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Lord Thomson of Monifieth: The noble Earl has raised an important point. There is no doubt, as he has argued, that the present character and success of the smaller regional companies in the ITV system depend crucially upon the discounted price system of the ITV network arrangements. If that were to be changed radically against them, they could not go on providing the services that they do and the popular regional programmes that are in many ways the jewel in their crowns. It is an important matter. It is one of what I called earlier a jigsaw of a number of pieces where the financing arrangements for the ITV and BSkyB system--taking commercial broadcasting as a whole--need a fundamental reappraisal.

There is one point upon which I do not wish to take issue with the noble Earl but merely to put a different gloss on what he has said. Towards the end he said that of course at the moment, although the network payment system is one that is agreed among the ITV companies, to change it requires the consent of the ITC. The ITC has a veto on any changes in the system that are unacceptable to it.

It is fair to say that the present system, which out of the rather bad Broadcasting Act 1990 we managed to rescue as something that retained, above all, regional public service elements of the system, was the creation of the ITC. I speak with a certain amount of interest I suppose, which I shall declare at one remove, in the sense that the ITC is the successor commission, although with different responsibilities and powers, to the IBA of which I was chairman.

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Although I am tempted by the noble Earl's proposition that the ITC might feel reassured and reinforced by having the ultimate sanction of a Secretary of State behind it, as happens, as the noble Earl said, in the transmitter system, I pause in my more pessimistic mood to wonder whether the ITC and its power of veto, digging in, and being stubborn in defence of the system which is at the heart of its pride and what ITV does, will face up to what the noble Earl called the big battalions ganging up, rather more stubbornly than the Secretary of State might do. I do not wish to be discourteous, but I have not been over-encouraged by the willingness of the present relatively new Secretary of State to stand up to some of the pressures with which we are dealing in the Bill.

While I agree with the importance of what the noble Earl is suggesting and think that it should be part of a reconstituting, in some ways, of the financial relationship between the big boys and the small boys of ITV and BSkyB and the regulator, I am cautious about whether in this case the Secretary of State would be an added safeguard or perhaps even an added danger.

Baroness Dean of Thornton-le-Fylde: From these Benches we support the amendment. We do not see it as an attack on the large companies and that was not our intention when we put our name to the amendment. We see it rather as a protection for regional television provision. It is one that has existed since the 1950s. It is a pricing mechanism which was taken into account when the small companies put forward their licence bids. It is one that has a profound impact on their financial viability.

The amendment cannot be an attack upon the large companies: the scheme has been successful because the large companies have supported it. The network supply agreement has had their backing. Nevertheless, these heady days of takeovers and concentrations have concentrated the minds of the small companies: "What is our future? Shall we be able to maintain quality?" It is quality that is at the heart of the amendment. We cannot just take regional programming; we have to take the whole programming structure in the round.

We hope that the Minister will be able to respond positively to the amendment. The noble Lord, Lord Thomson of Monifieth, is very experienced in these matters. His counsel is one to which we should listen. He is absolutely right: it is sometimes easier to take an independent view as an independent regulator than perhaps a Secretary of State, who may be subject to political pressures.

This is a key and important amendment if the Bill is to achieve what we are led to understand from the Minister it is designed to achieve: variety, diversity, national programming and regional programming. The excellence of many of our small regional companies is due to the fact that they have had this network supply agreement in place.

It is unfortunate that the ITC has not taken the opportunity, or found it possible--perhaps it does not wish to--to confirm that the pricing mechanism which is in place will remain throughout the period of the regional companies' present licences; that is, until 2002.

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It seems a long way away but it is not. It would have helped considerably had the ITC been able to confirm that to the small companies which feel vulnerable at the moment. We support the amendment.

6.15 p.m.

Lord Lyell: I support what my noble friend Lord Arran said. The Committee will see that among the names on the list of those supporting the amendment is that of the noble Lord, Lord Kirkhill, who warned me that he had to get home to my area--which is familiar also to the noble Lord, Lord Thomson--which is served by one of the prime examples of what my noble friend spelled out. I would not call it a small company, and one is reminded that size is no guarantee of strength. Grampian Television provides an enormous service. Lest the Committee forget--the noble Lord, Lord Thomson, will be aware of this--it serves a colossal area of the UK.

Secondly, Grampian provides a special type of service. It is unique in that it provides a great deal of Gaelic. I must confess that when Gaelic programmes come on I sometimes change the channel or turn off the television. Sometimes I press another button and often--it is not the "Magic Roundabout"--it is the young man's "magic roundabout", shown on Grampian at 5.20 p.m. on a Saturday. I see that my noble friend Lord Arran is aware of that programme. Perhaps I may add my tiny weight to my noble friend's powerful remarks in support of reasonable costs for smaller companies which provide a unique service, often to large areas with small populations.

Lord Inglewood: I understand entirely the Committee's concern that greater consolidation within the Channel 3 network might mean that the position of the licence-holders for the smaller regions, and specifically the arrangements for the charges made to them for programming, might be altered in such a way as would threaten their independent viability and regional character.

I do not, however, think that it is at all desirable for the Government, albeit for different reasons from those advanced by the noble Lord, Lord Thomson, to be involved in approving something as detailed and operational as amendments to the Channel 3 networking agreements. That would be an undesirable intervention in any industry, and the more so in an industry where, quite properly, government are traditionally very loath to make any direct intervention. I feel that it would instead be a better way of meeting the concern raised by my noble friend to strengthen the ITC's duty. The ITC must already, by statute, approve the Channel 3 networking arrangements. By virtue of Section 39(10) of the 1990 Act it is forbidden to approve any arrangements which may operate to the detriment of Channel 3 as an effective national network. I suggest that it would be sensible also to prevent it from approving any arrangements which would in its opinion jeopardise the continuing effective fulfilment of regional licence-holders' regional programming obligations. As we have already discussed, Clause 63 seeks already to

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strengthen the ITC's hand as to specifying those regional programming requirements; such an amendment would mirror that clause.

I hope that in the light of my undertaking to bring forward an alternative government amendment to meet the concerns my noble friend has raised, he will not press his amendment.

The Earl of Arran: I am grateful to the Minister for his understanding and general support of the amendment. He said that he would be prepared to come forward at a later stage with an alternative government amendment. I am also grateful for the support of the Committee. I understand the point made by the noble Lord, Lord Thomson of Monifieth. As was mentioned by the noble Baroness, Lady Dean, this is a key amendment and protection is extremely important. My noble friend Lord Lyell mentioned the specialist expertise--

Lord Thomson of Monifieth: Before the noble Earl withdraws his amendment, perhaps I may congratulate him on obtaining the Minister's assurance. It was most helpful and answers the anxieties which I expressed while giving general support to what lies behind the amendment.

The Earl of Arran: I take the noble Lord's point. I am delighted at the possibility of beefing up the ITC. It is a good and sensible compromise and I hope that it works well in a determined effort to continue to protect the quality of regional television. On that understanding, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Thomson of Monifieth moved Amendment No. 195BA:

After Clause 66, insert the following new clause--

Licences for non-domestic satellite dishes

(" .--(1) Section 45 of the 1990 Act is amended as follows.
(2) After subsection (9) there shall be inserted--
"(10) A licence to provide a non-domestic satellite service shall include conditions requiring the licence holder to pay to the Commission (in addition to any fees required to be so paid by virtue of section 45(1)(b)) in respect of each accounting period of his falling within the period for which the licence is in force such amount as the Commission may determine representing a percentage of the qualifying revenue for that accounting period.".").

The noble Lord said: The amendment follows closely the previous amendment and is part of the jigsaw about which I spoke. It attempts to deal with fair taxation within the commercial broadcasting system in this country. I hope to persuade the Government that the time has now come when BSkyB in particular should pay its fair share of taxation together with the other commercial television companies.

I do not wish to labour the point as we have covered the ground many times. BSkyB may well have been entitled to a "tax holiday" in order to engage in such a high risk operation. However, it has been a successful operation and appears now to be running extremely well. I believe that the time has come to have a more

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fair arrangement between the ITV and BSkyB systems. I was trying hard not to use the awful phrase "a level playing field". I beg to move.

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