The
Chairman: Order. I am reluctant to interrupt the hon.
Gentleman, but we are supposed to be looking at what is in the order.
He is presumably making the case that an uplift in the community fund
should have been part of the order, but could he address his remarks to
the order in front of
us?
Mr.
Vaizey: Yes. I noticed that the community fund is not
mentioned in the order in front of us. When the measure was debated in
the other place, the Minister’s spokesman there specifically
addressed the issue of the community radio fund and said to our
colleagues in the other place that the Department for Culture, Media
and Sport had written to other Departments, seeking contributions to
the fund. Given that that debate took place on 15 December 2009, now
would be a good opportunity for the Minister to bring us news hot off
the press on his success in discussing the issue with the Department
for Communities and Local Government, the Home Office, the Department
for Children, Schools and Families, the Department of Health or any
other Department where he thought there might be money down the back of
the sofa that can be put into the community radio fund. As many hon.
Members know, many community radio stations operate at a deficit, with
an average income of just £80,000, which is dropping
drastically.
I have made a
number of forceful points about the order. What people may notice,
because of the title of the order, is that there is nothing about the
great, new initiative proposed by the Conservatives for local
television. However, we will have to wait for a Conservative Government
to initiate that revolution in local television.
[Interruption.] Order. There is a debate tomorrow
in Westminster Hall, when we will discuss local newspapers, and I will
elaborate on that exciting new policy for 2010.
4.47
pm Mr.
Adrian Sanders (Torbay) (LD): It is a pleasure to serve
under your chairmanship for the first time, Mr. Streeter. I
begin by declaring an interest as an occasional unpaid presenter on
commercial radio in my area of the
country. I
thank the Minister for his introductory remarks on the order. Community
radio has enjoyed considerable success in recent years—more than
200 stations are a testament to the hard work of staff and
volunteers
across the country. The benefits of community radio are easy to
see—local education and increased social inclusion are just some
of the
advantages. On
the Liberal Democrat Benches, we support the work that the Government
have undertaken to date, and we share the majority of the aspirations
and the intent of the order. We come to the order with a wealth of
evidence: there is the Ofcom review of 2007, the interim
“Digital Britain” review, the Myers independent review,
the final version of “Digital Britain”, the consultation
on amendments to the community radio licensing regime in June, the
summary of responses to the consultation, the Government’s
response in October and the impact assessment and explanatory
memorandum to the order. The Government have made their position clear,
and we have a strong basis on which to
proceed. However,
there is one area where there are some concerns. RadioCentre and others
have highlighted the potential impact on small commercial radio
stations. The impact assessment is welcome, but it fails to delve
deeply into the potential impact on small stations. It
says: “The
effect of allowing community radio stations to co-exist with the
smallest commercial stations is difficult to quantify. However, it is
likely that community radio stations will attract some listeners from
local commercial stations. This could affect the value of an
advertising slot to a local commercial
station”. The
commercial industry has asked for impact assessments to be conducted
when new licences are granted to community radio stations, and I hope
that the Minister will give some consideration to that request. The
rest of the impact assessment for the order is comprehensive, but I am
sure that further research on that point would be much appreciated by
the wider
industry. We
agree with much of what the Government have to say, particularly in
respect of loosening the regulation on sources of funding, licensing
overlap and extension of licence periods. Greater flexibility on
licences can only be a good thing in reducing the administrative burden
on community stations. We also welcome the maintenance of the
restrictions on advertising, which act as a safeguard for commercial
stations.
The issue of
funding for local community radio continues is of paramount importance.
The community radio fund continues to be a large source of finance for
community stations. The fund has seen increasing spending commitments
in recent years, allowing the expansion from 14 stations to more than
200. Of course, we know that there are many hundreds more in the
pipeline that have yet to be assessed and granted
licences. The
Government are supporting, in principle, the community radio sector,
and the changes in regulations that we see today are evidence of that,
but will the Minister address the central issue of funding, as referred
to earlier? All the support and positive regulations will pale into
insignificance if that question goes
unaddressed. I
understand that the Minister has written to other Government
Departments highlighting the many benefits of community radio and
asking for a financial contribution. Would he be kind enough to provide
an update on his progress?
Michael
Fabricant (Lichfield) (Con): In the light of the recent
statement from the hon. Gentleman’s leader regarding the Liberal
Democrats’ aspirations about the
amount of money that would be available if they were to gain power, I am
curious to know how much money a Liberal Democrat Government might make
available to community
radio.
The
Chairman: Order. May I remind the Committee once again
that we are supposed to be discussing the
order?
Mr.
Sanders: Thank you, Mr Streeter. I am asking whether the
Minister has been successful in asking other Government Departments
whether they might have, as the hon. Member for Wantage said, money
stuffed down the back of a sofa. Indeed, I would expect the Liberal
Democrat Chancellor to do exactly the same.
Mr.
Vaizey: Will the hon. Gentleman let the Committee know a
bit more about his radio show? Having said that community media
stations were protected by the rules on undue influence, and with his
broadcasting between now and April, it concerns me that the voters of
Torbay could be misled into believing that they might have to re-elect
him.
Mr.
Sanders: Alas, I am not at this moment broadcasting, or
expecting to broadcast between now and the general election. But it is
a classic rock radio show. Not for nothing am I known as the Minister
of
rock. I
hope that the Minister will be able to address the questions that I
have
raised. 4.52
pm
Mr.
Hollobone: I have been struck by the briefing that we were
sent by the Community Media Association. Even though we are discussing
community radio stations and small commercial radio stations, I feel
that community radio stations are the little guys in this debate,
because they are often run by volunteers who give of their time and
serve particular and special local needs. I do not see why the
Government seem to be so obsessed with the idea that they represent a
major commercial threat to the small commercial radio sector.
The briefing
from the Community Media Association was extremely good. In that
briefing, the CMA says that the restriction on advertising and
sponsorship by the
Government “was
introduced...under pressure from the commercial radio sector and
the restrictions...were significantly more extensive than those
recommended in the independent evaluation study conducted by Professor
Anthony
Everitt,” to
which my hon. Friend the Member for Wantage
referred. The
CMA goes
on: “At
the time the Government promised that the restrictions would be
reviewed within two years. Five years later this restriction remains
unchanged”
despite the lack
of
“any substantive
evidence...that it brings any beneficial impact to the economy of
small commercial radio stations, or that such commercial stations would
suffer if this constraint were
removed.” I
have been contacted by three hon. Members with regard to their own
local radio stations. First, the hon. Member for Foyle (Mark Durkan)
has contacted me and other members of the Committee with regard to
Drive community radio in his constituency. Richard Moore from that radio
station noted that the order does not address the issue of advertising.
He said that, in his opinion, the inability to access funds from
advertising and sponsorship was “the single most
debilitating aspect of running a community radio station like
Drive”. My
hon. Friend the Member for Westbury (Dr. Murrison) has
communicated with me and other members of the
Committee: “I
have Warminster Community Radio in my area which is absolutely
brilliant but whose future is threatened because community radio
licences currently mean they can’t advertise if a small
commercial radio station...operates in the same area. In my view,
there should be room for both the amateur and the professional as they
offer very different products...Having seen community radio
struggle in the current regulatory environment, the legislation needs
to be far more permissive in my
view.” I
completely agree with my hon. Friend.
My hon. and
learned Friend the Member for Harborough (Mr. Garnier)
contacted me about a local community radio station that we
share—Harborough FM. It, too, is affected by the difficulty of
accessing advertising and sponsorship. A spokesman for the radio
station
stated: “As
you know, funding for community radio is still a big sticking point for
all stations like
ours.” As
was mentioned earlier, Ofcom has said that community radio stations
which receive advertising and sponsorship get something like
£20,000 per station. According to Ofcom, the average income of a
community radio station in 2008-09 was just £79,000, which is a
decrease of one fifth from the previous year. Around 40 per cent. of
community radio stations operate at a deficit.
It is clear
from the evidence that relatively small amounts of advertising and
sponsorship money could make a big difference to community radio
stations, and I do not accept that those relatively small amounts of
money are a threat to the future of small commercial radio stations.
The Government seem to have missed an opportunity to allow further
private sector funding into community radio stations, which would allow
those stations to thrive but would not be a threat to small commercial
radio stations. We could have thriving radio stations in both the
voluntary and commercial sectors.
4.58
pm
Michael
Fabricant: May I say what a pleasure it is to serve under
your chairmanship, Mr. Streeter? I think it is the first
time that I have had that joy. Both you and I came to the House at the
same time, and I hope that you will not be standing down like so many
others, and leaving some of us alone and vulnerable.
I rise
primarily because I have a background in this subject. Before I became
a Member of Parliament in 1992, I used to set up radio stations. I did
that in 48 countries around the world, but also in the
United Kingdom. I set up two radio stations in the UK, during a time of
great wealth, which went bankrupt—Centre Radio in Leicester,
which was later rebranded as Leicester Sound and is now thriving, and
Gwent Broadcasting in Newport, Gwent.
The
Chairman: Order. The hon. Gentleman has made some nice
comments, but that does not excuse him from having to speak to the
order.
Michael
Fabricant: I mentioned those points because there is a
vulnerability with commercial radio stations. If they could not survive
in the ‘80s, when commercial radio was a licence to print money,
there is even greater vulnerability today. My point is that at a time
when the advertising cake is getting smaller rather than larger, Ofcom
and the Government have a duty of care to protect smaller commercial
radio stations.
Having said
that, I tend to agree with my hon. Friend the Member for Kettering. An
amount of £20,000 or £30,000 will not make that much
difference to a small commercial radio station, which might cover only
50,000 to 100,000 people. Moreover, the two types of radio will appeal
to two different types of audience: commercial radio, primarily the
smaller stations, is aiming for the biggest target audience that it can
reach, which is an 18 to 35 or 40-year-old audience; and
community radio is far more segmented. I want to join my hon. Friend
the Member for Wantage and, indeed, the Liberal spokesman—the
“Minister of rock”, as he said he was called—in
saying that more research needs to be done in the area. What would the
cost to commercial radio be if community radio were allowed to try to
attract
advertising? I
put it to the Minister that even in those areas where there are small
and vulnerable commercial radio stations, the sort of advertisers that
commercial radio attracts is very different from the sort of specialist
advertiser that a community radio station would attract. While we
support the order, because it goes a long way in the right direction,
it does not go all the way. The Government—or a future
Conservative Government perhaps—still have time to get rid of
what the hon. Member for Walsall, North so admirably pointed out was a
restraint on
trade. 5.1
pm
Mr.
Simon: I fear I may have neglected, when I rose initially,
to say what an extraordinary pleasure it is to serve under your
chairmanship, Mr. Streeter—in my case, I am pretty
sure, for the first time. However, my neglect has afforded me the
opportunity to express my pleasure with the benefit of having
experienced your wisdom and judicious
chairmanship. I
shall do my best to respond to the points made in Committee. It is
perhaps worth noting that earlier this afternoon I was in an
Adjournment debate on the future of local commercial radio, which, for
a Westminster Hall debate, was thronged with concerned Members,
agitating strongly on behalf of their local—often
small—commercial radio
stations. The
hon. Member for Kettering referred to community stations as the little
guys, which they are, being community people; they are not
professionals, but amateurs. However, it is a mischaracterisation to
assume that everyone at the small end of the commercial sector is a big
guy throwing his muscle around. As the hon. Member for Lichfield said,
we are in straitened times, in particular given the declining
advertising revenues, which in the commercial sector fell from
£750 million across the whole sector in 2000 to only £560
million now, and they are still going down. The sector perceives itself
as being under extraordinary pressure, fighting for every pound of
revenue; industry advocates are putting forward—pessimistically,
I think—cataclysmic predictions of stations that will close and
so on.
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