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Lord McIntosh of Haringey: My Lords, perhaps I may take the points in a different order from that in which they were debated and start by discussing reciprocity. I shall do so because a number of noble Lords have pointed out that reciprocity is a red herring in the major debate that we are having about foreign ownership. I have to say that I think that that is true.

We have been told that to remove restrictions on non-EEA countries owning UK broadcasting licences without reciprocity would be contrary to all the principles of negotiation and of free trade. I simply do not think that that is the case. First, I should say that it is not the case that there are no reciprocal arrangements with the United States, in particular for UK firms. There is not a complete ban on UK companies investing in US media. A UK company may own up to 20 per cent of a US company with a

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broadcast licence, and can also own up to 25 per cent of a company whose subsidiary company comes with a broadcast licence.

Secondly, it is not the case that we would be in an unusual situation for the European Union. A number of countries have taken this deregulatory step, including Germany, the Netherlands, Portugal, Spain, Denmark, Ireland, Finland, Belgium and Luxembourg, as well as New Zealand, without reciprocity—and we shall encourage others to do likewise. If it is right to liberalise trade, then our general approach within the World Trade Organisation—formerly GATT—is not to wait for reciprocity before liberalising trade. If it is a good thing to do, we do it. If we did not do it, there would be no progress whatsoever on globalisation and the liberalisation of world trade.

Lord Fowler: My Lords, can the Minister explain why, in November 2001—which is not a long time ago—the Government took precisely the opposite view?

Lord McIntosh of Haringey: My Lords, for the past 18 months the Government have been listening to everyone who has taken part in this debate including, if I may say so, the Joint Committee. The Joint Committee agreed with me and has said that the issue of reciprocity was not pivotal to this debate, and I agree. It is a politer way of saying that it is a red herring, but I really do not think, when we are considering an issue of such importance as the liberalisation of world trade, that we should be diverted by the issue of reciprocity.

I shall now discuss the major issue; that is, whether we should maintain the ban on non-EEA countries. We propose to open up to foreign ownership for one very simple reason: that there is benefit in it for UK broadcasting. It is in our interests to open up.

The current rules are not coherent. I do not doubt that there are noble Lords who would wish to impose the same kind of ban on countries within the European Economic Area, but they know that they cannot do so because of European rules. Those noble Lords are not going to resign from the European Union for that purpose; I can say that with impunity because I see that the noble Lord, Lord Pearson, is not in his place. We are doing this because it is right to do so and because we have so much protection, including the additional protection that has been introduced in debate this afternoon and which will be brought forward by way of amendments tabled at Third Reading.

As a general rule, surely to open up the industry to foreign ownership will allow investment in UK broadcasting from a wider range of sources. No one has denied that point. In other industries, foreign investment has boosted new ideas and improved customer service both within individual companies as well as in that of their competitors. We have seen many examples of foreign investment in our industries, including those so close to the ones we are now discussing—the cable and satellite industries—and we

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have seen the benefits of such investment in both directions. Indeed, I would go so far as to say that our economy is in very large part dependent on it.

Amendment No. 193 proposes that Ofcom should test the content and competition rules in the Bill before changing the rules on foreign ownership. I take it that this is the ingenious way proposed by the noble Lord, Lord Crickhowell, of softening the difficult position he has in the opposition between himself and his own Front Bench. Of course he has had support, but not so much for Amendment No. 193 as for Amendment No. 194, which proposes a complete ban.

Lord Gordon of Strathblane: My Lords, I intervene on behalf of the noble Lord, Lord Crickhowell. His amendment reflects what the Joint Committee recommended. It is the Joint Committee recommendation he is putting forward. I do not like it as much as his subsequent amendment but, to be fair to the noble Lord, it is not brought forward as an attempt to resolve the difficulties within the Conservative Party.

Lord McIntosh of Haringey: My Lords, I readily absolve the noble Lord, Lord Crickhowell, of that. I should never impute motives to anyone. I caught myself out by doing so. However, the noble Lord does have two amendments side by side which seek to do different things.

Let me make two points about this group of amendments as a whole—that is, Amendments Nos. 193, 194, 213 and 239. The first concerns the point made by the noble Baroness, Lady Buscombe, about content rules. The Bill protects content quality and any comparisons made with the United States system are bound to be misleading. We will have in place robust and wide-ranging public service remits—which Ofcom will strictly regulate—and the United States has no comparable system.

I have read in the broadsheets—as have we all— passionate articles by people we respect. In particular, I remember an article in the Guardian by Richard Hoggart, whom I not only respect but venerate. He argues against opening up and in favour of Amendments Nos. 193 and 194. But he does so on the false basis that this would overturn the content rules that we have in our broadcasting and that there is a comparability between the nature of content regulation in the United States and in this country. It could not be more different.

The Bill will put in place quotas for original production, EU production, regional and independent production. There will be flexibility in the content provisions. Ofcom will be able to renew the licence commitments on change of control to ensure that new owners maintain the standards of the old. In other words, any change of ownership to any owner from outside the European Economic Area will entail compliance with our content regulations. I do not know whether that is clear to those who argue about the dumbing down of British television as a result.

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In radio, Ofcom will have to protect the local content of radio. It will also be able to vary the licence conditions when local licences change control in order to preserve the local character of the station and maintain the quality and range of the service.

Unlike the United States, we also have rules preventing broadcasters from using their companies to further their own political agenda. Broadcast news must be accurate and impartial and companies must not use television or radio in order to express their own views on politics or current public or industrial policy.

I do not know what motivated Rupert Murdoch when he went into the American market and took American citizenship to do so. Although I used to know him very well I have not met him for 50 years and so I am somewhat out of contact. But, whatever were his motivations, they could not apply here. If he was looking to do in this country what he has done with Fox, for example, in the United States, he could not do it. Our regulatory system makes it impossible.

The next matters I want to address concern the plurality amendments we propose to table at Third Reading and the plurality issue which was the subject of our previous debate. The noble Lord, Lord Crickhowell, opened his speech by saying that the plurality issue was irrelevant to this issue. The noble Lord, Lord Gordon, said that this is a totally separate issue and should not be considered in the same breath. That is simply not the case.

The government plurality test addresses the concerns expressed over foreign ownership. My noble friend Lord Puttnam has already acknowledged that case. The test will cover the need for a wide range of high-quality broadcasting calculated to appeal to a wide range of tastes and interests. It will cover the need for a genuine commitment to the standards objectives. Just like existing domestic players, foreign acquirers of UK media could be and will be judged against those tests. I stress that the tests would bite even if foreign companies had no existing UK assets.

6.15 p.m.

Lord Phillips of Sudbury: My Lords, I am grateful to the Minister for giving way. As he is now dealing with the amendment of the noble Lord, Lord Puttnam, does he not accept that that is posited on the basis of plurality of media owners? So it would scarcely be possible for objection to be raised if, for example, one of the big American combines were to purchase one of our television channels.

Lord McIntosh of Haringey: My Lords, as I said, we have considered changes to the Bill to introduce a plurality test. As I have explained, this test would allow us to look at a proposed foreign acquisition from the point of view of the number of owners in the relevant market—the noble Lord, Lord Phillips, is right, in some cases such an acquisition would not change the numbers—and it would enable us to look at a proposed foreign acquisition in the light of the need for a wide range of high-quality broadcasting

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which is calculated to appeal to a wide variety of tastes and interests, and the need for a genuine commitment to the Ofcom standards code.

Even if the numbers were not changed—and I acknowledge that that could happen—the other criteria in our test, which will be debated at Third Reading, will still apply. Therefore I flatly contradict the view that what we have done and what we have said to the noble Lord, Lord Puttnam, on the plurality test does not affect the issue of foreign ownership.

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