Wednesday 8th May 2024
(6 months, 2 weeks ago)
Lords ChamberMedia Act 2024 View all Media Act 2024 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 44-I(a) Amendment for Committee (Supplementary to the Marshalled List) - (7 May 2024)
Baroness Thornton
“Review of children’s access to public service broadcast contentWithin six months of the passage of this Act, the Secretary of State must prepare and publish a report on how to ensure that children have access to public service broadcast content.”Member’s explanatory statement
This new Clause would require a review of how to ensure children have access to public service content.
Baroness Thornton (Lab)
My Lords, I also enthusiastically support Amendment 34 in the name of the noble Baroness, Lady Benjamin.
These are important matters. If the Bill is to look to the future, we must address the issue of what is happening to our children. On Second Reading in the Commons, my honourable friend Thangam Debbonaire, the shadow Secretary of State, said that the Bill is welcome but misses the opportunity to consider how we can secure the future of UK public service media for school-aged children. She echoed the Children’s Media Foundation’s concern that legislators are failing to recognise the realities of young people’s viewing and how this will impact on public service loyalty in the future.
We should thank the Children’s Media Foundation because it has done a huge amount of work on understanding the patterns of media consumption by children and how those patterns might impact on their chances of viewing public service media. If we all agree that public service content is important for adults, we can probably agree that it is equally important, if not more, for our children. Certainly, the high-quality public service content that our public service broadcasters can provide for children has powerful potential. For the last 75 years, it has been the envy of the world. It can promote well-being, give children an understanding of where they live, teach them British values of tolerance, provide entertaining forms of education to supplement their learning at school, and show a diverse range of role models. Ultimately, public service media can encourage children to value culture, crave knowledge and value characteristics of the citizens they have to become in due course.
However, due to several connecting factors, this sort of content is under threat. As technology has rapidly evolved, the children’s content landscape has fundamentally changed for ever. Children as young as toddlers have access to new devices and platforms. They can navigate apps on tablets and choose content they would like to watch. It gives them access not only to video on demand services, such as Netflix and Disney+, but to platforms such as YouTube and TikTok. The popularity of these forms of content are such that Ofcom estimates that less than half of three to 17 year-olds now watch live television. Similarly, of potentially 9 million school-aged viewers for the top-rated programmes on CBBC, there will be as few as 50,000 viewers in any one week. Similar numbers will request that programme on iPlayer. That number is a fraction of what we would hope it to be, given the importance of children’s public service content.
As well as declining viewership, there has arguably also been a decline in the amount of children’s content produced that could genuinely be considered to be public service. It is not that the industry is unaware of the problems surrounding children’s public service content. In 2022, when the Government brought the young audiences content fund to an end, more than 750 creatives and executives from the UK’s children’s content industry signed an open letter and campaigned to extend the fund for another three years. The likes of Channel 5 and Paramount are also working hard to keep their “Milkshake!” offering. They are increasing their year-on-year spend on children’s programming just to keep provision at the same level but, where there is a met need for commercial demand, valuable children’s content will inevitably continue to suffer.
There is almost nothing in the Bill to show that this combination of concerning trends and declining viewership, alongside declining content quality, has been identified. There are no meaningful measures to stop the problem escalating. Children’s content is included in the new, simplified remit in the first clause, but it does little to increase accountability or individual channels’ contribution to creating children’s public service content, or to recognise the changing trends in how children consume their media.
For all those reasons, the Children’s Media Foundation argued that we must urgently accept that children’s public service media are under threat and rethink how we can best protect them as part of the passage of this Bill. As a result, we propose that the Government conduct a review to better understand how we can secure children’s content long into the future. Such a review would be an opportunity to ask bigger questions than the Bill currently allows. For example, do we need to go where children are and broaden our concept of public service media for children, encouraging and promoting such content on the likes of Netflix, YouTube and TikTok? Do we need to learn lessons from the ambitions of the Online Safety Act 2023, and consider how algorithms serve content to young people—perhaps adjusting them to ensure that they promote diversity of thought rather than simply more of the same? Should we target PSBs to hit a number of hours consumed rather than a number of hours produced when it comes to public service media for children?
We do not claim to have the answers to these sorts of questions, but I believe they need to be explored. The UK must address the reality of the matter and accept that a new approach will be needed if we are to ensure that valuable content reaches the eyes and ears of young people across the country. I hope the Minister can acknowledge this, and I look forward to his response. I beg to move.
Baroness Benjamin (LD)
My Lords, I fully support Amendment 12 in the name of the noble Baroness, Lady Thornton, to which I have added my name, but I rise to speak to my Amendment 34, which says:
“Within 12 months of the passing of this Act, the Secretary of State must prepare and publish a report on how to ensure that children have access to culturally relevant and age-appropriate original UK … content, and”—
importantly—
“how such content might be funded”.
The Children’s Media Foundation has summed up the two problems with UK children’s content as being about finding and funding, and we need to solve both. This amendment is very important as it is imperative that the Bill looks to the future and reflects what young people are doing now in their viewing, not what they used to do.
I have spoken previously about the crisis we face with respect to children’s media. At a time when our children are struggling to make sense of the world around them, we have allowed public service media for children to wither on the vine. A lack of investment and a failure of regulation have led to the current situation in which children and young people are no longer accessing this sort of age-appropriate and culturally relevant media content that can help them to navigate the challenges of growing up.
As adults, we quite rightly expect to have access to media content that speaks uniquely to us—dramas, factual programming and entertainment that embody the culture, values and concerns of our society. Why is it, then, that we seem prepared to deny our children the same opportunities? How can our children develop and grow to become citizens of this country if we continue to allow a media environment that fails to support or promote similar public media for children?
I am sure the Minister will say that this point has been considered by the Government and that the Bill is designed to ensure that our public service broadcasters will be required to offer the children’s audience appropriate levels of audiovisual content. But I am afraid that misses the point. My amendment would require a review to determine how we can ensure that children can access culturally relevant and age-appropriate, original UK content wherever they are watching or listening. The wording of the proposed new clause deliberately makes no reference to television services or to public service broadcasting, because I am afraid that for children and young people the old PSB system is simply irrelevant. They have no loyalty to our traditional broadcasters and very little interest in their platforms, except for the purposes of family co-viewing, which remains important and valuable.
I am concerned that the Bill in its current form does not address the needs of the children’s audience. When it comes to children’s personal viewing, as reported in great detail by Ofcom, the vast majority of their media content is found on video-sharing platforms such as YouTube and TikTok. That is where we must turn our attention if we hope to create a new public service ecosystem that meets the needs of children.
If we allow the Bill to remain focused solely on the provision of content by public service broadcasters, it will have failed the children’s audience from the outset. We have to ensure that this does not happen. There is a crisis of childhood and this Bill has a part to play in addressing the roots of that crisis. The current media lives of children and young people have impacted on their mental well-being, their engagement with society and culture, and the formation of their values. Some of that is the result of harmful content, and the Online Safety Act will go some way to address this, but surely we must also find a way to provide constructive and life-enhancing content to counteract any negative content that may find a way through to our children.
Here in the UK, we have one of the most creative and child-centred media production sectors in the world. We need a review to consider how to create conditions that will facilitate growth in children’s media production. This new content will, in turn, help our children cope with the unique challenges they face in the 21st century media landscape. But without appropriate funding, there will not be anything to see so it is vital that we find ways of increasing the revenue available for original UK children’s content, now that the Young Audiences Content Fund has, sadly, ended.
My amendment seeks to set in motion a process that will determine how children can once again have access to the same range of culturally relevant, trusted and life-affirming content that was made available to previous generations, in a form and on platforms that reflect the way that children and young people live today. So what are the solutions to finding suitable content? Ofcom has identified a dramatic shift in viewing habits among young people, particularly children over the age of seven. Our young people are now consuming content in so many different ways and via a variety of devices. They are flocking to services such as YouTube and TikTok, and watching content designed for adults. We have to work out how children and young people will find culturally specific and original UK content on those platforms in future.
Regulation could be one solution. It is very difficult for regulated commercial PSB broadcasters to invest in kids’ TV content. They do not have the scale of kids’ audiences, or a fraction of the revenue from kids’ content, that they once had. The ban on HFSS advertising some years ago speeded up the decline. The PSBs have been replaced by services such as YouTube, which alone takes in around £50 million a year in advertising revenue around unregulated children’s content.
If the young audiences fund is not coming back— I think it should—perhaps we need to look for inspiration from other countries which have put levies on streamers. EU rules allow countries to impose investment obligations to support local content and language. In France alone, Netflix has agreed to invest at least €30 million a year, either directly or through contributing to local film funds. I am encouraged by how this type of intervention could be used to help fund original UK children’s content. Interestingly, Australia is currently consulting on a proposal that would require streamers to invest 10% to 30% of their Australian revenue in Australian drama and children’s content.
I also understand that, for the first time, it has been suggested that such an obligation could be imposed on video-sharing platforms such as YouTube. This idea has been floated by the Government in Belgium, which will shortly be taking over the presidency of the Council of the EU, and which may therefore influence future EU policies—hurrah.
It is this type of thinking that we will need if our children are going to see the best UK-originated culturally specific children’s content, as we all did when we were growing up. I ask the Minister: will the Government consider these common-sense interventions at the same time as my amendment and that of the noble Baroness, Lady Thornton? The crisis is upon us and we need to act fast before we reach a point of no return. I look forward to the Minister’s response.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
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 (Lab)
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.
Baroness Thornton
“Delivery of public service content on relevant television servicesAfter section 264A of the Communications Act 2003, insert—“264B Delivery of public service content on relevant television services(1) OFCOM must monitor the extent to which the public service remit for television in the United Kingdom is met in respect of relevant television services. (2) If OFCOM considers that the public service remit for television in the United Kingdom is not being met in respect of such services, it may set whatever programming quotas it considers necessary to ensure that the remit is met.(3) For the purposes of this section, “relevant television services” means—(a) the television broadcasting services provided by the BBC;(b) the television programme services that are public services of the Welsh Authority (within the meaning of section 207);(c) every Channel 3 service;(d) Channel 4;(e) Channel 5.””Member's explanatory statement
This new Clause would give OFCOM powers to measure the delivery of public service content on the linear services of the public service broadcasters, and set quotas if it considered the current level to be unsatisfactory. This is to ensure access to content for viewers reliant on linear TV services.
Baroness Thornton (Lab)
My Lords, Amendment 13 in my name hopes to force a discussion raised by these Benches and by the noble Baroness, Lady Fraser. The amendment seeks to introduce a safeguard so that, if Ofcom believes that delivery of PSB content on broadcast linear services is less than satisfactory, it will have the powers needed to set a quota to ensure that a certain proportion of public service content remains available to linear audiences through a broadcast signal. In short, quality should remain available to those families up and down the country who rely on their TV rather than watch online content.
This new clause makes no prescriptive requirements on how that should be achieved, nor does it set a specific figure on how many programmes might be available; it simply allows Ofcom to monitor the effects of the Bill. There is, and there is likely to remain, a section of the population for whom a broadcast signal is their sole connection to media, news, entertainment and information. Therefore, it is important that those people— some of whom more likely to be older citizens, families in rural areas and those struggling with bills as a result of the cost of living—are able to access their media. My husband regularly updates, as I told the House before, so I have ended up with an enormous television screen and lots and lots of choice willy-nilly, but I know that that is something that lots of families may not be able to afford.
This case has been argued extensively by the campaign group Broadcast 2040+, which is made up of a number of concerned organisations. We recognise that the direction of travel is that people are watching content online more than ever, but that does not mean there should be diminishing content on broadcast linear services, especially where that content caters to a local audience. That belief goes beyond the Bill and into wider worries about the impact that a digital-first strategy would have on traditional means of broadcasting, and, as a result, on audiences.
My new clause, therefore, introduces this safeguard and gives Ofcom the power to take action and monitor the effects of the Bill. As well as encouraging the Minister to accept this new clause, I also ask him to update us on whether the Government intend to support linear broadcasting beyond 2034, and, if they do not, what plans they are putting in place to manage possible transition away from linear services. This is just the beginning of the conversation. I beg to move.
Baroness Fraser of Craigmaddie (Con)
My Lords, I rise to speak to my Amendment 32, and I thank the noble Baroness, Lady Featherstone, for her support and for adding her name. I draw your Lordships’ attention to my interest in the register as a board member of Creative Scotland.
My Amendment 32 seeks to protect the provision of digital terrestrial television—DTT. As the noble Baroness, Lady Thornton, outlined, the current provision of DTT is due to run out in 2034. Without this amendment, we could see a decline in the universality of free-to-air public service broadcasting and the further exclusion of vulnerable parts of our population who are already digitally excluded. This amendment safeguards the long-term future of these services to ensure that broadcast TV and radio that is free at the point of consumption will continue to be available across the UK.
The recent World Radiocommunication Conference in Dubai secured digital terrestrial television’s place as the exclusive primary service in the crucial 470 to 694 megahertz frequency band across ITU region 1. This has secured reliable access to the radio frequency spectrum and regulatory conditions needed to deliver broadcast services such as DTT across the UK, and it solidifies their central role in the broadcasting landscape. However, I note that a further debate on spectrum use and future needs is scheduled for 2031, meaning that the call for certainty to 2040 and beyond is even more vital.
Let me be clear that I am not trying to act against the tide of progress towards IP delivery of television. However, I have spent far too much time looking at digital exclusion—most recently as a member of the Communications and Digital Committee of your Lordships’ House—not to understand the fatal flaws in believing that broadband provision will be the universal answer within 10 years. Our committee’s recent Digital Exclusion report noted that, even if rollout continues across the UK, take-up would not necessarily follow. Social broadband tariffs are still expensive; they are an additional monthly cost for the financially vulnerable—often with half the speed—and far too many people who could benefit from them do not even know that they exist.
Living in Scotland, I appreciate the fragility of the broadband network: how easily it is adversely affected by the weather and how so many parts of the country do not receive the speeds that are advertised by the providers. In fact, just this afternoon, I picked up on an email from a colleague from Alzheimer Scotland who has just done a piece of work on the impact on the elderly and vulnerable of BT moving all the telephone lines to digital. It is a shocking piece of work, looking at how this group has been left behind and how the telecom companies’ assurances about addressing the needs of vulnerable people have not been fully acted on.
A recent study by EY predicted that, regardless of rollout, more than 5.5 million properties in the UK will not have a high-speed broadband subscription in 2040. In contrast, DTT is free if you pay your licence fee. Yet, currently, these services, which the Digital Poverty Alliance describes as a “lifeline”, have no guarantee of a secure future. The Ofcom Online Nation report confirms that 6% of UK adults lack an internet connection at home. This is higher in Wales and Scotland, higher among older audiences—20% of people over 65 do not have an internet connection at home—and higher among people with disability, 11% of whom do not have one. As things stand, these populations face the threat of terrestrial TV being switched off forever within a decade, and many of the most vulnerable and excluded are in danger of being left further isolated.
Baroness Featherstone (LD)
My Lords, I shall speak to Amendment 32, to which I have added my name. The noble Baroness, Lady Fraser of Craigmaddie, has made an excellent case—I am not sure that I need to speak, but I am going to regardless—for the longer retention of this significant broadcasting platform, which serves millions of households and is a vital lifeline for the many who will become members of the digitally excluded if there is no extension to the current regime. According to statistics from Ofcom, in 2021, around 7% of United Kingdom households relied solely on DTT for their television viewing, and it is currently accessible to 98.5% of the population—pretty much everyone. If and when this goes ahead, those who rely on DTT and cannot for whatever reason—whether it is poverty or otherwise—transition to satellite, cable or internet-based services will be cut off, and the people in that position will obviously be the most vulnerable or poorest.
Television plays a central role in the lives of many people, including me; I love television. It provides entertainment and information, as well as a sense of shared experience and companionship. For those who are not tech savvy or have no access to alternative forms of television, it will be devastating. Transitioning to those alternatives is expensive. Potential upfront costs for equipment such as satellite dishes, set-top boxes and smart TVs for households on limited budgets will be unaffordable. We will be looking at an increase in social isolation and loneliness and loss of mental stimulation and cognitive function, as well as loss of emotional well-being and stress relief. There will be a cessation of access to information and news and physical health impacts.
I assume that this is a probing amendment at this point. I hope that the Minister will agree to extend the deadline for the termination of DTT but will also say something about financial or other support for those who are literally dependent on DTT and who will be adversely affected by its termination should the Government not be swayed by the amendments.
The ending of DTT would also have implications for the broadcasting industry. Distribution strategies will need to change. There will probably be a need to renegotiate contracts with distribution partners and to invest in new technology to deliver content over alternative channels. There may be a loss of advertising revenue; costs to consumers for subscription fees to alternative services; equipment and infrastructure costs for both consumers and suppliers; and an economic impact on related industries, because the broadcasting industry is interconnected with various other sectors of the economy, including advertising, content production and technology manufacturing. Losing DTT will have ripple effects throughout those industries, leading to job losses, reduced investment and decreased economic activity.
We will also see the exacerbation of the digital divide, as so well documented, as the noble Baroness said, in the Communications and Digital Committee’s report, Digital Exclusion. There will be increasing disparities in access to television services between different socioeconomic groups. While urban areas may have access to a wide range of alternative services, rural and remote areas will have limited choices and poorer quality of service, which would further marginalise communities that already face barriers to accessing digital technology.
Further, DTT plays a critical role in emergency broadcasting, warnings to the public and so on. Having just gone through the Covid experience, we know how important that is. The loss of DTT could compromise the effectiveness of emergency broadcasting systems, particularly for individuals who rely solely on over-the-air broadcasting. The loss of DTT, which supports public service broadcasting, could also diminish the availability of programming that serves the public interest—we heard how vital that is in our earlier debate on the first group of amendments—including educational content, cultural programming and programming for minority audiences. It could also reduce diversity in the media landscape, particularly if alternative platforms prioritise commercial interest over public service obligations, which I fear may be the case.
The Broadcast 2040+ campaign, as has been mentioned, is fighting this corner and has two core messages to deliver to the Government. The first is that broadcast services are relied on by millions of people and must be protected, and the second is that the Government must act now to safeguard these vital national assets for the long term, into the 2040s and beyond. I very much hope that the Minister will be able to address the issues that I have raised, and I look forward to his response.
Baroness Bonham-Carter of Yarnbury (LD)
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 (Con)
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.
Baroness Thornton (Lab)
I start by thanking the noble Baroness, Lady Fraser. As she was speaking, I was thinking, “Oh, I wish I’d said that”. It was a very coherent laying out of the issues. I also thank the noble Baroness, Lady Featherstone, for her support.
It is clear that this is a process, and a discussion will be needed all the way through it. I hope that Broadcast 2040+ is involved in some of the research and consultation that the department is doing, because there are 5.5 million premises that do not have high-speed broadband at the moment, and whose critical traditional TV and radio services have to be protected. We have to be able to take that into consideration.
The thing that troubled me a little about what the Minister said—which was reassuring in many ways—is that this is a very permissive matter for Ofcom. It is permitted still to make and advertise the licences. The question then is why it would do that. What are the criteria it would use for doing that? Those are the issues we need to tease out. We probably need to do that in the next little while because of the process of this Bill, which is about future-proofing. We are talking about how we ensure that linear television and radio, and so on, are still available to those who need it in the future. That said, I beg leave to withdraw my amendment.
“(2A) After subsection (1), insert—“(1A) The regulatory regime for Channel 4 includes the conditions that OFCOM consider appropriate for securing that, in each year, not less than 35 per cent of Channel 4’s total spend on qualifying audiovisual content is allocated to independent productions made by independent production companies with an annual turnover not exceeding £25,000,000.(1B) The Secretary of State may by order amend subsection (1A) by substituting a different figure for the annual turnover specified in that section.(1C) Before making an order under subsection (1B) the Secretary of State must consult—(a) OFCOM,(b) Channel 4, and(c) independent production companies that are likely to be affected by the order.””Member's explanatory statement
This amendment would add an “SME Guarantee” for Channel 4 commissioning, requiring that at least 35% of Channel 4’s annual spend on qualifying audiovisual content is allocated to productions made by “indie” producers with annual revenues smaller than £25m. This amendment also provides the Secretary of State the power to amend, following consultation, the revenue figure defining the production companies eligible under the SME Guarantee.
Viscount Colville of Culross (CB)
My Lords, I declare an interest as a freelance television producer who works for small independent production companies making content for public service broadcasters. I am also an officer of the Channel 4 APPG, so I speak as a critical friend to the channel. I thank the noble Lord, Lord McNally, for putting his name to this amendment. I also thank the many small independent companies to whom I have spoken, as well as Tom Chivers from the Media Reform Coalition, and Channel 4 itself.
I put down Amendments 14 and 15 to Clause 8 because I want to ensure that Channel 4 focuses its commissioning on future support for the SMEs. I hope the amendments will encourage the channel to expand its present commissioning process, which too often rewards large suppliers with large commissions. There will be much argument about the level of the cap below which companies qualify as SMEs. However, subsections (1B) and (1C) of this amendment give the Secretary of State the power to be flexible and alter the threshold figure if it proves to be too low for small drama producers, for instance, but only after she has consulted Ofcom, Channel 4 and independent companies.
Amendment 15 requires the criteria to be extended to an annual revenue of £25 million a year over five years. This would mean that a single large drama commission would not adversely affect a company’s status as an SME by pushing its annual revenue in a single year over the £25 million mark. The information on the company’s revenue will not be hard to find; it will be readily accessible in Companies House.
Channel 4 was set up in 1982 by Mrs Thatcher’s Government in order to break the duopoly of BBC and ITV. Its purpose was to disrupt the television ecosystem, which it did wonderfully well. Its aim was not just to have content different from the existing public service broadcasters and to reach new audiences, but to allow a thousand flowers to bloom. As Mrs Thatcher’s deputy, Willie Whitelaw, said:
“We must aim for a channel that says something new in new ways”.
He added:
“We must seek to provide an outlet for the talent of independent producers”.
Channel 4 has been very successful in encouraging thousands of people across the television industry to leave their comfortable staff jobs in the other public service broadcasters and take the risk of setting up small, independent television production companies. It created a culture in the media where independent producers became risk takers and small business owners, supplying a channel which aimed to reach minorities and poorly served audiences.
For much of the last few decades, Channel 4 has been at the centre of nurturing Britain’s independent television sector, which is the engine of our world-beating creative economy, the seed corn of the industry. But the media environment has changed dramatically in the last few years, both in content commissioning and in the supply side of the industry. Hundreds of small companies, which make up the lifeblood of the industry, have been bought up by mega television production companies such as Banijay and All3Media, which is owned by the American company Warner Brothers.
It is not surprising that these big companies have been so successful. In 2022, over three-quarters of Channel 4’s UK commissioning spend went to production companies with turnovers in excess of £25 million per year, while just 21% went to producers with annual revenues of under £25 million per year, despite these smaller companies making up more than half of all independent production companies in the UK.
Unfortunately, the latest figures, from 2022, show the percentage of Channel 4’s spend on commissioning from those bigger companies to have increased from 64% in 2020 to over three-quarters two years later, while the figures for the under £25 million companies have gone down from 36% in 2020 to 26% in 2022. This has happened at a time when Channel 5—which is privately owned—commissioned an amazing 81% of those smaller companies, a figure which has gone up even further in 2022.
This is contributing to the crisis in the industry, with commissions to smaller indies, and regions, collapsing. The latest BECTU survey of its members estimates that nearly three-quarters of its members are not working. Some 30% have not worked in the past three months, while 34% have had less than a month’s work since November 2023. As a result, there is a dramatic exodus from the industry, which has been one of the beacons of our economy. In February 2024, 37% of the respondents to the BECTU survey said that they were planning to leave the industry, with 40% of women and half of black respondents saying that they were going to look for work outside the sector within five years.
The money to build these small companies comes from the terms of trade, set up to ensure that they get the majority share of the back-end revenue from further sales of these programmes. This comes only from commissions by British broadcasters. US companies pay a straight production fee and keep all the back-end profit, so the Bill needs to focus on ensuring that British broadcasters support the future of up-and-coming content suppliers across the UK. The BBC is carrying much of the burden, but I and many other colleagues have fought hard to ensure that Channel 4 remains in public ownership. That mission having succeeded, the emphasis must be to encourage the broadcaster to support the next generation—the seed corn of television production.
I fear that Channel 4’s attitude can be summed up in its submission to Ofcom when renewing its 2024 licence, in which it said that
“the UK production sector continues to be significantly smaller outside London”,
with
“fewer production companies, often smaller in scale, and therefore with less capacity to develop creative ideas and produce them”.
This statement also relates to Amendments 16 and 17 in the next group, in the name of the noble Baroness, Lady Fraser of Craigmaddie, which will support quotas for commissioning in the regions and nations.
I have been talking to small indies across the country and have been told horrendous stories of the Channel 4 commissioning process—or lack of it. One told me of a series being cancelled just three weeks before filming was due to start. Others had the extreme difficulty of getting programme ideas through the channel’s commissioning process.
I want to balance my statements by pointing out that Channel 4 is capable of commissioning astonishing programmes from small production companies, such as “The Push”, from a small Leeds-based company, Candour, which had good ratings, and told an important story from a diverse community, but there are not nearly enough of these. The channel did point out to me that its emerging indie fund has invested £17 million over the last four years, to identify and nurture emerging talent and to help them grow their businesses. The fund also provides guidance to selected indies about the Channel 4 commissioning process, to provide them with the skill set to pitch for further work. This help must, of course, be welcome, but it is not revenue from commissions.
This great channel, which is still one of the jewels of public service broadcasting, is battling against the headwinds of a fiercely competitive television economy. As it is a publicly owned company, I call on the Government to push it further in supporting SMEs and to help to bolster the future of our creative industries. Channel 4’s slogan is “4 All the UK”, and I ask the Minister at least to look at Amendments 14 and 15, to ensure that this publicly owned channel does just that.
Lord McNally (LD)
My Lords, I point out that I did not speak at Second Reading. I was here until 6 pm and then went off to speak at a long-standing engagement at Queen Mary University of London.
It is a great pleasure to follow the noble Viscount, Lord Colville. I put my name to Amendment 14 because I strongly support his campaign, as he has explained it, to make sure that we do not get stampeded or bamboozled into policies because the world is changing, globalising and internationalising and we therefore think that certain things are inevitable. One of the things that we enjoy in the British broadcasting environment is that, for 100 years, we have been bucking the market. It was a Conservative Government that created the BBC as a public corporation safeguarded by a royal charter. It was a Conservative Government that introduced ITV as a confederation of regional television companies. Even today, ITV retains some of the DNA of that regional network; I still consider myself as coming from “Granada land”, and you can still find some of that company’s ethos in ITV today. As was pointed out, it was a Conservative Government, under Mrs Thatcher, that created Channel 4. Let us not be bullied; we have a good record of making television that is national—in the broadest sense—and distinctly British and that sets standards for others around the world.
Unfortunately, I cannot stay for the debate on the next group, but I crept into the meeting that was held on it. I felt like a Sassenach in the gathering of Scots and Welsh and Northern Irish people, putting the point, which has been proved time and again with a little nudging by government, that there is talent out there in the regions. But if you leave it just to the market, you have to make some effort to get results, because London is such a massive black hole of energy.
I am sometimes teased by my colleagues when I refer to the fact that I was on the Puttnam committee that gave pre-legislative scrutiny to the 2003 Act. One of the great advantages of the House of Lords is having that kind of perspective. When I look at that, I see that it was amazing that we got so many things right when we were not just looking through a glass darkly at what was happening. There was no internet and none of the technologies that have been developed in the last 20 years. In that Act, there were still various safeguards for making sure that our broadcasting ecology retained a British stamp to it—a British DNA—and that is why I support this amendment now.
I do not think that the idea for Channel 4 was to create a whole new industry of successful British indies, but that is what it did. It was perhaps too successful, in that many of those indies, as was referred to, were then swallowed up by other companies or themselves became big—not little—minnows.
However, that is the great effort: if we can keep this diversification of commissioning in Channel 4, and in the other countries and the regions, we are distorting the market to a certain extent but beneficially, by forcing it to find the talent in the regions and in the smaller companies. The noble Lord, Lord Vaizey, in his intervention earlier referred to the crude market forces “squeezing out” those opportunities. I therefore hope that Channel 4 will think again.
Lord Bassam of Brighton (Lab)
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 (Con)
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 (CB)
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.