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Mr. Sproat: I did not know when I began all this that the hon. Member for Ellesmere Port and Neston was something of an expert in these matters. Anyway, the BBC meets the rest of the cost. Any surplus or deficit is a BBC responsibility and it therefore remains with the main scheme. I hope that although the hon. Gentleman is clearly unlikely to agree with me, he will understand why we decided that it would not be proper for the 850-odd staff who were being transferred to the new organisation to get a share of the accrued surplus.
Mr. Clifford Forsythe (South Antrim): I am trying to follow what the Minister is saying. Is he saying that the contributions made by employees would not be part of that surplus?
Mr. Sproat: I am saying three things. First, any employee who is transferred to the new undertaking will have the option of taking the accrued benefit to the new undertaking. Secondly, the employee will have the option of leaving the accrued benefit in the BBC scheme, knowing that it will be uprated by RPI every year up to a limit of 10 per cent. a year. Thirdly, the employee can transfer the accrued benefit to a private scheme. I was saying to the hon. Member for Ellesmere Port and Neston that it would not be appropriate to divide up any part of the accrued surplus and to hand that over.
Mr. Forsythe: Who will estimate the total value of the pension fund? Which actuaries will be involved? Will there be actuaries representing the BBC, will there be actuaries representing the new firm and will Government actuaries be involved in order to arrive at a satisfactory conclusion?
Mr. Sproat: That is a very fair question. The answer is that the BBC will take the advice of its actuaries; no doubt the new undertaking that purchases the transmission service will have its own actuaries. In addition, under clause 126, my right hon. Friend the Secretary of State has to approve the transfer of the scheme and she will agree to a transfer only if she is convinced by the Government actuaries that it is a fair way in which to do things.
Mr. Miller: Am I right in assuming, therefore, that if there was, say, a £1 million surplus attributable to the past contributions of the people transferred into the new company, the BBC could take a £1 million pension holiday? That would be much to the advantage of the licence payer, but clearly to the detriment of the 850 employees.
Mr. Sproat: What will happen is quite clear. I can see that I shall not convince the hon. Gentleman that it is not just clear but right. I believe that our proposal is right. I looked at the matter carefully after the hon. Gentleman's comments in Committee. The accrued surplus will remain with the BBC; it will remain for the pension fund that
will service the 44,000 other BBC employees who will remain in it rather than for the 850. The 850 over 44,000 share will not be transferred because keeping a surplus is the responsibility of the BBC pension fund. The BBC provides the fund and it must maintain it for the benefit of the 44,000. However, I understand that under the proposed scheme, the three options that I set out to the hon. Member for South Antrim (Mr. Forsythe) will be available and the BBC will give every possible financial advice to those employees transferred as to which of the three options is best for them.
Amendments Nos. 51 and 52, tabled by the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis), seek to ensure that the quality of transmission services in less populated areas will be maintained for 25 years following the privatisation of the BBC's transmission network. The hon. Gentleman's concern is understandable, but I hope to convince him--in this case, at least--that it is unnecessary.
Under the Broadcasting Act 1990 and the agreement between my right hon. Friend the Secretary of State and the BBC, the ITC and the BBC are responsible for establishing and maintaining the standards of quality, coverage and reliability of the four main terrestrial channels. That did not change when the IBA's transmission network was privatised in 1991 and it will not change with the privatisation of the BBC's transmission network.
As the hon. Gentleman will know from our previous discussions, the ITC and the BBC have achieved 99.4 per cent. coverage for their services in the United Kingdom and 98.3 per cent. in Wales. That impressive level of service will be maintained following privatisation.
The Government have already pledged that analogue transmissions will not be switched off until a roughly equivalent level of service is provided by digital terrestrial television. That will ensure that the interests of all viewers--including those in sparsely populated areas--are protected.
I hope that hon. Gentleman will be reassured that the privatisation of the BBC's transmission network will in no way disadvantage people in less populated areas of the country and withdraw his amendment.
I now turn to amendments Nos. 254 and 255, tabled by the hon. Member for Moray (Mrs. Ewing). Having had the honour to represent her part of the country, I well understand the strong feelings of people there. The amendments seek to ensure equality of access to transmission services for those living in less populated areas, following the privatisation of the BBC's transmission services. The amendments would provide for the quality of transmission services in such areas to be enhanced and then maintained for 25 years following privatisation.
Let me first reassure the hon. Lady and the House that the privatisation of the BBC's transmission network will in no way disadvantage people in less populated areas. I explained why a few moments ago in answer to hon. Member for Ceredigion and Pembroke, North. It is a long-standing principle of Government policy that broadcasters are not required to provide a television service to every potential viewer because of the cost and the technical difficulty of reaching small and scattered communities. That followed the recommendation of the
Annan committee in 1977 that there should be no obligation on the broadcasting authorities to provide satisfactory coverage to communities of fewer than 500.
Mrs. Ewing:
People in those areas are required to pay the same licence fees as everyone else, but they do not receive the same level of service. Could there be some adaptation in the light of that?
Mr. Sproat:
Again, I know from personal experience that that irritates many people in those areas, but alas the television licence is no guarantee of the quality of reception; it simply gives permission to receive reception. I hope that some of the problems that the hon. Lady mentioned will be addressed and improved when we get digital television. In the meantime, I can say only that the Annan committee made that recommendation in 1977 and successive Labour Governments--for a few months, anyway--and Tory Governments have stuck to that principle.
The Government have pledged that analogue transmissions will not be switched off until a roughly equivalent level of service is provided by digital terrestrial television. That will ensure that the interests of all viewers--including those in sparsely populated areas--are protected, so I ask the hon. Lady to withdraw her amendment in light of that assurance.
Madam Speaker:
The hon. Gentleman has already spoken on this group of amendments, so I am afraid that I cannot allow him to do so again. I must put the Question.
Question put and agreed to.
Clause read a Second time, and added to the Bill.
Mr. Sproat:
I beg to move, That the clause be read a Second time.
The new clause arises from the commitment that I gave in Committee on 21 May to discuss with the Radio Authority what further safeguards might be necessary following our liberalisation of the ownership of local radio licences.
A number of hon. Members expressed concern that our liberalisation could lead to predators purchasing existing licensees simply to use that licence to transfer an existing
AM service on to digital. We are confident that the promises of performance attached to licences can be rigorously enforced to prevent that, and I point to the Radio Authority's recent imposing of fines on a number of stations that failed to remain within the terms of their promises as evidence.
'. Schedule (Transfer schemes relating to the BBC transmission network: successor companies) (which makes provision about the accounts etc. of wholly-owned subsidiaries of the BBC to which any property, rights or liabilities are transferred in accordance with a transfer scheme) shall have effect.'.--[Mr. Wells.]
Brought up, read the First and Second time, and added to the Bill.
'. After section 106 of the 1990 Act there is inserted--
"Variation of local licence following change of control
106A.--(1) Any local licence granted to a body corporate before the commencement of this section shall be taken to include--
(a) a condition requiring the body to give the Authority advance notice of any proposals known to the body that may give rise to a relevant change of control, and
(b) a condition requiring the body to provide the Authority, in such manner and at such times as they may reasonably require, with such information as they may require for the purposes of exercising their functions under subsection (3).
(2) Subsection (3) applies in relation to any local licence which--
(a) was granted before the commencement of this section,
(b) is held by a body corporate, and
(c) has not previously been varied under that subsection.
(3) Where, in relation to any local licence to which this subsection applies--
(a) the Authority receive notice, in pursuance of a condition imposed under subsection (1) or section 88(2)(d), of any proposals that may give rise to a relevant change of control, or
(b) a relevant change of control takes place (whether or not that change has been previously notified to the Authority),
the Authority may vary the licence, by a notice served on the licence holder, so as to include in the licence such conditions as they consider appropriate for the purpose of ensuring that the character of the local service is maintained after the relevant change of control.
(4) Subject to subsection (5), any new or varied condition imposed under subsection (3) in relation to any matter may be more onerous than any existing condition imposed under section 106(1) in relation to that matter; and in this subsection "existing condition" means a condition of the licence as it has effect, or had effect, before the relevant change of control.
(5) The Authority may not under subsection (3) include any new or varied condition in a licence unless the new condition or the condition as varied is one which (with any necessary modifications) would have been satisfied by the licence holder--
(a) during the three months immediately before the relevant date, or
(b) if the Authority consider that the performance of the licence holder during that period is not typical of its performance during the twelve months before the relevant date, during such other period of three months during those twelve months as they may notify in writing to the licence holder;
and for the purposes of this subsection "the relevant date" is the date of the relevant change of control or, if earlier, the date on which the Authority exercise their powers under subsection (3).
(6) The Authority shall not serve a notice on any body under subsection (3) unless they have given it a reasonable opportunity of making representations to them about the variation.
(7) Where, in any case falling within paragraph (a) of subsection (3), a notice under that subsection is served before the change to which it relates takes place, the variation shall not take effect until the change to which it relates takes place.
(8) The power in subsection (1) of section 106 to vary conditions imposed under that subsection includes power to vary conditions imposed under subsection (3).
(9) In this section "relevant change of control" means a change in the persons having control over the body holding the licence." '--[Mr. Sproat.]
Brought up, and read the First time.
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