Economy: Broadcast Media

Lord Gardiner of Kimble Excerpts

Thursday 28th November 2013 Lords Chamber

[Lord Gardiner of Kimble (Con)]

My Lords, I start by congratulating my noble friend on securing this debate. As I expected, it has been wide-ranging and thought-provoking and it has displayed a wealth of experience. It also provided noble Lords with the opportunity to hear four outstanding maiden speeches. My noble friend Lord Holmes of Richmond rightly drew attention to sport—a key element of the broadcast media and important to so many. My noble friend Lady Humphreys spoke up for S4C, media broadcast and her rural community. S4C of course has funding not only from the Exchequer but through the BBC. As long as the funding timespan is agreed, the Exchequer funding for S4C is confirmed at the current level into 2015-16 and there is, in addition, BBC licence fee money up to 2017. I am sure that that will all be part of the continuing discussions, but what a good job that channel does.

My noble friend Lord Purvis of Tweed gave us an insight into the broadcast media in Scotland. His reflections on that glorious part of our nation, the Borders, were extremely important. My noble friend Lady Grender spoke of the reputation of broadcast media, about which many of your Lordships also spoke. I was struck by the words of my noble friend Lord Watson of Richmond. The noble Viscount, Lord Colville of Culross, spoke about the importance of impartiality. I felt personal sympathy with my noble friend Lady Grender in her view of the A-list of broadcasting. I felt myself, as I looked at your Lordships and heard the speeches that noble Lords were delivering, that I had no direct experience. It has been a very interesting and important debate.

Broadcast media touch us all, directly and powerfully, through coverage of hugely popular and exceptional occasions such as the wedding of the Duke and Duchess of Cambridge, the Diamond Jubilee and the Olympic and Paralympic Games. My noble friend Lord Holmes mentioned the Games and his journey from Seoul to London. I believe that we are in debt to him for the part that he played in enhancing the important and nation-changing element that the Paralympics in London represented for the nation. The media also touch us through the more routine enjoyment of listening to the news on the radio each morning.

Through these turbulent economic times, the UK has continued to benefit from what I have called a vibrant broadcast sector, which my noble friend Lady Bonham-Carter referred to as “resilient”, the noble Lord, Lord Bragg, as “strong” and the noble Lord, Lord Birt, as having “exuberance”. The sector leads the way in the quality of its content and contributes to the country’s economic well-being.

As a number of your Lordships said, the UK television industry generated £12.3 billion in revenue last year. The UK broadcasting industry comprises a mixture of public service broadcasters—BBC, ITV, Channel 4, Channel 5 and S4C—and commercial multichannel broadcasters such as Sky and Discovery. Because of parliamentary duties last night, I was unable to go to the global TV hub presentation but I am sure that it was particularly interesting and I would very much like to hear how it went from noble Lords who attended.

All this provides an environment where consumers are well served with a broad choice of content, including sports coverage, which made up 11 of the 15 most watched programmes in 2012. My noble friend Lord Addington rightly referred to that in terms of the impact that it should have, and I hope will have, on the health of our nation. That content also includes arts and culture programmes such as the BBC’s “Imagine” strand, digital radio stations such as Absolute Classic Rock and shows such as “Grand Designs”. There is abundant choice for the UK audience—I entirely agree with the noble Baroness, Lady Bakewell, in that regard.

Multichannel broadcasters have doubled direct employment in the UK over the past decade and increased their turnover to £5 billion last year. The PSBs invested £2.6 billion last year in UK content. Non-PSBs have increased their investment, too, with Ofcom estimating it at £1.2 billion per year. The Government want to ensure that such investment in UK content is sustained and supported.

My noble friend Lady Wheatcroft spoke about international exports. The development and international sale of programming is remarkable. The UK is second only to the United States of America in TV content sales, which reached £1.7 billion last year. New markets in China, India and Indonesia present extraordinary opportunities; exports to China rose 90% last year. Sales to the United States of America were up 11% to £475 million, representing 39% of total sales. Digital rights are growing rapidly, as are co-productions. This sector is one of the fastest-growing sources of international business.

Formats such as “Who Wants to be a Millionaire?” have been sold to more than 100 countries worldwide. “Strictly Come Dancing” is licensed to 48 countries, with a worldwide audience of more than a quarter of a billion people. Dramas such as “Sherlock”, “Parade’s End” and “Downton Abbey” have bolstered Britain’s reputation and are attracting more international investment. Your Lordships have already mentioned “Doctor Who”. Its 50th anniversary special has just had a record-breaking global simultaneous broadcast—I am informed by officials that it is called a simulcast—that reached 94 countries across all the continents. The noble Lord, Lord Birt, referred to Monty Python.

My noble friend Lord Shipley referred to the trio of theatre, cinema and television coming together and making all these great productions more accessible across the land, which is an increasing part of the cultural experience. The noble Baroness, Lady Bakewell, used the term “the direction of travel”. The direction in which we are going is extraordinary, and the consumer, the viewer and the listener have a considerably enhanced experience.

The independent production sector, which a number of your Lordships mentioned, is also a major export success story. Independent producers are increasingly winning commissions direct from international broadcasters, as well as selling a greater number of finished programmes and formats to international buyers. Channel 4 commissions all its content from the independent production sector, supporting a wide range of SMEs across the United Kingdom. These commissions are a key part of the UK’s international sale of programmes and formats. My noble friend Lady Grender particularly referred to that.

We should not forget radio, which is also a major export. For example, talkSPORT broadcasts Premier League matches in eight languages—English, Spanish, Mandarin, Arabic, Malay, Indonesian, French and Vietnamese—from its base in London to 25 different markets in Europe and the rest of the world. I hope very much that my noble friend Lady Wheatcroft will approve of that. In response to the noble Lord, Lord Stevenson of Balmacara, I should say that UKTI-led events and the GREAT campaign are very important in beating the drum for the sector. I have looked before at the various tours that have taken place and there are many examples of where the creative industries, quite rightly, are in the frame as part of those tours.

The economic contribution made by the sector is clear, but we should not forget that it plays an equally vital educational, social and cultural role. The noble Lord, Lord Stevenson of Balmacara, quite rightly stressed this. The noble Lord also mentioned the settlement in this sector. I think that it is fair to say, having looked at it again, that in many respects the endurance of cuts, which in an ideal climate many would regret, was a good settlement in the end for the sector compared with many other sectors, although I understand the issues that a number of your Lordships have mentioned.

I particularly want to mention the BBC World Service, which my noble friend Lady Wheatcroft spoke so powerfully about. I agree with the noble Viscount, Lord Colville of Culross, that it is an important aspect of our collective identity. The BBC World Service has the largest audience of any international broadcaster, with a weekly reach of 192 million people; add BBC World global news and the figure becomes 256 million people.

The sector supports a host of highly skilled jobs in distribution, marketing and technical and support services. Overall, according to the Creative UK report, the sector supports more than 7,000 firms and 132,000 jobs. The talent of tomorrow must also be nurtured, as many of your Lordships said. I was interested that Channel 4’s 4Talent, for example, offers work experience placements, apprenticeships, workshops and master classes to people looking to gain entry into the creative industries, alongside funding and support for external skills bodies such as Creative Skillset and the National Film and Television School.

The noble Lord, Lord Bragg, and the noble Baroness, Lady Bakewell, referred to Sky. Sky delivered more than 104,000 training days and 160,000 hours of e-learning across its business. Mention was also made of the Sky Academy, which has the ambition of creating new opportunities for up to 1 million young people by 2020. The BBC will be taking on an apprentice in every BBC local radio station across England and in stations across Scotland, Wales and Northern Ireland by September 2014. ITV invested £50 million in enhancing facilities in Leeds and at MediaCityUK in Salford, which my noble friend Lady Bonham-Carter referred to as the hub of Salford, which is important across the media area. Indeed, ITV’s investment in skills and development training to help the next generation of talent across the UK should be acknowledged. The noble Lord, Lord Bragg, mentioned ITV in particular. It is remarkable that ITV is now in the top five biggest independent producers in the United States of America and one of the top three European programme distributors.

Radio is a valued source of entertainment, education and information for millions of people across the country. Every week, 90% of the adult UK population listens to the radio. It is a significant employer, with an estimated total workforce of 17,500 people, and total radio industry revenue last year was £1.2 billion. Some 65% of adults tune in to commercial radio at least once a week. BBC Radio 2 is the most popular radio station in the UK. BBC national and local radio, commercial radio and community radio are all part of the vibrant mix. Since 2010 there has been a further shift to digital listening, which now represents over 35% of all listening. Conscious of consumers, the Government are looking at how to support the long-term transition to digital radio. A more detailed announcement will be made at the end of the year.

I now turn to how the Government are playing and need to play a part in supporting the growth of UK broadcasting. As part of the Government’s wide-ranging review of the communications sector, our discussions with industry, regulators and consumer groups indicated that the present framework is broadly operating well, is generally working for the consumer and supports economic growth and innovation. However, where legislative changes are deemed necessary, the Government will act. An example is the prominence of public service broadcasters. We need to update electronic programme guide regulation, to keep pace with recent developments in TV technology, to provide flexibility to adapt to future technological changes and to preserve public service broadcasters’ prominence. We all value high-quality content, which the noble Lord, Lord Sugar, concentrated on, and we expect public service broadcasters in particular to adhere to this. The public must be able to continue to find and enjoy this in the future, so we expect to consult on these issues in the near future.

My noble friend Lord Watson of Richmond mentioned the wider creative industries. Indeed, the media broadcast sector cannot and does not function in isolation. I acknowledge the work of the wider creative industries. Collectively, the creative industries are worth more than £36 billion a year to the UK. The creative industries supporting the broadcast media include: craftsmen and craftswomen, fashion designers creating props and costumes, production crews, make-up artists, composers and musicians, and many more. My noble friend Lady Wheatcroft and others quite rightly mentioned the skill of advertising.

Again, the Government have an important role to fulfil. The Government helped to set up the Creative Industries Council in 2011. Led by industry, the council now works to ensure that barriers to growth can be removed. A sub-group of that council will look at access to finance skills, export markets, data collection and infrastructure. If I have more detailed information, I will certainly write to my noble friend Lord Watson of Richmond about these matters.

The Government have set up a range of creative content-targeted tax reliefs, such as tax breaks for British films. There are clearly strong links between the film world, which benefits from these tax incentives, and broadcasting. For example, Channel 4 is a major investor in UK film. Indeed, films supported by Channel 4 have won 14 Oscars in the past seven years. My noble friend Lady Bonham-Carter mentioned tax reliefs for animation and high-end TV. These came into force in April this year, to support innovation and the growth of the content for which the UK is renowned. These initiatives are already bringing more productions to our shores; for example, “Outlander” is being made in Cumbernauld and “Game of Thrones” has had a significant impact on the local economy and skills base in Northern Ireland.

Furthermore, as was announced earlier this week, local television has now started broadcasting in the UK, with Grimsby channel Estuary TV leading the way. Another 18 channels will be launched in the spring, with a further wave of channels to come. This was raised by the noble Lord, Lord Birt, my noble friend Lord Shipley and others. It is an important feature and part of the direction of travel that the noble Baroness, Lady Bakewell, referred to. I say to the noble Lord, Lord Stevenson of Balmacara, that, as a countryman, I am passionately keen to ensure that broadband results are going to grow swiftly in this tail end of the process of establishing what I hope will be successful coverage for the overwhelming majority of if not the whole nation very soon.

The importance of the broadcast media in the UK and the contribution that they make has been outlined most eloquently by your Lordships today. The Government’s role must be to ensure that the environment is suitable for the sector to continue to flourish. There are undoubtedly challenges and opportunities in this increasingly converged world. The title of today’s debate specifically highlights the economic contribution of broadcast media. That is not in doubt. What is impossible to assess adequately or precisely is what this sector contributes to the social and cultural well-being of our nation. As noble Lords mentioned—particularly the noble Lord, Lord Stevenson of Balmacara—it is a prime example of how soft power operates across the globe in the British interest. The reputation of our nation abroad is in no small measure enhanced by the UK’s high standards for content—set by producers and regulators, and by the expectations of those who listen and watch. That reputation is secured by and because of the talented, hard-working people in the industry. We can be proud of the quality that they bring to the screen and to radio.

In this debate, the broadcast media have rightly been championed and their prospects encouraged and there has been openness about some of the problems that need to be addressed. All these matters could not have been better articulated by your Lordships, from all parts of the House.