Office of Communications Bill [Lords]

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Miss McIntosh: Thank you, Mr. Gale. The noise is very distracting—it makes me lose my trail, and I have to go over the same points again.

Mr. Richard Allan (Sheffield, Hallam): Notwithstanding the general climate for ITV stations, I am trying to understand the amendment. As Ofcom functions in its shadow form, the Independent Television Commission will still be responsible for ITV. In its shadow form, Ofcom will not have powers to do anything about ITV regional programming, even if it wanted to.

Miss McIntosh: I am grateful to the hon. Gentleman for allowing me to explain that the

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function of the Bill is to prepare Ofcom for its functions, which is why it is so important to get it right.

Mr. Taylor: To some extent the moment has passed, but recession is relevant to the discussion. The problem for companies such as Carlton is that the diffusion of different distribution platforms has diluted their ability to attract advertising. Regional television may attract more localised advertising which will assist them to continue broadcasting.

Miss McIntosh: I am most grateful to my hon. Friend, who puts the point more eloquently and accurately than I did. Perhaps I may use that as a building block. I tried, in my humble and inimitable way, to make a point about the current deep recession, about which many of us agree. I did so precisely because of the point made by my hon. Friend. Independent stations' revenue from advertising and other commercial ventures has fallen considerably.

The fall in advertising revenue is causing the greatest problem. Curiously, the impact of 11 September has a bearing on that fall. I declare an interest because my husband is sales director for an American company, Delta Air Lines. Airlines and television companies are suffering from a common problem. At this time of year—31 January—most of the advertising revenue on television and other media should come from holiday advertising. It speaks volumes that that market has collapsed so dramatically.

Mr. Simon Thomas (Ceredigion): Will the hon. Lady join me in welcoming the new Wales Tourist Board campaign, which is pumping money into the television companies and attracting tourists to Wales.

Miss McIntosh: Not only will I join the hon. Gentleman, but I will express a tinge of envy. If the English Tourism Council had even a modest marketing role, it might advertise north Yorkshire in that way.

Advertising revenue has fallen in this quarter; from January to March, revenues will simply not be the same as usual. The main British Airways advert being carried at the moment simply asks people to go and do the business by travelling to get the business. It is a very powerful advert.

Against the background of falling advertising revenues, independent television stations face unprecedented competition. That is true of radio stations too, but the amendment refers specifically to independent regional programming and news editions. I pay tribute to Independent Radio News, which covers London. For hon. Members who might not know about it, it is a great alternative to BBC Radio 5. The unprecedented collapse of advertising revenue and falling audience shares because of unprecedented competition, especially from such alternatives as BBC News 24 and satellite television, have exerted pressures that we must acknowledge. Bearing in mind that the Bill is preparatory to the main communications Bill, we must recognise that a function of Ofcom at this stage should be to ensure continued effective ITV regional programming and news editions.

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I pay tribute, Mr. Gale, to your many years' experience in broadcasting and media, on which we in the Committee are hoping to draw. When you speak to your local broadcast media, as I am sure all Committee members do regularly, you will hear the deep concern at the impact such problems are having, and not only on regional programming. We do not only want to see more ''Countdown'' and ''Coronation Street''—now the subject of an all-party parliamentary group; we want to see ITV take regional programming seriously, especially regional news editions. We are all interested in accessing through regional television news broadcasts the wider audience that we could not meet, for example, by standing on Thirsk marketplace on the two days a week that the market meets.

ITV performs public service broadcasting extremely well. It must take its regional programming and news editions seriously against the background of intense competition from the BBC and others, and falling advertising revenue. I commend the amendment to the Committee, against the background of the Government response that was enthusiastic and eloquent about regional television programming and news editions. I recognise that Ministers other than the Under-Secretary of State might have been responsible for that—I accept that the appointment of the Secretary of State and Ministers in each Department is in the Prime Minister's gift. However, as the response is dated November 2001, the Under-Secretary of State might have been responsible for the reply. I hope that he will see fit to support the amendment.

Michael Fabricant: Surprisingly, I support the amendment, which is well thought out and appropriate. My hon. Friend the Member for Vale of York was jeered by Government Members when she talked about the strains being suffered by independent television. I was shocked that the Minister seemed to find it amusing when she quoted figures from Carlton Television. I will not quote such figures, because I do not want to be jeered, but perhaps the Minister will take more seriously figures from the Independent Television Commission—after all, it reports directly to him.

I presume that the ITC reported to him that between 1994 and 2000 the annual growth in net advertising receipts was 8.6 per cent. I point out to those, including the hon. Member for Hampstead and Highgate (Glenda Jackson), who are oblivious to the reality of the world, the ITC's report that independent television—that is the whole of the network, not just Carlton Television—suffered losses in net advertising receipts that were larger than the average loss for the whole industry. Moreover Carlton Television's advertising revenues were down by 13 per cent. and Granada's by 12 per cent. for the year ending September 2001—

The Chairman: Order. I have now listened carefully to that argument on several occasions. This Chairman happens to know a little about broadcasting, and unless the hon. Gentleman is suggesting that Ofcom should take responsibility for advertising sales, which I

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do not think he is suggesting, I fail to see that his remarks have anything to do with the amendment.

Michael Fabricant: I take your direction, Mr. Gale. My point is that this is a difficult time for broadcasters. Of course, Ofcom's role will not be that of an advertising sales house, but it is important to recognise that economic pressures will tempt broadcasters to centralise.

In a previous sitting the hon. Member for Milton Keynes, North-East (Brian White) pointed out that the ownership of independent television is unimportant as far as the provision of its contract is concerned. What is important is its current contract, which is with the ITC. Although in recent years we have seen consolidation in ownership in independent television, we have also seen a broadening of independent television's regional presence. There are now 48 regional news broadcasts going out simultaneously from the ITV network throughout the United Kingdom, which is a major expansion.

You will know, Mr. Gale, that thanks to changes in technology such as the introduction of electronic newsgathering, large numbers of staff are no longer necessary. Nevertheless, the Bill will have an economic impact on independent television companies at, as my hon. Friend the Member for Vale of York pointed out, a financially stressful time for independent television.

Although the ITC can be commended on ensuring that independent television, and the other organisations to which it applies, maintain their regional structures, that may not be the case with Ofcom—all bets are off. The Minister has said that he wants to see a light regulatory touch, for which I applaud him, but how light will that touch be? Will we see the end of regional broadcasting in the United Kingdom?

Miss McIntosh: Was that not precisely the plea that Mr. Clive Jones made to us yesterday on the need for clause 12? In the uncertain period in which we have only a paving Bill, it is important to get the commitment to the consideration of regional television, news programming and regional programming.

Michael Fabricant: As ever, my hon. Friend is absolutely right. I do not know whether she will press the amendment to a vote, but this is an issue that must be discussed. The Minister, rather than reading the information given to him by his officials, should respond properly to the debate. What is the Government's commitment to ensure that Ofcom will carry on the regional broadcasting tradition currently managed by the ITC? I shall happily give way to the hon. Member for Ceredigion.

Mr. Thomas: I thank the hon. Member for Lichfield for giving way—it is a delight that Ceredigion is being pronounced correctly after several sittings of this Committee. I do not doubt his sincerity about regional broadcasting and the amendment, but I am at a loss to understand why the amendment is only about broadcasting, given that Ofcom is about much more than broadcasting. The internet carries a plethora of news sites relating to Wales, Scotland and all the different parts of England, and the BBC

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investing heavily in regional internet provision. Surely the amendment should be wider. Is it not flawed because it does not address those issues?

Michael Fabricant: The hon. Gentleman is absolutely right to say that the amendment could be wider. However, the capital required to set up an internet site is considerably less than that required to provide regional television. The Welsh Development Agency—I shall probably now receive a letter from it—maintains an excellent site at no huge cost as a percentage of its overall budget. If it received a new remit to set up some sort of independent television station or to provide local news, it would face a high cost. I think that that was in the mind of my hon. Friend the Member for Vale of York when she tabled the amendment. There must be a clear commitment from Government that regional television will be maintained under Ofcom.

3.30 pm

I know that the Minister will read out his response that Ofcom is only a shell organisation. However, he said at the very opening of the Committee that the reason for establishing that shell is to maintain liaison with the existing regulators and to form the structure of the future Ofcom. We need to discuss and understand now the very spirit of where the Government are coming from, and to hear their commitment to regional television.

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