Office of Communications Bill [Lords]

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Mr. John Grogan (Selby): It gives me great pleasure to follow my fellow north Yorkshire MP, the hon. Member for Vale of York (Miss McIntosh), whom I will attempt to overpower with my arguments in the next few minutes. Apart from the close proximity of our constituencies, I have one thing in common with the hon. Lady in that I, too, have not yet got digital television in my constituency home. I urge her to join me in getting one of the £99 boxes retailing from a good Yorkshire firm, Pace, which allow the purchaser to pick up all the free-to-air digital channels, including the BBC's.

Miss McIntosh: I am grateful to the hon. Gentleman, my distinguished neighbour. What does he propose for those of our constituents who have more than one television set in their home? Should they spend £99 per set, or should they physically move their box around the house from set to set?

Mr. Grogan: Some of my constituents have more than one television, but I would say that the purchase of a £99 box would represent a toe in the water for them, enabling them to see the new channels that are now available. It is interesting that they have become available because the BBC, unlike other broadcasters, cannot set up new channels without the Secretary of State's consent. It is regulated more than other broadcasters. If Ofcom rather than the Secretary of State had complete control over the BBC, I doubt whether Ofcom would be able to withstand the many commercial pressures from commercial TV companies, which it will have a duty to promote and help. For example, would it have been able to resist those companies arguing against the BBC's new children's channels, which are coming into operation shortly?

I want to consider some of the hon. Lady's arguments in detail. She insisted several times that Ofcom should regulate the BBC for economic and content purposes. Of course, Ofcom will regulate the BBC for those purposes—that is stated clearly in the

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White Paper. In economic terms, for example, commercial radio stations need have no fears, given that allocation of radio spectrum and other matters come under tier 1 regulation. Equally, the BBC will be regulated in terms of content. It is externally regulated now by the Broadcasting Standards Commission, to which one can make complaints about BBC programmes, as people in north Yorkshire occasionally do. There is already an independent regulator to which they can apply in relation to content, and they will be able to apply to Ofcom in the same way.

Ofcom will carry out light-touch regulation for many commercial companies, but it will regulate the BBC far more heavily than it has been regulated in the past. If the hon. Lady or her constituents are concerned that the BBC is not fulfilling its regional remit, they will be able to complain about the BBC to Ofcom, as an external regulator. She suggests that people sometimes have complaints about impartiality. If she feels that the BBC's news coverage is prejudiced, she will be able to complain to Ofcom about not only the content but the lack of primetime news. The BBC will be strongly regulated by Ofcom.

The argument centres on tier 3 regulation—that is the meat of the debate. I am sorry that my hon. Friend the Member for Rhondda (Mr. Bryant) is not here, as he is debating the same issue in the Select Committee on Culture, Media and Sport. His was the crucial speech on Second Reading; he asked what public service broadcasting was all about. It is about the content of BBC programmes such as ''Walking with Dinosaurs''; it is about its history and sports programmes, which allow the mass of the population to watch the World cup, for example, rather than restricting coverage to those on subscription. To propose that Ofcom should have a detailed overview of that is to misunderstand the ecology of broadcasting, to use the hon. Lady's phrase.

Ofcom should be a light-touch regulator. The BBC itself must ensure that it maintains high standards in its programming output and remains one of the leading public service broadcasters in the world. BBC governors have a long history of holding the BBC to account, ensuring that it appoints managers who are committed to delivering programmes of the sort that I mentioned. Under tier 3 regulation commercial companies will have to report to Ofcom and give a broad outline of their programme priorities, but Ofcom will have a light touch. The BBC will have to do the same but, if it fails to fulfil its remit, the backstop powers will rest with the Secretary of State and Parliament.

The BBC was set up, all those years ago, with the intention of distorting the market—it was intended to be a public service broadcaster with a different ethos from other broadcasters. That ethos is summed up in the culture of the BBC governors. Will the hon. Lady reflect on the matter? Her party's policy is a little awry. On Second Reading, the Conservative Front Bench spokesman could not say whether his party supported the privatisation of the BBC. The hon. Lady has expressed her admiration for the organisation—indeed, the Conservative party in government has a

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long tradition of supporting public service broadcasting, for example, it presided over the establishment of Channel 4 and ensured that the BBC was not privatised.

None the less, the hon. Lady referred to the possibility of replacing the governors. If that is on her agenda, it would be a radical step and beyond the scope of a modest little paving Bill like this. She should develop her policies over the next two or three years. As she says, there will be a big debate about the future of the BBC in 2004–05. I hope that the Conservative party will have clarified its views by then, and that it come out in favour of public sector broadcasting. Now is the wrong time to raise the Aunt Sally of the BBC's not being regulated. Clearly it will be regulated more tightly than before under OFCOM.

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There is no need for the amendments. Their logic, if taken to its limit, would whip up the ecology of public service broadcasting that has served us all well. As a fellow north Yorkshire Member of Parliament, I urge the esteemed hon. Lady, for whom I have much respect, to reflect. I am pleased that she admires the BBC. If she were to reflect a little more, she would probably withdraw the amendments.

Mr. Allan: This is becoming something of a Yorkshire debate. I shall add a south Yorkshire perspective, probably with more sympathy for the arguments advanced by the hon. Member for Selby (Mr. Grogan) than for those of the hon. Member for Vale of York, although hers were seductive. When first thinking about the establishment of Ofcom, it is logical to ask why the BBC should not be included. However, the amendment would fail to achieve that in sensible way. In any case, the hon. Lady suggested the proper context for consideration of the future of the BBC—charter renewal in 2006.

One of the hon. Lady's more seductive arguments involved asking why the Government do not deal with the matter now, to save themselves hassle in the run-up to the next general election, so that they do not need a big debate about the BBC in 2004–05. That was a wonderful offer coming from the Opposition, but they would do neither themselves nor the British public any favours by getting the BBC question dealt with separately.

The BBC is a big issue for the British public. Every household pays towards it and feels sensitive about it. Most households regularly use it for radio, television and interactive services over the internet, and they feel warmly about it. It is right to hold a big public debate in 2004–05—a debate that should be independent and non-partisan, in the spirit of the BBC. Election timetables should not worry us. We should not shy away from that debate.

My fear is that if we try to tuck everything up in the Ofcom process, we shall go without the full debate that is required. If we do not give the issues enough thought, unexpected ramifications will emerge later. We will have set a time bomb, whose eventual explosion will damage public service broadcasting, the public interest and the reputation of politicians—if that can sink any lower.

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A flaw in the amendments is the suggestion that the BBC governors are comparable to the group of regulators being merged in Ofcom. They are not. The BBC is a self-regulating broadcaster. If a body were being set up in which the board of directors of Carlton, Granada, News International and so on were to be represented, it could be argued that a BBC governor would be comparable to those—certainly more than to the independent standards commissions and other authorities. To add the BBC board of governors to a list that includes the Broadcasting Standards Commission, the Director General of Telecommunications, the Independent Television Commission and the Radio Authority would create an unwieldy five-legged stool, with one leg not comparable to the other four. That would be the wrong method.

In considering the future of the BBC, we think of it as a broadcaster. We must consider the extent to which that broadcaster, which is comparable to Carlton or some other media group, should be made even more comparable to such groups and brought into a common, market-based framework; or the extent to which it should stay separate. In this context I differ from the hon. Member for Selby on one point—although we might agree if we flesh out the argument. I think that public service broadcasting is not fundamentally about content, but about channels. That is the crucial distinction in respect of the BBC.

The BBC controls channels of the current terrestrial broadcasting spectrum, which every broadcaster must carry. Digital and satellite broadcasters too must carry the BBC channels. It controls channels of the airwaves, with local radio, and now it controls channels within the internet, with respect to the BBC interactive services. It is important to putt together those channels, which include content with a public service remit, but far more than that.

I want to avoid the situation that would occur if the amendments were accepted and an homogenised, market-based framework developed in which we saw the BBC only in terms of its provision of content. We have an organisation that provides a ''Walking with Dinosaurs'' every now and then, and then flogs it to all the commercial channels, but if we thought of the BBC as essentially commercial and decided that only content provision was important, we would lose sight of an important part of the BBC spectrum.

Developments such as BBC interactive are very significant. The BBC has developed perhaps the most successful website in Europe. It is the primary point of contact for news and many other things. No commercial provider would have developed that; the licence fee enables its provision for everybody—globally, as well as in the United Kingdom.

Local radio has a particular market niche. All of us as local politicians are familiar with it, because BBC local radio provides us with our primary exposure to constituents and others in the area. No other body fulfils that function: in the commercial market, nobody wants to listen to us talking about topical issues—or, at least, few people would pay money to do so. However, through the BBC, people engage in the debate—they are led into it in a way that would not

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happen commercially. Commercial radio broadcasters do a good job locally, but their news content is very small and their local political news is tiny; they cover only big, national political issues.

The BBC fulfils some very specific functions, going well beyond the obvious remit of the BBC1 and BBC2 channels. We can become fixated on the BBC's most obvious output, but interesting changes are ahead. That is an argument for waiting until the 2006 charter renewal to see how things develop.

Digital free-to-air services are crucial. The £99 box available from Pace—a Yorkshire firm, as we have heard—should sell, because it will appeal to many people who do not want to take up a subscription service. I have put on record my view that the digital switchover—or analogue switch-off—is not feasible unless and until there is mass penetration of free-to-air devices, which has not been the case to date. I shall welcome it.

People will have to make a choice. I hope that the price of the boxes will come down; that is usually the case with technological devices. Currently, people who have four television sets would have to buy four boxes, but in future, using what might become a £49 box, they might be able to extend the range of each set from five to 20 free-to-air channels. Most households will probably find a one-off payment of £49 comfortable.

That will create a new landscape for the charter renewal and for the concept of the BBC. If people see a range of free-to-air channels, digital radio services and interactive services developed, we shall be going to them with a different proposition. They will be asked to pay £100 or so a year for a licence fee—or some different model of payment—for the range of services. Perhaps we shall include within the digital television subscription an element that pays for the public service broadcasting channels. A range of options that we cannot foresee will become available. We shall see it more clearly by 2006—another reason to wait until that stage before making any fundamental decision about how the BBC should move forward.

My final point relates to independence. We live in moderate times—there is no perception of major political control of the broadcasters, although it is sometimes suspected—accusations are often bandied around in the case of the growth of News International. However, there is no perception that any individual political party has control of the major news broadcasters in the way in which, for example, Prime Minister Berlusconi clearly had control over the major media broadcasting group in Italy, which created a lot of political difficulties.

In some ways, we underestimate the importance of independence. There are vehement complaints from both sides: whoever is in government accuses the BBC of not being independent, and such complaints have heard for years. The fact that the complaints come from both sides suggests that perhaps the balance is appropriate. Having a statutory independence and lacking dependence on the owner of a group are important. One cannot regulate for true independence

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if ownership is in the hands of a particular political interest group. One can put regulators in place, and make all the rules that one likes, but ownership that is not in independent hands will always override. Fortunately, we have not experienced anyone asserting such control. That is partly because the BBC has been there as a bulwark.

Making an explicit decision to place control of a certain number of the most popular channels in the hands of an independent broadcaster goes against market logic. There is market failure in that respect, and my perception is that that failure is growing. Media ownership is concentrating. We have seen the ITV groups restructuring into ever larger groups. The risk of political control of media outlets increases in the current marketplace, and it looks as though that risk will increase further. That suggests to me that the question of independence will become more, not less, critical in the future.

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