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Mr. Robert Syms (Poole): The history might have been different had BSkyB been part of the original consortium, but competition law, of course, precluded it from being so. Given the changed situation, is BSkyB still precluded from having an impact on the future of ITV Digital in receivership?
In the Budget the Government cracked down on tax relief on films, because television companies were using it extensively to make programmes. The Treasury now expects to take £500 million, principally from the television industry, over the next three years. Does the Secretary of State consider that that will have any impact on the financial background of television companies and their ability to sort out this situation?
Tessa Jowell: As I am sure that the hon. Gentleman understands, who bids in the event that the licences are re-advertised, or who bids for the new licences, or who buys the company are matters for the ITC and the administrator, with reference to the Competition Commission as necessary, so I have nothing to add to that. In relation to the tax changes announced by my right hon. Friend the Chancellor in the Budget, we are in discussion with Treasury Ministers about their application and in discussion with the industry, as the hon. Gentleman would expect.
Mrs. Jackie Lawrence (Preseli Pembrokeshire): My right hon. Friend mentioned in her statement the fact that 1,000 people in Pembrokeshire will lose their jobs unless an alternative buyer is found to operate digital pay TV. Will she please impress on the ITC the need to speed up the licence transfer process to encourage another buyer to come forward, in the hope that we can preserve those jobs? Will she, in her discussions, bear it in mind that the 1,000 jobs in west Wales and 700 jobs in Plymouth and the livelihoods of those people are far more important than the bleating of a few wealthy football chairmen, whose intransigence and stubbornness seems to have brought this situation to crisis point?
Tessa Jowell: I pay tribute to my hon. Friend for her unstinting efforts on behalf of her constituents to mitigate the effects of a very difficult and uncertain time for them. That difficulty and uncertainty is likely to continue for days and possibly weeks, but I recognise what she says about the importance of a speedy resolution. For that reason, the ITC has said that if the licences have to be re-advertised and re-tendered, that will happen within an accelerated time scale of about six weeks. Obviously, everyone involved needs some certainty—not least my hon. Friend's constituents, who are wondering whether they will have a job in two weeks.
Martin Linton (Battersea): I thank my right hon. Friend for her statement. As she mentioned, 150 employees at the headquarters in Battersea were made redundant on Monday, along with about 80 field staff, but
there are still about 250 at the headquarters, and I spoke to some of them this morning. They are very grateful for the period of grace that they still have, and for any attempts to find a buyer or a consortium that can take over the company.The football contract is certainly seen by everyone as a very important element in precipitating the crisis, but is my right hon. Friend aware that the company regards the fundamental issues as being technical and competitive? They are technical in the sense that, despite the Government's best efforts, the reach of the transmitters has still been much less than expected and the strength of the signal has been an enormous problem. It is about 20 times higher in Australia, even after all the efforts that have been made. The company would ascribe to those technical factors the fact that it had 1.2 million customers instead of about 2 million.
There were also competitive problems. Sky is of course required to make its platform available, but ITV has been paying more than the retail price for that and that extra cost has been a huge element in the crisis. In many other countries, such an arrangement would be regarded as predatory pricing. I understand that a complaint has been lodged with the OFT. There is also a lawsuit in the United States over the switchcard.
The Secretary of State may not be able to comment on those issues, but those to whom I spoke this morning earnestly hope that further action is taken on those that are essential to the future of the whole digital platform, not just the future of ITV Digital, and those over which the regulator and Government have power.
Tessa Jowell: My hon. Friend has made great efforts to explain the uncertainty felt by his constituents who are employed by ITV Digital, arising from its collapse. He also mentioned two important issues to which we have already referred, the first being the need to improve the technology by increasing signal strength. I have made the position clear on that. The second issue is the need to extend coverage so that viewers can get a picture of equally high quality whether they are watching the commercial channels or the public service broadcasting channels, particularly the BBC. The need to address those requirements is being driven by the ITC as regulator. The importance of those issues is why those regulatory and technical obstacles in a new and emerging technology have been addressed with such success.
Finally, my hon. Friend was absolutely right when he referred to the various aspects that touch on the role of the competition authority. They sit fairly and squarely with the authority and he understands that it would not be right for me to comment.
Mr. Dennis Skinner (Bolsover): Does not the Minister find it reprehensible that those television companies that in the past 20 or 30 years or more have been making money hand over fist—they have had a licence to print money—can engage in a contract and then blithely walk away when it does not suit them because they are going to lose money? What steps can we take as a Government to ensure that they foot the bill, especially in regard to the 1,700 people who are bound to lose their jobs?
In the absence of any proposals from the Tories, who just had 10 questions, or the Liberals, who had a few spending commitments but no proposals, will the Minister
consider the unthinkable? Is there any legal, financial or economic impediment to the BBC's stepping in as a rescue act, not to line the pockets of football chairmen or anyone else but to ensure that some or all of these jobs are saved?
Tessa Jowell: My hon. Friend makes points that many people will sympathise with. However, the facts are that the demise of this commercial company is a matter for the company, its creditors and the administrator. It is the Government's role to provide assistance with the consequences, not to intervene directly in what is a commercial contract between Carlton and Granada and the Football League, or in the relationship between Carlton and Granada and the creditors of ITV Digital. However, I am sure that companies facing these circumstances and the resulting damage understand the importance of their reputation and the way in which they conduct themselves in these very difficult times.
At the moment, the BBC is clearly one of the contributors to the digital terrestrial platform, and we expect that to continue. If and when the licences are re-advertised, we hope that bids will come from a very wide range of potential providers of programme services on that platform, and the ITC will be looking for such bids.
Mr. Clive Betts (Sheffield, Attercliffe): My right hon. Friend has rightly drawn attention to the fact that in the general sense, football clubs and football itself are at least partly the author of their own misfortunes, given the unsustainable salaries that clubs have been paying. However, in this case it was probably not unreasonable for clubs to enter into contracts beyond the end of this season, given the basis of the Football League's contract with ITV Digital. In keeping with the comments of my hon. Friend the Member for Bolsover (Mr. Skinner), whatever the legal arguments, is it not unacceptable for companies of the status of Carlton and Granada to stand idly by and watch communities in fear of the loss of their football clubs? Have not these companies at least a moral obligation? Is it right for them to reap the benefit of the digital dividend, while at the same time seeking to wash their hands of the consequences for football of the collapse of a company of which they were joint owners?
Tessa Jowell: As the Government, we have to operate within the constraints of the legal contract as it stands. My hon. Friend expresses a frustration that will be reflected by football fans and clubs up and down the country, but the fact is that the contract between ITV Digital and the Football League existed. The matter may be the subject of litigation, so it would be unwise of me—even on the Floor of the House—to say any more than
the fact that it is a great pity that a resolution was not achieved, and that football is so very heavily out of pocket.
Lawrie Quinn (Scarborough and Whitby): Having listened closely to the Secretary of State's statement, Members will know that discussions have taken place with the management of football clubs. Has any contact been made with the Professional Footballers Association, however, particularly given that the lion's share—a suitable phrase in English terms—of the costs associated with football are generated by the players' wage bills?
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