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Lord Avebury: I thank all those who have spoken in the debate, particularly the noble Baroness, Lady Howe. I thank the noble Baroness, Lady Jay, for clarifying something which caused a little concern at earlier stages in the debate. I am sure that all your Lordships will be pleased to learn that there is a prospect of an agreement and that the reason why the BBC has not gone free to air for the time being is simply that it is allowing extra time in which an agreement can be reached in the dispute over EPG and that by July a solution will have been reached that will satisfy all concerned. We very much hope that that will occur.

I accept that it would be impossible for us to design a solution along those lines. What we have put forward is only an attempt at what all your Lordships said ought to be done; that is, to clarify further what we mean by due prominence. To that extent, I am disappointed by the Minister's reply and I can only comfort myself with the thought that, from everything that your Lordships have said, the Committee does

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believe that due prominence should include many of the elements that we have tried to insert into the amendment. When Ofcom considers the code, whether it takes longer than six months or not, presumably it will look at Hansard and, in the absence of any other guidance, see what your Lordships have said. That will help Ofcom to arrive at what it thinks the code should say about due prominence. For that reason, I am pleased that we have had the debate and I hope that it will have been of some service to those who will have to consider the issue in the future. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 250B to 250D not moved.]

Clause 304 agreed to.

Clause 305 agreed to.

Clause 306 [Character and coverage of sound broadcasting services]:

Lord Dubs moved Amendment No. 250E:

    Page 270, line 5, leave out "the words from "except" onwards shall be omitted" and insert "for the words from "except" onwards there is substituted "and, in the case of a local licence, that an appropriate amount of local material is broadcast, of which an appropriate amount is locally made""

The noble Lord said: My noble friend Lord Eatwell apologises to the Committee for the fact that he is not able to be here this evening and he has asked me to introduce the amendments on his behalf, which is something I am very happy to do.

I wish to move Amendment 250E and I shall also speak in support of Amendments Nos. 252A and 252B. I also wish to oppose the Question that Clause 307 stand part of the Bill.

We are discussing local radio. Both Clause 306 and Clause 307 reflect the Government's desire to strengthen and sustain localness in local radio, which is something that would command widespread support. That is an objective which I believe is well served by Clause 306, but is ill served by Clause 307.

At Second Reading, my noble friend Lord Eatwell argued that Clause 307 was notable for the fact that it was injected into the Bill without any consultation whatever with those whom it was intended to regulate. He also said that it was damaging for a number of reasons. It creates a "one size fits all" regulatory code that will be irrelevant and damaging. I do not believe that anyone can say that one code can capture what localness means in relation to, for example, Capital Radio in London, which broadcasts to 10 million potential listeners, and Oban FM, which broadcasts to 15,000.

The thinking behind Clause 307 involves excessive micro-regulation of inputs into radio programmes but nothing for the outputs. It is ridiculous for Ofcom to be charged with ascertaining for every radio station in the country where their employees live. Surely it is unreasonable to ask Ofcom to do that, and reflects not a light touch but a heavy-handed approach. It is equally ridiculous that Ofcom should, for every radio station in the country, be required to regulate the amount of local advertising. That is surely best left to

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commercial pressures and skills. I cannot believe that the Government intend to persuade a radio station to turn away advertising. For example, would they want a large metropolitan station to turn away major national brands simply because it did not have that local element? That is not necessarily how advertising works and it would be inappropriate in this case. Is specifying exactly how a station should run its sales business what the Minister meant at Second Reading when she referred to light-touch regulation?

The simple point is that if localness means anything, it must mean diversity and variety. Clause 307 would work as much more of a straitjacket and should not stand part of the Bill. Fortunately, we already have a solution at hand in the Bill; that is, in Clause 306. The outstanding virtue of the approach to localness in Clause 306 is that it achieves its goals via the specification of format in the award of the licence. In other words, the specification of localness is tailored to local conditions. Instead of the straitjacket of a "one size squeezes all" code, Ofcom can secure and protect the local characteristic—the individual characteristic—of each station.

Moreover, Clause 306 places the weight of concern where it should be: with the listener. Clause 306 does that as it stands. However, my noble friend Lord Eatwell, who has had discussions with some DCMS officials, identified various concerns that are dealt with in Amendments Nos. 250E, 252A and 252B. Those amendments strengthen significantly the ability of Ofcom to specify local characteristics in a licence format. Amendment No. 250E makes localness a licence requirement. Amendments Nos. 252A and 252B ensure local production by requiring that an appropriate amount of material is made locally.

Amendment No. 252B also broadens the definition of what is "local material". At present, Clause 306 characterises that as material including news that is of particular interest to local people. The amendment broadens the definition of "local material" to include, "news, information or entertainment". I suggest that that far better reflects the diversity of the different ways in which different stations can be local. News is not the only way in which stations connect with their locality. They do so through the provision of local information about charities and events, as we all hear on our local stations, and through tailored provision of, for example, musical outlets, reflecting live music in the region, or discussion programmes and so on. I emphasise that the crucial power of Clause 306 strengthened by the amendments is that Ofcom may determine localness on a case-by-case basis. The use of the word "appropriate" in Amendment No. 250E permits different localness requirements to be set for different types of station. Those that serve a geographical community, such as Tower FM in Bolton and Bury, should be treated differently from those that primarily serve a community of interests, such as Jazz FM.

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Localness is important. That is why people listen to their local station; and Clause 306, as amended, would allow radio to celebrate the diversity of localness. I beg to move.

Baroness Buscombe: I rise to speak to Amendment No. 254 and to oppose the Question that Clause 307 stand part of the Bill. Furthermore I support the amendment tabled by the noble Lord, Lord Eatwell, and spoken to by the noble Lord, Lord Dubs.

Clause 306 relates to the character and coverage of sound broadcasting services and amends Section 106 of the Broadcasting Act 1990. Clause 307 seeks to define localness for commercial radio purposes. It requires Ofcom to draw up a code and identify a substantive input requirement that could be covered with a view to maintaining and establishing connections between local sound broadcasting services and the relevant localities. The UK radio industry has enjoyed fantastic growth in the past 10 years. We need to provide a regulatory structure that will encourage growth and innovation in that fast-moving, converging media environment.

The regulatory regime proposed by the Bill for local radio places an onerous burden on the local stations within its remit. Clause 307 was not included in the draft Bill, and as a result was not considered by the draft scrutiny committee. The policy behind the additional clause concerns me greatly. If implemented, Clause 307 would grant Ofcom the power to micro-manage the day-to-day running of local radio stations. The clause is so prescriptive that it requires the local radio station to maintain premises within the area of locality, provide local training and development and employ local people. Surely the ability to perform a job should be a consideration when deciding to employ a person, not merely where that person lives. I emphasise that we are not questioning the validity of the overriding legislative objective that local radio stations should provide a local service. However, we do not believe that it is necessary to impose such prescriptive obligations on the local stations affected. Indeed, the concept of localness is entirely subjective. Perceptions of locality may vary for a number of reasons—language and culture for example.

Our philosophy is simple. A local radio station has to take into account the requirements and needs of local listeners. Commercial radio is not vastly profitable. The stations have to ensure that they are successful. If they fail to do that effectively they will not survive. The localness of a particular station will not depend on whether the employees live just inside or just outside the area in question.

The Bill is largely deregulatory in its approach. The general principle that underpins the Bill is self-regulation or co-regulation where possible, and only to impose a regulatory regime where necessary. Do the Government believe that the clause will advance that general policy? Do they not agree that the clause intimately defines how a local radio station should be run rather than setting out the purpose that should be

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achieved? The Government have failed to appreciate that localness would result from commercial demands alone and that a co-regulatory approach would provide a more efficient local radio broadcasting service that does not measure its success on input requirements.

We oppose the Question that Clause 307 stand part of the Bill. The Government have stated that Ofcom can choose whether or not to include the input requirements in the code, as imposed by the clause. That begs the question—why have a legislative obligation to compile a code at all? That is an area where self-regulation or co-regulation would be a more appropriate alternative. The service provider would be in a more suitable position to determine how best to further local interests and local culture.

Amendment No. 254 requires Ofcom to have regard to the extent to which the various requirements of Clause 307 are being satisfied by self-regulation prior to drawing up or revising a code. That would encourage local radio stations to comply with the spirit underpinning Clause 307 through self-regulation. The inevitable result would be substantial compliance, where appropriate, with various conditions set out by the legislation. In addition self-regulation or co-regulation would place less of a financial burden on Ofcom, and I urge the Government to consider the significant advantages that a less prescriptive regime would demand.

I turn to support the amendments in the name of the noble Lord, Lord Eatwell. Amendment No. 250E recognises the importance of local broadcasting without listing input requirements. It would effectively ensure that the services remained locally focused without detailing how that objective was to be achieved. The focus would be on content rather than input and it omits the need for a legally enforceable code detailing the locality requirements set out in Clause 307. The amendment would thus ensure that the local character and coverage of a service is maintained through the condition requiring that an appropriate amount of local material is broadcast of which an appropriate amount is locally made. The amendment also ensures that the locality element is maintained, even if the terms of the licence are varied.

Amendment No. 252A complements Amendment No. 250E by defining the phrases "local material" and "locally made". We support this proposal to limit unnecessary control and to encourage industry participation in the regulatory structure.

I also support in principle Amendments Nos. 253 and 255. The importance of the music industry cannot be underestimated. That is why we wish to encourage its continued growth. We do not believe that the correct place to include a reference to music is Clause 307. I raised this issue earlier in Committee when we debated Amendments Nos. 251 and 252 to Clause 306. We want to achieve the appropriate balance. We believe that Clause 306 is the only clause where these issues can be comprehensively addressed.

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10.45 p.m.

Lord Gordon of Strathblane: I support the amendments in the name of my noble friend Lord Eatwell and I support the noble Baroness, Lady Buscombe, in opposing the Question that Clause 307 shall stand part of the Bill.

As my noble friend Lord Dubs indicated, one year ago the draft Bill gave Ofcom a duty to promote and protect the local content and character of local radio. No one quarrels with that. The correct way forward is perhaps to leave it at that and say to Ofcom, "Right, it is up to you how you go about this". I hope that it would consult with the industry and with other people who know something about it and come forward with a code which it would then enforce.

I was shocked to find that there had been no consultation with the industry about Clause 307. It possibly stops short of describing what colour the wallpaper will be at various local radio stations, but not by much. It goes into a ridiculous amount of detail and can have been drafted only by people who know little about local radio. I take one example. What is a local advertisement? Is it an advertisement for a local product or service? If it is not, why would it be on the local radio station? Ultimately, everything is delivered locally, whether it is from Marks and Spencer, Safeway or Jaguar. Products are purchased in a locality and therefore the advertisements are for local products and services.

Is the product locally made? That is not a restriction on the radio station; it is a restriction on the advertiser. If I operate the local garage, is it being said, "Sorry, you cannot go to a London advertising agency. Saatchi and Saatchi may be all right for people down there, but how dare you use them? You must use a local agency". There may not be one in many localities. It is daft.

As the noble Baroness, Lady Buscombe, pointed out, it is not only news that defines a local radio station. If a tune is played as a request for someone's granny in the area, it has a local flavour to it. That is who local radio plays to. It is why independent local radio has successful audiences. It is not because they are more professional than the BBC presenters, as I have said previously—of course they are not—but they are more locally based. They are anchored in their communities.

As regards advertising, one cannot define proportions because it depends on the size of the radio station. I mentioned previously that I am still chairman of Scottish Radio Holdings but no longer have any hands-on executive responsibility. Within that comparatively small group of radio stations, we have a station like Radio Clyde, which with a very large audience is clearly attractive to national advertisers and too expensive for local plumbers. Why would a local plumber advertise on a station with a catchment area as large as ours and waste many of his bullets? By contrast, a station like Borders or South West or Moray Firth in Inverness is not particularly attractive to national advertisers because of their comparatively small populations. But the local

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plumber might well want to advertise on these because he does not waste money on an audience that cannot use his product.

The idea that one can put forward a one-size-fits-all certain percentage of local advertising frankly does not bear scrutiny by anyone who knows anything about the way local radio or the advertising industry work. I favour the route that operated while I was involved. An application—

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