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12 Jan 2010 : Column 228WH—continued

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Mr. Carmichael: In a moment. I will accommodate as many of my hon. Friends-indeed, hon. Members from all parties-as I possibly can. The number of briefings that have come my way have borne testimony to the wide range of interest there is in the issue. I realise that the matter is still very much a work in progress for the Government, but the nature and range of the briefings that I have received suggest that there is still a lot of work to be done.

If hon. Members will indulge me for a moment, a briefing I have not read is the one that came my way from Ofcom. I had a quick flick through it and reached the back page, which, for the benefit of the record, has a map of most of the United Kingdom on it-in fact, the map includes the Isle of Man, which is not even part of the United Kingdom. The only parts of the United Kingdom that the map does not include are the islands of Orkney and Shetland. I have a suspicion that somebody at Ofcom might pick up the Hansard report of this debate and read it, so may I just place on the record that if Ofcom wants me to read its briefing, it will have to show my constituency on its maps? If Ofcom cannot be bothered to do that, I will not be bothered to read its briefing.

Malcolm Bruce: My hon. Friend has initiated an important debate. Local radio stations have grown up and spread quite rapidly. If digitalisation leads to the closure of those stations, it would be a retrograde step. Would it also be true to say that the BBC has not done all that it could have in relation to local radio in areas such as north-east Scotland? That area has the same population as Cornwall, which gets a 24/7 service, but it gets five and 10-minute opt-outs, which is a long way short of what the BBC should be providing.

Mr. Carmichael: Indeed. I was a constituent of my right hon. Friend for long enough to know the truth of that. Certainly, the BBC is very patchy across the country. We are well served in the Northern Isles for the population that we have, but as he says, the situation in north-east Scotland is very different.

Mr. Brian H. Donohoe (Central Ayrshire) (Lab): May I establish one thing? Does the hon. Gentleman oppose the provisions in the Digital Economy Bill or is he in favour of them? If he opposes the Bill, a possible consequence of that is that radio stations such as West Sound in my constituency will fail.

Mr. Carmichael: No, I am not saying that. The purpose of today's debate is to start the discussion and ask a wide range of questions that have not been properly ventilated. If I may say so, hitherto this has been something of an anorak's debate, but as the White Paper "Digital Britain" comes forward, it is clear that there will be a wider interest in the matter. I have a lot of questions. I have said already that the matter is a work in progress for the Government, but clearly they have not got all the answers right yet.

Mr. Letwin: My question flows from everything that the hon. Gentleman has said. Does he agree that one of the prime requirements is not just that Ofcom includes his constituency on the map, but that we see greater regulatory flexibility, for example in relation to the ability of local newspapers to enter the local radio market?

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Mr. Carmichael: That takes the debate to a level beyond that which I had intended to discuss today. If the right hon. Gentleman will forgive me, I will not go down that line. If I am to deal with interventions and get beyond the fact that Ofcom has not included my constituency on its map, I will have to be a bit distant in dealing with the subject.

Bob Spink (Castle Point) (Ind): Will the hon. Gentleman give way?

Mr. Carmichael: I must make a little bit of progress first. I certainly do not pretend to be an expert on these matters, but over the past few months, a number of concerns about the Government's plans for local radio, as set out in the Digital Economy Bill, have been raised with me. Given the importance of local and community stations to the surrounding communities that they serve, I want to raise those issues.

I should also place on the record my acknowledgement of the efforts of the hon. Member for Selby (Mr. Grogan) in relation to his early-day motion 436, of which I am also a signatory. The main area of concern I want to raise is that the Government's push into digital switchover is in danger of creating what appears to be an unlevel playing field for local stations. That is a consequence of how the market in this area operates and is a recognition of the fact that although we talk very loosely about local radio, there are at least two national companies-Bauer and Global-that are providing local radio in different areas of the country. That is having its own impact on the market.

First, I want to raise with the Minister the issue of the 2015 switchover date. The concern raised with me is that that could leave more than 120 local commercial stations and 200 community radio stations with an uncertain future in analogue. Effectively, the switchover will have created a two-tier radio industry. The "Digital Britain" White Paper proposed that such radio stations should form part of an ultra-local tier of radio. I understand that the decision to leave those stations on FM is driven by the limitations of the UK's current digital radio network, which apparently lacks sufficient capacity for every station in the area.

Among the concerns raised with me is that it is too expensive for local radio stations to go digital in that way. I hope the Minister will agree that it would be most unsatisfactory if local operators were forced out of business because of rising costs. I know from my own constituency experience that that is a very real danger-I am thinking of those costs associated with going digital. It is important for regions to keep a variety of local operators that often have valuable local knowledge and serve specific communities. I hope that the Minister will agree with me that it is essential that one digital platform is not advantaged at the expense of all other alternatives.

I would also be interested to hear the Minister's comments on the concerns that, should radio go digital as planned, those stations left on FM will find it increasingly difficult to retain listeners, and as a consequence advertisers, due to their absence from DAB-only radios and their unavailability on alphabetised digital station lists. A combination of reduced listening and lack of digital functionality could make those stations less attractive to advertisers. It is, of course, extremely important that FM does not become irrelevant to radio, especially
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considering that there is unlikely ever to be a DAB multiplex in the entirety of my constituency, and indeed in many other parts of the UK.

One proposed solution, on which I would like there to be greater debate, is DAB-plus. That has been proposed to allow all radio to go digital and is being implemented in other countries around the world. The representations that have been made to me have indicated that there are two problems with DAB: first, that it has a gatekeeper, meaning that one cannot operate one's own transmitter; and secondly, that it is on double the frequency of the FM band so that, as a consequence, relays are needed for the same coverage, which will be particularly problematic in hilly areas, such as Shetland. If Ofcom had shown Shetland on the map and shown any of its topography, readers could see that we have a fair number of hills there.

As a parliamentarian who represents thousands of constituents living in hilly areas, I would like some assurance from the Minister that people in such areas will not be forgotten. I hope that he will understand my concern at the comments made to me that current proposals will not provide a digital migration path for stations serving remote rural areas. I am told that AM/FM enjoys near-universal coverage of 99 per cent., but that DAB is significantly below that. I am aware that the Government have required that the DAB outreach should cover 90 per cent. of the whole population before the upgrade timetable will begin, but my suspicion is that when it comes to looking at where the remaining 10 per cent. will be, the communities of Orkney and Shetland will both feature in the list.

Mr. Edward Davey (Kingston and Surbiton) (LD): I totally agree with what my hon. Friend has been saying, as will those who run my local radio station, Radio Jackie, which is very popular. They also suggested that the Government must make it absolutely clear that FM will not be switched off, that there should be a public information campaign so that the public can be reassured that it will not be switched off, and that the licensing regime should be more sensible, including much longer licences, so that those local radio stations that might have to remain on FM while the digital roll-out is sorted out have viable businesses.

Mr. Carmichael: I am alarmed to admit, such is the level of detail I have acquired in the past seven days, that I am familiar with Radio Jackie, having received a briefing from those who run it. My hon. Friend's points are, for the most part, sound. As he illustrates, what we are discussing is very much a work in progress. Until, and unless, the concerns that he has outlined can be addressed satisfactorily, we should not rush head-first towards a switchover date for which there is no obviously compelling factor, technological or otherwise, other than that it was felt that that would be the only way to get things moving.

Several of the briefings I have received in the past few days mentioned the possibility of being able to upgrade to DAB-plus in future. Is that something the Government are looking at and, if so, why not upgrade to DAB-plus from the beginning, rather than trying to bolt it on a later stage? Where is the Government's thinking in relation to DAB-plus.

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I would also be interested to hear the Minister's comments on the fact that three quarters of all radio listening is still to traditional FM/AM radio. I understand that there are 120 million analogue radios in the UK, compared with 10 million DAB sets. The average purchase price, I am told, of a DAB set is £85. The Minister said in departmental questions last July that the Government were

We still seem to be some way from that, so I would be interested to know what progress the Government are making.

I find the question of in-car listening compelling, as I generally listen to the radio while driving around. In-car listening is currently estimated to account for about 20 per cent. of all radio listening, yet DAB is currently in fewer than 1 per cent. of all UK cars. That figure is expected to rise to just 10 per cent. by 2015. I understand that the Government have recommended that all new car radios sold in the UK by the end of 2013 should be digital, but that is just two years before the proposed switchover date. What impact will that have on the 2015 switchover date?

It was recently suggested to me that DAB is 12 times less energy efficient in its usage than FM/AM. Have the Government considered that, and what are they doing to ensure that the energy efficiency of the switchover costs will be taken properly into account?

The hon. Member for Central Ayrshire (Mr. Donohoe) asked me about the Digital Economy Bill, and I say to him genuinely that I do not oppose it. There is much in that Bill that is very positive, particularly clauses 34 and 35, and it seems to have brought with it a whole range of opportunities for local radio. It has been widely and warmly received by the industry. However, it is also fair to say that a tremendous amount of detailed work still needs to be done. I hope that the debate will allow the Minister to at least start to explain how the Government are addressing some of that important detail to ensure that switchover will operate effectively for all parts of the country.

1.47 pm

The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr. Siôn Simon): I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing the debate and on his contribution-he said he was not an expert, but I thought that his remarks were well informed and insightful. I do not have much time to reply, so I will try to speak succinctly and will take interventions from Members who have not yet intervened.

Local radio is, without question, important to the Government and to communities, playing an important role in binding together the social fabric. We take it very seriously.

Dan Rogerson (North Cornwall) (LD): On the point about the importance the Government place on local radio, it seems that local radio stations, and certainly those in my constituency, Pirate FM and Atlantic FM, do not necessarily feel that they have had the opportunity to get their points across at an early stage. That is why
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they are now contacting local Members to look at some of the issues when the Digital Economy Bill is debated on the Floor of the House. What sort of consultations are taking place with local radio stations?

Mr. Simon: The hon. Gentleman is quite right; there is undoubtedly some concern in the industry. There has been a bit of a campaign, led by UTV. I recently met at RadioCentre representatives of many local commercial local radio stations from across the country, and some of them will have been those he mentioned from his constituency. There was extensive consultation when the Bill was drafted, so we do take it seriously. During my remarks I hope to allay some of the fears, which may have emerged through misunderstanding.

Bob Spink: There are genuine fears that the Bill will lead to a two-tier system, so would the Minister address a couple of those fears? Will clause 34 genuinely lead to deregulation for smaller local radio? Will digital be affordable for smaller local radio, and how can we achieve that? Will smaller local radio get more access to higher-quality FM while it is still around?

Mr. Simon: I am pretty confident that I shall address all those points in my brief remarks. Let me make some progress before I take any more questions.

Digital switchover provides new opportunities and increases functionality. It is an essential part of securing the long-term future. The total revenue of the commercial sector has fallen from £750 million in 2000 to £560 million now. At the same time, transmission costs have gone up, with stations now bearing the cost of carriage on FM, DAB, online and digital TV. A market facing such rising costs and falling revenue is unsustainable and puts the health of the entire sector under threat.

Although the path to digital may not be easy, we are convinced that it is the only route for securing the long-term future of radio, and that is a view shared by the vast majority of the sector, notwithstanding some of the reservations raised by hon. Members. Therefore, rather than a catalyst for decline, the changes set out in the Digital Economy Bill are essential to secure the survival of local radio.

For the first time, we will have three distinct tiers. First, there will be a tier of national services, both commercial and BBC, with a wide range of content. It will allow the commercial sector to compete more effectively with the BBC, employ high-profile presenters and attract high value national advertising and sponsorship.

Secondly, a regional or large local tier, again comprising commercial and BBC services, will provide a wide range of programmes, including regional news, traffic and travel. The tier will increase the coverage size and potential revenue of many large local stations, which in turn will increase the opportunity for linked advertising between regions so that regional commercial operators can benefit from quasi-national advertising.

The hon. Member for Orkney and Shetland mentioned the issue of advertising being badly commissioned by the Scottish Government, which I understand. None the less, the benefits of linked advertising for regional radio can be very great if commissioned sensitively.

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Most important in the context of today's debate, there will be a tier of local and community radio stations with the specific focus of informing and reflecting the communities they serve. They will be distinct from the national and regional tiers because of the very local nature of their content and they will benefit from less competition for local advertising funding.

Mr. Letwin: People in my constituency and elsewhere who depend on radios will not be able to get local radio if it is purely digitised.

Mr. Simon: Local radio will not be purely digitised. That tier will stay on FM for the foreseeable future, but it will not be an FM ghetto; it will be an accessible FM, as I shall explain.

Mr. Donohoe: Given the time constraints, will the Minister agree to meet Members who are interested in the subject?

Mr. Simon: Yes, I am happy to meet Members who are interested. I have another meeting scheduled with local radio operators from all over the country, which will be under the same auspices as my recent meeting with them.

I am not sure whether I have enough time to continue. I do, so let me be clear: we see a digital future for all radio eventually. However, with more than 50 BBC services, nearly 350 commercial stations, 200 licensed community stations, the current infrastructure will not support a move to digital for everybody. For small commercial and community stations, the coverage area and the cost of carriage of a digital multiplex are too great. That is one reason why, for the time being, we believe that those stations are best served by continuing to broadcast on FM.

Malcolm Bruce rose-

Mr. Simon: I am nearly coming to my point, but I give way to the right hon. Gentleman.

Malcolm Bruce: Some of the small stations have already invested in being on digital. Are they not in danger of being kicked off to FM having made that investment, and would that be a fair outcome?

Mr. Simon: No, small stations are not in such danger. Stations that are already on digital are not in danger of being kicked off digital, but they are suffering the extra cost of running on two platforms. That is one of the reasons why we need an orderly, managed and reasonably speedy transition to an affordable single platform for as many people as can afford to be on it.

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