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Lord Thomson of Monifieth: Noble Lords on these Benches support the amendment moved by the noble Lord, Lord Crickhowell, although I cannot hope to match him in his Welsh eloquence. I want to begin by taking up the points made on EC companies which have been raised by a number of noble Lords. The Government's position on this—stated baldly but, I hesitate to say, also naively—makes no sense at all. It is set out in paragraph 239 of the Joint Committee report:

That point was taken up by the noble Lord, Lord Lipsey.

There is a distinction to be made between European investment in British broadcasting and American investment. Broadcasting is very much more than a commercial business. It is in a real sense a reflection of national culture and the character of our society. The influence of broadcasting on the whole climate of opinion in our society is beyond argument. In that sense, the character of British broadcasting has infinitely more in common, in important ways, with the broadcasting systems of our partners and neighbours in the European Union than with our American neighbours. In Europe, Britain has one of the best broadcasting systems and it is so regarded around the world.

I have a vivid recollection of arranging, when I was chairman of the Independent Broadcasting Authority, a dinner for the chief of one of the great American networks to meet ITV chairmen and managing directors. It was an interesting dinner because, although we shared a common language and had some common interests, we were deeply divided by our fundamentally different broadcasting cultures—which is not to say that American broadcasters do not produce very high-quality programmes that we all enjoy. I totally agree with the noble Lord, Lord Gordon, that high-quality programmes are produced all over the world. However, the Bill deals with something much more fundamental than simply buying good programmes from anywhere in the world in a global market place. It deals with the character, quality and organisation of our broadcasting system; the purposes for which it is organised; and the ethos that lies behind it.

At the dinner to which I have referred, the distinguished American executive responsible for many highly entertaining programmes considered himself first and foremost a business man who had become a programme maker, whereas the ITV executives saw themselves as programme makers who had become business men. For our American guest, ratings ruled. Although the ITV executives needed to pay due regard

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to their companies' shareholders, dividends and commercial success, they equally paid due regard to the great regulator in those days—the IBA. That is the big difference between the broadcasting culture in this country and Europe, in the main, and that of the United States. As the noble Lord, Lord Crickhowell, pointed out, that difference is vividly set out in the book by Professor Michael Tracey.

The globalisation of communications has a major impact on national broadcasting systems, to which all have to adapt in one way or another, but the Government are being over-optimistic about the benefits of foreign—mainly American—ownership and investment and underestimate the dangers. The Government should pause for thought and be ready for a review of the balance of considerations by Ofcom once it has settled in. The Government seriously underestimate the difficulties that Ofcom will face in preserving programme quality simply by regulation, in the face of pressure from the great American corporations—especially when the going gets tough.

Does anyone seriously believe that if Mr. Rupert Murdoch, a major newspaper owner in this country, becomes the owner of Channel 5, Ofcom and its admirable regulators will, in the last resort, be able to prevent the kind of influence that would be brought to bear on a British national television channel by a man who is famous for defining public service broadcasting in terms of such contempt that he is alien to the broadcasting ethos in this country?

Those are the realities, so I regard reciprocity in a slightly different light from the noble Lord, Lord Gordon. His is a principled position. Mine is more tactical. I regard it as very unsatisfactory and a little humiliating that we should not approach this aspect of international trade relations on the normal basis of reciprocity. But I am keen on preserving reciprocity on the basis that it will be an additional barrier to allowing the domination of American investment in the UK. As there is a total imbalance and not the same appeal, there are fewer chances of Britain being able to enjoy equal opportunities in America.

I am genuinely puzzled by the Government's position on reciprocity. Paragraph 244 of the Joint Committee's report shows that in November 2001, the Government were very robust:

    "Without reciprocal arrangements with other nations that would allow our own companies to expand into their markets, we do not feel that we could justify lifting our ban at the present time".

At paragraph 245, the Secretary of State is quoted as characterising reciprocity as

    "a negotiation in train".

In the same sentence, she is also reported as saying that she saw

    "no case for holding out for reciprocal agreement"—

in part, because no change in US policy appeared in prospect. Against that background, I fail to understand the Government's reasons for abandoning their

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November 2001 position and flying in the face of the all-party unanimity that was declared in a particularly forceful way in the report of the pre-legislative scrutiny committee.

Ownership is one of the Bill's biggest issues. If we do not have a positive response from the Government today, I shall echo the noble Lord, Lord Puttnam, when speaking to a previous amendment, in saying that we shall need to return to the matter on Report. Your Lordships have an all-party view that has resonance in the nation.

Baroness Jay of Paddington: In the context of everyone declaring their personal position, I hope that I am not being naive or innocent. I certainly declare that I am not anti-American but have worked happily in the United States for public broadcasters and commercial television networks.

It is worth making two simple economic points in response to my noble friend Lord Lipsey because they may also be deployed by my noble friend the Minister. The first is whether ownership should be confused with investment. In my view, it is extremely likely that in any ownership decisions about the takeover of ITV, over-the-top market prices would probably be paid for ITV companies. Simple economics would suggest that the owners would probably be more likely to wish to take money out of those companies than invest in them.

The second economic point concerns the so-called dumping of programmes. This is not an issue about the quality of imported programmes; it is about economics and the supply of those programmes. I am sure my noble friend Lord Lipsey is right. Most people viewing television in this country would prefer to see home-grown programmes rather than what they might see as low-quality American ones. The dumping issue is not about quality. US broadcasters would be able to screen their American products in this country at marginal cost. This would be greatly advantageous to them, particularly in the situation where they might find themselves making an initial investment beyond inflation.

That might lead to audience share loss but it would generate an increase in profits. My concern is one that has been expressed by Members on all sides of the Committee. American companies would see this investment as an investment in an industry they would equate with baked beans. We discussed this on the previous amendment about the particular qualities of the media. Their interest would be maximising their profits. Their share of audience in this country would be less important than that. They would maximise their profits by using the opportunity to show, at marginal cost, programmes originating in America. This brings the debate back to the question that I raised on the previous group of amendments about trying to ensure the quality of television through domestic origination of programmes and original programming. The noble Lord, Lord Fowler, and other noble Lords raised fundamental points on the previous group about the special nature of the media industry, global or not.

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1 p.m.

Baroness Howe of Idlicote: I commend particularly the way that the noble Lord, Lord Crickhowell, expressed very important views that need to be decided today. I support this group of amendments for three reasons. The first is that, like many Members of the Committee who have spoken, I cannot see any justification for the United Kingdom to open up opportunities for the media barons of the United States or any other country to buy into the British communications industry on a non-reciprocal basis. If what has been said today is correct and the intention of the US is to drop its own barriers to foreign ownership, we should wait until that has happened. Even then, the conditions and regulations under which such change in ownership would take place need to be stringent. I share the doubts already expressed about the stringency of existing conditions.

Although that would be my own approach, like many other noble Lords who have spoken I would support a logical compromise suggestion by the pre-legislative committee that any decision on foreign ownership be delayed until Ofcom was in place. Ofcom will be a very large organisation. It will have wide, possibly conflicting, responsibilities. We should give it time to settle in before expecting it to take on board this potential Trojan horse.

The second reason—even more important—is the short or long-term effect that opening up our broadcasting industry may well have on the public service broadcasting requirement expected from all British terrestrial broadcasters. The debate on the previous group of amendments pointed to the worries that existed when aspects of cross-media ownership come to the fore. The worst case scenario is having one media baron, possibly Murdoch, owning a near monopoly of local and national radio, television and print media. There has been rather gloomy news this week that the United States plans to go even further down this particular liberalising free-market media ownership road. The effect on plurality, the range, the quality and possibly impartiality of what the average citizen would be able to see or hear, would be worrying. Diversity of thought was mentioned. I believe that to be crucial.

Many speakers have mentioned recent research by Professor Michael Tracey. He is someone versed in the broadcasting cultures of both the UK and the US. His findings show how little attention is given to programming unlikely to make money for American shareholders. Public service broadcasting does exist in the States and the small amount of it is sometimes better than in this country. However, there the market reigns supreme. Broadcasting is not seen as a public good. The warnings that have been given are stark indeed. One Commonwealth country, New Zealand, which started with a UK public service broadcasting regulated model, changed to a US liberal market model when new technology came in. It is now so dismayed by low-quality programmes that it is seriously considering a return to the current UK approach.

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My third reason is that my experience, when chairman of the Broadcasting Standards Commission, confirms the ruthlessness of approach described so graphically by Professor Tracey. While I was in the United States, I had a number of meetings over some years with media academics at Stanford and other universities. They briefed me on how their industry operated. I asked about the weight given to research on issues such as the portrayal of violence and the reactions when this research was shared with broadcasters. Unlike in the UK, where broadcasters, academics and regulators take a keen interest in such findings, American broadcasters do not even bother to attend. They send their public relations people to rubbish such findings.

I hope therefore that the Minister will accept the proposed amendment. If our regulation ensures that high standards and quality of broadcasting are maintained, we should wait until Ofcom has settled down and America has removed its own restrictions on ownership by non-Americans.

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