11 Nov 2014 : Column GC23

11 Nov 2014 : Column GC23

Grand Committee

Tuesday, 11 November 2014.

Deregulation Bill

Committee (6th Day)

1 pm

Relevant documents: 4th Report from the Constitution Committee, 14th Report (Session 2013-14) from the Joint Committee on Human Rights and 5th and 9th Reports from the Delegated Powers Committee

The Deputy Chairman of Committees (Lord Brougham and Vaux) (Con): My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells ring. We will resume after 10 minutes.

Clause 58: Exhibition of films in community premises

Amendment 78ZA

Moved by Lord Stevenson of Balmacara

78ZA: Clause 58, page 44, line 22, leave out “is not provided with a view to profit” and insert “cannot generate more income than the total cost of the exhibition”

Lord Stevenson of Balmacara (Lab): My Lords, in moving Amendment 78ZA, I shall speak to Amendments 78ZB and 78ZC in this group. These are probing amendments, as I have some sympathy for what is being proposed. As a former director of the British Film Institute, I can hardly object to a measure which is aimed, I think, at broadening access to group viewing of films, which must he a good thing. However, I worry that what this clause proposes is at one and the same time oversimplistic and unsighted about some of the problems of operating such venues.

The clause effectively would create two classes of film exhibitor—one that is regulated and another that is unregulated. In the regulated sector would be the majority of current commercial cinema operators and several dozen existing voluntary and community-run enterprises, such as the Ritz Cinema in Thirsk and the Market Hall community cinema in Brynmawr, which in its 120th year was recently awarded “cinema of the year” at the prestigious Screen Awards—something which we should all celebrate.

In the unregulated sector would be the new “community premises” over which the appropriate licensing authorities would have no control. I suggest that we need some definitions. What are the community premises of which the Bill speaks? Will the Minister spell out today the type of venues these community premises would be? Who can operate these events? New Section 6A(2)(b)(i) to be inserted in the Licensing Act 2003 under Clause 58 suggests that they might be,

“a trade, business or other undertaking (for profit or not)”.

I assume that this might include, for example, a pub, a bingo hall or any other place which would otherwise require a local authority licence to attest to its ability

11 Nov 2014 : Column GC24

to host a public gathering. Perhaps the Minister will confirm that. If such operators were to organise any other type of event, such as a dance or a charity function, particularly if alcohol was to be sold, would these meet the same definition of “community premises” and would they need to be licensed?

The Government have made the proposal sound like an idea to open up windy church halls to genteel afternoon showings of perhaps classics of the silent cinema or even “Brief Encounter” and the like. However, the clause is so loosely worded as to allow for any operator to exhibit any film without a licence. The clause opens up a world in which any group might exhibit virtually any type of film or video presentation in public. What about children? What is role of the BBFC in this matter? What role will the local authority have in all this? I seem to remember that the wonderful film “Life of Brian” is still banned in some local authority areas.

What is a not for profit venue? The Government suggest that this clause is aimed at not for profit venues but no legal definition is offered. Given that the venue itself could be for profit or not, how does that sit with the wording in the clause, which states that the deregulated film exhibition,

“is not provided with a view to profit”?

What does that mean? Does it mean that the film costs less to hire than the price of entry, that the ticket income does not exceed the cost of any venue hire or that the total revenue for the event, perhaps including food and drink, does not exceed total costs, including contributions to the venue’s heating, lighting, staff and other overhead expenditure? We need more detail on that.

At the heart of all this is the question: why should public safety regulations not apply? An existing commercial cinema exhibitor must adhere to licence regimes covering fire, electrical and heating safety, hygienic food handling practices, noise pollution and local environmental rules, as well as, on occasion, fitness to serve alcohol. Why would the Government want to reduce existing levels of public protection? We should remember that these venues will be capable of holding up to 500 people at such an event. What happens if there is a problem such as a fire?

More generally on the size limit, why is it so high? Will the Minister explain the thinking here? I am informed by the Cinema Exhibitors’ Association, which represents well over 90% of UK cinemas, that there are no more than 60 screens nationwide which can show a film to an audience of 500 persons. Why then should an unregulated cinema be allowed to present films in an unregulated environment to so many? I strongly suggest that the Government consider a much lower maximum attendance figure.

Finally, unregulated film exhibition of the type proposed threatens to significantly weaken controls over piracy, which remains a very real threat to the livelihoods of all those working in the wider film industry. What consultations have the Government held with the industry about this, and what reassurances have they given? Are they content with the situation more generally?

11 Nov 2014 : Column GC25

Existing licensed cinema operators have a strong history of offering safe, clean, well managed and fair access; the lack of clarity in this clause is not helpful and we need a lot more detail from the Minister when he responds. In an extreme case—it would be extreme, I recognise that—the Government could find themselves deregulating cinema exhibition for a well meaning purpose but letting unsavoury operators into a market that is currently well regarded, law-abiding and safe for its customers and staff. Quite apart from the health and safety, fire, food and environmental regulations gap, will the Minister say how the Government can be certain that the other necessary public protections, such as child protection, will work in practice?

Undefined “community premises” no longer needing to apply for an entertainment licence would effectively fall off the radar of protection and enforcement authorities. The planned changes, although welcome, appear to put at risk the high standards of safety and child protection that have worked well over the years. There would be little or no oversight of the admissions criteria or content shown at community premises and no real control over who could claim such community status and so avoid enforcement. The level playing field in standards for public protection would be lost.

Our amendments point to the need for further work on the maximum audience size, on the definition of community premises and on defining what “not for profit” means in practice—all aimed at avoiding the creation of an unlevel playing field with existing regulated community cinema providers. Assurances are also needed about the continued regulatory role of enforcement bodies in order to ensure that wider public protections are in place to safeguard customers, with regard to, for example, underage admission, BBFC certification, piracy, public decency and safety standards. I beg to move.

Lord Gardiner of Kimble (Con): My Lords, I thank the noble Lord for his amendment. It is important that I should start with the definition of “community premises”, because I hope to be able to reassure the noble Lord and your Lordships as to the modest nature of these measures, and the protections included in them.

Community premises, as defined in Section 193 of the Licensing Act, are those premises which are or form part of a church hall, a chapel hall or other similar building, or a village hall, parish hall, community hall or similar building. The Government’s view is that this modest measure relates only to the exhibition of film in community premises as I have outlined. We do not believe that these events will bring in meaningful competition with local cinemas, even where such cinemas operate on a not for profit business model. This is because the deregulation is subject to certain conditions, one of which is that the exhibition is not provided with a view to profit. This includes where the profit is for charitable or other fundraising purposes.

The Government believe that intention is the key factor here. For example, a film society is not set up to exhibit films for profit; its intention is to explore film culture rather than to generate income. We are therefore confident that the test of intention will provide protection

11 Nov 2014 : Column GC26

against an exhibitor with a profit-making motive being able to exhibit a film legally under this exemption. To assist licensing authorities that are responsible for enforcement, and event organisers, the Government will issue revised statutory guidance on this exemption. Indeed only yesterday the Minister for Sport and Tourism deposited in the House Libraries a working draft of the revised Chapter 15 of the licensing guidance, to assist with Parliament’s scrutiny of Clause 58.

A rather more blunt measure of whether or not profit was made, without reflecting the intention, could have a detrimental effect on community film screenings. I will explain why. For example, people would have to be turned away from an unlicensed exhibition if their attendance could give rise to a profit being made. It would also require the event organiser to know, with the audience already present, whether they had generated more income than the total cost of the exhibition. If they had, then in the absence of a licence or other authorisation the exhibition of the film could not legally proceed.

The whole point of this exercise is that the Government wish to remove the licensing burden for low-risk entertainment activities, such as the exhibition of a film in community premises as defined in the circumstances of Clause 58. The Government therefore consider that the clause cannot be exploited by anyone seeking to exhibit films on a “for profit” commercial basis, without the need for a premises licence.

Amendment 78ZB would limit to 250 persons the maximum audience allowable for an exhibition of a film in a community premises. I know that the noble Lord was particularly concerned about that point. The Government consulted widely in 2011 on a proposed audience limit for all forms of entertainment. The audience limit of 500 is reflective of the wider outcome of that consultation. An exhibition of a film is a lower-risk activity, and having an audience limit of 500 people maximises the cultural benefit for community groups and does not, in the opinion of the Local Government Association and others, give rise to particular public safety concerns. The limit also provides a read-across to the 499 audience limit for an event authorised by a temporary event notice.

This limit is generally regarded by local authorities and the emergency services as an appropriate audience ceiling for these sorts of events. Further, it is consistent with other entertainment activities within the Licensing Act, such as a performance of dance or of live music. Indeed, it would be very odd if community premises could put on a pantomime for 500 people without the need for an authorisation, but could show a film of that pantomime to an audience of no more than 250 people. I also make it clear that key safeguards remain in place; Clause 58 makes no changes to protections already in place in respect of alcohol licensing, health and safety, noise pollution or fire safety.

In more detail, the noble Lord’s final amendment in this group seeks to add a further condition to the qualifying criteria. The Government’s starting point is that regulation should be required only where it remains necessary and proportionate to safeguard the licensing objectives. The licensing objectives—set out in the

11 Nov 2014 : Column GC27

Licensing Act 2003—are in respect of the prevention of crime and disorder, public safety, the prevention of public nuisance and the protection of children from harm. The issue of an appropriate audience limit relates most closely to the public safety objective. The Government considered those objectives when preparing these proposals, and concluded that licensing film exhibitions in small community premises could not be justified when assessed against the risk to the four licensing objectives.

The four licensing objectives rightly focus, as I said, on the prevention of disorder and ensuring public safety in places where people gather together in numbers for leisure. They ensure that regulation is focused on what is necessary to protect the public. Very importantly, they also avoid duplication with other regulatory regimes, which can increase the cost of regulatory compliance for all concerned. I will take the proposed conditions in turn. The noble Lord posed these questions, and I hope that your Lordships will find the following reassuring.

As regards fire safety, Clause 58 makes no change to the requirement that community premises owners are responsible for fire safety. This is set out in the Regulatory Reform (Fire Safety) Order 2005, which in most cases is enforced by the local fire and rescue authority.

1.15 pm

The amendment proposes compliance with the law on public health and foodhygiene. We do not consider that this is necessary to promote the licensing objectives, but it might be helpful to highlight that the Food Standards Agency provides guidance on how food hygiene legislation applies to community events.

There is reference in the amendments to “environmental licensing”. In terms of noise prevention, the requirements under the Environment Protection Act 1990 provide protection to the general public from the effects of noise disturbance and nuisance. I should add that this deregulation applies to an exhibition only before 11 pm.

Quite rightly, the noble Lord asked about child protection, with the amendment proposing its inclusion. This is clearly an important issue. I can confirm that Clause 58 already offers protection. A film is not eligible for this licensing exemption unless the British Board of Film Classification or the local licensing authority has issued a recommendation as to whether children may be admitted.

Lord Watson of Invergowrie (Lab): When this issue was debated in Committee in the other place on 13 March, Toby Perkins MP raised concerns about child protection and asked what action could be taken where there was evidence that someone had regularly allowed children to watch films inappropriate to their age. Tom Brake MP, the Minister, said that he would set out in a letter what actions could be taken. Can the Minister tell me what that letter contained and what actions the Government envisage could be taken in such circumstances? I understand that he may not be able to give me the answer right away, but I would like to have that on the record.

11 Nov 2014 : Column GC28

Lord Gardiner of Kimble: I am most grateful to the noble Lord. If some information can be provided to me during my remarks, I will be able to record it here—but, if not, I will make sure that that noble Lord and the Committee know of the response.

The whole purpose of this part of the Deregulation Bill is to make it easier to exhibit films in village halls and other community premises, as I have suggested. We wish to strike a better balance between necessary protections—I hope that I have outlined what will remain and why that is so important—and removing unnecessary burdens. I think that we would all agree that there are too many examples of burdens sapping the will of volunteers and very often soaking up scarce financial resources.

Where the conditions of this exemption are not met, then, rightly, a licence will still be required. Other key protections will continue to apply, such as alcohol licensing and health and safety and noise abatement legislation.

The noble Lord, Lord Stevenson, asked a number of questions relating to fire safety and health and safety. A person who organises a film screening will continue to be subject to a whole range of legal duties on fire safety, safe workplaces and public nuisance. This includes a common-law duty of care towards the health and safety of those attending the film screening.

On the question asked by the noble Lord, Lord Watson, those responsible for the exhibition of a film on community premises must have in place operating arrangements. That would include a suitable child admission policy implementing the recommendation made for that film by the BBFC or local licensing authority. They may operate a membership subscription scheme which pays for entry to all titles in a season and is limited just to adults, or they could sell tickets to the public and ensure that children are permitted entry only in accordance with the age rating for the film. If there is anything further I have on that, I will write to the noble Lord and ensure that other Members of the Committee are made aware of it.

The noble Lord asked about the weakening of controls on piracy and how this could be controlled. Indeed, a film shown in a community premises must be compliant with the Copyright, Designs and Patents Act 1988 in the same way as a film shown in a cinema.

The noble Lord raised a number of questions. I know that these are probing amendments but it is important that all the points the noble Lord has raised are clarified and there are assurances that this proposal is a force for good. Coming from the countryside, I know that very often cinemas are 30 or 40 miles away from communities. I do not believe there is competition in place. This is about communities enjoying films to which those who live in suburbs and towns have a much readier access. That is the whole purpose of the clause—to ensure that communities have the advantages that those who live in cities and towns and close to cinemas enjoy. I have been to many community film exhibitions near to where I live. They are well supported and anything we can do to encourage communities to enable people to enjoy film is desirable. So if the noble Lord would like to discuss anything further with me

11 Nov 2014 : Column GC29

before further stages of the Bill, I would be delighted. I hope I have been able to reassure your Lordships, and that the noble Lord will withdraw his amendment.

Lord Stevenson of Balmacara: My Lords, that is the first time I have been invited to go to see a movie with a member of Her Majesty’s Government. I will reflect carefully on that. We actually live quite close to each other and there are several local community film venues between our respective villages, so it is feasible to do that. We will think about that.

Film as we see it today is rarely controversial and rarely leads to public disorder but it was not always thus. Those of us who are interested in film history will know that one of the early screenings by the pioneers of cinema—a train arriving at the station in Lyon—resulted in the audience evacuating the hall so fast that it could not be considered safe, because they feared that the train was actually coming out of the screen at them and leapt out of the way to avoid imminent disaster. I do not think even 3D could possibly cope with that. But we should bear that in mind when thinking about what we are doing here.

I will read carefully what the Minister said and may take him up on his idea of a meeting. It is slightly irritating that we did not get sight of the draft licensing regulations. They may have been placed in the Library yesterday but it would have been useful to know that they were around; we could perhaps have saved a few of the questions I raised.

There are three points that I would like to make. First, it is now clear from the noble Lord’s response that the model here is the live music scene—I think he mentioned dances and music—where obviously an upper limit of 500 is perfectly understandable. I do not see this being appropriate in church or village halls or even parish halls, which are not ever going to be as large as that. If that is the restriction, I think the 500 is otiose but I will reflect on that.

Secondly, I still think there is a dichotomy in the way in which this is intended to apply. If it is restricted in operation to church halls, village halls and parish halls but can be run by profit-seeking bodies such as pubs or others, there is still a tension about what is exactly in mind here, but the gap for those who might be wishing to exploit that for profit may not be as bad as I originally feared.

Thirdly, the trick here is to limit the exercise of this to sites that are licensed in the full round of local authority licensing—including fire safety, public health and noise—but the event itself will not be specifically licensed, so that it can be done with a minimum of fuss. I still think there is a tension there about what happens when child protection issues are raised or there are questions about whether the films are certified under the BBFC or by the local authority. We are not quite sure about that. But that is not sufficient to hold back discussions today and I beg leave to withdraw the amendment.

Amendment 78ZA withdrawn.

Amendments 78ZB and 78ZC not moved.

Clause 58 agreed.

11 Nov 2014 : Column GC30

Clause 59: TV licensing: duty to review sanctions

Debate on whether Clause 59 should stand part of the Bill.

Lord Stevenson of Balmacara: My Lords, Clause 59 mandates the Secretary of State to carry out a review of the alternatives to criminal sanctions for non-payment of the TV licence fee. A television licence is required to watch all live, or nearly live, broadcast television content on any device in the UK. It has become popularly known as the BBC licence fee but that is of course a misnomer—it is a licence to receive a broadcast signal sufficient to be able to watch television or to listen to radio. Nevertheless, the BBC is tasked with collecting the licence fee. The function is subcontracted to a private company under the brand TV Licensing. Failure to have a TV licence is an offence under Section 363 of the Communications Act 2003, punishable by a fine. This clause specifies the timing of a review, which is to commence within three months of Royal Assent and to be completed within 12 months of it beginning. It specifies that a report must be presented before both Houses of Parliament and presented to the BBC Trust.

It is surely an irony beyond satire to have a clause in a deregulation Bill which duplicates what is already happening in the real world. On 9 September 2014, the Secretary of State for DCMS announced his intention to begin a review into TV licence enforcement, which will be independently led, on behalf of the Government, by David Perry QC. The objectives are in fact broader than this clause specifies. They are:

“To conduct a review into the enforcement regime for failure to have a TV Licence to … examine whether the sanctions for contravening this offence are appropriate, fair and whether the regime represents value for money for licence fee payers and tax payers; and … identify and assess options for amending the current enforcement regime, including those for decriminalisation of TV licensing offences, and whether these options would represent an improvement”,

based on certain key considerations.

Mr Perry has to,

“make recommendations to the Government by the end of June 2015”,

which is well within the timescale specified in the clause. He is charged with producing:

“A report setting out an assessment of the current and proposed enforcement regimes, key findings, conclusions and any other supporting information to be submitted to the Government by the end of June 2015”.

The Secretary of State is required to,

“lay this report before both Houses of Parliament and present it to the BBC Trust”.

These requirements are identical, in all but a few words, to the requirements specified in Clause 59. So what, precisely, is the purpose of this clause? It has been overtaken by events, is not required and should be excised forthwith. I look forward to the Government agreeing with me that this clause should not stand part of the Bill.

Lord Gardiner of Kimble: My Lords, at Commons Committee stage, the Government supported the amendments tabled by the honourable member for North West Leicestershire. Clause 59 imposes a duty

11 Nov 2014 : Column GC31

on the Secretary of State to ensure that a review of the TV licensing enforcement regime is carried out—as the noble Lord, Lord Stevenson of Balmacara, mentioned. This review will identify whether the current enforcement regime is appropriate and proportionate. The review will also ensure that there is a strong, evidence-based case for any potential changes to the TV licensing enforcement regime.

The findings of the review—which has already started—will be completed by June next year and should be considered in the context of the charter review. It will be for the Government of the day to take forward any further actions as they see fit. The current Government are very clear that the review of the licensing enforcement regime is a high priority. Hence, we have taken the decision to commence the review this autumn, in advance of Royal Assent.

If there is potentially an issue with the current regime, it can be of benefit to no one to delay the review or to prevent its findings informing any required change to the existing system. Our overriding aim is to ensure that the system is appropriate, proportionate and fair and that it represents the best value for money for licence fee payers and taxpayers. There was significant support for both of the TV licensing clauses in the earlier stages of this Bill in the other place. We believe that the firm commitments set out by the Government at that time must be honoured, particularly given that strong cross-party support. For that reason, we would not seek to remove the review clause from the Bill.

The current review has clearly defined terms of reference and, although there are no guarantees over decisions that any future Administration may seek to make in this area, particularly if they were minded to go against the will of Parliament as demonstrated in the strong support for these clauses, we do not believe that there should be any delay to the review. However, we think that the retention of Clause 59 ensures that at the absolute latest the review must be completed within a year of having begun. This duty will apply to the future Government and provides a crucial backstop to ensure that this important piece of work completes within the charter review period. That is why, although the noble Lord, Lord Stevenson, made a very interesting point about the Deregulation Bill and I am sure that he will pull my leg about it, the Government believe that this clause should stand part of the Bill. As I have said, strong views were expressed in the other place that we think are important. This provides some backstop to the work of the review. That is why I very much hope that Clause 59 will stand part of the Bill.

Clause 59 agreed.

1.30 pm

Clause 60: TV licensing: alternatives to criminal sanctions

Amendment 78A

Moved by Baroness Howe of Idlicote

78A: Clause 60, page 46, line 45, at end insert—

“(14) Any regulations which may be made under subsection (1) shall not take effect before 1 April 2017.”

11 Nov 2014 : Column GC32

Baroness Howe of Idlicote (CB): My Lords, it is vital that any impact on the BBC’s income is well considered before any potential changes to licence fee enforcement come into effect. For this reason, Amendment 78A seeks reassurance that any proposed changes to licence fee enforcement should not take effect before 1 April 2017.

The BBC’s current licence fee settlement is due to expire at the end of March 2017. Having an agreed licence fee settlement has meant that the BBC has been able to plan its long-term budget and programming. Clearly, any prior reduction to this income will impact services and content for all licence fee payers. The reality is that a change in the way that the licence fee is collected may affect the BBC’s income and, without sufficient time to respond to such change, the BBC could be forced into drastic action such as the loss of key programmes or service closures.

If, for example, non-payment of the TV licence becomes solely a civil matter, collection will become harder to enforce and of course evasion will be likely to rise. Utility bill evasion is currently around 10%; if licence fee evasion went up accordingly, it would cost the BBC about £200 million a year. To put that into context, it is similar to the amount that the BBC spends on programming for CBBC, CBeebies and BBC Four put together. The importance of this amendment—which, as noble Lords can see, has cross-party support—is about getting the timing right and ensuring stability for the BBC and licence fee payers to ensure that it continues.

As the Committee has already heard from the noble Lord, Lord Stevenson of Balmacara, on 21 October the DCMS launched a review into TV licence fee enforcement, independently led on behalf of the Government by David Perry QC and expected to conclude in June 2015. The BBC has said that it looks forward to engaging with the review. Once it has concluded, its recommendations can be considered as part of the charter and licence fee negotiations. This fits with the timing, as the Government have said that they will start to review the BBC charter next year, ahead of its expiry at the end of 2016 and that of the licence fee settlement in 2017. Ensuring that no changes take place before 1 April 2017 will give all parties a chance to think carefully before taking decisions that could have a huge impact on the future of public service broadcasting in this country. Only when the licence fee penalties are considered in the round can the impact be properly measured and assessed.

It is worth remembering that the BBC was given a commitment by the Government when the 2010 licence fee settlement was signed. They agreed to provide,

“a full financial settlement to the end of the year 2016-17. No new financial requirements or fresh obligations of any kind will be placed on the BBC and/or licence fee revenues in this period”.—[

O

fficial Report

, 7/11/11; col. 4.]

The amendment ensures that the Government can fulfil this commitment.

As we know, the BBC is independent of government and accountable to the licence fee payer. It is therefore right that any changes to the BBC—a British institution cherished and trusted by audiences—should not be made without the public having had their say. The

11 Nov 2014 : Column GC33

most effective way of giving the public the chance to contribute their views and decide what kind of BBC they want is to look at the impacts and consequences of the decriminalisation review in line with charter renewal.

Before we think about any possible changes to the licence fee, including enforcement, it is worth noting the popularity of the current system. More than half the public support the licence fee as the BBC’s funding mechanism, regardless of the individual’s age or socioeconomic group or whether they are in a Freeview, Sky or Virgin household. This compares to 17% for subscription and 26% for advertising, and has risen significantly in the past decade.

It should also be noted that 96% of the adult population use BBC services each week and it is therefore right that we take the time to ensure that the funding mechanism is efficient, appropriate and proportionate in the best interests of all licence fee payers. It is also right that any licence fee enforcement is fair to those who are paying for its services. One of the benefits of the current system is the universality it provides in regard to payment and services offered.

The BBC currently costs the licence fee payer 40p a day—rather less than a cup of tea or coffee—and it is able to maximise its revenues by having low evasion rates. We should therefore be wary of any changes that would mean evasion rates rise, as the BBC cannot turn off the TV signal to evaders and those paying their licence fee will obviously suffer from a decease in funding for programme-making. Again, we need to take time to ensure that all possible changes are carefully considered in conjunction with all aspects of the BBC’s remit.

I also point your Lordships to a report produced by the Constitution Committee. The committee expressed concerns in its report that Clauses 59 and 60 were not included in the draft Bill and were not scrutinised by the Joint Committee on the draft Bill. The report says:

“It seems illogical that Parliament should be invited to legislate for a review and at the same time for a possible outcome of that review. If it is decided in due course to change the sanctions regime in respect of TV licence violations, the better course would be to introduce a bill at that point, rather than legislating now by means of a Henry VIII clause”.

I echo the concerns raised by the committee, chaired by the noble Lord, Lord Lang, and ask that careful scrutiny be applied to any change made to the current system and that the impacts and consequences be fully considered.

In summary, the BBC is a national institution valued by audiences and admired the world over. It brings huge respect for its contributions to this country. Its independence from government and budgeted funding need to be safeguarded. As the Government’s review concludes in June 2015, assurances need to be put in place to make certain that any potential changes are considered in the round with the charter review and licence fee settlement. I beg to move.

Lord Grade of Yarmouth (Con): My Lords, I support everything that the noble Baroness has just said. I fully support the review, as bringing some evidence to bear on the issue of decriminalising non-payment of the

11 Nov 2014 : Column GC34

licence fee would be very valuable. I suspect that the review can conclude only one thing on the evidence: that this is a solution in search of a problem.

The debate around the problem with the criminalisation of non-payment of the licence fee is full of misinterpretations and deliberate misinformation. You do not go to jail for not paying your licence fee; you may possibly go to jail if you do not pay the fine when you are caught, for not obeying the court order to pay. I understand that it is the same in the civil courts if you do not pay your council tax. That is a civil offence, and if you are ordered to pay by the court, you can similarly go to jail. I do not see the great difference in decriminalisation.

The idea that the courts are swamped with licence fee avoiders and non-payers is, again, a myth. The average time that is spent dealing with these mostly uncontested cases is 3 minutes and 13 seconds. That will improve, as I believe there are moves afoot to have a single magistrate hearing these cases. Jail seems to be a last resort. That is not based on empirical evidence, but I think it is generally accepted anecdotally that people who end up having to go to jail are people with a long track record of not paying fines and of disobeying court orders. The licence fee turns up as the last straw in the case, and magistrates lose their patience with the individuals.

There is not a problem in that sense. The problem lies in the decriminalisation issue being used by the enemies of the BBC—the commercial and ideological enemies—to move to a point where the BBC has to move to a voluntary subscription or voluntary payment model. That would totally destroy one of the great glories of UK plc and one of the greatest and most recognised international brands in the world— the British Broadcasting Corporation. It would be severely damaged if the Government rushed into some hasty measure such as decriminalising on the pretext of solving a problem which does not actually exist on the evidence. I am confident that the review panel will come to that conclusion.

It is very serious that the Government of the day could consider changing the basis on which the BBC licence fee is collected and its basis in statute ahead of the charter review. That is the obvious and simple process that has been enshrined and which will give everybody an opportunity to take their time and decide what the best thing to do is in this particular case. I fully support this amendment and I can see no reason whatever to expedite the results or any preview of the results of the review ahead of the charter review. This is a very serious matter. Decriminalisation could become a Trojan horse for those who wish to see the destruction of the British Broadcasting Corporation. I hope the Government will give some assurance today, or maybe at future stages of this Bill, that they understand that issue and that they will therefore not move hastily to change anything, other than through the normal process of charter review.

Baroness Bonham-Carter of Yarnbury (LD): My Lords, I rise very briefly to support the amendment and what the noble Baroness, Lady Howe, and my noble friend Lord Grade have just said. I agree with him

11 Nov 2014 : Column GC35

in supporting a review. I will quote David Attenborough, whose words exemplify my view of what our broadcasting system, at the heart of which the BBC sits, has achieved:

“The BBC is in my view one of the most important strands in the cultural life of this country … But what could happen is it is diminished”.

If so,

“it would no longer be the BBC and that would be a catastrophe for the country”.

In order for the BBC not to be diminished, it needs a good licence fee settlement. I thought that the previous settlement was rushed through, and I hope that the next one takes a greater length of time. As the noble Baroness, Lady Howe, said, the BBC needs to be able to forward-plan; it needs to know how much money it has. That is one of the commitments that were made during the previous, rushed settlement. Whatever comes out of this review, it is essential that it should not mean that that commitment is reneged on. The amount of money that the BBC has to use should remain the same until April 2017.

1.45 pm

Viscount Colville of Culross (CB): My Lords, I support the amendment of my noble friend Lady Howe, not just because I am a producer in the BBC’s science and history department but, much more importantly, because I am a licence fee payer who very much appreciates and enjoys the wide range of programming offered by the BBC to the people of this country. To me, it is a beacon of education and information, and I fear that Clauses 50, 59 and 60 are a threat to that.

The amendment does not ask us to decide on the pros and cons of the decriminalisation of the non-payment of the licence fee, but it asks noble Lords to support a delay in the implementation of its recommendations until 1 April to ensure that it is incorporated in the full charter renewal process, as the noble Baroness, Lady Bonham-Carter, said.

When thinking about the effect of suddenly introducing the results of the review, we ought to think about the sums of money involved. My noble friend Lady Howe suggested that £200 million could be taken out of the BBC budget. That has been based on research from the Debt Advisory Centre looking at the evasion of utility bills, which I think actually stands at about 8%. However, this situation risks being worse than 8%; after all, research from households shows that the payment of gas and electricity is a very high priority, while paying the licence fee is a lower one. Also, the BBC does not have the option of turning off its signal.

The reduction in income would affect the quality and quantity of programmes that we see on our TV screens and hear on our radios. There are comparisons that can be made internationally. In Finland, which I think is generally seen as a law-abiding country, there is a non-criminal enforcement regime and modest financial sanctions for non-payment of its television licence fee, and the evasion rate there is 12%. In Japan, which is so law-abiding that when I was there people would not jaywalk, there is a 27% rate of non-payment of the licence fee to NHK, the national broadcaster.

11 Nov 2014 : Column GC36

1.48 pm

Sitting suspended for a Division in the House.

1.57 pm

Viscount Colville of Culross: As I was saying before the Division, we are talking about the possibility of the income of the BBC being reduced by a further £200 million. The BBC has already suffered a 26% fall in revenue during the last six years of the licence fee, which has been frozen at £145 per year, as well as taking on extra responsibilities. There have been staff efficiencies, with more than 2,000 posts being cut and other efficiency savings, but there have also been huge reductions in what the corporation broadcasts. As both a producer and a consumer of television, I have seen a dramatic cut in production, which I know many of your Lordships value very highly.

BBC News has withdrawn correspondents from bureaux across the world, which obviously affects its ability to report globally. The important investigative programme “Panorama” brought us the investigations into the abuse at Winterbourne View, “FIFA’s Dirty Secrets”—which showed that members of the executive committee had taken bribes prior to the World Cup going to Qatar—and, of course, the “cash for questions” programmes. “Panorama” has had its hours cut from 56 to 48 a year. That is eight hours’ less investigation on our main channel. I know only too well that investigations are very expensive and can take months or years to come to fruition, and sometimes do not at all, but they are a crucial part of the public service remit at the BBC and I would hate to see extra cuts reduce their funding even further.

My noble friend Lord Hall has placed great emphasis on broadcasting the arts, but there have been huge cuts in factual programming on BBC2, which covers arts, science and history. I am sure that many of your Lordships miss the regular “Culture Show” slot. On digital television, BBC Four, which is a bastion of culture and the arts, has also seen cuts in factual programming. History and business have been withdrawn from the channel.

The cuts that have already taken place are huge. As a producer I can confirm that the reductions in production budgets have resulted in many efficiencies, which I am sure your Lordships will welcome. We go out on shoots with smaller crews—sometimes even no crew. However, inevitably this has a knock-on effect on what viewers see on screen. We can film in fewer locations, for fewer days, and often we talk to fewer contributors.

I am not asking for the BBC to be given more money. I am saying only that, given the huge savings that have already been made, to suddenly add another £200 million cut would blow a hole in the corporation’s business plans. Inevitably, programmes that we all love and admire would suffer. We would all be the poorer. The BBC is probably one of the most well known and respected British institutions around the world. In a world sated by superficial entertainments it is a beacon of culture, education and news. I urge your Lordships to support the quantity and quality of its work by supporting this amendment. I fear that failure to do so would have an adverse effect on its programming.

11 Nov 2014 : Column GC37

Lord Grade of Yarmouth: My Lords, with your indulgence, perhaps I may correct something: I omitted earlier to declare an interest as an occasional documentary maker for BBC Four. I should also record that there is a bigger audience in this Room than I normally get.

Lord Stoneham of Droxford (LD): I think most noble Lords who have severe concerns about this clause fear that it stems from some underhand undermining of the BBC by its enemies, and to appease Back-Bench interests. I hope, from what the Minister said earlier, that he can give us full assurances on that: that the national institution that is the BBC, which has wide public appeal and respect, is not going to be foolishly undermined by an inappropriate, hurried action.

Everybody who likes institutions such as the BBC, and who supports the BBC strongly, is in favour of reforming and improving it, because that will keep it and what it does in the public’s favour. We should not be frightened of change, but that change must be considered and phased, and we must stand up for what was originally agreed in the settlement: namely, that there would be no change until 2016-17. If it is done in a considered way, we support it. However, it must not be done in an underhand way.

Lord Berkeley of Knighton (CB): My Lords, almost before opening my mouth I must declare an interest, having been for many years—more than I care to think of—a broadcaster for the BBC, both on the staff and as a freelancer.

The points being made are important. When we talked about the arts in your Lordships’ House recently, the Government, it seemed to me, were very open to the concept that people need to know their budgets before they forward-plan. At a time when the charter review is coming up and the BBC accepts that there are many problems with the licence fee and current funding and is trying to deal with that, to cut the ground from under it before the charter is properly considered would be very dangerous.

From my own experience, the cuts within the BBC—particularly the cuts to Radio 3—have been draconian. Many people have been laid off; programme budgets have been cut. One of the things I find strange about this is that I subscribe to Sky—I enjoy it; I sometimes watch the BBC on Sky—but for my Sky package, which includes sport, I pay about £46 a month. For the BBC I pay £12 a month. That is a quite extraordinary disparity and it is worth thinking about it. For what the BBC provides—the Proms, the culture, the natural history, sport, Wimbledon: all things for which they are in competition with Sky—the figures hardly stack up. To add this additional burden would be rather irresponsible. I therefore beg the Government to consider delaying. It is not asking an awful lot—not to cancel, just to delay.

Lord Rooker (Lab): My Lords, I did not come to speak on this—I am a complete outsider as far as the media are concerned—but having listened to the noble Lord, Lord Grade, before the Division, I will.

11 Nov 2014 : Column GC38

This is unfortunate. I know that it is fair enough to make the point that we did not have these discussions on the draft Bill; I will not make a serious complaint about that, because things in the Bill have been added since the pre-legislative scrutiny. However, on what I know about the media, I certainly take the point of what the noble Lord, Lord Grade, said, that in the end this is basically all about the attempt to force the BBC to go down to a subscription channel basis, and I fundamentally disagree with that. The BBC has not helped itself in the last couple of years; as an outsider I have watched in the other place some absolutely inept performances in front of that Select Committee by very highly paid people, who on some occasions are inarticulate beyond belief. You can imagine where the groundswell against it comes from.

I fully accept that there has been an attempt to do something about the banker-style salaries. I fully accept that you need the best people, and it is a competitive market. I have nothing to declare, by the way. While Murdoch’s alive, I do not do Sky. I sacrifice Formula 1 and everything for that. There will come a day when I can have Sky, but it is not there at the moment. The fact is that there is a disparity when one sees the cost of what is advertised—but then you do not see the full cost of the BBC, for example. When you turn the radio on in the morning, you expect it to be on, but you do not see the separate figures for that. It is a bit like other services, whether schools or hospitals. When you walk through the door you do not see a price on the top—although now you do with universities, where the cost of walking through the door is nine grand a year. It is not quite like that; it is not put across that way. Therefore you do not have the marketing. The BBC has no interest in having the marketing to compete with the marketing that Sky does to make it seductive.

That is the only point I want to make. There is a conspiracy—no question about it. I freely admit that I was very tempted after it went to the Commons; I was not sure whether it would be put in the Commons or the Lords. When the arguments were first put they were very seductive on decriminalisation. I have friends who are magistrates, and they say, “Jeff, it’s nonsense. We parcel them all up—we do them all together”. On the time argument, the noble Lord, Lord Grade, said that it takes 3 minutes and 13 seconds. That is exactly believable—talk to magistrates. That is the way it is done. There is no time factor in the courts; there is no question about that. If anyone wants to go to jail in this country, it is very easy to do it—just do not pay the fines. Lots of people make a business out of that. Therefore the BBC is an excuse. However, I fully accept that there is an underlying issue. The BBC staff have to up their game when they appear before Select Committees, but we have to bear in mind that at the end of the day there is a seductive and well funded attempt here to force the BBC to go to a subscription service. We ought to oppose that at every step of the way.

Lord Watson of Invergowrie: My Lords, I, too, support the proposition that Clause 59 should not stand part of the Bill. The arguments have been very eloquently made, in many cases by people who are broadcasting professionals of many years’ experience.

11 Nov 2014 : Column GC39

Of course I have nothing to offer in that sense. However, I fear that this is largely an ideologically driven suggestion. Whether it is intended to end up with subscription fees or not, I do not know, but I believe that it was suggested to fundamentally weaken the BBC by those who, for whatever reason, are not supporters of the organisation. I firmly declare myself a very firm supporter of the BBC in its various forms—radio, television, and not least the World Service, which is a tremendous organisation; what it achieves with the money it has is superb.

I would like to know, if the Minister can say, how decriminalising non-payment would be likely to reduce the number of those who, for whatever reason, refuse to pay the licence fee. I understand that the figure is around 5% on an annual basis. How would decriminalisation be likely to increase the payment of the fee? I cannot see any way in which that would be likely; in fact, the very opposite is almost certain to happen.

The other aspect is that the clause mentions monetary penalties for those who do not pay the fee. I am sorry, perhaps I am missing something, but if someone does not pay the licence fee, how will a monetary penalty imposed for not paying it make it more likely that the fee itself will be paid? I do not see the point of that.

It worries me that the BBC has often been undermined, and not just by the present Government; I have to say that on many occasions my party, when in government, did not exactly hold back from undermining the BBC or attacking its integrity or that of some of its reporters, which I thought was at best unfortunate if not misguided. So I do not make this a particularly party-political issue, although we have the Government that we have for the moment. I very much hope that this time next year there will be another party in government, my party, and that we will be prepared to say that we will not go ahead with decriminalising this offence.

My final point is a word of warning to the BBC’s many supporters in this Room. I suspect that even those who are in favour of decriminalisation are supporters of the BBC. We have heard from a producer today, and that was very valuable. However, anyone who read Olenka Frenkiel’s comments in the Guardian last Friday must accept that there are still problems that the BBC needs to address if it wants to broaden and deepen its support. It needs to treat its female staff—I am talking not so much about presenters as about reporters—in a far better way. I was really taken aback by what Olenka Frenkiel had to say. I thought that recent cases had meant that the BBC had turned round, but it appears that in that respect it has not.

If decriminalisation does go ahead at the end of the review, it will not help the BBC. Those of us who treasure the BBC and what it does, and who want to allow it to continue as far as possible into the future in the face of some pretty fierce competition, need to support the licence fee, what it stands for and what it is used for. If that is what we are going to do, we have to ensure that as many people pay it as possible, and I do not believe that the suggestion in this part of the Bill would achieve that purpose. That is why I oppose it.

11 Nov 2014 : Column GC40

Lord Stevenson of Balmacara: My Lords, this has been a very good debate about a very important topic. It is important to pick up that this amendment, signed by all sections of your Lordships’ House, was also spoken to by every side of the Committee, and is therefore reflective of the difficulty that the Government might have if they were to take this matter much further. There would be considerable opposition to the overall concept implied by the two clauses here and strong agreement about the need to ensure that the arrangements that may come out of Mr Perry’s report should not be implemented until at least after 1 April 2017.

We have heard from those who work with and have worked with the BBC, and from those who just watch and absorb its activities. All the contributions were redolent of a feeling that we have created a national institution that is admired and loved widely, not just in this country, and one that, as has been pointed out, needs safeguarding. The words of the noble Lords, Lord Grade and Lord Stoneham, and my noble friend Lord Rooker, about the question of whether or not this is a stalking horse for a much bigger prize, the destruction of the financing arrangements under which the BBC is currently safeguarded—the use by the enemies of the BBC of a Trojan horse—rang true. We must be very careful as we go forward on this matter.

There is of course no objection to the review of the enforcement regime; it is a good thing. It may well be a solution in search of a problem and, as the noble Lord, Lord Grade, said, much is said here that is not accurate in practice. What exactly the offence is that has been committed, and how it is dealt with through the courts at present compared to how it might be dealt with in future, is a very technical issue. It will have wide implications but it is still at heart an issue that needs to be narrowed right down to the precise issue that is being questioned. It would not be wise or sensible to see the review as being something more widely about the BBC; it must be about the question of the collection of a fee for the receipt of broadcasting communications, not the funding of the BBC.

However, the implications of any recommendations, and whether they would generate more income or less as a result of the processes that would follow the review, have to be considered. Of course, it would be completely wrong for the Government to introduce a significant change before the start of the next licence fee period on 1 April 2017—whichever Government were in power.

2.15 pm

Reading the briefing for this, I was struck by one thing that I had not picked up—perhaps I should have done—which I thought was so important. We are of course in a situation where the BBC is absorbing huge reductions relative to where it might have been subject to arrangements made in previous charter and licence reviews. The figures I have are that by the end of 2016-17 the funding available to the BBC to spend on services from the UK licence fee will be 26% lower in real terms than in 2011-12. That is a pretty amazing efficiency cut. Of course, it is not just the freezing of the licence fee at £145.50 but the absorption

11 Nov 2014 : Column GC41

of new funding that previously had been met by others, including the BBC World Service, which has been mentioned.

There is obviously quite an issue here. It is an important review and one that we need to look at very carefully. It was good that we were reminded of the commitment given by the Government when the 2010 licence fee settlement was signed, to provide,

“a full financial settlement to the end of the year 2016-17. No new financial requirements or fresh obligations of any kind will be placed on the BBC and/or licence fee revenues in this period”.—[

Official Report

, 7/7/11; col. 4.]

That seems to be a very firm and solemn commitment.

Finally, I think I heard the Minister say in the previous debate on the clause stand part that the outcome from the report should feed into the charter and licence review. It would calm a lot of those concerned by this issue if the Minister could change that conditional to a certainty.

Lord Gardiner of Kimble: My Lords, this has been a fascinating debate. On occasions it may have strayed to the merits of the BBC rather than the precise clause and amendment in question. But there is no harm in that because, as we all acknowledge, the BBC does extraordinarily good work across a range of issues of which our country can be extremely proud.

The amendment seeks to apply timing constraints to the implementation of any potential—I emphasise that they are potential—changes to the enforcement regime that underpins TV licensing offences. The Government have been very clear on the importance of these issues and of considering the efficacy, proportionality and fairness of the current regime. The amendments concerning TV licensing enforcement, as noble Lords will recall, received significant support, across all parties, in the other place.

As has been mentioned, the Secretary of State announced in September that the review of the regime would be commencing this autumn, and the terms of reference for the review were published and laid in the Libraries of both Houses on 21 October. The terms of reference clearly define the scope of this work. A review will be conducted into the enforcement regime for failure to have a TV licence, examining whether the sanctions are appropriate, fair and represent value for money, and identifying and assessing options for amending the current enforcement regime. It will not consider or assess the licence fee itself or broader issues or options for the future funding of the BBC.

As has been referred to by noble Lords, the review of TV licence enforcement will be led by an independent lead reviewer, David Perry QC. It will begin taking evidence this autumn, and Mr Perry will submit a report making recommendations to the Government by the end of June next year. The enforcement review will start gathering views and data this autumn and, as noble Lords would rightly expect, any findings and recommendations will be based on the best possible evidence.

These findings will then be presented to the Government. The Government have been clear that the findings of the review should be considered in the

11 Nov 2014 : Column GC42

context of the charter review process, which will not begin until the next Parliament. The BBC charter review is the point at which the Government can consider all aspects of the BBC. As has been mentioned, the current charter runs out on 31 December 2016.

I emphasise that if the existing regime needs to be improved—we should make no presumptions about this until Mr Perry’s review has been able to complete its work and to report findings to the Government of the time—surely it does not make sense to apply any constraints that could hinder moving to a new enforcement regime; nor would any such constraint represent the best approach for licence fee payers, or the courts system. Having said that, and in light of the enforcement review now being in its preliminary stages, I must stress again that the Government are keeping an entirely open mind and look forward to the findings of the review, without any preconceptions about whether or when changes need to be made. It is right that the Government of the day must be free to consider the report when it completes in June 2015 and be able to act without unnecessary limitations at that point.

The noble Baroness, Lady Howe, mentioned Henry VIII clauses. If there were any changes to an enforcement regime under this clause, it would be afforded proper scrutiny in this House, as regulations would be subject to the affirmative resolution procedure. The noble Baroness and, I think, the noble Lord, Lord Watson of Invergowrie, referred to the impact on the revenue of the BBC should decriminalisation go ahead and result in reductions in BBC income. Any impact on BBC services will be examined in the review. I can of course make no assumptions as to the outcome of the review. We obviously want an open process which considers all options available to us and delivers for the licence fee payer. All those points clearly will need to be borne in mind.

Lord Stevenson of Balmacara: On the record, will the Minister be clear about my final question? I thought I heard him say that he felt that the outcome of the report should feed into the charter and licence review. In his current speech, he has clearly said that he does not wish to see the Government constrained in any way as to the timing of any changes, if there are any changes. Does that not fly directly against the commitment given when the 2010 licence fee settlement was signed?

Lord Gardiner of Kimble: I do not believe that it does. The Government obviously want to be in a position after the report to consider those matters. I have already said that those matters will play a part in the considerations of the charter review but we need to consider what the QC brings forward in his report. I do not think that it conflicts.

We believe that it would be inappropriate to apply a constraint to the timing of implementation of any potential changes to the existing regime and that it would be unnecessarily restrictive to inhibit any potential future changes to the enforcement regime, should the findings of the review lead the Government of the time to be minded to make them through specifying a date before which any change could be implemented. I emphasise that this is about a review of the enforcement.

11 Nov 2014 : Column GC43

We make no presumptions about the possible outcome or findings of the review. As I have said, the Government have stated that the review findings will be considered in the broader context of the charter review. After June 2015, these matters will take some time but we do not think that there should be an artificial limitation on timing. On that basis, and with the reassurance that they are to be considered in the broader context of the review charter, I ask the noble Baroness to withdraw her amendment.

Baroness Howe of Idlicote: My Lords, first, I thank the Minister for his reply and all noble Lords who have spoken very passionately about what the BBC means to them, their colleagues in different parts of the organisation and the general public, with whom I certainly align myself.

I think we have heard from around the Room a clear feeling that people are very concerned that there is a conspiracy here. The Minister has done his best to reassure us on that point but that overview will remain in everybody’s minds. Quite clearly we will have to look carefully at what was said, especially by the Minister. However, I am fairly sure that this issue is likely to return and be considered at different stages of the Bill. With that point made, I am prepared at this stage to withdraw the amendment.

Amendment 78A withdrawn.

Clause 60 agreed.

Amendment 79

Moved by Lord Stoneham of Droxford

79: After Clause 60, insert the following new Clause—

“Busking deregulation

(1) Omit paragraph 14 of section 54 of the Metropolitan Police Act 1839.

(2) Omit sections 32 to 44 of the London Local Authorities Act 2000.”

Lord Stoneham of Droxford: I rise in the name of the noble Lord, Lord Clement-Jones, who is unable to be with us today. I thought it might be appropriate to provide some musical accompaniment to this debate, but unfortunately I lack the skills to do that and speak at the same time.

Busking is an essential element of street culture in London and many cities. It is often the start of a major career. Eddie Izzard, for example, famously started his career on the streets of Covent Garden. As a leading busking campaigner, Nick Broad, once said:

“Street performance is one of the most noble ways that artists can earn a living: performance first, pay later, and only if you enjoyed the show. Making tips as a busker is a great alternative to making tips as a waiter or bartender: you get to practise, reach an audience and learn what people like about your show while earning a living. No managers. No PR. No cult of celebrity. No Facebook popularity contest. No latest gig app. No entrance fees. No service charges. No security guards or fences. No clever lighting. No razzle-dazzle. No fancy brochures or billboards. No sponsorship deals. No product placements. No middlemen. Just an artist and their audience”.

11 Nov 2014 : Column GC44

Live music and street entertainment can enrich a community’s quality of life and generate a positive atmosphere that can be enjoyed by many people. The Mayor of London, too, has rightly been fulsome about the place of busking in London life. Following the work of the mayor’s busking task force, the mayor has approved the creation of Busk in London and provided start-up funding. Together with more enlightened London authorities and busking campaigners, we are well on the way to agreeing a new busking code as a way forward in London, building on the experience in Liverpool. The aim is to implement the busking code of conduct in agreement with the London boroughs and other cities across the UK, to create an interactive map of London’s busker-friendly locations, to pilot the website and to secure continuing funding and sponsorship over the coming six months.

Despite this, not everyone is supportive. There remain great threats from inappropriate use of existing legislation. Therefore, this amendment is explicitly designed to remove Part V of the London Local Authorities Act 2000, which provides for busking licensing schemes at individual London councils’ discretion, so that the licensing of busking under that Act by a growing number of London councils is no longer allowed, and the conflict with the Live Music Act’s provisions on the playing of unamplified music in London is ended.

Camden, under the London Local Authorities Act, has banned street music at any time, amplified or unamplified, except through a special busking licence. The breach carries a fine of up to £1,000. Camden’s approach runs counter to the arguments heard and accepted by government and Parliament during the Live Music Act debates.

We should also remove Section 54(14) of the Metropolitan Police Act of 1839, which was recently used against buskers in Leicester Square. The noble Lord, Lord Clement-Jones, has explained that the King’s Parade, the winners of the mayor’s busking competition, were interrupted by the police mid-song as they performed in Leicester Square and informed that they were in breach of Section 54 of the archaic 1839 Metropolitan Police Act. They were bundled into a van by eight officers and held at Paddington police station for more than six hours. This 174 year-old piece of legislation—which, incidentally, also prohibits kite flying, sleigh riding, doorbell ringing without excuse, causing mischief to cattle, rolling hoops on footways and distributing profane songs—was used to justify the arrest.

2.30 pm

The problem is the scope of Section 54(14) of the Metropolitan Police Act 1839, which appears to allow the police to arrest buskers just for doing what buskers do, without any complaint about noise or nuisance, without any criminals or opportunistic thieves nearby or, indeed, without any large crowds. Under this provision, the mere act of playing a saxophone, giving away a free CD or accepting a donation is a potential criminal offence. It is indeed a suitable new clause to be included in the Deregulation Bill.

11 Nov 2014 : Column GC45

To his great credit, my honourable friend Norman Baker, while Minister for Crime Prevention, subsequently wrote to every chief constable warning against the heavy-handed use of their powers to silence buskers. The vast majority of complaints about busking relate to noise nuisance. There are more than adequate powers under separate legislation to deal with noise nuisance, anti-social behaviour, bullying, harassment, begging and street trading.

I will just give some examples of these. In the case of noise nuisance, there are two main statutes that can relate most readily to busking and which have been used for buskers. These are the Environmental Protection Act 1990 and the Control of Pollution Act 1974. The Environmental Protection Act gives local authorities a statutory duty to respond to complaints about noise and, if it is deemed that a statutory nuisance has been or is likely to be caused, gives them robust powers to deal with it. The breach of a Section 80 notice is an offence which can carry a fine of up to £5,000.

Liverpool’s lead environmental health officer points out that the majority of Section 80 notices are complied with and do not result in further prosecution. Also, a high-profile exercise of Environmental Protection Act powers is likely to be well publicised among the busking community and to show that certain thresholds of permissibility exist beyond which consequences are inevitable. The exercise of Environmental Protection Act powers should be reserved for anti-social buskers who do not respond to polite requests. Noise that some might find irritating but does not meet the threshold for statutory nuisance would not be covered by this Act but by definition would not be causing material interference with a place of residence or business and therefore is not causing any issue that warrants enforcement. In practice, different local authorities have a different view of their powers under the Environmental Protection Act.

There is other legislation to control buskers. The Control of Pollution Act 1974 makes it an offence to use a loudspeaker in the street after 9 pm. The Highways Act 1980 makes it an offence to cause an obstruction on a public highway; if a busker has set up on a public highway and is causing an obstruction, enforcement action can be taken against them using this Act. Any part of the code of conduct relating to pitch selection would emphasise the importance of not blocking doorways or fire exits and of allowing room for people to get past freely. There are also powers to make by-laws available to local authorities with respect to street nuisance.

Often it is a small minority of performers who cause specific issues to other buskers and users of shared spaces in particular locations. Enforcement action which targeted specific examples of bullying behaviour could be carried out under the Public Order Act. Although claims have been repeatedly made that there is a link between spontaneous street performance and criminal activity, these have never been backed up by any evidence. None the less, if the police and local authorities have concerns about specific buskers or specific behaviours, they have ample powers to address them under public order and anti-social behaviour legislation.

11 Nov 2014 : Column GC46

To cap it all, antiquated laws such as the 1824 Vagrancy Act and its successor legislation make it an offence to beg for money. It is fair to say that, even in 2014, many people regard buskers as beggars with musical instruments. There are also sweeping powers introduced by the Anti-social Behaviour, Crime and Policing Act 2014.

These are very wide-ranging powers, and it is vital that it is made clear to local authorities that they should have proper grounds for invoking them. The scope of the orders is similar to that of by-laws; they can be obtained, but much more easily. By-laws must go through a democratic process and be sanctioned by the Secretary State, while police security protection orders are made in a summary manner by councils.

Ministers have given assurances that tests and safeguards set out in the new anti-social behaviour powers will ensure that they will be used only where reasonable, but we fear that just at the time when there is a major initiative by the Lord Mayor and others to encourage legitimate busking, there is the spectre of police security protection orders being used in a heavy-handed way.

I hope that I have explained to the satisfaction of the Minister and the Committee precisely why there are enough powers in existence to make buskers’ lives a misery without having to keep Part 4 of the London Local Authorities Act 2000 and Section 54(14) of the Metropolitan Police Act. It seems appropriate to remove them with this Bill.

Lord Rooker: My Lords, I think that there is only one other person in the Room who sat through three months of the draft Deregulation Bill. I want to make a suggestion to the Minister that he can answer when he comes to reply to that very powerful speech. Given the amount of legislation that we have just had recited to us that is up to date and modern, why has this issue not yet been referred to the Law Commission? We know that there has been a bit of a problem between Ministers and the Law Commission; that was self-evident when we took evidence from both parties about the reform and updating of legislation. Part of that is to do with deregulation, part of it is modernisation and part of it is legislation that is allegedly of no further practical use—there will be a debate on that next week. In this case, though, bearing in mind that we do not make substantive decisions in Grand Committee, what is the reason why the issue cannot be referred to the Law Commission?

Lord Gardiner of Kimble: My Lords, I thank my noble friend for his amendment. The Government are clear that busking can enrich a community’s quality of life and generate a positive atmosphere enjoyed by many people. Regrettably, though, street entertainment can sometimes be a source of conflict between buskers, businesses and residents. Complaints of noise, nuisance and anti-social behaviour can arise, and police and local councils have to respond and try to find solutions.

The Government do not start from the position that busking requires regulation and control. Busking should be about freedom of the individual, and only if necessary should local action be taken to curb certain

11 Nov 2014 : Column GC47

excesses. To answer the noble Lord, Lord Rooker, although I am still waiting for some advice, there is actually no general legislation on the subject of busking but local authorities can have policies on it, including codes of conduct or permit regimes, and occasionally by-laws and local authority legislation, such as the London Local Authorities Act 2000. That Act enables London councils to license busking. Indeed, it is a matter for London councils to determine whether or not they utilise these powers.

The amendment proposes that a government Bill should seek to overturn private legislation promoted by London local authorities and passed by Parliament. If we were to accept the amendment, the Government would indeed be saying that London councils should not have the option to decide whether or not to license busking based on local circumstances. Indeed, we feel that this is not a subject for top-down government solutions; it is for local authorities to determine fair, reasonable and transparent policies in relation to managing our streets.

As far as the Metropolitan Police Act 1839 is concerned, while Section 54(14) is rarely used, the Metropolitan Police need to retain the provision to give their officers the tactical option of dealing with what they have called “busking-related offences”. We are seeking to strike a balance between freedom to busk and having to control nuisance caused by persons with no musical intent.

Lord Deben (Con): I have often had discussions with the Metropolitan Police. I find the phrase “busking-related offences” precisely the kind of comment always made when you are suggesting that things might be changed. Perhaps the Minister could describe a “busking-related offence” that is not covered by any other legislation.

Lord Gardiner of Kimble: My noble friend always intervenes to engage the Committee in important issues with his own touch. It is important to say that I know what he is saying but that, at the same time, if the Metropolitan Police need to have the ability to ensure that they have some means by which they can have assistance as regards a certain possible alleged assistance, for all the cynicism that there may be about the Metropolitan Police, we have to place our trust in them.

Lord Paddick (LD): My Lords, as a former Metropolitan Police officer of 30 years’ experience, I cannot think of any offence that a busker might commit that is not covered by other legislation or requires the use of the Metropolitan Police Act.

Lord Gardiner of Kimble: Of course, I am receiving advice from the current Metropolitan Police, but I very much take on board what my noble friend of very considerable experience has said to the Committee. We are trying to seek a balance between the freedom and the need to control. I still think that if the police are telling us that for operational reasons they need a specific power, it is reasonable and sensible to listen to them. However—I emphasise the word “however” as

11 Nov 2014 : Column GC48

we are seeking to strike a balance—in saying that the Metropolitan Police have recognised the need to strike the right balance between protecting the public, law enforcement and not restricting reasonable behaviour and activity, the police have said that they recognise the concerns with the recent arrest of members of the King’s Parade band in Leicester Square, for instance, and have taken steps to ensure that their policing response is proportionate and that officers use their powers appropriately. They have indicated:

“Officers in the West End have been advised that they should not be pro-actively using the Metropolitan Police Act 1839 legislation to deal with busking as it is not an offence per se. Officers have been advised that they should engage with those busking if there is a particular issue and deal appropriately. The expectation will be that individuals will not be arrested under this act, unless it is the only available tactical option.”

I would say to my noble friend Lord Deben that, ultimately, the Metropolitan Police wish that this may remain available as the only tactical option that they might have in their locker.

We believe that this is a sensible approach that will ensure that all types of street entertainment are able to thrive and will minimise the need for the use of powers designed to deal with crime, disorder and anti-social behaviour. I hope that my noble friend will accept that the Metropolitan Police have a desire to retain necessary powers. The impending introduction of the code of practice for buskers across London, to which the Metropolitan Police are contributing, will help to preserve good relations between buskers, councils, the police and local authorities. At the end of the day, all of us very much seek to achieve good community relations. I trust that these factors, as well as the Government’s clear support for buskers and street entertainers, are sufficient to address the concerns.

The noble Lord, Lord Rooker, referred to the Law Commission. My understanding is that if legislation is still in use, it is not appropriate for the Law Commission to deliberate on it—but I will reflect on what the noble Lord has said and I might come back to him on that matter.

2.45 pm

Lord Rooker: This is the issue that was before the Committee: there are different functions. The commission can look at legislation that might be of no practical use. There is some of that in Schedule 20—none of which was looked at by the Law Commission, I might add; it was dreamed up by civil servants. However, it will also look at modernising legislation. On the basis of the speech given by the noble Lord, Lord Stoneham, the legislation needs modernising, because all the offences are covered by more modern legislation than the 1839 legislation to meet the modern day. So the commission is quite capable of looking at modernising legislation as well as considering legislation that is no longer in use. That is a separate function of the Law Commission.

Lord Gardiner of Kimble: My Lords, I hope it might help the noble Lord, Lord Rooker, if I say that I will specifically make known to my colleagues the observation that the noble Lord has made. However, on that basis, I hope that my noble friend will be prepared to withdraw his amendment.

11 Nov 2014 : Column GC49

Lord Stoneham of Droxford: I thank the Minister for his support for busking. I also liked the unexpected but welcome support from the noble Lord, Lord Rooker, and my noble friends Lord Paddick and Lord Deben. Police never willingly give up any powers, and it is a matter for politicians, not the police, to balance freedom and law enforcement. I will withdraw the amendment, but I am sure that my noble friend Lord Clement-Jones will want to return to this at some stage, either in this legislation or in future.

Amendment 79 withdrawn.

Amendment 80

Moved by Lord Grade of Yarmouth

80: After Clause 60, insert the following new Clause—

“Copyright in broadcast-

Omit section 73 of the Copyright, Designs and Patents Act 1988 (reception and re-transmission of wireless broadcast by cable).”

Lord Grade of Yarmouth: My Lords, I first went into broadcasting in 1973 and remained in and out of it over a period of some 40 years. While all around me the industry changed at a breathtaking pace in terms of technology, industrial practices and the ambition of programme content, one thing remained a constant throughout and remains so today—the inability of legislators to keep up with the changes in the sector. I believe that there is an old saying in Whitehall: “Nothing endures like the temporary”. What we have before us today is exactly such a case, which absolutely proves that aphorism.

This clause we are seeking to abolish sits in the 1988 Act and was designed to stimulate in an analogue world the advance and competitive regime of the cable industry. It was deemed at the time that the dominance of the public service broadcasters—I think there were only four channels at that time—would put them in a position to wreck the fledgling cable industry by demanding ridiculous terms in return for carrying the services. Therefore it was a necessary market correction at the time.

That was 1988. We now have I do not know how many possible channels—hundreds and hundreds. The public service broadcasters, who are commercially funded and free-to-air by advertising, are seeing their market being chipped away at by the online market, which is growing at breakneck speed. I can see no reason whatever why the cable and satellite gatekeepers should profit, through this legislation, from the efforts and the investment made in the British creative industries by the public service broadcasters. This is utterly anomalous and belongs in the days of valves and steam radio.

It is interesting to take note of the United States, which has a very developed television market that has a mixed economy of free-to-air, cable and satellite. We have rapidly caught up with that market; I suspect that we in the UK have as developed a market as the United States has. The carriage fees are at the heart of the 1988 Act; we are trying to establish that satellite operators and cable gatekeepers should pay a commercial

11 Nov 2014 : Column GC50

rate for carrying the public service broadcasters’ services. In the United States, this is common practice and produces some $3.3 billion of revenue each year for those who are investing in content. Among the happy recipients of those carriage fees is Fox Broadcasting, a division of News Corp, which is one of the largest shareholders in Sky, which over here is objecting to the idea that it should have to pay carriage fees—some mistake here, I suspect. This cannot be right.

We have before us a Deregulation Bill, which is the perfect vehicle for getting rid of this anomaly and making sure that the return that is due to those who invest in British content in the UK is forthcoming and that the market is not inhibited by an outdated measure in the 1988 Act that was designed to stimulate a completely different market. It is now penalising the PSBs.

I imagine that one of the biggest gatekeepers in this country, Sky, will say—as indeed I think it has said—that if you are going deregulate on carriage fees and allow commercial negotiation between the public service broadcasters and Sky for it to carry programmes that the BBC and, most particularly, ITV, Channel 4 and Channel 5, provide, it should be coupled with deregulation of the electronic programme guide, where prominence is an important issue for broadcasters. This is a nice diversionary tactic. While you could possibly say that it comes under a generic term of deregulation, putting the regulation of Sky’s EPG on the same footing as exploiting the investment of British public service broadcasters and failing to allow negotiation of a fair price for carriage are two very different matters. Let us not forget that Sky is a dominant player and gatekeeper—it has some 50% of the market and is in more than 10 million homes now. It has done an amazing job and created new funds to be invested in broadcasting in this country through subscription. However, it is also a service provider—it has its own channels—so there is an innate conflict in being a dominant gatekeeper and a service provider. So it needs to be regulated.

The public service broadcasters have considerable benefits for viewers imposed on them through contract: I am thinking of regional news, prime-time news and all kinds of things that are not commercial that they are required to do in return for their broadcasting licence. In return for doing that, they get some value from the due prominence provisions on the EPG. That is very important not least at the nations and regions level, where nations and regions news is under tremendous pressure from the economics of advertiser-funded broadcasting, which continues to be under threat. So I hope that the Government will not fall for the three-card trick of trying to couple the EPG argument with the deregulation of this section of the 1988 Act.

I look forward to hearing what my noble friend the Minister is going to say in trying to offer some arguments—I struggle to think of any—in favour of not repealing this section. However, if the Minister needs one more argument—just to make sure that we have the full set—I refer him to the fact that, as I understand it, the European Commission has opened a formal infringement procedure against the UK Government, on the basis that Section 73 of the Copyright, Designs and Patents Act 1988 is incompatible

11 Nov 2014 : Column GC51

with EU law. A formal letter has been sent to the UK Government informing them of this, although so far it is only available to the UK Government. There is, therefore, a serious issue about whether this is compliant—and I can feel the answer floating behind me from the subs’ bench on to the field of play. I look forward to hearing the answer.

It is time that this was booted into touch. Legislative opportunities to repeal creaking, outdated and damaging legislation—as it has transpired—come along very rarely indeed. This is a perfect opportunity to show that the Government are supporting the creative industries and making sure that there is a fair commercial marketplace between the public service broadcasters and the new providers, the new distributors—the cable companies and satellite companies. I look forward to what my noble friend the Minister has to say in support of this creaking anachronism.

Viscount Colville of Culross: My Lords, I put my name down to support Amendment 80 because I believe it is in keeping with the spirit of this Bill, which is to strip away regulation and to open up commercial activity—in this case in the television market. The noble Lord, Lord Grade, has explained the restrictions on public service broadcasters created by this antiquated section. The Secretary of State for Culture, Media and Sport acknowledged this in his RTS speech in September, when he said:

“I will be taking a long, hard look at the balance of payments between broadcasters and platforms … I still want to know whether the amount of regulation around these transactions is really necessary”.

He went on to ask:

“Can we take government out of what should be a private matter between two private companies?”.

The broadcasting of PSB channels on Virgin Media draws in extra viewers, adding to the number of subscribers to the platform. However, Virgin does not reinvest in original British content. Obviously it is doing very well from this arrangement. It is charging its subscribers extra for a new set-top box to record viewers’ favourite shows. They are signing up in record numbers, not least to time-shift their viewing of programmes. ITV estimates that 40% to 50% of viewers record its top-value drama programmes, such as “Downton”, and watch them at a later date. Virgin's new set-top boxes even go on automatically to record viewers’ favourite programmes. Not only does Virgin make extra revenue from this service but the commercial stations increasingly lose advertising revenue from the use of these set-top boxes. Guess what, my Lords: when you have a pre-recorded programme, you whizz through the adverts. So the commercial impact—a major source of revenue—is severely diminished.

The absurdity of this arrangement is revealed by the fact that even though the main channels, ITV1, Channel 4 and Channel 5, cannot charge retransmission fees, their digital counterparts, ITV2, ITV3 and ITV4, and E4, can do so, with great effect. If this amendment becomes law it will open up the regulatory system for the negotiation of retransmission fees, not just for Virgin Media but also for other platforms, such as Sky.

11 Nov 2014 : Column GC52

Ofcom has in place a regulatory framework left over from the rollout of digital television. It means that the emphasis is on the value of the programme content for Sky and the platforms rather than for the content providers. Surely that should be redressed at a later stage, but your Lordships need to repeal Section 73 first, which will pave the way for a level playing field between the content providers and the platform operators.

It is hard to say how much revenue will be generated for the broadcasters, but the latest report by Morgan Stanley reckons it could provide between £50 million and £100 million in revenue. Those are very disparate figures, but they give us a clue to the huge sums in play. There are clearly concerns that this extra money will go straight into the profits of the broadcasting companies. However, in the MacTaggart lecture this August, David Abrahams, CEO of Channel 4, said:

“I commit, here and now, that Channel 4 will reinvest all of the proceeds of a fair deal back into commissioning more original UK content”.

Commercial television is a very competitive market. If one channel invests in content and the others do not, they will start losing viewers and market share to their rivals.

3 pm

The noble Lord, Lord Grade, mentioned what has happened in America, with $3.3 billion being generated by retransmission fees. According to the NERA report, this has been reinvested in local news production, with output increasing by 11 minutes per week for each of the 1,300 commercial stations in the US. They have also reinvested in digital multicasting, which will allow programmes to be received via the internet on mobile devices.

At the moment ITV invests £1 billion a year in programming, the vast majority of which is original British content. That has been the case for the past few years. It has also invested heavily in the regions and nations, spending £350 million on a new production base and stage at Manchester’s MediaCityUK; over in Leeds it has spent £7 million on new production facilities. The commercial broadcasters commission extensively from independent regional production houses, supporting creative industries and economies outside London. There is every reason to believe that the extra revenue from retransmission fees would further increase spend in the regions and nations of this country.

The introduction of retransmission fees for broadcasters will reflect a value to the platforms of the content provided—the better the content, the bigger the audience, and so the more they should have to pay. We the viewers will be the winners if this amendment becomes part of the Bill.

Lord Macdonald of Tradeston (Lab): My Lords, I, too, support Amendment 80, which would repeal the outdated Section 73 of the Copyright, Designs and Patents Act 1988. As my noble friends have already argued, Section 73’s impact on UK television is negative; they have outlined some of the areas in which the provision is damaging. I am concerned about the effect it is having on the commercial public service

11 Nov 2014 : Column GC53

broadcasters’ spending in the regions. I speak from experience of working for Granada in the north-west of England for 18 years.

The commercial public service broadcasters play a significant role in the English regions, as we have just heard. We have only to consider the very substantial presence they now have at the creative hub of MediaCityUK in Salford. The largest commercial public service broadcaster, ITV, also has other regional bases, such as its studios in Leeds. In fact, ITV employs nearly 1,300 people in the north and its recent capital investments in the north total nearly £50 million.

As well as the English regions, there are the nations of the United Kingdom—Scottish Television in Scotland, Ulster Television in Northern Ireland and the considerable activity in Wales of not just ITV but S4C—which are equally important to what is going on in the English regions and indeed, in terms of cultural identity, probably held in even higher regard in the nations. But it is not about just the broadcasting bases in the nations and the regions. The commercial public service broadcasters are responsible for huge investment and production outside London across the UK. Both ITV and Channel 4 have public service obligations which require that at least 35% of their original programme spend and volume of programming should come from outside the M25. Both exceeded their targets, with ITV reaching 47% and Channel 4 making more than half.

The money that the commercial public service broadcasters invest in the regions has a multiplier effect on the regional creative industries. There are many examples of people working in television in the regions and also working in theatre or film in the same areas. When I was at Scottish Television for 13 years, I saw that as a very decisive factor in the activities that were going on north of the border. The production investment also boosts the wider regional economies, contributing to their economic growth. At a time when we in Parliament are talking about greater devolution to the nations—and now also to the regions of England—which are not well represented on screen, this becomes an important factor.

Some of the regions of England have been marginalised by the metropolitan and international programming that dominates our multiplying satellite and cable channels. I want to enhance the prospects of seeing programmes that reflect the different regional cultures on television. I also want to see strong regional economies where the commercial PSBs can continue to make a full return on their successful content investments. I therefore support this amendment to repeal Section 73. It cannot be right that the commercial public service broadcasters that invest so much in the regions effectively are subsidising Virgin Media. It is owned by the multinational US company, Liberty Global, which makes very little investment as far as I can see in the UK’s creative industries. I therefore urge the Government to accept this amendment.

Lord Holmes of Richmond (Con): I support the amendment. It is a privilege to speak among such broadcasting colossi. Having grown up in the Midlands when Lew Grade was running ATV, the name Grade lasts long in my memory. Similarly, the noble Lord,

11 Nov 2014 : Column GC54

Lord Macdonald, presenting “What the Papers Say” gave me my first glimpse into current affairs and an interest in politics. I hope that it will help your Lordships if I start with some clarification of what my noble friend Lord Grade said at the beginning of his speech when he spoke of stimulating cable—I believe that this had nothing to do with the right honourable Member for Twickenham.

Noble Lords: Oh!

Lord Holmes of Richmond: Work with me. This amendment is incredibly straightforward. It goes to the heart of one question: why should terrestrial television in the United Kingdom subsidise Sky, Virgin and other providers? More significantly, why should we as taxpayers put money into the pockets of the owners of those companies? As a nation, our terrestrial television is some of the best in the world, of which we should be rightly proud. We have brilliant drama, fabulous sport and exceptional television across the piece. Just look at what Channel 4 did with the Paralympics in the summer of 2012. For me, it is no more complicated than that. It is an out-of-date clause. One can see why it existed way back when. Now the Deregulation Bill gives us the right opportunity to wipe it out. We should all accept this amendment.

Lord Black of Brentwood (Con): My Lords, I very much support this important amendment. Although I have no direct involvement with the broadcasting sector, I should draw attention to my media interests in the register. This debate and this amendment impact on the creative economy and the wider media, particularly in relation to news provision. As we have heard, the pace of technological change across the whole of the media is breathtaking. It is relentless and punishing. It is difficult enough to plan for even one month ahead sometimes, let alone one year. As my noble friend Lord Grade said, we need to look very carefully and very warily at legislation binding the media that is 26 years old and is, to all intents and purposes, from a bygone age, especially where it has implications for jobs and investment.

Where legislation is out of date—Section 73 of the 1988 Act clearly is—it should go. If ever I saw a piece of law that should be put out of its misery, it is this one. That is why the debate on this amendment is so important. Central to it is the health of our public sector broadcasters, who are, in turn, crucial to the sustainability and vibrancy of the whole creative economy. These commercial PSBs have a number of important public service obligations, including obligations to broadcast high levels of original content; significant quotas for spending outside London, as the noble Lord, Lord Macdonald, made clear, and on independent production; and the provision of national and regional news services and current affairs.

We had glimpses earlier of the fact that the UK is fortunate in having such a PSB system that guarantees the provision of well resourced, independent and impartial news from the BBC and the commercial PSBs—ITV, Channel 4 and Channel 5. All the evidence shows that viewers expect and benefit from effective competition

11 Nov 2014 : Column GC55

between providers of TV news at national and regional levels. In the regions, ITV is the only competitor to the BBC and provides services to 16 different regions, including the Scottish Borders, as we have heard, ensuring that viewers across the country receive a relevant and local news service. Regional news is important, not only because it helps to keep people informed about local events but because it is a hugely important part of the UK democratic process.

That is why the amendment is important, and why we need to do everything we can to defend the system. To do so, though, we need to be clear that PSB needs to be commercially successful. There are two keys to that. First, the PSB framework has offered the direct benefit of access to the digital terrestrial television spectrum and an appropriately prominent position on the EPG, as the noble Lord, Lord Grade, said. These benefits are crucial to the continued viability of regional news in particular, which is very expensive to make. Without that direct benefit, it is very doubtful that high-quality regional TV news would be viable commercially.

Secondly, the ability of the commercial PSBs to earn a return on investments in original UK TV content is massively important. It is the commercial PSBs that offer by far the most watched news services in the UK after the BBC, at no cost to the taxpayer, and those services depend on continued commercial success in a wide variety of genres of programming.

I support the amendment because I care about our PSB system and the role of news within it. It is more important than ever that the commercial PSBs can make a successful return on their investments and retain their ability to sustain this hugely important public service. Section 73 of the Copyright, Designs and Patents Act 1988, which was designed in a bygone analogue era, is undermining the PSB system and, in turn, damaging the wider creative economy. I hope that my noble friend will have listened to the arguments and that the Government will consider accepting the amendment.

Baroness Ford (Non-Afl): My Lords, I, too, support this amendment, which was so ably moved by the noble Lord, Lord Grade. I declare my interest as chairman of a commercial PSB company, STV plc, which of course operates the Channel 3 licence in Scotland.

As almost all the speakers have said, the amendment focuses on a change that is very long overdue. For many years, the current arrangements for television platform access have been wholly inappropriate to secure the continued investment in original content made by all the commercial PSB operators in the United Kingdom. I, too, urge the Government to develop a commercial and market-orientated solution that recognises the real value of this original content to the pay TV operators. The amendment presents a golden opportunity to effect that change. Often throughout my career I have heard Governments say, “We recognise a need to change but we do not readily possess the legislative vehicle to effect it”. That is not so in this case. By repealing Section 73 of the 1988 Act, this time the change could be very readily and swiftly achieved.

11 Nov 2014 : Column GC56

In support of the amendment, I offer additional points to reinforce some of the important points already made. I particularly emphasise that the current legislative framework that determines television access arrangements between channel operators and pay TV platforms is, as everyone else who has already contributed has said, totally outdated, completely inappropriate and biased in favour of pay TV platforms. We have reminded ourselves, and the Government must be clear on this, that, as the noble Lord, Lord Grade, said, the current arrangements, based on legislation set out in the 1980s, had the necessary aim at the time of encouraging the rollout of the cable network in the UK to challenge the analogue monopoly that existed at that time. However, the current landscape is totally unrecognisable from that time, and legislation has simply not kept up with industry changes. Sometimes I think at my board meetings that we have enough trouble keeping up with industry changes, so it is not surprising that legislation struggles to keep up. However, here is an opportunity.

For example, the online providers and aggregators of content are using the lack of clarity in the legislation to exploit the content of public service broadcasters in an online environment. This was simply not foreseen at the time of the original legislation. Indeed, the real and potential value of original content was not properly understood at that time, probably by any of us. No one makes that mistake now. So long as commercial PSB operators carry a must-offer obligation within their licences and pay TV platforms retransmit PSB channels without any charge for carrying that content, the net result is that the PSB channel operators suffer a net outflow of value which, as other noble Lords have said, is subsidising large pay TV platforms. This has to change.

3.15 pm

I had the pleasure of listening to the Secretary of State for Culture, Media andSport when he addressed the Royal Television Society conference in September. It struck me that he clearly understood the issue. It was very heartening to hear him say:

“Politicians and Government have no business controlling television. What we do have is a role to play in making the industry work for viewers. That’s why we’re going to look at whether the time is right to remove Section 73 of the Copyright, Design and Patents Act, which could allow PSBs to invest more in high-quality content”.

He hit the nail right on the head with the last point. The creative industries are hugely important to the UK economy—and, as my noble friend Lord Macdonald said, disproportionately important to regional economies and to the Scottish economy. In one of the few truly global and increasingly consolidated industries, the role of PSBs in creating high-quality content has never been more important. This change would result in an increase in investment that would directly and swiftly enhance capacity in the industry and act as a clear incentive to further investment by PSBs by transforming the return on investment—a huge incentive.

This is an important amendment and a rare opportunity for public policy to catch up with a changing industry landscape and lay the foundations for strengthening that industry further. I urge the Government to take the opportunity.

11 Nov 2014 : Column GC57

Lord Stoneham of Droxford: My Lords, the main arguments have been made in favour of these amendments but I have just one or two points to make. We have to remember how the growth of pay TV is such that its revenues now hugely exceed those of our public service broadcasters. Sky TV’s revenues are more than twice the BBC’s, which gives it huge power. The Government are considering a review of licence fee collection, but are not prepared to accept some changes to this Bill along the lines of this amendment. Why on earth are they not prepared to have a review or consultation on the proposals which stand in this amendment—and the sooner the better?

Lord Deben: My Lords, I believe that my noble friend will realise that my earlier intervention had a degree of mischievousness to it, as I had come in specifically to address this particular amendment. I do so for three reasons. First, sometimes we on this side of the House have been disappointed with the Deregulation Bill, because quite a number of things have been deregulated that really do not seem to have been very important. There has been a tendency to add up the number of things that we have got rid of. On one occasion my noble friend had to justify the removal of a statutory right from someone who was still able to exercise it voluntarily—not, I thought, one of the biggest things that we have ever done in government. I am particularly concerned that when we have an opportunity to make a change that is really worth while, we should do it.

The second reason for my concern is that sometimes one of the ways you can judge the validity of a proposition is to see who opposes it. For much of the time in my period in the House of Commons, there were one or two Members on my own side from whom, when I knew they were in favour of something, I was almost automatically on the other side. I believe that that is true of both sides of the House: we all have bellwethers, who are always extremely useful if we have not quite grasped what is behind the issue. My noble friend’s characterisation of the dual position of Fox News is one that deserves considerable investigation. The reason that people do not want that is because they make money out of it. We therefore have to ask ourselves some very simple questions. Should they make money out of it? Is it in the public interest that they make money out of it? Is it money that could be better spent somewhere else?

That brings me to my third point. Torn aside from all the history, the phrases, the arguments and the discussions, this is a simple matter. We once had a different system, and we had different rules to deal with that system. The system has changed but the rules have not. Would it not be sensible to change the rules now that the system has changed? If there is a big reason for deregulation, and there are several, the biggest of all is that many Administrations suffer from the inability to get rid of good things when they become bad. You can go round the whole Continent of Europe and find all sorts of bits of regulation that were frightfully good at the time when they were put forward but which now get in the way of trade, make it more difficult for people to innovate, and distort the market.

11 Nov 2014 : Column GC58

I am not always known for my upholding of the free and unfettered market, mainly because most markets are neither free nor unfettered. However, I wish to say that here there is an obvious way in which a Conservative-led coalition can make the market freer. In those circumstances, seeing as it appears to have the support of the Opposition as well as that of its coalition partners, there is not much reason for saying that this is not a sensible amendment. I therefore hope that my noble friend will find it possible, if not to give way on this occasion, at least to indicate that he has every intention of giving way at a more amenable moment, but before the Bill passes.

Lord Dubs (Lab): My Lords, I have enjoyed listening to the speeches on the amendment moved by the noble Lord, Lord Grade, who gave a very powerful indictment of the present situation. I do not know what the Front Benches will say to this.

When I was first in the Commons in 1979, a small Bill or measure was working its way through—I cannot remember what it was—and both the Front Benches were passionately in favour of it. I ended up in the Lobby, voting against it with friends, who said, “When both the Front Benches agree, we’d better all be careful”. I do not know about that. However, when Governments are in difficulty, our brilliant officials put forward a number of ideas or thoughts. One is to say, “Accept the principle, but not now”. That is pretty much what Governments do in order not to have to do anything. The other thing they could say to get out of it is, “Well, we’re going to have a review”, because that puts it all into the long grass. Or they can say, “This measure has other implications, and we’ve got to think about those”. Those are all stock excuses that the civil servants, in their brilliant and imaginative ingenuity, pull off the shelf and say, “Here, Minister; these will get you out of the mess you’re in”.

The Minister is in a bit of a mess, because people with far more experience in the industry than me have all united to condemn this anomaly, which, frankly, in logical terms, cannot be defended. I bow to the experience of many Members of this Committee who have far more media experience than I have. I served for a brief time on the ITC and for a slightly longer time on the Broadcasting Standards Commission, but we on the commission certainly did not deal with matters of this sort, so I accept that noble Lords here have far more experience in this than I have.

I suspect that the Minister will say that he accepts the principle, and then there will be a big “But”; I look forward to hearing that. However, we are in a ridiculous position if he does not accept it anyway. We have a brilliant creative industry in Britain; our television creativity is second to none. We are allowing it to be weakened by this anomaly, which dates back many years as a way of protecting a small and up-and-coming cable industry. The time has come to say, “No, there’s no point in this”.

We have to support our creative industries and, in terms of competition, have at least a semblance of a level playing field, which we simply do not have at the moment. We are allowing the public service broadcasters to subsidise the pay TV platforms, and surely that is

11 Nov 2014 : Column GC59

not right in any approach to competition policy. In a normal situation, one would say that these things have to be negotiated freely between the parties and, where they cannot be negotiated freely because of anomalies, we should get rid of the anomalies. Good heavens, I am in the Labour Party and I am arguing for competition—what is going on here? What we do not want is this partly hidden subsidy.

Of course, as has been said, Virgin Media and Sky are willing to enter into such a process for the channels not covered by Section 73—in other words, ITV2, ITV3 and ITV4. It does not make sense even in those terms, any more than it makes sense in terms of what News Corporation is doing in the United States. There are many ridiculous defences of the present position and they just do not stand up at all. I would argue that Section 73 has outlived its useful life. It defies logic, it defies fairness, it defies competition policy and it might defy even the ingenuity of the Government to defend it.

Lord Stevenson of Balmacara: My Lords, this has been a very interesting and useful debate, again, on this topic. I say “again” because although when the noble Lord, Lord Grade, introduced the topic he said that he could not think of a more perfect vehicle for this amendment, he might like to reflect on the fact that we have had this argument before on four other occasions—this is the fifth time this issue has come up—and every other vehicle has also been seen as a perfect vehicle for this amendment. I rather suspect, although I would not wish to impugn any of his motives, that there are people on a mission to do a particular thing who are looking for any vehicle that comes along to hook their amendment to. That is not necessarily wrong, though; this is a complicated topic.

Section 73 is part of a very complex web of regulations that provides equilibrium in the UK broadcast market—at least it has done for some 28 years, as we have heard. Its focus is on consumers, who have of course already paid for public service broadcasting content through the licence fee or through indirect taxation, paying for advertising costs on the goods that they purchase. It is a question of whether or not the arrangements that were set up in 1988, not on a temporary basis, are still relevant today. It is important that among all the various vested interests that we have heard about today, the consumer interest is kept at the forefront of our thinking.

Obviously, Section 73 is an old clause. It was created when the cable industry was in its infancy. It is also true, as everyone has said, that the industry has changed a lot since then. It is interesting, though, that the reason why this suddenly became prominent in people’s thinking, and why it has been raised in three successive Bills that I have been involved in, is because of a case involving catch-up television that is still going through the courts and therefore perhaps should not be excessively commented on. The point is that the judgment in the first instance will have raised legitimate concerns about the use of Section 73 as a defence for retransmission of free-to-air channels online. That, of course, is radically different from any cable commitments or any negotiations that may take place between Sky, Virgin and others

11 Nov 2014 : Column GC60

that are involved in this. It is right to have in mind that the reason why this has become so topical starts with that case, which is ongoing.

Of course we would say—wouldn’t we?—that the age of things does not necessarily determine whether or not they still have value, and attempts to delete old things just because they are old cannot give much comfort to Members of this House. Is this not perhaps another candidate for the Law Commission, about which we have heard? There is an issue of whether or not this measure is still relevant and perhaps needs to be reregulated. The right thing to do is to accept that there is a big issue here and to carry out the due process to get it to a point where it is considered by a review to ensure that it still delivers good public policy objectives and is good for consumers. I think that the findings will be very useful in understanding that better.

My understanding is that the Government have announced that they will carry out a review of how Section 73 might be amended. I hope that the Minister will let us know what progress has been made—

3.30 pm

Lord Deben: Does the noble Lord notice that he is almost exactly paralleling the suggested answer that was given to him by his noble friend Lord Dubs? I respectfully say that it is supposed to be Ministers who listen to the civil servants giving them those ideas; I thought it was the Opposition who were supposed to get out of that and be free to be able to say, “Well, we may have got it wrong in the past but perhaps we are now on the side of the progressives who have been so far putting forward this case”.

Lord Stevenson of Balmacara: I am always grateful for comments made by the noble Lord, Lord Deben, whose expertise and knowledge are legendary in this House, but, of course, prospective Ministers might also be wise to think about what civil servants are advising.

Lord Macdonald of Tradeston: On the question of our perhaps not discussing this matter because it has been in the courts for some four years already, is my noble friend aware of the Interpretation Act 1978, which speaks of this very issue? It provides that,

“where an Act repeals an enactment, the repeal does not … affect any investigation, legal proceeding or remedy”.

Just to rub in the irony, when the copyright Act came in, in 1988, it was despite related ongoing legislation at that time.

Lord Stevenson of Balmacara: I am not as well briefed as my noble friend Lord Macdonald, but it is also true that the Digital Economy Act suffered from similar problems, which have not allowed it to emerge from the purdah in which it has been placed.

As I was trying to explain before I was accused of being too craven towards the Minister, which is a very unlikely position for me to be in, if a review is already ongoing then we should at least do the decent thing and wait for that. I think that the review will be forthcoming and give us the results.

11 Nov 2014 : Column GC61

I still worry about whether we are being told the whole story about this. The noble Lord, Lord Grade, the noble Viscount, Lord Colville, and other noble Lords have suggested that we could expect savings from this area; figures of about £100 million have been mentioned. If that were reinvested in British original content, that must be a good thing—there is no question about that—but what exactly would we see for it? Where has anybody specified in detail what that would be? It would be helpful to have some knowledge of that. Would it be more children’s programming or regional programming, better local news or better investigative work? We do not see quite so much of that as we used to on the commercial channels, and they have PSB ratings and should therefore perhaps be expected to move up to the mark. They need to be a bit more forward about that. I say this because, in September, media analysts at the Bank of America said on this issue that an extra £100 million of revenue for ITV could add about 15% to profits and could be worth 40p a share. I am not saying that that is what is driving this issue, but we might wish to bear it in mind.

I am sure that this issue needs to be resolved. We need a review, which I think has started. It is not right simply to put down an amendment at this stage. We should do this in a proper process, and I hope that the Government will push ahead with their review.

Lord Gardiner of Kimble: My Lords, I thank my noble friend for his amendment, because it has enabled a fascinating debate, the basis of which, I think, is that we all care very much about the creative industries and the public service broadcasting channels. They are of enormous importance to our national life, and there is so much to be done in terms of the economic benefit that they bring to our nation. So the Government come to this with that very much in mind.

Section 73 permits the retransmission on cable of the main public service broadcast channels—it is important to say to my noble friend Lord Holmes of Richmond that Section 73 applies only to cable and not to satellite platforms. The effect of it is that public service broadcasters are not able to charge cable operators for retransmission of their services.

Section 73 is part of a much wider framework that supports the availability of TV and investment in television programming in our country. A variety of rules and regulations affect the production, availability and the ease of discovery of PSB programming and its relationship with the different platforms—cable, satellite and digital terrestrial television—that carry it. These include the obligations on PSBs to offer their content to all relevant platforms, the rules governing payments by broadcasters for “technical platform services” and the powers for regulators to compel these services to carry PSB content, as well as Section 73. This is an area where many competing interests are at large and must be balanced; namely, those of broadcasters, platforms and, of course, viewers. The Government believe therefore that we should not abolish Section 73 without exploring these interactions within the wider framework of regulation that impacts the balance of payments between platforms and PSBs. That is precisely the approach the Government propose to take.

11 Nov 2014 : Column GC62

The noble Baroness, Lady Ford, referred to the Culture Secretary, who has already announced that the Government are going to look at whether the time is right to remove Section 73 of the Copyright, Design and Patents Act, which could allow PSBs to invest more in high-quality content. We believe that, rather than doing so in isolation, we will look at this in the wider context. I am very conscious that now when I think of the noble Lord, Lord Dubs, I must think of “But”. I know that noble Lords would like the Government to accept this amendment, but we think that it is not sensible to do so in isolation. More work needs to be done and we will examine the framework of regulation that governs the balance of payments between broadcasters and platforms. The Government will examine whether the amount of regulation around these transactions is really necessary.

I should perhaps say to my noble friend Lord Grade that my understanding is that the Government are wholly satisfied that this section is consistent with EU law, but I do not think that I can say much more than that at this moment. A number of noble Lords, including the noble Lord, Lord Stevenson, my noble friend Lord Deben and, in particular, my noble friend Lord Stoneham mentioned the Government’s intentions. They intend to consult by early next year on a proposed approach to Section 73 within the broader framework of the balance of payments debate. We think that that is the right way, given the fact that this matter has complexity. It is not as straightforward as just saying, “Away with this section”. There are intricacies and we need to look carefully at the impact on regulation relating to the must-offer obligations of the PSBs and the must-carry requirements on pay-TV platforms. That is the position and we want to get it right.

I understand that the noble Lord, Lord Dubs, will add another category to his “But” point, but it is for those reasons that I hope that noble Lords will feel that work is about to be put in hand on this area. The Culture Secretary and the Government are serious about ensuring that the work is thoroughly and properly done. For those reasons, I would ask my noble friend if he is prepared to withdraw his amendment.

Lord Grade of Yarmouth: I am grateful to my noble friend for that response. As a long-term Charlton Athletic supporter, I have sympathy for the underdog on any occasion. Given the score here today—an unexpected own goal from the Opposition Benches, but there you go—there seems to be a widespread body of strong opinion in terms of the list of obfuscations and get-out-of-jail-free cards alluded to by my noble friend Lord Deben and as regards trying to complicate the issue in order to avoid it. It is not a complicated issue.

The noble Lord, Lord Stevenson, alluded to public interest and talked about the shareholders of ITV, Channel 5 and so on. I do not know about the figures but if £100 million is sitting somewhere, would he rather that money went to News Corp and Liberty Media than to the shareholders of British companies who control the purse strings of what gets invested under the obligations of their licences to broadcast? I was really shocked by that comment.

11 Nov 2014 : Column GC63


Lord Stevenson of Balmacara: If the noble Lord is going to play that game, he must add another one to his list: make an outrageous suggestion which he could not possibly say no to and then ask him to respond.

Lord Grade of Yarmouth: I think that we need to move on. This is a very simple matter which does not need to be complicated in reviews. I am very disappointed that the Government seem determined to let this legislative bus pass by without getting on it and correcting what is clearly an anomaly, an action for which there is widespread support across the House.

In the end, it is a simple matter. If you believe in a free market, in investment in the UK creative industries, in support and competition in regional and national news, and in stimulating employment in areas of the United Kingdom other than London, then the commercial free-to-air broadcasters need to get a fair return, not an unfair return, on the investment and the risk that they take on investment in British production. This section alone prohibits them by law from getting a fair return on their investment. It seems a great shame that a Government who I support and who believe in a properly regulated free market do not seem able to accept the arguments that have been put today from all sides of the Committee. I am sure we shall return to this matter—I look forward to returning to it—and I beg leave to withdraw the amendment.

Amendment 80 withdrawn.

Amendment 81

Moved by Lord Mancroft

81: After Clause 60, insert the following new Clause—

“Changes in mandatory conditions of lottery operating licence

(1) Section 99 of the Gambling Act 2005 is amended as follows.

(2) In subsection (2), after “at least 20% of the” insert “aggregate annual”.

(3) In subsection (3)(a), for “£4,000,000” substitute “£10,000,000”.

(4) In subsection (3)(b), for “may not exceed £10,000,000” substitute “is unlimited”.

(5) In subsection (4)(b), for “10%” substitute “50%”.”

Lord Mancroft: My Lords, usually when one introduces an amendment in Committee there is a vague prospect that other Members of the Committee will have some familiarity with the subject, having sat through Second Reading and other days in Committee. However, we have already had a gallop through BBC funding, busking regulation and copyrights for broadcasting, so it would not be unreasonable for me to assume that not everybody in Committee this afternoon is intimately familiar with the details of lottery regulation.

I declare an interest as president of the Lotteries Council, which is the trade organisation that looks after 440-plus organisations, most of which are charities or non-profit-making sporting organisations that promote lotteries in this country. The collective revenues are about £350 million a year and they donate, provide or raise for their charitable organisations about £155 million a year, which is quite a significant sum.

11 Nov 2014 : Column GC64

Most noble Lords will probably have come across the National Lottery. However, I will forgive them if they have not all come across society lotteries. Society lotteries were introduced following the Rothschild commission on gambling in 1968, which was followed by the Lotteries and Amusements Act 1976, which provided the regulations by which charities, known in law as societies, could raise money for their activities by running small lotteries.

As have many things in this world, they have developed over the years since 1976. There was a significant change in lottery law in this country with the advent of the National Lottery in 1994, after the Bill became law as the National Lottery etc. Act. At that stage your Lordships agreed half a dozen small amendments, not dissimilar to those I am proposing today, to change the 1976 Act to protect society lotteries from the might of the proposed National Lottery. I am delighted that the Government agreed to those amendments, which I had the honour to propose in Committee in your Lordships’ House in the summer of 1994. My noble friend Lord Astor was the Minister who was sitting where my noble friend Lord Gardiner is sitting now. I am delighted that the Opposition strongly supported what we were trying to do then and I hope that they will do so now.

I will not go into all the detail but Amendment 81 proposes five small changes to the regulations. The first one is really the preamble and need not particularly concern us. Subsection (2) of the proposed new clause is in relation to the amount of money that society lotteries are obliged by law to give back to the promoting charity. That has consistently been 20%. However, it is quite difficult for some of the smaller charities when they are starting out to maintain that, and my suggestion is that that 20%—which is quite right, and of course it is the primary purpose of lotteries to raise money for their good causes—should be aggregated over the year rather than in single lotteries. If your Lordships think that amount is too low, it is worth remembering that in the last year for which figures are available, 2012-13, society lotteries actually provided 48% to the societies that were promoting them, significantly more than the 20%. This is just to protect those in start-up when their costs are at their highest and it is more difficult for them. They may not all make use of it but it would be an important change.

3.45 pm

Subsection (3) of the proposed new clause is about changing the pool size of each individual lottery. It has changed several times over the years. All the regulations in all areas of the gambling industry change from time to time. If you are a very grand industry such as the bookmakers or the casinos, you get a three-year annual review. Society lotteries, being charities, are at the bottom of the heap and, despite endless promises from Governments of all complexions, they remain at the bottom of the heap and very rarely get to these reviews, so the numbers go up in very small steps. The proposal here is simply to increase the pool size from £4 million to £10 million, which seems like quite a lot of money, except when you bear in mind that the National Lottery often has a pool size in excess of £100 million. This is small beer but it would be of immense help.

11 Nov 2014 : Column GC65

Subsection (4) of the proposed new clause is about the annual aggregate number that lotteries can promote—the number of tickets they can sell and the amount of money they can provide. I have never been entirely sure what this cap is for. I have asked Ministers. I worked it out when I was preparing for this amendment—I think I have put down 18 Questions to Ministers over the past 20-odd years asking what the purpose of the cap is and I have received 18 different Answers, every single one of which has quite clearly been complete rubbish. It is very difficult to work out what it is for. The only answer I got of any substance was from the former secretary of the old Gaming Board, which was subsumed into the Gambling Commission in 2005, who told me, “Actually, don’t say it too loudly but we are not sure why it’s there. It crept into the 1976 Act and no one has had the courage to take it out”. In other words, it achieves absolutely nothing at all and if that is the basis on which a regulation should be removed from the statute book, then this one should be removed.

Subsection (5) of the proposed new clause, substituting 10% for 50%, is in relation to the jackpot of any lottery. I am not absolutely certain why the Government, Parliament or the statute book should be remotely interested in what the jackpot of anybody’s lottery is, but they appear to be. Even so, it causes an unnecessary restriction and I therefore ask for it to be removed. These are really ridiculous regulations. There is no real reason for them in this day and age. Therefore I hope that, with the Committee’s agreement, the Government will accept my amendments.

I will finish with a few comments. These increases will pose no threat whatever to the National Lottery, which will continue to have in excess of 95% of the market. It will make no difference to it at all. These changes will significantly reduce the administrative and cost burdens of society lotteries and therefore will allow more money to go to the charities that propose them. None of the measures I am proposing today will inhibit the ability of society lotteries to meet their statutory obligations of ensuring that gambling remains crime-free, is fair and open and that children and vulnerable people are protected. Those are the statutory obligations. It is important that we should acknowledge them today. I beg to move.

Lord Low of Dalston (CB): My Lords, I am grateful to the noble Lord, Lord Mancroft, for outlining the background to this amendment and the reason for it with such admirable clarity, born of the great experience that he has in this field. As a former chair and now vice-president of RNIB—which interests I declare—I put my name to the noble Lord’s amendment because I have had first-hand experience of the restrictive effect of the current regulatory regime for society lotteries on the charity’s fundraising potential, which I thought it relevant to place before the Committee in its consideration of this amendment.

Society lotteries are minnows by the side of the National Lottery but are nevertheless a useful tool in the fundraiser’s tool-box. They could be an even more useful tool if they were freed from the restrictions and red tape which the noble Lord, Lord Mancroft,

11 Nov 2014 : Column GC66

talked about and which significantly hobble fundraisers who seek to use society lotteries to maximise their income.

RNIB currently runs two society lotteries: one for RNIB itself and one for Action for Blind People, which is part of the RNIB group. It raises £8 million a year through its society lotteries, which provide valuable funding for vital services such as the RNIB helpline, sight-loss advisers in hospitals—who are there to pick people up at the point when they are told that they are going blind—and talking books, which many people describe as a lifeline.

Society lotteries are a successful fundraising vehicle for RNIB but, as I say, this success could be increased were there to be a relaxation of the limits imposed on prizes, draws and turnover. In particular, the charity is restricted in how much it can generate in charitable income through its society lottery due to the £10 million annual cap on turnover or sales. This is difficult to understand, as the noble Lord, Lord Mancroft, said, because this is the only form of fundraising that is capped in this way. RNIB thus well illustrates how charities can have their ability to raise funds restricted by unnecessary and burdensome regulation.

RNIB also has concerns with the regulatory regime which governs licensing. Society lotteries have achieved strong growth in recent years, reflecting their popularity with the public as means of raising money for good causes. However, if RNIB wants to sell more tickets, and thereby raise more money, it would be limited by the income and ticket sales caps. It would therefore have to register a new society lottery, which would mean that much needed charitable funds would be spent on duplicating auditing, legal, licensing and other bureaucratic costs.

As provided for by this amendment, an increase in the permissible amount of ticket sales for a single draw would enable RNIB to raise more money while at the same time limiting costs. An increase in the annual income cap would enable it to maximise its fundraising. Furthermore, if prize value limits were increased, more people could be attracted to play RNIB’s lotteries, thereby boosting the overall amount raised through tickets sales. In addition, as the noble Lord, Lord Mancroft, has explained, the 80:20 rule, whereby 20% of proceeds have to be returned as profit to the good cause, restricts new product launches and can stifle innovation. For smaller lotteries, such as Action for Blind People’s, the requirement that 20% must always be returned can stifle growth, as it makes it difficult to invest heavily in new acquisitions. This could be alleviated by allowing lotteries to apply the 20% rule to the financial year as a whole rather than to each individual lottery.

Society lotteries are a valuable form of fundraising, not just for the RNIB but for charities across the country. They provide much needed funding for highly valued services, and evidence shows that were modest deregulation to take place, it could allow good causes across the UK to increase the amount that they receive through this popular form of fundraising.

Lord Rooker: My Lords, I would like to ask a question. I know nothing about the detail of this, but I take it that these four elements that the noble Lord has

11 Nov 2014 : Column GC67

described do not hang as a package. In other words, I am saying to the Minister: just for once, pick one. Okay? The case seems overwhelming. I have spent more time in this Grand Committee than I have done at any time since I was in the Minister’s position, so I know what it is like; because there is no vote, you can stonewall and accept nothing, hoping that, by the time you get to Report, you can wing it through.

Given the figures that the noble Lord, Lord Mancroft, gave, I would also say to the Minister that this is not a threat to the National Lottery. I understand that when the lottery was first formed, a lot of constraints were built in to protect it. For example, someone tried to start a lottery betting on the six numbers, and I think that it was banned because it would drain off other funds. The National Lottery is now so well established that there cannot possibly be any threat to it.

There is another factor here, if I have got it right, and I do not declare an interest but I do the odd lottery myself: this would mean more choice for the player. In the National Lottery you do not get any choice. We know what the overall picture is—it is a public good, we know that massive benefits to sport, culture and our heritage have come from it, and long may that continue—but we do not get any choice. However, with the society lotteries you get a choice. You can make that your key.

I will also say, although I know that these words are not used often these days by the Government, that this is classic “big society”. Does the Minister remember that? All the elements of society lotteries—individual choice, very small beer compared to the National Lottery but substantial benefits to the societies involved—make them the big society. They fit in exactly with what the Prime Minister used to talk about. It was a good idea; he just could not sell it. The fact is that these schemes seem to fit with that.

I say to the Minister: go on, just pick one of them. I am sure that he will still be there when we get to Report—it is too late for reshuffles now—so pick one that is really good and go back to the boss, as I used to do occasionally. I used to go back and say, “Look, we’re going to be defeated on this”, and we did not really want all the mess connected with that. I know that we cannot have a vote on this, but the fact is that on Report this could be a bit tricky at the wrong time of day. It would be a lot better if the Minister showed a bit of willingness, and I think he should be prepared to accept one of them.

Lord Collins of Highbury (Lab): My Lords, I hope that we are not going to disappoint my noble friend or even the noble Lord in terms of the position of the Opposition. As someone who has spent a lifetime trying to raise money—for causes that were perhaps difficult, like the Labour Party campaign—I understand the importance of lotteries, and the importance of a range of options when it comes to raising money. However, we have to understand that this proposal would considerably change the lottery regulations, and such a change—again, I am glad that my noble friend Lord Dubs is not here—would need detailed study regarding its consequences. Not just the National Lottery but also smaller lotteries may be squeezed by

11 Nov 2014 : Column GC68

the larger society lotteries that can expand and push the smaller ones aside. The Opposition would want to discuss that in detail before we could consider any changes.

4 pm

My strong starting point, which we heard in the debate yesterday, is that the “one national lottery” system remains the best model to achieve the maximum return for good causes. Noble Lords made that point very strongly at Question Time yesterday, and I was very pleased to hear the Minister respond likewise—that the National Lottery has done a huge amount and that the principle was worth defending. We know that actions or changes that impact on sales of National Lottery tickets will have a huge impact on all the very good causes that my noble friend Lord Rooker mentioned. We do not know what the impact would be, which is why I am articulating caution.

Lord Mancroft: My Lords, the noble Lord says that we do not know. We do know; this has been out to consultation several times. We also have the recent report of the Centre for Economics and Business Research, which, as he knows, was published in February this year and went into this subject in great detail. After carrying out a great deal of research, it made it absolutely clear that all the changes that have been made to society lotteries over the years and the ones that we are proposing today have absolutely no negative effect on National Lottery sales at all. What they can do and have done in the past is to expand the market overall, therefore actively improving National Lottery sales. The biggest increase in society lottery sales was in the past year, which also saw the biggest increase in National Lottery sales. Therefore the argument that he is proposing at the moment has been proven to be completely wrong.

Lord Collins of Highbury: I will come to that point, because in this market the proposals could result in an expansion with unforeseen circumstances and I want to address that. I have raised that with the Minister before, with regard to who may enter that market if we deregulate it. That is one of our major concerns. The principle of the National Lottery is that it was designated as a monopoly to ensure that it generates sufficient income for all the causes that Sir John Major originally envisaged for it. We need to be very careful about weakening the protection of that principle. That is the point that I am making at this stage. My noble friend Lord Rooker quite rightly pointed out that there was a range of proposals within these amendments; I will come to one of them, which could be well worth considering.

We need to protect the principle of the model that has worked successfully over the past 20 years. Measures that could have the potential to undermine that settled principle of one national lottery alongside many small small-scale society lotteries need to be avoided. I shall mention as an example the increase in prize caps for society lotteries. The level of prizes on offer to players is a fundamental differentiator between the National Lottery and society lotteries. When we introduced the

11 Nov 2014 : Column GC69

National Lottery, we had that in mind. Any substantial increase in prize caps for society lotteries risks fragmenting the money spent by players across all the different lotteries available, which would lead to smaller jackpots, fewer tickets sold and, ultimately, less money for the good causes that were highlighted in the Chamber yesterday.

Lord Rooker: My noble friend is rewriting history. The Labour Party was opposed to a national lottery—I remember the years I spent in the other place when it was being promoted—because it would damage the football pools. That was the argument given. My noble friend is arguing from a monopolistic position. Where is the threat to the National Lottery? It may be a good model for a national lottery, which is fine—the past 20 years have shown that it works—but this is not the National Lottery; these are society lotteries, which are minnows compared to it. We were not always in favour of the National Lottery, just as we were not always in favour of the minimum wage, so I cannot sit here and have history rewritten.

Lord Collins of Highbury: I was not attempting to rewrite history—far from it. That is why I mentioned the debate yesterday where noble Lords referred to Sir John Major’s proposals and their legacy. In the context of the Olympic Games and their legacy, the National Lottery has played a critical role. I think that the Labour Party has learnt many lessons over the years and adopted policies that perhaps it had been concerned about. My noble friend referred to the national minimum wage. I worked for a trade union that opposed that every step of the way, but it has learnt the lesson of reconsidering positions. We are talking here about the outcome of the National Lottery and the huge amount that it has achieved for a whole range of good causes, not just the national legacy causes but local causes and, in particular, the cultural impact. Any change to that principle therefore needs to be considered extremely carefully.

The proposal that the 20% contribution should be spread over a period of time may be one that the Minister will take on board. However, another point that I want to make about any changes, and I have raised this in the Chamber, relates to the loophole that we have seen exploited by the Health Lottery. It is supposedly made up of 51 separate companies yet has the same three directors, the same office and the same branding, in effect enabling it to operate as an alternative to the National Lottery. That is something that the Minister needs to look carefully at, despite the actions of the Gambling Commission in this regard. The amount that goes to worthy causes there is 20% but it is not absolutely clear how it is spent, and its promoters are certainly operating on a commercial basis.

Lord Mancroft: I do not want to enter into a debate about the Health Lottery now, but it is registered with the Gambling Commission. For every single lottery that it does, every single week, it submits a return to the Gambling Commission, which noble Lords can all see online today. There is no hidden money anywhere else. The putting together of a group of societies into

11 Nov 2014 : Column GC70

one big one, with a lottery operator working above it, was debated and agreed very forcefully in your Lordships’ House 15 years ago. There is nothing secret about it. I accept the fact that Mr Desmond is, for some reason I am not clear about, a very unpopular person, but he has done exactly what the law envisaged and what Parliament intended. I took part in all those debates, and that is exactly what we planned. The Health Lottery has not produced any threat to the National Lottery. Camelot endlessly says that it does but, in the year of the Health Lottery’s birth and rise, National Lottery sales increased at a greater rate than at any time in its history, and long may that be so.

Lord Collins of Highbury: I do not accept what the noble Lord says because that lottery has exploited a loophole which I had hoped that the Government would be able to close. I am not suggesting for one moment that, in the dodgy sense, there is hidden money but only 20% of the money raised by that lottery goes to good causes. That may be seen to be a reasonable return, but it is advertised on Mr Desmond’s channels and in his newspapers, it is competing with the National Lottery and people think that it is a national lottery. It is even called a “national lottery”, which I think is in breach.

Furthermore, if that company can do it, what if Tesco suddenly decides, “This is a market we need to expand into. It’s a worthy cause. We can say to our customers that we’ve the infrastructure and the stores”? I believe that this is why we need to exercise caution. We have a model that has worked. We need to support local societies, even small societies, in terms of enabling them to raise money, and that includes local lotteries. I do not believe that when people buy those tickets they are necessarily thinking, “I need to win £4 million”, but we know the impact and the dream of the National Lottery, which is why it is so important to regulate the area. I am sorry to have banged on a bit on this, but there is a principle here that is worth defending and protecting. If we move forward in any step to deregulate that, we need to understand fully the consequences for the good causes.

Lord Gardiner of Kimble (Con): My Lords, I thank my noble friend for his amendment and noble Lords for the lively debate that has followed. The effect of this amendment would be to allow society lotteries to offer jackpots of up to £5 million per draw and to hold as many draws as they wish. I know that my noble friend disagrees with this but we do think that this may—and I use the word “may”—present a serious risk to the good causes funded by the National Lottery. We believe that the best way of raising funds is through encouraging people to play by offering them the life-changing prizes possible only through mass participation in a single national lottery.

As the noble Lord, Lord Collins of Highbury, has said, in the past 10 days I have answered two Questions on the Olympics and the importance of the National Lottery. I was asked about the dangers if National Lottery proceeds were to reduce and the impact that that would have on the Olympics. Indeed, it was borne out into the many other aspects of the National Lottery.

11 Nov 2014 : Column GC71

I am sure that we all agree that the National Lottery has been an extraordinary success, raising over £32 billion for good causes in its 20 years of existence. It has funded everything from large-scale national projects to thousands of small-scale local groups and has had a transformative effect across the whole of the United Kingdom.

It is appropriate today to refer to what the Heritage Lottery Fund has been doing. It has awarded more than £12 million to enable the National Museum of the Royal Navy to turn HMS “Caroline” into a visitor attraction in time for the centenary commemorations of the Battle of Jutland. At the other end of the scale, the Heritage Lottery Fund also awarded more than £5 million to more than 700 projects through its First World War: Then and Now community grants programme.

It is this scale and reach that makes the National Lottery so unique. Ultimately, a total of over £60 million was given to more than 1,000 First World War centenary projects, covering nearly three-quarters of constituencies across the United Kingdom. This is only a fraction of the funding distributed by the National Lottery each year. The Government believe that allowing the sort of direct competition that could result from this amendment goes against the very spirit of the National Lottery. My noble friend makes clear that he does not believe that it puts this at risk, but there are others who feel that it may.

I want to refer to what the noble Lord, Lord Low of Dalston, said about society lotteries. They are undoubtedly very successful at raising funds for good causes and have grown significantly in recent years. We very much welcome that success but we are clear that they are part of a wider good cause landscape and, again, we would not want that to be at the expense of the National Lottery.

4.15 pm

The noble Lord, Lord Collins of Highbury, referred to consultation. The Government’s view is that the best way forward is to consult, and we will do this shortly through a call for evidence asking for views on how we can ensure that society lotteries continue to flourish alongside the National Lottery. In addition, the Culture, Media and Sport Select Committee is currently investigating society lotteries and will be considering whether the current limits on such lotteries are appropriate. To answer my noble friend Lord Mancroft’s point about the purpose of subsection (3)(b), we believe that size limits and jackpot limits protect the National Lottery and its unique ability to offer life-changing prizes. That is why we believe subsection (3)(b) is appropriate.

We hope that the evidence-gathering process will highlight what reforms are needed, if any. Reforms made to monetary amounts or percentages could be achieved through secondary legislation. Of course I understand what my noble friend Lord Mancroft, and indeed the noble Lords, Lord Rooker and Lord Low of Dalston, have said. I would very much like to oblige the noble Lord, Lord Rooker, but I am afraid it is not going to be today.

11 Nov 2014 : Column GC72

The Government believe that society lotteries are an important feature but the National Lottery has become such a key part of the well-being of our nation that we would not want to rush into anything that could even possibly put that in jeopardy. I understand the points that my noble friend made in denying that this will have an impact but there is sufficient concern—it was raised in the Chamber yesterday across the House—that the Government’s process of looking at this, considering what the Select Committee is going to come forward with, is the right way of doing it so that we get this right for both the National Lottery and the society lotteries, which do so much good. On that basis, I ask my noble friend to withdraw his amendment.

Lord Mancroft: My Lords, I was not expecting a different answer but that does not mean that I am not disappointed. As I said when I moved my amendment, I have been down this track before and I have heard all those answers before.

The noble Lord on the opposition Front Bench was talking about a detailed examination. That is a good thing to do, which is why the Government commissioned the Budd report before the 2005 Act. That, of course, came out in favour of this level of deregulation. The report of the joint scrutiny committee on the draft Bill in 2004 said that we should remove these regulations. My noble friend has just referred to the upcoming report of the DCMS Select Committee. Of course, he may wait for that but if he was to look at the previous DCMS Select Committee report on society lotteries, it, too, recommended that these regulations should be removed. The two most recent government consultations recommended that they should be removed. Indeed, fascinatingly, 350 organisations and individuals responded to the Government’s most recent consultation on society lotteries, and 349 of them were in favour of deregulation. One organisation was opposed to deregulation and that, amazingly enough, was Camelot.

What is proposed here is not, as the noble Lord said, an alteration of the principle. There is no alteration of the principle at all here. The first section of the National Lottery Act says there is only one national lottery. That is entirely true. The Health Lottery is not a national lottery. The People’s Postcode Lottery is not a national lottery. Collectively, those two enormous organisations, and the 440 or so other organisations that run lotteries in this country, still have less than 5% of the market. The National Lottery, quite rightly, has 96% of the market. How on earth can that be seen to be a threat? There is an idea that Tesco or Sainsbury might suddenly launch a society lottery. Actually, they tried, but even they, with their massive marketing might, could not take on the might of a 96% monopoly operator.

The principle is odd because, as the Committee will know, Britain and France are the only two countries that have monopoly national lotteries. In America they are state lotteries; in South America they are primary, secondary, tertiary and charity lotteries; in eastern Europe, which invented lotteries, they have provincial, state and national lotteries and even smaller ones; in Germany they are state lotteries; in Ireland and Spain there are three—need I go on? The way that

11 Nov 2014 : Column GC73

the national lotteries are set up in Britain and France is virtually unique; no one else does it like that. It is recognised in most other parts of the world that secondary, tertiary and charity lotteries actually increase the size of the market, as the noble Lord, Lord Rooker, suggested, and everyone benefits. That is why, I repeat, when the Health Lottery started last year or the year before, it was the best ever year for the National Lottery.