Select Committee on Communications Minutes of Evidence

Examination of Witnesses (Questions 2094 - 2099)


Lord Puttnam

  Q2094  Chairman: Thank you very much for the paper that you sent, which is extremely helpful. Could I start at the beginning with your experience not least in chairing the Joint Committee that looked at the Communications Bill? Why should there be special conditions governing the media? Why should we not just leave it to the market?

  Lord Puttnam: Because, unlike the rest of the market, most people's decisions as citizens and consumers are made on the basis of the information available to them. The nature, the plurality and the accuracy of that information are what drives people's lives forward. If the information is false or misleading, they will make false decisions. If the information is accurate and sufficiently broad, they are likely to make better decisions. The market for information is not a market place in the sense of markets for commercial products.

  Q2095  Chairman: In a democratic state all those factors are of great importance.

  Lord Puttnam: They are fundamental. One of the wonderful, almost surreal moments during the passage of the 2002 Communications Act was when we drafted a report containing the word "citizens" on more than one occasion. It was knocked back by officials on the grounds that the word "citizens" could not be incorporated in English law. It was not until the Secretary of State bravely said to her officials that she was not prepared to stand at the despatch box in the House of Commons and make the point that we were not citizens that the lawyers scuttled back and found a way of getting the word "citizens" into the legislation. It is the only place where the word "citizens" is in legislation. That is a very broad criticism of our legislation generally, not just of a specific piece of legislation.

  Q2096  Chairman: You were Chairman of the Joint Committee that scrutinised the Draft Communications Bill. That Bill deregulated much of the media in any event. Remind us what your main objections were from the Joint Committee.

  Lord Puttnam: My experience in the motion picture industry was the amount of damage done over 30 years by a process of consolidation built on purely economic grounds. I have come to the conclusion that almost always when this occurred it would be the consumer, the audience, who ended up with a raw deal. I was at a conference the other day and it started with an organisation called FIDO, the Film Industry Defence Organisation, a brilliant idea dreamed up in the late 50s by British film companies, which created a pool of money whereby they were going to buy the television rights of all American and British movies off the market place, prevent them from going on television and by doing that crush television. This was the way of trying to ensure that television never took off. The scheme lasted six months but it was interesting because it was a precursor of dozens of attempts to stun at birth new technologies and new means by which consumers could have access to movies. If there is an over-arching theme that I have tried to fight against, it is the presumption in favour of the economic over the legitimate expectations of the audience. At almost every turn audiences have been manipulated in favour of the economic considerations.

  Q2097  Chairman: Is it fair to say that you agreed to or went along with a compromised solution which led to the government introducing amendments which established the Public Interest Test for media mergers?

  Lord Puttnam: Yes. The architect of it was my colleague on the Committee, Andrew Lansley, who lit on the fact that, at exact the same time as our Bill was going through, the Enterprise Bill was also going through. He conceived this notion of a double lock whereby you use the provisions of the Enterprise Bill to look at things from a competition perspective and at the same time you looked at those same provisions from the perspective of the public interest. By creating these two locks, you were likely to get a reasonable result.

  Q2098  Chairman: Tell us what the Public Interest Test in mergers means in practice?

  Lord Puttnam: Broadly speaking, the public interest would be affected in the event of diminution of plurality of voice. It was taken as being the written, audio or televisual voice. If you were diminishing the plurality of voice, you were damaging the public interest.

  Q2099  Chairman: Has that test done the job that you hoped for?

  Lord Puttnam: Yes. I think in some senses very much so. We now at least have the way that Britain works on the basis of precedent. We now have sufficient precedent to move forward reasonably confidently. I am still slightly bothered that Sky may end up with 7.5% of ITV. Again, it comes down to this business that the economics are seen to be defended at all times, whereas the market would be clearer and everyone could get on with their business if the position was that Sky had to get rid of an entire investment.

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