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Mr. Whittingdale: The hon. Gentleman is right: the arguments came from ITN and they were put forcefully to the then Prime Minister, Margaret Thatcher, who was persuaded by them. However, the world has now moved on. ITN certainly no longer believes that that system is good for it, and neither, indeed, does the Conservative party. I suppose that we have all seen the light.
The effect of the nominated news provider system has been to reduce the revenue for ITN by a very large amount. The ITV news contract price back in 1993 was about £70 million in today's prices. Some 10 years later, the price had halved. The result is obviously that the amount of resources available to ITN has been drastically reduced, which has meant that it has not been able to invest in its business to the extent that it needs to invest in order to provide a news service that is competitive with those offered by the other major news providers. It has been suggested that Sky News was the beneficiary, as it was able to bid against ITN for the ITV contract and was likely to benefit whatever the outcome, as it could either have beaten ITN and got the contract, or not beaten it, but, in bidding, forced down the price that ITN was able to charge and weakened it as a competitor.
In our view, it is terribly important that there should be three powerful television news providers. There is no question but that the BBC has always been such a provider. Sky News has now established itself very successfully as an extremely robust and reliable news provider. While continuing to do a good job, ITN has nevertheless suffered from lack of investment caused not only by the nominated news provider system, but by the ownership cap. Currently, there are five shareholders, each of which holds a 20 per cent. stake. Two of those shareholders will be likely to wish to increase their stake, especially if they come together. Under the Government's previous proposals, however, they would have been unable to do so.
In this House and the other place, it has been pointed out that ITV is the only broadcaster that is prevented from owning its own news provider. Indeed, it was Lord Bragg who said:
- "BBC News is at the heart of the BBC and Sky News is at the heart of Sky."
- "it should be repeated in Hansard as often as possible"
- "ITV is the only broadcaster prevented from owning its own news provider."—[Official Report, House of Lords, 3 June 2003; Vol. 648, c. 1225.]
It is not only the effect on the nominated news provider in terms of the necessity of cutting the price in order to beat the competition that is an issue, but the most extraordinary list of requirements regarding information that ITN has to supply to the ITC at the time of renewal. There is a list of about 40 pieces of information that the nominated news provider is required to provide to the ITC, including matters such as 24-hour capability to retrieve and transmit news and foreign external broadcasters' material not substituting for original production. It goes right into the detail of the management of the company. It is wholly unnecessary that a commercial operation should have to account to a regulator to that extent, particularly in a competitive environment. If ITN is to provide a competitive third force, it badly needs to be relieved from its current requirement and to have access to the investment that it needs.
ITN has suffered over the course of the past few years. There are many reasons for that. The uncertainty about when its nightly news bulletin is going to go out has not helped it to win an audience. Equally, the fact that the bulletin lost 10 minutes meant that it was not always able to provide as great a depth of coverage as its competitors. What ITN most needs now is long-term sustained investment. That is most likely to occur if the ownership cap is removed and if, in due course, the ITV company is able to take ITN in-house.
I welcome the fact that the Government have belatedly come round to seeing the force of those arguments, and I strongly support the amendments from the House of Lords.
Nick Harvey: I, too, welcome the amendments and the change of stance on the part of the Government. It is absolutely right that we need at least three strong news providers and that that requires ITN to be in a position to battle on equal terms with BBC News and Sky News. In recent years, the existing restrictions have handicapped ITN from fulfilling that competitive role. There are two reasons for that. First, it has suffered from a lack of investment as a result of a dispersal of shareholders, with nobody having a strategic grip on the situation or an incentive to put some serious money into it. Secondly, it has periodically to go through the auction process, whereby others can either take its service away or bid its price down; that is exactly what has happened. Although we do not know who will own ITV in future, at least if a
new owner from abroad takes control of the news service he will be subject to Ofcom regulation in the course of his daily business, whereas Ofcom has no such lean upon an investor from a completely different sector.I am pleased that the Government have shifted ground and decided to go ahead with the provision now instead of relying on a sunset clause.
Tessa Jowell: There is broad agreement that this is the right decision. I shall underline why that is. The hon. Member for North Devon (Nick Harvey) mentioned the important point—namely, that news has a special place in public service broadcasting and that it is crucially important that news services across all public service broadcasters are of high quality and adequately resourced. In that context, I stress the protection that clause 276 affords on both counts of investment and quality. There was a remarkable degree of consensus in another place. However, having had many discussions about the matter I would say that the original decisions were taken on balance rather than being conclusive in terms of retaining ownership limits.
I pay tribute to the way in which ITN conducted the argument and to Lord Bragg and Lord Alli, both of whom contributed to the debate constructively and from their own experience. We have reached the right conclusion, and I commend the amendments to the House.
Lords amendments Nos. 57 to 72 and consequential amendments (a) to (e) agreed to.
Lords amendments Nos. 73 to 114 agreed to.
Lords amendment: No. 115.
Tessa Jowell: I beg to move, That this House disagrees with the Lords in the said amendment.
Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to consider amendment No. 116 and the motion to disagree thereto, Government amendments (a) to (e) in lieu of Lords amendments Nos. 115 and 116 and Lords amendments Nos. 117 and 118.
Tessa Jowell: With amendment No. 115, I will also speak to Government amendments (a) to (e), which are offered in lieu of Lords amendments Nos. 115 and 116, and to Lords amendments Nos. 117 and 118. It may be helpful if I indicate that I propose that the House agree with the Lords in their amendments Nos. 117 and 118.
Amendments Nos. 115 and 116 would have the effect of narrowing the scope of the code regulating broadcast advertising. At present, the ITC and Radio Authority codes can cover any matter governing standards in broadcast advertising. Those codes are developed after consultation and cover matters that are to be regulated under domestic or European law and other matters of public policy relating to broadcast advertising. The Lords amendments would limit the scope of the broadcast advertising codes to matters that may be misleading, harmful or offensive. We accept the
"misleading, harmful or offensive" formulation introduced in the Lords amendment. However, some of the matters that are regulated by way of the current codes, and which will need to continue to be regulated, appear to fall outside the scope of that amendment. We have identified two specific areas where we believe that there must be a proper basis for the inclusion of these additional matters in the code. They are the continuation of the ban on political advertising, which has widespread support in the House, and the discharge of the United Kingdom's international obligations. The Government amendments would make those matters standards objectives in their own right, regulated by the code, and include them in the aspects of clause 314 that relate to advertisement and sponsorship.Lords amendment No. 116 would apply the standards objective for the protection of children to the provisions of clause 314 on advertisement and sponsorship. Our amendments in lieu would not overturn that, but that is an exception to our overall approach. The general framework of clause 314(1) is designed to pick out the provisions in the standards objectives that apply specifically to advertising.
Michael Fabricant: The Secretary of State mentioned the codes for children and for political advertising. However, she has not mentioned the code that controls the way in which a crime is depicted in an advert. It is part of the codes of the Radio Authority and the Independent Television Commission that the perpetrator is always caught. One can see that in such advertisements. Do the amendments mean that the codes will be outside the scope of the Bill?
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