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Lord Phillips of Sudbury: My Lords, I am extremely grateful to the Government and to the Minister for in effect accepting the amendment which, as the Minister rightly says, was pressed strongly not only by myself but also in particular by those whose names were attached to the amendment: the noble Baronesses, Lady O'Neill and Lady Howe, my noble friend Lord McNally and the noble Lord, Lord Fowler. In Committee there was an hour long debate on the matter. I am sure that everyone will be extremely content that what must be by any reckoning the most single important non-economic factor linking into Clauses 262 and 263, as they now are, is written into the keynote clause of the Bill. I am grateful for that.

At Second Reading I mentioned that I felt that commercial strains fell heavily on producers and programme makers in commercial television. Indeed, the noble Lord, Lord Birt, added his own gloomy prognostication to that theme. I gave as an example my local television company, Anglia, which I know and with which I have worked closely for many years, and was perhaps a little unfair to it in that it has done better than some other commercial television companies in relation to what one might call the public broadcasting remit or standards.

I know that good programme makers and producers, of whom there are very many in the commercial sector, will welcome this entrenchment of the public service broadcasting remit in Clause 3 as it will strengthen their hand when the going gets a bit rough. That is all I need to say. Later we shall deal with an amendment to the enforcement clause, which is now Clause 268, and there will be more to say then. In the mean time I am most grateful to those who supported this long campaign and to the Government and the Minister for concurring. I beg leave to—no, I do not do anything, do I?

Lord Fowler: My Lords, not yet. I wish to add to what the noble Lord, Lord Phillips, said. This is an important amendment. I congratulate the noble Lord, Lord Phillips, on his persistence with it. I congratulate the Government on accepting it. Personally, I prefer the wording of the amendment as it stands now without the Government's amendment, but we shall not argue about that because the Minister has given way.

As has been said, public service broadcasting is not just about the BBC, but the dispute between the BBC and the Government is being used to attack the very concept of public service broadcasting in this country. It is argued that there are other options: government controlled radio and television making no pretence to

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be other than the Government's mouthpiece or the kind of marginal public service broadcasting that exists in the United States.

My own view is that the standards of public service broadcasting are so demonstrably superior to any of those other brands that it is something that we should fight very hard to preserve in this country. In that respect the Government have been entirely right in putting that at the head of the Bill. Perhaps one might add in parenthesis that one hopes that the tabling of this amendment by the Government might mark an end to the rather futile warfare between the Government and the BBC at the moment. It would be in everyone's interest if that were to take place. I shall not go further down that particular road, but I congratulate the Government on underlining their belief in public service broadcasting.

Baroness Howe of Idlicote: My Lords, as one who has put my name to the amendment of the noble Lord, Lord Phillips, on many occasions, as he acknowledged, I, too, congratulate the Government. I also particularly congratulate the noble Lord, Lord Phillips, on his persistence. The measure will give considerable reassurance to many organisations. I mention especially the Voice of the Viewer and Listener and Public Voice, representatives of which have written many times to your Lordships throughout the Bill's passage. Indeed, many individual citizens have let us know how deeply concerned they are to preserve that unique quality of British broadcasting which they consider is crucially embedded in public service requirements.

As has already been said, British public service broadcasting is the bench-mark not just for British terrestrial channels but for all broadcasters who wish to compete for our viewing time. Again, I congratulate all concerned and particularly the wider public who made us aware of their views.

Baroness O'Neill of Bengarve: My Lords, I shall not spin this debate out, but I should like to ask the Minister what are the reasons for the restriction of Amendment No. 4 for the purposes of public service television broadcasting. That is the substantive difference between the government amendment and that of the noble Lord, Lord Phillips. So far, I have failed to understand the reason for that restriction.

Lord Davies of Oldham: My Lords, I shall not talk about public service radio—that is effectively the BBC, and its purposes are set out and secured through the BBC Charter and Agreement rather than in the Bill. When we talk about public service television, we are talking about a wide range of channels, but public service radio is the remit of the BBC. That is why Amendment No. 4 is expressed in these terms. I accordingly commend it to the House.

On question, amendment agreed to.

[Amendment No. 5 not moved.]

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Lord McIntosh of Haringey moved Amendments Nos. 6 and 7:

    Page 3, line 41, leave out paragraph (b).

    Page 3, line 46, leave out paragraph (d).

On Question, amendments agreed to.

Clause 14 [Consumer consultation]:

Baroness Buscombe moved Amendment No. 8:

    Page 18, line 5, leave out from "matter" to end.

The noble Baroness said: My Lords, the House will recall that the words in brackets in Clause 16(5) which my amendment seeks to remove are the words inserted by the Government on 15th May in Committee into what was then Clause 15(5), dealing with areas which should be subject to consultation by the consumer panel.

The purpose of the government amendment was, according to the Minister,

    "to give the consumer panel the power to consider matters of content which are referred to it by Ofcom".—[Official Report, 15/5/03; col. 357.]

The Minister said that these would be matters that had a "high consumer dimension", and misleading advertising was cited as an example.

Your Lordships will recall that we debated the issue again on the second day of Report, on 26th June, in relation to Amendment No. 33. The aim of my amendment then was to remove the words in brackets, and thus return to the clarity of remit previously given to the consumer panel. It was identical to the amendment that I am moving now.

My amendment reflects concerns expressed to me by content providers and the advertising industry throughout the progress of the Bill in this House about the potential for overlap between the consumer panel and the content board, and the need for clearly defined boundaries between the two.

The Government gave some reassurance at Report stage on 26th June that the consumer panel would not have free rein to advise on content, and that it could do so only when asked by Ofcom. That was helpful, but I do not believe that it goes far enough. It is essential, going forwards, to have clarity between the functions of the regulatory and advisory bodies. Otherwise, the whole purpose of creating a single regulator—to develop a common regulatory approach across the communications sector and to avoid regulatory overlap—will have been pointless.

The Minister also referred to the fact that that has been government policy since the White Paper. Yes, that is true—but have not the Government developed the remit of the content board since then; and is it not true that Ofcom is required to carry out research on public opinion and the experience of consumers in accordance with Clause 14 of the Bill? Surely that should be sufficient to ensure that Ofcom's policy on content issues takes full account of wide consumer concern.

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The Government said that the wording that they added in Committee was merely to correct a disparity between what is now Clause 16(5) and Clause 16(6)(c). I believe that it goes further than that. My reading of the Bill is that there is no disparity in the meaning of the respective clauses if the words in brackets in Clause 16(5)—

    "other than one referred to them for advice by OFCOM"—

are taken out. It then means that the consumer panel can give advice to Ofcom in relation to any matter except content, which is specifically excluded under Clause 16(5). However, if the words in brackets are left in Clause 16(5), this would nullify the specific exclusion created for content by that clause. In other words, the opposite effect is achieved.

In conclusion, my amendment seeks to address the concern that I know still exists among content providers in the advertising industry that there should be complete clarity and avoidance of overlaps between the consumer panel and the content board. I beg to move.

Lord Thomson of Monifieth: My Lords, I support the noble Baroness, Lady Buscombe, in her amendment. The noble Baroness described succinctly the previous discussions that have taken place on this matter. I share her desire as regards the value of achieving certainty over the frontier between the responsibilities of the consumer panel and those of the content board before the Bill finally leaves this House.

The consumer panel has clear and important responsibilities—there is no question about that. So does the content board. But they are distinctively different. One of the advantages of this mammoth Bill is that it tidies up the landscape of communications and clears the regulatory undergrowth of competing responsibilities.

Ofcom has a massive task ahead of it dealing with the pressures of conflicting interests, some of them very powerful. Ofcom deserves the maximum of clarity in the Bill that finally completes its passage. It does not deserve having thrust on it the duty of deciding which content matters have such "high consumer dimension" that the content board should be second-guessed by the consumer panel.

It is a quite unnecessary fudging of the regulatory frontiers. It will confuse the work of the content board and will add a dimension of uncertainty to a regulatory system for television advertising which has a record of working well and which is in the process of development within the new responsibilities of Ofcom.

It is true, as the Government have previously pointed out, that there was a specific reference in the original policy document relating to the draft Bill to the consumer panel having a say in,

    "content issues that have a high consumer dimension, such as rules on misleading advertising".

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But the Bill itself permits Ofcom to contract out its functions and to promote "effective" self-regulation. If key areas may be contracted out, leaving Ofcom as a backstop regulator, albeit with teeth, surely we should be careful about giving Ofcom's consumer panel a statutory role, however limited, in content.

It is no secret in this House after our prolonged discussions that a key area which may be contracted out by Ofcom in the near future, subject to the results of a public consultation, is the regulation of broadcast advertising, using aspects of the ASA system.

The Bill provides that self-regulation of areas co-ordinated by the Bill must be, first, adequately funded and, secondly, independent of the industry that it regulates. An effective self-regulatory system operating in a co-regulatory framework would surely base policy decisions on input from consumers as well as from the industry. It would surely also ensure that the complaints adjudication process is properly and effectively managed, with published performance indicators.

If broadcast advertising is contracted out, Ofcom would become the backstop regulator. Would it not be odd in such circumstances for Ofcom to refer advertising content matters to its consumer panel if the self-regulatory system is already using established procedures for taking views from consumers?

Advertising is but one case, but I believe it demonstrates that we have to be extremely careful, as we move into the new regulatory environment, not to perpetuate the problems created by previous legislation—where, for example, there were overlaps between the ITC and BSC advertising remits which sometimes resulted in conflicting decisions. We are creating a single regulator with the purpose of developing a unified approach to communications policy and we must therefore ensure that we avoid creating overlaps and additional bureaucracy within the regulator and its boards and advisory groups, one of which is the consumer panel.

The consumer panel is important, but we must avoid two groupings giving conflicting advice. It would be a recipe for confusion and delay to have an advertising self-regulatory system consulting with consumers and relevant interest groups and advertising also being discussed by Ofcom's own consumer panel.

5.30 p.m.

Lord Davies of Oldham: My Lords, the noble Lord, Lord Thomson, is certainly right when he says that we have been round this course before. We have had substantial discussions on these issues as the noble Baroness, Lady Buscombe, attested when moving the amendment. We have discussed a similar matter at Committee and Report stages. I understood that the amendment had been brought back at Report stage so that the Government would have an opportunity to put on record the details of a letter that my noble friend Lord McIntosh sent to the Advertising Association. The letter assured the industry—I take this opportunity of renewing that assurance—that this provision does not risk double jeopardy and that there is no perception that misleading advertising is a problem. It was not our

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intention to suggest that it is. I had hoped that our answer on Report gave further reassurance to the industry, although the noble Baroness has renewed her fears on their part again today.

The consumer panel is an advisory body and has no regulatory powers. The contents board of course is part of the regulatory structure, but the consumer panel is not. The consumer panel will provide another means of advice for Ofcom if Ofcom wants to use it.

I understand that there is a more fundamental objection to the policy of Ofcom being able to refer matters of content with a high consumer dimension to the consumer panel for advice—please note, for advice, not regulation; not for decision taking, just for advice.

The principle behind the amendment seems to be at some odds with the will of the Chamber when it gave Ofcom a principal duty to further the interests of consumers and citizens. The joint scrutiny committee was quite clear that it, while recognising that,

    "the interests of the citizen in the nature of broadcast content should first and foremost be represented by the Content Board . . . nevertheless support the current proposals in the draft Bill whereby certain issues could be examined by the Consumer Panel at the instigation of Ofcom's main Board".

That is exactly what the Bill says.

The noble Baroness, Lady Buscombe, said on Report that she wanted to be sure that nothing in the Bill undermines the advertising industry's ability to regulate itself successfully. She has emphasised that point again and as we said on Report we agree with her wholeheartedly, but we do not see how this provision could undermine the Advertising Association's plans for co-regulation. It does not.

Furthermore, I believe that if we were to deny Ofcom that flexibility we would be doing consumers a great disservice. As my noble friend Lord Evans fully explained on Report, this is not about advertising. There are some—not many—content-related matters, such as the bundling of different channels on pay TV services that could have a high consumer dimension on which Ofcom may need to seek expert consumer advice.

The consumer panel is best placed to give Ofcom that advice. This is not about blurring the boundaries or muddying the waters, as the noble Lord, Lord Thomson, was suggesting. The content board, within the regulatory structure, is the proper place for matters of content. I believe that we are totally agreed on that point. But on the few issues where there is a high consumer dimension we must not deny Ofcom the flexibility of hearing the consumer voice.

Responses to the consultation on the draft Bill fell into two fairly distinct camps on this issue. Powerful interests like BSkyB were quite clear that they did not want the consumer panel to be able to advise on content matters referred to them by Ofcom. They were concerned that the consumer panel should have,

    "no jurisdiction over content-related issues or the terms on which content services are provided".

The consumer lobby, in the other camp, wanted the panel to have a much broader remit that allowed it free reign over all of Ofcom's remit, including content. Some, like Channel 5, were supportive of the Government's position that the consumer panel,

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    "should only be required to consider broadcasting/content issues when instructed to do so by Ofcom".

This is the balance that we have struck between two competing perspectives on this issue. We believe that the balance that we have struck provides certainty for the industry and gives consumers a voice on content matters where Ofcom decides that its advice is relevant. BskyB have nothing to fear. The panel has no jurisdiction over content. Ofcom merely has the ability to seek its advice and we have made it clear that we expect it to do so only when matters of content have a high consumer dimension.

At Report stage the noble Baroness, Lady Buscombe, said that she felt the wording that this amendment removes was unnecessary. We introduced the wording to give certainty in respect to our policy which has always been clear throughout the Bill. Clause 16(6)(c) which provides for the panel to,

    "give advice to Ofcom in relation to any matter referred to the panel by Ofcom for advice",

is where it is given effect.

But we were concerned that there was a tension between Clause 16(6)(c) and Clause 16(5). I think that the debates in Committee, on Report, and again today—the noble Baroness has put her case with admirable clarity—have helped us to examine the matter further. It is the Government's intention in drafting the Clause 16(6)(c) that "any matter" would include matters of content where there is a high consumer dimension and where Ofcom chooses to seek advice. I firmly believe that it is in the interests of consumers that this is so. I hope that the noble Baroness at this late stage—we have tried to persuade her on two previous occasions without conspicuous success—will say that we have sought to strike a balance between competing interests in these terms and that we have a provision that will secure the interests of consumers so she will withdraw her amendment.

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