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local television services in the UK are underdeveloped in relation to almost the whole of the rest of the free world.
I have no doubt whatsoever that in future we must find ways, whether alongside regional news or replacing itI hope that it is alongsideto provide high-quality, local news, not just as we already have on radio, but on television.
Some people say that local programmes are already beginning to be developed on the webmore will develop if the BBC local video proposal goes aheadbut that is increasingly where more and more people, particularly young people, are looking for news. Indeed, the evidence shows a huge growth in the number of young people who have switched off from watching the ordinary television news, whether national or regional news, and are turning to the worldwide web for news. I shall go further and say that the technology is being developedit already exists to some extentto enable material on the web to be placed on our television screens and the miraculous electronic programme guide.
Paul Rowen: I am listening carefully to my hon. Friend, and I appreciate his point about the use of the worldwide web. Does he agree with the point that I made earlier about the threat that the BBC, with its fat licence fee, poses to the sort of programming that ITV Local is providing on the web? Does he agree that we should strengthen that programming before allowing the BBC, with licence fee payers money, to swamp the commercial opposition out of the way?
Before we move forward, having begun to put together thoughts about what we wantnational programming, regional programming and the addition of high-quality local programmingwe must be aware of the context in which a debate about how to achieve that takes place. That is why, as my hon. Friend said, Ofcom is conducting a major review and why the Government are simultaneously conducting a review so that proposals for a way forward may be made early in the new year. The context in which we do so has been summed up succinctly and admirably by Ofcom:
The existing system of public service broadcasting...a publicly owned BBC with competition from commercially funded broadcasteris under huge pressure, and will not survive the transition to an all-digital broadcast world.
That will not survive, so we must do something and not just bemoan the problems facing us. We must come forward with radical solutions to determine what we want, how to deliver it, and how it can be funded.
With more digital channels and new online, TV-like programmes the market will continue to make a significant contribution to content that meets public purposes, particularly in entertainment, sport, archive programmes and, in one exceptional case, news.
However, the commercial prospects for areas like regional and national news, children's television, UK drama and current affairs are poor. Nor can these most highly valued genres be sustained on ITV, Channel 4 and Five under the existing system as competition intensifies. Indeed, our extensive analysis indicates they will not deliver genres that require large and risky investment.
That is the context in which we are operating. Simply wishing to retain regional programming as it exists at the moment will not help us. We must talk about how to move forward, so we must have the debate. I welcome my hon. Friends debate, as it is the start. It is the first time that the issue has been debated seriously in Parliament.
My hon. Friend the Member for St. Ives asked about the BBC local video. You will be aware, Mr. Williams, that the matter is being considered by the BBC Trust. The result of that consideration will be combined with Ofcoms market impact assessment, and by Friday it will bring those two pieces of work together and make its judgment. Although I was critical of the hon. Member for Wantage (Mr. Vaizey), who speaks for the Conservative party on such issues, for not having clear views during a previous debate on another issuehe said that he would prefer to see the outcome of researchI confess that on this occasion I shall join him, because the critical piece of work is that market impact assessment, and my hon. Friend rightly said that newspapers, ITV and others are concerned about the impact of the BBCs proposals. Frankly, I am not competent to conduct that market impact assessment and will have to leave it to others, including the hon. Gentleman, who might have done some of his own research.
Mr. Edward Vaizey (Wantage) (Con): Having been stung by the remarks of my mentor, the hon. Gentleman, last week, I would like to say that we do have a clear position on local video, on which I will expand when I have the opportunity to speak.
The hon. Gentleman and his party have already said that they reject the proposals for BBC Local in all forms. However, I am not as robust in my attack on the proposals. The BBC proposes to attach video news to 60 existing websites and increase the linkages between those websites and the websites of local newspapers and others. It also proposes to limit the number of news stories to a maximum of 10 a day for each of those areas, and it has said that it will work with all the organisations that might be affected to minimise the impact of the proposals. There are people who, like me, believe that local television is importantI welcome the work already done on that subject by ITVfor driving up e-democracy and ensuring that there is greater and easier access to council services and local information about events taking place in the immediate area. We must therefore seriously consider a proposal that mentions 60 sites in areas that are occupied by 1,300 local newspapers, particularly if genuine attempts are made to minimise and support other organisations. As I have said, our response still has to be tempered by the seriousness of the impact on those other local organisations, which is why I am not prepared to say to my hon. Friend the Member for Rochdale that I support his total and outright objection to the proposals; I want to see how serious the impact will be on others.
Having said that we must identify what we want and who will deliver it, I welcome the point made by my hon. Friend that if we are determined to continue regional news in something like existing arrangements, and if ITV is not prepared to do so or is unable to provide it, we certainly ought to look to others to enable that to happen. We must start to consider radical solutions to provide a way forward. I end by pointing out to my hon. Friend that it is very well saying that we simply want to put pressure on ITV to continue to do what it is doing, but last November its share price was 130p; only yesterday, the share price had plummeted to about 30p. Commercial public service broadcasters face serious financial problems, and radical solutions are needed if we are to move forward.
Mr. Edward Vaizey (Wantage) (Con): May I say what a pleasure it is to serve under your chairmanship this morning, Mr. Williams? I congratulate the hon. Member for Rochdale (Paul Rowen) on initiating this extremely important debate, which is effectively about the future of public service broadcasting. An important aspect of that is regional broadcastingboth in terms of regional production and of regional news. As usual, it is a pleasure to speak after my mentor, the hon. Member for Bath (Mr. Foster), who finished with a market update on the stock price of ITV. Given that the stock price is only 30p, I was tempted to suggest that perhaps hon. Members in the Chamber could have a whip-round and buy ITV. We would then solve the problem ourselves and be able to carry forward our solutions for regional broadcasting and news.
That slightly facetious remark leads me to a serious point. All of us would like to return to an ideal world. In the run-up to this debate, many broadcasters pointed out how much regional broadcasting and production
they do. Channel 4 told us that it has invested more than £100 million a year in out-of-London companies for each of the past 10 years. ITV rightly points out that, hitherto, it has spent about £800 million a year outside London and that, as a proportion of its total spend on broadcasting, it spends a far larger amount outside London than any other broadcaster.
No one has mentioned the commercial radio companies that exist up and down the country. They have had an extremely tough time and are still stuck with a tough regulatory regime that holds them back from expansion. Of course, all hon. Members have made fond reference to the BBC, which has 40 local radio stations and a now famous out-of-London strategy to increase regional production up to the level of 50 per cent. In any debate about broadcasting, one is tempted to take refuge in some anecdotes. As a constituency MP, I see no particular difference in the regional coverage given by BBC Oxford, Fox FM and my local newspapers.
For example, last week was a typical week for me, during which I worked hard for my constituents. I am regularly on the excellent BBC Oxford programme, hosted by the indefatigable and unique Bill Heine, who is a peer among regional and national broadcasters. However, I receive equal amounts of coverage from other broadcastersfor example, only ITV regional news covered my extraordinarily important debate on proposals for a reservoir in my constituency. BBC television news did not do soalthough the breakfast TV programme did cover it. Only Fox FM covered my extraordinary meeting with the Didcot thong rangers last Saturday, who are a group of men who regularly raise money for charity by pulling large trucks through the streets of Didcot dressed only in thongs. I joined them. May I welcome you to the Chair at this important moment, Mr. Key?
Mr. Vaizey: I would like to make it clear that for health and safety reasons, I was not wearing a thongmainly for the health and safety of the people watching. However, only Fox FM covered the important event of young men raising thousands of pounds for national and local good causes in Didcot. I pay tribute to the hard work of those young men.
No one has made the point in this important debate that The times they are achangin. We now live in an extremely different broadcasting world from the one that existed two or three years ago. As the hon. Member for Bath pointed out, it is in fact the market that has noticed such changes, rather than hon. Members. As we move into a digital environment, ITV is under an extraordinary amount of pressure to make the same profits it used to and to provide the same quality of service. The way in which we gather information and news has changed completely. Almost all young people get their news from the web and social networking sites, and they spend more time on their computers than watching television. We all have hundreds of channels from which to chose to watch our news and broadcastingwhether we have Freeview or a subscription
to a commercial company. It is a testament to ITV and Channel 4 that they have been able to maintain anything resembling their previous market share.
There has been virtually no leadership on the issue from the Government. It has been fascinating to watch how they have dealt with it. First, the entire subject of public service broadcasting was handed over to Ofcom, which treads a fine line between being a regulator and a policymaker. Ofcom certainly came up with a series of interesting policies on the future of public service broadcasting, many of which have now been cast asideincluding the proposal to have a public service internet site. When Ofcom got too big for its boots, the convergence think-tank was created to enable the Secretary of State to call people together. That has cost the taxpayer the princely sum of £300,000. Not content with a large and expensive building in Cockspur street where he could perhaps call people together to discuss the future of convergence, the Secretary of State hired Arsenal football stadium for his first meeting. The convergence think-thank did not come up with much and the issue then went back to Ofcom.
We now have the land grab by the Department for Business, Enterprise and Regulatory Reform. The arrival of Peter Mandelson seems to have spelled the demise of the Department for Culture, Media and Sport as a force in broadcasting policy. Lord Carter of Barnes is now installed in Victoria street and he has commissioned yet another review of the impact of digitisation on television and numerous other areas. We are told that the Government will come up with their policy in January. We wait with bated breath to see what emerges from either Lord Carter or the Secretary of State; it is not clear who will make the announcement. Government policy is all over the place on this issue, and meanwhile, as every hon. Member has pointed out, we are witnessing the slow decline, potentially, of regional broadcasting and regional news.
I would like to echo the comments made by many hon. Members about the importance of regional news in particular. Four fifths of people say that TV is an important provider of local news; 90 per cent. of people in the devolved nations say that. Eighty-eight per cent. of people say that it is important that the main TV channels provide news from the nations and regions, and 70 per cent. said that it was important for ITV to make programmes in different parts of the UK.
At the same time, it is worth pointing out that in most regions about 40 per cent. of people said that if there was no regional news, they would get their regional news from other sources. It is also important to point out that even with the current set-up of regional news, many of us do not identify with those regions. For example, there is very little coverage of the events in my constituency on local BBC news.
Although many of us in this Chamber will of course regret the cuts being made by ITV to regional news, we cannot, as I think the hon. Member for Bath said, look on this issue with rose-tinted spectacles. ITV is taking what it regards as proper action in the face of the difficulties it faces now in having an analogue regulatory system while competing in a digital world. Again, it is a matter of regret that the Government seem no further forward in easing the regulatory burden on ITV. There are a number of thingsI am not saying that they are panaceasthat would make life much easier for ITV.
For example, under the audiovisual media services directive, we have a consultation on product placement. Product placement would not necessarily fill the coffers of ITV, but it would make life much easier.
I was lucky enough to visit the set of Coronation Street with ITVs head of public policy, the estimable Jane Luca. We went round and had a good look at the shop in Coronation Street, where all products have to be covered up from view. It is impossible in Coronation Street, unlike the rest of the country, to buy a Kit Kat or a Mars bar. I do not think that if someone bought a Kit Kat or a Mars bar in Coronation Street, the world would come to an end, but ITV might be able to make slightly more money. We live in this bizarre world where people watching Desperate Housewives on Channel 4 will see no end of product placement, from an Aston Martin downwards, but in British programming, no product placement is allowed.
What is the Secretary of States reaction when he launches the review? It is to say that he is completely against product placementhe has cut the review off at the knees even before it has begun. There is no news on contract rights renewal. There is no news on flexibility on advertising minutage. On all those regulatory burdens imposed on ITV, there is no leadership from the Government. Therefore, ITV has to react. It has to save £40 million a year and to merge regional news operations, but again I counsel hon. Members against sounding like Cassandra. As I understand it, the key bulletins that ITV is planning to drop are the weekday mid-morning bulletinsit would be interesting to know how many people watch thoseand the lunchtime weekend bulletins. The main bulletinsthe ones that hon. Members and their constituents watchthe early evening and late evening bulletins, will remain.
In addition, ITV is hoping that Ofcom will allow it to drop its regional production quota from 50 to 35 per cent., but at the same time there will be an increase in Channel 4s regional production quota from 30 to 35 per cent. I am told by Ofcom that although that will save ITV some money, it will also result, if we take into account what the BBC is doing as well, in an increase overall in regional production from all broadcasters. That is a necessary and sensible move to give ITV the opportunity not to go bust.
We would be well advised to take account of exactly what pressures companies such as ITV are under. We learned only last week that almost 2,500 people had lost their jobs in media companies such as Virgin Media, Haymarket and Time Out, and another 4,000 jobs are likely to go not just at ITV, but at Channel 4 and in national and local newspaper groups. That is why the current consultation on local television is so important. As the hon. Gentleman pointed out, this is an interesting issue because the Conservative party has a clear position on it, which is that we firmly oppose the BBCs proposal to introduce local video. Again, ITV is doing its bit: itvlocal.com provides 1,900 hours of video content viewed by 1 million people a month. It is due to break even next year. That system will be decimated if the BBC gets its way. As ITV points out, it will jeopardise commercial services. Local commercial radio companies have called the BBCs proposals a damaging intervention.
A couple of weeks ago, I received a letter from Simon ONeill, the brilliant editor of my local newspaper, the Oxford Mail, and his colleague, Derek Holmes, the
equally brilliant editor of the Herald Series, from which I get my local news and which occasionally I am very lucky and privileged to appear in. They point out that, in Oxfordshire alone, 15 websites are already run by seven local newspapers with local video. They say that if the BBC goes ahead and broadcasts local video services, that will be a serious threat to their business. The point that they make, which I think is one of the most powerful arguments made, is this: why is the BBC allowed to do online what it would not be able to do offline? Let us imagine the furore if the BBC announced tomorrow that it was to publish a national daily newspaper. People would think it utterly absurd that the BBC was choosing to compete in a market that was already saturated, so why on earth is it being allowed to compete with taxpayers money, licence fee payers money, in a market that is being served by local newspapers, local commercial radio companies and ITV?
Mr. Don Foster: Although I remain, as I said earlier, agnostic as to the final decision that will be made on Friday, I fail to understand this point and I would be grateful if the hon. Gentleman explained it. Given that, as he said earlier, a lot of younger people are getting their news online and the BBC has a charter requirement to reach out to all age groups and all sectors of the community, how do he and his party believe that the BBC could meet the charter requirements if it did not at least look at initiatives such as the one that he is discussing?
Mr. Vaizey: The BBC is perfectly entitled to look at such an initiative, but we would say that it is not entitled to go ahead with it. There are numerous ways in which the BBC could reach out to young people that all of us would find unacceptable. For example, it could publish a daily newspaper. It could start competing with Metro or London Lite by handing out a daily newspaper at tube stations. [Interruption.] The website is being used by the BBC to impinge on a potentially thriving commercial sector. That commercial sector should be given the chance to grow and thrive before the BBC comes in with its size 12 boots.
First, we are clear that we will allow local newspaper groups to own local television stations. We shall ask Ofcom to ensure that, as much as possible, interleaved spectrum can be used for the benefit of local television stations. We shall also provide clear leadership to supply super-fast broadband for most homes in the country. Again, that potentially offers an incredibly important platform for local news provided by commercial stations. As I said earlierdespite the heckling from the Liberal Democratswe do not believe that the BBC should enter that territory at this sensitive point.
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