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Lord Forbes: My Lords, I welcome Clause 66 of the Bill. It will protect regional Channel 3 services in the event of a change of ownership. This clause quite definitely should be strengthened so as to empower the commission to investigate any prospective new owner. I believe that the amendment should give strength to the commission in protecting regional services. It has been demonstrated time and again that it is the regional services that people want. This amendment should ensure that people do not suffer any loss of Channel 3 regional service if there is a change of ownership. I therefore support the amendment.

Lord Thomson of Monifieth: My Lords, we on these Benches support the amendment. This matter was gone into thoroughly at the Committee stage and the Minister was forthcoming in his reply to the discussion. We all welcome the clause which the Government have tabled but feel that the regional character of ITV is of such importance that there are various ways in which the clause can be strengthened beyond peradventure. This amendment is designed for that purpose.

Lord Inglewood: My Lords, while I sympathise with the purpose of the amendment I doubt whether it is necessary or helpful absolutely to require the ITC to investigate the new owner where a change of control is

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proposed. We are, after all, talking about a situation in which the prospective owner may be very well known in great detail to the ITC by virtue of being an existing and longstanding licence holder itself. Moreover, it may for business reasons be of the essence that a change of control which everyone agrees is in the public interest should proceed. So I hesitate over the first part of the amendment.

Nevertheless, I sympathise with the principle that in coming to decisions whether or not to act to use its powers under the clause the ITC should have available to it all relevant information and those concerned should be required to provide that information. I should therefore like to consider further whether the ITC already has sufficient powers, as indeed the noble Lord, Lord Prys-Davies, pointed out, or whether something like the second half of the amendment needs to be added to the Bill. If it does, the Government will introduce an amendment for that purpose. I very much hope that in the light of that assurance my noble friend will feel it is not necessary to press the amendment at this stage.

Lord Trefgarne: My Lords, I think I am right in understanding that my noble friend accepts the principle of the amendment but would like to look at its wording and has undertaken to bring forward an appropriate amendment with the right wording at Third Reading. On that assumption, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Prys-Davies moved Amendment No. 140:

Page 57, line 12, leave out ("included") and insert ("originating from each regional services area and offered for inclusion").

The noble Lord said: My Lords, I am comforted by my understanding that the commission may consider that there is merit in this amendment. I hope therefore that I can deal with it briefly. If regional broadcasters are to be able to continue to make their contribution to the diversity of British society it is essential that they should be able to continue to offer their productions to the Channel 3 network. Of course, it would be for the network to accept or reject what is being offered. Nevertheless, the commission ought to be satisfied that they can have access to the network. To the best of my recollection, at Committee stage no Member of the Committee spoke against a similar amendment. Indeed, the noble Lord the Minister promised that the department would consider carefully what had been said. I beg to move.

Lord Inglewood: My Lords, an amendment similar to this one was tabled by my noble friend Lord Crickhowell at Committee. I have discussed the issue with the Independent Television Commission. We believe that the correct formulation is to protect the quality and range of programmes a regional service makes available to the ITV network. This includes the idea of a continuing capacity to provide programming, while still keeping reasonably close to the programmes viewers are actually able to see on the network. We intend to bring forward at Third Reading a government amendment which, while it may not reflect the wording of this amendment exactly, will mirror it closely and protect levels of programming made

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available to the network by Channel 3 companies. I very much hope that this will provide the assurance that the noble Lord seeks.

Lord Prys-Davies: My Lords, I am very grateful to the Minister for his response and, in reliance on it, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Kirkhill moved Amendment No. 141:

Page 57, line 21, leave out from ("service") to ("a") in line 22 and insert ("having regard to").

The noble Lord said: My Lords, I believe we now know that, as a result of the Minister's very careful explanation during Committee stage, Clause 66 was introduced into the Bill--the noble Lord accordingly received suitable congratulations--to ensure that the ITC can protect the regional character of the independent television system. This clause enables the ITC to amend regional Channel 3 licences, following a change of control, to ensure that the regional character of the service is not diminished.

Clause 66 also allows the ITC to place additional requirements on a licensee if, for example, it appears to the commission that the merger would be prejudicial to the quality or range of regional programmes or would result in a significant reduction in either the amount of regional programmes, or the use of offices or studios in that particular region. In addition, it safeguards those obligations which were undertaken by Channel 3 licensees at the time that the licences were awarded.

It is vital to the valued regional character of independent television that such obligations should not be diluted by merger or acquisition. However, in my view there are limitations inherent in the clause as it stands. Certain restrictions are placed on the circumstances in which the ITC can act which I believe are prejudicial to viewers' interests.

At the heart of Clause 66 is the concept that any change in control should not be prejudicial to the regional service. However, subsection (4) of that clause limits the actual interpretation of "prejudicial" to represent only "a significant reduction" in the regional service. It is surely the case that the definition of "prejudicial" must be allowed to capture a wider set of circumstances. It is difficult to anticipate what effect future mergers may have. There may well be repercussions which do not fit the label of "significant reduction" but are nonetheless unwelcome. In my view, the regulator ought not to be fettered in such a way, but should be allowed flexibility to apply his reasoned judgment on a case-by-case basis. It is on that basis that I move this amendment. I beg to move.

Lord Thomson of Monifieth: My Lords, I am happy to support the noble Lord, Lord Kirkhill, in this amendment, which is one of the more important amendments seeking to strengthen Clause 66. The noble Lord has rehearsed the arguments pretty thoroughly. My own feeling is that the phrase "significant reduction", which is on the face of the Bill at present, is too high a hurdle for the ITC to perform its responsibilities in this matter. It implies that the change

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of service will need to be a fairly major one before the ITC can act, otherwise it might be vulnerable to legal challenge. Moreover, no such hurdle is applied to the aspects of the service referred to in subsection (3) of the clause. For that reason the elimination of the phrase "significant reduction" and the insertion of the words proposed in the amendment will be a very significant and necessary strengthening of the purposes of this clause.

Lord Prys-Davies: My Lords, this amendment is grouped with Amendment No. 141A, which is in my name, because it is connected with the same subject matter. However, with the leave of the House, I do not propose to move my amendment as the wording of Amendment No. 141 is preferable to my own.

Lord Inglewood: My Lords, in considering these matters I understand that those promoting the amendment are seeking to remove the provision that the ITC must perceive a threat to regionality by foreseeing a significant reduction in regional programming or the use of regional personnel and resources in order to vary the licence conditions to protect them. It is replaced by a provision which will require the commission simply to perceive a threat to regionality, and that is defined in terms of hours of regional programming or the use of regional personnel and resources.

I understand that the noble Lords are seeking to prevent the ITC having to make a judgment which may be challenged about whether and when a new controller may attempt to run down the regional services. However, what concerns me is that I do not believe that the amendment, as proposed, makes its position any less open to challenge. If anything, it makes a challenge more likely because it is less transparent. I do not quite understand how we can see a change as being prejudicial to regionality in terms of these things unless we see grounds for expecting a reduction to occur.

There are concrete, measurable aspects of regionality. It still seems to me appropriate, in spite of the noble Lord's persuasive arguments, to refer to a likely reduction in them as a trigger for the commission to act. Indeed, it seems logical to say that a threatened reduction is the trigger because the protective licence variation which meets the threat is likely to take the form of requirements in terms of the numbers of hours of programming or the percentage of personnel involved. I hope that I have explained the Government's attitude to Amendment No. 141.

I understand that the noble Lord, Lord Prys-Davies, does not propose to move Amendment No. 141A, which seems to us to be a helpful amendment. We agree with it because, on reflection, a reduction is inherently sufficiently significant if it is such that it prejudices the regional character of the service. I am not entirely clear what the appropriate procedure is in these circumstances.

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