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Lord Lipsey: My Lords, I, too, congratulate my noble friend Lord Puttnam on his success. I briefly reply to the point made by the noble Lord, Lord Fowler, among others, who said: "Yes, we will have this and then we will go on to debate foreign ownership and Channel 5". Of course we shall debate that, but the two issues are fundamentally linked. It is not a question of a deal—that is, the Government accept the public interest test and those of us who had doubts on the other issue will let them go.

Some of us were rather uncomfortable with the Bill in the form in which it arrived. It seemed to contain a difficult dilemma. On the one hand, we were not satisfied that purely economic competition regulation was a sufficient safeguard for the integrity and plurality of our media—we believe that—but, some were also uncomfortable with the argument being put on the other side for ownership restrictions. That seemed to say that it was absolutely fine for Signor Berlusconi to own large parts of British media, but that certain very reputable foreign owners—far too much

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focus has been on Rupert Murdoch as though he is the only one with all the vices and virtues that exist—must be ruled out. That seemed chauvinistic.

This breakthrough has removed that deplorable chauvinistic aspect but has preserved, and indeed put in lights, the public interest which is at the root. It will not be where you come from; it will not even particularly be what kind of chap you are; it will be whether your ownership is such that it endangers public interests by reducing plurality. Incidentally, plurality in media law is a concept that stretches much more widely than simply numbers, as was shown by the verdict of the regulatory authorities in the Bristol radio cases. That is why this is such a tremendous breakthrough and why some of us can now, with a song in our hearts, go through the government Lobby in the unfortunate event that there is a Division, for example, on foreign ownership.

Lord Phillips of Sudbury: My Lords, before the noble Lord, Lord Lipsey, sits down, I am intrigued. He said: "It won't in future be a question of what sort of chap you are"—I think those were his words—"it will be a question of whether you can reliably uphold the public interest in the manner indicated in the amendment". Surely, those two issues go together. If the nature of the proprietor is of, for example, a Berlusconi pattern, it will be directly relevant to the public interest.

Lord Lipsey: My Lords, yes, I think that I misspoke there. I take the point made by the noble Lord.

Baroness Howe of Idlicote: My Lords, as noble Lords will know, the Cross Benches do not have a view, each one of us has an individual approach. From my viewpoint, and possibly from that of one or two other noble Lords who have followed the debate from the beginning, it is a huge relief to have this new concept of plurality and public interest test brought in. Whether in due course we can all be convinced that it applies to all the issues that still worry us, I think will need a little more explanation over time.

However, it is a very worthwhile beginning to this debate. Again, I most warmly congratulate the noble Lord, Lord Puttnam. Yet again we have more than one reason to be grateful to the noble Lord and his colleagues. Equally, I give my congratulations, along with those of everyone else, to the noble Lord, Lord McIntosh, who has spoken so eloquently and with such understanding.

5.15 p.m.

Baroness Buscombe: My Lords, will the noble Lord confirm that even if a public interest test were not included on the face of the Bill, the Secretary of State has the power under Section 59 of the Enterprise Act 2002 to introduce such a test at any time by order?

Lord McIntosh of Haringey: My Lords, I have confirmed that Clauses 59 to 66 of the Enterprise Act will be included in any provision that we make. Yes, of course there is an order-making power, but the House

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is demanding that we put the provision on the face of the Bill, and that in addition we set out not just a numbers test—because that could happen under the Enterprise Act—but the need for a wide range of high-quality broadcasting, which is calculated to appeal to a wide variety of tastes and interests. We propose to include that and the need for a genuine commitment to the standards objective. I doubt whether that would be possible under the Enterprise Act.

Lord Eatwell: My Lords, I begin by declaring an interest as chairman of the Commercial Radio Companies Association. I add my congratulations to the universal congratulatory tone for my noble friend Lord Puttnam. He has sought to achieve something very important: that as many voices as possible provide many viewpoints and a wide diversity of programming throughout the media.

However, I confess that I am slightly worried by the belief that plurality will be a universal panacea to achieve those goals. I am also a little worried about the identity which has emerged in discussion between plurality and the public interest test. They do not seem necessarily to be the same thing.

When my noble friend introduced his amendment he pointed out that the plurality test was designed to apply across the board. Although most of the discussion has taken place with respect to television, perhaps I may be forgiven for reflecting for a moment on the impact on the radio industry.

First, a number of important qualifications were made by my noble friend Lord McIntosh with respect to the amendment of my noble friend Lord Puttnam. He made three points with which I agree completely. I shall list them without going into the arguments. First, he pointed out that there is some confusion in this discussion—a confusion which emerged in the contribution of the right reverend Prelate—between plurality and diversity. Plurality and diversity are not the same thing. A reduction in plurality may often increase diversity of programming and vice-versa. They are not the same thing.

I see some puzzlement on noble Lords' faces, so perhaps I should elaborate a little. Let us suppose that in a given area there are two owners of local music stations. In order to maximise their revenues their rational business strategy would be to play exactly the same kind of music—the most popular music in the area. If those two owners combined, their rational business strategy would be for the two stations to play different kinds of music and thereby maximise the coverage in the market. Therefore, the reduction in plurality would increase diversity and consumer choice.

There have been significant examples of that occurring in the radio industry. For example, the mergers which have taken place in London by Capital Radio have actually increased the diversity of programming across the radio stations taken over by it. So my noble friend the Minister was quite right: plurality and diversity are not the same thing.

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Secondly, my noble friend pointed out that there is a degree of elision in the amendments between the newspaper industry and other media. They are not the same. The newspaper industry does not have content regulation, whereas, in this country, we have strict content regulation for broadcast media. Not only does the regulator apply content regulation but, in the radio industry, content regulation is strongly supported by the industry. That helps it to become much more effective.

The third point that my noble friend made with which I agree was that, with respect to the presentation of news, there are requirements on broadcast media to present a fair, balanced and impartial news coverage. That already exists in legislation.

There is a fourth point that my noble friend could have made about the impact in the United Kingdom on plurality issues that does not apply abroad. It is that commercial broadcasters in this country—commercial radio in particular—face a powerful and creative competitor in the form of the BBC. If commercial radio does not provide a wide variety of programming appealing to local tastes, it will inevitably lose its listeners to the BBC. The fact that the BBC is there forces improved performance by commercial radio. Indeed, the effect is reciprocal; they mutually reinforce one another.

I hope that those four elements will be taken into account when the Government draw up their plurality amendment. Those issues are important and mean, with respect to format regulation and the presence of a powerful BBC, that analogies based on Italy, Australia or America—which have been widely used in consideration of the matter—are not valid for the UK.

I draw the House's attention to a wider point. An important book dealing with the issues of media ownership, competition and plurality was published in 1997. It was entitled, The Undeclared War: the struggle for control of the world's film industry. One clear message of that book was the importance of scale in underpinning success in competitive media markets. As we all know, the author of that book was my noble friend Lord Puttnam.

It is therefore ironic that my noble friend's amendments could prevent British companies in other sectors of the media industry from achieving the competitive scale shown to be so important in the history of film. I am worried about that. One factor underlying the failure to build a successful commercial television company of world class in this country—there is not one—has been the fact that we have restricted the growth of commercial television companies and prevented them from competing on a suitable scale with foreign companies.

If we are so determined to force our media companies to be small, we must be sure that we are happy to hand all the long-term competitive advantage to companies based outside the UK. If we are prepared to accept the consequences of that, that is fine, but we should be aware that those are the consequences. In the long term, the consequence will be an ever weaker UK commercial broadcasting sector

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facing more and more powerful competition overseas. Therefore, the UK sector will be sustainable only by erecting larger and larger protective barriers.

With strong commercial companies overseas and weak commercial companies here, we could also face a BBC able to maintain its position only by getting into bed with those powerful foreign interests. That is happening already.

I am worried about the notion that plurality is a panacea. In drawing up their amendments, I hope that the Government seek to achieve a balance between the attempt to create an environment within which companies can grow and be strong and competitive on a world scale and the diversity of voices, programming and consumer choice that we all seek.

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