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Regional Television

2 pm

Mr. John Grogan (Selby): I do not know whether any hon. Member watched the boxing on television on Saturday night, but I feel a little like Audley Harrison. He is used to fighting just three or four rounds, but was asked to fight eight rounds on Saturday, and if he ever challenges for the world title he will have to fight 12. The analogy is that my average speaking time in the House is seven and a half minutes, but I have a little longer today.

I have three qualifications for talking about regional television. First, I am fortunate enough to chair the all-party BBC group. Secondly, I was fortunate enough to be on Lord Puttnam's Joint Committee on the draft Communications Bill. That was by far my most interesting activity in Parliament and we got to the meat of the Bill. It was a reasonably successful process and should be extended to other Bills. I was not a member of the Communications Bill Standing Committee, but the Whips gave me other interesting things to do, and I spent a particularly fascinating morning considering a Northern Ireland Audit Office report. I did not have much expertise on that, but I was pleased to be kept gainfully employed on pre-legislative scrutiny of the Communications Bill.

My third qualification, which applies to every Member of Parliament, was expressed by the recent Independent Television Commission report on a charter for the nations and regions, which stated:


It would be uncharitable to say that Back Benchers such as myself are interested in regional television because it is the main, if not the only, form of television that we are likely to be on, but that is largely true. I have just done an interview on "BBC Look North" on coal and, for reasons that I shall not go into, it has typecast me for floods, coal and beer. If there is any news about those subjects, I am on the regional news.

My success nationally is rather more limited. I nearly got on "Newsnight" a little while ago, but we invaded Afghanistan and my piece was cancelled. I nearly got on breakfast television nationally, but the Queen Mother died and my piece was again cancelled. I did make one memorable appearance last year when I was dashing into the House for an important meeting and saw Jon Snow of "Channel 4 News" out of the corner of my eye. I vaguely remember him shouting "Pensions" at me, but I was in too much of a hurry. "Channel 4 News" led that night with an item on MPs' pensions and how they run away from talking about them, and there was a picture of me running into the House.

To show that it is not all bad, I was stopped on College green during the summer and asked for my views on "The West Wing", which appears regionally and nationally, and then found that I was part of an advert. I have never had so much publicity in Selby as when I was advocating "The West Wing". I was there with the Mayor of London talking about the programme and the strapline was that top leaders recommended it. That was my moment of fame on national television.

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I want to celebrate regional television this afternoon; we should not approach the subject with doom and gloom because there is much to celebrate. I shall go through the public service broadcasters in turn, examine the good things that they are doing, and how we can make them better. We must not forget that in this country we spend more per head on indigenous programme production than any other major western country, including the United States. A lot of that money is spent regionally.

There is a lot of source material for the debate. Some potential sources include the Joint Committee's report; the Independent Television Commission's report, "Television in the Nations and Regions", which was carried out a couple of years ago; the ITC programme review, which was instituted by the Minister following the Joint Committee report; and a very important conference at the Granada studios in Manchester towards the end of last year, which considered the issue of regional television. That conference also considered television of the nations, such as Wales and Scotland.

There is also a substantial background to the debate, such as the consolidation of ITV—traditionally the strongest regional broadcaster. The decline in viewing share has been quite marked during the past five years. All the regional ITV companies combined gained a 33 per cent. viewing share in 1997. That has declined to about 26 per cent. today, although they have made a strong start this year. Obviously, there is a prospect of further consolidation in ITV in the reasonably near future. That raises questions about the future regional output and structure of ITV.

A debate about regionalism has grown over recent years. The right hon. Member for Richmond, Yorks (Mr. Hague) famously remarked recently that we did not need regional government in Yorkshire because we had a cricket team and an attitude. We have those things, to which I would add Yorkshire Television. YTV is not just of economic benefit to the region—I shall talk more about that later—but of cultural benefit, too. That is true of many of the ITV franchises and BBC regions. They give an identity to the region. Whether there is regional government or not, in a more globalised world, they are something to which people cling.

When talking about regional television, the first factor to consider is definition. There are three possible definitions of regional broadcasting, and it is important to make them distinct. Those definitions are taken from the ITC. First, there is the sheer volume of production of regional and network programmes in locations outside London. Secondly, broadcasting of regional opt-out programmes in specific nations and regions reflects the diversity of life in the UK outside London. For example, Yorkshire has regional news, regional sport such as "Rugby League Raw", and coverage of the House of Commons in "Around the House". The Ulster Television area broadcasts programmes such as "Lesser Spotted Ulster", which is very popular. There is a whole range of regional opt-out programmes.

Thirdly, when people talk about regional broadcasting, they talk about the broadcasting on the national networks of television programmes that reflect the diversity of life in the UK outside London. An obvious example of that is "Coronation Street", as is "Emmerdale". Such shows reflect at a national level regional characteristics and values.

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Those are three definitions of regional broadcasting. How important is it? I turn to the ITC for some numbers relating to that important question. The total value of regional programme expenditure—network programmes made outside London and opt-out programmes made for regional audiences—was over £907 million in 2001. That represents about a third of the total value of programmes produced and acquired for UK television broadcasters.

All UK terrestrial broadcasters have promised to earmark a proportion of their expenditure on UK first-run originated programmes from outside London. Many of those promises will become statutory obligations when the Communications Bill becomes law. It is worth reminding the House of the current commitments: BBC, 33 per cent.; ITV 50 per cent.; Channel 4, 30 per cent.; Channel Five, 10 per cent. We should note, however, that in 2000, two thirds of all the network's new programming, across all the public service channels, originated in London. That was followed by Manchester, with 11 per cent. of spend and Glasgow with 4 per cent.

A similar regional pattern applies to the share of network hours given to programmes produced in the regions that then go out on the national network. Some 69 per cent. of network hours are accounted for by London, 9 per cent. by Manchester and 4 per cent. by Glasgow. To illustrate that further, 20 hours per year of production from the Tyne Tees area in the north-east of England goes on to the national network. In some areas, then, the amounts can be very small.

I shall go through what the different public service channels are doing on regional television production, and make one or two suggestions on how they can renew and extend their commitments. If we start with the BBC, we must really start with Greg Dyke, who has imposed his personality on the BBC in many ways and competed aggressively in the market, not least at regional level. He commented not long ago:


There is a story that Dyke has placed importance on the regions because, during his first months in office, he went round the BBC's regions and visited areas that had not been visited by a director general for some years. That might have had something to do with the fact that his predecessor, John Birt, was occupying his office and showed no signs of hurrying out, but that regional tour was none the less instructive and has led to considerable action.

The BBC network's programming commission from the regions has, during the past two years, increased from £55 million to £95 million. Some of the physical evidence can be seen in my region. BBC buildings in Yorkshire are springing up all over the place. BBC

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centres are currently being built at Quarry hill in Leeds and Queens gardens in Hull, following the opening of the new centre in Shoreham street, Sheffield. There will be new offices in Grimsby and in Bradford, as part of the national museum of photography, film and television. Altogether, the BBC complement of staff in the region is 330 strong.

There are not only more BBC buildings, but more regional opt-out programmes. Again drawing on my experience in Yorkshire, although I think that it is a nationwide trend, I can say that regional current affairs shows are appearing at prime time on BBC 1 for the first time in many a long year. Only the weekend before last, we saw "The Politics Show". Quite a lot of the BBC's reputation on politics coverage is riding on that. It is a revival, in many ways, of the old "Nationwide" concept, which was the current affairs programme in the '70s, when national news was very much integrated with regional news.

The new show has a younger presenter, and a tighter format, but the content is crucial, and I hope that gimmicks are avoided. I understand that the hon. Member for Ryedale (Mr. Greenway), on the show in its first week, was asked to appear without a tie and jacket, à la Jeremy Vine. He took his jacket off but left his tie on, and I commend him for that. I doubt whether the young people of Yorkshire will turn on in their droves simply because the hon. Gentleman or I, as middle age takes hold, appear in our shirtsleeves or without ties. Whatever Jeremy Vine does, it is important to concentrate on the politics. The show should not pretend that it is doing something fundamentally different. It is not; the difference is in style. If it ensures that it gets the good, solid, region-based stories, "The Politics Show" could be a great success.

The BBC is trying to expand its entire range of programming, not just news, in the north and elsewhere. For example, BBC Scotland has a new, gritty soap called "River City". A soap does a great deal for a region by providing work and a long-term commitment to those with talent. I have no doubt that we shall hear about "Emmerdale" and "Coronation Street". The BBC needs to develop regional soaps. It is no accident that Granada's main soap, "Coronation Street", is set in the Manchester area. The BBC, which has, perhaps, been London-based too long, has as its main soap "EastEnders".

That brings me to the experiment in Hull. BBC regional television now has an opt-out for its local news programming and is experimenting with interactive broadband. BBCi Hull is a £25 million initiative that is designed to test new ways for the BBC to provide local services, and regional television is very much linked with it.

Let us not forget the training element of BBC activity in the regions. It is as important at the local level as at the national level that the BBC has strong in-house production and searches for talent for the future. Several programmes deal with that role: the producer-development programme; the BBC northern exposure programme, which works with more than 3,000 budding writers in conjunction with regional theatres throughout the country; and "BBC Talent", which has gone to more than 20 cities to find the presenters of the future.

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I suggest two areas in which the BBC could further its regional commitment. I was lucky enough to be invited to the launch last week of BBC 3, which is one of the BBC's new digital channels. The head of BBC 3 is a chap called Stuart Murphy, who is aged about 31, which puts him in the target range for the channel. He comes from Yorkshire and, when he heard my name, he asked whether my father was the John Grogan who was his primary school head teacher. He remembered an occasion when he was about seven on which my dad gave him the slipper for being somewhat naughty—that was a different age. I had to confess that it was the same man. I tell that story because there is no way that Stuart Murphy would be the controller of a national channel had he stayed in Ilkley, just outside Leeds, where he grew up.

The BBC has many channels: BBC 1, BBC 2, BBC 3, which is the youth channel, BBC 4, which is a more highbrow, intellectual arts channel, two children's channels and BBC News 24. As we approach charter renewal in 2006, is it impossible to imagine that one or more of those channels might locate in Cardiff, Manchester or Glasgow? That would be a big commitment by the BBC, which has dramatically changed its regional opt-out hours during the past 40 years. It now produces six times as many regional programmes as it did in the 1960s, but such a move would be a further dramatic step.

It is not impossible to imagine a BBC national channel based outside London. It would give the BBC greater insight into life in the regions, and it would strengthen production in the area to which it moved. That is my first suggestion, which I make to the governors of the BBC and to Ministers in the run-up to charter renewal.

Secondly, the BBC has begun to address its relations with independent producers following the work of the Puttnam Joint Committee and the independent television supply review that followed it. In many regions, the independents are the source of ideas and creativity. I believe that most people in the BBC recognise that they did not get right their relationships with independents and that they did not make the most of the talent that can be found in many such companies not only in London but, for the purpose of the debate, scattered around the country. The new rules will give independent producers a much better deal.

The BBC has appointed an executive who will be the point of contact for independent producers and ensure that independent production, wherever it is, is nurtured and brought forward. I make those two suggestions to the BBC. It should get its relations with independent producers right. That is important politically, not least from the point of view of the BBC's self-interest in the run-up to charter renewal. It should also put a channel in the regions.

ITV has what is perhaps the greatest regional structure. ITV was created in 1955 as a federal system; it grew from only a few companies in the early years to a federation of 15 separate regional companies, firmly located in the nations and regions, with their own studios and offices broadcasting network and regional material to local audiences. It is worth remembering that the duty to provide regional programmes was built into ITV's structure from the outset. The Television Act 1954, under which ITV was established, stipulated that

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each regional station should include a suitable proportion of matter calculated to appeal specifically to the taste and outlook of persons served by the station. It is interesting that that same phraseology—


appears in the most current legislation; it has stood the test of time.

Moving on to today, Carlton and Granada own 11 of the 15 regional licences. Together, the ITV companies produce more than 6,000 hours of original regional programming each year. There is more than 5,000 hours of regional news, which the ITV network specialises in, and 150 cameras on the road up and down the country. A total of 27 separate local services cover the 15 licence areas.

I said that I would make brief mention of the economic impact of the ITV companies on the regions. In my region, Yorkshire, there are 1,100 employees. Approximately the same number of people rely on ITV and Yorkshire Television and provide related support and production services. Together they contribute £140 million to the local economy. Of course, it is ultimately about programmes. ITV had 10 of the 2002 top 20 programmes. They included "Coronation Street", "Emmerdale", "Heartbeat" and "Blood Strangers", all of which reflect life in the nations and regions of the United Kingdom. Over many years and in many ways, we have had a success story.

So what are the threats to that and what can we do about them? First, we have to acknowledge that regional opt-out hours have decreased dramatically on ITV over the past couple of years. The number of regional opt-out slots—that is to say, regional productions for the regions—has gone down from 8,775 to 6,682 hours. That is a loss of about 2,000 hours. By contrast, the BBC has slightly increased its opt-out hours to more than 5,000, but that is over two channels, not one.

Stuart Cosgrove from Channel 4 said:


He went on:


He sees the decline of regional opt-out hours and the domination of network programming by the big four in ITV—London Weekend Television, Carlton, Granada and Yorkshire Television—as threatening regional production in relation not just to ITV, but to the many companies that depend on it.

The ITV network has responded with many assurances. It has a very impressive charter for the network and regions, which talks about the importance of regional management. It is concentrating on regional investment, rather than the number of programme hours. But what could be done to address the challenges and threats to ITV in the years ahead?

There is a big debate about exactly how tough Ofcom should be in regulating ITV. Should it insist that a suitable proportion of programmes made by ITV are made in the regions—or, as some suggest, should it be a substantial or a considerable proportion? I hope that the House will consider that in other contexts in the weeks

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ahead. I will give definitions of those words. The suggestion is that "suitable" be used. Suitable means right or appropriate for a particular person, purpose or situation, which is not very strong. Substantial, on the other hand, means of considerable importance, size or worth. Considerable means great in size, amount or importance. I shall not detain the Chamber, because I am sure that these debates will go on in this House and the House of Lords in the coming weeks, but I believe that there is scope for strengthening Ofcom's role. Indeed, 100 hon. Members have signed early-day motion 260 along those lines.

The ITV network is pressing quite hard for a redefinition of an independent TV company. At present, at least 25 per cent. of ITV and BBC production must be taken from independent companies. Regional ITV companies do not qualify, even for the BBC's quotas. Naturally, they do not qualify for ITV. I read from an ITV memorandum:


ITV goes on to claim:


At present, Endemol will be able to compete for the BBC's 25 per cent. although it is owned by a foreign broadcaster, whereas Tyne Tees, which is much smaller, will not be able to do so.

I agree that it is not a simple matter. The ITC's programme review suggested that Ofcom conduct a market analysis of the difference that the change would make. That is probably the proper way forward, but it is worth examining. It is something that Producers Alliance for Cinema and Television and the independent producers are beginning to address, because a great deal of faith has been placed in the independent producers. However, the top 10 independent producers—there are rumours that there will be more consolidation—are based in London. I am told that 60 per cent. of the total public service channel quotas are produced by those top 10. Some outstanding examples, such as Red Productions in Manchester and Maverick in Birmingham, are just below the top 10. Given the changes to be made as a result of the Communications Bill and so on, the hope is that those independent producers will be in a much stronger position in the regions: they will be able to keep more of their rights and grow.

The future of regional broadcasting depends both on the emerging independent companies such as Red Productions and on traditional ITV companies such as Granada. As a Member of Parliament from the north, I

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hope that in the final ITV merger Granada rather than Carlton emerges as top dog. That would be good for programme production. Granada has a history of concentrating on classic programme production over many generations, which Carlton does not. It would do much to reassure northern Members about ITV's commitment to the regions if Granada won out in the end.

I shall conclude on Channel 4 and Channel Five in a moment, but I want to reiterate my challenge to the independent companies. There is now a great deal of potential for the growth of independent companies in the regions, but it must not be through independent, northern companies that are based in London hiring an office in Leeds—to be realistic, probably not in Selby—putting a brass plate on the door and pretending to be regional. If in two or three years' time most independent production is concentrated in London, as it is now, many MPs will ask questions the next time broadcasting is discussed in Parliament.

The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells) : For once, we have the luxury of time, Mr. Deputy Speaker. I have been following the issue closely. My hon. Friend asks whether we—or Ofcom, when it becomes active—can change the rules. Not all the excellent independent production companies are based in London. Is he asking us to bend the rules to ensure that companies such as Granada, which have been around for donkey's years and for generations have had a licence to print their own money, should be favoured simply because they are based in the regions, rather than the independents in London?

Mr. Grogan : Far be it from me to suggest that we should bend the rules. Some would suggest that bringing in Endemol—an independent company that broadcasts in Britain but which is owned by a foreign broadcaster—bent the rules.

Dr. Howells : As the Minister who bent—I would rather say set—the rules, on the basis of the evidence that was put before us, I think that that was a very wise decision, but I would say that, wouldn't I?

Mr. Grogan : I would describe that, as the Minister does, as setting the rules. I am calling for a proper market analysis to look at the impact of changing the rules, such as the one that the ITC carried out. There is a strong case to be made. Why should not a small company such as Tyne Tees TV—the only company in the north-east, not counting a few independents that feed off it—which is dwarfed by some of the London independents, be able to make a bid for the BBC's 25 per cent. if it has the creative ideas? That question must be examined further.

Mr. Simon Thomas (Ceredigion): I have some sympathy with the hon. Gentleman's point, but he is worrying at the wrong end of the bone. If we look at regional production from the point of view of ownership, we shall probably get it wrong. As the hon. Gentleman has mentioned, I want it to be looked at from the point of view of investment in the regions and nations and of protecting the continuity of that investment, whether in HTV or independent Welsh

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production companies in the Welsh context. He is right to raise the issue. It will be a feature of the forthcoming Communications Act. Rather than looking at ownership, we should be looking at the framework of Ofcom to ensure a continuity of regional investment and regional production in the regions and nations.

Mr. Grogan : The hon. Gentleman makes a good point. HTV is an interesting example. It does much work for the BBC in Wales. Under the current format there is nothing to stop that, but it does not seem to happen in many other regions at the moment. It is worth raising the question whether it should.

In many ways, Channel 4, as Lord Puttnam put it in his Manchester speech, is the trailblazer of regional production. Stuart Cosgrove, whom Lord Puttnam praised, is in charge of Channel 4's regional production, and his office is in Glasgow. Over many years Channel 4 has sustained many independent regional production companies and has invested in companies such as Red Productions based in Manchester and Maverick in Birmingham. It has a good record in that regard.

Channel Five has starting putting a toe in the water to invest in the regions. It is now saying that it will invest 10 per cent. of its total programme budget in the regions. It is worth speculating over what may happen in the coming months. If legislation goes through unchanged, there is a possibility that for the first time a major newspaper proprietor may buy Channel Five. Taking an example at random, Mr. Murdoch will not be able to buy Channel 3, but under a clause that was possibly written in No. 10 Downing street rather than in the Department for Culture, Media and Sport—the special adviser certainly played a part in it—he will be able to buy Channel Five. Why should that matter?

One reason is that nearly 40 per cent. of our Sunday newspaper market, more than 20 per cent. of our daily newspaper market, our only major satellite producer and a major terrestrial broadcaster would then be in the hands of one man and one company. Hon. Members might ask what that has to do with regional production; it would mean that there would be all the opportunity in the world to cross-promote. We would not read much about "Big Brother", a Channel 4 production, in The Sun, for example.

At the moment, Channel Five has few public service obligations, so Mr. Murdoch could grow it very rapidly on a diet of premier league football matches loaned from BSkyB, big movies and so on. That would, in time, undermine Channel 4, and eat into its audience and that of Channel 3. Mr. Murdoch says that he is not interested in Channel Five, but he would say that, wouldn't he?

What have the Government done to give assurances to those on Lord Puttnam's Committee and others who were worried about the issue? They have done some quite good things, actually. For example, they suggested that Channel Five should for the first time have regional and UK-based obligations, and that when there is a change of ownership of either Channel 3 or Channel Five, there should be a review of regional production, news and so on. Incidentally, I think that those clauses were written in DCMS rather than No. 10; I give DCMS officials full credit for them. However, such a review would take place at a specific moment, and there is

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nothing that would allow Ofcom to take account of the expansion of Channel Five over a period. I would like there to be a ratchet, so that as a channel increases in size, Ofcom can increase its regional and original production targets.

Mr. Deputy Speaker (Sir Nicholas Winterton): Order. I am listening to the hon. Gentleman's interesting contribution, but he is touching rather too much on the Communications Bill, and that is inappropriate for this debate. However, I am perfectly happy for him to refer to it from time to time.

Mr. Grogan : I could see that remark coming. I shall touch on the Bill tangentially from now on.

In principle, regulators need a clear agenda, and that is as true for regional television as anything else. In the words of an article written in 1998 for the Columbia Journalism Review, Mr. Murdoch


The likes of Mr. Murdoch are adept at such behaviour, and it is absolutely crucial that, in all regulatory structures on which regional television depends, a clear message is sent to those who own our television stations about what they can expect as their stations grow or decline.

One of the Back Bencher's weapons, aside from Adjourment debates, is the early-day motion. Some describe early-day motions as constitutional graffiti, but they are important to Back Benchers, and real effort goes into obtaining signatures to them. I draw the Minister's attention to early-day motion 260, which touches on regional programme production. It is quite boring getting the signatures, so I pretend that I am trying to get a century batting for Yorkshire, and always aim for 100. We have that many signatures for the regional production early-day motion.

My hon. Friend the Member for Birmingham, Hall Green (Mr. McCabe) will speak on the subject later, but I tabled an early-day motion only yesterday on must-carry. I shall not go into great detail on the issue, but it is an absolutely crucial subject for regional television. There is a real danger that many resources will go from regional ITV companies into BSkyB coffers, undermining regional television—unless we get things right. I hope that the Minister, and, indeed, the special adviser in No. 10, will look kindly on both early-day motions and strengthen the position of regional television.

Thank you, Mr. Deputy Speaker, for allowing me to make my longest speech in the House of Commons.

Mr. Deputy Speaker : Before I call the second speaker, I point out to hon. Members that it would be my wish to start the wind-ups at 3 o'clock. There are at least two other speakers to get in before that time.

2.40 pm

Mr. Simon Thomas (Ceredigion): I am pleased to follow the hon. Member for Selby (Mr. Grogan) and I congratulate him on securing the debate. He has obviously been able to get rid of some of his frustration at not being present during the 26 sittings of the Communications Bill. I can tell him that it was not all

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that enjoyable, although the debates that we had on regional programming were some of the high points. I am sure that his presence in the Committee was missed. He brought to this debate a lot of useful thought and understanding about regional production, which, in the Committee, may have swayed the Minister to move slightly further than he did.

I shall concentrate on the situation in Wales, from which we could bring lessons to bear throughout the UK. The first thing to say about regional production in Wales is that it comes, as the hon. Gentleman acknowledged, from a national perspective. What is framed in legislation as regional television is national in Wales, and it has been increasingly regarded as such during the past 20 years. That has been especially apparent since the coming of S4C, which has given the Welsh language a regional dimension, although, of course, we cannot talk about the Welsh language as a regional thing; it is a national language. The whole situation has changed during that period, especially since the coming of the National Assembly for Wales.

The obligation on broadcasters to provide current affairs and news programmes has enabled them to take on a more vigorous and confident national role without feeling that they are trying to fulfil two roles in the system. All broadcasters in Wales have succeeded in doing that within their public service remit, and they are to be congratulated, on the whole, on the way in which they have innovated. I would like to talk about those innovations because they could be useful for other parts of the UK.

I shall start with the BBC, which has taken a national role since it broadcast the first radio programmes in Wales which were intended just for Wales. The interesting thing about the BBC is that in addition to its usual regional aspect, which one would see in any other part of the UK, it has a digital opt-out on BBC 2. The hon. Gentleman mentioned the possibility of locating a national BBC channel—a UK channel—somewhere such as Cardiff. I would welcome that. Let us bring BBC 3 to Cardiff; I can tell the hon. Gentleman that it would get more viewers if it were located there.

The digital format of BBC 2 in Wales has an opt-out of an hour and a half to two hours every evening. I am not sure whether that happens in other parts of the UK. I do not think that there is, for example, a BBC 2 Yorkshire opt-out, although there may be such a thing. The opt-out in Wales is new—it has been in place for about a year—and I am sure that hon. Members in other parts of the UK would want to look at that and think about how it could work in their area.

We know, having seen the viewing figures for BBC 3—which are something like 1.2 per cent. of the total for digital television—that digital viewers still watch the main ITV and BBC channels, and they also watch BBC 2 and Channel 4, or S4C in Wales. Anything that could help to strengthen the regional or national aspects of the main channels on digital should be welcomed and supported.

Although the hon. Gentleman was right to ask about the new national channels and whether one could be located outside London, it is also important to point out to the BBC that perhaps it should be doing more to

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strengthen its mainstream digital broadcasting. We are in danger of seeing the BBC putting all its digital eggs in the extra-digital channels basket, rather than thinking about how it could enrich its two main channels, which most people still want to watch and are watching.

HTV, which is owned by the Carlton Group, is the independent television broadcaster in Wales. It has gone through some difficult times during the past five years, but it seems to have come out in fairly good shape and it is continuing to make a contribution to broadcasting in Wales. To qualify what the hon. Gentleman said about HTV, it is important to say that it makes programmes for S4C, rather than for the BBC in Wales. That gives it a different dimension: in effect, HTV is part of the independent sector, making programmes for another channel in Wales. That certainly enriches HTV, because it can make a Welsh-language programme for S4C, for example, and if it makes an investigative programme, that can be used as the news on HTV in English. All Wales benefits from working in such a way.

My worry about the ITV franchise in Wales is the hours, as the hon. Gentleman said. There has been an overall diminution of about 2,000 hours throughout the United Kingdom. The response of the ITV companies is, "Yes, but many of those programmes were repeats. We are concentrating on quality, and one should not think about such matters in terms of the number of hours." We should not micro-manage broadcasters, but the number of hours on the third channel in Wales or elsewhere in the United Kingdom spent on recognisably regional or national programmes strengthens the regional role.

If people expect to have only regional news and little else, over time they will accept that. Repeats can strengthen regional aspects. I certainly appreciate repeats being shown on Saturdays and Sundays, because I never see certain programmes during the week. I have never seen "Nuts and Bolts", "Barry Welsh is Coming" or other good HTV programmes. If repeats can strengthen and embed regional or national broadcasting, they are not all bad.

Regional broadcasting is given a different appearance in a Welsh context by S4C. It is the Welsh-language channel, and it also carries the majority of Channel 4 programmes. It is celebrating 20 years of success this year, and I am sure that we all congratulate it on that. S4C has made the independent sector in Wales, including HTV, grow, although I do not think that that was the intention. Part of the agreement was that S4C takes 20 hours for free from the BBC. The rest of its hours it purchases from independent broadcasters and HTV. Since S4C has established a digital channel, it has increased its role in the independent sector; 80 per cent. of S4C's output now comes from the independent sector in Wales, including HTV, with the other 20 per cent. being BBC programmes.

Such an arrangement has given rise to about 4,000 jobs in the creative media sector in Wales, which the declining post-industrial economy can do with. The majority of those jobs are in objective 1 areas and are well paid. It is important to mention that not only because Wales concentrates matters in Cardiff as England concentrates matters in London, but because Welsh-language programme making needs to be located in Welsh-speaking areas, which means that we have a

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strong independent sector in the most unlikely of places. It is important that the Selbys of Wales have independent television production.

Teledwyr Annibynnol Cymm—TAC—is the Welsh equivalent of the Producers Alliance for Cinema and Television. It can locate its work in the regional sector, which will have economic benefits. One aspect of the Welsh experience is that it is possible to have sub-regional economic benefits from independent broadcasting which are then linked to regional broadcasting. I hope that other areas will be able to build on that.

I want to raise with the Minister an important aspect that we debated when the Communications Bill was in Committee. I also raised it when I intervened on the hon. Member for Selby. How do we protect regional investment within the framework of Ofcom? At present, the Bill is a little too weak. In Committee, my amendments and those tabled by the hon. Members for Gloucester (Mr. Dhanda) and for Glasgow, Anniesland (John Robertson) were not accepted. However, there will be another opportunity to table such amendments when the Bill comes back to the House.

Since our debate in Committee, an article that appeared in Broadcast magazine on 10 January 2003 has come to my attention. It says:


I could not have put it better myself. That is one of the key things that we will need to address in supporting regional broadcasting in future.

The Bill deals with the need to support investment and production centres outside the M25. If large independent producers put their production centres just outside the M25 where it is still very easy to employ a work force from London, we will not be able to protect such investment in regions throughout the United Kingdom. We should try to ensure that the Bill achieves that.

I want the Minister to look again at some aspects of the Bill, and I hope that he will address the need for regional representation on the Ofcom board. I welcome this opportunity to note the importance of regional broadcasting in a national context in Wales.

2.50 pm

Mr. Stephen McCabe (Birmingham, Hall Green): I congratulate my hon. Friend the Member for Selby (Mr. Grogan) on securing this important debate on regional television—even if I do not entirely share his hopes about the outcome of the rivalry between Granada and Carlton.

I want to raise a current anomaly in the system. The Communications Bill could rectify it, but I fear that it will not do so. I think that it could have a profound

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impact on the long-term viability of regional television, and I would like to hear the Minister's comments about it.

There is an expectation that public service broadcasters will make their services available to all platforms. The Bill contains reserve powers for must-offer powers relating to public service broadcasters and must-carry powers for cable because the Government think that this is important. I believe that they have also allocated a part of the digital spectrum for public service broadcasters.

With regard to satellite, the BBC, ITV and others have to negotiate the conditional access charges—a wholly commercial arrangement—with Sky, which is, in effect, a monopoly provider. Oftel is responsible for overseeing those arrangements, which it does under the FRND system, which seeks to ensure that charges are fair, reasonable and non-discriminatory. However, Oftel fails to distinguish between the needs of public service broadcasters such as ITV, which requires conditional access solely to ensure that the right regional service is made available to each viewer—that, I understand, is a licence obligation—and the needs of other channels, such as pay-per-view channels, which use access to raise revenue.

Currently, ITV pays Sky £17 million per annum for access, but the cost of that is probably tens of thousands rather than millions of pounds. The BBC also pays millions of pounds and that money comes straight from the licence fee payer. The effect of that is that the satellite company—in other words Sky—secures money from the public service broadcasters to subsidise its own commercial operations. I am not saying that Sky is not entitled reasonably to recover some of its own development costs; of course it is. But that money could, and some might say should, be used to improve regional output. In effect, analogue viewers who do not have access to satellite, often because they cannot afford it, pay for their own service and for the cost of Sky services that they do not use, such as pay television, business channels and so-called free set-top boxes.

What is the point of the Government placing such emphasis on the content of public service channels, such as the diversity, quality and volume of regional output in news and current affairs, if viewers are not being treated equally? The result is that terrestrial viewers pay for the service that they receive and part of the cost of satellite services that they do not receive.

A new world of broadcasting is opening up. We have an opportunity to regulate it in a way that is fair and meets other obligations for regional access. However, will the Minister consider guidance on the FRND system, rather than new legislation or changes to the Communications Bill? Guidance would enable Ofcom to distinguish between public service broadcasters and pay-per-view channels. Similar guidance already covers content regulation and regional and independent production.

If we do not see some movement on the subject, I fear that the commitment to regional viewers will be lost. They will be the losers because they will end up paying, and they will be making the sacrifice to subsidise a monopoly operator. When we are extolling the virtues of regional television output, and when the Government themselves desire a regional service to be available on

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the satellite platform, it is grossly unfair to expect those viewers to pay the costs of a monopoly operator. I would appreciate hearing the Minister's thoughts on that matter.

2.57 pm

Mr. Adrian Sanders (Torbay): I congratulate the hon. Member for Selby (Mr. Grogan) on his 39 minutes—far more than his average seven minutes and all of them good value—on this interesting topic. He made a strong case for regional production and broadcasting. His argument for one of the BBC's national channels to be based outside London is a good one. Not to be outdone, I put in a bid for it to be based somewhere in the south-west of England.

There is concern about the drop in regional opt-out hours on ITV and its threat to regional production, which is very real. The hon. Gentleman called for the strengthening of Ofcom and a new definition of independent production. He is worried about changes to the law that could allow a multi-media operator to purchase Channel Five. Those concerns are shared by Liberal Democrats.

The hon. Member for Ceredigion (Mr. Thomas) believes that we can learn lessons from Wales, which seem to be based on the fact that Wales has a separate language channel. They may not apply in the rest of England, but my Cornish colleagues are keen to see more Cornish language broadcasts. To the credit of the independent television franchisees in the far south-west, they have tried to introduce some Cornish language broadcasting in that region. The hon. Gentleman also mentioned the BBC 2 opt-out. There are opt-outs in England of about half an hour a week, and those could be increased to encourage more production in the BBC regions.

The most important point that the hon. Gentleman made was his warning about the definition of regional production, echoing comments made by the hon. Member for Selby. The hon. Member for Birmingham, Hall Green (Mr. McCabe) also raised an important point when he claimed that terrestrial viewers are subsidising satellite viewers for programmes that he or she cannot see. I would be interested to hear the Minister's response to that.

We on the Liberal Democrat Benches believe in regional television; we are naturally regionalist. We believe that regional identity is part of cultural diversity, and that regional television increases both accountability and people's view of where they are in the world. In many respects, people identify more strongly with their regional television than they do with the artificial boundaries imposed on them by the Government offices for the regions.

My television region is comparatively small, covering just 19 constituencies. We therefore have more contact with our regional television than Members in London who are competing with upwards of 100 or more MPs for regional coverage of their activities. That suggests to me that smaller regions are preferable to the danger of the amalgamation of regions through company buy-outs.

Regional programming plays a unique and invaluable role in British television. Whenever they are polled, viewers say that it is essential that ITV produces

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regional programmes. The licensees network the commissioning of locally produced programmes and that provides them with extra income, from which the local economy benefits. Research by the south-west economy centre concluded that for every £1 earned by the TV sector, £1.42 is generated in the south-west, and that each job generates a further 2.6 jobs.

None the less, the future of regional television is threatened today partly because regional programming is expensive. It does not attract the same audiences as nationwide programming, and therefore has less commercial potential. In addition, the new digital platform threatens to bring an end to broadcasters' public service obligations, which have historically been predicted on spectrum scarcity. The future for regional television therefore does not look good, although the hon. Member for Selby wanted to be optimistic. I will try to be so too, although that requires the political will to protect what is good and to enhance and improve on it.

It is clear that ITV continues to be the best placed broadcaster to provide regional programming: it enjoys the regional infrastructure that the BBC sadly lacks; it has experience and expertise in commissioning regionally and broadcasting across the network; and its licence holders have a record and reputation of being quality regional providers. Despite the mergers that one feared would reduce that, so far that has not proved to be the case. We must, however, be very careful about what happens in future. To keep ITV interested in producing regional television—especially past the point at which it may be commercially viable for licence holders to go elsewhere—we as politicians must ensure that an element of regional provision does not jeopardise a company's commercial viability.

When the digital switch-over occurs, competition between broadcasters will inevitably become even more fierce. The audience and advertisers will increasingly take over from Government as the arbiters of power. In the longer term, that may mean that central Government will have to subsidise regional services to ensure their continued existence. However, in the medium term, the Department for Culture, Media and Sport and the Department of Trade and Industry must do some serious thinking about their new creature—the super-regulator, Ofcom.

As other hon. Members have suggested, Ofcom's powers must be strengthened, but it will need a lightness of touch as well as a sharpness of bite to succeed in the world of media regulation. It will need to understand the economic aspects of business, as Oftel now does, without threatening or undermining the public service broadcasting obligations of many companies. In the short term, there is still a need for a statutory requirement for ITV companies to produce and broadcast regional output, but we will have to use alternative carrots and sticks in the longer term.

Ofcom will need to have the power and flexibility to address the future of regional broadcasting. It will need to consider the concentration of ownership among ITV companies and gauge whether it has any effect on regional production. Flexibility will be required if audiences for regional broadcasts drop off—there is no point in merely filling quotas if broadcasters are meeting measurable demand—and in negotiations for time slots for regional programming.

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The view of the Liberal Democrat party is clear. We believe in regional broadcasting and regional production, and we want a framework that will enable them to continue long into the future.

3.6 pm

Mr. John Greenway (Ryedale): I remind the Chamber of a former interest. Until three years ago, when I was appointed to the Department for Culture, Media and Sport shadow Front-Bench team, I was for almost 10 years a consultant to ITV, Yorkshire Television, Tyne Tees Television and, eventually, ITV Network.

I congratulate the hon. Member for Selby (Mr. Grogan) on securing the debate. The Minister and I, having spent the past seven weeks in Committee, were wondering what to do with our Tuesdays and Thursdays, and 90 minutes in Westminster Hall on some of the issues that we debated in Committee is something that we look on with great relish.

I was particularly interested in the contribution of the hon. Member for Torbay (Mr. Sanders), because I was not entirely sure that he was singing from the same hymn sheet as the two Liberal Democrat Members who served on the Committee had at their disposal, but I shall not pursue that. However, he made one comment that struck me as different—it is something with which I strongly agree—when he said that it is important to keep in mind where the money will come from to pay for the commitments that we place on broadcasters. I shall return to that comment.

ITV has always been regarded as the regional television channel and is a feature of our broadcasting landscape. It has survived significant change in the structure of its ownership in a way that very few people in the Standing Committee discussions on the Broadcasting Bills in 1990 and 1996 thought likely or feared would be the case.

As an example, I wish to mention how important a company such as Yorkshire Television is to the Yorkshire region. YTV makes a direct contribution of £55 million to the regional economy. It is the largest media employer in the region, employing more than 1,000 people, and is at the hub of an expanding media cluster that supports jobs, independent production companies and training opportunities.

The hon. Member for Torbay referred to the importance of the south-west franchise. I was delighted to receive in the post in the past 48 hours—bang on cue for this debate—the annual programme statements and reviews for the year ahead and the past year for each of the regional ITV licences owned by Carlton. They include the south-west, HTV, Central and London. Lest anyone should think that Carlton as the London franchise holder for Mondays to Fridays is not doing its bit for the London region, last night I attended the 10-year anniversary celebration of the creation of the Carlton Television trust. During those 10 years, it has provided more than £4 million in grants to more than 1,000 charities and voluntary organisations in the London region. No other broadcasting organisation or part of our broadcasting structure has such a commitment to the area that it serves.

I daresay that Members throughout the House, not only those present today, could give examples of how the ITV regional franchise holders have most involved

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themselves in the cultural, business, social and community life of their regions. It is extremely important that ITV retains its regional character. The way to ensure that is to stick to the method tried and tested during the past 13 years: to give the regulator the necessary powers, although not greater than necessary, to ensure that licence commitments are fulfilled, irrespective of ownership.

Two or three events, and general concerns about future trends, provide the background to the debate on regional television of recent months. One concern is what will happen should ITV come into single ownership. There will still be 15 licences, and there are currently 27 different news studios, broadcasting local and regional television news across the length and breadth of Britain. My study of the Communications Bill during the past three months suggests that Ofcom will have the power to ensure that all that is maintained.

There is concern about what might happen to the regional aspect of ITV in the multi-channel digital world. The hon. Member for Selby has referred to some recent concerns that ITV's regional commitment is weakening, prompted by the agreement between ITV and the Independent Television Commission on its regional programming commitments. That change coincided with the BBC strengthening its regional commitments, funded largely by a licence fee increase. Against that background, the ITC made a study of regional programme production as part of a study of television programme production in this country in general. It highlighted the concern, which is justifiably held, that regional television production for national network showing is in decline.

Several issues arise from that. First, it is clear that during the past three or four years, the BBC has got richer while ITV, Channel 4 and Channel Five have got poorer because of the decline in advertising revenues. Although we hope that those revenues will recover, there is no certainty of that. We therefore think that the case for a further licence fee increase, which the Government have announced this week, is barely credible. I hope that the Minister will confirm that that increase will mean a new regulation, which we could seek to debate in the House.

A second concern related to the ITC agreement on network arrangements. There is not enough time this afternoon for us to spell out in complete detail all the benefits that the agreement provided. I refer hon. Members to columns 590–92 in Hansard of the 15th sitting of proceedings in Committee on the Communications Bill, when I spelled them out. ITV competes with the BBC and for most people it is the main competing channel. In trying to produce a coherent network, it is sensible that the local and regional dimensions should reflect what the BBC is doing, which is something that ITV has not done previously.

What powers should Ofcom have to ensure that ITV's regional licence holders retain and maintain their regional programme commitments to ensuring that a significant proportion of ITV network programmes are made in the region? Someone posed the question of how tough those powers should be. Contrary to what people say, the Bill's framework is adequate because it places new obligations on Channel 3 licensees. If anything, it

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may be too prescriptive and unnecessarily interventionist. Thankfully, Ofcom will have the duty to consider costs of production and sources of income.

It is important to look again at some of the smaller ITV production centres such as HTV, Scottish Television, Tyne Tees Television and Anglia Television, which are at the extremities of the national map. They could be allowed to make programmes for other networks such as Channel 4, Channel Five or even the BBC, which would allow them to contribute to independent production quotas. The issue arising from the exchange of views between the hon. Member for Selby and the Minister is that we have to decide the No. 1 priority: is it to retain serious regional production centres, which are centres of excellence, or it is simply ensuring that production centres are genuinely independent?

I want to conclude my remarks to allow the Minister the same time as I have had. Before I do so, however, I want to refer to a comment made by Mr. Mick Desmond in one of the articles that appeared in the magazine produced by the Westminster media forum about people's attitude towards ITV's commitment to the regions:


That view misunderstands what ITV is about and the fact that its regional commitment will continue because it makes commercial sense.

3.18 pm

The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells) : My hon. Friend the Member for Selby (Mr. Grogan) is emerging as an authority on broadcasting matters. I take his advice seriously and his analysis is always sound, Mr. Winterton—

Mr. Deputy Speaker : Order. May I draw attention to my little title? It took 32 years to get it.

Dr. Howells : Sorry, Mr. Deputy Speaker, the new working arrangements have driven me demented.

I thought that Yorkshire men were supposed to be phlegmatic and down to earth, but I am thinking of turning the conspiracy theory fantasy set out by my hon. Friend the Member for Selby into a film script. I can assure him that the clauses about which he was talking were drafted in the Department for Culture, Media and Sport, and we have the bloodstains on the wall to prove it.

Mr. Greenway : They are the longest in the Bill.

Dr. Howells : I should say they are.

Let me take a few moments to explain how the work of the Joint Committee chaired by Lord Puttnam, with the aid of extensive consultation and the Independent Television Commission programme supply review, has helped to shape and refine our views on how to support regional television. We have set out a range of measures to maintain and strengthen regional commitments so that public service broadcasters can continue to meet the

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needs of different communities and cultural interests. Those measures include targets for programme production and investment in the regions, and back-stop powers for Ofcom. In its report, the Joint Committee asked for reassurance that Channel 3 regional production and regional programming requirements would not be diluted and that Channel Five would have appropriate public service broadcasting obligations. That has been the general thrust of this afternoon's debate. The Government were able to give the Joint Committee those assurances, and I will elaborate a little further on our proposals for Channel Five in a moment.

Perhaps the most important outcome of the Joint Committee's recommendations was the Secretary of State's decision to ask the ITC to undertake a thorough review of the programme supply market, about which, as my hon. Friend the Member for Selby knows, I was very concerned. We shall hear a lot more about that. Intellectual property rights and what happens to the return on investment, particularly that of the independents, how many of those rights they retain, and how much they can put into future investment in programmes, are all crucial, especially for independent companies, which may be operating on the very margin.

The ITC accepted that task and produced an authoritative and incisive report in November last year. The United Kingdom programme supply review investigated the role of independent producers and ways in which investment in UK programming could be sustained, but, no less important, the ITC also considered the health of the programme supply market in the nations and regions and made recommendations on how it could be supported.

The review recognised that there is a long history of successful regional production, especially centred around some of the Channel 3 regional licensees, and that economic pressures were creating new challenges to the sustainability of production outside London. As the hon. Member for Ryedale (Mr. Greenway) reminded us a few moments ago—I could not agree more because this is the key to my argument—the top 20 programmes in the United Kingdom, week after week, are produced predominantly in two regions: Yorkshire and the north-west, by Granada and Yorkshire Television. My hon. Friend the Member for Selby said that that is formula television, but it is very successful television—people watch it. As my hon. Friend said, it has also been a great training ground where many of our best scriptwriters, dramatists, actors, producers and directors learned their trade. We must be careful not to pooh-pooh such productions, because they have been enormously important.

The ITC suggested that all public service broadcasters, including the BBC, should have obligations for investment in programming at a range of production centres in the United Kingdom outside the M25 area. The hon. Member for Ceredigion (Mr. Thomas), who suffered with us for 65 hours and 26 sittings of the Standing Committee on the Communications Bill, read a couple of marvellous sentences from Broadcast magazine predicting a nightmare vision of clusters of regional production centres in Amersham, at the end of the Metropolitan line—outside the M25. I am sure that that article has sped around Britain with the hon. Gentleman's words

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and that house prices in Amersham have gone through the roof. We have had that argument before, but I do not believe that that nightmare vision will come to pass and I shall give my reasons in a moment.

The ITC also suggested that broadcasters should be encouraged to draw up schemes for supporting regional programming initiatives and extend their codes of practice to cover programmes commissioned in specific nations and regions. That is very important. I forget which hon. Member mentioned Stuart Cosgrove, but Stuart and Channel 4 have done sterling work in regional programming, and, in so doing, they have started to develop a lot of new talent and formats. As the hon. Member for Ryedale reminded us, that is the great strength of regional broadcasting. People are not brighter or more creative in London. In fact, a great part of the creative genius of this country is out there, hidden. Regional broadcasting—whether BBC or ITV—has started to attack that problem. Channel 4 has done well, and I am glad that my hon. Friend the Member for Selby mentioned it.

We accepted the vast majority of the ITC's recommendations, including all those I mentioned relating to broadcasting in the nations and regions. Although I understand that we are not supposed to mention it, those who have been following the Standing Committee on the Communications Bill will know that we have introduced Government amendments to make the changes necessary to reflect that. Such changes include regional production and investment targets for all public service broadcasters and greater powers for Ofcom should the ownership of Channel 3 or Channel Five change hands.

My hon. Friend the Member for Selby concentrated on that issue a great deal. He was quite right to do so; it was a focus for the Joint Committee. If the Liberal Democrat members of the Standing Committee had got up about half an hour earlier in the morning, the amendments they tabled on that subject could have been moved, and we might have had a debate. We shall probably have that debate at some other time.

Channel 3 will have targets for programmes produced in the regions for the regions, programmes made regionally for national audiences and investment in programme production in the regions. It will also have targets for the provision of high-quality regional programmes, including news, a sufficient proportion of which must be shown in or around peak time. My hon.

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Friend did not mention that, but I think that it is very important. The hon. Member for Ceredigion did us all a service by pointing out that there is a difference between quantity and quality. He could have added that it is very important that such material is shown at peak time. It is important because all too often regional productions are tucked away in the early hours of the morning. Nobody watches them, but the channels still meet their quotas. That does not do anyone any good.

Channel 4 and Channel Five will also have targets for programme production and investment in the regions. In addition, Ofcom will be required to publish a review of the tier 2 obligations in each Channel 3 and Channel Five licence whenever ownership changes hands. Ofcom will have powers to reset the baseline for such obligations—including targets for regional production—at the level achieved during the past year by the former owner, not merely the minimum requirements in the licence. That will provide good, cumulative build on best practice. It is very important that we incorporate that, because it means that the new owner will not be able to cut back on the existing quality of that service. We believe that the requirements will ensure that the quality of UK programming is maintained and enhanced for the benefit of regional audiences.

I do not want to miss out the very important subject of carriage by satellite. My hon. Friend the Member for Birmingham, Hall Green (Mr. McCabe) knows that I take a hard line on that. The public service broadcasters chose to pay for Sky's conditional access system. They could have gone direct to Astra—indeed, if ITV had been keen enough, it could have launched its own satellite; it probably would have been cheaper than ITV Digital, which had to be abandoned, turned out to be. It is not for Parliament to become involved in commercial contracts, as opposed to ensuring that regulation is good and proper. Oftel did a good job, and Ofcom has a much wider arena than Oftel had: it can look carefully at the problem and decide what a proper and fair charge for carriage ought to have been.

I am not the kind of Minister who gets involved in such commercial arrangements. There have been long periods in which ITV has done very, very well out of the commercial arrangements that were set in place for it. If we are to set up Ofcom and spend a great deal of money on it, we must trust its decisions. That is the definition of light-touch regulation. That is what we said we would do, and we will stick to it.

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