agree that Ofcom must have regard to general economic and market conditions when considering whether a broadcaster has met its public service remit, but I do not understand why clause 262 will not apply if Ofcom simply forms the opinion that the failure to provide is serious. If the failure is serious, perhaps the provider's licence should be removed or other aspects of the service reformed. If there is a general failure in the market conditions, surely that affects all broadcasters, not just the public

service broadcaster. I accept that economic and market conditions are an important consideration for Ofcom, but I am concerned that they are being placed above the public service remit.

This aspect of the Bill comes down to the fact that a long time ago we privatised our spectrum and allowed private companies to use it for entertainment, education and, generally, for profit. In doing so, we set aside certain parts for Channels 3, 4 and Five—though we seemed to slip back on that in the last debate—and we reflect in the public service remits that we give to broadcasters the type of broadcasting environment that we want in order to provide a diverse range of programmes in the different parts of the United Kingdom. It would be a very worrying trend if we were to set all that to one side and say that such requirements can be thrown out if market conditions dictate. I am not aware that that is the current position, but I ask the Minister to give some indication of the ITC's approach to such issues. Our approach over the years has been to say that the public service remit is the overriding principle. Clause 262 seems to make the principle of market conditions more important than that of the public service remit.

While I am happy to accept that Ofcom will take into account market conditions when making any assessment of the failure or otherwise of any broadcaster to fulfil its public service remit, the wording of the Bill places too much emphasis on them. It provides a get-out clause that clever lawyers and accountants could use on behalf of an unscrupulous future owner of one of our independent broadcasters to get out of its public service remit. That would be a sorry day indeed.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

I am sorry that I missed this morning's sitting, but I had to attend the Liaison Committee sitting—that is another hat that I wear.

I, too, was struck by the curious phrasing in the clause. Other legislation shows that it is curious to have so up-front a defence. Imagine that we decided that other offences, such as theft, should be punished unless excused by ''market or economic conditions''. The normal presumption in legislation is that regulatory action should be taken and the defence is set out below; in this Bill, the defence is incorporated into the phrase that instructs the regulator to take action. I would be more comfortable if, as the hon. Member for Ceredigion explained, the clause stated clearly that such enforcement action was anticipated, and then stated that such things as market and economic conditions could and should be taken into account when enforcement action was being taken.

It is also curious phrasing to say that the offence must be ''serious'' but to set no level of seriousness in respect of the ''market and economic conditions''. The clause gives Ofcom quite a high threshold to take action in the first instance against those who are believed to have breached their public service obligations, but those individuals can present almost any form of rationale using ''current economic or market conditions'' as the basis of their defence. There is no suggestion of a threshold for negative conditions and the ''It was the market made me do it, guv''

defence. The clause does not say that the market must be in serious difficulty before that defence is brought into play.

A recurrent theme of our debates has been the difficulties that independent television, especially Channel 3, has recently faced, and we are all sympathetic. We understand that the future might hold revenues seriously declining in the long term, which should provide a defence for, for example, Channel 3 if it were having difficulty fulfilling its public service obligations. However, there would have to be serious difficulty in the market. Given that we have, rightly, not given Channel 3 leeway to drop its obligations in the current climate, the market conditions would have to be even more serious than the current negative market. I do not think that hon. Members on either side of the Committee have suggested that the current difficult market somehow provides Channel 3 with a get-out from its public service obligations, and Channel 3 has not argued for that.

The phrasing in the clause in curious and I hope that the Minister can assure us that we are not providing—I shall not use a clever lawyer's phrase—too easy a defence for cases in which Ofcom should be taking action in the public interest.

Kim Howells (Labour, Pontypridd)

First, I do not think that the defence here is unusual, as the hon. Member for Sheffield, Hallam says it is. Existing provisions on newspaper mergers of the Fair Trading Act 1973 provide the regulator with discretion in certain economic circumstances, as such provisions must.

The hon. Member for Ceredigion helped to start a radio service in west Wales, so he will be the first to admit that if one tries to unpick the equation that makes a successful broadcaster, one finds that one of the chief variables is market conditions. To turn his argument on its head for a moment, to try to ignore economic conditions is ludicrous: we could end up with the best possible regulation, and a perfect defence of public service broadcasting, causing a company to go bust. Where is the sense in that? Clearly, the regulator must look at such situations very carefully.

Amendment No. 348 would prevent Ofcom from taking into consideration whether a licensed broadcaster's failure to fulfil its public service remit might be excused by economic or market conditions.

Michael Fabricant (Conservative, Lichfield)

What the Minister is saying is borne out by history. He may recall that the first two licensed companies ever to go bust under the old Independent Broadcasting Authority were not television, but radio. The first was Centre FM in Leicester and the second was Gwent Broadcasting, not a million miles away from him. That was because of over-regulation in a difficult market.

Kim Howells (Labour, Pontypridd)

I cannot remember exactly why Gwent Broadcasting went bust, but I remember doing lots of interviews about it.

The Bill makes provision for Ofcom to determine not to use enforcement powers if it considers that the broadcaster's failure is serious but is excused by economic or market conditions. That applies both to

the broadcaster's fulfilment of his individual public service remit and to his contribution to the overall purposes of public service broadcasting, on which Ofcom will report no more than every five years. Although we want to ensure that Ofcom has power to intervene when necessary in order to maintain quality, it is neither realistic nor reasonable to ignore the impact of economic and market conditions on the ability of licensed broadcasters to fulfil their remits. As the Committee will appreciate, licensed broadcasters operate in a commercial market and are affected by external market conditions, such as those affecting advertising revenue.

I am not sure whether it was the hon. Member for Ryedale who said this morning that if broadcasters cannot hack it, they should stand aside. That may well be what Ofcom decides. I can see the force of that argument, but we also have to be realistic. As the hon. Member for Lichfield said, there have been cases in which companies have gone bust because of economic conditions, no buyers have come forward, and we have therefore been deprived of a service. Even if a service were inadequate in many ways, I would prefer that it continue to exist.

John Greenway (Conservative, Ryedale)

I agree with the Minister, but the argument goes even wider than he suggested. We are trying to anticipate what will happen in future. I would guess that if anyone asked now whether the term ''diverse programming'' included coverage of sport, the most likely answer would be yes, but it is conceivable that sports rights will become so expensive that Channel 3 will not be able to afford them. Heaven forfend that that should happen, but if it did, Channel 3 would be in breach of the subsection that the hon. Member for Ceredigion wishes to be amended, but for the words that he wishes to delete.

Kim Howells (Labour, Pontypridd)

Absolutely. There has been a recent example of that: a service for which there were high hopes and which had a lot of money invested in it failed partly because of the nature of its contractual relationship with the very bodies—football clubs and their association—that were seen as some of the main drivers for the channel.

Simon Thomas (Plaid Cymru, Ceredigion)

The examples that have just been given are relevant to the debate, but it could be argued that, in the case of ITV Digital, serious business mistakes were made. Too high a price was paid, so in business terms the company was badly led. What comfort can the Minister give that the provisions will not be a cop out for bad business practice by bad holders of franchises, and that they will not enable bad businesses to get out of their public service remits?

Kim Howells (Labour, Pontypridd)

That is a fair point. It would be for Ofcom to determine whether the failure was excused by economic or market conditions, although it would have to consult the relevant service provider before taking enforcement action. I hope that I have answered the point.

I hope that in the light of what I have said, the Committee will agree that the approach to enforcement of public service remits set out in the

Bill is the right one. I hope that the hon. Member for Ceredigion and his supporters will withdraw the amendment.

Simon Thomas (Plaid Cymru, Ceredigion)

The Minister's reply to this short debate has rather oversimplified my position. Let me make it clear that in no sense do I oppose the use by Ofcom of market and economic conditions to consider how a broadcaster has met or not met the public service remit. That is covered in the Bill. Subsection 3(e) gives sufficient protection and comfort to Ofcom and anyone operating under a public service licence in the UK. It lets such individuals know that if there are genuine market difficulties, they will not be pulled out of the game and substituted by another player. However, I am concerned about how open-ended the clause might be in the hands of an unscrupulous operator who has taken over Channel 3 and sucked out its resources to invest overseas, which would leave that public service broadcaster in the UK in a weak position and unable to cope with a public service remit.

Michael Fabricant (Conservative, Lichfield)

The question is not only how unscrupulous a future ITV owner might be, but how gullible Ofcom might be. If one assumes that Ofcom will not be gullible, it will not fall for such a ploy.

Simon Thomas (Plaid Cymru, Ceredigion)

I accept that, but we do not know what Ofcom will be like. One of the difficulties with the Bill is that on several occasions when I and colleagues have raised such questions, the Minister has said that the matter is for Ofcom to decide. I can well imagine that, in two or three years' time, hon. Members will be having Adjournment debates on certain decisions—or non-decisions—taken by Ofcom that they are not happy about, but by then it will be too late, because we are giving Ofcom powers now to take such decisions. Nevertheless, I do not have much support for the amendment at this stage, so rather than detain than Committee, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 262 ordered to stand part of the Bill.

Clause 263 ordered to stand part of the Bill.

Clause 60 - Must-carry obligations

Brian White (Labour, North East Milton Keynes)

I beg to move amendment No. 503, in

clause 60, page 60, line 25, after 'form', insert

', is comprised in the Home Services as defined in the BBC Charter'.

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss the following:

Amendment No. 491, in

clause 60, page 60, line 31, at end insert—

'(g) any local digital television service;

(h) any access radio service'.

Amendment No. 504, in

clause 60, page 61, leave out lines 4 and 5 and insert—

'(a) the extent to which the service contributes to the purposes of public service television broadcasting;'.

Amendment No. 505, in

clause 60, page 61, line 16, at end insert—

'(e) in determining whether it is appropriate for the purposes of subsection (6) to add a service to the list of must carry services, the Secretary of State must, in having regard to the matters specified in subsection (7)(c) and subsection (7)(d), have regard to any representations made by a provider of a network to which conditions set in accordance with this section apply concerning the ability of that provider to use the capacity for broadcasting or transmitting the service by means of that network for another purpose and, in particular, the ability of that provider to derive income from the use of the capacity for another purpose.'.

My co-Chairman indicated this morning that he would be happy to have a wider debate than normal on the first group of amendments dealing with must carry and related matters, but if hon. Members have technical points that they want to raise on subsequent clauses, perhaps they should wait until those clauses are debated.

Brian White (Labour, North East Milton Keynes)

My amendments are a small part of the must-carry debate which will be dealt with through amendments other than mine, which deal with cable and the related list set out in the clause. I would have loved to begin by declaring that NTL provides 40,000 customers in Milton Keynes with digital television but, unfortunately, we are stuck in the analogue mode with little prospect of going to digital, although that is the subject of ongoing discussions.

The reference to the BBC in the clause is intended to narrow its scope to exclude commercial services, such as those produced by BBC Worldwide. My concern, which is shared by several people who have raised the issue, is that there is no reason why the BBC should not produce non-licence fee-funded services that are commercial in nature within the corporation itself. My first amendment borrows language from the BBC charter that refers to ''Home Services'' to deal with the disquiet—I think it is more perceived than actual—that the BBC's commercial ambitions are going to be pushed through with must-carry obligations. The Secretary of State should consider that and be explicit about the BBC's role. As always, I am being helpful to the Government in tabling the amendment. Amendment No. 504 would focus the must-carry obligation more narrowly on public service broadcasting benefits, and by imposing such obligations would ensure that the service has to meet a hurdle that prevents opportunistic attempts to obtain must-carry status on the basis of vague unquantified statements. That would make the process more specific.

I have drafted amendment No. 505 as it is because the Government have made it clear that they intend the opportunity cost of set-aside capacity on cable for must-carry purposes to be addressed in the evaluation. The Secretary of State made a speech about that just before Christmas. Amendment No. 505 makes that point explicit. There are a significant number of economic costs to must carry. Unlike satellite, cable has a dynamic capacity, and the amendment addresses that issue. Although the must-carry list may not be a problem at the moment, if it were substantially to expand, the anomaly could begin to damage the cable sector. Simply to prove how prescient the cable

operators' fears are, I suggest in amendment No. 491 increasing the items included in must carry. That follows on from last Thursday's debate on the problems that community media have had in negotiations on access to the cable network.

In conclusion, the cable side of must carry is key. I look forward to the Minister's response, which will allow us to get on to the bloodletting associated with the rest of must carry.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

Briefly, in response to the hon. Member for Milton Keynes, North-East (Brian White), I have tried to look into some of the issues surrounding cable. I wonder whether the Minister will look at the differential impact of must carry on operations that depend on potential capacity, which is an issue that the amendment is intended to tease out. I know that we will have a wider debate later on, but he is trying to achieve a level playing field between very different technologies. The cable point is particularly important. Furthermore, the digital terrestrial platform has the greatest restriction on the number of channels available.

Two of the amendments tabled by the hon. Gentleman tease out those issues. Amendment No. 504 would change the definition so that, rather than talking about public benefit in a general sense, we would be talking about public service broadcasting as a more specific benefit. The amendment raises some real questions, especially if one takes it in conjunction with amendment No. 491, which is in favour of local digital television and local access radio.

Where there is limited bandwidth and one is therefore stuck with a smaller number of channels, there may be some tough questions about whether public service broadcasting is better served by, for example, having a local digital television service or by having another children's channel, which the Secretary of State would properly define as a public service broadcaster, such as CBBC or CBeebies. Such a service will have some public benefit and will be properly defined as a public service broadcasting channel, but it will be in competition with other channels, which the cable provider may already be providing for children. How does one judge between that and, for example, a local television service, which has a different kind of public service broadcasting benefit, where there is limited bandwidth?

If the Minister is correct and the ecology of production takes off, lots of people will become interested in broadcasting and will want to make local television and take charge of their local media output, in which case we will have some real competition questions about the limited number of must-carry channels. I hope that he can explain how he perceives the tensions between the different platforms, particularly those between digital terrestrial, which is technically the most limited form, and cable, which is technically not quite so limited in terms of the potential number of channels, but carries a considerable additional cost.

My understanding is that as additional television channels are added to the cable platform, which can be done up to a greater number, each additional

television channel is the equivalent of lost revenue from quite a lot of the bandwidth that could otherwise have been sold to, for example, broadband customers. We want to encourage broadband and there may be a public benefit in adding television channels to the cable platform, but it is not without cost in terms of potential loss of additional broadband customers and other use of that cable capacity, which is, necessarily, limited by the technology.

Parmjit Dhanda (Labour, Gloucester)

I hope that the hon. Gentleman is not saying that there is no significant need for a must-carry option. It is important to take into account the fact that, whoever the provider is—NTL, Sky, digital terrestrial and so on—consumers, too, are important. We should not forget that typical consumers who pay to watch sport have paid once to watch premiership football on Sky, and before ITV 2's problems they would have had to pay separately for a different platform to watch champions league football via cable. I hope that the hon. Gentleman is taking that into account.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

I am keen to have must-carry channels and I recognise that there is an important block of public service broadcasting that should be carried. I am trying to highlight a potential problem that arises if there is a finite number of channels and the number of must-carry channels increases. If there is a limit and it is set differently for the different technologies, there is a potential conflict if the public want to receive a type of service other than public service broadcasting.

That is why the hon. Member for Milton Keynes, North-East is right to highlight local digital television access. The public might not be able to receive some public service broadcasting if the mandatory fixed national block of must-carry channels grows to the extent that it squeezes out other forms of new media that people want to get hold of. I am suggesting that that is a potential future conflict, particularly with cable and digital terrestrial. I am not suggesting that that is a reason not to have must-carry channels, but we must flesh out the issues in our debates to assure the platforms that they will be able to deliver want the public want.

Kim Howells (Labour, Pontypridd)

At the end of his contribution my hon. Friend the Member for Milton Keynes, North-East referred to the blood-letting that is about to flow from the must-carry debate. I do not know whether I heard him properly, but I hope that there will not be blood flowing all over the place.

John Greenway (Conservative, Ryedale)

It depends on whose blood it is.

Kim Howells (Labour, Pontypridd)

No one's blood.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

After the watershed.

Kim Howells (Labour, Pontypridd)

Clause 60 sets out the list of must-carry services. As far as the BBC is concerned, our firm intention is that only the digital television services provided by the corporation are included and that the services produced by BBC Worldwide will be excluded. One might argue that the corporation could also produce non-licence-fee-funded digital

television services, provided that they obtain the consent of the Secretary of State. However, it is not our intention to give the BBC consent to provide any such services.

Amendment No. 503 would insert a specific reference to the BBC's home services into the Bill. I do not consider that that is appropriate. It would not be right to define the relevant BBC services by reference to the charter, given that the charter is subject to change with each successive renewal and that any existing reference in legislation might be rendered obsolete. The Committee will be aware that the current charter expires at the end of 2006 and that the process of examination, discussion and renewal starts next year.

I reiterate that we intend to reserve the benefit of must carry to the public service channels provided by the BBC. In light of that brief explanation, I hope that my hon. Friend will withdraw the amendment, intriguing though it is. He will be disappointed to hear that I do not support amendment No. 491, either. We did not consider it appropriate to mandate the carriage of radio services, as they might be accessed through other means. As that is the case, we do not consider it appropriate to include access radio in the must-carry list, despite the intriguing arguments of the hon. Member for Sheffield, Hallam about what people think that they might need. We will have to consider that issue again, as it is interesting.

On local digital television services, I do not really believe that my hon. Friend the Member for Milton Keynes, North-East would think it appropriate for all such services, whatever their content, to benefit from must carry. Why should a local commercial service benefit from that? As the hon. Member for Sheffield, Hallam said, we must not forget that must carry is a heavy obligation imposed on network providers, and we have to take into account the financial implications that the addition of services in the must-carry list will have on them. Currently, we can find no justification for including such services on a must-carry list. However, subsection (4) requires the Secretary of State to keep the must-carry list under review, and subsection (6) enables the Secretary of State to add services to the must-carry list by order.

In deciding whether to make any change to the must-carry list, the Secretary of State is required by subsection (7) to have regard to a number of matters, including the benefit of the change to the public and the effects of such a change on the availability of capacity. That gives the Secretary of State the sort of flexibility that my hon. Friend the Member for Milton Keynes, North-East and the hon. Member for Sheffield, Hallam hinted at. As I say, the issue is important. We also have to consider the spare network capacity of providers of electronic communications networks, to whom the must-carry obligations apply, and must consider whether the burden of compliance is proportionate to the objective.

Amendment No. 504 proposes to amend the wording of one of the criteria to which the Secretary of State must have regard when reviewing the list of

must-carry services. It is not our intention to impose unreasonable charges on network providers, and we will make sure that we do not add any service that has no real value or provides no benefit to the public. That is why I resisted amendment No. 491. Our formulation, in terms of the public benefit secured by the addition to or retention of a service on the list, is clear and quite accurate. I am not sure that the words of amendment No. 504,

''the extent to which the service contributes to the purposes of public service television broadcasting'',

would give any more assurance, although I am all for having a crack at trying to improve the effectiveness of provisions and explaining what we want from them.

On amendment No. 505, I understand fully the concerns of the cable companies. It is not our intention to impose disproportionate or unreasonable burdens, or add lots of extra channels to the list of must carry. Even when a network has capacity, adding a channel to the basic package can decrease the attractiveness of the premium packages, as the hon. Member for Sheffield, Hallam said. I also understand fully that cable platforms are used not only for broadcasting but to give access to broadband services. I am told that the capacity used by one channel is equivalent to what is needed to serve half a million broadband subscribers, which is a pretty phenomenal statistic. We will not add any new service to the list of must carry without having regard to the opportunity cost, which is important. In the light of those explanations, I hope that my hon. Friend the Member for Milton Keynes, North-East will withdraw the amendment.

Brian White (Labour, North East Milton Keynes)

I am totally devastated that the Minister has not accepted the amendment with alacrity. I understand that he accepts the problems in gaining access to some platforms and that there are differences between national and local networks. However, in light of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Simon Thomas (Plaid Cymru, Ceredigion)

I beg to move Amendment No. 212, in clause 60, page 60, line 31, at end insert—

(g) television services for the deaf and visually impaired so far as provided in digital form.'.

The amendment is narrowly defined but it is important to consider it at this stage. The Minister has outlined the thinking behind clause 60, mentioning particularly the public services that may be subject to must-carry obligations and any general conditions of Ofcom. However, something is missing. Many television programmes already provide audiodescription, subtitling and signing for the deaf and visually impaired. In analogue, those services are taken as read. However, an increasing digital divide is appearing. Services for deaf and visually impaired people are prepared with audiodescription, subtitling and signing but are not transmitted in that way.

To the list of services that come under the must-carry obligations, amendment No. 212 would add

''television services for the deaf and visually impaired so far as provided in digital form.''

I emphasise that phrase ''so far as provided''. The amendment does not request an additional service; it requests that analogue broadcasts with subtitling, by the BBC for example, should, when transmitted digitally under a must-carry obligation, still carry the

subtitling. Some technical difficulties arise that will have to be dealt with.

If the Minister accepts amendment No. 212 in principle, it would have two effects. One would be to ensure that subtitling, audiodescription and signing were explicitly on the must-carry list, and the other would be to highlight to the Committee the need to ensure the widest possible access to audiodescription and other types of assistance. Such assistance will have already been prepared but, increasingly, it is not available to deaf and visually impaired people because of the technology that they are using at home.

The universal service directive states that

'' 'must carry' obligations may include the transmission of services specifically designed to enable appropriate access by disabled users.''

That raises the question of why such a statement is not explicit either in this clause or in any other clause in the Bill.

It may well be that, in stating services that are to come under the must-carry obligations—services on Channels 3, 4, Five, S4C digital and so on—the Minister and the Government have in mind the automatic inclusion of audiodescription, signing or subtitling with programmes. However, in the absence of anything to that effect being explicit in the Bill, it is worth while our exploring how such services can be delivered.

The present difficulty is that many visually impaired and deaf people cannot get subtitling or audiodescription on digital satellite services. As soon as the main broadcasters such the BBC or ITV transmit in digital, those aspects are lost. As a result, by the time an analogue public service broadcast with subtitling has gone up to a satellite and come back into a deaf person's home, it no longer has subtitling. That is a weakness in the present technology, which must clearly be dealt with. The Committee must concern itself with that and try to place it more specifically in the Bill, so that we know that we are protecting a publicly available service in the switch from analogue to digital.

The current provision exists on satellite. I am told by the Royal National Institute of the Blind, to which I am grateful for information, that Sky digital provides a good service that is expanding. It is good to hear that, but although it works technically and it works well, it is specifically a service for satellite. I am told that Sky uses software that is downloaded to the customer's digiboxes, so all they have to do is change to an audionarrative setting and they have an audiodescription in their own home. That open audio service is provided at no extra cost and I congratulate Sky for helping people with visual impairments to enjoy their programmes. The difficulty is that that only happens on Sky programmes and where it is provided otherwise. BBC, ITV, Channel 4 and S4C programmes may include an element of subtitling, signing, or any other access assistance. However, by the time that people get into the software, and those things get scrambled and unscrambled, the audio description is not there at the other end of the satellite system.

I have been provided, helpfully, with another example of what one could see, as it were, if one were audio-assisted. On Christmas day, people using Sky could, had they needed such a service, have had audiodescriptions of ''Aerobics Oz Style'', ''The Premiership Years'' and three films: ''The View from the Swing'', ''Special Delivery'' and ''Supergirl''. I admit that I have not heard of any of those films and I am not sure that I would have been encouraged to tune in to such programmes. By contrast, if people had been watching audiodescribed programmes provided by the public service broadcasters on analogue, rather than on digital, they could have enjoyed audiodescriptions of ''EastEnders'', ''Only Fools and Horses'' and ''Chicken Run''. I am not sure if those are more appealing than the Sky programmes, but they are at least more familiar. It is clear that visually impaired people are missing out on much programming that is being made technically available to them, but which is not being delivered through satellite channels.

The BBC spent money on the audiodescription of programmes this Christmas, in which only 45 visually impaired viewers, who were taking part in a trial of audiodescription on DTT, were able to participate. That shows how far we have to go. Why do we not require broadcasters to provide versions that are technically suitable for broadcast on Sky? My amendment would do that. Why do we not require the satellite operators and digital cable to carry such descriptions?

There will be technical difficulties and costs will be involved, but I am advised that there is enough bandwidth and that there would be no additional programme-making costs, because those audiodescriptions are already being made available. My amendment does not demand an increase in the amount of audiodescription, signing, or subtitling, it simply asks that what is already available is made available on digital satellite.

The BBC transmits its audiodescription differently from Sky, so a technical hurdle must be overcome. I am advised—I certainly do not know about the relevant technology—that it is possible to reroute the audiodescription signal through particular equipment and software, which would make the mix that Sky could then use to broadcast as part of the must-carry requirements. The digital divide is increasing for many visually impaired and deaf people and Freeview has not sorted out the problem of audiodescription. Accordingly, I hope that the Minister will accept, at least in principle, that there is a need for must-carry television PSBs to include, wherever possible, television services for the deaf and the visually impaired where those are already provided in digital form.

Kim Howells (Labour, Pontypridd)

First, I assure the hon. Gentleman that it is not the intention of the Government or Ofcom to retreat from targets set to aid the enjoyment of television by disabled people. I am sure that he received a terrific briefing from the Royal National

Institute of the Blind. I was the Minister who organised the first conference that pulled together partners to try to understand the problems of audiodescription models. I have been rather disappointed by the RNIB's lack of urgency to get together with manufacturers, broadcasters and market researchers, although I might be completely wrong about that and not have heard about its actions. The hon. Gentleman did not mention whether the problem relates to the availability of the right technology or the cost of it and the willingness of people to invest. That is vague and it is disappointing that the issues have not been resolved. The Government can address the problems in a regulatory fashion—I shall address the amendment in a moment—but action and organisation by the partners is required. The partners have not made the progress that I assumed that they had made since the conference, despite the promises and undertakings that were given.

I am glad that the hon. Gentleman paid tribute to BSkyB. It made important executive decisions to ensure that its services would address the important issues, and those decisions were voluntary because we do not regulate BSkyB. We know from our debate about S4C that the Bill will make subtitling compulsory, and S4C is enthusiastic about that in many ways. I shall fill in some of the background for the benefit of the hon. Gentleman. Audiodescription model technology is not proven and settled. I have seen excellent examples of the technology but it has not yet captured the imagination of the market.

I turn to the amendment. We want to ensure that the needs of disabled people are fully taken into account. If a channel has to be carried, the relevant aids to viewing available for the service are also carried, and the Bill already provides for that. Section 48(4) of the Broadcasting Act 1990 deems that licences for Channels 3, 4 and Five include the right to provide subtitling and section 15(3) requires a Channel 3 applicant to say how it would provide subtitling. Under section 24(2) of the Broadcasting Act 1996, subtitling, signing and audiodescription are ancillary services that benefit from the same requirement as the main service.

I shall restate an undertaking for the hon. Gentleman and the Committee: what is available on analogue will at least be available on digital, although everybody who looks at digital sees great advantages because of the possibilities of what could be provided for disabled people. We must consider that carefully. With those reassurances, I hope that the hon. Gentleman will withdraw the amendment. Although the debate is important, the amendment is superfluous.

Simon Thomas (Plaid Cymru, Ceredigion)

I am grateful for what I think that the Minister said: what is available on analogue should be the minimum of what will be available on digital and there might be further opportunities to develop digital. However, I was a little surprised by his wider comments. I know that he likes to shoot from the hip, but the Government have a greater responsibility to drag things along. I am pleased that he called for a conference, but there needs to be a follow-up. Heads must sometimes be knocked together to get action.

A feature of the DVD revolution is that an increasing number of films are automatically available with an audiodescription track. DVDs have tracks in Spanish, Greek, and so forth as well as audiodescription. They are tailor-made for broadcasters to use to provide extra services. I acknowledge the work that Sky has undertaken to date, but there are even more challenges and opportunities for broadcasters such as Sky and the public service broadcasters to prepare even better services. As more are produced, the costs drop.

Kim Howells (Labour, Pontypridd)

I agree entirely. Far from shooting from the hip, I have great admiration for the RNIB. I want to tell hon. Members what I perceive the truth to be. I am sorry if that offends people, but the issue is an important one. We can bumble along from now until analogue switch-off and we may be in the same position unless we apply greater urgency about getting the audiodescription module technology and the sale and research right.

Simon Thomas (Plaid Cymru, Ceredigion)

I hope that that urgency will be applied, and that it will come from the Government as well as those organisations that have represented disabled people. It should also come from the broadcasters themselves as they realise the opportunity provided by digital switchover. Whoever is responsible for not achieving that, disabled, deaf and visually-impaired people will suffer the consequences of that lack of action.

Bearing in mind that the Minister said that there should be no diminution from the change from analogue to digital, and that he will go back to his Department, pick up the minutes from that conference and reconsider how the Department can drag people into action, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss the following:

Amendment No. 210, in

clause 348, page 299, line 10, at end insert—

' ''must-distribute services'' means the services for the time being listed in section [conditions applying to satellite packagers];'

Amendment No. 211, in

clause 348, page 300, line 8, at end insert—

' ''satellite package'' and ''satellite packager'' are to be construed in accordance with section [definition of satellite packaging];'

New clause 9—Definition of satellite packaging—

'(1) For the purposes of Part 3—

(a) a satellite package is a facility by the use of which a person is able, at a place in the United Kingdom, to receive a satellite television service in an intelligible form; and

(b) a satellite packager is a person who, in the course of carrying on a business, offers to supply such packages to members of the public.

(2) For the purposes of Part 3 a person supplies a satellite package to a member of the public if he confers an entitlement on that member of the public to have the package made available to him.

(3) In this section ''satellite television service'' means a service which—

(a) consists in or involves the broadcasting of television programme services from a satellite; and

(b) is used by a significant number of the persons by whom the broadcasts are received in an intelligible form as their principal means of receiving television programmes.'.

New clause 10—Notification requirements for satellite packagers—

'(1) A person shall not act as a designated satellite packager unless, before beginning to do so, he has given a notification to OFCOM of his intention to do so.

(2) For the purposes of this section—

(a) a person acts as a designated satellite packager if he acts as a satellite packager of a description for the time being designated by OFCOM for those purposes; and

(b) such a description may be framed by reference to any one or more of the following—

(i) the manner in which a satellite packager acts as such;

(ii) the circumstances of his so acting;

(iii) the characteristics of the services included in his package;

(iv) the programmes included in those services; and

(v) any other factors that OFCOM consider appropriate.

(3) Where a person has given a notification for the purposes of sub-section (1), he must, before ceasing to act as a designated satellite packager, give a notification to OFCOM of his intention to do so.

(4) A notification for the purposes of this section must—

(a) be sent to OFCOM in such manner and form as OFCOM may require; and

(b) contain all such information as OFCOM may require.

(5) Before—

(a) making or withdrawing a designation for the purposes of this section,

(b) imposing requirements under sub-section (4), or

(c) modifying requirements imposed under that sub-section,

OFCOM must consult such of the persons who, in their opinion, are likely to be affected by it as they think fit.

(6) OFCOM is only required to consult under sub-section (5) about modifications that appear to them to be likely to have a significant impact on persons affected by them.

(7) Before making or withdrawing a designation for the purposes of this section OFCOM must also consult the Secretary of State.

(8) The way in which a designation for the purposes of this section or a requirement under sub-section (4)—

(a) is to be made or imposed, or

(b) may be withdrawn or modified,

is by a notice published in such manner as OFCOM consider appropriate for bringing the designation, requirement, withdrawal or modification to the attention of the persons who, in their opinion, are likely to be affected by it.

(9) Requirements imposed under sub-section (4) may make different provision for different cases.

(10) Where a description of satellite packager is designated for the purposes of this section at a time when a person is already acting as such a packager—

(a) his obligation under this section to give a notification before beginning to act as such a packager shall have effect as an obligation to give a notification within such period after the coming into force of the designation as may be specified in the notice in which the designation is contained; and

(b) that notification is to be one stating that that person is already acting as a designated satellite packager (rather than it is his intention to do so).'.

New clause 11—Register of designations and satellite packagers—

'(1) It shall be the duty of OFCOM to establish and maintain a register for the purposes of section [notification requirements for satellite packagers].

(2) OFCOM shall record in the register—

(a) every designation by them for the purposes of section [notification requirements for satellite packagers];

(b) every withdrawal by them of such a designation; and

(c) every notification given to them under that section.

(3) Information recorded in the register must be so recorded in such manner as OFCOM consider appropriate.

(4) OFCOM shall make the register available for public inspection—

(a) during such hours; and

(b) on payment of such fees,

as they may by order prescribe.

(5) Section 388 applies to the power of OFCOM to make an order under sub-section (4).

(6) It shall be the duty of OFCOM to publish a notification setting out—

(a) the times at which the register is for the time being available for public inspection; and

(b) the fees that must be paid for, or in connection with, an inspection of the register.

(7) The publication of a notification under sub-section (6) must be in such manner as OFCOM consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by it.'.

New clause 12—Conditions applying to satellite packagers—

'(1) OFCOM may set such conditions applying to satellite packagers as OFCOM think fit for the purpose set out in sub-section (2).

(2) That purpose is securing that satellite packages supplied by those packagers in the course of acting as designated satellite packagers (within the meaning of section [notification requirements for satellite packagers]) include, in the case of every package, an entitlement to receive—

(a) free of charge,

(b) in an intelligible form, and

(c) by means of the satellite television service to which the package relates,

the services included in the list of must-distribute services.

(3) An entitlement to receive a must-distribute service is made available free of charge only if no charge attributable (whether directly or indirectly) to the conferring of that entitlement is imposed for or in connection with the supply of the satellite package in which the entitlement is comprised.

(4) The list of must-distribute services is as follows—

(a) any service of television programmes provided by the BBC so far as it is provided in digital form and is a service in relation to which OFCOM have functions;

(b) a Channel 3 service so far as provided in digital form;

(c) Channel 4 so far as provided in digital form;

(d) Channel 5 so far as provided in digital form;

(e) S4C Digital;

(f) the public teletext service.

(5) Conditions under this section that require an entitlement to be conferred as respects a service included in the list of must-distribute services must, to such extent as OFCOM consider appropriate—

(a) require the same entitlement to be conferred as respects every service which is an ancillary service by reference to a service included in that list; and

(b) provide for the services as respects which the entitlement is conferred to be treated, in relation to particular satellite packages, as constituting such services comprised in or provided with the listed service as may be determined by OFCOM.

(6) Before setting, revoking or modifying a condition under this section, OFCOM must consult—

(a) the Secretary of State; and

(b) such of the following as OFCOM think fit—

(i) the persons who are likely, in OFCOM's opinion, to be affected by the condition, revocation or modification; and

(ii) the persons who appear to OFCOM to represent such persons.

(7) The way in which conditions under this section are to be set or modified is by the publication of a notification setting out the conditions or modifications.

(8) The way in which such a condition is to be revoked is by the publication of a notification stating that the condition is revoked.

(9) The publication of a notification under sub-section (7) or (8) must be in such manner as appears to OFCOM to be appropriate for bringing the contents of the notification to the attention of the persons who, in OFCOM's opinion, are likely to be affected by its contents.

(10) The Secretary of State may by order modify the list of must-distribute services.'.

New clause 13—Enforcement of sections [notification requirements for satellite packagers] and [conditions applying to satellite packagers]—

'Schedule [Enforcement of sections [notification requirements for satellite packagers] and [conditions applying to satellite packagers]] shall have effect.'.

New clause 14—Power to modify satellite packager notification provisions—

'(1) The Secretary of State may by order to modify sections [definition of satellite packagers], [notification requirements for satellite packagers] and [register of designations and satellite packagers] and Part 1 of Schedule [Enforcement of sections [notification requirements for satellite packagers] and [conditions applying to satellite packagers]] in such manner as he thinks fit.

(2) The power to make such an order is not to be exercised at any time after the commencement of section [notification requirements for satellite packagers].

(3) Before making such an order the Secretary of State must consult—

(a) OFCOM;

(b) providers of the must-distribute services or persons appearing to him to represent those providers or both; and

(c) such persons not falling within the preceding paragraphs as appear to the Secretary of State to be, or to represent, persons likely to be particularly affected by the proposed order.

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

New schedule 1—'Enforcement of sections [notification requirements for satellite packagers] and [conditions applying to satellite packagers]—

Part 1

Failure to notify under section [notification requirements for satellite packagers]

Notification of failure

1 (1) Where OFCOM determine that there are reasonable grounds for believing that a person has failed to give a notification that he is

required to give by section [notification requirements for satellite packagers], they may give him a notification under this paragraph.

(2) A notification under this paragraph is one which—

(a) sets out the determination made by OFCOM; and

(b) specifies the period during which the person notified has an opportunity of doing the things specified in sub-paragraph (4).

(3) That period must be a reasonable period.

(4) Those things are—

(a) making representations about the determination; and

(b) providing OFCOM with the information which the notified person should have provided for the purposes of section [notification requirement for satellite packagers] but has not.

(5) A notification under this paragraph—

(a) may be given in respect of more than one contravention of section [notification requirements for satellite packages]; and

(b) if it is given in respect of a continuing contravention, may be given in respect of any period during which the contravention has continued.

(6) Where a notification under this paragraph has been given to any person in respect of a particular contravention of section [notification requirements for satellite packagers], OFCOM may give a further notification in respect of that contravention if, and only if—

(a) the subsequent notification is in respect of so much of a period during which the contravention in question was continuing as falls after any period to which the earlier notification relates; or

(b) the earlier notification has been withdrawn without a penalty having been imposed by reference to the notified contravention.

Enforcement notification for failure

2 (1) This paragraph applies where—

(a) a person (''the notified packager'') has been given a notification under paragraph 1;

(b) OFCOM have allowed the notified packager an opportunity of making representations about the notified determination; and

(c) the period allowed for the making of the representations has expired.

(2) OFCOM may give the notified packager an enforcement notification if they are satisfied—

(a) that he is or has been in contravention, in any of the respects notified, of section [notification requirements for satellite packagers]; and

(b) that he has not himself, during the period allowed under paragraph 1, taken all such steps as OFCOM consider appropriate for providing them with the information which he should have provided to them but has not.

(3) An enforcement notification is a notification which imposes a requirement on the notified packager to take all such steps for providing OFCOM with that information as may be specified in the notification.

(4) A decision of OFCOM to give an enforcement notification to any person must fix a reasonable period for the taking of the steps required by the notification.

(5) It shall be the duty of a person to whom an enforcement notification has been given to comply with it.

(6) That duty shall be enforceable in civil proceedings by OFCOM for an injunction, for specific performance of a statutory duty under section 45 of the Court of Session Act 1988 (c.36), or for any other appropriate remedy or relief.

Penalty for failure

3 (1) This paragraph applies (in addition to paragraph 2) where—

(a) a person (''the notified packager'') has been given a notification under paragraph 1;

(b) OFCOM have allowed the notified packager an opportunity of making representations about the matters notified; and

(c) the period allowed for the making of the representations has expired.

(2) OFCOM may impose a penalty on the notified packager if he has been in contravention, in any of the respects notified, of section [notification requirements for satellite packagers].

(3) Where a notification under paragraph 1 relates to more than one contravention, a separate penalty may be imposed in respect of each contravention.

(4) Where such a notification relates to a continuing contravention, no more than one penalty may be imposed in respect of the period specified in the notification during which that contravention continued.

(5) OFCOM may also impose a penalty on the notified packager if he has contravened, or is contravening, a requirement of an enforcement notification given in respect of the notified contravention.

(6) The amount of a penalty imposed under this paragraph is to be such amount not exceeding £10,000 as OFCOM, having regard to the matters mentioned in sub-paragraph (7), determine to be—

(a) appropriate; and

(b) proportionate to the contravention in respect of which it is imposed.

(7) Those matters are—

(a) any representations made to OFCOM by the notified packager, and

(b) any steps taken by him towards complying with his obligations under section [notification requirements for satellite packagers].

(8) Where OFCOM impose a penalty on a person under this paragraph they shall—

(a) notify the person penalised; and

(b) in that notification, fix a reasonable period after it is given as the period within which the penalty is to be paid.

(9) A penalty imposed under this paragraph—

(a) must be paid to OFCOM; and

(b) if not paid within the period fixed by them, is to be recoverable by them accordingly.

(10) The Secretary of State may by order amend this paragraph so as to substitute a different maximum penalty for the maximum penalty for the time being specified in sub-paragraph (6).

Part 2{**qc**}

Contravention of must-distribute obligations{**qc**}

Notification of failure

4 (1) Where OFCOM determine that there are reasonable grounds for believing that a person has contravened or is contravening a must-distribute obligation, they may give him a notification under this paragraph.

(2) A notification under this paragraph is one which—

(a) sets out the determination made by OFCOM;

(b) specifies the obligation and contravention in respect of which that determination has been made; and

(c) specifies the period during which the person notified has an opportunity of doing the things specified in sub-paragraph (4).

(3) That period must be a reasonable period.

(4) Those things are—

(a) making representations about the matters notified;

(b) complying with notified obligations of which he remains in contravention; and

(c) remedying the consequences of notified contraventions.

(5) A notification under this paragraph—

(a) may be given in respect of more than one contravention; and

(b) if it is given in respect of a continuing contravention, may be given in respect of any period during which the contravention has continued.

(6) Where a notification under this paragraph has been given to any person in respect of a particular contravention, OFCOM may give a further notification in respect of that contravention if, and only if—

(a) the contravention is in respect of so much of a period during which the contravention in question was continuing as falls after any period to which the earlier notification relates; or

(b) the earlier notification has been withdrawn without a penalty having been imposed with respect to the notified contravention.

Enforcement notification for failure

5 (1) This paragraph applies where—

(a) a person (''the notified packager'') has been given a notification under paragraph 4;

(b) OFCOM have allowed the notified packager an opportunity of making representations about the matters notified; and

(c) the period allowed for the making of the representations has expired.

(2) OFCOM may give the notified packager an enforcement notification if they are satisfied—

(a) that he is or has been in contravention, in any of the respects notified, of an obligation notified in the notification under paragraph 4; and

(b) that he has not himself, during the period allowed under that paragraph, taken all such steps as OFCOM consider appropriate for—

(i) complying with that obligation; and

(ii) remedying the consequences of the notified contravention of that obligation.

(3) An enforcement notification is a notification which imposes one or more of the following requirements on the notified packager—

(a) a requirement to take such steps for complying with the notified obligation as may be specified in the notification;

(b) a requirement to take such steps for remedying the consequences of the notified contravention as may be so specified.

(4) A decision of OFCOM to give an enforcement notification to any person must fix a reasonable period for the taking of the steps required by the notification.

(5) It shall be the duty of a person to whom an enforcement notification has been given to comply with it.

(6) That duty shall be enforceable in civil proceedings by OFCOM for an injunction, for specific performance of a statutory duty under section 45 of the Court of Session Act 1988 (c.36), or for any other appropriate remedy or relief.

Penalty for failure

6 (1) This paragraph applies (in addition to paragraph 5) where—

(a) a person (''the notified packager'') has been given a notification under paragraph 4;

(b) OFCOM have allowed the notified packager an opportunity of making representations about the matters notified; and

(c) the period allowed for the making of the representations has expired.

(2) OFCOM may impose a penalty on the notified packager if he is, or has been, in contravention, in any of the respects notified, of an obligation notified in the notification under paragraph 4.

(3) Where a notification under paragraph 4 relates to more than one contravention, a separate penalty may be imposed in respect of each contravention.

(4) Where such a notification relates to a continuing contravention, no more than one penalty may be imposed in respect of the period specified in the notification during which that contravention continued.

(5) OFCOM may also impose a penalty on the notified packager if he has contravened, or is contravening, a requirement of an enforcement notification given in respect of the notified contravention.

(6) Where OFCOM impose a penalty on a person under this paragraph they shall—

(a) notify the person penalised; and

(b) in that notification, fix a reasonable period after it is given as the period within which the penalty is to be paid.

(7) A penalty imposed under this paragraph—

(a) must be paid to OFCOM; and

(b) if not paid within the period fixed by them, is to be recoverable by them accordingly.

Amount of penalty

7 (1) The amount of a penalty imposed under paragraph 6 is to be such amount not exceeding ten per cent. of the turnover of the notified packager's relevant business for the relevant period as OFCOM, having regard to the matters mentioned in sub-paragraph (2), determine to be—

(a) appropriate; and

(b) proportionate to the contravention in respect of which it is imposed.

(2) Those matters are—

(a) any representations made to OFCOM by the notified packager;

(b) any steps taken by him towards complying with the obligation contraventions of which have been notified to him under paragraph 4; and

(c) any steps taken by him for remedying the consequences of those contraventions.

(3) For the purposes of this paragraph—

(a) the turnover of a person's relevant business for any period shall be calculated in accordance with such rules as may be set out by order made by the Secretary of State; and

(b) provision may also be made by such an order for determining what is to be treated as the business by reference to which the calculation of that turnover falls to be made.

(4) No order is to be made containing provision authorised by sub-paragraph (3) unless a draft of the order has been laid before Parliament and approved by a resolution of each House.

(5) The Secretary of State may by order amend this paragraph so as to substitute a different percentage for the percentage for the time being specified in sub-paragraph (1).

(6) In this paragraph—

''relevant business'' means (subject to the provisions of any order under sub-paragraph (3)) so much of any business carried on by the person in respect of whose contravention the penalty is imposed as consists in the supply of satellite packages to members of the public;

''relevant period'', in relation to a contravention by any person of a must-distribute obligation, means—

(a) except in a case falling within paragraph (b) or (c), the period of one year ending with the 31st March next before the time when notification of the contravention was given under paragraph 4;

(b) in the case of a person who at that time, has been carrying on that business for a period of less than a year, the period, ending with that time, during which he has been carrying it on; and

(c) in the case of a person who at that time has ceased to carry on that business, the period of one year ending with the time when he ceased to carry it on.

(7) In this paragraph ''the notified packager'' has the same meaning as in paragraph 6.

Suspending or restricting entitlement for contravention of must-distribute obligations

8 (1) OFCOM may give a direction under this paragraph to a person who is a satellite packager (''the contravening packager'') if they are satisfied—

(a) that he is or has been in serious and repeated contravention of a must-distribute obligation;

(b) that the imposition of penalties and the giving of enforcement notifications under paragraph 5 have failed to secure compliance by that person with the obligation that he has contravened; and

(c) that the giving of the direction is both appropriate and proportionate to the contraventions in respect of which it is imposed.

(2) A direction under this paragraph is—

(a) a direction that the entitlement of the contravening packager to act as a satellite packager is suspended (either generally or in particular respects); or

(b) a direction that that entitlement is restricted in the respects set out in the direction.

(3) A direction under this paragraph—

(a) must specify the activities to which it relates; and

(b) except so far as it otherwise provides, takes effect for an indefinite period beginning with the time at which it is notified to the person to whom it is given.

(4) A direction under this paragraph—

(a) in providing for the effect of a suspension or restriction to be postponed may provide for it to take effect only at a time determined by or in accordance with the terms of the direction; and

(b) in connection with the suspension or restriction contained in the direction or with the postponement of its effect, may impose such conditions on the contravening packager as appear to OFCOM to be appropriate for the purpose of protecting the packager's customers.

(5) Those conditions may include a condition requiring the making of payments by way of compensation for loss or damage, or for any annoyance, inconvenience or anxiety, that is suffered by the contravening packager's customers as a result of the direction.

(6) Where OFCOM give a direction under this paragraph, they shall, as soon as practicable after doing so, provide that person with an opportunity of—

(a) making representations about the effect of the direction; and

(b) proposing steps for remedying the situation.

(7) If OFCOM consider it appropriate to do so (whether in consequence of any representations or proposals made to them under sub-paragraph (6) or otherwise), they may revoke a direction under this paragraph—

(a) with effect from such time as they may direct;

(b) subject to compliance with such requirements as they may specify; and

(c) to such extent and in relation to such activities as they may determine.

(8) For the purposes of this paragraph there have, in any person's case, been repeated contraventions of must-distribute obligations if—

(a) more than one notification under paragraph 4 has been given to that person in respect of the same contravention or in respect of different contraventions of the same obligation; and

(b) the latest of those notifications was given no more than twelve months after the day of the making by OFCOM of a determination for the purposes of paragraph 5 or 6 that the contravention to which the earliest notification related did occur.

Enforcement of directions under paragraph 8

9 (1) A person is guilty of an offence if he acts as a satellite packager—

(a) while his entitlement to do so is suspended by a direction under paragraph 8; or

(b) in contravention of any restriction contained in such a direction.

(2) A person guilty of an offence under sub-paragraph (1) shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to a fine.

(3) Paragraphs 4 to 7 apply in relation to a contravention of conditions imposed by a direction under paragraph 8 as they apply in relation to a contravention of a must-distribute obligation.

Civil liability for contravention of must-distribute obligations

10 (1) The obligation of a person to comply with—

(a) a must-distribute obligation applying to him,

(b) a requirement imposed on him by an enforcement notification under paragraph 5, and

(c) the conditions of a direction under paragraph 8,

shall be a duty owed to every person who may be affected by a contravention of the condition or requirement.

(2) Where a duty is owed by virtue of this paragraph to any person—

(a) any breach of the duty that causes that person to sustain loss or damage, and

(b) any act which by inducing a breach of the duty or interfering with its performance causes that person to sustain loss or damage and which is done wholly or partly for achieving that result,

shall be actionable at the suit or instance of that person.

(3) In any proceedings brought against a person by virtue of sub-paragraph (2)(a), it shall be a defence for that person to show that he took all reasonable steps and exercised all due diligence to avoid contravening the obligation requirement or condition in question.

Part 3

Information Provisions

Power to require information

11 (1) OFCOM may require a person appearing to them to be a satellite packager to provide them with all such information as they consider necessary for the purpose of ascertaining whether any person is contravening or has contravened—

(a) a requirement to give notification under section [notification requirements for satellite packages]; or

(b) a must-distribute obligation.

(2) OFCOM may also require a satellite packager to provide them with information for statistical purposes.

(3) OFCOM shall not require the provision of any information under this paragraph except—

(a) by a demand for the information that describes the required information and sets out OFCOM's reasons for requiring it; and

(b) where the making of a demand for that information is proportionate to the use to which the information is to be put in the carrying out of OFCOM's functions.

(4) The reasons for requiring information for statistical purposes must define the statistical purposes for which the information is required.

(5) A person required to provide information under this paragraph must provide it in such manner and within such reasonable period as may be specified by OFCOM.

Application of Part 2 of Schedule to enforcement of information requirements

12 (1) Subject to sub-paragraph (2), Part 2 of this Schedule applies for the enforcement of a requirement imposed under paragraph 11 as it applies for the enforcement of a must-distribute obligation.

(2) The amount of a penalty imposed under paragraph 6 by virtue of this paragraph must not exceed £50,000.

(3) The Secretary of State may by order amend this paragraph so as to substitute a different sum for the sum for the time being specified in sub-paragraph (2).

(4) For the purposes of paragraph 8 (as applied by this paragraph) there have, in any person's case, been repeated contraventions of requirements imposed under paragraph 11 if—

(a) more than one notification under paragraph 4 (as applied) has been given to that person in respect of the same contravention or in respect of contraventions of different requirements; and

(b) the latest of those notifications was given no more than twelve months after the day of the making by OFCOM of a determination for the purposes of paragraph 5 or 6 (as applied) that the contravention to which the earliest notification related did occur.

Offences

13 (1) A person who fails to provide information in accordance with any requirement of OFCOM under paragraph 11 is guilty of an offence and shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to a fine.

(2) In proceedings against a person for an offence under sub-paragraph (1) it shall be a defence for that person to show—

(a) that it was not reasonably practicable for him to comply with the requirement within the period specified by OFCOM; but

(b) that he has taken all reasonable steps to provide the required information after the end of that period.

(3) A person is guilty of an offence if—

(a) in pursuance of any requirement under paragraph 11, he provides any information that is false in any material particular; and

(b) at the time he provides it, he either knows it to be false or is reckless as to whether or not it is false.

(4) A person guilty of an offence under sub-paragraph (3) shall be liable—

(a) on summary conviction, to a fine not exceeding the statutory maximum;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both.

(5) No proceedings for an offence under sub-paragraph (1) are to be brought unless—

(a) OFCOM have given the person a notification, in relation to the contravention in question, under paragraph 4 (as applied by paragraph 12);

(b) the period allowed under paragraph 4 for the provision of the information to which the contravention relates has expired without the information being provided; and

(c) OFCOM are satisfied that the case is not one in which it would be appropriate to impose a financial penalty under paragraph 6 (as so applied).

Statement of policy on information gathering

14 (1) It shall be the duty of OFCOM to prepare and publish a statement of their general policy with respect to—

(a) the exercise of their powers under paragraph 11; and

(b) the uses to which they are proposing to put information obtained under that paragraph.

(2) OFCOM may from time to time revise that statement as they think fit.

(3) Where OFCOM make or revise their statement of policy under this paragraph, they shall publish that statement or, as the case may be, the revised statement in such manner as they consider appropriate for bringing it to the attention of the persons who, in their opinion, are likely to be affected by it.

(4) It shall be the duty of OFCOM, in exercising the powers conferred on them by this Part of this Schedule to have regard to the statement for the time being in force under this paragraph.

Obligation of OFCOM to provide information

15 (1) On application made for the purpose by any person, OFCOM must comply with any request contained in that application—

(a) to notify the applicant whether or not any notification is required to be submitted by him under section [notification requirements for satellite packagers]; and

(b) to notify the applicant whether any notification submitted by him for the purposes of that section satisfies the requirements of that section.

(2) An application for the purposes of this paragraph must be made in such manner and form as OFCOM may require.

(3) OFCOM shall not be required to comply with a request contained in an application under this section if (without having been asked to do so) they have already given that person the notification or information for which he is asking.

(4) Any notification or information which under sub-paragraph (1) must be given or provided by OFCOM must be given or provided before the end of the period of one week beginning with the day on which the application for the notification or information was made to OFCOM.

Part 4

Interpretation of Schedule

16 (1) In this Schedule ''must-distribute obligation'', in relation to any person means an obligation imposed by a condition applied to him under section [conditions applying to satellite packagers].

(2) For the purposes of this Schedule, where there is a contravention of an obligation that requires a person to do anything within a particular period or before a particular time that contravention shall be taken to continue after the end of that time, until that thing is done.

(3) References in this Schedule to remedying the consequences of a contravention include references to paying an amount to any person by way of compensation for loss or damage suffered by that person, or in respect of any annoyance, inconvenience or anxiety to which he has been put.

(4) In determining for the purposes of any provision of this Schedule whether a contravention is a repeated contravention for any purposes, a notification of a contravention under any such provision shall be disregarded if it has been withdrawn before the imposition of a penalty in respect of the matters notified.'.

Nick Harvey (Liberal Democrat, North Devon)

I do not know whether this was the point at which the hon. Member for Milton Keynes, North-East thought that the blood-letting would begin, but, suffice to say, I do not see the debate in quite those terms. The Government have a long-standing commitment to ensuring the universal availability of public service broadcasting, which was underlined in the policy narrative to the draft Bill. That referred back to the Government's White Paper as having offered a

''strong commitment . . . to ensuring that public service broadcasters are available on all the main platforms, both before and after digital switchover. There was also a commitment that they should be available to all those who receive them at present.''

The policy narrative went on to propose a balance of obligations. There should be a must-offer obligation on public service broadcasters to provide their services to all platforms balanced by a dual obligation on the main packagers and retailers of satellite channels, both to provide those channels at no extra cost to all their subscribers and to make cards available to those satellite viewers who were not subscribers to any particular satellite package.

The balance of obligations was spelled out in greater detail in the draft clauses published by the Government in July last year. They were described at the time as containing the

''principal clauses to give effect to the policies set out in the Policy statement, including revised clauses relating to the ''must-carry'' provisions contained in the draft Bill''.

In case any members of the Committee thought that my hon. Friend the Member for Sheffield, Hallam and I had spent endless hours dreaming up what the clauses for a must-carry obligation might look like, let me point out to anyone who has not spotted it that the amendments and new clauses now being discussed are the self-same ones that the Government tabled in July, brought back for our further consideration. That is not because we thought that they were perfect. From my perspective, it was perfectly clear that the July clauses had some critical weaknesses. I think that the Joint Committee, which examined them when the ink was still wet, also took that view.

First, those clauses did not propose any action until after digital switchover, whereas I believe strongly that sorting the matter out beforehand should be a precondition for digital switchover. The Joint Committee's report said:

''We see no logic in the Government providing itself and OFCOM with a valuable failsafe and then circumscribing the time at which it can be used. We recommend that the final Bill seeks to give effect to the ''must-carry''/''must-offer''/''must distribute'' arrangements on all platforms and the most effective solution to regional distribution, as determined by OFCOM, at the earliest possible opportunity.''

Secondly, the July clauses did not address the vexed question of pricing for PSB access through digital satellite set-top boxes, although the Government said that they were considering what to do about that. Without that, access to PSB services for the majority of digital viewers will be dependent on lengthy commercial negotiations between the public service broadcasters, Sky and ultimately, if they cannot arrive at agreement, Ofcom. We saw that when past disputes between ITV and Sky did not resolve themselves and the two parties went to Oftel, it took an inordinate length of time to arrive at a conclusion.

That is no way in which to achieve universal access to such crucial services. That is why I shall be looking at amendment No. 527 under the next group. The critical question that I would like answered now is why the Government believed in July that more than 34 pages of clauses were needed to guarantee universal accessibility to public service broadcasting but no longer feel that that is the case. Have they decided that they no longer care about ensuring universal availability of PSB? I presume not. Do they now believe that universal access is guaranteed anyway by the European directives implemented in secondary legislation? If so, why did they not think that in July? Given that the Bill proposes must-carry rules to guarantee universal availability on cable and specifically allocates spectrum to terrestrial broadcasters, why does that same Bill leave such things to be resolved for the dominant digital platform—satellite—simply through the vagaries of a commercial negotiation that may or may not produce the desired result?

That does not make much sense to me, and I do not think that it will make much sense to others. It would not make much sense to satellite viewers if at any time, even only briefly, public service channels became unavailable to them. I readily acknowledge that the matter is complicated, and I do not mean to point fingers at the Government and accuse them of mischief. I have listened to quite persuasive representations from Sky, asserting that existing EU directives provide a must-carry regime in effect. However, if that is the case, why did the Government not take that view in the first place?

Should we not stop to think whether it is a satisfactory solution to such a tricky problem to allow lengthy negotiations between commercial parties that will ultimately be refereed—on past form, very slowly—by Ofcom? It might be better to be more proactive and give Ofcom a responsibility by some means—even if that is not the amendments currently before us—to establish a regime for dealing with such issues in a much speedier, more effective and fairer manner.

At the very least, something has changed the Government's thinking between July and now. They have not said much on public record concerning what has changed their minds. I look forward to hearing the Minister explain what it was.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I start on a note of agreement with the hon. Member for North Devon, concerning the importance of ensuring that the public service broadcasters are available on digital platforms. That is clearly right. The argument is whether the provision is necessary to achieve that.

The hon. Gentleman was honest in moving his amendment. He admitted that he was not the author of the amendments and new clauses. He pointed out that they were proposed by the Government in the original draft legislation and questioned why the Government decided to withdraw them. I suspect that they did so because they listened to the arguments, acknowledged that those arguments were correct and realised that the provisions were unnecessary. The hon. Gentleman asked why the Government thought it necessary to put them forward in the first place, if that were the case. That is a perfectly reasonable question and I am interested to hear the Minister's response. I shall not waste too much time attacking the Government for what they did previously, when in my view, they have finally reached the correct conclusion.

Terrestrial broadcasters have made several arguments as to why the provisions for must carry are necessary, the first of which is that they are necessary to balance the Government's provisions for must offer. I do not think that that follows. There is a clear need for a must-offer provision, which is demonstrated by the fact that for a long time one of the main public service broadcasters did not offer. As a subscriber to digital satellite, I can tell the hon. Gentleman that I found it extremely annoying that I was unable to obtain ITV on satellite for a long time.

ITV have now acknowledged that as a mistake. I was pleased that the head of the ITV network told me that, in retrospect, it had been a mistake. It was clearly a device to try and drive viewers to subscribe to ONdigital where they could find digital ITV. By withholding the product from satellite, ITV felt that it might give a commercial advantage to ITV Digital. In fact, the move proved unsuccessful. It is worth pointing out that it did so at considerable cost to itself. ITV has now admitted that when it reversed its decision and decided to make ITV available through satellite, it immediately benefited from a dramatic increase in the digital dividend, which meant that it made a net gain.

Parmjit Dhanda (Labour, Gloucester)

I am interested to know whether the hon. Gentleman thinks it is right or fair that it cost ITV £17 million to be carried on the Sky platform, when it only cost about £100,000 for them to be carried?

John Whittingdale (Conservative, Maldon and East Chelmsford)

I will come on to the question of whether they should play the marginal costs, but it is worth pointing out that Granada announced in its year-end results on 30 September:

''The benefit from the digital dividend at £49 million was £39 million more than the previous year due largely to the carriage of ITV1 on satellite.''

Although it may have had to pay something to go on to the satellite, the amount that it got back in the digital dividend was considerably greater and as a result it saved money by going on to the satellite. It has not made as much of that as it might have done in advancing its arguments. Its original behaviour in staying off the satellite was damaging in that it may have deterred people from going over to digital. If we are to achieve digital switchover, it is clearly important that people see advantages in changing. The fact that people could not get ITV perhaps made the digital satellite less attractive than it would have been.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

Does the hon. Gentleman agree that the situation in relation to the desirability of the public being able to access all the public service broadcasters is likely to become significantly worse as people remove their analogue infrastructures? The situation was not fundamentally serious when Sky did not carry ITV 1 because people could still access ITV 1 through their analogue infrastructure. However, over time we can expect people to have only a single digital infrastructure. They will take away their old analogue TV aerials and neither maintain them, nor convert them for digital terrestrial. That makes the problem far more serious. We must ensure that everybody carries all the PSB channels.

John Whittingdale (Conservative, Maldon and East Chelmsford)

I entirely accept that. Although once one had experienced digital satellite and the superior quality of the signal, the fact that one had to switch back to analogue to watch ITV simply brought home the poor quality of the technology that one was leaving behind. Obviously, if we do reach a point at which analogue is no longer available, must offer potentially becomes far more important. I do not think that there is any disagreement on must offer.

It is ironic that it was the commercial companies that lobbied us in 1995. Veterans of the Broadcasting Act 1996 will remember the debates on conditional access, which seemed to take up a huge amount of our time. As a result of the lobbying, we achieved the passage of the European advanced television standards directive, which includes a legislative requirement that broadcasters should be given access to the digital satellite platform on ''fair, reasonable and non-discriminatory'' terms. That is the crux of the matter. There is no question but that public service broadcasters can gain access to the digital satellite platform. It is an open platform, unlike, for instance, cable.

The question revolves around the amount that broadcasters should have to pay. That brings me to the point that was made by the hon. Member for Sheffield, Hallam. Some people have suggested that public service broadcasters should enjoy access to the platform and pay only the marginal cost. I do not see why that should be so. Although public service broadcasters are doing a public service, that does not mean that they should not have to pay the full cost of any other service that they purchase. They do not get a discount on their electricity bills or pay only a marginal cost; they have to contribute to the overall cost of the infrastructure.

It is worth saying that we all take digital satellite for granted, but when it was launched an awful lot of people thought that it was going to be a miserable failure. It involved the investment of billions of pounds and a number of people thought that those making that investment were going to come seriously unstuck. It took a leap of faith to make the investment. At the time, there was also competition from BSB. Several people said that BSB was by far the superior technology and that Sky would not survive against the BSB squarial. Well, so much for those who thought that they knew better.

Given the investment that was made at the time and the risk involved, it is only reasonable that those people should be able to get a return on their investment. To say that the public service broadcasters should not have to pay the same commercial terms as others and should not have to make a contribution to the overall cost of establishing the infrastructure is entirely unreasonable. That is not only my view but that of Oftel, which has clearly stated that

''public service broadcasters should pay a commercially negotiated rate for conditional access services . . . This is the basis on which they would expect to pay for any other service which they need to purchase, including other regulated services.''

The terms by which public service broadcasters achieve a contract for carriage on a satellite are rightly subject to scrutiny by Oftel. We are talking about a monopoly, which is why we were clear in 1996 that conditional access terms should be regulated—indeed, they have been regulated. Oftel has clearly stated that

''conditional access providers will not be able to charge above levels that are fair, reasonable or non-discriminatory. All purchasers of conditional access, including public service broadcasters, are able to ask Oftel to enforce this requirement if they regard it as being breached.''

That has always been the case, and it will remain the case under the Bill.

A number of people are pressing for the provision to be put back into the Bill because they do not like the result of Oftel's decision. Oftel has recently examined a complaint about the terms being charged and on 22 October 2002 concluded that

''Oftel found no evidence to support ITV's complaint that SSSL's charges for access to their satellite network were unreasonable, unfair or discriminatory. Oftel has therefore rejected ITV's complaint.''

Sadly, the hon. Member for Rhondda (Mr. Bryant) is not with us this afternoon, but he told me that Oftel had got it wrong. The purpose of establishing a regulator is to establish a body of experts in the examination of competition law and potential monopoly abuse who are independent and able to arbitrate on complaints of that kind. We cannot turn round and say that they have got it wrong when they reach a decision.

I say to the hon. Member for North Devon that the Government's finding it necessary to take the clauses out of the final version of the Bill is an acknowledgement that a successful mechanism is already in place, which will ensure that public service broadcasters are able to access the satellite and that they can do so on fair terms. I therefore support the Government in their decision not to proceed with the must-carry clauses.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

I rise to explore a couple of issues under the clause stand part heading. They concern subsections (8) and (9), which are about setting the terms for any agreement. As the debate has progressed we have heard different views, but the contentious point from the public interest angle is whether the public can get the public service broadcast channels that they want across all platforms or whether things are held up in dispute. The other side of that issue is whether the terms will ensure that the money, which would otherwise be going into programme making for public service broadcasters, is not being paid over the odds for carrying those channels. The public want a balance between those two issues.

Subsections (8) and (9) set out the procedures by which agreements will be made. Subsection (8) indicates that the Secretary of State rather than Ofcom has the primary responsibility, and subsection (9) states that the Secretary of State can effectively delegate those powers to Ofcom. It would be helpful for the Minister to indicate whether the intention is to continue with the current arrangements, in which case subsection (9) means that the Secretary of State will not be involved in negotiating those terms, as that will be delegated to Ofcom, or whether there is an intention for the orders to be more specific on the Secretary of State's role in trying to reach agreement in any potential future dispute between the two. It is interesting that the Secretary of State has the primary responsibility.

Can the Minister assure us that the intention is to be as open as possible on the information about reaching a settlement? Part of the problem is that we are given different figures from all sides. The broadcasters, who clearly have their own beef, are

coming to us and saying, '' We are being charged unreasonably. The platforms we are expected to carry have their own arguments.''

The arguments that the hon. Member for Maldon and East Chelmsford made about the serious capital investment by satellite broadcasters could equally be advanced in respect of cable companies. The financial difficulties that many of them face show that their investments were risky. They are not arguing for the ability to charge more, but there are interesting parallel arguments about investments in infrastructure and the need to make a return.

John Whittingdale (Conservative, Maldon and East Chelmsford)

Investment in cable is a risky venture, and there is a need to achieve a return. However, the positions of cable and satellite companies are not equivalent. A satellite is an open platform from which anyone, by agreement, can be carried. Cable companies offer packages—there is no equivalent open access. Indeed, the BBC has acknowledged that there is no analogy between their negotiations with cable companies and with satellite companies.

Richard Allan (Liberal Democrat, Sheffield, Hallam)

I accept the distinction. I simply wanted to make a point about investment difficulties. There is a public interest in the cable infrastructure not going down, in commercial terms, and there are parallel arguments about the way in which investment is made, but I fully accept that the commercial models used for television carriage are actually very different because of the two different platforms.

I conclude with a point about openness, which is important. The hon. Member for Maldon and East Chelmsford correctly used the word ''fair'' for what we are trying to achieve. I referred to finding a level playing field, but that is not possible. It would be like trying to find a level playing field in Sheffield—they are all on the sides of hills. If one kicks the ball too hard, it ends up in Manchester. We will not find a level playing field—it is not possible in the context—but one that is fair.

The public interest is not to pay over the odds for public service broadcast channels but at the same time to pay fairly to support the infrastructure that delivers the service to them—the hon. Gentleman made a reasonable point. So that everyone can evaluate whether the charge is fair, and with the public interest in mind, far more information must be made available.

It is very clear from the clause that the Secretary of State is primarily responsible if we do not get Channel 3 from one of our broadcasters in the future. I hope that the Secretary of State will set the conditions and the process in a way that makes available as much information as possible from a largely neutral source, presumably the Department for Culture, Media and Sport and/or Ofcom, so that we are able to evaluate whether deals have been settled with fair terms to all sides.

Parmjit Dhanda (Labour, Gloucester)

Having had an Adjournment debate on the topic with my hon. Friend the Minister some time ago, it would be rude not to say something about

it. I read the brief that was written collectively by the BBC, ITV, Channel 4 and Channel Five. It is not often that they all see eye to eye on an issue.

Kim Howells (Labour, Pontypridd)

I wonder why. [Laughter.]

Parmjit Dhanda (Labour, Gloucester)

Let me quote one powerful paragraph from the brief. It says that if the situation continues unchanged,

''hundreds of millions of pounds will be diverted from public service programming to BSkyB in the next decade, helping boost BSkyB's revenues, underwriting its set top box subsidies, and entrenching its dominance of the digital market.''

Brian White (Labour, North East Milton Keynes)

One of the issues that have been mentioned is the cost. However, given that ITV, for example, bears only one tenth of the cost that Sky bears for the conditional access charge, is not the burden of administration of the conditional access network, which brings benefits to all broadcasters, actually falling on BSkyB rather than the public service broadcasters?

Parmjit Dhanda (Labour, Gloucester)

One can argue that it is. I shall deal with that point in a moment. I mentioned earlier the $17 million that was paid, but we must ask whether £17 million is the right amount to pay for something that may cost closer to £100,000. We can discuss the actual cost later. Let me return to the brief from the broadcasters:

''A huge subsidy from public service broadcasters (transferring investment from programming) to subsidise Sky's set-top box giveaway, a marketing decision taken to drive its own Pay TV subscriptions, is quite another. That cannot be what Parliament had in mind.''

We may take what the BCC, ITV, Channel 4 and Channel Five say with a pinch of salt or we can actually listen to it. However, £17 million does seem a lot of money to have ITV put on the Sky platform.

I had my Adjournment debate after many of my constituents had written to me because they had shelled out for premiership football and also wanted to be able to watch champions league football but, because of the dispute between those that must offer and those that must carry, that was not possible without also purchasing the other platform. We must look carefully at those issues.

I seek clarification of the EU directive. If it is the answer to all our concerns, that is terrific. It is what we want to hear. However, I have my own concerns in that the directive may result in bureaucratic problems and slow down the process when we should be looking for another way of resolving the problem, perhaps through Ofcom rather than the commercial negotiation that we are discussing.

Simon Thomas (Plaid Cymru, Ceredigion)

This has been an interesting debate and the briefings have been hard at work. They come to the surface like a lump of coal which hon. Members have picked up and shared with the Committee. The issue is difficult for hon. Members to pick through because strong commercial interests are at work, as well as public interest. I should like the Minister to explain—the hon. Member for North Devon referred to this earlier—the thinking behind tabling and then withdrawing the proposals. If we know what thoughts

went through the Government's mind, we might be better placed to build a framework for the future. There must be some movement on this—perhaps a middle way—that would allow BSkyB to recoup some of its investment over many years in building up a digital satellite audience and, at the same time, acknowledge the position of terrestrial broadcasters who must offer their programmes. That is very different from the position of al-Jazeera or any other television station coming along and asking to pay to put their programme on a satellite channel.

Brian White (Labour, North East Milton Keynes)

Was that not the crux of the Oftel investigation? It came down squarely with an answer in a large amount of paperwork. The answer was that the current regime delivers what the hon. Gentleman is asking for.

Simon Thomas (Plaid Cymru, Ceredigion)

I accept that that was the purpose of the Oftel examination. My concern is that in setting what seem to be quite high costs, particularly in ITV's case, for access when a channel must be offered under the Bill—that was not the case before—could lead to a breakdown of service or difficulty in negotiations between broadcasters and digital providers such as BSkyB. Many years ago the Government's intention was to have two satellite broadcasters to provide competition, but that did not work. There is a monopoly in satellite broadcasting and in public service broadcasting. We must marry the two together without introducing an excessive penalty.

My final question is more specific. What is the position of customers who do not subscribe to any Sky services but simply want to invest—as I have done in my office—in the infrastructure to receive satellite digital broadcasting? My understanding is that each and every time a customer does that, a payment must be made by the public service broadcaster to Sky according to a set scale. That could increase enormously because the last rump of people who are reluctant to cross to digital broadcasting are those who do not want to subscribe. They will expect to receive free on digital the analogue or terrestrial services they now receive. They will take the extra services as a little bonus, but they will certainly not want to pay for them. If there is an expansion in the number of customers, there will be an increase in the payments that public service broadcasters will have to make to the digital satellite broadcaster BSkyB. That might increase the burden considerably and, bearing in mind the Oftel investigation and decision, might have a much more injurious effect on the sums available for public service broadcasting in the very long term. I hope that the Minister will pick up on that, and explain why we are using the current framework of the Bill and why the Government have gone back on their initial movements to ensure a smoother arrangement on must carry and must offer.

Kim Howells (Labour, Pontypridd)

The amendments would reintroduce draft clauses that we withdrew after extensive consultation with various stakeholders. Following the publication of the draft clauses, we had many representations from interested parties and many discussions with them—rightly so, because this is a controversial subject, and our decisions might have strong impact on businesses. We carefully considered

all points of view before we made our decisions, and we believe that we ended up with a good balance.

The bottom line is that we must ensure that public service channels are available on all digital platforms after analogue is switched off. A different approach is needed according to the particular platform. The EC communications directives require that access to conditional access systems be given on fair, reasonable and non-discriminatory terms. Quite rightly, Ofcom, and not the Government, will determine what is fair, reasonable and non-discriminatory, and what that means in relation to public service broadcasters. We are creating Ofcom—and are spending enough time doing it—so we should not then say, ''No, we don't trust it.'' I trust Ofcom and I trust Oftel, and the deliberations that it published in October.

It is absolutely appropriate that the decision on what is fair, reasonable and non-discriminatory—FRND, as we in the Department call it—in a commercial transaction should be taken by an independent regulator in an open and transparent manner, and should be based on economic analysis. The hon. Member for Sheffield, Hallam hinted that perhaps the regulation was not as transparent as it should be on this matter. We debated the subject under clause 3(3)(b), and I reiterate that Ofcom must have regard to the principles of good regulatory practice, including transparency, set out in clause 3. We will expect Ofcom to stick to those principles, and I think that it will.

As the hon. Member for Maldon and East Chelmsford told us, on 22 October Oftel issued a revised set of conditional access guidelines, which explained how Oftel expects conditional access prices to be calculated by digital platform providers, particularly Sky Subscribers Services Ltd., a Sky subsidiary providing conditional access systems. Oftel makes it clear that it was inappropriate for BSkyB to require customers to subscribe to one of its packages to receive the free-to-air channels when all broadcasters were required to contribute to the subsidy of boxes through conditional access charges. That is a helpful statement, and following discussions with Oftel, BSkyB anticipated the regulator's decision, and removed the contractual requirement for consumers who receive a free set-top box to subscribe to its digital television services. That re-creates a free-to-view satellite option for the consumer. I hope that the hon. Member for Ceredigion heard that; I know that it is late in the afternoon, and I could miss that statement, too.

Given responses to the consultation, the new guidelines, and the decision about the free set-top box, it was decided that our policy might be better implemented through a different technical way. There are strong reasons for that decision.

The decision to turn off the analogue signals but to ensure universal access to PSB channels has been taken by the Government and its cost should not be borne by private companies. Commercial PSBs already get the digital dividend, as the hon. Member for Maldon and East Chelmsford reminded us. That does much more than simply compensate for the extra costs of

conditional access. The proof of that is that broadcasters have taken the commercial decision to be on satellite, have enjoyed the benefits, and, even with the current charges for conditional access, have found it profitable.

New provisions have been introduced to ensure that, when the broadcasters are under a legal obligation—that is, when the must-offer and must-provide provisions are commenced by order—Ofcom will review the financial conditions of their licences and, if appropriate, decrease them. The BBC will not benefit from such a review, but it would be part of their licence fee settlement. In addition, Oftel recognises that it will be entitled to different treatment and may get a better deal from Sky. That may also apply to Channel 4. For all those reasons, we do not wish to reintroduce these provisions to the Bill and I hope that hon. Members will not press their amendments.

I will explain what we intend to do with clause 60 and the must-offer provisions. As I have said, we are strongly committed to ensuring that public service channels are available on all the main platforms so that citizens may watch them wherever they live in the United Kingdom and whatever platform they use to receive their television signals.

All the must-carry, must-offer and must-provide provisions will have huge implications for the industry. I am sure that everyone on the Committee understands that. They will also have huge implications for viewers. We have had strong and conflicting representations from all parties. We tried to find the best compromise to achieve our aim of ensuring universal and free access to PSBs while ensuring that all interested parties were fairly treated. We had to comply with European legislation and this clause implements condition 6 of part A to the annexe to the authorisation directive and article 31 of the universal service directive.

We want public service channels to be available on all the main platforms before and after switchover. I will explain the mechanism that we want to set up to meet that objective. In simple terms, we impose on PSBs the obligation to offer their services to all the main platform operators; and, as far as practicable, we impose on platform operators the obligation to carry those services. However, as hon. Members have already hinted, different arrangements are needed for different platforms.

On cable, we reproduce the present system—with must-offer and must-carry provisions—and, in respect of must-carry provisions, we do so in accordance with the new EC rules for networks and services. Cable operators are no longer subject to a licence but they may operate within the general authorisation framework. We give Ofcom the power to ensure that general conditions may be imposed within that framework to secure the availability of public service channels on networks that are used by a significant number of people as their principal means of receiving television.

The list of must-carry and must-offer services will be the channels funded by the BBC licence fee,

Channel 3, Channel 4, S4C, Channel Five and the public teletext service—in their digital form. There are also powers for the Secretary of State to add new channels and to make provision for reasonable compensation and other terms. Those arrangements and the list of must-carry and must-offer services will be reviewed regularly, as required in respect of must-carry services by EC legislation—having regard to such things as the public benefit secured by the channel, the availability of technical capacity, and proportionality. We will ensure that we do not impose any unreasonable burden on cable operators. We are aware of their concern that a long list of must-carry channels may decrease the attractiveness of their platform. We will ensure that that is not the case, while securing universal access to those channels that really benefit the public. A thorough economic analysis will be conducted to ensure that the result is fair to broadcasters, network providers and in benefits to the citizen. That is what the clause provides for. We will not expect Ofcom to impose any must-carry conditions, so long as broadcasters and cable operators reach a voluntary agreement.

To explain the full mechanism, I will sum up what happens on terrestrial and on satellite. On terrestrial, public service broadcasters have guaranteed capacity and they must use that to provide a digital simulcast service: if they fail to do so, they risk losing their licences. We have various clauses to ensure that that capacity is made available by Ofcom and by the multiplex providers.

On satellite, things are not so easy. We must draw a distinction between the satellite operators, such as Astra and Eutelsat, who sell or let transponder spaces on their satellites, the providers of the satellite network who provide the transmission system and so forth that are necessary for the transmission of signals to and from the satellite, the companies that provide satellite services to consumers, such as BSkyB, and the companies that provide access to conditional access systems.

We cannot impose any obligations on the satellite operators, as they are not under our jurisdiction. However, I wish to stress that clause 60 applies to any electronic communications network by cable, xDSL or satellite that is provided in the UK. We had thought of imposing requirements on satellite packagers, but we considered that this new regulatory measure would be a disproportionate burden for those operators and that it would not deliver an effective solution for public service broadcasters. Therefore, we will rely on the EC rules, which require conditional access system providers to offer their services on fair, reasonable and non-discriminatory terms. Ofcom will implement the EC provisions—as Oftel currently does.

We are adding provisions to require public service broadcasters to offer their channels on satellite—the must-offer conditions—and to provide solus cards to those viewers who will no longer be able to receive terrestrial signals after switchover—that is part of the must-provide conditions. The hon. Member for Ceredigion did not mention that point, but he got

close to doing so. We will look in detail at the provisions for satellite when we reach the relevant clauses, but I thought that it would be useful to describe the full picture of the provisions that ensure the distribution of public service channels on all the main platforms.

Those arrangements for cable and satellite will be brought into effect only if and when that is necessary. We might be in a situation in which contractual arrangements make the implementation of those arrangements superfluous, but we might not, in which case a commencement order would bring them into effect. We do not expect that to happen now, but we might need to commence those provisions in the run-up to full switchover in order to allow it to happen. Before we switch off the analogue signals, we would want to ensure that the small number of people who cannot get digital terrestrial television can receive their television services by another means.

John Greenway (Conservative, Ryedale)

Given that we will not reach clause 266 before five o'clock, in light of what the Minister is saying, will he look carefully at amendment No. 451? It is important to ensure that the cost of providing the solus cards does not arise unless and until we are actually at the point of digital switchover. He does not have to respond to that point now.

Kim Howells (Labour, Pontypridd)

I assure the hon. Gentleman that I will look into that.

Question put and agreed to.

Clause 60 ordered to stand part of the Bill.

Clause 71 - Conditional access systems and access to

Nick Harvey (Liberal Democrat, North Devon)

I beg to move amendment No. 527, in

clause 71, page 70, line 11, at end insert—

'(2A) It shall be the duty of OFCOM, when setting access-related conditions under section 69(5), and ensuring that the conditions are set in accordance with subsection (2)(b) (and in particular the first indent to sub-paragraph (b) of Part 1 to Annex 1 to the Access Directive), that the factors listed in subsection (2B) are taken into account.

(2B) The factors referred to in subsection (2A) are—

(a) achievement of any of the three objectives specified in section 264 or 265 or of any corresponding objectives in relation to the BBC, or the imposition of any obligation pursuant to section 264 or 265, or any corresponding obligation imposed on the BBC, whether (in the case of the BBC) corresponding objectives or corresponding obligations arise under such an agreement as is referred to in section 193 or otherwise;

(b) the extent, if any, to which a person to whom such a conditional access system is to be provided requires the use of such a system—

(i) to achieve an objective or to secure the discharge of an obligation of the kind referred to in paragraph (a); or

(ii) to achieve objectives or secure the discharge of an obligation imposed on it pursuant to its licence or, in the case of the BBC, pursuant to objectives or obligations laid down in its Charter or pursuant to the agreement referred to in section 193; and

(c) the extent, if any, to which the use of such a system by the person to whom such a system is to be supplied confers a benefit on the provider of such a system or on any other person having a commercial interest in such provider.'.

As with the amendments to the previous clause, this is not an entirely original idea. In the policy narrative to the draft Bill, the Government floated the idea of requiring Ofcom to consider the special position of public service broadcasters, when regulating the price of access to satellite conditional access systems.

Given his response to our arguments about the previous clause, I am disappointed that the Minister did not cast much more light on the consultation processes of last July. He seems to have great faith in the commercial negotiations. Oftel's interpretation of European Union rules for regulating access to conditional access services requires commercial negotiations that are focused on fair and effective competition. That will leave Sky, as the satellite provider, with great freedom and in a strong position, whereas the public service broadcasters will have less freedom. We are, in effect, putting a pistol to their heads and not putting an equivalent pistol to the head of Sky as the platform provider.

Sky's arguments were rehearsed by the hon. Member for Maldon and East Chelmsford. It has gambled and invested hugely. I would not argue that public service broadcasters should go up to the satellite platform free, nor that they should do so even at marginal cost. It is fair that public service broadcasters pay for everything else, such as electricity. Nevertheless, just throwing such matters entirely into the negotiating process, as the Government intend to do, still leaves Sky in a very strong position.

The rest of the debate is in Hansard.