Broadcasting (Local Digital Television Programme Services and Independent Productions) (Amendment) Order 2012

Lord Stevenson of Balmacara Excerpts

Monday 25th June 2012 Grand Committee

I hope that the Committee agrees that these deregulatory measures are proportionate and necessary. Without these changes, unnecessary regulatory and cost burdens remain on new local TV providers. It is essential that we help to create incentives for independent producers to invest in local TV and simultaneously reduce regulatory barriers. I assure the Committee that the order is compatible with convention rights. I beg to move.

[Lord Stevenson of Balmacara]

My Lords, I am grateful to the Minister for giving us some context for the order. It is a pity that so few of our colleagues have turned up to debate and enjoy the discussion, because this is an interesting topic. I am even slightly surprised to see that the Minister has managed to lose her civil servants as well. They must have tremendous confidence in what she is proposing and I quail at the prospect of trying to put down a few points that she might consider. I apologise if my voice gives out; I have a sudden summer cold and I am struggling to get my points across.

As we have heard, the proposals are part of a package to get local TV up and running. These provisions remove the 10% independent production content quota from applying to local television services and remove the ownership ceiling for independent producers to have full ownership of local TV services without losing their independent status.

The UK independent production sector is a great economic and cultural success story. In less than 10 years it has grown from a cottage industry to the world’s biggest exporter of TV programme formats. Sector revenues have grown from £1.6 billion in 2004 to £2.3 billion in 2010, with companies of global scale emerging, and it is heartening that production companies can be found right across the UK, not just in London. The independent sector now makes around 50% of qualifying UK television programmes and employs more people than the combined TV divisions of the BBC, ITV, Channel 4 and channel Five. However, it would not be so successful—indeed, some people would argue that there would not be an independent sector at all—if it had not been for the 10% independent production quota. It is that simple.

The proposals that we are discussing today have been subject to a public consultation. However, we need to do a reality check here on several grounds. First, the consultation had a very limited reach. The DCMS confirms that a total of 12 responses to the consultation were received from a range of organisations, including potential local TV providers, independent producers, industry bodies and other interested parties. This is from one of the best resourced and most vibrant TV economies in the world. What, I wonder, does that tell us? Secondly, the limited number of responses received raises questions about what other parts of the industry think about these proposals. There was nothing from advertisers, nothing from ITV, nothing from Channel 4—although S4C responded—and nothing from regional newspapers or other media interests in localities. Scotland is represented, but what of Wales and Northern Ireland? Local government is not present, despite the ostensible impact that this will have on its initiatives.

Thirdly, although there are responses from the BBC, the trade union BECTU and PACT, which represents some 500 producers in the UK, the report does its best to reduce all responses to numerical equivalents across the 12 responses, with very little attempt to differentiate producer interest from public interest or potential licence holders from competitor interests at a regional or national level. I should be very grateful if the Minister would comment specifically on how she justifies basing her proposals in the order on this very flawed and inadequate consultation. Can she explain how the department considers it to have been a sufficient exercise? Can she also let us know whether it considered any other ways of getting a better sense of the industry’s views, which would have allowed it to draw meaningful conclusions about why these methods were rejected, if they were?

I thought that this Government accepted the need for evidence-based policy, but I struggle to see what compelling evidence exists on the 10% quota, for example, when I read:

“Of those who responded, three respondents supported removal of the quota, one suggested a quota increase, five did not comment and three were opposed to a change”.

The DCMS consultation response goes on:

“One industry body stated that there is a strong demand from independent producers to provide content for local TV services, so local TV licence holders should not have difficulties in finding independent producers willing to make content for them in order to meet the quota. However, other respondents (including potential local TV providers) suggested that a 10% quota would be a significant burden for any local operator, given the local TV station cost assumptions, and could present an administrative barrier to long term sustainability”.

One can, without much difficulty, assert that those bidding for a licence are likely to support the lifting of the quota as much as PACT, the independent film and TV-makers’ trade body, are likely to oppose it, but what evidence was produced to back up the Government’s assertion that a quota would indeed be a significant burden and should be refused? Perhaps the Minister could enlighten us later.

To be frank, this consultation was a complete failure. The fact is that there is nothing in the published responses to justify the decision that the Government want to take today. If you take the trouble to read the submissions made to the public consultation, as I have, you are left in no doubt that, despite the paucity of response, the general feeling is that there is no case for removing the 10% quota and there is a real danger in lifting the 25% ceiling on ownership by independent producers.

It is probably too late to revise this order, particularly as I understand that Ofcom is currently advertising local TV licences, so I will end by suggesting some things that the Government might wish to consider. There is strong evidence of a willingness by independent producers to provide local content for local TV services. The strength of the sector undoubtedly derives from the 10% quota applying elsewhere in the system and, if it ain’t broke, why fix it? I suggest that the Government should consider, as PACT rather generously, in my view, suggests, the introduction of a grace period of perhaps two or three years during which the quota would not be enforced at a local level.

Secondly, the Government should require Ofcom to publish the percentage of independent productions that has actually been transmitted by licensed local TV stations each year, so that we have an evidence base. The department should commit today to making local TV services compliant with the quota in, say, three years’ time.

There is concern in the production community that the removal of the quota in the case of local TV will be the thin end of the wedge as far as regional and national production is concerned. Therefore, I suggest that the Government confirm today that this is a truly exceptional case which is being considered only because the AVMS European directive permits member states to disapply the 10% quota in relation to television broadcasting intended for local audiences that does not form part of a national network. Also, in line with the AVMS directive, the Government should confirm that they have no intention of relaxing quotas for other broadcasters.

In relation to the proposal to remove the 25% ownership ceiling on independent producers owning a local TV licence, the Government should recognise and be sensitive to the fact that this will be seen as opening the door to pressure from other bodies to amend the definition of independent producer in other contexts. In particular, there is concern that this would reopen calls from Channel 3 licensees, such as STV, to qualify for independent producer status. We therefore suggest that the Government take this opportunity to confirm that they will not amend the current definition of independent producer more generally.

Finally, given that as a result of these and other changes one or more independent production companies would be able to own one or more local television stations, the Government should recognise that this undermines the fundamental rationale for the current distinction between independent production companies and broadcasters. These proposals, together with the Media Ownership (Radio and Cross-media) Order 2011, which removed all local cross-media ownership rules, would appear to suggest that a single media organisation will be able to run a majority of news services in a local area while at the same time potentially having a large interest in national news provision. I suggest that the Government take this opportunity to confirm that they are very concerned about media plurality and will require Ofcom to review the impact of these changes on that fundamental issue within three years of the first licence being awarded.

The Minister called this a deregulatory order and suggested that we should support it for that reason. However, I fear that it will cause quite a lot of damage to the independent production sector and will not be appropriate invigoration for local media activity. I apologise for my voice, which is just about to give out, and thank noble Lords.