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3 Dec 2002 : Column 833—continued

8.31 pm

Mr. Austin Mitchell (Great Grimsby): This is a unique Bill. It is unique in its size—it is enormous—unique in that it has received such a broad welcome across the country, and unique in that almost all Front-Bench spokesmen, apart from the nitpicking nationalists, have given it a broad welcome today. It is unique, too, because it produces broad acceptance but also many problems, reservations, cavils, quibbles and difficulties, which have been well aired tonight. I propose to add my contribution to that.

I must start by saying that I am a bit suspicious of the Bill. I am suspicious because I am conservative about change—that is why I am a member of the Labour party—and because I do not want change in structures that have given us the least worst television in the world, with a system of regulation that has stopped the descent to lowest common denominators and with different sources of funding. In the end, if pigs are fed from the same trough, they produce the same manure. We have managed to avoid that in British television.

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It would not be too much to say that there was a golden age in British television—largely a period in which I worked in it, having worked for the BBC, ITV and Sky, and having run a local radio station, which is a fairly unique experience—which was ended by the Conservative legislation of 1990. That legislation was sold to us on much the same grounds as those on which this Bill is being sold to us. We were told that we must give television the scale to take on the world. Now we are being told that we must bring in the world to take it over, because it is not investing enough. We were told that we must have light-touch regulation, which has led gradually to the dumbing down and the relegation of current affairs, news and politics to late night slots that would normally be filled by sex or romantic interludes. Television is now largely about building—DIY—botox and bellies, given the endless cooking programmes.

I am therefore suspicious about dumbing down, which I do not want to be furthered by the Bill. I am also suspicious about the briefing given to Labour Back Benchers, which describes the Bill as

All that—and XBlind Date" too—will be quite an achievement.

The Bill will not be the beginning of the reign of virtue, however, as it will be the beginning of a period of great turmoil. First, all the different regulators, each of which have their own agendas, which they will want to maintain, will be shoved in one box and will have to learn to work together by new rules. A period of difficulty from 2003 onwards will follow. Then there will be the skirmishing for takeovers as we settle into the new organisations.

We also face the problem—we are dealing with it today and I hope that we will deal with it in Committee—that results from the fact that the devil is in the Bill's detail. I shall say something about some of the problems that I envisage, because we must state our basic view and describe what we want from the Bill. That will guide its implementation.

I seem to be a lone voice when I say that the BBC should be subject as little as possible to the new regulatory framework. The BBC is a unique institution. It is a public corporation that has its own procedures and methods of dealing with complaints. At the moment, there is a good deal of jealousy of the BBC, partly because Greg Dyke is a driving, dynamic and competitive head of the BBC, and partly because it has much more money than ITV. People are envious. Far too much of that money has gone into creating new digital channels that no one watches rather than into producing programmes. More than £100 million has been wasted so far on News 24, which is only just coming into its own. The BBC suffers from premature digital ejaculation and the money should be devoted to making programmes. However, that is a matter not for the regulator but for the licence and charter renewal that is ahead of us. These matters can be taken care of then.

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ITV has had a hard time. I suppose that it is inevitable that there will be one ITV company. Perhaps that will not be too bad, as long as it is Granada, which has a passionate concern about programmes and about regional activity, and not Carlton, which has a passionate concern about money. However, when ITV is one company, it is important that we maintain regional production, the regional framework, regional centres of excellence in television, such as that in Yorkshire, and the regional clusters of independent producers that are found around each existing company. Such clusters are also found around the BBC, which is putting a lot more into the regions.

We want dynamic production on a big scale that takes place outside the M25. It is nice that Xoutside the M25" is now a legislative concept, but it could have been called civilisation actually. We need production outside the M25 and ITV is the main framework to which it should be attached. We must keep up the pressure for that. It will be more difficult to maintain a regional service if ITV becomes only one company. The regional service has been ITV's strength and provided its roots, and it brings it much benefit. The service also brings the regions many benefits in terms of employment, economic stimulus and all the activities that go with it. Pressure will have to be kept up to maintain that service.To do that, it must be possible to turf out a provider—even if it is one company—because that would provide a check over quality. It must be possible for a rival contender to exist and there should be a review that examines whether a provider is performing properly.

On ITV, I echo the general view that it is insane that ITV is not allowed to control ITN. ITN is the only news organisation that does not have its own news channel, but it should be able to control one. ITV was good and adequately funded when the individual companies controlled it. We should return to that situation.

We should maintain the protected status of Channel Five. I know that people say that it is not particularly important as it is only a small channel. They argue that not much could happen if it were bought by Murdoch or an overseas company. However, let us consider what happened to The Sun. It was only a small and non-competitive newspaper that did not serve much purpose. Murdoch took it over and what happened then? It is entirely possible that, if Channel Five buys an audience with sport and has money pumped into it, it might become a major problem for ITV.

I am trying to scoot through the issues quickly, but I want to say something about foreign ownership. European Union rules require us to allow European bidders, but it is not a level playing field. It would be difficult for a British company to take over television production or radio stations in France. Let us consider the problems that Murdoch faced with Kirch, for example.

I agree that if we are to allow European competition, we must also allow American competition, but why not leave that to the discretion of the regulator? It should decide whether there is a level playing field, by which I mean that a foreign takeover can be allowed here if we can take over interests in the country concerned. The process needs to be phased in when the regulator decides the time is right to avoid an immediate turmoil of takeovers.

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Although I have other points to make, I finish by stressing that the Bill is important because we need to maintain British production, British quality, British regional services and British strength in television.

8.40 pm

Mr. Andrew Lansley (South Cambridgeshire): I am glad to have the opportunity to contribute to the debate. I served on the pre-legislative scrutiny Committee and, like other hon. Members who sat on it, pay tribute to the noble Lord Puttnam for the way in which he skilfully handled his chairmanship and brought us to a consensus on most issues. I might touch briefly on those aspects on which we were not of one mind.

In the Committee's defence, I must tell the hon. Member for Glasgow, Anniesland (John Robertson) that we considered employment and training. He will note from paragraph 53 of the report that we felt constrained by the annex to the authorisation directive which does not permit a general condition of authorisation to be extended to employment and training in telecommunications. I say that to emphasise the detail with which we conducted our scrutiny.

The Bill's principles will not encounter substantial opposition on Second Reading, with the exception of the Scottish and Welsh nationalists. It is important, however, that we discuss the first-order issues, not the second-order issues, before the Bill goes into Standing Committee. We need to consider what the Bill's principles are and what we are trying to achieve. If we are clear about that, it will help us tremendously when we consider the detail of this long and complicated Bill.

It is interesting that light-touch regulation was at the forefront of the Secretary of State's presentation of the Bill when it was produced in draft form earlier in the year, because that is the dog that did not bark this evening, and rightly so. It is not a matter of the quantity of regulation that is imposed on any given industry, but a matter of the character of the regulation and what results it has. I am afraid that we do not get good regulation simply by having a lot of regulation that is accountable and transparent. We need to protect the necessary public interest. We also need the minimum amount of regulation so that we permit competition to succeed to the greatest possible extent.

Although other hon. Members have mentioned broadband, I do not want to be diverted into a discussion on that. Indeed, the Bill is not intended to be a strategy for the roll-out of broadband. However, it is clear that whatever one might think about the relationship between Oftel and BT, it was only when BT cut prices that the extension of roll-out of broadband began. That may have happened in circumstances that did not lead to competition, but it demonstrates forcefully that ex-ante regulation—in this case in the form of 37 directions and determinations in the two years leading up to the time when prices were cut for wholesale broadband—does not deliver competitive outcomes and probably does not deliver the best outcome in terms of consumer benefits.

Two themes run through the legislation, from telecommunications to broadcasting. It is important not to consider those sectors in isolation. The two themes are the necessity of increasing competition in communications markets if we are to succeed

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internationally to a greater extent, and the protection of the interests of consumers and citizens. Those two things could easily have been at the forefront of the Bill in response to the scrutiny Committee's recommendations. We thought it necessary to further the interests of consumers wherever possible through competition, and to balance that with the interests of citizens. Those two interests expressly arise in relation to plurality and the media.

The Government have chosen not to accept that recommendation. I hope that they will reconsider their decision, even at this late stage. It is a matter not just of clarifying duties, but of setting a hierarchy of duties. It is not simply a matter of handing over duties to Ofcom and telling it to decide how best to strike the balance in all circumstances; it is a matter of indicating Parliament's intention concerning those duties.

If we legislate without giving primacy to issues such as competition in telecommunications, we will take a backward step. The Office of Telecommunications, in using its powers under the Telecommunications Act 1984, did not, until earlier this year, give primacy to competition. It is important to carry that primacy through into the way in which Ofcom does its job, just as competition has been important to the way in which Ofgem works and is increasingly built into the structure of our utilities regulation.

There are other instances in which the Bill would be better if we thought strictly in terms of competition and citizenship. On media ownership, the Government have confused themselves because many of those who come to them, including many with vested interests, have said that they want certainty. They want some media ownership rules to rolled back and the burden of regulation to be reduced.

There is something to be said for certainty; cross-media ownership rules, in particular, give some certainty, but it is only temporary. We know from many past experiences that the circumstances that give rise to such rules are likely to be rapidly overtaken, requiring further legislation. Whatever we think about those rules now will be undermined by the markets, sometimes very rapidly, so we should concentrate on competition. How can we future-proof the Bill? How can we make it endure in a form that drives towards competitive markets in areas including broadcasting and the media and at the same time protects the interests of the citizen? We cannot do that until we tackle the question of plurality, and of how the citizenship interest in plurality is to be protected.

On the newspapers, it seems to me evident how we should approach that question. We have not had cross-media ownership rules for newspapers. We have effectively allowed the market to determine ownership within normal competition rules, which are now to be strengthened. Within that structure, we have established, and will re-establish in the Bill, special tests intended to govern plurality. Why is that not equally true for other forms of media ownership? Why do we not give equal protection to the rights of citizens?

The Government should consider that, because we would establish a better long-term structure for the Bill if we swept away more of the media ownership rules.

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The members of the scrutiny Committee were not of one mind on that, and I think that we should have gone further. However, we did agree that we wanted plurality. The Committee did not say that it wanted to restrict foreign ownership or to have tighter cross-media ownership rules. To paraphrase St. Augustine, it said, XMake me competitive, O Lord, but not yet"; we need however to include in the Bill a competition structure to take us into the future.

I turn now to another area where competition may be important, the BBC, and some of my hon. Friends may have an opportunity to amplify this point. On the face of it, one would say that the BBC is not subject to competition, but it is subject to competition rules, and some Members who have contributed to the debate have asked how that works. In theory, if the BBC uses its licence fee money to buy public service broadcasting in a form that has anti-competitive affects, it can be subject to competition rules, and Ofcom should clearly apply those rules if necessary.

The BBC is not, however, subject to competition in the use of the licence fee. We need to think forward to 2006 and charter renewal, and we need to include in the Bill a structure that will be sensitive to all the changes that may come with charter renewal, even up to and including the possibility of separating the BBC, as a provider of public service broadcasting, from the governors, as the custodians of the licence fee. As the Secretary of State said, the licence fee is venture capital for the nation's creativity. The nation's creativity is not confined to the BBC alone—that is beyond the scope of the BBC—so BBC governors, who control the licence fee, should be able achieve such a separation.

In conclusion, competition to deliver consumer benefits and protecting citizens' rights should be two threads that run right through the Bill. We can relate many issues to those goals with success.

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