Media Bill (Fourth sitting)
Thursday 7th December 2023
(1 year ago)
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The Chair
I remind the Committee that with this we are considering the following:
Clauses 33 to 36 stand part.
Schedule 4.
Hywel Williams (Arfon) (PC)
It is a pleasure to speak under your chairmanship, Mr Vickers. I will speak to clause 32, and the other clauses about S4C. I welcome the clauses, as do many people in Wales. They arise from the 2018 review carried out by Euryn Ogwen Williams, one of the great figures of television in Wales for many years. I expected an avalanche of complaints, possible amendments and new clauses from my compatriots; however, I am afraid that there is complete silence from them, so I will speak fairly briefly—perhaps to the relief of some members of the Committee. That silence is perhaps a measure of people’s qualified satisfaction with the channel, and is due to it being such a normal part of life. It has been normalised, and is no longer the matter of dispute that it was when I was a student, many years ago, campaigning in its favour. Having been a permanent Member of the Opposition in this place for the last 22 years, I am in the rather strange position of agreeing with the Government and supporting a Government Bill; it is a very peculiar feeling.
I come back to the S4C clauses—I may slip into calling it ès-pedwar-èc, which is what it is usually called in Wales. I was looking for an explanation from outside broadcast television. I know quite a bit about language planning, and there are two principles there that may help us to understand what is happening: the principles of normalisation and institutionalisation. Normalisation is just that—making something that was at one point new, novel and a subject of dispute unremarkable. As I said, I think that is what has happened to an extent with S4C.
The other principle is institutionalisation—that is, when someone switches the machine on in Wales, the output comes out bilingually, or in one language or the other. That process has happened through a great number of public institutions in Wales. Hon. Members may have seen lobbying or advertising material from public bodies and third-sector bodies in Wales that has .cymru at the end. Some time ago, when I chaired the language committee of the Central Council for Education and Training in Social Work, I had a leaflet through the post from the office in London, and it was bilingual. I phoned the staff up in Cardiff and asked, “Is this your work?” They said, “No, what is it?” I said, “It was nothing to do with me either.” When we checked, we found that the machine had just produced it in Welsh, because now the process was institutionalised.
That is one way of seeing what is happening to S4C; it is now being treated as any other public service broadcaster. That is as it should be—but, of course, S4C is a special case. I am not pleading any special rights for S4C, but it is the only Welsh language television broadcaster in the universe, I suppose, if I might possibly venture to say so. Hon. and right hon. Members can, if they choose, switch to Sky, Channel 4, ITV or perhaps even GB News—who knows?—but no such facility is available to Welsh speakers. S4C has a specific and very special place in cultural and democratic life in Wales. It is 40 years old. I am happy to say that it was established by a Conservative Government—by Mrs Thatcher’s Government—40 years ago. Eventually, she could not resist a deputation made up of a Labour party grandee, the Archbishop of Wales and a senior ex-civil servant, who told her that, unfortunately, she had to produce a Welsh language channel. Apparently, she said, “Do I have to?” They said, “I’m afraid you do, Prime Minister,” and she did.
Those were some points about S4C as a special case. I welcome the removal of the geographical restriction on S4C. There are S4C viewers outside Wales—perhaps quite a lot of them, as I said this morning; who knows? They can now much more easily access the channel’s digital and online services. Bringing S4C in line with other public service broadcasters is welcome. It must be put on a par with larger broadcasters, because it provides the same sort of service: it is a generic broadcaster that produces anything from game shows to gardening programmes, but in the medium of Welsh.
On Tuesday, I think, I spoke about the demography of the language, and why that was relevant. The conventional way of thinking about minority languages is that they are the language of the old people, and young people modernise and speak the other language. For instance, I have Polish friends whose grandparents spoke Polish when they escaped communism after the war. The grandchildren do not speak it at all, and the parents occupy some sort of intermediate space. Paradoxically, the Welsh-speaking population is getting younger; young people are learning the language. People of my generation, who were not taught Welsh in the ’60s, are still about—language change takes a very long time—and the proportion of older people who speak Welsh, about a fifth, is much lower than the proportion of younger people who speak Welsh, which is about a third.
That leads me to mention, with some pride, S4C’s provision for children, including mine. There is a dedicated service called “Cyw”, which means chicken, chick or young person. It produces all kinds of content for children in the medium of Welsh. It has its own YouTube channel. It has roadshows, books, badges, balloons and biros—the whole lot. It is extremely popular. Allowing S4C wider prominence will allow even more children to absorb the language in an easily accessible way—by seeing it on telly, absorbing it as they do English. I see that with my children, who were monoglot Welsh speakers until they were about five or six, and are now thoroughly bilingual.
In the ’60s, living in west Wales, I had the pleasure and advantage of accessing Raidió Teilifís Éireann; we could watch Irish television as well as the BBC. There was no ITV available at the time. On RTÉ, we could see American shows much sooner than they appeared on the BBC; the Irish had a certain advantage. That is an early example of something that came up this morning: the value of choice. People these days can choose what they like; we could choose BBC Wales or RTÉ. I sometimes think that watching RTÉ as a child accounts for my accent. Who knows?
Moving quickly on, clause 33, which concerns the board, puts in place the recommendations of the 2018 review. A shadow board has been operating for some time, and I think it seems to be trouble-free. Clause 34 is on accounts and audit. The Comptroller and Auditor General is already the BBC’s external auditor, and there are no issues with that also being the case for S4C; it perhaps normalises its position as a PSB like any other.
Finally, the possibly more worrying—or possibly not—clause 35 changes the previously fixed approach in which the BBC was required to provide at least 10 hours of programmes in Welsh per week to S4C. It allows for alternative arrangements. The contribution of the BBC is highly valued and of a high standard. It produces the news and various other things, including what I think is the longest running soap opera in the universe. “Pobol y Cwm” has been going for a very long time and has a devoted audience, not only in Wales but slightly beyond the border.
The worry is that replacing statutory provision with an agreement that requires a high degree of trust might not work. That was tested in the past, when the licence fee was cut substantially and the funding for S4C was cut substantially. The BBC’s provision, which was set in law, was very much valued. One wonders what will happen if the BBC has further cuts—who knows? Without the 10-hour arrangement, will those cuts be knocked on to S4C?
However, one of the outstanding successful features of S4C is that it obtains programming from more than 50 independent companies, many of which are located in my constituency. People are occasionally slightly surprised when they ask me where I represent and I say, “I represent Arfon, and the main industries in Arfon are agriculture, tourism, the production of blood-testing machines and television programmes.” That is considered slightly peculiar for what is seen by some people as the back of beyond—that depends on where you start from, of course; it could also be said about London. S4C obtains much of its programming from those companies, and that is highly valued.
All I am really asking for is any observations that the Minister might have about the danger for S4C of cuts to the BBC’s provision. Otherwise, I am very glad to support these clauses.
The Minister for Media, Tourism and Creative Industries (Sir John Whittingdale)
I am grateful to Opposition Members for their general support for these clauses. The hon. Member for Arfon has taken us through the history of S4C, and he is right to say that it now has widespread acceptance and has become part of the institutional landscape. There is only one part of what he said that I would question: having worked as political secretary to Margaret Thatcher for five years before I entered this place, I can assure him that she would not have done anything unless she wanted to do it.
The hon. Gentleman raised a point about the BBC’s funding of S4C. The Government determine the funding for S4C. It merely comes from the licence fee pot. The BBC is being given knowledge of its funding for the coming year in today’s statement by my right hon. and learned Friend the Secretary of State for Culture, Media and Sport. That does not affect the funding of S4C, which has already been determined. The hon. Gentleman also spoke about the flexibility that we are giving S4C and the BBC to determine, potentially, alternative arrangements for the BBC’s support for S4C. That was a request from S4C, which saw it as a benefit that it might receive other forms of support from the BBC, but of course it will have to be by agreement, so the BBC will not be able to change that unless S4C and the BBC reach an agreement together.
The hon. Member for Barnsley East asked for further details about the Secretary of State’s power to approve commercial activities of S4C. We feel that allowing that to be done in writing, rather than by order, provides greater flexibility. The timescale for taking advantage of commercial opportunities, together with the confidential nature of the activities sometimes involved, makes it difficult to do that by order. The Secretary of State will be required to publish any approvals, exempting only confidential matters, and the Secretary of State of course remains accountable to Parliament. I do not think that there is any cause for concern in either case.
The clause is essentially based on the recommendations of the review of S4C, which the hon. Member for Arfon pointed out was widely welcomed across Wales.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Clauses 33 to 36 ordered to stand part of the Bill.
Schedule 4 agreed to.
Clause 37
Tier 1 services
Stephanie Peacock (Barnsley East) (Lab)
I beg to move amendment 22, in clause 37, page 77, leave out lines 6 to 9.
This amendment, together with Amendments 23 to 27, is intended to pave the way for the regulation of all video on demand services, rather than just those designated as “Tier 1” services.
The Chair
With this it will be convenient to discuss the following:
Amendment 23, in clause 37, page 77, line 11, leave out
“that is a Tier 1 service”.
See explanatory statement to Amendment 22.
Amendment 24, in clause 37, page 77, line 14, leave out from “of” to the end of line 16 and insert
“on-demand programme services and non-UK on-demand programme services”.
See explanatory statement to Amendment 22.
Amendment 25, in clause 37, page 77, line 28, leave out
“that are Tier 1 services”.
See explanatory statement to Amendment 22.
Amendment 26, in clause 37, page 77, line 37, leave out “Tier 1” and insert
“the regulation of on-demand programme”
See explanatory statement to Amendment 22.
Amendment 27, in clause 37, page 78, line 1, leave out “Tier 1” and insert
“the regulation of on-demand programme”.
See explanatory statement to Amendment 22.
Stephanie Peacock
I am pleased that we are making good progress in scrutinising the Bill, having reached part 4 on the regulation of on-demand services. We have spoken at length about the growth and popularity of on-demand services, so it may come as a surprise to some members of the public that the content on most of our video on-demand services is not regulated. We are all used to high standards, thanks to the high-quality content provided by PSBs, which we see when we turn on our television set, and the regulatory landscape that complements that content; but it is easy not to consider whether regulatory standards apply to content on demand. Indeed, the high standards set by our PSBs have played a big part in creating an atmosphere in which newer streaming services have had to provide content of the highest standards. They have to model best practice to compete with traditional television.
That has put us on a good footing, and the streaming services and on-demand providers I have spoken to actually welcome the regulatory clarity that a new regime will provide. Currently, if a complaint is received against a piece of on-demand content, the service that has provided that content has nowhere to point towards in handling that complaint, and does not have to prove compliance with a regulatory regime. Part 4 brings on-demand services under the scope of Ofcom, and gives it new responsibilities, including to follow a new on-demand code. It is a good thing for viewers and providers, who will benefit from consistent high standards in the on-demand space.
However, I have concerns regarding the proposed tiered approach to the framework. Clause 37 and schedule 5 both set out that only tier 1 services will be regulated under the new regime. The only real information we have about how tier 1 will be defined, however, is that it will be based on size, which is determined by audience figures, turnover and catalogues.
In many areas of the Bill, there has rightly been a desire to avoid being too prescriptive in the primary legislation in order to allow flexibility in the light of rapidly changing technological advances and viewer habits, but in the uncertainty and lack of detail about on-demand services has been troublesome for some providers. Netflix said in its submission to the Culture, Media and Sport Committee that without clarity on scope, there was no way for it to tell whether the scope will ultimately be discriminatory.
I know that there are good intentions behind taking what might be considered to be a proportionate approach that avoids placing new burdens on smaller video services that are trying to grow and compete with much larger services. However, the approach could create perverse incentives. One can imagine smaller services becoming averse to growing, for fear of meeting the regulatory threshold and having to contort their services to comply.
Putting all services on a level playing field will ensure that no service is deterred from competing with those at the very top, and no one at the bottom can feel that the situation is unfair, or that they are being unfairly given burdens that others are not. Further, everyone will be given an entire year’s grace period in which to become compliant; that will ensure that those who are less prepared can come up to speed.
Perhaps even more pressing than the impact of the tiered approach on providers, however, is the effect that it will have on viewers. As the CMS Committee highlighted, the Government said that part of their purpose in introducing the provisions was
“to protect audiences from the potential harm arising from the gaps in the existing regulatory framework”
and to
“ensure UK audiences receive a similar level of protection no matter how they watch television— whether it be live or on-demand.”
Clearly, requiring only the largest video-on-demand providers to abide by the new regulatory scheme would not achieve that aim. For the average viewer who does not invest their leisure time in understanding the nuances of a tier 1 service, a category in which I believe most of the general public will fall, how will such a person possibly be aware whether they are watching a regulated service?
To strive to create a consistent regulatory approach between broadcast and on-demand services, while simultaneously creating an inconsistency within the regulation for on-demand services, seems counterintuitive. Viewers deserve to have certainty over the level of protection they are being provided with. Put simply, I believe that the best way to meet that aim is for the new video-on-demand code, and the various other changes in this part of the Bill, to be applied universally across all video-on-demand services watched by UK audiences.
Such a move has been also recommended by everyone from the Culture, Media and Sport Committee and the Voice of the Listener & Viewer to Amazon and Netflix. Including all services would provide the harmonisation in regulatory approach that I believe the clause sets out to achieve. It would get rid of confusion for viewers and prevent any definition from being discriminatory or drawing what could have been a somewhat arbitrary line between services.
If the Government cannot accept my amendments, which would pave the way, I would be grateful if the Minister at least explained their current plans for the definition of tier 1 at this stage, and detail how they will work to create consistency in experience for viewers. I believe that we are on the same page about the importance of the new framework and what it could achieve, and I hope we can work constructively to ensure that it is the best it can be.
Sir John Whittingdale
I welcome the hon. Lady’s general support for what the Government are trying to do by bringing video-on-demand services within the scope of regulation. We believe it is important for audiences to be appropriately protected when watching TV on demand. We will do that through what we see as a proportionate regulatory approach, which will ensure that all the mainstream streaming services that target UK audiences are subject to rules similar to the existing ones governing UK TV broadcasters.
Under the Bill, any UK on-demand service used by a PSB other than the BBC will automatically be designated as tier 1. Alongside that, other mainstream TV-like video-on-demand services will be designated after the Media Bill comes into force, following a review of the market by Ofcom. I can tell the hon. Lady that all the streaming services with which most people are familiar will certainly come under tier 1, but at this stage we cannot publish a list or the general categories to determine it because the market is rapidly evolving. Once again, as elsewhere in the Bill, we want to have a degree of flexibility and we believe that regulatory change needs to be proportionate and practical.
At the moment, more than 270 video-on-demand services are notified with Ofcom. Many of them simply do not provide TV-like content and nor are they widely accessible, so it is important to balance audience protection with freedom of expression, and to avoid placing unnecessary burdens on them. Consultations that have been conducted already tell us that extending tier 1 regulations to the smallest niche services, such as a football team’s on-demand service, could unfairly and unnecessarily penalise them with little or no benefit to audience protection.
Andy Carter (Warrington South) (Con)
I understand what my right hon. Friend is saying, and I am very supportive of a tier system, but a broadcaster on linear TV, be it a football station or a new start-up, would be bound by the Ofcom broadcasting code. Why would rules in the new online environment be different from those for someone who holds a broadcast licence in the linear world? That does not seem to make a lot of sense.
Sir John Whittingdale
My hon. Friend is right that at the moment linear TV channels are required to be licensed by Ofcom, but in the new world it is much more likely that we are going to see quite small niche channels, which serve a particular audience. There has been a proliferation of such services, which simply could not really have taken place in the old linear world. That is why the Government felt it was right that new services that command considerable audiences and target a broad range of viewers should be subject to the same sorts of requirements as exist for linear broadcasters.
However, it would be excessive to place those requirements on every single new notified VOD service, including those that are relatively small and serve very small and defined audiences. If it is determined that a small service has the potential to cause harm, the Bill allows that it can be designated as tier 1. The Government retain the power to do so if there is evidence supporting a need for it. That will allow us to ensure that regulation can be updated or added to.
Kevin Foster (Torbay) (Con)
I can very much see the logic that the Minister describes. To recall my private Member’s Bill on small-scale DAB, one of the issues was that people could use a laptop to set up an online radio station in their bedroom with no regulation at all, or they had to jump up to being a large broadcasting operation. I agree with the Minister that there is a logic to having a tiered system, so that we do not have either no regulation at all for those online or, for any form of broadcasting, regulation on the level of a very large operation.
Sir John Whittingdale
My hon. Friend is right that there are different levels of service that require different amounts of monitoring and oversight. To my hon. Friend the Member for Warrington South, I would say that UK-based on-demand services are already required to abide by the on-demand programme service rules, which are less restrictive than the Ofcom regulations but control things such as hate speech and have basic protections for young audiences. It is appropriate that we determine the appropriate level of regulation on the basis of the audience and the size of the station. As I say, Parliament will be given further information that sets out the list or description of services at least five sitting days ahead of any regulation, so there will be transparency and oversight. For that reason, we do not feel it necessary to bring all the existing video-on-demand services within tier 1 at this time.
Stephanie Peacock
I am, of course, aware of the complexity of removing the tier 1 element from the Bill at this stage, and I acknowledge that agreeing to this set of amendments would create difficulties for the Bill more generally. I was aware of that when drafting the amendments, but I wanted to raise the issue that the Bill is perhaps not clear enough about—what the video-on-demand provisions will apply to and how audiences would receive the certainty they need. The Minister has alleviated some of those concerns today, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Kirsty Blackman (Aberdeen North) (SNP)
I beg to move amendment 38, in clause 37, page 77, line 34, at end insert—
“(5A) In section 368C (Duties of the appropriate regulatory authority), after subsection (6) insert—
‘(6A) The appropriate regulatory authority must draw up, and from time to time review and revise, appropriate guidance relating to the duty of providers of on-demand programme services to ensure the archiving and retrieval of programming delivered by these services for the purposes of preserving cultural heritage.
(6B) The guidance under subsection (6A) must include guidance on providers’ relationships with—
(a) the British Library;
(b) the National Library of Scotland (Leabharlann Nàiseanta na h-Alba);
(c) Llyfrgell Genedlaethol Cymru (the National Library of Wales);
(d) the Library of Trinity College Dublin;
(e) the British Film Institute.’”
This amendment would place a duty on OFCOM (or other regulator) to draw up guidance aimed at streaming services giving them duties to liaise with legal deposit libraries and the BFI to ensure that appropriate measures and strategies are in place for the archiving of video.
The Chair
With this it will be convenient to discuss new clause 9—National Television Archive—
“(1) The Communications Act 2003 is amended as follows.
(2) In Part 4A, after section 368R, insert—
‘368RA Contributions towards maintenance of national television archive
(1) OFCOM shall, for the financial year which includes the commencement of this section and each subsequent financial year, determine an amount which they consider it would be appropriate for a provider of on-demand programme services to contribute, in accordance with this section, towards the expenses incurred by a nominated body in connection with the maintenance by it of a national television archive.
(2) In this section “a nominated body” means such body as may for the time being be nominated by OFCOM for the purposes of this section, being a body which—
(a) appears to OFCOM to be in a position to maintain a national television archive, and
(b) is engaged in preserving the cultural and social heritage in one of more of—
(i) Scotland,
(ii) Wales,
(iii) Northern Ireland, or
(iv) England.
(3) A provider of on-demand programme shall pay to OFCOM, in respect of each of the financial years mentioned in subsection (1), such amount as they may notify to them for the purposes of this section, being such proportion of the aggregate amount determined for that year under that subsection as they consider appropriate (and different proportions may be determined in relation to different persons).
(4) Any amount received by OFCOM by virtue of subsection (3) shall be transmitted by them to a nominated body.’”
This new clause would extend the current provisions under the Broadcasting Act 1990 that pertain to Channel 3, Channel 4, and Channel 5 to on-demand programme providers, namely that they make a contribution towards the costs of a national television archive.
Kirsty Blackman
It is a pleasure to take part in this Committee again today. Amendment 38 and new clause 9 relate to the archiving of television content.
The television archives are pretty fabulous. A lot of stuff is available there, but there are also significant gaps, including some of the earliest broadcasts. Earlier this year, Aberdeen celebrated 100 years of radio broadcasting. Aberdeen has been a hub of Gaelic radio broadcasting for quite some time, which is slightly bizarre given the small number of Gaelic speakers in Aberdeen. Unfortunately, we do not have access to some of the earliest broadcasts, because they were not properly archived or saved. We have seen that issue through the years with a number of different things.
The amendment is meant to probe. It is a request for the Minister to have a look at the issue and highlight the disparities in relation to it. Amendment 38 asks the regulatory authority to
“draw up, and…review and revise, appropriate guidance relating to the duty of providers of on-demand programme services to ensure the archiving and retrieval of programming”
to ensure that our cultural heritage is preserved. I do not think that it is unreasonable for the Government to require that of agencies or on-demand programmers that are providing programmes that are part of our cultural heritage.
Stephanie Peacock
Preserving television and visual content is a way of preserving our history. There are already some amazing examples of how television is collected and archived. The British Film Institute, for example, looks after one of the largest and most important collections of film and television in the world, where teams of experts ensure that the collective programmes are accessible for generations to come. In particular, the BFI’s priceless television archive, which includes programming from the 1950s, can help us to tell with fascinating clarity the story of British television and Britain at large over the last 70 years. Since 2016, the BFI has automatically recorded various channels, all day, on an on-air and off-air basis, meaning that the recording is complete with adverts, trailers and announcements. That archive will only become more precious as the years pass.
The BFI archive is complemented by the BBC Archive, which contains over 1.5 million items recorded on everything from film to videotape to digital files. Despite the range of the BBC Archive, there are still programmes missing from that collection, particularly from earlier years of broadcasting. The BBC cites a few reasons for that, including limited means of recording, the expense of recording and tapes of which there was only one copy simply being lost. It also says that limited records were also the result of the fact that there was no requirement to build an archive. It was not until 1979 that the advisory committee on archives recommended that a requirement to keep archives be included in the charter, at which point programmes began more routinely to be kept for good.
It might be easy to assume that archiving in the digital age might be a given, given the capacity of the internet to host vast amounts of information that is then available at our request. However, even digital files and the cloud ultimately rely on physical infrastructure, and the nature of the internet means that there is more content than ever that requires such storage. I therefore support amendment 38, which seeks to set guidance on the archiving and retrieval of on-demand programming. That is not only because we cannot take it for granted that such programming will be properly archived, but because it matters how and where those archives are stored and whether something ends up being in the public interest.
I hope that, in the years to come, we can preserve broadcasting as an insight into our society and culture. To achieve that, we will need input from and collaboration between on-demand programming services and those institutions that can help with archiving, such as the national libraries and the BFI. I believe that amendment 38 recognises that and looks to set us up for a future that values the past.
On new clause 9, although I am interested to hear more about the idea of a nominated body being responsible for a centralised national archive, I am not sure about the detail of how it would work. I feel that I should ask, on behalf of the on-demand services implicated here, what the forecasted cost implications are and on what basis a contributory system has been identified as the most effective and efficient way for services to be part of the effort of archiving. I wonder whether, perhaps, the way forward should not be assumed, as it is in the clause, but rather should hinge on any guidance that is issued as a result of amendment 38, particularly with reference to using those archives and resources that are already working well.
I emphasise that I am keen to support the archiving of our television services, but I want to ensure that the way that is done is carefully considered and properly consulted on.
Hywel Williams
I rise briefly to support the amendment in the name of my hon. Friend the Member for Aberdeen North, as well as the new clause, and to reassure her and the Committee. In her amendment, she refers to Llyfrgell Genedlaethol Cymru: the National Library of Wales. It maintains the Archif Film Theledu Cymru—the Welsh Film and Television Archive—which is a highly successful development in Aberystwyth.
I also note that these archives have monetary value. In passing, ITV in Wales, for example, has a regular programme with clips from the ’60s, illustrating Welsh life. It fills half an hour—more than fills it. It is not just to fill space. It is very interesting, particularly to people who see culture in its broadest sense: not high culture, but the entire scope of human activity in Wales. It is available in the National Library of Wales, but is also available to broadcasters.
Sir John Whittingdale
I think that there is general agreement across the Committee about the importance of archiving television programmes that are of cultural significance. That is already the case, as we know, for the public service broadcasters. Indeed, I can recall the excitement when various episodes of, for instance, “Doctor Who” or “Only Fools and Horses” were rediscovered, having been lost before the requirement for archiving was in place. The hon. Member for Aberdeen North is absolutely right that there are now examples of programmes or series commissioned by on-demand services that are of similar value—she mentioned “Bridgerton”, for instance. I was fortunate enough to go and see the final episode of “The Crown”, which Netflix showed us a couple of night ago, in advance of its being made available, and that undoubtedly will be seen for a long time to come as a culturally important programme that needs to be preserved.
Where we differ slightly is that the Government’s view is that a non-legislative approach is best able to achieve the objective of archiving on-demand content. The BFI is extremely active in this area and works directly with mainstream services such as Netflix and Amazon. The BFI National Archive has already entered into initial partnerships with Netflix and Amazon to provide both financial contributions and a curated selection of their UK content. The BFI is also talking to other subscription video-on-demand platforms and will continue to do so as it moves ahead with its Screen Culture 2033 ambitions.
We are pleased that considerable progress is being made and we do not want to impose unnecessary additional requirements on organisations at this time. Therefore we do not see a necessity to legislate at the moment.
Kirsty Blackman
I appreciate that, and I appreciate the work that the BFI is doing on this. In the event that the BFI found it particularly difficult to get an agreement with an on-demand service, would the Government assist with some of the conversations in order to ensure that the cultural heritage is preserved, if they were asked to give some level of assistance or if the BFI were struggling with some level of intransigence?
Sir John Whittingdale
I recall discussing this matter with the BFI some years ago and I absolutely share its wish, and indeed the hon. Lady’s wish, that it should have access to any of the programming content that it felt was important to preserve. I hope that the circumstances that she describes will not happen, but should they do so, I or whoever is holding my position would, I hope, be keen to assist in those discussions with any video-on-demand provider.
Finally, I come to the amendment that the hon. Lady tabled. Amendment 38 includes Trinity College Dublin, which of course is not a UK institution, and we do not feel that it would be appropriate to instruct the deposit of important works with an overseas institution. For that reason, and for the reasons that I have described, we cannot accept the amendment.
Kirsty Blackman
I thank the Minister very much and genuinely appreciate the way in which he has approached this amendment. I am pleased that around the room we are happy and keen to see the archiving of lots of culturally important television footage and on-demand footage as well. I believe, from what the Minister has said, that he has a good handle on this, and I am glad to hear that he does feel that it is important enough for the possibility of intervention in the future should a significant gap be identified. Hopefully, as he says, we will not get to the point at which that happens. Given the Minister’s comments, I am happy to beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 28, in schedule 5, page 142, line 34, at end insert—
“(3A) In preparing or revising a code under section 368HF, OFCOM must take account of how principles will apply in a video-on-demand context where there is a library of content where users choose what programmes to watch and when.”
This amendment would place a requirement on Ofcom, when preparing the Video on Demand code, to consider how principles will apply in a VoD context where there is a library of content where users choose what programmes to watch and when.
Schedules 5 to 7.
Sir John Whittingdale
We now come to the core of this part of the Bill, which is the extension of regulation to the major video-on-demand services. Take-up has grown dramatically in recent years, and many of them make a significant contribution to the UK economy. Audiences now have access to thousands of hours of their favourite television programmes at the touch of a button, but providers are not regulated in the UK to the same extent as linear TV channels, and some mainstream international services are not regulated in the UK at all. That means that TV-like content in the UK is regulated differently depending on how audiences choose to watch it.
Stephanie Peacock
As I hopefully emphasised in an earlier discussion, I am on the whole supportive of clause 37 and schedule 5, which will bring video-on-demand services into Ofcom’s scope. It is absolutely right that on-demand services are regulated against a new standards code, given their popularity with the public. That will provide certainty for providers and viewers alike. Of course, it will be up to Ofcom to develop the detail of the new standards code, but I welcome the requirement to consult the services that are regulated by the new code and audience representatives before it is finalised.
The objectives that the code should meet are set in the Bill, as is some further detail on due impartiality. There is also a list of matters that Ofcom should have regard to in preparing the code. As such, the Bill sets out the framework within which the code will be drawn up.
However, there are aspects of the framework that have caused some concern among providers of video-on-demand services. I will address those concerns in relation to amendment 28—I appreciate the Minister’s comments about it—before I move on to the accessibility code and schedules 6 and 7. Providers’ most common concern is that it does not seem that the framework takes into consideration the differences between the broadcast and on-demand environments.
As Netflix pointed out to the Culture, Media and Sport Committee, regulation of linear television was driven by a concern that viewers may come across unsuitable content by accident. The risk is inherent and specific to linear TV, as a viewer cannot dictate what is shown to them on any one channel at any one time.
As such, the broadcast code ensures that broadcasters make choices on behalf of the viewer that protect them from being subject to unsuitable content. For example, as Disney+ points out, the 9 pm watershed helps to shield children from inappropriate language and themes for their age. In an on-demand setting, however, every decision to view a title is active and deliberate. Video on-demand catalogues can hold thousands of titles, of both new and catalogued content, with the audience in complete control of what they decide. In that context, platforms make fewer choices on behalf of the viewer and instead aim to provide the information and tools they need to make informed choices themselves. The Bill does not explicitly address the differences, but I am grateful for the Minister’s points and I welcome them.
I want to move on to discuss the accessibility code, which will apply alongside the broader standards code already discussed. I am pleased to welcome that second code, which will ensure that on-demand services adopt a minimum standard of accessibility on the content they make available for UK audiences, with target figures rising over time. For example, providers must ensure after two years that at least 40% of their total catalogue has subtitling, at least 5% has audio description and at least 2.5% has sign language, rising after four years to 80%, 10% and 5%, respectively.
That has been welcomed by Ofcom, which says the measures reflect its 2018 and 2021 recommendations to Government, which should bring tangible benefits to disabled people, including the 87,000 people with British Sign Language as their preferred language and the more than 2 million people living with sight loss. It has also been welcomed by the Royal National Institute for Deaf People and the Royal National Institute of Blind People, which have been campaigning together for on-demand services to deliver access services. They say that 80% of those with hearing loss or who are deaf stop watching a programme when subtitles are not available, showing just how important they are to people’s ability to enjoy video on-demand content.
I wonder whether the section could have been more ambitious. Disney+ said in its contribution to the CMS Committee that it is confident it already meets the obligations set in the Bill and Netflix also said it has English-language subtitles for 100% of its UK catalogue and audio description of all its English-language branded content in the UK. Though on-demand services should be commended for that great work, it shows that a target of 40% of content being subtitled could be stronger. I understand that the 5% target for signed content on large back catalogues is seen by some as slightly more burdensome, but BSL users deserve to watch on-demand services as much as anyone.
Where BSL interpretation is available, it is used, with the BBC reporting that 1.4 million people watched the signed coverage of the coronation. Does the Department, therefore, have any plans to increase the requirements in future? I would hope that the standards are seen as a minimum and just the beginning, rather than an aspirational goal or target for larger services. Indeed, should the code be applied beyond tier 1 services at any point, I would expect that smaller services might be exempt from some of the quotas where necessary.
The RNIB and RNID have further shared with me their concerns about the timescale for implementation. Powers were initially created in the Digital Economy Act 2017 to set minimum levels of access services for on-demand TV. The timeline just shows how rarely such legislative opportunities come about. Are there any mechanisms that could shorten the timescale if desired or needed?
It is also important that online and digital accessibility measures are not used as an excuse to axe services that are more convenient and inherently accessible to disabled people. When campaigning against the changes being made to BBC local radio services, I met the National Federation of the Blind multiple times. They taught me that radios with real, tactile buttons are often much easier for the visually impaired to operate compared with websites, even though websites claim to be more accessible. It is important, therefore, that an increase in accessible content through on-demand services is not used as a reason for saying that other options are no longer necessary.
I would like to touch on the issue of disabled representation in the media more broadly which was highlighted to me by Brooke Millhouse and Simon Sansome, who run podcasts on disabilities as part of their work. I met them briefly a few weeks ago alongside the shadow Minister for disabled people, my hon. Friend the Member for Lewisham, Deptford (Vicky Foxcroft). It is very important that on-demand services can be accessed by disabled people, but that can and should be matched with a conscious effort to better represent the lives of disabled people in that content. That means getting more disabled people into the creative industries, right the way through from writers to actors, in the hope of creating a more diverse array of disabled characters. In doing so, we might be able to finally put a stop to disabled people primarily being represented in the extremes.
Kirsty Blackman
The hon. Lady is making a powerful and important point. All of us feel better when we can see lives like ours reflected on the television screen. She is absolutely right that we currently see extremes for disabled people; we do not see them on television programmes living their lives as they do. It is all about, “That person is disabled, and that is why they are on this programme,” rather than, “That person is on this programme; they are living their life and they happen to be disabled,” which is much more reflective of life in general.
Stephanie Peacock
I completely agree. That is the point I am attempting to convey to the Committee: that we want to see everyday life reflected on television, and that obviously includes disabled people. What work is the Minister’s Department doing to open up opportunities for disabled people in the creative industries and to encourage better representation in the media?
As I have said before, if we to implement a new regime whose effects we really believe in, but that regime relies on Ofcom being a strong regulatory presence, Ofcom must be empowered to act with strength where that is needed; otherwise, the desired impact will not be realised. As such, I am happy with the powers set out in schedule 6, but what recent conversations has the Minister had with Ofcom about its capacity to carry out all the new duties bestowed upon it by the Bill? It is important to the integrity of the new regime for on-demand services, and to the Bill more widely, that there is confidence on all sides in Ofcom’s ability to enforce the new regulation.
Schedule 7 amends references to tier 1 services in the Representation of the People Act 1983, the Communications Act 2003, the Wireless Telegraphy Act 2006 and the Online Safety Act 2023. I will speak specifically about the amendments to the Broadcasting Act 1996, as those changes will have a more tangible impact. The changes in this schedule require Ofcom to create a tier 1 fairness and privacy code and to bring tier 1 services in line with Ofcom’s enforcement powers on breaches of the fairness and privacy code. Hopefully, that will protect members of the public from unwarranted infringements of privacy resulting from the activities of video-on-demand services, but some on-demand and streaming services, particularly Netflix, have raised concerns about the impact on their content and on Ofcom’s resources. They warn that, since the fairness and privacy code will enable complaints to be made from outside the UK, Ofcom could become something of a global policeman, and will have use its resources dealing with complaints from people who do not live in the UK but have failed to seek redress elsewhere.
That practice—complaint tourism—is of particular concern to Netflix in relation to its catalogue. It says it is aware of international complainants previously trying to use the UK regulator to get material removed. It appears from the pre-legislative scrutiny process that Ofcom does not share those concerns. Its approach seems to be that if harm is happening, or there is a risk of harm to UK audiences, it wants to know, regardless of whether a complaint is being raised by someone outside the UK. However, it would be reassuring if the Government and Ofcom worked together to monitor the extent to which the code requires Ofcom to manage a high volume of complaints from abroad, to ensure that genuine complaints can be handled appropriately and that complaints with malicious intent are not encouraged.
Overall, I hope it is clear that I am pleased that the on-demand services will finally be regulated. I look forward to hearing more from the Minister in response to my questions about the details.
Sir John Whittingdale
As I said in my earlier remarks, we feel that the hon. Lady’s amendment in particular is unnecessary. Regarding the phrase “matters to be taken into account” by Ofcom in drawing up the list, those matters that are specified in the Bill are not exclusive; there is an ability to take other matters into account. The purpose of this measure is to set out the general regard for the principles that Ofcom is required to consider, so I do not think that this amendment would add anything to the existing position. For that reason, we do not support it.
I agree with the hon. Lady very much about the importance of accessibility. As she rightly said, that is something that the organisations representing disabled people have been campaigning on for a long time. Regarding the targets in the Bill, it is the hope and expectation that broadcasters will exceed the minimum targets wherever possible, but it is possible for the Secretary of State to increase the minimum targets at some future date.
Interestingly, the hon. Lady said that she does not want to add to the burden on smaller services. To some extent, that is exactly why the tier 1 provisions were put in place: so that the requirements are different for much smaller services, which would otherwise find them quite burdensome. As for her comments about Ofcom’s resource, it is certainly not the intention that Ofcom should become a sort of global policeman acting on behalf of anybody around the world who wants to make a complaint, particularly about content that is designed for global audiences. Some of the big streaming platforms commission programmes that are intended to be viewed right around the world, but Ofcom’s role is to protect UK consumers, and obviously it will need to take that into account in how it administers the code.
I am grateful to the hon. Lady for her support for the overall intention behind these measures. I am sorry that I cannot accept her amendment, but I think the Bill will deliver what she wants to see.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Schedules 5 to 7 agreed to.
Clause 38
Audience protection reviews
Stephanie Peacock
I beg to move amendment 30, in clause 38, page 78, line 25, at end insert—
“(e) information about where viewers can seek help if they have been affected by content.”
This amendment would add “signposting” measures to the audience protection measures which OFCOM must review under new section 368OB of the Communications Act 2003.
The Chair
With this, it will be convenient to discuss the following:
Amendment 34, in clause 38, page 78, line 25, at end insert—
“(4A) When considering the adequacy of age ratings, OFCOM must assess whether any age ratings used by providers are—
(a) widely recognised by the UK public;
(b) underpinned by a transparent set of standards;
(c) informed by regular consultation with the UK public.”
Clause stand part.
Stephanie Peacock
I have already spoken in detail about the rise of on-demand services and the need to bring them into the scope of Ofcom regulation. At the heart of these calls is a desire to ensure high standards of protection for audiences, so I welcome clause 38, which requires Ofcom to carry out a review of the protection measures in place on on-demand services. I understand that this review will then be considered against the duty to protect audiences from harm, as set out in the Communications Act 2003, to ensure that standards of protection are high across the board.
It is important, as Ofcom pointed out in its contribution to the CMS Committee inquiry, that such a review considers the unique differences seen in an on-demand environment. For example, rather than catching a programme halfway through, users are likely to start at the beginning of an episode or movie, meaning that there is an opportunity to warn audiences about the nature of the content they are about to see. With that in mind, I am happy for the most part with the clause, as the examples of matters to be considered include parental controls, content warnings, age assurance measures and age ratings. I will speak about them in more detail in a moment, but first I will pick up on a point made by the Antisemitism Policy Trust. In its submission to the CMS Committee, the trust identified something that had perhaps been left out of the list of measures that are to be reviewed, in particular the value of signposting and educational resources when viewers might be impacted by a programme.
Content warnings and age ratings can give a viewer an idea of what a piece of content might contain before they watch it. Although there is always a chance that a viewer will be affected by a programme or film in an unanticipated ways, some viewers may go ahead and watch a programme knowing that it may affect them, in an attempt to find solidarity about something that they have gone through. In such cases, information on where to seek further help can be extremely useful, not only for the individual who will be able to access support and resources, but for society as a whole when programmes address potentially harmful topics such as racism, extremism or self-harm. In those cases, further resources can help to counter any damaging narratives.
This sort of education and signposting is not a new concept. Indeed, on linear television, we often see a message pop up at the end of a show to guide us towards a particular charity or organisation if we have been affected by the content. On-demand services have also adopted that approach in some areas. For example, the Antisemitism Policy Trust says it has engaged in discussion with Channel 4 about its support offers following a documentary the channel hosted on antisemitism. However, there does not seem to be a co-ordinated approach to that sort of feature, and I fear that could continue if the measures are not included in the clause.
The Ofcom review should cover signposting and educational resources as an important component of audience protection, alongside those measures already listed. Such measures can and should play an important part in complementing warnings and ratings, which cannot do much to help once a piece of content has already been watched. Amendment 30 does not prescribe that education and signposting will always be necessary or even needed in just some circumstances; it simply suggests that the way in which they are used should be reviewed alongside other audience protection measures. I hope that the Minister and colleagues will support the amendment, with a view to putting the best interests of viewers first.
There has also been a lot of discussion about whether it would be appropriate to identify a single system of age ratings across on-demand services. As has been the case throughout much of the Bill, the clause is not over-prescriptive about how age ratings and protections for under-18s should be presented in the new audience protection code for on-demand services. It simply confirms that such ratings should be reviewed as part of the process. Of course, such protections are extremely important. On linear television, the watershed has long provided a distinct barrier to ensure that content is age appropriate to the time it is being shown. Further, there is a high standard of protection in place on the content that public service broadcasters create in general, due to a combination of regulations, which has been crucial in ensuring that children are not exposed to material that could be damaging to them and their development. How we mirror those protections for online content must therefore be explored in depth, both by us in Parliament and Ofcom in its review.
Despite the need to keep legislation flexible, I believe that some criteria for age ratings should be recognised legally, but they have not yet been. There are already some strong examples of good practice in the area of age classification. In particular, I will highlight the work being carried out by the British Board of Film Classification. Long before there was a possibility of consuming thousands of films on our phones, BBFC was providing trusted age classification services for cinemas and packaged media. Its ratings are almost universally recognised across the UK; the general public have a strong understanding of the categories, which run from U to 18. Trust in BBFC ratings comes not only from their being widely recognised, but from their being underpinned by a transparent set of standards and informed by regular consultation with the UK public, so that changing attitudes on relevant topics such as violence and swearing can be taken into account. That consistency, transparency and track record over time means that where BBFC ratings are used, families can be sure that the content is appropriate for the stated age group.
To keep providing its service in the modern media landscape, BBFC has been working hard to adapt its best-practice age-labelling system to be used in video-on-demand settings. That is exemplified by its hugely successful partnership with Netflix, where 100% of content now carries BBFC ratings on a voluntary basis. Netflix uses the BBFC criteria to police its own content, which is then periodically cross-checked by the BBFC for accuracy. That model seems to have great potential to be rolled out further to provide universally understood and trusted ratings for children and adults alike, but some providers use alternative methods of providing age ratings and protections.
Sir John Whittingdale
I absolutely share the desire of the hon. Member for Barnsley East, and I suspect all members of the Committee, to protect children and vulnerable audiences from harmful and inappropriate video-on-demand content. As we discussed earlier, the principle underlying this part of the Bill is to bring mainstream TV-like on-demand services in scope of the new code to be drafted and enforced by Ofcom.
Ofcom already has considerable experience in the regulation of broadcast TV to ensure that it is age-appropriate, and those those who may be deeply affected by what they see or hear are protected. Clause 38 inserts new section 368OB into the Communications Act 2003, giving Ofcom a new ongoing duty to review audience protection measures on all UK-based video-on-demand services and on any non-UK services that are brought under Ofcom regulation for the first time as a result of being designated as tier 1.
As we previously discussed, while linear television has a watershed that means unsuitable material should not be shown before 9pm, it is not possible to have a similar arrangement for on-demand content, so alternative protection measures are needed. Age-ratings, content warnings and parental controls in particular are necessary tools for parents and guardians; they give information to all audiences on what they are about to see. We do not want to restrict Ofcom on what it considers to be protection measures. It needs to be able to take account of the impact of systems that evolve in the future through new technology and audience trends. The Bill gives Ofcom powers to request information from providers, to provide guidance, to report, and to use existing sanctioning powers to deal with any providers that they consider are not providing appropriate audience protections.
Andy Carter
I accept what the Minister is saying about the role of Ofcom. May I take him back to his earlier point about the 9 o’clock watershed? That was the time when children went to bed so that they did not see things. It was a protection mechanism. One thing that we have seen with the development of technology is the introduction of a children’s profile so that we can exclude children from content on demand.
What concerns me is that all the individual VOD companies rate their own content, and different companies and providers to have a very different view of what they believe is suitable for children. The shadow Minister made a particular point about Disney+. Because my son is taking GCSE English, I watched “A Christmas Carol” the other day; there is a Disney version that was on at 9 pm. I would not have wanted a 16-year-old to watch that. It contained graphic nudity and foul language, and I was very concerned that if I had set the rating at a particular level for a child to watch, they would have been exposed to something that I and most parents would be uncomfortable with them seeing. Can the Minister assure me that the framework that Ofcom puts in place will deliver a comparable and consistent level of protection for children so that families and parents can be assured that the age rating system and the children’s profile will give that layer of protection?
Sir John Whittingdale
I am interested to hear that example. There will always be disagreement about what is suitable for children and what is not. Some parents will take a much stronger view on what is appropriate than others, who will think it part of the education. Ofcom has a lot of experience in this. I am not sure whether it was “A Christmas Carol”. I remember a good version that contained some quite graphic material, which perhaps was not in the original by Dickens. I think that was on the BBC, so it would have already been subject to Ofcom’s scrutiny.
Part of Ofcom’s overall objective, in determining whether a system of age rating is appropriate or viable, will be to make sure that it is in line with other systems, so that parents have a basic level of assurance, whatever they are watching and whatever system for determining age ratings is chosen by that provider.
Amendment 30, tabled by the hon. Member for Barnsley East, seeks to add information about where viewers can seek help, if they have been affected by content, to the list in new section 3680B of examples of audience protection measures. I completely agree that it is sometimes absolutely right that audiences be given a warning if they might suddenly encounter content that they were not expecting and which could be distressing. That already takes place across the broadcasting sector, and it is appropriate. However, the Bill already fully enables Ofcom to review or provide guidance on any such measures. The Bill purposely does not give an exhaustive list of measures that Ofcom can consider. As a result, it will enable Ofcom to take into account anything it considers to be appropriate. That can certainly include signposting.
The hon. Lady’s amendment 34 would impose requirements on Ofcom when it is assessing age ratings on VOD services. However, we feel that there is a danger that that might restrict innovation and impose extra requirements and costs on VOD providers that will not necessarily equate to increased protection. As I think I said on Second Reading, I am a great admirer of the work of the BBFC, with which I have worked for at least 30 years. Generally, it reaches very sensible decisions on what is deemed appropriate. It goes to great lengths to ensure that its ratings reflect the current standards of what the public views as appropriate for particular age ratings. My reluctance to support the hon. Lady’s amendment in this area is not in any way a reflection on or a criticism of the BBFC. The Government take the view that we do not think it appropriate to mandate the use of BBFC ratings at this time.
The important thing is that each channel should have a system of age ratings that delivers effective protection for young people. It is for Ofcom to assess whatever audience protection measures are put in place by that channel to ensure that they are effective and fit for purpose. We think that that is more effective than specifying any individual system. Ofcom will have the power it needs to provide guidance and to report and deal with any providers that it considers are not providing appropriate audience protections. For that reason, we feel that amendment 34 would put unnecessary restrictions on Ofcom and could preclude any new form of age ratings from entering the market. I am afraid that I am therefore unable to accept the hon. Lady’s amendments.
Stephanie Peacock
I appreciate the Minister’s comments. Although I do not fully agree with his explanation, I am quite happy to withdraw amendment 30.
I will not press amendment 34, but I will just clarify that although I think there is agreement across the Committee that we support and praise the work of the BBFC, my amendment was not specifically mandating BBFC ratings or the use of the BBFC, however well it does. My amendment set out three best practice criteria: recognition, transparency and consultation. It proposed that those three things be taken into account by Ofcom. Obviously the BBFC does that very well, and others might too. The distinction that we are making is that where those are not taken into account and the public cannot necessarily trust age verification ratings, where problems emerge. However, I have put my points on the record and I am happy not to press amendment 34.
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 38 ordered to stand part of the Bill.
Clause 39
S4C: on-demand programme services
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
This is a very brief return to S4C, which we debated before our lunchtime break. All clause 39 will do is amend the Communications Act to update the regulation of S4C’s video-on-demand services to bring them into line with other UK on-demand services. It removes the red tape that currently means that Clic, the S4C on-demand service, is regulated not by Ofcom directly, but by S4C’s board, which could be fined by Ofcom if it contravened the basic requirements that other VOD services have to follow. The change will also mean that Clic will, in due course, be rightly regulated under Ofcom’s new VOD code. It will also have the accessibility requirements for subtitles, audio description and signing to support those with sight and hearing loss. I should add that the clause is also fully supported by S4C.
Stephanie Peacock
Clause 39 will make amendments to the Communications Act to update the regulation of S4C’s video-on-demand services, as the Minister has just outlined. I believe these to be largely technical changes to create consistency, and I therefore have no further comments.
Question put and agreed to.
Clause 39 accordingly ordered to stand part of the Bill.
Clause 40
Other amendments of Part 4A of the 2003 Act
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
Clause 40 introduces schedule 8, which contains minor amendments to part 4A of the Communications Act 2003, covering existing legislation for video-on-demand services. The changes will ensure that existing legislation will be updated where necessary to take into account the new regulatory regime for tier 1 services. These are simple, minor and technical amendments, which include updates to existing enforcement definitions to include the newly defined tier 1 non-UK services. Schedule 8 will also remove or amend old target-setting provisions on accessibility that are not needed after the addition of new, more robust accessibility requirements contained in schedule 5. I commend clause 40 and schedule 8 to the Committee.
Stephanie Peacock
I have no particular concerns to raise about the content of the changes. As the Minister said, they make minor amendments to part 4A of the Communications Act, and update requirements and definitions to reflect the changes made in this part, and in the media landscape more generally.
Question put and agreed to.
Clause 40 accordingly ordered to stand part of the Bill.
Schedule 8 agreed to.
Clause 41
Licensing of analogue radio services
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
We now turn to part 5 and the provisions affecting radio. Clause 41 is the first of seven clauses through which the Government are updating the legislative framework for the licensing and regulation of commercial radio. The intention behind the changes is to ensure that the regulatory structure continues to support investment by broadcasters in content and the long-term sustainability of the sector. They will also strengthen the protections for local news and information which are a fundamental part of radio’s public value.
To that end, clause 41 will make a number of changes to the Broadcasting Act 1990 to allow Ofcom greater flexibility when exercising its powers in relation to analogue radio licensing. Subsection (2) removes the current statutory requirement for Ofcom to provide for a diversity of analogue services. The requirement is no longer necessary, given the wide range of stations now available over digital. Subsection (3) gives Ofcom a new power to extend analogue licences in the event that a date is set for a digital switchover which postdates the expiry of any remaining licences. I commend the clause to the Committee.
Stephanie Peacock
I am pleased we have reached the stage of the Bill when we can discuss the importance of our radio services. There will be further opportunities to talk about protecting radio services in the digital age in part 6, but I would like to begin by acknowledging my support for radio. Indeed, as the digital radio and audio review recognised back in 2021, radio is a great British success story. Almost 90% of the population tune in to the radio each week, where they find trusted news, entertainment, music and cultural programming. It is important that these clauses look to protect the future of those services, from commercial to BBC to community radio, and ensure that people are able to enjoy them for years to come.
Despite the continued popularity of radio, however, the provision of services and listening habits have both changed significantly over the past few decades, particularly with regard to the decline of analogue radio. Since the launch of DAB, its popularity has grown and grown, resulting in 76% of listening to commercial radio now being on digital platforms. That trend has led to an estimate that analogue radio listening will account for just 12% to 14% of all radio listening by 2030. As a result, we must ensure no one who listens to analogue radio is prematurely excluded from accessing those services. As is the case with those who watch broadcast television, it is vital that we update our legislation to reflect the new realities in the sector.
The clause seeks to do just that by removing Ofcom’s duty to provide a range and diversity of national and local analogue radio services. Of course, is still important that a range and diversity of radio services are available. However, the rules applying specifically to analogue services were conceived when there was an inherently limited number of stations. Ensuring diversity within this small range of services was therefore sensible in order to cater for as many people’s needs as possible. Now that we are no longer limited to a small choice of analogue stations, there is an unprecedented range of radio services available. These truly do cater for everyone, covering genres from country to dance, and eras from the ’60s right through to the present day. Radiocentre confirms that these digital services will be unaffected by the changes in regulation, so this immense choice will remain available despite the changes in this Bill.
In that context, it seems appropriate to remove legal requirements on creating diversity in analogue services specifically. That is not to say that analogue services do not remain important; indeed, FM coverage is greater than DAB coverage, so it is vital to rural areas, particularly in Scotland. However, with the new and heavy regulatory responsibilities that Ofcom is taking on as a result of the Online Safety Act and this Bill, it is sensible that we alleviate outdated duties by recognising the bigger picture.
The clause will also make one other major change, following the commercial radio deregulation consultation in 2017. In the event of a digital switchover date being issued for radio, the clause allows Ofcom to extend for a short period any licences that are due to run out before that date, so that they can continue operating until the switchover date. It is my understanding that there is currently no nominated date for switchover. The digital radio and audio review has confirmed that FM spectrum will be needed for BBC, commercial and community analogue radio until at least 2030.
Should a date be announced in future, it makes sense that there be flexibility in licence arrangements to ensure that they can continue until any end date. Placing that flexibility in the Bill will hopefully save parliamentary time in the long run. The very fact that it was 2017 when the Government decided that that change would be made shows how rarely the opportunities come about to make legislative changes. However, although this measure will be sensible if the time comes, it is still very important for the timing to be right. It would therefore be good if the Minister outlined today the Department’s current thinking on the future of analogue radio beyond 2030. As has been mentioned, although we must take into account the dominance and range of DAB services provided, DAB is not available as widely as FM. The future of FM is still vital to people, particularly in rural areas.
As I did in speaking about broadcast television, I point to the Broadcast 2040+ campaign and its work to highlight the importance of preserving broadcast services despite the rise of online services; I was pleased to attend its event in Parliament. It is with that question on analogue radio’s future in mind, and with full support for the future of a diverse programme of radio services, that I would like to conclude.
Sir John Whittingdale
I welcome the hon. Lady’s invitation to speak a little more broadly on radio in general. About 20 years ago, lots of people were saying that radio was in permanent decline. It was thought that the advent of things like podcasts and streaming services such as Spotify would mean that people slowly gave up listening to radio.
I am delighted that that has proved to be completely wrong. Actually, radio is going from strength to strength, particularly in the commercial radio sector, at which these clauses of the Bill are primarily aimed. It is doing very well, which is extremely welcome.
Similarly, about 20 years ago there was a great debate about when we should switch off analogue transmission as people moved to digital. The hon. Lady is right to say that the take-up of digital broadcasting has been considerable and continues to grow. We now have additional means of radio reception, such as via smart speakers or online, which we will debate when we consider later clauses of the Bill. There is a wealth of ways in which listeners can access radio, but I think analogue, rather like digital terrestrial television, will be around for some considerable time. I am afraid that I cannot give the hon. Lady a date by which we think we might switch off analogue, but it is not under consideration at the moment. Actually, I do not think that radio is particularly pressing for it in the way it was some time ago, for cost reasons.
Sir John Whittingdale
I give way to my hon. Friend, who is a considerable expert in the matter.
Andy Carter
I will limit my comments on the clause to analogue radio. I am aware that there are community radio operators that would very much like to go on to the analogue spectrum, particularly in rural areas. Rutland and Stamford Sound has been providing a community service that would simply not work on DAB. I set up the first commercial radio station in Rutland. I know the territory incredibly well, and it does not work to run a small-scale service on DAB. So many transmitters would be needed that it just simply would not be viable. There is an operator there that wants to run an FM service. Will the Minister speak to Ofcom to look at offering more licences in rural areas where there is demand?
The second point I would like to raise with the Minister is also an issue for Ofcom. Where there has been small-scale DAB roll-out, we have many more excellent local services as a result, and I am supportive of it. However, the fact that the signal and reception of small-scale DAB are measured from a height of 10 foot, which is equivalent to the eaves of a house, has given rise to disappointment in communities. Not many radio receivers have aerials that high, so although it says on a graph that someone can hear it in a car down on the ground, the reality is that they cannot. Ofcom could look at that to improve small-scale DAB radio coverage at a local level.
Sir John Whittingdale
My hon. Friend is correct that attention has mainly been focused on small-scale DAB roll-out, which provides options for communities to access more locally based stations. My view has always been that we should let a thousand flowers bloom. Therefore, in whatever format, I would be keen to encourage the licensing and starting up of new stations, if possible. I am a great supporter of community radio as well.
I note that our hon. Friend the Member for Rutland and Melton (Alicia Kearns) has been active in pressing the case for a station in her constituency. She is always active on behalf of her constituents and she has been outspoken in this policy area, having already been to see me about it once. I will draw Ofcom’s attention to the remarks of my hon. Friends the Members for Warrington South and for Rutland and Melton, because I share the wish to see that take place, if possible.
The means by which they choose to transmit is up to stations. However, there is currently a requirement under their licence for national commercial stations to continue to maintain an analogue service. A point may come when there is no longer any particular benefit in doing so. That will not be covered by the Bill, but I would like to put on the record that I am personally quite sympathetic to the idea that, although analogue is appropriate in many cases, we should not necessarily force it where it is no longer appropriate.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Clause 42
Licensing and local services
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
Clause 42 makes a number of changes to the Ofcom process for advertising local and restricted service licences and for renewing local licences. The provisions will give Ofcom a greater degree of flexibility in relation to the process for the licensing of local analogue commercial radio stations, given that the licences for nearly all such services will be eligible for renewal over the coming years. There should therefore be very few occasions when a licence needs to be advertised.
Subsection (3) will allow a licence holder to renew its licence in circumstances where the station intends to broadcast on digital but is not in a position to do so because a suitable digital multiplex service is not available in its broadcast area. In these circumstances, the station would have to nominate a suitable, either local or small scale, multiplex service as soon as it is reasonably possible to do so and commit to taking carriage when that service launches. That will ensure that smaller stations that have been unable to take advantage of renewals will be in the same position as larger stations.
Clause 43 makes a number of changes to the Broadcasting Act 1990 and the Communications Act 2003. It provides stations with increased flexibility to respond to changing listener preferences by removing the requirement for them to commit and adhere to conditions in their licences requiring them to, for instance, broadcast specific genres of content or target a particular age group. These requirements made sense in 1990, when they helped the Radio Authority to manage the development of local FM services on limited spectrum and to seek to maximise the public value of the spectrum, but they have become obsolete given the range of stations available across the UK on digital. However, Ofcom will still be required to ensure that there is local news and information on local radio, as set out in clause 44, which I look forward to debating very shortly. In the meantime, I commend the clauses to the Committee.
Stephanie Peacock
Clause 42 amends rules around local radio licences, as the Minister has outlined.
The Broadcasting Act 1990 sets out that Ofcom must publish a notice stating that it proposes to grant a licence to a local service before granting such a licence. The notice must specify the area in which the service will be provided, invite applications for the licence, specify a close date and state the fee for applications. This sort of competition is becoming less and less necessary, particularly as most licences are eligible for renewal under additional rules in the Broadcasting Act that allow for renewal when Ofcom is satisfied the licence holder is also providing a local digital radio service. As such, it makes sense to give Ofcom the discretion to decide how applications will be made in future, removing the prescriptive notice and competition requirements. This will allow for flexibility going forward, allowing Ofcom to exercise its own judgment on applications in a changing landscape while also maintaining its ability to require fees if necessary.
The clause also allows for parity on the ability to renew a licence where it is not possible to broadcast a digital service. It seems fair to ensure radio services that intend to broadcast on digital but physically cannot do so are not excluded from being able to renew their licence in the same way as those with a digital service. The technical changes being made in this part have been long awaited, and I hope it will benefit both Ofcom and radio services to finally have flexibility where it is needed.
Similarly to clause 41, clause 43 accounts for the fact that things have changed quite dramatically from the times where a strict, finite number of radio licences were available. In a situation where there were limited services, it made sense that licences for providing such services would include precise conditions on character to ensure that each station provided content to a high standard. Indeed, the current requirements on character are prescriptive, and can be deviated from only if Ofcom is satisfied the departure will not narrow the range of radio programmes available to people living in the area where the licence was provided. However, given the unprecedented choice and diversity of content now available across commercial radio, to have such strict conditions on character seems much less necessary. It makes sense, therefore, to review which aspects of the conditions on character should be kept, and which are outdated.
I will speak more on the requirements that must be maintained when discussing clause 44, but overall it seems sensible to provide more flexibility on character conditions given the range of services now available, which this clause allows for.
Question put and agreed to.
Clause 42 accordingly ordered to stand part of the Bill.
Clause 43 ordered to stand part of the Bill.
Clause 44
Local news and information
Stephanie Peacock
I beg to move amendment 31, in clause 44, page 83, line 12, at end insert—
“(5A) After subsection (1A) insert—
‘(1B) The Secretary of State must publish guidance as soon as practicable after the commencement of this section on the guidance which OFCOM is required to draw up under subsection (2), including the meaning of “local news” for the purposes of subsection (1).’”
This amendment would require the Government to publish guidance regarding OFCOM’s responsibility to ensure that broadcasting licences contain conditions requiring the broadcast of local news and information, including clarity on what ‘local news’ means in this context.
Stephanie Peacock
Following on from the removal of prescriptive licence requirements in clause 43, clause 44 makes further amendments to the requirements on the character of local radio services. In short, it strengthens the need to provide local news on analogue services, while repealing requirements to provide other local material, increases flexibility on where local radio content is produced, and allows for future regulations to require news on digital local radio services.
I will speak to these changes in turn, starting with the newly strengthened requirements on local news on analogue services. The 2017 commercial radio deregulation consultation found that there was strong support across the board for provisions protecting local news. In fact, many respondents said that local and national news are often the prime reason that people choose to listen to a particular radio station. On the other hand, there are poor financial incentives for stations to provide news, which can be expensive to produce. I agree with that and, as I said many times during the debates on BBC local radio services, local news has proved its importance time and again in recent years—whether by providing school closure updates in extreme weather events or keeping people updated during the pandemic.
Localised radio updates are even more important for people who cannot access news in other ways—for example, those with visual impairments or those without an internet connection due to cost or location. As a result, it is pleasing to see that there will still be clear requirements on the provision of local news on analogue stations, particularly given the crossover between those who are unable to access a stable internet connection and those living in places without access to digital radio signals. It is also pleasing to see that local news must include locally gathered news, encouraging positive relationships with local papers, journalists and agencies working directly in communities.
Rob Butler (Aylesbury) (Con)
I find myself in fervent agreement with the hon. Lady on local news, and I wonder how she would define it. I have been concerned in my area of Buckinghamshire, because when Mix 96 ceased to exist when it was taken over by Bauer and made into Greatest Hits Radio Bucks, Beds and Herts, the amount of Buckinghamshire news coverage drastically reduced. Often, we have found that journalists do not live in the area, and we could have a news bulletin with no Buckinghamshire news in it at all, yet it is still officially compliant with the requirement for local news. What is her view of what local should mean in practice?
Stephanie Peacock
The hon. Member makes an incredibly good point and I welcome his support. Indeed, I will go on to speak about my amendment, which talks about what local is, and I would be delighted if he would like to support it.
Stephanie Peacock
If the hon. Member bears with me, I will give him the answer and the opportunity to perhaps vote for the amendment, too.
I want to raise the importance of local programming that is not also local news. Although I understand that there is a range of DAB services offering a whole host of programmes, it is a shame that there has not been some recognition of the value of non-news-related local programming among the changes, which dropped requirements on local spoken material and music. Again, as I spoke to in the debates on BBC local radio services, I hope that a range of the content continues to be delivered on local analogue services, as well as digital ones.
On the newly relaxed requirements on production, which mean that stations can provide local programming from studios outside the coverage of their area, I note that concerns were raised during the consultation process about the impact of that on local opportunities and routes in the industry, with production becoming concentrated in larger cities. Respondents said that a local presence can be important for listeners who want to feel connected to the content the station produces, so they might be less likely to engage with call-ins and competitions if they feel presenters and production are not based where they are.
I understand the need to carefully balance requirements on analogue services and to release undue burdens where possible, particularly given the changing landscape of listenership and the fact that there are no such localness requirements on DAB commercial services. However, I would still like to ask the Minister whether the Government have assessed the impact the requirement relaxations will have on listeners and local people, rather than just on the services themselves. It is important that communities and those who actually benefit from local radio services are taken into account.
Separate to the requirements on analogue services, the clause also provides the Government with the ability to introduce local news obligations on DAB radio services in the event that analogue services cease at some point in the future. It is my understanding that multiplex owners will be responsible for requiring that there is at least one digital local radio service that carries local news, rather than that being a direct obligation on the radio services themselves. Radiocentre, which represents the commercial radio sector, has said that it is sensible to introduce the powers to guarantee the provision of local news in the future. Indeed, I have already discussed how important local news is to local people.
Radiocentre has also shared that it is not entirely clear how that will work in practice. I would therefore be grateful if the Minister could explain, in the event of the power, how multiplexes would decide which service must carry local news. Furthermore, in the event that the chosen service stops doing so, or goes out of business, how would the obligation be transferred to another service? Lastly, how would all that be enforced between Ofcom and the multiplex owners? What conversations has the Minister had with both Ofcom and the multiplex owners, including Arqiva, to ensure readiness when the time comes? The preservation of local news is very important, and I look forward to hearing some clarity on how the new system could work.
Finally, I tabled amendment 31 on what counts as local news, which was raised by the Department for Culture, Media and Sport during the pre-legislative scrutiny process. Indeed, the Committee noted that in 2017 the Government promised to provide greater legislative clarity on what local news actually meant, and stated that it would enable Ofcom to produce guidance in the policy area. However, the issue was never fully resolved, leading to Ofcom calling for clearer guidance regarding its responsibility to enforce the provision of locally gathered news.
In its submission to the Committee, Ofcom said:
“We think it is important the Bill is clear what is intended by this new requirement.”
In response, although the Government said that they accepted
“the principle that the definition and enforcement of the obligations on local radio to provide locally-gathered news could be clearer”,
there was a lack of detail on how they would put this principle into practice, other than references to some technical changes on the face of the Bill. I would therefore be grateful if the Minister could talk us through the technical changes and how, or whether, they might be able to act as a replacement for full guidance on this issue. In the absence of such confirmation or detail in the Government’s response to the Select Committee report, I felt it important to raise the issue again. It seems like people from all parties in the House and, indeed, radio services and viewers alike can agree on the importance of local news and information, but if the new requirements on local news are not enforced properly, such unanimous agreement is futile. I look forward to hearing the Minister’s response.
Sir John Whittingdale
Perhaps I should start by outlining the purpose of clause 44, which makes changes to section 314 of the Communications Act to reflect the evolution of the market and the findings of the Government’s 2017 consultation on commercial radio deregulation.
In particular, it is clear from that consultation, and the steps taken since by Ofcom to relax its definition of locally made programming, that the requirements in this area are too onerous and are constraining the industry from rationalising its production base. This is making it harder for stations to compete effectively against new online services, so the clause removes the requirement for Ofcom to secure that stations provide a certain amount of programming from a studio within their coverage area. However, it is the case that local news and information remain of great importance to listeners, and their provision remains central to radio’s public value. Commercial radio’s local news provision plays an important role in ensuring plurality in the sector. Stations will, then, be specifically required to provide news that has been gathered within the area to which they broadcast.
The provisions do not require stations to directly employ journalists to gather local news. A station could, for example, enter into a partnership with a newspaper agency or a freelance journalist who gathers news in the local area. We also taking powers to apply the requirements to DAB services if there is a future shortage of available local news. This could take a variety of forms—for example, Ofcom could be required to impose conditions in local radio multiplex licences that require the multiplex operator to carry at least one digital radio station that carries local news and information. Alternatively, the multiplex operator could be required to reserve capacity on the multiplex for a radio service that carries local news and information. At the moment, many existing digital radio services are simulcast versions of analogue stations that carry local news and information, so we do not consider that there is currently a need to consider in detail how the powers would be exercised.
Amendment 31 seeks to add a requirement for the Government to publish statutory guidance on the interpretation of the clause, including on the meaning of “local news”. Ofcom would then need to have regard to that guidance in developing its own guidance for holders of local sound broadcast licences on how they are able to meet the new local news and information requirements as set out in the Bill.
Andy Carter
I want to press the Minister a little more on the requirement on the multiplex operator to deliver news services. If, for example, a multiplex is full, and contracted legal licences to deliver product for 10 years are already in place, but the operator now has a requirement to deliver news, how can they do that? They are not providing the service; they are contracting space to other radio operators. I am interested in the practical application of the Bill where a multiplex provider is required to ensure local news provision.
Sir John Whittingdale
That is a matter for Ofcom to determine. As I said, Ofcom will be able to ensure that a local radio multiplex, through its licence, can provide space for a local news service. For the moment, that might well be provided by the existing analogue service, but if we reached a point where none of the services wishing to go on to the multiplex provided a local news service, the operator could restrict remaining space on the multiplex, so that it is available if someone comes forward.
Andy Carter
In effect, Ofcom needs to change the licences of existing multiplex operators, because in the licences issued, I do not see a clause to say that they have to deliver news if that is not provided locally on an analogue service.
Sir John Whittingdale
The powers relate to future shortages. I suspect that we could not backdate the provisions to kick someone with a contract off a multiplex. Perhaps it would be helpful if I later provided a bit more information to the Committee on precisely how that would work.
To go back to the definition of “local news” in the amendment of the hon. Member for Barnsley East, I understand that her purpose is to refine that definition and that of “locally gathered”, but I think that the amendment is unnecessary.
Rob Butler
The Minister and my hon. Friend the Member for Dudley South on the Front Bench will be relieved to hear that I do not intend to add to the woes of the Government Chief Whip by supporting an Opposition amendment, but I want to press the Minister a little on what “local” means, and how it is to be interpreted. I gave an example from my area. What was intrinsically an Aylesbury radio station has been superseded by one with three counties in its name: Bucks, Beds and Herts. Are the people of Aylesbury to assume that “local” means anything from any one of those three counties, rather than one from their town? I wonder whether some form of guidance—not necessarily statutory—might be helpful as we move quickly to develop new audio-visual services in radio and television.
Sir John Whittingdale
I hope to provide my hon. Friend with further detail in my response to the amendment of the hon. Member for Barnsley East. I take my hon. Friend’s point, however; people expect to hear local news, relevant to the place where they live. In some cases, the definition of local news seems to be stretched somewhat. This is not a debate about the BBC, but I am sure that it might crop up in our discussion.
Local news and information are not defined in section 314 of the Communications Act 2003. They are mentioned as elements of local “material” that Ofcom is required to secure as part of the licensing of local commercial radio. Ofcom is also required to
“draw up guidance as to how they consider the requirements…should be satisfied; and…have regard to that guidance in carrying out their functions”.
Clause 44 amends section 314, and enables Ofcom to impose local news requirements in stations’ licences. It also enables Ofcom to ensure that this local news includes “locally-gathered” news. The hon. Lady suggested that she wanted further clarity on the definition of local news, but the provisions include a definition of local news for the first time. Under clause 44(7), to be regarded as “locally gathered-news”, news will need to be gathered
“by persons who gather news in the course of an employment of business”—
in other words, by professional journalists. We considered whether there was a case for being even more specific about how much news should be provided, or the times of day when local news should be available, but we felt that it would be most beneficial to the effective operation of the licensing system for Ofcom to continue to have responsibility for drawing up guidance on how stations should meet requirements.
Ofcom will draw up guidance that will replace the existing local news guidance. That will ensure continuity, while retaining a degree of flexibility in an approach that has been taken ever since 2003. It must have regard to the new definition of local news, and the requirement for at least some of that local news to be “locally-gathered”. We do not think it is either necessary or helpful for the Bill to require the Government to provide guidance to Ofcom on drawing up its guidance.
Sarah Owen (Luton North) (Lab)
On the point around Ofcom drawing up guidance, will Ofcom seek—and will the Government press it to—consultation with viewers, readers and listeners affected by these local changes, especially given that local newspapers are closing their doors across the country? It is so important that we have proper, accountable local news that is accessible to everybody.
Sir John Whittingdale
I would love to spend time debating the importance of local newspapers with the hon. Lady; it is a point on which I completely agree. I also share her concern about the disappearance of local newspapers in so many places, but that matter of concern is slightly outside this Bill. Nevertheless, she is right that it means that the remaining sources of local news become all the more important.
As she suggests, I would expect Ofcom to consult widely in local communities before it decides precisely how the guidance should work. We differ from the Opposition, however, in not thinking that it would be helpful to have two sets of guidance, one emanating from the Bill and the other from Ofcom. I think that would simply add to the complication and confusion, and we need Ofcom to be able to apply the new provisions across a wide range of stations with flexibility. The provisions, which include a requirement for at least some local news to be gathered locally, give a degree of clarification. I hope that on that basis, that the hon. Member for Barnsley East will withdraw her amendment.
Stephanie Peacock
I appreciate the Minister’s comments. My amendment was based on concerns put forward by Ofcom and the CMS Committee. The issue of, and debate around, local news is important. Further to the point made by my hon. Friend the Member for Luton North about consultation, although this debate is of course not about the BBC, we are all very familiar with its changes to local radio, which were made without any local consultation. Further to the point made by the hon. Member for Aylesbury, the listeners from Barnsley who used to tune into BBC Radio Sheffield are now listening to programming for the entirety of Yorkshire. Obviously, that is a parallel issue not connected to this, but having local people involved in these decisions is really important. I hope that Ofcom is genuinely satisfied with the Minister’s comments, and I beg to ask leave to withdraw my amendment accordingly.
Amendment, by leave, withdrawn.
Clause 44 ordered to stand part of the Bill.
Clause 45
Financial assistance for radio
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
The clause amends section 359 of the Communications Act 2003 to give the Secretary of State the power to provide financial assistance for, or in connection with, the provision of community radio, commercial radio services and audio production. It is a technical amendment.
The covid-19 pandemic provided an illustration of circumstances in which the Government may need to make grants directly to radio stations, potentially on an urgent basis. In particular, during the pandemic the Government relied on the funding powers found in section 70 of the Charities Act 1993 and common law powers, in conjunction with section 86 of the Coronavirus Act 2020, to provide funding in relation to various radio services. However, relying on provisions such as section 70 of the Charities Act and common law powers is not always straightforward; it requires a considerable amount of legal and policy analysis to establish whether the relevant power is available for the need identified.
The purpose of the clause is therefore to make it explicit that radio stations and audio producers, whether their content is for on-demand or broadcast access, as well as those who facilitate the transmission of radio and audio content, can benefit from potential future grant schemes. I commend the clause to the Committee.
Stephanie Peacock
As I have spoken at length about my support for radio services, it will come as no surprise that I welcome the power for the Secretary of State to give financial assistance for the provision of such services. The measure is welcomed by AudioUK and Radiocentre, which ran a successful three-year pilot of the audio content fund. I understand that that came to an end, having previously been funded through the TV licence fee, but I hope that the measure will make it easier for the Department to support like-minded projects directly in future, where needed.
Does the Department have any plans to use the provisions? If so, how? The answer to that question is of interest not just to those who seek to benefit from this new opportunity, but to those benefiting from other funding pots. Indeed, the UK Community Radio Network has shared with me its concern that the commitment would be delivered off the back of funding currently allocated to the community radio fund. The UK Community Radio Network says that opening up the fund to more broadcasters could have negative consequences for the sector. Will the Minister clarify whether the aim of the clause is to expand the community radio fund?
Many colleagues spoke in support of local TV on Second Reading. Local TV forms a vital part of the wider television ecology and makes a great contribution to communities up and down the country. The Local TV Network has also been in touch with me to share that, although it is not seeking financial assistance, it would have liked a similar clause for local television to have enabled an increase in local programming or expansion of geographic coverage. Did the Department consider such a clause during the development of the Bill? It would be good to hear the Minister’s response, particularly given that the Bill does not give local TV the same prominence benefits as our public service broadcasters.
Sir John Whittingdale
The hon. Lady raises a number of issues. I remain a great supporter of the audio content fund, which was created when I was first in the Department and responsible for the renewal of the BBC charter. Of course, the audio content fund, along with the young audiences content fund, was funded for a time through licence fee money. It did a good job, but at the moment there is no plan to resurrect it. I remain a great supporter of community radio, and certainly there are no plans to raid the community radio fund for that purpose either. The clause creates a general power that will make it much simpler for us to provide grants directly to radio stations or for the transmission of radio, but I regret that at the moment there is no immediate prospect of doing so.
The hon. Lady touched on local television. I met local TV representatives yesterday. The Government will shortly announce the result of the consultation on the renewal of licences for local TV. I remain supportive of local TV. We continue to discuss issues around prominence with local TV representatives. Again, I am afraid that there is no current likelihood of our being able to provide financial assistance.
Question put and agreed to.
Clause 45 accordingly ordered to stand part of the Bill.
Clause 46
Licensing of non-UK digital sound programme services
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
This clause makes changes to sections 245 and 402 of the Communications Act. It enables overseas digital radio services to be provided on a local or small-scale multiplex, where their country of origin has been specified in regulations. The Secretary of State intends to specify Ireland as a qualifying country, with the effect that RTÉ—the Irish national broadcaster—and other Irish commercial and community radio station operators can apply for digital licences for their radio services, and ultimately for those services to be broadcast in the UK. This simply removes an unnecessary restriction on Ofcom’s ability to license well regulated overseas stations, in contrast to similar TV services targeted at the UK. That was raised in the Government’s 2017 consultation on radio deregulation.
Stephanie Peacock
The clause allows the Secretary of State, by regulation, to specify a country in which international digital radio services can come under Ofcom’s regulation and be broadcast in the UK, as the Minister outlined. I understand, as he said, that this was done with the intention of specifying Ireland as a qualifying country first, so that Irish radio services can apply for digital licences for broadcast in the UK. When this issue was consulted on back in 2017, the majority of respondents were in favour of allowing this, particularly in the case of Ireland; the station RTÉ was identified as long having been important to members of the Irish community living in the UK.
While there must always be careful consideration of the spectrum available and the need to ensure a diversity of UK-based services, I see no reason why selected non-UK stations of particular importance to those living in the UK cannot complement UK services. Indeed, these non-UK services may be uniquely placed to attract new audiences to radio and subsequently advertisers and sponsors. It is due to those same concerns about prioritising UK services, however, that it seems the Government have opted to take a gradual approach to the change, allowing the Secretary of State to specify one country at a time, rather than opening things up more broadly. This gradual approach has perhaps been even more gradual than expected, given the five-year gap between consultation and the Bill.
Could the Minister share with us whether the Department has any intention of specifying countries other than Ireland under the clause? For example, does the Secretary of State intend to extend this arrangement to any other station’s licence, in the EU or beyond? I am pleased to support the clause, but I am keen to hear an update on whether there are plans to actually use it.
Sir John Whittingdale
The hon. Lady is right that, at the moment, the demand is primarily from Ireland. If there were to be significant demand from other countries, this would need to be reviewed in the context of views from industry and advice from Ofcom. The regulations would then be in the form of an affirmative order, which would need to be laid before the House, but there is no current intention of doing that.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Clause 47
Radio multiplex licences
Question proposed, That the clause stand part of the Bill.
Sir John Whittingdale
This clause updates provisions in the Broadcasting Act 1996 to remove Ofcom’s function of overseeing the line-ups of national and local radio multiplexes, in light of the Government’s 2017 consultation on commercial radio deregulation and the responses to it. As long as applicants for a multiplex licence can demonstrate that they are able to provide a sustainable service with sufficient geographic coverage, and that they will enable fair and effective competition, they will otherwise be free to decide the number and nature of the radio stations they carry. This change reflects the availability of a wide range of stations across the UK, and will allow for simpler arrangements between multiplex operators and Ofcom.
Stephanie Peacock
Clause 47 continues the deregulation of requirements on radio, this time simplifying radio multiplex licence applications. In effect, this means that Ofcom will no longer have to oversee the line-up of national and local radio multiplexes, other than by ensuring that there is regard for sustainability and competition. Again, when this was consulted on in 2017, most respondents agreed that there was no longer a need for Ofcom to oversee station line-ups on multiplexes and approve changes. As I have said multiple times, the need to oversee the content and diversity of radio services has decreased significantly since the introduction of a vast range of digital services. I believe this relaxation of requirements, therefore, should not have any negative effects on the range of services available for audiences in the UK, with their different tastes, needs and preferences.
As we come to the end of our consideration of the provisions on regulation of radio services, I reiterate my support for radio services, which provide so much to audiences. I am pleased that this package of long-awaited changes will finally be implemented, and I hope that the future of radio is protected for years to come. That hopefully leads us nicely to the next part of the Bill, which we will debate next week.
Question put and agreed to.
Clause 47 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mike Wood.)
Media Bill (Third sitting)
Thursday 7th December 2023
(1 year ago)
Public Bill CommitteesRead Full debate Media Act 2024 View all Media Act 2024 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 7 December 2023 - (7 Dec 2023)
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
Order. Before we begin, I remind Members to please send any speaking notes to Hansard at hansardnotes@parliament.uk—they will be very grateful. I also remind Members to please switch all devices to silent, and that tea and coffee are not permissible in this sitting.
Clause 28
Prominence on television selection services
Stephanie Peacock (Barnsley East) (Lab)
I beg to move amendment 21, in clause 28, page 37, line 4, at end insert—
“(5) A statutory instrument containing regulations under subsection (1) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
This amendment would make the Secretary of State’s power to designate regulated television selection services subject to approval by both Houses of Parliament.
The Chair
With this it will be convenient to discuss the following:
Amendment 29, in clause 28, page 40, line 2, at end insert—
“(2A) When preparing guidance under subsection (1), OFCOM must have regard to the strategy and policy published by the BBC pursuant to clause 62 of the Agreement between Her Majesty’s Secretary of State for Culture, Media and Sport and the British Broadcasting Corporation, dated 7 November 2016, as that clause may be amended or updated at any time.”
This amendment requires OFCOM explicitly to consider the relevant parts of the BBC’s regulatory framework when setting its guidance for the new prominence regime under subsection (1) of 362AL.
Clause stand part.
Schedule 3.
Stephanie Peacock
I am pleased to be starting part 2 of the Bill today. Indeed, an update to the prominence regime is arguably the most anticipated of all the Bill’s measures, and I am certainly keen to see it come into force.
As I have spoken about many times already, our public service broadcasters are the cornerstone of our broadcasting sector in the UK, investing billions in original productions and creating content that is trusted, valuable and entertaining for UK audiences. Historically, in return for the high standard of programming and investment that public service broadcasters provide, their channels have been made easy to find on linear television sets—to the benefit of audiences across the country. However, amid rapid changes in how viewers access television and content more generally, the prominence regime, which has not been updated for decades, is at increasing risk of becoming diluted and outdated.
As ITV identified in its submission to the Culture, Media and Sport Committee, the major risks are twofold. First, public service broadcasters are in danger of being cut out of view, as global content players and platforms strike international deals with online platforms for prominence. Secondly, as a result, our public service broadcasters are at risk of being forced to concede increasingly material percentages of their revenue to these platforms, simply to appear on them. In this situation, it seems like almost everyone loses out—from audiences, to the wider UK production economy, to even the platforms themselves, which may find themselves in a position where they cannot promote the content that UK viewers most want to see. A new prominence framework for the digital era, therefore, was always going to be crucial.
The next question to answer was how prescriptive such a new regime would be in legislation. I am pleased that, in response to this, the Government have avoided explicitly spelling out what prominence looks like in the Bill, or making primary legislation restrictive or resistant to future changes in technology and behaviour. Instead, we have before us a principles-based approach based on finding mutually beneficial carriage deals between what is branded “designated internet programme services” and “regulated television selection services”, with Ofcom being able to provide a framework in which these negotiations can operate.
That is then backed up by a strong dispute resolution and enforcement powers for Ofcom, including the ability to improve significant penalties in the result of non-compliance. This allows for maximum flexibility in both legislation and negotiations, as well as proper protections where agreements cannot be reached. It also allows for the regime to be expanded where necessary to capture new technology that people might be watching television content on. Platforms and PSBs have a history of successful negotiations, creating mutually beneficial deals and partnerships that would be counterintuitive for the prominence regime to undermine.
With that in mind, I am glad that the Department has made a few changes to the initial drafting of the Bill, in particular regarding the agreement objectives that are designed to incentivise the agreement of appropriate terms between platforms and PSBs. The original phrasing had concerned both parties. For PSBs, there were fears that the stated focus on costs would see platforms making unfavourable demands on advertising and data. For the platforms, there was concern that the phrasing could imply a responsibility on their behalf to cover the cost of PSBs. The new phrasing, which looks at the provision of public service content to audiences in the round, will hopefully alleviate some of these worries.
It is also welcome that there has been a clarification over legacy devices. It is important that technical feasibility is taken into account when deciding which devices are designated as being in scope of the regime. I would, however, like to ask for some clarity on the requirement to secure “appropriate” prominence. This was a major topic of discussion during the pre-legislative scrutiny process, with the majority of PSBs calling for this to be upgraded to “significant” prominence. The arguments around this were mostly based on the differences between linear and digital streaming landscapes.
On a traditional television set, appropriate prominence has, in practice, meant a fixed and high slot on programme guides—a relatively straightforward goal to achieve. However, the BBC said in its evidence that it has still sometimes struggled to secure high listings for its children’s channels on linear televisions. Likewise, S4C noted that it remained channel 166 on Virgin Media in Wales until 2021 due to a wide interpretation of the word “appropriate”. On streaming sticks and smart TVs, however, there is an ambiguity as to what appropriate prominence should provide in practice, especially given the many ways one programme might be reached within only one such device. Therefore, for the regime to have its intended impact, the argument is that significant prominence will be needed to ensure that public service content is easy to find on every necessary interface. That was also recommended by the Culture, Media and Sport Committee. However, I am aware that Sky and others have expressed that there may be some unintended consequences to upgrading to significant prominence, particularly because of the risk of overriding consumer choice and preference.
Will the Minister provide a full response to the argument for significant prominence and outline the reasons why the prominence requirement has not been upgraded? Further, what conversations have been had with Ofcom on how the detail of the regime will be set out in the code of practice to ensure that it meets its aims? As I will go on to say throughout the Bill’s passage, we need a strongly empowered Ofcom if this Bill is to be a success.
On a similar note, Will the Minister tell me whether the Department has considered the possibility of including remote controls and multi-use devices in the prominence regime? I know that is something the BBC has consistently called for. Its latest thinking is that electronic programme guides could be given a prominent button on remotes, rather than one PSB in particular. Although my priority remains to see this clause passed, we must explore these questions to make sure that we are fully seizing this once-in-a-generation opportunity to ensure that public service content is easily findable in a digital age.
I will also take this opportunity to briefly discuss the role of regional prominence. Before I continue, I want to reassure colleagues that I do not mean to imply through the use of the phrase “regional prominence” that Wales and Scotland are regions, rather than nations in their own right. I use that terminology because that is how the Bill refers to prominence arrangements that will be required for the likes of S4C and STV, as well as other, genuinely regional services provided by our PSBs. For those broadcasters and their respective audiences in Scotland and Wales, proper prominence will be absolutely crucial. That is perhaps even more so the case when we consider that S4C simply cannot match the promotion budgets of those that dominate streaming platforms, yet it provides a unique service in the Welsh language that others simply do not.
However, some platforms have raised concerns over the technical feasibility of ensuring regional prominence. For example, techUK has said that technical and privacy challenges mean that providing regional variation in prominence would be a disproportionate burden. As a result, S4C has raised concerns that user selection might be used in lieu of guaranteed prominence. That would be quite different to the envisaged package of benefits that the prominence regime would provide for PSBs.
First, will the Minister first reaffirm that the Bill does not require regional prominence for S4C, STV and other regional programming that our PSBs provide? Secondly, will he update us on what discussions his Department has had with both Ofcom and platforms on how this requirement on regional prominence will be enforced and adhered to on a practical level? I know that the detail of what is required will become clear when Ofcom’s code is published after the Bill, but some baseline reassurances are needed now to clarify whether changes are needed to primary legislation to secure the kind of prominence we had all envisaged for the likes of S4C. The Bill must empower Ofcom as much as it can. Regional prominence goes to the very heart of why these changes are being made in the first place, and it is vital that its inclusion in the Bill is in no way compromised or diluted.
Finally, I will address my two technical amendments to this clause. First, I suggested an amendment that changes the power of the Secretary of State to designate or specify a description of regulated television selection services from the negative procedure to the affirmative. As the CMS Committee report recognises, although the Secretary of State can only designate services deemed to be used by a significant number of viewers, and must receive a report from Ofcom, the Minister can still make a decision that goes against Ofcom’s recommendations. Given that, it seems sensible that their decision should be open to greater parliamentary scrutiny.
Too many Bills coming through this Parliament have given sweeping powers to the Secretary of State, as the Minister and I discussed at length during the Data Protection and Digital Information Bill. Though such measures are sometimes needed to futureproof a regime, it is absolutely crucial to ensure that parliamentary scrutiny is not seen as an onerous task to be bypassed, but an important part of shaping good policies. With that in mind, I would like to see the affirmative procedure used in this case.
Secondly, the BBC has raised concern that the new framework creates a level playing field for licensed public service broadcasters in a way that it does not for the BBC. Indeed, the BBC is required under its framework agreement to publish a distribution policy, outlining the conditions under which it makes its services available. The conditions include securing appropriate prominence, quality and value for money. The BBC is also legally required to offer services to third parties without charge and on a fair, reasonable and non-discriminatory basis.
The Media Bill largely recognises that the BBC has a distinct regulatory framework—no less so than in this very clause, where it is made clear that there will be no additional “must offer” obligations on the BBC given its equivalent obligations. However, though there is explicit reference to the BBC’s “must offer” duties in the Bill, there is no matching reference to the BBC’s charter and framework agreement in the “must carry” section of the Bill. Both a “must carry” and a “must offer” requirement are needed to create the conditions for PSBs and platforms to have successful negotiations on prominence from a level playing field. The exclusion of comprehensive “must carry” requirements on platforms when it comes to the BBC may therefore make such negotiations harder. That is particularly worrying given the BBC says it already faces increasing difficulty when negotiating with some platforms that have little interest in supporting UK PSBs. It says global platforms, in particular, are more focused on self-preferencing their own content, monetising user interfaces and controlling data and algorithms.
My amendment would seek to rectify that inequality in the Bill. It would give the BBC an equivalent negotiating position to the commercial broadcasters, setting out that any regulated platform must also act consistently with the charter and framework agreement. That is hopefully a largely technical change to ensure no unintended consequences that could put the BBC at a disadvantage. My absolute priority on prominence is to ensure that the new measures are brought into force, but it is also important that we take the opportunity to ensure the new regime is as robust and effective as possible while we still have the chance.
The Minister for Media, Tourism and Creative Industries (Sir John Whittingdale)
This section of the Bill on prominence is a central part of the changes the Government wish to make. Although the hon. Lady has done a good job setting out the reasons we decided it necessary to update the prominence requirements, I hope she will forgive me if I recap them since I think it is important that the Government’s position is set out in some detail.
As the hon. Lady described, the objective of the UK system of public service broadcasting is to ensure that public service content is readily available to as wide an audience as possible and is easy to find. PSB prominence plays a crucial role in delivering that. In doing so, it boosts viewership and engagement, which are important to sustain advertising revenue and brand value for PSBs. In turn, that ensures they can continue to deliver the high-quality original programming that UK viewers expect. PSBs receive the benefit of prominence in recognition of the additional obligations placed on them, such as news and current affairs provision, and that has become known as the PSB compact.
However, the existing regulatory framework for ensuring carriage and prominence of PSB channels, set out in the Communications Act 2003, does not extend to the PSBs’ on-demand services, nor services other than electronic programme guides that enable viewers to navigate and select TV programmes. Audiences increasingly watch TV online and, in many cases, bypass traditional distribution platforms altogether, so without the new prominence frame- work, we risk undermining the long-term sustainability of the PSB system in the UK. All PSBs have been calling for an update for some time.
Clause 28 introduces a new online prominence framework for PSB apps, referred to in the Bill as “designated internet programme services”, wherever they appear on particular user interfaces, referred to as “regulated television selection services”. The framework is principles-based to ensure that regulation is proportionate and adaptable for the future without negatively impacting consumer choice and experiences. This approach to regulation aligns with the consistent feedback we have had from stakeholders on both sides through our engagement with them on this issue.
Damian Collins (Folkestone and Hythe) (Con)
A lot of the existing regime, and also a lot of what is in the Bill, is based on the assumption that as many people as possible will seek to be designated as a public service broadcaster and will do everything they can to keep that designation. Is there not a danger now that if prominence is not effective enough, PSBs will simply decline to be PSBs, with all the obligations that being a PSB places on them, and just seek to make programmes that are popular and that will therefore be recommended and promoted on smart devices? Is my right hon. Friend confident that Ofcom will have the ability to issue guidance that distributors of programmes may need to increase the prominence of public broadcasting if they are not doing so already?
Sir John Whittingdale
My hon. Friend makes an interesting point, and I have sympathy with the concern he expresses. However, if this Bill was not passed, the advantages of being a public service broadcaster would be very small. All the PSBs have made it clear that they regard prominence as an essential benefit of the compact, in order that they are easily found and accessible. Because they have laid such stress on that, we assume that it is still their wish to remain designated as PSBs.
It is, of course, up to any PSB to walk away from the compact if they chose to do so. In doing so, they would no longer necessarily be able to benefit from prominence and the other advantages that come with PSB designation. However, I know that both my hon. Friend and I believe that there is a continuing need for public service broadcasting in this country. One of the purposes of the Bill is exactly to address the point he makes, by ensuring that PSB designation is still an attractive proposition for broadcasters to seek.
Let me return to one or two details of precisely how the system will operate. Once the necessary internet programme services and regulated television selection service providers have been designated, new sections 362AJ to 362AN introduce new rules to ensure the availability of public service content. That is achieved by requiring providers to offer their designated IPSs to RTSS providers and requiring RTSS providers to carry these designated services. After all, prominence would be redundant if the PSB services are not on the platform to begin with.
These availability requirements will be underpinned by statutory agreement objectives that providers of designated IPSs and RTSSs must act consistently with when reaching an agreement on the availability and prominence of designated services and when keeping that agreement in force. These include that the arrangements support the sustainability of public service broadcasting and do not disproportionately restrict how the platform may innovate its service. The intention behind these agreement objectives is for Parliament to provide expectations for the outcome of negotiations between designated IPS providers and RTSS providers. These objectives are to be supplemented by more detailed Ofcom guidance on how providers may act consistently with them.
In that respect, let me address the point made by the hon. Member for Barnsley East in her amendment 29. Proposed new section 362AL requires Ofcom to
“prepare…guidance about how providers of designated internet programme services and providers of regulated television selection services may act consistently with the agreement objectives”
when negotiating on the carriage and prominence of designated services and after an agreement has been reached. The Government absolutely recognise that Ofcom’s guidance should take into account the BBC’s equivalent duties under the framework agreement, as also reflected in its relevant strategies and policies under the agreement, including clause 62. However, I can tell the hon. Lady that proposed new section 362AL(2) already provides for such considerations by Ofcom by referring to
“any duty of the BBC under the BBC Charter and Agreement that is comparable to the duty of providers of designated internet programme services other than the BBC”.
This may be a good opportunity to expand on another point. By convention, the BBC is not regulated in statute. It is the Government’s intention for the new prominence framework to apply to the BBC through the framework agreement. We plan to work at pace with the BBC to make corresponding changes to the its framework agreement to ensure that the relevant parts of the prominence regime apply to the BBC, while also acknowledging how it legally functions. It is the Government’s view that there is already provision in the Bill for Ofcom to consider the BBC’s comparable duties and corresponding policies under its framework agreement in its guidance on the agreement objectives. It is for that reason that I am unable to accept the amendment of the hon. Member for Barnsley East.
Overall, we think the principles-based approach that we are taking, with Ofcom playing a vital role, is the correct one. It will give Ofcom the tools it needs to ensure that the regime is functioning effectively without being too inflexible or overly prescriptive. Once designated services are available on the platform in question, new sections 362A0 to 362AR introduce specific duties on providers of RTSSs, including the requirement to carry and display designated IPSs with an appropriate degree of prominence. That includes the requirement to carry and give regional prominence to designated S4C services in Wales and STV services in relevant parts of Scotland.
Stephanie Peacock
I asked the Minister to reaffirm that it does not require regional prominence. Obviously, I am very keen to hear that it does because I know that there are some concerns, particularly from S4C, that it might do so in theory but not in practice.
Sir John Whittingdale
I am happy to address that point. The hon. Lady also raised the subject, which was debated on Second Reading and in the Select Committee, of whether the requirement for “appropriate prominence” is a better description than “significant prominence”. That is something we looked at carefully, particularly as it was one of the Select Committee’s recommendations, but we feel that it is important that the approach to regulation should be proportionate and allow for flexibility and operability across different RTSSs. We believe that an appropriate level of prominence, as determined by Ofcom in the code of practice, provides that flexibility and enables Ofcom to implement the regime in a practical way.
Damian Collins
Does the Minister agree that, given the nature of new smart devices, which favour personalisation of content and recommendations to users, smaller regional broadcasters, such as S4C, may benefit significantly, because viewers who have a habit of watching programming in the Welsh language are far more likely to be recommended that programming in the future?
Sir John Whittingdale
My hon. Friend is right. As he says, the technology in this area is evolving very rapidly, so it is important that the regulatory framework is sufficiently flexible to keep up to date with technology as it arises. His point is that we are moving towards viewers having greater and greater control not only of what they watch, but of what comes up as recommendations for them to watch, and can choose which channels appear, and that will continue to evolve. It is therefore important that Ofcom can take account of technology developments in the framework.
Andy Carter (Warrington South) (Con)
The Minister and the shadow spokesperson have been talking about regional content in respect of national content for Wales, Scotland and Northern Ireland. It is incredibly important that viewers in the regions are able to access regional news and information. Does the Minister agree that it is incumbent upon service providers such as ITV and the BBC to ensure that, when people access their services, it is very easy to find that regional content? Geolocation is particularly helpful, because it will recognise the user’s postcode, but there needs to be a requirement for public service broadcasters to ensure that it is easy to be set up, so that people can access their local area. That would certainly benefit the service providers, who we all know always talk to us about the strength of their services, such as the number of viewers who watch Granada and other services in the regions. Does the Minister agree that it really comes down to ensuring that the public service broadcasters have those things set up properly and prominently in their apps?
Sir John Whittingdale
I very much agree with my hon. Friend. As I said—and as the hon. Lady the Member for Barnsley East mentioned in her remarks—the issue of regional prominence is important. It is our view that we should replicate the current regional prominence arrangements under the linear regime in the online space, given that the nations and regions are a core component of PSBs. We designed the regime to give Ofcom the discretion to determine various ways of delivering appropriate prominence across different platforms, and that includes delivering regionally.
We expect that Ofcom will set out different options, depending on what would be proportionate and reasonable for RTSSs to deliver, having regard to technical considerations. One method, which my hon. Friend the Member for Warrington South suggested, would be to ask the viewer to submit a postcode at the time that their smart TV or other device is first set up. That would be sufficient to enable regional prominence. Stakeholders will have the opportunity to submit their views on how regional prominence should be delivered in due course, when Ofcom consults on the code.
Kevin Foster (Torbay) (Con)
Does the Minister agree that part of this is about viewer or listener choice? For example, my phone would currently geolocate me in London, but I might be far more interested in listening to—and I do, actually—BBC Radio Devon or watching the evening news back in Devon and Cornwall, than I might be in the content based purely on the location. That is the point. The types of choices now available to viewers would have been unimaginable in the era before IT, when we were merely relying on broadcast signals.
Sir John Whittingdale
As I said earlier, the Bill does not, at the moment, suggest that prominence should be required on mobile phones, because they are not primarily used for watching TV, but the point that my hon. Friend makes is absolutely correct. More and more applications and devices are going to be influenced by the location from which they are being used. It will therefore become more important that TVs and all other devices are clearly geolocated in order to allow appropriate prominence of regional programming.
Proposed new sections 362AT to 362AY give Ofcom a dispute resolution function, should negotiations between providers of designated IPSs and RTSSs fail. Our overall intention is to allow PSBs and platforms to pursue mutually beneficial commercial arrangements in the first instance, but if that is not possible, it is appropriate for the regulator to have the necessary powers to intervene in support of effective negotiations.
In addition, proposed new sections 362AZ to 362AZ11 provide Ofcom with the necessary powers to enforce the new prominence framework, which include information-gathering powers and the power to issue notices requiring the provider to take remedial steps and/or pay a financial penalty in the event of a breach. Many of the providers we are talking about are large, sometimes global, organisations, and it is important that Ofcom feels confident that it can take robust enforcement action when required.
Schedule 3 contains further changes to the Communications Act 2003, which are required as a consequence of the new provisions inserted by clause 28. Taken together, we believe that the provisions in the clause will deliver, for the first time, a new, much-needed and bespoke prominence regime to ensure the availability and discovery of PSB content online to the benefit of audiences and PSBs alike. I hope hon. Members will support the clause, and I ask the hon. Member for Barnsley East to consider withdrawing her amendment.
Kirsty Blackman (Aberdeen North) (SNP)
I agree with the Minister that the clause creates a new and bespoke prominence regime. I have some questions that I was going to ask in interventions, but I figured that I had too many.
I am happy to support the amendments tabled by the shadow Minister relating to the BBC and affirmative approval by the House, but I have some questions arising from the comments that have been made. The comment about personalisation is key. I hope that people who regularly watch S4C, for example, will be offered it. I am slightly concerned that that will conflict with the commercial nature of these devices, and that we will end up in a situation whereby Amazon provides more money to give prominence to a certain television show, which bumps S4C down the list. I am glad that there is flexibility in the Bill to allow things to be updated and changes to be made, because it is important that such conflicts are resolved.
Damian Collins
What may resolve that conflict is the fact that personalisation is often linked to the placement of advertising, so the platform operator may only care about advertising reaching eyeballs and may be agnostic about whether it is placed against S4C content or anyone else’s.
Kirsty Blackman
That is possibly the case. I have never been a platform managing its budget on the basis of advertising, so I do not know exactly how the advertising regime works. As time goes on and the way that people interact with these services changes, that may be updated anyway, provided that there is the flexibility to make changes if we find that people are not being served the content that we expect, and are not receiving that level of prominence of the services. It would be great if the new regime works and people are algorithmically served the content that they like and want to see, but I am concerned that it might not always work out like that. It would therefore be incredibly helpful if the Minister can keep that under review.
On the comments about the words “significant” and “appropriate”, I completely understand the BBC’s concerns. I know that not everybody feels quite so strongly about those words. Some people believe that Ofcom will be clear that “appropriate” means “fairly significant” and “quite prominent”, so that people are able to access these broadcasters. Again, the Government need to keep that under review to ensure that there is an appropriate level of prominence, and that Ofcom has the ability and strength to say, “This is not appropriate. We need it to be more prominent than it currently is.” Ofcom must have the teeth to enforce that. It should first work with the platforms to ensure prominence—we do not want to move straight to enforcement—so that people can access the public service broadcasters that they expect.
The comments made about television remote controls were also key, and we might come back to them later in relation to radio selection. Hardware is an issue as well as software. For example, a television remote control may allow people to press a Netflix button but not a BBC button, despite the fact that significant proportions of people would prefer to press a button to access the BBC, STV or whatever service they are keen to get, and that they generally go to for information. I have spoken already about the importance of accessibility. Public service broadcasters need to be accessible, and we must work with people to make PSBs as accessible as possible, and prominent; those are two separate but related things.
Local content and local news content are very important. Yesterday, I had a discussion with the BBC, which now provides Aberdeen and Aberdeenshire local bulletins on some of its on-demand services, after a long-running campaign by the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) and me. We have both been constantly pestering the BBC to ensure that our local news bulletins are accessible, particularly so that we can see what is being reported in our local area when we are down here. The BBC has now done that, but I would like commensurate prominence for online and on-demand television services, as well as services on my phone or computer.
On a related note, the Minister talked about the measures applying only to devices that have the main purpose of allowing people to watch television, and I can understand why he has gone down that route. I do not know whether he is aware of Ofcom’s “Media nations” report, which shows that 21% of TV users in Scotland watch through a games console. That is not an insignificant proportion. Some family members may use the games console to game, but others may use it only to watch television. If games consoles are outside the regulatory regime and are not required to give any prominence to public service broadcasters, a chunk of the population is not being properly served and does not have proper access to public service broadcasters.
I appreciate the Minister’s comment about Ofcom being able to update and make changes to the regulated services and providers. However, I am slightly concerned that he has gone too far down the route of saying that the measures apply to devices that are mainly used for television purposes. I am concerned that that will not provide my constituents with the best service, particularly when the percentage of people in Scotland who use games consoles to watch television is double that in England. The proportion is much higher, so this issue will be important. For example, if someone can watch television on a PlayStation, why would they waste money on a Fire Stick? They can already watch television through the games console. If that is the main route by which a not insignificant portion of people watch television, it is important that the Minister considers whether regulating games consoles would improve our constituents’ lives. I genuinely think it would. My concern is mostly that the Minister should not rule it out; I do not necessarily want him to say that he will definitely regulate things such as games consoles.
My other question, which the Minister may not be able to answer today, is about the prominence requirements for smart TV provision. If I say to my Fire TV Cube, “Alexa, play BBC News on BBC iPlayer,” I would expect it to do that. Provisions we come to later relate to asking a smart speaker to play something on a certain provider. That is about not just prominence on screen, but prominence when I use my voice to make a request of my Fire Cube. I hope and expect that Ofcom and the Government intend that I will get BBC News on BBC iPlayer, if that is what I ask my smart TV for. This is about not just navigating the system, but being able to make a request by voice.
Hywel Williams (Arfon) (PC)
I will not repeat the points made by Members on both sides of the Committee, with which I agree. Briefly, I welcome the provision under proposed new section 362AA(7)(a) to the Communications Act 2003 that
“OFCOM must have regard…to the contribution that the internet programme service will make towards fulfilling the public service remit”
of PSBs, and S4C in particular. As I said on Tuesday, and as I am sure that I will say again when we come to discuss clause 32, S4C is a national, not regional, broadcaster in Wales. It is a separate, independent broadcasting service, much like BBC1 and ITV1. Broadcasting in Wales through S4C is not niche; it offers a wide range of broadcasting, from sport and drama to stand-up and gardening. In fact, through its range of programmes, it can and does extend people’s knowledge and surprise them. One of the things that has always surprised me about BBC news provided through S4C is the range of international reports in Welsh from all parts of the world., sometimes from professional journalists, but also from Welsh people who happen to be wherever the incident or news item is. That extends people’s horizons. S4C is not niche, and not parochial in any sense, so its content must be readily discoverable and prominent on television services, wherever they are.
It is difficult to find out how many Welsh speakers there are outside Wales. The census does not ask that, but it is reckoned that there are at least 100,000 Welsh speakers in England. A rather more interesting proxy for the figure is the fact that quite recently, Welsh was the most popular language to learn on Duolingo. In 2023, some 3 million people had registered, one way or another, to learn Welsh on Duolingo—that is probably more people learning Welsh outside Wales than there are people living in Wales. The extent of it may be learning to say “bore da”—good morning—but that is still interesting. I seek reassurance that “appropriate degree of prominence” in proposed new section 362AO will not lead to S4C being limited to specific audiences, for the reasons I have set out.
Sir John Whittingdale
I am most grateful to hon. Members for raising a number of interesting questions. The general answer to them is that these matters need to be considered by Ofcom when it draws up the details. However, I can seek to address one or two of the points made. On the continuing discussion about “appropriate” versus “significant”, I will try not to repeat our maxim that “significant” may be appropriate, but “appropriate” does not necessarily always mean significant—hopefully I got that right. For instance, there is the issue around S4C. Obviously, if someone lives in Wales, then S4C prominence is appropriate. If someone lives in Chelmsford and is learning Welsh, then perhaps it might become appropriate, as the hon. Member for Arfon set out.
My hon. Friend the Member for Torbay made a point about algorithms, and basing prominence on behaviour as well as geolocation. If someone regularly turns to, and finds, S4C, it is an indication that they are interested in Welsh language television. That might well be taken into account in the prominence regime, but that is a matter for Ofcom. The technology may not yet have reached that point, but I entirely take my hon. Friend’s point that geolocation does not necessarily deliver sufficient prominence for each individual viewer.
On the question that the hon. Member for Aberdeen North asked about PSB buttons on remote controls, she is right that one or two of the streaming services pay to have their own button. My remote control has a Netflix button. I think it would be quite difficult to have a PSB button, because PSB obviously covers quite a wide range of broadcasters. It would not be right to say, “You’ve got to have a BBC button”; in a sense, the whole of the point of the legislation is to ensure that we do not need to do that. The prominence regime is designed not to force people to watch PSBs, but just to make them easily findable, so that when someone turns on their television, the first thing they see is the range of PSB channels as suggestions. If that is delivered, we do not necessarily need a button. Netflix presumably paid to have a button because it does not automatically pop up when someone turns on their television, but it will only be pressed by those who choose to watch Netflix. I do not think a button is necessary.
The hon. Lady also raised the interesting question of television-like devices. My children had an Xbox, and because it was constantly plugged in, we used it to access TV, rather than having to remove all the wires. She is absolutely right that in some families, the games console may well be frequently used to access television. That too is something that Ofcom will need to take into account. She asks that I make it clear that it is not ruled out, and I am happy to do that. We have asked Ofcome to look into those issues and draw up what is appropriate. It came as something of a surprise to me to read in my guidance notes that people can watch television on their refrigerator in some cases. I am not necessarily suggesting that it would be appropriate to give the BBC prominence on a refrigerator. All those things are matters that Ofcom will need to consider.
Damian Collins
Does my right hon. Friend agree that a distinction needs to be drawn between internet-connected devices—through which BBC iPlayer or the ITV hub or whatever it is can be accessed—and a smart television, which displays multiple different TV providers in the same place? On the latter, the user is not necessarily going to a separate place on the internet to watch something; they are going to one place, where these things are held together. It is in that environment that we want to ensure that the public broadcasters have due prominence.
Sir John Whittingdale
My hon. Friend is absolutely right. More and more devices have screens, but they are not necessarily primarily or even occasionally used for watching television, so it would be completely wrong to include them within scope. However, there will be a variety of possible devices for watching TV, and Ofcom will need to look at that.
Kirsty Blackman
On the PlayStation, the user can click on all the games, but they also have a TV button they can click on, which takes them to a screen like that on a smart television, showing each of the different apps. This is similar to what the hon. Member for Folkestone and Hythe was saying: there will be a view of all the different apps, and then the user can choose from them. They are not all set out separately, in amongst the games. I feel it would be easy to regulate this, if the Minister and the Government felt that it was important to do so, particularly given the number of people for whom consoles are their main source of television use.
Sir John Whittingdale
The hon. Lady makes an absolutely fair point. I hope Ofcom will look into that as it draws up the rules. Finally, on the point about voice activation, she is right that I can talk to my television set without even needing to pick up a remote control. Again, it is an obligation of Ofcom’s to consider appropriate prominence in that respect, and I am sure that it will take that into account.
Stephanie Peacock
I hope the BBC is reassured by the Minister’s explanation. I am happy not to press amendment 29 to a Division. This has been a useful debate, involving Members on both sides of the room, and it was particularly good to note the points about TV remote controls and gaming, which affect so many of the population.
On amendment 21, I continue to disagree with the Minister on the use of the affirmative procedure. For that reason, I would like to vote on it.
Question put, That the amendment be made.
Sir John Whittingdale
This chapter of the Bill relates to Channel 4 and is perhaps a little less contentious than it originally might have been.
Channel 4 is a vital part of the UK’s world-renowned system of public service broadcasting. For over 40 years it has commissioned innovative and distinctive content that reflects and shapes our culture, but like all our PSBs, Channel 4 faces structural changes in the broadcasting landscape. Changing consumption habits are making audiences more fragmented and harder to reach than ever before; at the same time, competition for viewers, programmes and talent is increasing at a rapid pace. The Government want Channel 4 not only to survive these changes but to seize the opportunities that they present. That is why in January this year the Government set out a package of reforms to support Channel 4’s long- term sustainability while remaining in public ownership.
Clause 29 takes forward the first element of the sustainability package: a new duty on the Channel 4 board to consider the corporation’s long-term sustainability as part of its decision making alongside delivery of the Channel 4 remit. The existing obligations on the corporation and its board are focused on the Channel 4 service—its continued provision and the fulfilment of its public service remit—and on the discharge of its duties in relation to media content. There is currently no formal requirement in legislation for the corporation to consider its financial sustainability and long-term success, although this kind of consideration may already be occurring informally.
The wording used in the clause is similar to the directors’ duty in section 172 of the Companies Act 2006, which places a duty on company directors, among other things, to promote the success of the company, and in doing so to have regard, among other matters, to the likely consequences of any decision in the longer term. The wording for the duty builds on that of the 2006 Act by using language that is appropriate for Channel 4; in particular, it reflects the fact that Channel 4 is a statutory corporation with board members but no shareholders, as opposed to a Companies Act limited company.
Stephanie Peacock
I will begin by discussing clause 31, which I think requires a bit more attention, before briefly addressing clauses 29 and 30. In perhaps the most significant of the changes made to Channel 4 throughout the Bill, clause 31 ends the restriction on Channel 4 that means it cannot be involved in the making of any programmes that it broadcasts.
Before I speak in a little more detail about the clause, I want to take the opportunity to set some context. I welcome the fact that an even more significant measure has not made its way into the Bill, as the Minister alluded to. The Government’s initial plans to privatise Channel 4 would have been disastrous. Channel 4 has a truly unique role in British broadcasting. As a company owned by the British public, which costs the public nothing, it commissions new programming, creates jobs, and discovers new talent across the country.
The channel plays a key role in the pipeline of talent and skills in the industry. For example, 4Skills has provided opportunities to young people who might never have considered a career in broadcasting, through apprenticeships, training schemes and the Content Creatives scheme. 4Skills has reached over 10,000 people since 2015 and aims to reach a further 100,000 over the next decade. Channel 4 has also brought us Film4, which spends more on British film than any other UK broadcaster. It invests millions in feature films that nurture new talent and help to sustain writers, directors and production companies across the UK. In addition, Channel 4 takes seriously the need to enable opportunities outside London, spending over 50% of its commissioning budget outside London—something it has committed to continue even after the introduction of the clause.
The Government’s plan to sell off Channel 4 was a plan to sell out Britain, heavily disrupt the broadcasting industry, and puncture several local economies. I am very pleased that Ministers finally came to their senses, although I question why it took them so long, and I reiterate the disappointment that I expressed on Second Reading that the process has delayed the introduction of other important measures in the Bill.
The clause is best understood in the context of the U-turn on privatisation. Channel 4 never asked for the removal of the publisher broadcaster restriction. Instead, the measure was announced as part of the package that the Government put forward when announcing Channel 4 would not be for sale. The statement that the then Secretary of State, the right hon. Member for Chippenham (Michelle Donelan), put out at the time said that the change would give the channel more “commercial flexibilities”, and
“exploit Intellectual Property…as other public service broadcasters are able to.”
What the announcement did not include was a detailed assessment of what impact the change might have on the independent production sector more widely. Even Channel 4 warned that there could be
“unintended consequences on the UK production sector”
as a result of the new powers. Directors UK also pointed out that the changes could
“distort or negatively impact the market in which our members are employed”.
Furthermore, the Media Reform Coalition expressed concern that even the current state of play was seeing smaller independent companies suffer, with Channel 4 becoming overly reliant on super indies. It was therefore crucial that the wider market was properly considered before the change was implemented.
I am pleased that the Department and Channel 4 have made a range of commitments to mitigate any potential negative impacts of the change. 4Skills will receive increased annual investment, the number of roles outside London will be doubled and, perhaps most important, Channel 4’s independent quota will rise to 35% of qualifying programmes. If Channel 4 does commence production, which I understand would be a gradual process and is some way off at the moment, further measures would be put in place. There would be a separate C4C production business with its own board and governance, a proper dispute resolution procedure and new reporting requirements. All of that will then be underpinned by a new requirement for Ofcom to consider whether Channel 4’s in-house productions have impacted on the fulfilment of its remit.
Nevertheless, I do not believe that package of measures has eased everyone’s concerns. I know the Media Reform Coalition, for example, has called for the restriction to remain in place and for further measures, such as a small and medium-sized enterprises guarantee, to ensure that a majority of commissioning spend goes to producers with an annual turnover of less than £25 million. Although I believe that significant progress has been made since the first draft was published to assess the impact of the clause on the market, I continue to understand and recognise that the changes will be worrisome to independent producers, particularly small ones.
If Channel 4 decides to exercise the new powers in the Bill, I hope it continues the approach it has taken thus far of doing everything possible to allow the independent sector to thrive, from top to bottom, and keeping itself accountable by setting targets that ensure this. With that in mind, I am happy to proceed with the measures within and without the Bill in the hope that they will be the start of a longer process of assessment and engagement with the wider market. I am grateful that Channel 4 will remain in public ownership, and hopeful that it will continue to deliver a unique contribution to the industry, as well as our screens, for years to come.
I know there was some concern over the initial drafting of clause 29, not because anyone disagrees with the principle of the duty, but because of a fear of unintended consequences if the clause did not take into account the primary functions of Channel 4 in looking to mirror the Companies Act 2006. Indeed, the new duty outlined in this Bill should largely only reinforce what Channel 4 is already doing. As such, it is right that the wording has been adjusted so that it directly references the primary functions of the channel, and is based on the well understood directors’ duties in the Companies Act 2006 while recognising the channel’s status as a statutory corporation rather than a limited company. Having spoken with Channel 4 since the new version of the Bill was published, I understand it is much happier with this drafting.
Clause 30 places C4C under a duty to facilitate fair competition for its commissions for broadcast and on- demand services; both Ofcom and Channel 4 are then given duties to report on C4C’s performance in adhering to that policy. As mentioned when we discussed the terms of trade regime in part 1, it is incredibly important to ensure that basic principles of fair competition are applied when public service broadcasters are commissioning work, so I am pleased that this clause will further enshrine good practice in legislation.
Sir John Whittingdale
Perhaps I should start by saying the one thing we agree on is that Channel 4 has played a valuable role in the UK broadcasting ecology, and that we want that to continue. I do not always agree with everything I see on Channel 4—I suspect few in this room do—but it has a history of innovative programming that is of real benefit. As the hon. Member for Barnsley East says, it has been hugely important in supporting the independent production sector and creating jobs across the UK. I should say that “Married at First Sight” is made, in part, in my constituency of Maldon. I think that Channel 4 has just announced there is going to be a dedicated channel to “Married at First Sight”, although how much of a contribution to the public service broadcasting remit that will make is perhaps debateable. Nevertheless, Channel 4 has a wide range of diverse content.
The Government considered whether there should be a change of ownership because we want to make sure Channel 4 is in a strong position to thrive going forward. There is no doubt that the Channel 4 model is under pressure. It becomes particularly vulnerable when faced with an advertising downturn, as indeed we are seeing at the moment. To provide Channel 4 with greater support through diversification of its revenue streams, the Government have decided it is appropriate to remove the restriction to allow Channel 4 to make its own programmes.
Clive Efford (Eltham) (Lab)
When Channel 4 representatives gave evidence to the CMS Committee recently, they were asked about that producer-provider split and whether they would make use of it. Their answers were quite dismissive in tone. They suggested the change would require them to take responsibility not only for production, but for the marketing of any product, which they do not have to do now; that is part of the role of independent producers that produce the content. Did Channel 4 at any time in its discussions with the Minister indicate that it wanted this new responsibility?
Sir John Whittingdale
The first thing to say is that nobody is forcing Channel 4 either to acquire a production capacity or to develop its own production capacity. That will be a matter for Channel 4; we are merely giving it the option. I hear the hon. Gentleman’s point about Channel 4 saying that it is not particularly interested in pursuing that option, but I think that has changed. I have had a lot of discussions with Channel 4, including one yesterday to discuss precisely how the requirements would work. The fact that Channel 4 has engaged a lot with us on the detail—particularly the competition aspect of the commissioning process—indicates that, even if not immediately, it certainly wishes to explore the option and have that ability. I do not think that debating how the requirements will operate is a waste of time. I do not know when Channel 4 will take advantage of the option; that is a matter for it to decide, but it is certainly keen to have it available.
Andy Carter
I hear what the hon. Member for Eltham said, but all the other media businesses in PSB have acquired production companies so that they can sell products around the world. If Channel 4 said, “We are not going to do that; we are just going to stay as a broadcaster publisher,” it would be left in an incredibly vulnerable state. I encourage Channel 4 to get on and move into that space, because having alternative revenue streams to advertising will give it more certainty in the future.
Sir John Whittingdale
My hon. Friend is absolutely right. Having an in-house production facility, as, for instance, ITV and the BBC do, allows channels to potentially make programmes not just for their own transmission but for others as well. It therefore offers a diversification of revenue streams.
The other point my hon. Friend might be getting at is that Channel 4 commissions all its programming output externally, but that is usually governed by terms of trade that mean that it does not retain the intellectual property of that programme. The restriction limits the amount of money that it can make from the commissioning of programmes. There are reasons why Channel 4 might well want to explore the option, but, as I say, it is not required to do so. It will be a matter for the channel.
The hon. Member for Barnsley East rightly raised the concern that giving Channel 4 that freedom could adversely impact the independent production sector. That is why we have included in the Bill the requirements for fair competition and for Ofcom to monitor the statement of commissioning policy and carry out a review to ensure that there is not an adverse impact of the kind that she described, as well as the increase in the independent production quota. I think that the Bill contains protections for the independent production sector, but at the same time gives Channel 4 the freedom that there is a strong chance it will wish to exploit at some future date.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Clauses 30 and 31 ordered to stand part of the Bill.
Clause 32
S4C’s powers and public service remit
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 33 to 36 stand part.
Schedule 4.
Sir John Whittingdale
Clauses 32 to 36 relate to S4C and enact the recommendations made in the “Building an S4C for the future” independent review. The clauses update S4C’s powers, public service remit, and audit and governance arrangements. They also adjust the approval arrangements for S4C’s commercial activities, and update the BBC’s responsibilities to support S4C in delivery of its public service remit.
Clause 32 amends the Communications Act 2003 to update S4C’s powers and public service remit. It removes the current geographical restriction on S4C’s powers, ensuring that it is able to provide services outside Wales, and confirms that it is allowed to provide digital or online services, as recommended by the independent review published in 2018. That will allow S4C to broaden its reach and offer its content on a range of new platforms in the UK and beyond, ensuring that it continues to play a vital role as a public service broadcaster and has a strong future delivering high-quality content for Welsh-speaking audiences in the UK and indeed around the world.
The clause also simplifies the framework of S4C’s functions, public service duties and public service remit currently set out in the Communications Act 2003, reflecting the new public service remit introduced for all public service broadcasters in part 1 of the Bill. In recognition of S4C’s position as the UK’s only dedicated Welsh-language broadcaster, the clause retains the requirement that a substantial proportion of S4C’s public service remit content must be in Welsh. However, to ensure that S4C is not unnecessarily limited in its ability to deliver for Welsh-speaking audiences, the clause confirms that S4C may also provide content that does not fulfil the public service remit alongside the content that does. That brings S4C’s powers into line with those of other public service broadcasters.
The clause also adjusts the approval arrangements for S4C’s commercial activities. It replaces the previous requirement for approval to be provided by way of an order in secondary legislation with the requirement for approval in writing. That will give S4C greater flexibility in responding to market developments, as was recommended by the independent review.
The Secretary of State will have the power to approve a range of activities by way of a general approval, or to approve a particular activity in a specific approval. Any other activities already being carried out by S4C are to be treated as approved at the point of commencement, whether or not they were previously approved by the Government, given that it would be impractical to pause them purely for the purposes of obtaining approval after commencement.
It is important that S4C is given commercial flexibility as recommended by the review. However, at the same time, as it is a PSB in receipt of significant public funding, it is also appropriate for the Secretary of State to be given the opportunity to consider the suitability of specific activities to ensure that they remain in line with S4C’s functions. The clause therefore specifies that S4C must obtain the Secretary of State’s approval in writing before providing any television programme service, or doing anything for a charge or with a view to making a profit.
It would be difficult to create an exhaustive list on the face of the Bill of approved activity for payment, or intended to make a profit, that S4C could undertake, because we cannot predict precisely what future commercial activity might constitute. The clause therefore allows the Secretary of State to determine which activities can be covered by a general approval and which would need specific approval, for example, on the basis of a financial threshold.
Clause 33 formally replaces S4C’s governance arrangements, currently set out in legislation, with a new unitary board that is composed of both executive and non-executive members. That is also in response to a recommendation made by the 2018 review, which recommended that the governance structure at the time, which was the S4C Authority, should be replaced with a new unitary board comprising executive and non-executive directors. That replaces the previous two-tier management structure, which the review concluded created uncertainty around responsibilities.
In response to the review, and with the support of the Government, S4C has already created a shadow unitary board that undertakes governance responsibilities, with provision in its standing orders for specific situations where the differences between the previous model and the unitary-board model have required a bespoke approach. The clause therefore places that arrangement on a statutory footing by establishing S4C’s new unitary board and confirming that the board has overall responsibility for S4C’s activities in pursuit of its powers and duties.
The clause makes further changes to the Broadcasting Act 1990 to create the unitary board, adding the requirement for non-executive and executive members in accordance with the principle of the unitary board, and confirms that, as now, the chair must be appointed by the Secretary of State, along with a specific number of non-executive members.
The rest of the clause is largely limited to updating existing legislation with references to non-executive and executive members.
Clause 34 amends S4C’s financial audit arrangements in schedule 6 to the Broadcasting Act 1990, so that the Comptroller and Auditor General is formally appointed in legislation as S4C’s external auditor, rather than S4C’s being able to choose its own auditor. Again, this is in response to a recommendation made by the review. The review recommended that the Government consider whether the audit arrangements were suitable, and the Government accepted the recommendation. Although the Comptroller and Auditor General has actually taken over the auditing of S4C’s accounts, the clause puts the arrangement on a statutory footing.
The clause also places requirements on S4C subsidiaries. It requires each S4C subsidiary to appoint the Comptroller and Auditor General as auditor unless the Comptroller and Auditor General agrees that the subsidiary may appoint a different auditor. The Comptroller and Auditor General may inspect the accounts of any S4C subsidiary regardless of the identity of the subsidiary’s auditor, and S4C must give the Secretary of State access to the accounts and related documents of an S4C subsidiary.
Clause 35 allows the BBC and S4C to come to an alternative arrangement on ways for the BBC to support S4C in delivery of the public service remit. Current legislation results in a fixed approach of requiring the BBC to provide at least 10 hours of programmes in Welsh to S4C per week. The clause amends the 1990 Act to allow the BBC and S4C to agree in writing an alternative arrangement to the BBC’s existing responsibility if it is mutually and commercially beneficial for both parties. That reflects the fact that the BBC may be able to provide to S4C other types of support that are more relevant to its functions and remit in the modern digital broadcasting age. That could include, for instance, the use of spectrum, specific services, rights, funding or content. This will better enable S4C to broadcast a wide range of high-quality content and serve Welsh-speaking audiences. The BBC will be required to publish the terms of an alternative agreement as soon as reasonably practicable. The BBC will be able to exclude from publication any information that it considers to be commercially sensitive.
The clause also removes references to S4C’s analogue television service and the requirement for Channel 4 to provide S4C with programme schedules and programmes to deliver that service. This simply reflects the fact that S4C’s analogue television service, which showed programmes in English from the Channel 4 service alongside Welsh language programmes when Channel 4 was not available in all parts of Wales, no longer exists.
Finally, clause 36 introduces schedule 4, which contains further amendments to the Broadcasting Act 1990, the Broadcasting Act 1996 and the Communications Act 2003 that are required as a consequence of the provisions in this part. The changes also reflect S4C’s new public service remit.
Taken together, these clauses reflect the Government’s recognition of the valuable contribution that S4C makes to the lives and wellbeing of Welsh speakers and learners. We remain committed to helping S4C to adapt to the changing media landscape and remain relevant as an independent and modern public service broadcaster in the UK. I urge that clauses 32 to 36 and schedule 4 stand part of the Bill.
Stephanie Peacock
The second chapter of part 3 of the Bill makes a number of changes to S4C, which I understand is largely very welcoming of the Bill and wants to see it passed, particularly in order to benefit from prominence measures and to become in scope of the listed events regime. These clauses are of crucial importance, but are not quite as immediately transformative as the changes made to C4C, as they largely provide a legislative basis for changes that have already started to roll out. Indeed, it was all the way back in 2018 that the “Building an S4C for the future” review made recommendations, which the Government accepted and which form the basis of the clauses.
Given the long wait for the new laws, S4C and DCMS agreed for many of the changes to be adopted early in the meantime. As such, although clause 32 introduces a new remit, S4C has already taken advantage of the changes within it, offering online and digital services and providing services outside Wales. This has allowed S4C to adapt to the changing landscape and broaden its reach and appeal beyond just those Welsh speakers situated in Wales. It is therefore welcome that the clause ensures that legislation reflects the new reality of how S4C can be accessed and delivered.