Deregulation Bill

Lord Stevenson of Balmacara Excerpts

Tuesday 11th November 2014 Grand Committee

Moved by

[Lord Stevenson of Balmacara]

78ZA: Clause 58, page 44, line 22, leave out “is not provided with a view to profit” and insert “cannot generate more income than the total cost of the exhibition”

[Lord Stevenson of Balmacara (Lab)]

My Lords, in moving Amendment 78ZA, I shall speak to Amendments 78ZB and 78ZC in this group. These are probing amendments, as I have some sympathy for what is being proposed. As a former director of the British Film Institute, I can hardly object to a measure which is aimed, I think, at broadening access to group viewing of films, which must he a good thing. However, I worry that what this clause proposes is at one and the same time oversimplistic and unsighted about some of the problems of operating such venues.

The clause effectively would create two classes of film exhibitor—one that is regulated and another that is unregulated. In the regulated sector would be the majority of current commercial cinema operators and several dozen existing voluntary and community-run enterprises, such as the Ritz Cinema in Thirsk and the Market Hall community cinema in Brynmawr, which in its 120th year was recently awarded “cinema of the year” at the prestigious Screen Awards—something which we should all celebrate.

In the unregulated sector would be the new “community premises” over which the appropriate licensing authorities would have no control. I suggest that we need some definitions. What are the community premises of which the Bill speaks? Will the Minister spell out today the type of venues these community premises would be? Who can operate these events? New Section 6A(2)(b)(i) to be inserted in the Licensing Act 2003 under Clause 58 suggests that they might be,

“a trade, business or other undertaking (for profit or not)”.

I assume that this might include, for example, a pub, a bingo hall or any other place which would otherwise require a local authority licence to attest to its ability to host a public gathering. Perhaps the Minister will confirm that. If such operators were to organise any other type of event, such as a dance or a charity function, particularly if alcohol was to be sold, would these meet the same definition of “community premises” and would they need to be licensed?

The Government have made the proposal sound like an idea to open up windy church halls to genteel afternoon showings of perhaps classics of the silent cinema or even “Brief Encounter” and the like. However, the clause is so loosely worded as to allow for any operator to exhibit any film without a licence. The clause opens up a world in which any group might exhibit virtually any type of film or video presentation in public. What about children? What is role of the BBFC in this matter? What role will the local authority have in all this? I seem to remember that the wonderful film “Life of Brian” is still banned in some local authority areas.

What is a not for profit venue? The Government suggest that this clause is aimed at not for profit venues but no legal definition is offered. Given that the venue itself could be for profit or not, how does that sit with the wording in the clause, which states that the deregulated film exhibition,

“is not provided with a view to profit”?

What does that mean? Does it mean that the film costs less to hire than the price of entry, that the ticket income does not exceed the cost of any venue hire or that the total revenue for the event, perhaps including food and drink, does not exceed total costs, including contributions to the venue’s heating, lighting, staff and other overhead expenditure? We need more detail on that.

At the heart of all this is the question: why should public safety regulations not apply? An existing commercial cinema exhibitor must adhere to licence regimes covering fire, electrical and heating safety, hygienic food handling practices, noise pollution and local environmental rules, as well as, on occasion, fitness to serve alcohol. Why would the Government want to reduce existing levels of public protection? We should remember that these venues will be capable of holding up to 500 people at such an event. What happens if there is a problem such as a fire?

More generally on the size limit, why is it so high? Will the Minister explain the thinking here? I am informed by the Cinema Exhibitors’ Association, which represents well over 90% of UK cinemas, that there are no more than 60 screens nationwide which can show a film to an audience of 500 persons. Why then should an unregulated cinema be allowed to present films in an unregulated environment to so many? I strongly suggest that the Government consider a much lower maximum attendance figure.

Finally, unregulated film exhibition of the type proposed threatens to significantly weaken controls over piracy, which remains a very real threat to the livelihoods of all those working in the wider film industry. What consultations have the Government held with the industry about this, and what reassurances have they given? Are they content with the situation more generally?

Existing licensed cinema operators have a strong history of offering safe, clean, well managed and fair access; the lack of clarity in this clause is not helpful and we need a lot more detail from the Minister when he responds. In an extreme case—it would be extreme, I recognise that—the Government could find themselves deregulating cinema exhibition for a well meaning purpose but letting unsavoury operators into a market that is currently well regarded, law-abiding and safe for its customers and staff. Quite apart from the health and safety, fire, food and environmental regulations gap, will the Minister say how the Government can be certain that the other necessary public protections, such as child protection, will work in practice?

Undefined “community premises” no longer needing to apply for an entertainment licence would effectively fall off the radar of protection and enforcement authorities. The planned changes, although welcome, appear to put at risk the high standards of safety and child protection that have worked well over the years. There would be little or no oversight of the admissions criteria or content shown at community premises and no real control over who could claim such community status and so avoid enforcement. The level playing field in standards for public protection would be lost.

Our amendments point to the need for further work on the maximum audience size, on the definition of community premises and on defining what “not for profit” means in practice—all aimed at avoiding the creation of an unlevel playing field with existing regulated community cinema providers. Assurances are also needed about the continued regulatory role of enforcement bodies in order to ensure that wider public protections are in place to safeguard customers, with regard to, for example, underage admission, BBFC certification, piracy, public decency and safety standards. I beg to move.

[Lord Gardiner of Kimble (Con)]

My Lords, I thank the noble Lord for his amendment. It is important that I should start with the definition of “community premises”, because I hope to be able to reassure the noble Lord and your Lordships as to the modest nature of these measures, and the protections included in them.

Community premises, as defined in Section 193 of the Licensing Act, are those premises which are or form part of a church hall, a chapel hall or other similar building, or a village hall, parish hall, community hall or similar building. The Government’s view is that this modest measure relates only to the exhibition of film in community premises as I have outlined. We do not believe that these events will bring in meaningful competition with local cinemas, even where such cinemas operate on a not for profit business model. This is because the deregulation is subject to certain conditions, one of which is that the exhibition is not provided with a view to profit. This includes where the profit is for charitable or other fundraising purposes.

The Government believe that intention is the key factor here. For example, a film society is not set up to exhibit films for profit; its intention is to explore film culture rather than to generate income. We are therefore confident that the test of intention will provide protection against an exhibitor with a profit-making motive being able to exhibit a film legally under this exemption. To assist licensing authorities that are responsible for enforcement, and event organisers, the Government will issue revised statutory guidance on this exemption. Indeed only yesterday the Minister for Sport and Tourism deposited in the House Libraries a working draft of the revised Chapter 15 of the licensing guidance, to assist with Parliament’s scrutiny of Clause 58.

A rather more blunt measure of whether or not profit was made, without reflecting the intention, could have a detrimental effect on community film screenings. I will explain why. For example, people would have to be turned away from an unlicensed exhibition if their attendance could give rise to a profit being made. It would also require the event organiser to know, with the audience already present, whether they had generated more income than the total cost of the exhibition. If they had, then in the absence of a licence or other authorisation the exhibition of the film could not legally proceed.

The whole point of this exercise is that the Government wish to remove the licensing burden for low-risk entertainment activities, such as the exhibition of a film in community premises as defined in the circumstances of Clause 58. The Government therefore consider that the clause cannot be exploited by anyone seeking to exhibit films on a “for profit” commercial basis, without the need for a premises licence.

Amendment 78ZB would limit to 250 persons the maximum audience allowable for an exhibition of a film in a community premises. I know that the noble Lord was particularly concerned about that point. The Government consulted widely in 2011 on a proposed audience limit for all forms of entertainment. The audience limit of 500 is reflective of the wider outcome of that consultation. An exhibition of a film is a lower-risk activity, and having an audience limit of 500 people maximises the cultural benefit for community groups and does not, in the opinion of the Local Government Association and others, give rise to particular public safety concerns. The limit also provides a read-across to the 499 audience limit for an event authorised by a temporary event notice.

This limit is generally regarded by local authorities and the emergency services as an appropriate audience ceiling for these sorts of events. Further, it is consistent with other entertainment activities within the Licensing Act, such as a performance of dance or of live music. Indeed, it would be very odd if community premises could put on a pantomime for 500 people without the need for an authorisation, but could show a film of that pantomime to an audience of no more than 250 people. I also make it clear that key safeguards remain in place; Clause 58 makes no changes to protections already in place in respect of alcohol licensing, health and safety, noise pollution or fire safety.

In more detail, the noble Lord’s final amendment in this group seeks to add a further condition to the qualifying criteria. The Government’s starting point is that regulation should be required only where it remains necessary and proportionate to safeguard the licensing objectives. The licensing objectives—set out in the Licensing Act 2003—are in respect of the prevention of crime and disorder, public safety, the prevention of public nuisance and the protection of children from harm. The issue of an appropriate audience limit relates most closely to the public safety objective. The Government considered those objectives when preparing these proposals, and concluded that licensing film exhibitions in small community premises could not be justified when assessed against the risk to the four licensing objectives.

The four licensing objectives rightly focus, as I said, on the prevention of disorder and ensuring public safety in places where people gather together in numbers for leisure. They ensure that regulation is focused on what is necessary to protect the public. Very importantly, they also avoid duplication with other regulatory regimes, which can increase the cost of regulatory compliance for all concerned. I will take the proposed conditions in turn. The noble Lord posed these questions, and I hope that your Lordships will find the following reassuring.

As regards fire safety, Clause 58 makes no change to the requirement that community premises owners are responsible for fire safety. This is set out in the Regulatory Reform (Fire Safety) Order 2005, which in most cases is enforced by the local fire and rescue authority.

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[Lord Gardiner of Kimble]

I am most grateful to the noble Lord. If some information can be provided to me during my remarks, I will be able to record it here—but, if not, I will make sure that that noble Lord and the Committee know of the response.

The whole purpose of this part of the Deregulation Bill is to make it easier to exhibit films in village halls and other community premises, as I have suggested. We wish to strike a better balance between necessary protections—I hope that I have outlined what will remain and why that is so important—and removing unnecessary burdens. I think that we would all agree that there are too many examples of burdens sapping the will of volunteers and very often soaking up scarce financial resources.

Where the conditions of this exemption are not met, then, rightly, a licence will still be required. Other key protections will continue to apply, such as alcohol licensing and health and safety and noise abatement legislation.

The noble Lord, Lord Stevenson, asked a number of questions relating to fire safety and health and safety. A person who organises a film screening will continue to be subject to a whole range of legal duties on fire safety, safe workplaces and public nuisance. This includes a common-law duty of care towards the health and safety of those attending the film screening.

On the question asked by the noble Lord, Lord Watson, those responsible for the exhibition of a film on community premises must have in place operating arrangements. That would include a suitable child admission policy implementing the recommendation made for that film by the BBFC or local licensing authority. They may operate a membership subscription scheme which pays for entry to all titles in a season and is limited just to adults, or they could sell tickets to the public and ensure that children are permitted entry only in accordance with the age rating for the film. If there is anything further I have on that, I will write to the noble Lord and ensure that other Members of the Committee are made aware of it.

The noble Lord asked about the weakening of controls on piracy and how this could be controlled. Indeed, a film shown in a community premises must be compliant with the Copyright, Designs and Patents Act 1988 in the same way as a film shown in a cinema.

The noble Lord raised a number of questions. I know that these are probing amendments but it is important that all the points the noble Lord has raised are clarified and there are assurances that this proposal is a force for good. Coming from the countryside, I know that very often cinemas are 30 or 40 miles away from communities. I do not believe there is competition in place. This is about communities enjoying films to which those who live in suburbs and towns have a much readier access. That is the whole purpose of the clause—to ensure that communities have the advantages that those who live in cities and towns and close to cinemas enjoy. I have been to many community film exhibitions near to where I live. They are well supported and anything we can do to encourage communities to enable people to enjoy film is desirable. So if the noble Lord would like to discuss anything further with me before further stages of the Bill, I would be delighted. I hope I have been able to reassure your Lordships, and that the noble Lord will withdraw his amendment.

[Lord Stevenson of Balmacara]

My Lords, that is the first time I have been invited to go to see a movie with a member of Her Majesty’s Government. I will reflect carefully on that. We actually live quite close to each other and there are several local community film venues between our respective villages, so it is feasible to do that. We will think about that.

Film as we see it today is rarely controversial and rarely leads to public disorder but it was not always thus. Those of us who are interested in film history will know that one of the early screenings by the pioneers of cinema—a train arriving at the station in Lyon—resulted in the audience evacuating the hall so fast that it could not be considered safe, because they feared that the train was actually coming out of the screen at them and leapt out of the way to avoid imminent disaster. I do not think even 3D could possibly cope with that. But we should bear that in mind when thinking about what we are doing here.

I will read carefully what the Minister said and may take him up on his idea of a meeting. It is slightly irritating that we did not get sight of the draft licensing regulations. They may have been placed in the Library yesterday but it would have been useful to know that they were around; we could perhaps have saved a few of the questions I raised.

There are three points that I would like to make. First, it is now clear from the noble Lord’s response that the model here is the live music scene—I think he mentioned dances and music—where obviously an upper limit of 500 is perfectly understandable. I do not see this being appropriate in church or village halls or even parish halls, which are not ever going to be as large as that. If that is the restriction, I think the 500 is otiose but I will reflect on that.

Secondly, I still think there is a dichotomy in the way in which this is intended to apply. If it is restricted in operation to church halls, village halls and parish halls but can be run by profit-seeking bodies such as pubs or others, there is still a tension about what is exactly in mind here, but the gap for those who might be wishing to exploit that for profit may not be as bad as I originally feared.

Thirdly, the trick here is to limit the exercise of this to sites that are licensed in the full round of local authority licensing—including fire safety, public health and noise—but the event itself will not be specifically licensed, so that it can be done with a minimum of fuss. I still think there is a tension there about what happens when child protection issues are raised or there are questions about whether the films are certified under the BBFC or by the local authority. We are not quite sure about that. But that is not sufficient to hold back discussions today and I beg leave to withdraw the amendment.

Amendment 78ZA withdrawn.

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Debate on whether Clause 59 should stand part of the Bill.

[Lord Stevenson of Balmacara]

My Lords, Clause 59 mandates the Secretary of State to carry out a review of the alternatives to criminal sanctions for non-payment of the TV licence fee. A television licence is required to watch all live, or nearly live, broadcast television content on any device in the UK. It has become popularly known as the BBC licence fee but that is of course a misnomer—it is a licence to receive a broadcast signal sufficient to be able to watch television or to listen to radio. Nevertheless, the BBC is tasked with collecting the licence fee. The function is subcontracted to a private company under the brand TV Licensing. Failure to have a TV licence is an offence under Section 363 of the Communications Act 2003, punishable by a fine. This clause specifies the timing of a review, which is to commence within three months of Royal Assent and to be completed within 12 months of it beginning. It specifies that a report must be presented before both Houses of Parliament and presented to the BBC Trust.

It is surely an irony beyond satire to have a clause in a deregulation Bill which duplicates what is already happening in the real world. On 9 September 2014, the Secretary of State for DCMS announced his intention to begin a review into TV licence enforcement, which will be independently led, on behalf of the Government, by David Perry QC. The objectives are in fact broader than this clause specifies. They are:

“To conduct a review into the enforcement regime for failure to have a TV Licence to … examine whether the sanctions for contravening this offence are appropriate, fair and whether the regime represents value for money for licence fee payers and tax payers; and … identify and assess options for amending the current enforcement regime, including those for decriminalisation of TV licensing offences, and whether these options would represent an improvement”,

based on certain key considerations.

Mr Perry has to,

“make recommendations to the Government by the end of June 2015”,

which is well within the timescale specified in the clause. He is charged with producing:

“A report setting out an assessment of the current and proposed enforcement regimes, key findings, conclusions and any other supporting information to be submitted to the Government by the end of June 2015”.

The Secretary of State is required to,

“lay this report before both Houses of Parliament and present it to the BBC Trust”.

These requirements are identical, in all but a few words, to the requirements specified in Clause 59. So what, precisely, is the purpose of this clause? It has been overtaken by events, is not required and should be excised forthwith. I look forward to the Government agreeing with me that this clause should not stand part of the Bill.

[Lord Gardiner of Kimble]

My Lords, at Commons Committee stage, the Government supported the amendments tabled by the honourable member for North West Leicestershire. Clause 59 imposes a duty on the Secretary of State to ensure that a review of the TV licensing enforcement regime is carried out—as the noble Lord, Lord Stevenson of Balmacara, mentioned. This review will identify whether the current enforcement regime is appropriate and proportionate. The review will also ensure that there is a strong, evidence-based case for any potential changes to the TV licensing enforcement regime.

The findings of the review—which has already started—will be completed by June next year and should be considered in the context of the charter review. It will be for the Government of the day to take forward any further actions as they see fit. The current Government are very clear that the review of the licensing enforcement regime is a high priority. Hence, we have taken the decision to commence the review this autumn, in advance of Royal Assent.

If there is potentially an issue with the current regime, it can be of benefit to no one to delay the review or to prevent its findings informing any required change to the existing system. Our overriding aim is to ensure that the system is appropriate, proportionate and fair and that it represents the best value for money for licence fee payers and taxpayers. There was significant support for both of the TV licensing clauses in the earlier stages of this Bill in the other place. We believe that the firm commitments set out by the Government at that time must be honoured, particularly given that strong cross-party support. For that reason, we would not seek to remove the review clause from the Bill.

The current review has clearly defined terms of reference and, although there are no guarantees over decisions that any future Administration may seek to make in this area, particularly if they were minded to go against the will of Parliament as demonstrated in the strong support for these clauses, we do not believe that there should be any delay to the review. However, we think that the retention of Clause 59 ensures that at the absolute latest the review must be completed within a year of having begun. This duty will apply to the future Government and provides a crucial backstop to ensure that this important piece of work completes within the charter review period. That is why, although the noble Lord, Lord Stevenson, made a very interesting point about the Deregulation Bill and I am sure that he will pull my leg about it, the Government believe that this clause should stand part of the Bill. As I have said, strong views were expressed in the other place that we think are important. This provides some backstop to the work of the review. That is why I very much hope that Clause 59 will stand part of the Bill.

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[Lord Stevenson of Balmacara]

My Lords, this has been a very good debate about a very important topic. It is important to pick up that this amendment, signed by all sections of your Lordships’ House, was also spoken to by every side of the Committee, and is therefore reflective of the difficulty that the Government might have if they were to take this matter much further. There would be considerable opposition to the overall concept implied by the two clauses here and strong agreement about the need to ensure that the arrangements that may come out of Mr Perry’s report should not be implemented until at least after 1 April 2017.

We have heard from those who work with and have worked with the BBC, and from those who just watch and absorb its activities. All the contributions were redolent of a feeling that we have created a national institution that is admired and loved widely, not just in this country, and one that, as has been pointed out, needs safeguarding. The words of the noble Lords, Lord Grade and Lord Stoneham, and my noble friend Lord Rooker, about the question of whether or not this is a stalking horse for a much bigger prize, the destruction of the financing arrangements under which the BBC is currently safeguarded—the use by the enemies of the BBC of a Trojan horse—rang true. We must be very careful as we go forward on this matter.

There is of course no objection to the review of the enforcement regime; it is a good thing. It may well be a solution in search of a problem and, as the noble Lord, Lord Grade, said, much is said here that is not accurate in practice. What exactly the offence is that has been committed, and how it is dealt with through the courts at present compared to how it might be dealt with in future, is a very technical issue. It will have wide implications but it is still at heart an issue that needs to be narrowed right down to the precise issue that is being questioned. It would not be wise or sensible to see the review as being something more widely about the BBC; it must be about the question of the collection of a fee for the receipt of broadcasting communications, not the funding of the BBC.

However, the implications of any recommendations, and whether they would generate more income or less as a result of the processes that would follow the review, have to be considered. Of course, it would be completely wrong for the Government to introduce a significant change before the start of the next licence fee period on 1 April 2017—whichever Government were in power.

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[Lord Gardiner of Kimble]

My Lords, this has been a fascinating debate. On occasions it may have strayed to the merits of the BBC rather than the precise clause and amendment in question. But there is no harm in that because, as we all acknowledge, the BBC does extraordinarily good work across a range of issues of which our country can be extremely proud.

The amendment seeks to apply timing constraints to the implementation of any potential—I emphasise that they are potential—changes to the enforcement regime that underpins TV licensing offences. The Government have been very clear on the importance of these issues and of considering the efficacy, proportionality and fairness of the current regime. The amendments concerning TV licensing enforcement, as noble Lords will recall, received significant support, across all parties, in the other place.

As has been mentioned, the Secretary of State announced in September that the review of the regime would be commencing this autumn, and the terms of reference for the review were published and laid in the Libraries of both Houses on 21 October. The terms of reference clearly define the scope of this work. A review will be conducted into the enforcement regime for failure to have a TV licence, examining whether the sanctions are appropriate, fair and represent value for money, and identifying and assessing options for amending the current enforcement regime. It will not consider or assess the licence fee itself or broader issues or options for the future funding of the BBC.

As has been referred to by noble Lords, the review of TV licence enforcement will be led by an independent lead reviewer, David Perry QC. It will begin taking evidence this autumn, and Mr Perry will submit a report making recommendations to the Government by the end of June next year. The enforcement review will start gathering views and data this autumn and, as noble Lords would rightly expect, any findings and recommendations will be based on the best possible evidence.

These findings will then be presented to the Government. The Government have been clear that the findings of the review should be considered in the context of the charter review process, which will not begin until the next Parliament. The BBC charter review is the point at which the Government can consider all aspects of the BBC. As has been mentioned, the current charter runs out on 31 December 2016.

I emphasise that if the existing regime needs to be improved—we should make no presumptions about this until Mr Perry’s review has been able to complete its work and to report findings to the Government of the time—surely it does not make sense to apply any constraints that could hinder moving to a new enforcement regime; nor would any such constraint represent the best approach for licence fee payers, or the courts system. Having said that, and in light of the enforcement review now being in its preliminary stages, I must stress again that the Government are keeping an entirely open mind and look forward to the findings of the review, without any preconceptions about whether or when changes need to be made. It is right that the Government of the day must be free to consider the report when it completes in June 2015 and be able to act without unnecessary limitations at that point.

The noble Baroness, Lady Howe, mentioned Henry VIII clauses. If there were any changes to an enforcement regime under this clause, it would be afforded proper scrutiny in this House, as regulations would be subject to the affirmative resolution procedure. The noble Baroness and, I think, the noble Lord, Lord Watson of Invergowrie, referred to the impact on the revenue of the BBC should decriminalisation go ahead and result in reductions in BBC income. Any impact on BBC services will be examined in the review. I can of course make no assumptions as to the outcome of the review. We obviously want an open process which considers all options available to us and delivers for the licence fee payer. All those points clearly will need to be borne in mind.

[Lord Stevenson of Balmacara]

On the record, will the Minister be clear about my final question? I thought I heard him say that he felt that the outcome of the report should feed into the charter and licence review. In his current speech, he has clearly said that he does not wish to see the Government constrained in any way as to the timing of any changes, if there are any changes. Does that not fly directly against the commitment given when the 2010 licence fee settlement was signed?

[Lord Gardiner of Kimble]

I do not believe that it does. The Government obviously want to be in a position after the report to consider those matters. I have already said that those matters will play a part in the considerations of the charter review but we need to consider what the QC brings forward in his report. I do not think that it conflicts.

We believe that it would be inappropriate to apply a constraint to the timing of implementation of any potential changes to the existing regime and that it would be unnecessarily restrictive to inhibit any potential future changes to the enforcement regime, should the findings of the review lead the Government of the time to be minded to make them through specifying a date before which any change could be implemented. I emphasise that this is about a review of the enforcement. We make no presumptions about the possible outcome or findings of the review. As I have said, the Government have stated that the review findings will be considered in the broader context of the charter review. After June 2015, these matters will take some time but we do not think that there should be an artificial limitation on timing. On that basis, and with the reassurance that they are to be considered in the broader context of the review charter, I ask the noble Baroness to withdraw her amendment.

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[Lord Dubs (Lab)]

My Lords, I have enjoyed listening to the speeches on the amendment moved by the noble Lord, Lord Grade, who gave a very powerful indictment of the present situation. I do not know what the Front Benches will say to this.

When I was first in the Commons in 1979, a small Bill or measure was working its way through—I cannot remember what it was—and both the Front Benches were passionately in favour of it. I ended up in the Lobby, voting against it with friends, who said, “When both the Front Benches agree, we’d better all be careful”. I do not know about that. However, when Governments are in difficulty, our brilliant officials put forward a number of ideas or thoughts. One is to say, “Accept the principle, but not now”. That is pretty much what Governments do in order not to have to do anything. The other thing they could say to get out of it is, “Well, we’re going to have a review”, because that puts it all into the long grass. Or they can say, “This measure has other implications, and we’ve got to think about those”. Those are all stock excuses that the civil servants, in their brilliant and imaginative ingenuity, pull off the shelf and say, “Here, Minister; these will get you out of the mess you’re in”.

The Minister is in a bit of a mess, because people with far more experience in the industry than me have all united to condemn this anomaly, which, frankly, in logical terms, cannot be defended. I bow to the experience of many Members of this Committee who have far more media experience than I have. I served for a brief time on the ITC and for a slightly longer time on the Broadcasting Standards Commission, but we on the commission certainly did not deal with matters of this sort, so I accept that noble Lords here have far more experience in this than I have.

I suspect that the Minister will say that he accepts the principle, and then there will be a big “But”; I look forward to hearing that. However, we are in a ridiculous position if he does not accept it anyway. We have a brilliant creative industry in Britain; our television creativity is second to none. We are allowing it to be weakened by this anomaly, which dates back many years as a way of protecting a small and up-and-coming cable industry. The time has come to say, “No, there’s no point in this”.

We have to support our creative industries and, in terms of competition, have at least a semblance of a level playing field, which we simply do not have at the moment. We are allowing the public service broadcasters to subsidise the pay TV platforms, and surely that is not right in any approach to competition policy. In a normal situation, one would say that these things have to be negotiated freely between the parties and, where they cannot be negotiated freely because of anomalies, we should get rid of the anomalies. Good heavens, I am in the Labour Party and I am arguing for competition—what is going on here? What we do not want is this partly hidden subsidy.

Of course, as has been said, Virgin Media and Sky are willing to enter into such a process for the channels not covered by Section 73—in other words, ITV2, ITV3 and ITV4. It does not make sense even in those terms, any more than it makes sense in terms of what News Corporation is doing in the United States. There are many ridiculous defences of the present position and they just do not stand up at all. I would argue that Section 73 has outlived its useful life. It defies logic, it defies fairness, it defies competition policy and it might defy even the ingenuity of the Government to defend it.

[Lord Stevenson of Balmacara]

My Lords, this has been a very interesting and useful debate, again, on this topic. I say “again” because although when the noble Lord, Lord Grade, introduced the topic he said that he could not think of a more perfect vehicle for this amendment, he might like to reflect on the fact that we have had this argument before on four other occasions—this is the fifth time this issue has come up—and every other vehicle has also been seen as a perfect vehicle for this amendment. I rather suspect, although I would not wish to impugn any of his motives, that there are people on a mission to do a particular thing who are looking for any vehicle that comes along to hook their amendment to. That is not necessarily wrong, though; this is a complicated topic.

Section 73 is part of a very complex web of regulations that provides equilibrium in the UK broadcast market—at least it has done for some 28 years, as we have heard. Its focus is on consumers, who have of course already paid for public service broadcasting content through the licence fee or through indirect taxation, paying for advertising costs on the goods that they purchase. It is a question of whether or not the arrangements that were set up in 1988, not on a temporary basis, are still relevant today. It is important that among all the various vested interests that we have heard about today, the consumer interest is kept at the forefront of our thinking.

Obviously, Section 73 is an old clause. It was created when the cable industry was in its infancy. It is also true, as everyone has said, that the industry has changed a lot since then. It is interesting, though, that the reason why this suddenly became prominent in people’s thinking, and why it has been raised in three successive Bills that I have been involved in, is because of a case involving catch-up television that is still going through the courts and therefore perhaps should not be excessively commented on. The point is that the judgment in the first instance will have raised legitimate concerns about the use of Section 73 as a defence for retransmission of free-to-air channels online. That, of course, is radically different from any cable commitments or any negotiations that may take place between Sky, Virgin and others that are involved in this. It is right to have in mind that the reason why this has become so topical starts with that case, which is ongoing.

Of course we would say—wouldn’t we?—that the age of things does not necessarily determine whether or not they still have value, and attempts to delete old things just because they are old cannot give much comfort to Members of this House. Is this not perhaps another candidate for the Law Commission, about which we have heard? There is an issue of whether or not this measure is still relevant and perhaps needs to be reregulated. The right thing to do is to accept that there is a big issue here and to carry out the due process to get it to a point where it is considered by a review to ensure that it still delivers good public policy objectives and is good for consumers. I think that the findings will be very useful in understanding that better.

My understanding is that the Government have announced that they will carry out a review of how Section 73 might be amended. I hope that the Minister will let us know what progress has been made—

[Lord Deben]

Does the noble Lord notice that he is almost exactly paralleling the suggested answer that was given to him by his noble friend Lord Dubs? I respectfully say that it is supposed to be Ministers who listen to the civil servants giving them those ideas; I thought it was the Opposition who were supposed to get out of that and be free to be able to say, “Well, we may have got it wrong in the past but perhaps we are now on the side of the progressives who have been so far putting forward this case”.

[Lord Stevenson of Balmacara]

I am always grateful for comments made by the noble Lord, Lord Deben, whose expertise and knowledge are legendary in this House, but, of course, prospective Ministers might also be wise to think about what civil servants are advising.

[Lord Macdonald of Tradeston]

On the question of our perhaps not discussing this matter because it has been in the courts for some four years already, is my noble friend aware of the Interpretation Act 1978, which speaks of this very issue? It provides that,

“where an Act repeals an enactment, the repeal does not … affect any investigation, legal proceeding or remedy”.

Just to rub in the irony, when the copyright Act came in, in 1988, it was despite related ongoing legislation at that time.

[Lord Stevenson of Balmacara]

I am not as well briefed as my noble friend Lord Macdonald, but it is also true that the Digital Economy Act suffered from similar problems, which have not allowed it to emerge from the purdah in which it has been placed.

As I was trying to explain before I was accused of being too craven towards the Minister, which is a very unlikely position for me to be in, if a review is already ongoing then we should at least do the decent thing and wait for that. I think that the review will be forthcoming and give us the results.

I still worry about whether we are being told the whole story about this. The noble Lord, Lord Grade, the noble Viscount, Lord Colville, and other noble Lords have suggested that we could expect savings from this area; figures of about £100 million have been mentioned. If that were reinvested in British original content, that must be a good thing—there is no question about that—but what exactly would we see for it? Where has anybody specified in detail what that would be? It would be helpful to have some knowledge of that. Would it be more children’s programming or regional programming, better local news or better investigative work? We do not see quite so much of that as we used to on the commercial channels, and they have PSB ratings and should therefore perhaps be expected to move up to the mark. They need to be a bit more forward about that. I say this because, in September, media analysts at the Bank of America said on this issue that an extra £100 million of revenue for ITV could add about 15% to profits and could be worth 40p a share. I am not saying that that is what is driving this issue, but we might wish to bear it in mind.

I am sure that this issue needs to be resolved. We need a review, which I think has started. It is not right simply to put down an amendment at this stage. We should do this in a proper process, and I hope that the Government will push ahead with their review.

[Lord Gardiner of Kimble]

My Lords, I thank my noble friend for his amendment, because it has enabled a fascinating debate, the basis of which, I think, is that we all care very much about the creative industries and the public service broadcasting channels. They are of enormous importance to our national life, and there is so much to be done in terms of the economic benefit that they bring to our nation. So the Government come to this with that very much in mind.

Section 73 permits the retransmission on cable of the main public service broadcast channels—it is important to say to my noble friend Lord Holmes of Richmond that Section 73 applies only to cable and not to satellite platforms. The effect of it is that public service broadcasters are not able to charge cable operators for retransmission of their services.

Section 73 is part of a much wider framework that supports the availability of TV and investment in television programming in our country. A variety of rules and regulations affect the production, availability and the ease of discovery of PSB programming and its relationship with the different platforms—cable, satellite and digital terrestrial television—that carry it. These include the obligations on PSBs to offer their content to all relevant platforms, the rules governing payments by broadcasters for “technical platform services” and the powers for regulators to compel these services to carry PSB content, as well as Section 73. This is an area where many competing interests are at large and must be balanced; namely, those of broadcasters, platforms and, of course, viewers. The Government believe therefore that we should not abolish Section 73 without exploring these interactions within the wider framework of regulation that impacts the balance of payments between platforms and PSBs. That is precisely the approach the Government propose to take.

The noble Baroness, Lady Ford, referred to the Culture Secretary, who has already announced that the Government are going to look at whether the time is right to remove Section 73 of the Copyright, Design and Patents Act, which could allow PSBs to invest more in high-quality content. We believe that, rather than doing so in isolation, we will look at this in the wider context. I am very conscious that now when I think of the noble Lord, Lord Dubs, I must think of “But”. I know that noble Lords would like the Government to accept this amendment, but we think that it is not sensible to do so in isolation. More work needs to be done and we will examine the framework of regulation that governs the balance of payments between broadcasters and platforms. The Government will examine whether the amount of regulation around these transactions is really necessary.

I should perhaps say to my noble friend Lord Grade that my understanding is that the Government are wholly satisfied that this section is consistent with EU law, but I do not think that I can say much more than that at this moment. A number of noble Lords, including the noble Lord, Lord Stevenson, my noble friend Lord Deben and, in particular, my noble friend Lord Stoneham mentioned the Government’s intentions. They intend to consult by early next year on a proposed approach to Section 73 within the broader framework of the balance of payments debate. We think that that is the right way, given the fact that this matter has complexity. It is not as straightforward as just saying, “Away with this section”. There are intricacies and we need to look carefully at the impact on regulation relating to the must-offer obligations of the PSBs and the must-carry requirements on pay-TV platforms. That is the position and we want to get it right.

I understand that the noble Lord, Lord Dubs, will add another category to his “But” point, but it is for those reasons that I hope that noble Lords will feel that work is about to be put in hand on this area. The Culture Secretary and the Government are serious about ensuring that the work is thoroughly and properly done. For those reasons, I would ask my noble friend if he is prepared to withdraw his amendment.

[Lord Grade of Yarmouth]

I am grateful to my noble friend for that response. As a long-term Charlton Athletic supporter, I have sympathy for the underdog on any occasion. Given the score here today—an unexpected own goal from the Opposition Benches, but there you go—there seems to be a widespread body of strong opinion in terms of the list of obfuscations and get-out-of-jail-free cards alluded to by my noble friend Lord Deben and as regards trying to complicate the issue in order to avoid it. It is not a complicated issue.

The noble Lord, Lord Stevenson, alluded to public interest and talked about the shareholders of ITV, Channel 5 and so on. I do not know about the figures but if £100 million is sitting somewhere, would he rather that money went to News Corp and Liberty Media than to the shareholders of British companies who control the purse strings of what gets invested under the obligations of their licences to broadcast? I was really shocked by that comment.

[Lord Stevenson of Balmacara]

If the noble Lord is going to play that game, he must add another one to his list: make an outrageous suggestion which he could not possibly say no to and then ask him to respond.

[Lord Grade of Yarmouth]

I think that we need to move on. This is a very simple matter which does not need to be complicated in reviews. I am very disappointed that the Government seem determined to let this legislative bus pass by without getting on it and correcting what is clearly an anomaly, an action for which there is widespread support across the House.

In the end, it is a simple matter. If you believe in a free market, in investment in the UK creative industries, in support and competition in regional and national news, and in stimulating employment in areas of the United Kingdom other than London, then the commercial free-to-air broadcasters need to get a fair return, not an unfair return, on the investment and the risk that they take on investment in British production. This section alone prohibits them by law from getting a fair return on their investment. It seems a great shame that a Government who I support and who believe in a properly regulated free market do not seem able to accept the arguments that have been put today from all sides of the Committee. I am sure we shall return to this matter—I look forward to returning to it—and I beg leave to withdraw the amendment.