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Session 2002 - 03
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Delegated Legislation Committee Debates

Draft Broadcasting (Independent Productions) (Amendment) Order 2003

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First Standing Committee
on Delegated Legislation

Monday 19 May 2003

[Miss Ann Widdecombe in the Chair]

Draft Broadcasting (Independent Productions) (Amendment) Order 2003

4.30 pm

The Minister for Tourism, Film and Broadcasting (Dr. Kim Howells): I beg to move,

    That the Committee has considered the draft Broadcasting (Independent Productions) (Amendment) Order 2003.

The Chairman: Order. I remind the Committee that our proceedings should be ringless and bleepless; hon. Members should ensure that all devices of communication function silently, or not at all.

Dr. Howells: Under section 16(5)(a) of the Broadcasting Act 1990, the terms ''qualifying programmes'' and ''independent productions'' are to be defined by order. Those terms were first defined in the Broadcasting (Independent Productions) Order 1991, which was made on 18 June 1991. That order was amended by the Broadcasting (Independent Productions) (Amendment) Order 1995, made on 20 July 1995. The draft order further amends the 1991 order.

Michael Fabricant (Lichfield): Will the Minister give way?

Dr. Howells: No. The order is laid before Parliament in pursuance of section 16(7) of the Broadcasting Act 1990. Before I go on to discuss the current provisions, I shall, after all, give way to the hon. Member for Lichfield (Michael Fabricant).

Michael Fabricant: I was shocked when the Minister said no a moment ago, because he is customarily so generous in giving way. Has he at any time given consideration to whether independent productions, as defined in previous orders, should include independent productions on radio?

Dr. Howells: The hon. Gentleman knows, because we discussed the matter at length when debating the Communications Bill, that we gave it a great deal of thought. However, we decided against it.

The Broadcasting Act 1990 requires the BBC, the channel 3 companies, Channel 4 and Channel 5 to ensure that not less than 25 per cent. of the total amount of time allocated to the broadcasting of qualifying programmes each year is allocated to the broadcasting of a range and diversity of independent productions. A similar requirement applies to digital programme services licensed under Part 1 of the Broadcasting Act 1996, but the percentage allocated for independent productions in that case is 10 per cent. Those requirements are intended to implement European Union directive 89/552/EEC of 3 October 1989, which, among other things, makes provision as to the proportion of a broadcaster's programmes that should consist of works created by producers who are independent of broadcasters.

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The independent productions quota is widely considered to be working well, as it has promoted greater innovation and creativity within the UK programme supply market. However, a number of issues relating to the quota's detailed operation have been identified, and the amendments made by the order are designed to deal with those issues. I shall briefly explain each of the amendments.

The first deals with change of ownership. The aim of the independent productions quota is threefold: to promote cultural diversity, opening up the production system to new energies and voices; to stimulate the growth of small and medium-sized enterprises, promoting creativity and fostering new talent; and to tackle vertical integration within the UK programme supply market. However, under current provisions, restrictions on share ownership of a producer by a broadcaster apply even if the broadcaster does not aim any of its services at the United Kingdom and, as a result, has no impact on the UK programme supply market.

The order makes amendments that will apply the existing restrictions on share ownership of a producer only in respect of those broadcasters who provide a television service intended for reception in, or in any area in, the United Kingdom, whether or not that service is also intended for reception elsewhere, rather than on broadcasters generally. If a producer is more than 25 per cent. owned by a broadcaster that does not aim any of its services at the UK, that producer will therefore qualify as an independent producer.

Mr. Martin O'Neill (Ochil): I take it that that means that companies such as Endemol, which are engaged in activities such as the production of ''Big Brother'', will be regarded as independents even though they do a great deal of work within the United Kingdom broadcasting set up, as they are owned by broadcasters outwith the UK. In many respects, they may contribute more independent broadcasting content to UK input than some regional broadcasters, such as Channel or Ulster. Is that a sensitive way of dealing with the British regional situation?

Dr. Howells: I have never been known as sensitive. My hon. Friend carefully chose to mention two regional broadcastersóChannel and Ulsteróbut not Yorkshire, HTV or any others. I assume that he used those two examples because they are not on the mainland of the United Kingdom. I see what he is getting at butó

Mr. O'Neill: Will the Minister give way?

Dr. Howells: No, I am still trying to answer my hon. Friend's first question. He well knows that if he had mentioned the latter companies my answer would be much more brutal than it would be to a question about Channel and Ulster.

My attitude to allowing regional broadcasters to be defined as independent producers of programmes was best summed up by Lord Ali in another place, who said that to let UK broadcasters be defined as independents conjured up a picture of the fox entering the chicken coop and saying, ''Don't worry,

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I'll work with you, my dears.'' That is precisely the way I see it.

Mr. O'Neill: I take my hon. Friend's point about the fact that I did not include those companies that are currently part of the Carlton and Granada empires within mainland UK. I took the two smallest companies because they are perhaps the most extreme examples. But as a Scottish Member, it would be reasonable for me to say that Scottish Media Group, which represents Grampian and Scottish, has a far bigger and stronger case for the preferential status that has been given to Endemol, although it is an estimable company in its way and does a good job providing popular television. However, the Scottish companies' difficulties create problems that the order does not address and which will disadvantage them and production facilities in Scotland.

The Chairman: Order. Interventions must be short and to the point and must require an answer from the Minister.

Dr. Howells: I appreciate the case that my hon. Friend has made so well, but the Government looked long and hard at the case for allowing broadcasters in the United Kingdom to be regarded in certain circumstances as independents. We decided that it was not the way to go forward, which may disappoint my hon. Friend.

If we had taken the opposite decision, I wonder whether we would have ended up with the BBC being regarded as an independent if it supplied programmes to Scottish Media Group. That is the logic of what my hon. Friend is saying; in most cases, it would result in a stitch-up by the powers that be in the world of broadcasting and would defeat the object of having a 25 per cent. independent production quota. I will have to disappoint my hon. Friend and say that although we have heard those arguments many times, we do not agree with them and will oppose them.

Currently, independent productions qualify for the quota only when they are made, which has been interpreted as the time of their transmission. Programmes commissioned in good faith from an independent producer who subsequently loses his independent status before the programme is made do not qualify as independent productions. That has caused a good number of problems for broadcasters, which I shall enumerate in a moment.

Michael Fabricant: I totally agree with what the Minister had to say about independent television. The Minister will be aware that Endemol is owned by a Dutch companyó[Hon. Members: ''Spanish.''] It is owned by a Spanish company, although its programmes are produced in the United Kingdom. Could a mechanism be introduced whereby we could encourage independent producers that make programmes in the UK and are owned in the UK, or would that be an impossibility under European law?

Dr. Howells: I did not quite get the last part of the question. The hon. Gentleman referred to producers in this country that make programmes in the UK, but by whom are they owned?

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Michael Fabricant: In my keenness to ask a brief question I was not as clear as I could have been. The Minister acknowledges that Endemol is owned outside the UK in Spain, even though it makes its programmes in the UK. I wondered whether an order could be made, or an adjustment to a subsequent order, which would encourage independent companies owned in the UK. Would that be in breach of European Union laws, which prevent us from discriminating between different EU countries, including our own?

Dr. Howells: As I pointed out in my introduction, we are trying to be clear on the matter. If a broadcaster aims its broadcast at the United Kingdom, it would disqualify the independent company that it owns in this country from being defined as independent. Many independent companies in this country are entirely independent. They own themselves, or are owned by banks or organisations that do not broadcast in this country, and therefore qualify as independents. I do not know if that is an answer to the hon. Gentleman's very difficult question as I am not quite sure what is at the heart of it.

Michael Fabricant: I understand and agree with the Minister. My point is simply that Endemol, which qualifies as an independent company, is not owned by British companies or individuals, but other independent producers in the UK are owned by British companies. Is there some way in which we can discriminate in favour of British-owned independent companies?

 
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