Baroness Rawlings
Main Page: Baroness Rawlings (Conservative - Life peer)Media Ownership (Radio and Cross-media) Order 2011
Baroness Rawlings Excerpts
Baroness Rawlings
That the draft Order laid before the House on 14 February be approved. 17th Report from the Joint Committee on Statutory Instruments.
Baroness Rawlings
My Lords, many of us are hungry for news, so naturally local newspapers, radio stations and television services play a vital and nourishing role in communities across the country. Their ability to scrutinise and hold local institutions and officials to account is an essential part of a healthy democracy. This is why rules to protect the choice and variety of local media have long been a feature of the UK regulatory landscape—in particular, the securing of plurality of voice through media-specific ownership rules. I know that the House of Lords Communications Committee gave great consideration to these rules in its 2008 report The ownership of the news. While the committee concluded that there remained a strong case to continue controls over the ownership of news providers, it recommended that local cross-media ownership restrictions should be lifted and that the impact of local cross-media mergers could be examined through the application of the more flexible public interest test. Although differing views within our media remains important, we believe that some of the ownership rules currently in place are a barrier to choice as they are stifling innovation and competition. This is because they no longer reflect the markets to which they apply—specifically, the local media markets.
Recent years have seen a significant decline in the revenues of local radio stations and newspapers. Local and regional newspaper advertising revenues decreased by 5.4 per cent in the second quarter of 2010 and the Advertising Association forecast that their revenues may continue to drop throughout 2011. In addition to this challenging market, local media companies are facing increased competition driven by the growth of digital technologies. Consumers now have, in many cases, free access to a wide selection of digital content that is available whenever and wherever they are able to receive a mobile signal or access a broadband connection. The changes to the local media landscape in terms of declining profits and increased competition represent a permanent reshaping of these markets, and if they are to prosper, they will need to adapt and be given the flexibility to grow. The Government have made a commitment to help the market deal with these issues. In the coalition programme for government we made a commitment to enable,
“partnerships between local newspapers, radio and television stations to promote a strong and diverse local media industry”.
It has always been the intention to keep under review the media ownership rules to make certain that they remain appropriate. This is why the Communications Act 2003 requires Ofcom to review media ownership rules every three years and assess the extent to which they remain relevant. The last such review was carried out in 2009 and concluded that significant liberalisation of the local ownership rules was desirable. Ofcom stated that such liberalisation could give the industry, and I quote,
“flexibility to respond to pressures and remove potential barriers”,
to the success of the local media sector. Ofcom’s recommendations were also supported by the Culture, Media and Sport Committee. In fact, its report Future for Local and Regional Media, published in 2009, urged the Government to go further, pursuing, “more far-reaching reform”. Taking account of Ofcom and the committee’s recommendation, this draft order will remove all the current local cross-media ownership rules—local, not national. Under the deregulated regime to be created by the draft order before the House today, local newspapers, radio companies and owners of Channel 3 licences, subject to competition law, will be able to consolidate, reduce costs and build successful businesses that could otherwise face the possibility of closure.
We are of course conscious that such changes must not in turn have a significant impact on the plurality of local media. Therefore, it is important to note that the public interest test which the noble Lords in this House so vocally championed during the passage of the Communications Bill will still apply under this framework. The Secretary of State, too, retains the capacity to intervene in media mergers on plurality grounds where a merger could give rise to public interest concerns. I would also reassure noble Lords that the national cross-media ownership rules, which restrict the concentration of national newspapers and Channel 3 licences, will remain in place. These rules will continue to protect against the excessive influence of a national media and to safeguard a diversity of views and opinions across the most influential national voices.
However, this draft order will remove the unnecessary and complex local radio media ownership rules which were designed to make certain that listeners in a given area had access to a minimum of two commercial radio operators and the BBC. These restrictions were designed for an analogue world and do not take into account the emerging digital radio landscape. Nor do they reflect the growth of the community radio sector, with over 200 community stations operating in the UK. Listeners now have access to a wide range of radio stations at local, national and indeed global level. We believe seeking to regulate in micro-local markets no longer reflects the wealth of choice available to listeners.
Finally, and again in respect of digital radio, this draft order will remove the rule preventing the ownership of more than one national multiplex. This Government have been clear about their intention to support the radio industry in realising the potential of digital technologies. We believe that the removal of these rules will support the launch of a second national commercial multiplex, which will provide greater choice for listeners and opportunity for radio companies.
Collectively, these measures provide a possibility to promote a successful model for the future of local media and will encourage greater innovation, investment and security for the provision of media at the local level. I assure the House that we are satisfied that the order is compatible with the convention rights, and I commend it to the House.
Baroness Jones of Whitchurch
My Lords, I thank the Minister for her very helpful introduction to the order. We have debated media plurality before in the context of the national media, and she will know that it is an issue about which many noble Lords across your Lordships’ House have voiced concerns. In many ways, the fundamental issues remain the same: in a vibrant democracy, it is not in our interests to allow a monopoly of news and opinion to dominate media outlets. Consumers need a guarantee of choice and diversity.
That is why Ofcom, quite rightly, has been cautious in its advice on this matter when it has been sought by Ministers. I have read the advice issued by it on local media rules both in 2009 and 2010. It appears that it is only with some reluctance that it is recommending a further step towards the liberalisation of the remaining rules of local ownership. We understand that reluctance because, whatever the immediate circumstances might be that force us to go along with a more laissez-faire approach, it remains the case that once the rules of ownership are relaxed it is difficult to backtrack should an unhealthy monopoly develop. We have to be satisfied that the Secretary of State remains committed to the fundamental principles of plurality, is alive to any threats and is prepared to intervene under their remaining powers if necessary.
However, we are also sensitive to the difficult commercial environment currently challenging local media. I say to my noble friend Lord Prescott that, on this issue, we differentiate between trends at local and national level, because it is true that local advertising revenues are down and many local newspapers are struggling to survive. As we have heard, those that do survive are cutting back on quality and local reportage. Meanwhile, the pressure of competition from multimedia outlets across a wide spectrum of platforms is damaging the economic viability of local radio. Those services still have a valuable customer base, but are in danger of becoming commercially untenable. The noble Lord, Lord Fowler, and my noble friend Lord Gordon both made powerful cases for strengthening the role of the regional press and local radio in delivering diversity in local media output. We therefore recognise that if the Government were to maintain too strong a grip on the issues of local plurality, it might be at the expense of the very services we are seeking to protect. So, along with our undeniable caution, there is a case for some pragmatism.
As the noble Lord, Lord Clement-Jones, reminded us and as Ofcom pointed out, we are protected from a complete monopoly at a local level by the continuing strength of BBC local radio. But, as we know, the BBC is reviewing the scope of its output in many areas in response to the licence fee cut. Can the Minister update the House on any discussions held between her department and the BBC about its continuing commitment to and resourcing of local radio?
The Government have also created great publicity around their plans for local television. While we are not yet convinced of the commercial viability of these proposals, we nevertheless acknowledge that if they were to be realised, local TV could provide new players in the market locally and thereby increase the diversity of media outlets. However, this would be the case only if the plurality rules were applied to ensure that one proprietor could not own local TV, local radio and local newspapers in the area. In other words, what would stop one person controlling all the commercial radio and TV output in, for example, Manchester? Can the Minister guarantee to the House that, should the order be agreed, the liberalisation of the rules would not be extended to local TV? It would be helpful if she could update us on progress in this regard.
If we approve the order today the last backstop preventing local media monopoly is the Secretary of State and his residual powers to apply the public interest test. So far his track record in this regard is not good. His handling of the debacle of Murdoch’s proposed takeover of BSkyB, which he has continued to support against a barrage of criticism from the public, politicians and media competitors, shows a callous failure to defend the principles of media plurality. My noble friend Lord Prescott has, quite rightly, again raised concerns about the credibility of the Murdoch empire in going forward and seizing further control of national media.
What reassurance can the Minister give the House today that the Secretary of State understands the strong demand for diverse media outlets in this country as part of a vibrant democracy and that he is prepared to actively intervene to prevent media barons’ creating monopolies at a local level? There is a crisis of confidence in his role and we still need convincing that he remains ready to stand up for these principles. On this issue I share the comment of the noble Baroness, Lady Howe, that a robust restatement of the role and status of public interest would be helpful.
There remains a residual protection against the development of unfair monopolies in that the Government give a commitment in the Explanatory Memorandum to reviewing the new measures a year after they come into effect. Can the Minister give some clarification as to the nature of that review and how it will be reported back to Parliament?
I hope, with suitable reassurances on these points, we will be able to support the order today.
Baroness Rawlings
My Lords, I thank all noble Lords who have contributed to this interesting and lively debate. I am grateful, too, to those noble Lords who have given the order their support.
I appreciate that the order may raise some concerns about the need to protect a wide variety of opinions and views in our media; equally, we acknowledge the argument that greater consolidation at a local level could lead to a reduction in locally made content. However, we believe that the draft order strikes the right balance between recognising that the local media markets have changed and the need to protect consumers’ interests and needs. The best way to secure high-quality local content and diversity is by creating a framework in which local media businesses can thrive, innovate and compete.
It is these principles which underpin the Government’s current proposals for local television, which will add to choice and balance at the local level. Television is a powerful and trusted medium and local television has the potential to offer many social and democratic benefits to communities and economic benefits to the local media industry. As I said earlier, the rules that this order removes have always been in addition to general competition rules and the public interest test. These remain in place to make sure that there is proper choice to protect against undue concentration.
I turn now to the specific questions asked by noble Lords who have contributed to the debate. I accept the vast knowledge of my noble friend Lord Fowler on this subject and I agree that the regional press are greatly trusted. I thank him for his support, especially in regard to the public interest test. He asked about competition rules, an issue which I suggest should be considered by the communications review. DCMS recently published an open letter inviting responses to high-level questions related to the communications review. Responses to these questions will inform our approach to a communications Green Paper, due to be published at the end of this year, which will in turn be followed by a full consultation and White Paper. I encourage all noble Lords to contribute.
On the question of local newspapers and their ownership, I was interested to read that over 80 per cent of local and regional titles in the United Kingdom are owned by six publishing groups—Archant, Associated News, Johnston Press, Newsquest, Northcliffe and Trinity Mirror Group—which have made some progress despite the downturn over the past two or three years.
I thank the noble Lord, Lord Gordon of Strathblane, for his constructive intervention. With his long experience, he is always interesting when speaking on this subject and I support what he said.
My noble friend Lord Clement-Jones asked why the order took so long. It was due to parliamentary business, the Easter Recess and the Recess we have just had. He asked about public interest and sufficient plurality, as did the noble Lord, Lord Prescott. I assure the noble Lords that plurality can still be maintained through competition law and, where appropriate, the public interest test. Plurality means giving citizens access to a variety of sources of news, an essential part of a democratic society resulting in a healthy media sector.
On the issue of emerging local television and the possibility of investing in further local television, the Government believe that one of the barriers preventing commercially sustainable local television from emerging in the UK was the restrictions around media ownership. With the removal of the rules for local media, which are now no longer necessary, local media companies will be free to affiliate and develop cost-effective local television service models, benefitting from syndication of resources, journalists and technical expertise, much as mentioned by the noble Lord, Lord Gordon.
The noble Lord, Lord Prescott, returned to the Sky debate and his concern about hacking. On the merger of BSkyB and where it has got to, this is not the subject of today’s debate. However, I can confirm that the Secretary of State is now considering the responses made to the consultation and will make a statement as soon as possible. This merger is being considered under the public interest rules and I can confirm to the House that these rules will remain untouched by this order. The Secretary of State is following a quasi-judicial process and this is a matter for him. I am sure the House will appreciate that I can discuss only the process. The Secretary of State has followed a very transparent process and has published even more than is required by legislation. As to the phone hacking mentioned by the noble Lord, Lord Prescott, as I have said before, these are serious allegations—but they are matters for the criminal courts and not for this debate today.
In answer to the points made by the noble Baroness, Lady Howe, who knows so much about the press and public interest, the public interest takes account of the need for those,
“persons carrying on media enterprises … to have a genuine commitment to the attainment in relation to broadcasting of the standards objectives set out in … the Communications Act 2003”—
which she probably knows well.