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Baroness Williams of Crosby: My Lords, I thank the noble Lord for giving way. Is there any consonant parliamentary structure which would enable the actions of the Executive to be considered in Gibraltar as they are in this country?

Lord McIntosh of Haringey: Yes, my Lords, I was about to refer to that point. I have more to say about our relationship with Gibraltar, but I may as well say now that we find the noble Baroness's suggestions very interesting. I do not think I can reply off-the-cuff. But if she will allow me, I shall write to her on the subject.

I wish to pay tribute to the Gibraltar Government for their newly opened office in Brussels and the links which have been established between that office and our own permanent representation in Brussels.

Gibraltar is unique not only because of its historical links with the United Kingdom--it was correct to refer back to the Treaty of Utrecht--but also because it is the only UK overseas territory within the European Union, as part of UK membership by virtue of Article 227(4) of the Treaty of Rome. Gibraltarians are rightly proud of the European identity. They are committed to being part of the European Union in the future, and we welcome that. Last year the Government of Gibraltar--representing 30,000 people--spent £1 million on bringing up to date implementation of European Community legislation in Gibraltar. They put into place effective regulatory mechanisms, which met UK and EU standards, to join in the international fight against money laundering.

Being part of the EU brings rights as well as responsibilities. As I have already said, we will continue to defend the position of Gibraltar in the EU as well as the Community law rights of Gibraltarians. A fundamental right which Gibraltarians enjoy within the EU is that of freedom of movement. The Spanish Foreign Minister has given an assurance that Spain has

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never questioned the right of Gibraltarians to freedom of movement in the European Union; nor will Spain do so in the future. We shall hold Spain to that assurance.

The noble Baroness, Lady Park, asked me about Spanish proposals for joint sovereignty, as indeed did the noble Baroness, Lady Williams, who made a similar point. We have agreed to study those proposals carefully. But the Foreign Secretary made clear to the Spanish Foreign Minister at their meeting on 10th December that there can be no compromise on sovereignty against the wishes of the people of Gibraltar. So it follows that any Spanish proposal would have to win the approval of the Gilbraltarians in order to prosper.

The noble Lord, Lord Monson, asked me about Spain's refusal to accept Gibraltar-issued identity cards. The Government notified the Commission in October 1995 about Spain's refusal to accept them as valid travel documents. In July 1996 the Commission accepted the cards as valid. The matter of whether or not formally to initiate infraction proceedings against Spain remains under consideration by the Commission. Commission infraction proceedings are confidential. However, contrary to press reports that appeared last August, Spain has not succeeded in closing the case and the Government continue to stand up for Gibraltar's rights in this matter. We wrote to the Commission in March and underlined that we looked to it to ensure compliance with EC law, and we remain in touch with it on that issue.

The final issue to which I have to refer was raised in particular by my noble friend Lord Hardy of Wath--voting in European parliamentary elections. Concern has been expressed both here and in another place. It has been suggested that the Government are ignoring the wishes of the people of Gibraltar. We understand the strong feelings and that this is an important and sensitive issue. The Foreign Secretary has been in touch with the Chief Minister on this issue and has requested a thorough legal review of the situation. That legal advice is consistent and clear: to extend the European parliamentary franchise to Gibraltar by changing UK law alone, as has been suggested by some Members in another place, would put the UK in breach of European Community law; namely, the European Community Act 1976 on direct elections which has treaty status.

I can spell all that out in detail, but I believe that your Lordships will really want to hear only the conclusion. The only legally secure way to extend the EP franchise to Gibraltar is to amend the 1976 Act. That would involve the agreement of all member states. I do not want to speculate on the likely views of other member states, but at the same time I would not underestimate the difficulties, which my noble friend Lord Whitty spelt out in Committee, of a process which requires treaty amendment. The prospect of securing that is uncertain, to say the least. It is not clear to us that risking the possibility of a veto on Gibraltar's inclusion in the European Parliament franchise would benefit the people of Gibraltar or further the wider and long-term interests that the UK is pursuing on Gibraltar's behalf.

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As I said at the beginning, I recognise the genuine and deeply felt concerns which noble Lords have expressed and I share them. I believe that we are doing the right thing, and have been doing so, to protect the people of Gibraltar. I invite the House to reject the amendment.

Lord Stoddart of Swindon: My Lords, before my noble friend sits down, I did ask him a question about the Treaty of Utrecht. I understand that he may not be able to answer it off the cuff, but I shall be most obliged if he will write to me.

Lord McIntosh of Haringey: My Lords, my understanding is that the Treaty of Utrecht is as my noble friend described it. It is dependent on UK sovereignty. That is the reason why there has been no move towards independence for Gibraltar.

Lord Moynihan: My Lords, I tabled a very tight amendment concerning the implications for the people of Gibraltar of the voting arrangements for an opt-in. In the light of earlier interventions this evening, not least about my use of the important example in the context of common foreign and security policy as regards Sierra Leone, I was interested to note the exchange on the Labour Benches on the much wider issue of voting in European elections. That is not covered in my amendment and it will be the subject of much more detailed debate at a later stage in another Bill coming before this House.

That said, I am grateful to the Minister for answering some of the questions that I have posed. He referred to "embarrassing multitude". For the record, an embarrassing multitude of questions remained unanswered. This evening many questions remain unanswered. The purpose of this specific amendment was not to cover the wider issues affecting the people of Gibraltar. The fact that I have not tabled an amendment to do that does not mean that I dissociate myself from the extremely important points made by the noble Lord, Lord Hardy, the noble Baroness, Lady Williams, and others, about the importance of having a wider debate in future--indeed, the sooner the better--the vital necessity of ensuring that the views of Gibraltarians are taken into account and the degree of cross-support for the many concerns expressed very clearly in correspondence to your Lordships by the people of Gibraltar.

I should like to pick up one or two points for the record. The noble Lord, Lord Monson, said that I had made some important allegations about the Dutch presidency. The noble Lord, Lord McIntosh, believed that I had laid those allegations at his door. I did neither. The important points that I sought to make related to the Foreign Secretary's strong criticisms of the Dutch presidency and his accusations that the Dutch government had been inefficient in its note-keeping, not to mention the accusation that the same state had effectively not told the truth about whether or not a challenge to the amendment had been made and also that it had colluded in a secret deal. Those were three very important allegations, all of which are clearly on

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the record, not least in the evidence of the Foreign Secretary to the Foreign Affairs Select Committee on 4th November last year and in other places.

I sought to highlight those points for one extremely important reason. In the context of this Bill the House has been allowed to look closely at the serious process of how decisions are made within the European context, particularly in the negotiations over this treaty. It is because of the ramifications for the transparency of the European decision-making process and the need to focus upon that that I have tabled this new clause.

I am grateful to the noble Lord, Lord McIntosh, for recognising that the comments that I made were deeply felt. They were as deeply felt as the comments that I made earlier this evening on the common foreign and security policy. I believe that his choice of words was more accurate in reflecting the tone of my delivery than that of his noble friend the Minister earlier this evening. But in the light of his answers and genuine desire to answer a number of questions--he has answered a considerable number of additional questions, but not all, the answers to which I should like to study in further detail--I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Inglewood moved Amendment No. 5

After Clause 1, insert the following new clause--


(". Within six months of the passing of this Act a Minister of the Crown shall lay before both Houses of Parliament a report on the meaning of "public service broadcasting" set out in the Protocol on the System of Public Service Broadcasting in the Member States annexed to the Treaty of Amsterdam.").

The noble Lord said: My Lords, as a preface to moving this amendment, I thank the noble Lord, Lord McIntosh of Haringey, for his letter to me of 5th May, which answered one of the questions that I raised when this matter was considered at Committee stage. He pointed out that the primary principles guiding the legality of the public funding of public service broadcasters remained the existing treaty state aid rules.

The protocol on the system of public service broadcasting in member states which is annexed to the treaty is drafted on the basis that broadcasting will continue in the future in very much the same form as today. However, to put it no higher--I do not want to overstate my case--there is a real possibility that this will not necessarily be so in the future. The traditional distinction in this area is between broadcasting--which is the transmission of material over the radio spectrum on a point-to-multi-point basis--and telecommunications--which is the transmission of a similar type on a point-to-point basis. This is a simple and clear distinction.

However, in the era of digitisation, convergence, digital compression, the interleaving of programme material and spectrum abundance, as opposed to spectrum scarcity, the concept of a broadcast channel is rapidly becoming redundant. Instead, with the development of video on demand and near-video on demand, the viewer or listener is able to view or listen at the time of his choice rather than that of the

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programmers. When at the same time we are seeing a number of cable companies, which were originally conceived as broadcasters, increasingly carrying on a business which is telecoms and, in particular, telephony-based, which incidentally carries some television material, which in turn itself may be linked to interactive services, the distinction between telecommunications and broadcasting starts to look very blurred.

What this protocol spells out is that state aids to public service broadcasters for the purpose of public service broadcasting will not be considered unfair state aids. This, in itself, is an uncontentious principle. However, what we are concerned about is the reality in the commercial world of contemporary Europe of the distinction upon which it is based. Can it truly be said that public service broadcasting will stand apart, separate and distinct from commercial broadcasting, commercial telecommunications or commerce conducted interactively via a return path?

There are two particular aspects of that which I should like to draw to the attention of the House. First, public service broadcasting, not least if it is also funded by advertising--that is sometimes the case on the Continent and, as your Lordships will know, with Channel 3, Channel 4 and Channel 5 in this country--may be linked to interactive services and can be a commercial rival to commercial broadcasters for viewers and for advertising.

Given that the acceptability of public money or subsidy of some kind or another going to a particular broadcaster is that the service it provides is defined as being public service, can the Minister confirm that the particular remit that a member state may give to its own public service broadcaster must fall within a wide European Community definition? I should like to invite the Minister to confirm that is the case, not least because it would appear to be in accord with the teleological approach to the interpretation of Community law. Can he also give us any indication of the definitions of public service broadcasting which are employed in each of the member states and confirm that the Government are happy that they are acceptable within their view of what constitutes public service broadcasting?

The risk here is that if we are not careful it is possible that this protocol can very easily become a device for unscrupulous member states to protect their own broadcasters through the mechanism of attaching the words "public service broadcasting" to a hidden or open subsidy that they may be inclined to give. Can the Minister therefore confirm that the European Commission intends to look behind whatever words may be employed in these circumstances to examine the underlying reality of what is involved and that it is prepared to act, where appropriate, if abuse can be established on the facts?

The second point I should like to draw to the attention of the House is that because public service broadcasters, commercial broadcasters and telecommunications frequently employ the same networks, would he therefore not agree that the presence of a particular

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public service broadcaster on any particular network will be a significant commercial advantage to the owner of that network?

That, in turn, could be a very easily disguised means of subsidising one network at the expense of another and/or favouring the users of one particular network at the expense of the users of another network. Again, can the Minister confirm that the Commission recognises that possibility and thereby the means that could exist of conferring unfair advantage in the single market; that it will be on its guard for that kind of abuse and that it will act where on the facts of any particular case, it will be appropriate to do so? I beg to move.

10 p.m.

Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord for setting out the reason for the amendment. Perhaps the House will forgive me if I rapidly recapitulate on how we have reached this position and on the debate on broadcasting in Committee.

The debate in Committee was based on the attempt principally by the Competition Directorate to restrict subsidy by member states of public service broadcasting on the ground that it would be in commercial competition with unsubsidised broadcasting. The thrust of the debate from the Opposition Front Bench was to see what was meant by Protocol 4 and the concept of public service broadcasting.

In response to the debate, I attempted perhaps in a foolhardy fashion to set out what we meant by "public service broadcasting". It is relevant because it affects my answers to the noble Lord's question about whether the definition is too wide and whether risks were involved. I suggested that public service broadcasting could be defined not in a single definition but by a number of shared characteristics. First, focus on the audience--in other words, for the benefit of viewers and listeners. Secondly, quality programming. Thirdly, diversity and choice, including programmes for entertainment, information, education and programmes for minority audiences. Fourthly, accessibility; that is, the geographical coverage of services and broadcast programmes which many people find enjoyable and interesting. Fifthly, editorial independence; that is, decisions about programmes being taken by broadcasters or broadcasting authorities, not by government or other interest groups. Finally, the concept of national identity--public service broadcasting reflecting the national interests and cultural traditions of the audiences.

I did not attempt a definition in terms of the way in which public service broadcasting operates. As I explained, public service broadcasting in this country operates under a number of different regimes; the BBC with its charter, Channel 4 and S4C in a different way and the regulatory role of the ITC having a different effect.

I understand the noble Lord to be asking me in what way the protocol will work. It might be useful if I put on the record the fact that I wrote to him--unfortunately, the letter reached him only today--setting

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out the Government's view of that. I am happy to repeat it on the record tonight. The primary principles guiding the legality of public funding of public service broadcasters remain the existing treaty state aid rules, in particular set out in Article 92.3(d).

Any company claiming that a public service broadcaster was receiving funding that contravened state aid rules would take its complaint to the Commission as guarantors of those rules. The Commission would then investigate whether the complaint did indeed amount to a breach of state aid rules, as it is doing now with the complaint by the Portuguese commercial company, SIC, against the public service broadcaster, RTP.

Once the treaty is in force, the Commission will take the protocol into account in its investigations. The aim of the protocol is to give a strong indication to all interested parties--the Commission, member states, public and private broadcasters--that a public service remit can carry onerous and possibly unprofitable obligations which are in the public interest and therefore require public moneys in one form or another.

That final sentence enables me to respond to the specific questions of the noble Lord, Lord Inglewood. I do not believe that the definition is too wide. In Committee, the general tone was one of welcome for the fact that our existing way of subsidising the BBC is not under challenge from the European Commission or under competition rules. I thought it was agreed generally that the protocol was helpful in relation to protecting those benefits of public service broadcasting which I have set out and which clearly involve obligations which can justify the use of state money.

I do not know how other member states will define "public service broadcasting" but I know that the protocol will make it easier for the Commission to make a proper balance between competition rules and the protection of public sector broadcasting.

DG.IV of the Commission is extremely experienced in state-aid cases. It will no doubt apply the protocol carefully so that where there could be unfair competition, the new provision will be applied.

The Government see this provision and the protocol as a protection for quality broadcasting and for the whole ethos of public sector broadcasting in this country and in Europe as a whole. We are not afraid of the implications of the protocol for this country and we believe that they will stand up to scrutiny both in Brussels and throughout the member states. I invite the House to reject the amendment.

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