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Therefore, the question is how you evolve from where you are to something that has scale and earns its money, its profitability and its revenue from things other than just broadcast advertising, given what is happening to that market structurally and cyclically. To do that, there are a number of options, some of which involve other what might be described as publicly owned assets and some of which might involve a contribution from the private sector. In the report, we are clear that there is a case for the creation of a new second player in the market, which is a public-service organisation in terms of its remit. However, the way in which it would be constructed and its funding models is work that needs to be done between now and May and June. We are absolutely open to people’s views on that. We have detailed analysis from Ofcom, although that is, by its nature, policy-based analysis rather than financial-based analysis. But when you are moving to the point of conclusion, the financial-based analysis is as important if not, in truth, more important. That is the next stage to which we are moving.

Lord Bragg: My Lords, I declare an interest as an employee of ITV and a freelancer of the BBC. Does the Minister agree with Ofcom’s analysis that regional news on ITV will not be sustainable after 2011, even with the benefit of sharing facilities with the BBC, and that alternative arrangements will be needed to ensure plurality in regional news thereafter?

Lord Carter of Barnes: My Lords, I hope that the noble Lord, Lord Bragg, knows my views on this question because I have been clear in many places, including in this House. There is clear evidence that the challenges facing commercial-funded broadcasters are accelerating. That creates a number of issues and where, perhaps, we feel that most sharply is around regional news, which is why in the report we make it clear that when we look at this second public-service organisation, one of the parts of the remit that we would look to consider as part of its responsibility is a

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significant commitment to news, national news, local news and regional news. Between now and then, there are other things that we could look at and, as the noble Lord knows, we are doing so.

Baroness Howe of Idlicote: My Lords, will the Minister give more information about media literacy and content harmful to children, an issue that was raised by the noble Lord, Lord Clement-Jones? The Minister will remember that during the passage of the Communications Act 2003, many of your Lordships were keen to expand the role of Ofcom to take account of rather more than media literacy as far as what was going on on the internet was concerned? Has he ruled out any more effective legislation on this or is that one of the options? This is a very important subject, and children are far more adept at accessing this material than any parents are likely to be.

Lord Carter of Barnes: My Lords, if my children are anything to go by, the noble Baroness is right. On media literacy, this House was prescient. I remember the debates, and one could politely describe the provisions in the Communications Act as limited. It is clear in the report that, if there is to be this expansion of capability and this explosion of speed and distribution, and if we are going to establish a universal service commitment and these services are going to be available in a much less controllable way, you must have a corresponding commitment to looking at literacy and standards. We are specific that we wish Ofcom to come back with recommendations on whether we should legislate for that. My personal view, for what it is worth, is that I am not sure that that is a responsibility that sits most neatly with the industry regulator, but we can return to that in the final report.

Lord Low of Dalston: My Lords, I declare an interest as chairman of RNIB. I can assure the Minister that, on the fourth ambition on accessibility and inclusion, we will be very happy, indeed anxious, to work with the Government and the industry to help to deliver that ambition. The Minister may be aware that there is a particular problem of accessibility of digital audio broadcasting radio sets as regards the visual displays and read-outs of programme content information et cetera. It would be very helpful if the Government were willing to use their good offices with the industry to help us resolve those problems.

Lord Carter of Barnes: My Lords, I thank the noble Lord, Lord Low, for his comments. As I hope he knows, in previous lives this has been an issue close to my heart, particularly in relation to accessibility on television. I am aware of the question that he raises. We would very much welcome an opportunity to work with parties, including his own organisation, with expertise in this area. We would welcome their input.

Lord Inglewood: My Lords, the Minister has explained what I might describe as his bipolar vision for public service broadcasting. But is not the easy bit explaining the vision, and the difficult bit, bearing in mind that two of the four public service broadcasters in this country are private entities, putting that vision into place? Does the Minister have any suggestion on how it might be done?

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Lord Carter of Barnes: My Lords, suggestions have been made by interested parties. Recently, the industry regulator put forward three options, or possibly four, depending on how one reads the document. A number of private sector parties have declared an interest in being part of a public/private partnership in creating a second entity. There have been—as I think the noble Lord, Lord Fowler, alludes to, although he puts it slightly strongly when he suggests who likes what—various options put forward by the two entities which might be called publicly owned. I hope we are saying clearly as the Government that, between now and the summer, we intend to design and devise a structure that we believe works; namely, one that reflects value for money for the taxpayer for publicly owned assets, which is sustainable, which has an ownership structure that we believe will allow it to thrive, and which has sources of income that will be sustainable in a fully digital age. We have said that we are open to declarations of interests from all parties and we begin that formal design process as of next week.

Lord Maxton: My Lords, I welcome this report, however interim it might be. It is both comprehensive and radical in its proposals. The Minister will not be surprised to know that I welcome in particular the commitment to broadband to all in the country. Does he agree that this must be the first priority? Internet services in entertainment, information and individual commercial operations carried out by individuals are essential to all if we are not to have a divide between the rich and the poor in this area. Does he further agree that the internet is just as important as motorways in providing the services that we need in this country, economically and culturally? Will he therefore make a commitment that we should have at least some public funding for this?

Lord Carter of Barnes: My Lords, I thank my noble friend for his constant enthusiastic support for this agenda. As he knows, I share his passion for it. Perhaps I may be allowed a brief reflection. I recall that when broadband services were first being sold in this country, the major player in the market took a public position saying that there would never be a market for broadband in Britain. Three years later, when the regulator decided to unbundle the local exchanges, the general view of the media was that it was an unnecessary piece of regulatory intervention in a perfectly functioning market. The evidence suggests that if you have a view, take a position and have a clear direction, the market will follow.

The internet is a truly revolutionary network. I agree with my noble friend that providing inclusion and access for all has to be the policy of a Government who believe in inclusion, and this Government certainly do. He will not be at all surprised to hear that I can make no comment on guarantees of public funding, but he can rest assured that I have strong views on the question.

Lord Swinfen: My Lords, first, I am disappointed with the statement that the speed of broadband is aimed to be two megabits a second, particularly since, as I understand it, parts of Europe are offering broadband speeds of up to 16 megabits per second. What are the

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Government doing to try and speed things up? Secondly, what is being done to prevent the drop-off in speed the further from the exchange that the computer operating on broadband is? For those living in the countryside with long distances between their computer and the exchange, this can be quite a serious matter. Can the Minister also tell us whether there are plans to recable the country with fibre optics, which I understand are a lot faster than metal cables, and would therefore help the situation? In asking these questions, I should declare an interest as a director of a charity that uses IT to provide specialist medical advice to doctors all around the world.

Lord Carter of Barnes: My Lords, I turn first to the universal service commitment because this was what I would call a point of confusion in an earlier discussion. We have stated that we wish to establish a floor of provision, not a ceiling. It is already the case that in certain parts of Britain, rates of up to 50 megabits are available. The noble Lord should not take from what we are recommending any indication that we are trying to cap the market; far from it. We are trying to suggest that, as with the water supply, there should be a basic level of quality and that that basic level should be universally available. Why have we set it at the notional rate of 2 megabits? We have done so because in today’s world, despite its limitations, two megabits is a rate at which one can get resilient data and video services. However, in no way, shape or form are we suggesting that it is the ceiling of our ambition, because it is not. They are quite separate things.

On the noble Lord’s point about capacity, which is largely a function of how networks interconnect in their design, we recognise absolutely that network capacity is an issue. It will be a central part of our analysis of next-generation networks because they are the way to resolve the issue; namely, to put into the middle or core of the network more capacity for the services he has described.

British Telecom has announced that it is going to deploy some new fibre optic cables, and I am certain that the technology it will deploy for this will be of the new variety described by the noble Lord. We also say elsewhere in the report that we shall ask for an examination of the case for opening up access to cabling ducts and other ways of distributing the fibre optics so that it is not always necessary to dig holes in the ground; rather it can be done through access to the existing infrastructure, whether it be current telecoms infrastructure or that of alternative utilities.

Lord Howarth of Newport: My Lords, reverting to the question of media literacy, is my noble friend aware that his affirmation of the importance of media literacy today will be extremely welcome, as is the emphasis on that matter in the report? Does he agree that there is too much facile disparagement of media studies courses? While it may be the case that some media studies courses are not as good as ideally they would be, is it not absurd to suggest, given the power of the media in influencing the development of public opinion in our politics and given the ubiquity and power of digital media in our emerging culture, that

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people should not be educated in media literacy? Is he aware that 100 years ago, the innovation of English literature in academic studies was rather comparably disparaged, and is not the situation today equal to that? Will my noble friend continue to do what he can to encourage his colleagues to promote good media education?

Lord Carter of Barnes: My Lords, as the Minister for broadcasting and communications, I share my noble friend’s view that it is the highest calling. I remember the slight reluctance in my parents’ household when I gave up a career in the law to pursue one in the media. I only managed to persuade them that it was a good decision when I finally gained entry to this House. However, I certainly share his view about the quality of the calling.

Lord Dubs: My Lords, I welcome my noble friend’s Statement, and in particular his support for Britain’s creative industries. Given the difficulties facing the commercial public broadcasting sector, can he suggest ways in which investment in the sector can be encouraged?

Lord Carter of Barnes: My Lords, that is one of the trickiest questions. Although it was said at a private breakfast meeting, I think that I am allowed to quote the Director-General of the BBC, who this morning described this as one of the tricky tensions of the new world. In this country we rightly take the view that the sector merits and benefits from public subsidy. That public subsidy is provided in the main by the licence fee, but there are other sources. In the report we ask the question—noble Lords may criticise it as an open question, but I have never felt that asking open questions is a bad thing; I was always taught that they were a good thing—as to whether we should identify alternative funding streams. Alternative funding mechanisms for quality content are available in other countries, and we need to find answers to this question.

Lord Alli: My Lords, will the Minister accept the deep concerns that some of us have about the creation of a second public service broadcasting organisation, particularly, if that is required, to be funded by the transfer of assets from the BBC?

Baroness Thornton: Do be quick, my Lords; we have reached 20 minutes.

Lord Alli: My Lords, if I am on my feet, I will take the time that I have, if the House wishes to listen to me.

Channel 4 was supposed to be that second public service broadcaster and it has received hundreds of millions of pounds to become such an organisation. Does the noble Lord recognise that he will have a tough argument in this House to persuade many of us that more resources should be taken away from the success of the BBC to be given to a new organisation whose mission he cannot define and whose structures he has yet to put in place? It will be a tough job to get that through this House, and I wish him the best.

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Lord Carter of Barnes: My Lords, if I am allowed to say so, few noble Lords are as renowned in the creative industry as the noble Lord who has just asked a question. He does not need me to tell him, therefore, that when you are trying to create something new, at times you are exploratory. Being exploratory in a creative process is difficult because you have to leave options open. I am well aware of the strong views on this question, not just in this House but in many places, but I would reiterate the position that the Government have clearly stated today: based on the evidence and the analysis we have seen, there is a case for looking again at what a new public service organisation, including a recast remit for Channel 4, would look like for the digital age. There are very real and difficult questions to be asked about how it would be structured and funded, and we will welcome the contribution of the noble Lord and those of all others.



2.49 pm

Moved By Baroness O'Neill of Bengarve

Baroness O'Neill of Bengarve: My Lords, about a year ago, I was talking with a midwife about the safety of maternity services and I asked her what she thought about the proposed increase of choice in maternity services. She answered that she supposed that it would be all right, “provided the mothers choose in the right way”. Her answer is amusing but it also hits a nail on the head: choices have consequences and, in maternity care, poor choices can endanger mothers and their babies. More generally, choices in public services have systematic effects on equalities and inequalities.

Yet we can see high enthusiasm in both political parties for introducing greater choice in public services, and the public endorse that. Many of the more established arguments for greater choice have stressed the supply side. The complaint has been that monopoly providers fail service users, be they patients, parents, pupils or others. The hope has been that choice by service users will empower them, incentivise all providers to do better and sanction the worst providers. Ideally, on this argument, everyone gains except the inadequate providers—and that is all right.

However, these are not the only effects of increasing choice. The more obvious effects are on choosers, not on the chosen—on the public, not on providers. Choices will differ and the subsequent experience and opportunities for those who choose variously will also differ. A child who gives up science early will, of course, not become a distinguished engineer and will not contribute to the innovations that the noble Lord, Lord Broers, stressed in the previous debate. Someone who chooses to smoke will increase their risk of illness and earlier death. These very obvious features of choice suggest that we should expect choice in public services to lead to varied inequalities.

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We therefore have to decide which choices matter and should be protected and which equalities matter and should be supported. Inevitably, protecting some kinds of choice will produce inequalities. If individuals are free to choose to work long hours or to pursue the fabled work/life balance, then working hours, earnings and leisure are likely to differ between those who choose differently. Some inequalities will be judged fair because they reflect fair processes and differing choices. In others, we judge equality as more important than choice. For example, we do not allow individuals to choose not to pay the same tax as others in like circumstances.

As we stand on the threshold of new and integrated legislation on equality, we need to aim for a coherent combination of liberties and equalities. In its December 2008 report, the Government Equalities Office stated that the forthcoming Bill will,

Read at speed, this can sound reassuring. It sounds like a commitment to strengthen anti-discrimination, which both protects certain choices and secures specific equalities, above all equality of treatment. Certainly strengthening and integrating anti-discrimination legislation is one central aim of the proposed Bill.

Anti-discrimination legislation seeks to prevent discrimination on irrelevant grounds. However, it also requires discrimination on relevant grounds. Anti-discrimination legislation, for example, requires employers to discriminate on the basis of relevant skills and experience, both in making job offers and in promoting; it requires universities to discriminate among applicants on the basis of relevant preparation and competence.

However, a great deal of discussion around the Bill is not about prohibiting discrimination on irrelevant grounds but about achieving what is called a more representative social and ethnic composition within each line of employment or each profession, or among students or holders of public office. This is well documented in the numerous so-called fact sheets published by various government departments and other public bodies. Groups of employees, students or office holders would be seen as representative when their social composition—judged, one must admit, using sets of categories with considerable deficiencies, but I leave that problem aside—mirrors that of the larger society.

The attraction of focusing on this statistical equality is presumably that it looks like a way of reconciling choice with equality provided that, as the midwife put it, the people choose the right way. But people do not. In a diverse population, choice leads to different outcomes for individuals and for groups. So a question that we shall face in debating the equality legislation is whether a quest for more representative cohorts of employees, students and office holders is compatible with prohibiting discrimination on irrelevant grounds. Is this very abstract statistical equality—equality in the social composition of groups—compatible with genuine commitment either to choice or to substantive equality for the individual members of those groups? The

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reality is that trying to secure a representative composition within each group neither respects choice nor furthers equality for individuals.

Let us consider for a moment that overworked issue, choice of secondary school by parents. It is said that middle-class parents, being better placed to choose, will choose better schools and—a quite separate point—will be more likely to get what they choose if there is a scarcity. Let us suppose that a particular area has one good and one bad school. Public policy could prohibit choice and avoid the unrepresentative consequences of choice by random allocation of children to schools. As noble Lords will know, that has been proposed in certain places. This would ensure that the social and ethnic composition of each school is representative of the area that it serves. However, achieving this outcome would not in itself increase equality for children; just as many children as before would attend a bad or a good school.

Even the supply-side argument is more promising, for, according to it, parental choice will put pressure on poor providers, so ensuring that in the long run fewer children attend a bad school. A quest for representative outcomes neither respects parental choice nor secures greater equality of schooling for individual children. A preoccupation with representative participation focuses on one very abstract equality at the expense not only of choice but of substantive equalities that matter to individuals.

There are many telling cases where a quest for representative outcomes furthers neither choice nor equality for individuals. For example, secondary schools in England allow an unusually high degree of subject choice. This is, of course, likely to increase with the proposed proliferation of sixth-form qualifications. Those applying to universities and later for employment will have chosen different subjects; they have the choice. The cohorts of applicants for specific courses are not likely to be representative of the population at large. Diversity of culture, background and interests is quite understandably reflected in diversity of interests and ambitions and so in diversity of choices and, down the road, in diversity of fitness for and choice of specific types of courses and employment.

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