Lord Parkinson of Whitley Bay Portrait The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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My Lords, I thank the noble Baronesses, Lady Benjamin and Lady Thornton, for their important contributions on the value of public service media for children.

The noble Baroness, Lady Benjamin, has also personally made huge contributions to this industry, not just through her time as a presenter—I count myself as one of her proud “Playschool” babies—but through her valuable championing of legislation in this space. This is a good opportunity for me to congratulate her on the wonderful news of the BAFTA Fellowship, the academy’s highest honour, which will be bestowed upon her this weekend. It is in recognition, as BAFTA has said, not just for her work on screen but her work in your Lordships’ House and outside it on the legislation that touches these important areas.

I will refer to both noble Baronesses’ amendments together. I strongly agree with them about the importance of ensuring that our children continue to have access to high-quality, original content which is relevant to their lives. The Government recognise that children’s television has a unique social and educational importance; it can be used to reflect and share our values and to support learning and development in a way that is fun and compelling for young people. My honourable friend Julia Lopez, the Minister for the Bill in another place, also feels passionately about this issue and has spoken about the significant impact that culturally relevant, original British programming can have on our children.

We are, however, aware of the challenges increasingly being faced by the children’s media industry, which the noble Baronesses alluded to. The way that our children are accessing content is changing rapidly, with shifts away from the traditional linear schedule and an almost endless digital library of global content easily accessible to them.

That is why we have included specific measures in the Bill to ensure that original British children’s programming, reflecting the lives of young people here in the UK, remains front and centre of the public service remit. I hope that sends a clear signal about the importance of high-value children’s programming being available to families across the UK on a free-to-air basis.

These updated remit requirements will complement Ofcom’s existing powers relating to children’s content. For example, the work that the noble Baroness, Lady Benjamin, did on the Digital Economy Act 2017 resulted in the introduction of a section to the Communications Act specifically on this topic, allowing Ofcom to publish criteria on the provision of children’s programmes if it sees fit. This is supported by several of Ofcom’s ongoing reporting duties. In this way, the legislation already provides for considered assessment of the provision of the types of valuable content we have debated in this group. As the independent regulator, Ofcom is well placed to consider the broader market and how children are accessing content in an increasingly digital world. Of course, it has the powers given to it through the Online Safety Act, during the passage of which we debated some similar topics. It already has a wealth of experience in this area.

Ofcom’s current duties and reporting will continue to give us an invaluable insight into the challenges faced by the children’s television industry. This will be key to helping both the Government and industry to consider in the round, and in more detail, whether further work is needed in this important area. We will of course do that. In addition to this, as the noble Baronesses mentioned, organisations such as the Children’s Media Foundation have been doing some fantastic work recently to convene industry partners to look to the future and consider these important questions in more detail.

Amendments 12 and 34 would require reviews into children’s access to culturally relevant and age-appropriate original content, and children’s access to public service broadcast content respectively. Given the specific reference to children’s content, which we already have in the Bill, and given the extensive powers that Ofcom has to report and act in this space, as I have mentioned, as well as the updates we have made to allow flexibility to the ways in which the public service broadcasters can fulfil their remits, I am not persuaded that we need the amendments that the noble Baronesses have put forward. I would, however, certainly join them in recognising the importance of high-quality children’s programming, and I am glad for their continued vigilance in this area. I would be very happy to keep talking to them as we continue our scrutiny of the Bill, but I hope I have been able to reassure them that we have tried to cover this already in the Bill as it stands.

Baroness Thornton Portrait Baroness Thornton (Lab)
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I thank the noble Baroness, Lady Benjamin, for her wonderful peroration and saying exactly the right things. I thank the Minister for his answer, but I confess to being disappointed, because if this Bill is about future-proofing, then it really does need to address what our children will be doing in the next few years in terms of what they are watching, what they are consuming and what they are hearing. I do not see anything in this Bill that is going to mandate Ofcom to do that kind of exercise of reviewing that. This is about the quality of what our children are viewing, and we certainly are not giving them any guidance on that. There is nothing in this Bill that does that. I do not think so: I have not seen that. That is what this amendment is about.

I am disappointed, and I hope we can continue to talk. Perhaps the conversation needs to be with Ofcom about what it thinks its remit is with regard to children. Perhaps that is the next conversation that we need to have. On that basis, I beg leave to withdraw the amendment.

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Baroness Bonham-Carter of Yarnbury Portrait Baroness Bonham-Carter of Yarnbury (LD)
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I was going to speak to these amendments, but they have been so comprehensively covered by the noble Baronesses, Lady Thornton and Lady Fraser, and my noble friend Lady Featherstone that I will just say that I support the amendments and I hope that the Minister has listened and will respond positively.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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I thank the noble Baroness for her brevity. I am grateful to the noble Baronesses who have taken part in this debate. I am particularly grateful to the noble Baroness, Lady Thornton, for tabling Amendment 13, which has facilitated an important debate about the provision of linear TV by our public service broadcasters. That is an important aspect of a wider debate about the future of the UK’s television distribution infrastructure.

With regard to linear television, in bringing forward this Bill, we have looked to strike a careful balance between allowing the public service broadcasters to deliver their content more flexibly and ensuring that this continues to suit the needs of audiences across the UK. Indeed, new Section 264(4)(a) of the Communications Act, introduced by Clause 1 of the Bill, requires that, for the remit to be fulfilled, the public service broadcasters must make available content in a manner that satisfies

“as many … audiences as practicable”.

I am glad to say there is an existing requirement on public service broadcasters to deliver a linear service, and they must use this, at a minimum, to deliver their news and current affairs quotas. This is a requirement in primary legislation, which Ofcom is required to report on and enforce. In sum, we know that many viewers still want to receive linear television—for example, over digital terrestrial television, satellite or on a hybrid TV—and the public service broadcasters are required to meet this need. I hope that what I have said today has reassured the noble Baroness that adequate protections for linear television are already in place, and that her Amendment 13 is not needed.

As for Amendment 32, from my noble friend Lady Fraser of Craigmaddie, I know that she has had the opportunity to discuss some aspects of the Bill with my honourable friend Julia Lopez, the Minister in another place, and I am grateful for her engagement on this issue. I know that she and other noble Lords are as keen as we are to ensure that our television distribution infrastructure continues to serve audiences across the UK. Her amendment looks to protect the future of digital terrestrial television, or DTT, the technology that underpins the popular Freeview platform. I am glad to reassure her and other noble Lords that the Government remain committed to the future of DTT. We know that millions of households across the UK rely on it, and we expect that situation to continue over the next decade. That is why we have legislated to secure the continuity of this infrastructure until at least 2034, as she mentioned.

I reassure the noble Baroness, Lady Thornton, and others that this legislative commitment does not mean that DTT will automatically cease in 2034. The framework that supports its provision is set out in law, so even if nothing were done, Ofcom would still be able to re-advertise the multiplex licences, and our public service broadcasters would still be required to continue distributing linear channels over digital terrestrial television. In fact, to turn off DTT, there would need to be specific primary legislation; for example, to revoke the multiplexing regime. Should the Government of the day—who may still be us in 10 years’ time, or who may be somebody else—seek to bring forward such legislation, I have no doubt that your Lordships’ House would want to provide robust scrutiny of it. Given that legal position, my noble friend’s Amendment 32 would have limited effect, but I appreciate that it is also focused more broadly on ensuring that audiences across the UK remain protected and covered, and I am glad to say that that is our focus too.

To ensure that we continue to put audiences at the heart of policy in this area, of course we need to understand how their preferences are changing over time, because as many more people choose to watch some or all of their television online, and as the connectivity that allows them to do so gets better over time, the economic and public policy rationale for supporting DTT changes. That is why my right honourable friend the Secretary of State announced last year a project to consider the future of TV distribution, and it is why, just this morning, my honourable friend the Minister for Media, Tourism and Creative Industries, Julia Lopez, used a speech at the Digital Television Group’s annual summit to provide an update on the progress of this project, including sharing some of the early outputs of the independent research project we commissioned. I will be very happy to share a copy of my honourable friend’s speech if noble Lords would like to see it.

This project is taking a broad approach and must be allowed to consider all possible options for the future of broadcasting in the UK. For in this situation, even a decision to maintain the status quo would, in the context of changing viewership, have quite serious consequences. Audiences are at the heart of this project and, as Julia Lopez announced this morning, we will be launching a new project to engage viewers and make sure that we understand their perspectives. We have also commissioned a six-month independent research project from a consortium led by academics from the University of Exeter. We hope to be able to publish this research in the coming weeks, to help inform this important and continuing debate.

By taking the time to complete this project before making legislative changes, and working with world-class researchers in this way, we will be able to make an evidence-based assessment of what will best serve audiences across the UK, now and in the future. I hope that, on the basis of those reassurances, my noble friend will feel able not to press her amendment, but I know she will continue to maintain her scrutiny of this area of the Bill, not least through her work on your Lordships’ committee, as she mentioned.

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Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, Amendments 14 and 15 in the name of the noble Viscount, Lord Culross, seek to finesse the Channel 4 commissioning regime that has worked so well for this highly innovative channel. I was one of the sceptics when Channel 4 was first thought of, and I remember writing an article which challenged the model. However, I have been proven wrong over those 40-plus years.

As the noble Viscount explained, he seeks to add an “SME guarantee” by virtue of Amendment 14 to the commissioning process to further stimulate the growth of indie production houses, in particular those with revenues of less than £25 million. Amendment 15 qualifies this to average out the £25 million cap over a five-year period.

The first amendment would require at least 35% of the channel’s spend to be on companies with a revenue of less than £25 million. We on these Benches can see some merit in this approach, and certainly in the direction of travel, given that the strength of Channel 4 has been the diversity it has brought to production, and that it has led to far more production outside the M25 and the south-east.

I am highly conscious that Channel 4 is thinking long term about the removal of the publisher/broadcaster restriction and its potential impact on independent producers. The channel is keen to protect the ecology of small production companies. It argued in a briefing earlier in the year that a move to in-house should be gradual, over a five-year period, and should not alter the value it places on the importance of independent production houses. As it says, its partnerships with indie producers have led to these companies growing, expanding and owning their intellectual property. Moreover, it has helped to spawn a whole new industry.

I can see that increasing the qualifying independent production quota from 25% to 35% would probably strengthen the indie sector, so today we would do well to listen to the Minister’s responses as to the workability of the amendments. I think we all share a common view—I hope we do—that the uniqueness of the Channel 4 commissioning model is of immense value to TV production generally and the development of the market, innovation, and the high production standards that UK TV is internationally renowned for. The Channel 4 approach has helped to give an edge to that. The question is, ultimately, whether this is the most appropriate way of protecting that reputation and ensuring that we have a sustainable independent production output.

The noble Viscount has done us a service this evening in tabling these amendments. We know that we must be very careful in tweaking the commissioning approach; as the noble Viscount said, there are industry concerns that we must listen to, and we have to find the best way forward to protect something that has become uniquely valuable in TV production. It is something that we support right across the House.

Lord Parkinson of Whitley Bay Portrait Lord Parkinson of Whitley Bay (Con)
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The diversity of our world-leading television production sector is one of the main reasons that it is so successful. We have companies of different sizes operating all over the UK, focusing on genres ranging from specialist factual to high-end drama and everything in between. Last year, these companies delivered the highest sector revenues on record: just under £4 billion. Smaller producers are, of course, hugely important for ensuring a healthy production ecosystem, and the current regulatory regime for independent production has been very successful indeed in promoting and supporting them. Boosting this independent sector was one of the purposes behind the design of Channel 4. I do not want to make the noble Lord, Lord Bassam, feel old, but I was not around to be a sceptic at the time of those debates—they happened before I was born. But Channel 4 has, as I have said from this Dispatch Box, done a great service over the last four decades, and the regulatory regime has supported that too.

PACT, the industry body, estimates that there are more than 250 independent producers with an annual turnover of less than £1 million operating in the market today. Its statistics also show that 75% of independent producers have an annual turnover of less than £25 million. These are the producers that the noble Viscount, Lord Colville of Culross, had in mind, particularly with his Amendments 14 and 15. The issue of providing further support for smaller independent producers is one that we have looked at closely, most recently through our work on the mitigations to accompany the removal of Channel 4’s publisher-broadcaster restriction, which noble Lords have noted.

The clear message from the sector when we did that was that the measures which singled out smaller producers specifically—for example, via a turnover threshold, as the noble Viscount’s Amendment 14 proposes—would not be welcome on the grounds that they would be anti-competitive and penalise success. Producers want an incentive to win more commissions and grow their businesses, not to stay small. Those we spoke to also raised concerns that such measures would be difficult for Ofcom to enforce and could lead to increased monitoring and compliance costs for the regulator. Although these issues are addressed in part by the additional flexibility which the noble Viscount offers through his Amendment 15, the overarching concerns that we have with this approach still stand.

The Government recognise that this is a challenging time for producers and the production sector because of the slowdown in commissioning activity as a result of the downturn in the television advertising market, and we are taking steps to support producers and the production sector at this time, including the generous tax reliefs across studio space and visual effects, investing in studio infrastructure, supporting innovation and promoting independent content through the UK Global Screen Fund, but, for the reasons I have set out, we do not feel that we are able to support the amendments which the noble Viscount has put before us, but we are grateful for the opportunity to have this debate.

Viscount Colville of Culross Portrait Viscount Colville of Culross (CB)
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I thank the Minister for his reply. I think we all agree that we want to try to encourage the diversity of Channel 4, which has been so successful in creating a vibrant independent sector. But the truth is that the small indies that I have spoken to are having a really hard time. I am grateful to the noble Lords, Lord Bassam and Lord McNally, for talking about the diversity of the production sector and the role that the channel has played in helping that to develop. I listened carefully to what the Minister said about the regulatory regime as it stands having been successful in developing the market, and that his work with PACT and other producers has delivered a message that the sector and small producers do not welcome any kind of threshold, which I am suggesting in this amendment.

All I can say is that I have spoken to a great many small independent production companies across this country. They are really struggling; they are having a really hard time getting their commissions even looked at, let alone getting any kind of positive response. I ask the Minister to go back and talk to some of the smaller ones—not just PACT, but some of the smaller indies as well. I know that the Conservative Government see themselves as being on the side of entrepreneurs, so I encourage the Minister to do all he can to support the courageous and determined men and women who have set up these independent production companies across our country and made the sector so successful. I beg leave to withdraw the amendment.