Digital Economy Bill

Lord Wood of Anfield Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Lord Birt (CB)]

My Lords, I accept that I have a special interest, but I have yet to be bored by the noble Lord, Lord Lester, on this matter. Indeed, I applaud his tenacity and hard work. The day this House discussed the royal charter was the lowest day in all my time in the House. It was a particularly distinguished debate, and there was a wide consensus on all sides that the charter was inappropriate. I do not plan to rehearse the arguments that I made on that day again, but there was wide agreement that, although we had all long believed that the charter was the right way of governing the BBC—I certainly believed that when I was the director-general—we had learned the hard way that it was not.

The royal prerogative is simply archaic; it flows from our history, with its origins in medieval times. Its shortcomings have just been unfolding in the Supreme Court; it has been found wanting there. That was a low day for me because, despite consensus across the House, the Government did not give an inch. I do not expect them to do so today. However, the good thing about this debate and about what the noble Lord, Lord Lester, and his colleagues are doing is that it puts this issue firmly on the agenda. If it is not won today, I predict that it will be won one day. The BBC simply has to be put on a statutory basis.

[Lord Wood of Anfield (Lab)]

My Lords, I should declare that my wife works at Ofcom, so I have an interest of some relation to the BBC. These amendments are crucial to an issue we all care about: the independence of the BBC and ensuring it is not compromised. The Government may protest that they have no intention of compromising the BBC’s independence—I am sure they do not—but I know from the debate and from many conversations over the past few months that I was not alone in being alarmed by the initial proposal floated last year that the Government would appoint a majority of members of the new BBC unitary board, replacing the BBC Trust. I am pleased to say that the Government seem to have moved away from that proposal in response to concerns expressed in this House and elsewhere.

But concerns remain. For one thing, we discovered last week just how close the Government intend still to remain to Rupert Murdoch’s companies, whose hostility to the BBC is well known. Senior executives from Murdoch-owned companies met the Prime Minister or Chancellor 10 times last year—more than any other media organisation. In the past 18 months, News Corp executives had 20 meetings with senior government representatives, 18 of which were with the Prime Minister, Chancellor or Culture Secretary, seven involving Rupert Murdoch himself, whose views on the BBC are very clear. Quite what was discussed in these meetings we do not know, but I would be astonished if complaints about the BBC were not raised repeatedly.

As the noble Lord, Lord Lester, eloquently set out, threats to the BBC’s independence come in much more subtle forms. The combination of financial constraint plus extra responsibilities has been a long-standing part of the Government’s relationship with the BBC. I worked for Gordon Brown as Prime Minister; we did a bit of that as well. But, as the noble Lord mentioned, in this new charter the Government have raised their sights and shifted more than £500 million-worth of responsibility for licence fees for the over-75s without allocating a single penny to support it. This process of shifting responsibility for government policy on to the BBC while tightening the purse strings even further, and, presumably, reserving the right to complain when the BBC revisits the viability of these commitments, is a serious threat to the autonomy of the BBC. We should be on our guard against it.

When it comes to the new unitary board, I agree with the spirit and content of the amendments. It is important that we have a transparent process to ensure a genuinely independent board. The Government’s current proposal on composition risks lining up a slate of government appointees against a slate of BBC appointees, aiming for some kind of internal balance rather than ensuring real independence for the board as a whole. It is also vital, as the noble Lord, Lord Lester, set out, that we have clarity on the terms of appointment to the new board.

We need only look at other countries in the European Union to see the dangers that can quickly arise when the independence of public broadcasters is compromised. For example, last year the Polish Government assumed the right to appoint the heads of state broadcasting authorities and removed the guarantees for independence of public service TV and radio, in breach of Council of Europe norms and the Polish constitution. We are a long way from being Poland in this respect, thank goodness, but the combination of governance change, political pressure from rival organisations, financial pressure and the temptation to offload policy commitments on to the shoulders of the BBC provide a real threat to autonomy and independence. It is right to err on the side of vigilance and caution in the spirit of this group of amendments.

I look forward to hearing the Minister’s response. We on these Benches will then take a view about how to work with others across the House on the issues raised, including this debate, which, as the noble Lord, Lord Birt, just said, will become more and more live, about whether it is time to put the BBC’s independence on a statutory basis.

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[Lord Gordon of Strathblane]

My Lords, I was a member of that licence fee commission under Gavyn Davies in 1998. It may interest the House to know that we had a subcommittee under the late Lord Newton looking at the issue of possibly funding a licence fee for over-75s and making it free. The unanimous conclusion of the committee was that that was a very bad idea and wholly inappropriate for the BBC.

[Lord Wood of Anfield]

My Lords, I wish to speak to Amendments 222B, 222C and 222D, which go together and which draw on the spirit of the excellent arguments from the noble Lord, Lord Best, and share many of the features of what the noble Lord, Lord Lester, set out. The idea is to reinforce the credibility of the licence fee, to ensure the BBC receives the resources it needs to fulfil its responsibilities under the charter. These amendments go together because, logically, the problem is that the process of negotiating the charter and setting a licence fee level do not always sit easily together.

At present, the connection between the charter process and the licence fee process is, at best, an indirect one. Each has its own political dynamics, so in setting the licence fee Governments have a range of considerations and pressures to contend with. One of those is the interests of the BBC to fund what the charter says it has to do, but it also includes the interests of other broadcasters, the politics around the headline licence fee rate—which is a huge thing for Ministers, proving to the public that they have got more for less out of the BBC and the overall settlement—and, as we discussed earlier, financial pressure to offload government responsibility on to the BBC without extra cost. So the temptation always exists for government to inflate the ambition of the charter and to put a lid on the increases in the licence fee simultaneously. That not only threatens the BBC’s autonomy but risks casting the Government with the suspicion of unwarranted interference.

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Moved by

[Lord Wood of Anfield]

224: After Clause 79, insert the following new Clause—
“Listed events qualifying criteria
(1) The Broadcasting Act 1996 is amended as follows. (2) For section 98(2)(b) substitute—“(b) that the service has been watched by at least 90% of citizens in the United Kingdom in the course of the preceding calendar year.”(3) After section 98(2) insert—“(2A) The Secretary of State may by Order amend section (2)(b) by substituting a different percentage for any percentage for the time being specified there.(2B) No order under subsection (2A) shall be made unless a draft of the Order has been laid before and approved by a resolution of each House of Parliament.””

[Lord Wood of Anfield]

My Lords, Amendment 224 is designed to protect the so-called listed events regime, the rules designed to ensure that major sporting events in the UK remain universally and freely available. The listed events rules have enjoyed cross-party support for well over 30 years, and have succeeded in preserving live coverage of certain major sporting events on free-to-air TV—such as the Olympics, the World Cup, the Grand National, the Rugby World Cup Final—while also ensuring that a second category of sporting events is guaranteed to have highlights available on free-to-air TV, such as the Six Nations rugby and the Commonwealth Games. Those rules have successfully managed to combine two competing sets of considerations: the desire of the public to be able to access, without extra payments, the major sporting occasions that define our culture and bring us all together; and the need for sporting bodies to maximise their commercial revenues to invest in both their professional sportsmen and sportswomen and to develop their grass-roots activities.

The audiences for these major sporting events testify to the success of the listed events rules. In 2015, over 40 million people watched the Rugby World Cup on ITV. Some 45 million people watched the Rio Olympics and Euro 2016. England’s disastrous performance against Iceland in the Euros last summer was the most watched sporting event of the year, with 15 million—which I am sure will cheer us all. The men’s final at Wimbledon and the final of Euro 2016 attracted more than 13 million viewers. Some 80% of the public say that listed events are important to our country and 25% say that the BBC’s Olympic coverage during the London Olympics inspired them to take part in sport themselves.

In recent years the listed events regime has come under some moderate threat, largely from competitors to PSB broadcasters, which want to undermine the privileged position of free-to-air channels. So far, all political parties—and all parties—have resisted the lobbying to reform those rules, and I trust that the Government have no intention to revisit the principle behind the listed events regime. However, this amendment is not about protecting the rules against calls for repeal of the regime; it is specifically to protect the regime from falling into obsolescence in the face of technological change and changing viewing habits.

The aim of the rules is to guarantee that major sporting events are available universally, irrespective of the ability to pay. I hope that we all share that ambition. The current rules express that in statute by restricting what counts as a qualifying service to channels which, first, are free and, secondly, are received on TV sets by 95% or more of the UK population. The problem is that despite the ambition of those rules, the criteria they adopt are becoming outdated as the number of households in which programmes are watched on devices other than TV sets rises. As a result, for the first time, the major free and free-to-air broadcasters share the fear and expectation that before this Parliament is over, no TV channel will qualify for the 95% criterion—not one. That leaves the regulator unable to guarantee the continued availability of listed events to audiences across the UK, and in the long term risks collapsing the credibility of the listed events rules altogether.

The rules for listed events need therefore to be updated. The amendment we propose, backed by all five free-to-air PSB providers, would replace the 95% reception criterion with a requirement that any qualifying service must have had programmes that have reached or been viewed by at least 90% of the public in the last calendar year—where the definition of a “viewing” is at least 15 minutes consecutive viewing a year. That measure would serve as a good proxy for “free to air” continuous availability. It maintains the spirit of the existing regime, is simple to implement, not tied to any particular distribution platform and, crucially, it is open to any service that is free and committed to maximising access.

Of course, there is a genuine debate to be had about the nature of the rule that is introduced to replace the existing rules that are at risk of becoming obsolescent. However, it cannot be right for anyone committed to maintaining the listed events regime to deny that there is a big problem brewing or the need for reform to keep major sporting events universally available. I hope that when the Minister replies he can agree at least with the principle that the rules need to be updated, and suggest a process for taking this revision forward. I beg to move.

Amendment 224A (to Amendment 224)

Moved by

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Amendment 224A (to Amendment 224) withdrawn.

[Lord Wood of Anfield]

My Lords, I thank noble Lords for that excellent short debate. I agree with much of what the noble Lord, Lord Gordon, said about the risks of a target—such risks definitely exist—but I also agree with other noble Lords that leaving it to Ofcom is probably not the best solution. There is definitely a need for some parliamentary clarity. Ofcom wants statutory clarity so that it can be a regulator in virtue of clear rules, rather than be thrown into the contentiousness that the judgments that this would require would embroil it in. So I think that the Ofcom route is not the best route forward.

I also agree with the noble Lord, Lord Wigley, that there are certain tough cases with any rules, in particular with the Welsh and Gaelic language carrying of live sporting events. In response to the Minister, I suppose I am 10% reassured and 90% not reassured at all. To say that noble Lords can be reassured that there is no threat is not really a reassurance, because the threat does not come from the Government’s intentions being in doubt.

[Lord Ashton of Hyde]

I think the noble Lord misunderstood me. I was trying to reassure him by saying that we will not let it be under threat.

[Lord Wood of Anfield]

I appreciate that and I am grateful for it, but I fear that it is under threat by virtue of technological change and changes in viewership—not because of changes in government policy. There is a threat emerging—one can see it in the graphs and the numbers—and it requires some pre-emptive thinking. There was a hint that maybe some pre-emptive thinking is going on behind closed doors on this, but it is just not true to say that there is no threat when all five PSB channels line up and say that the numbers suggest that not one of them will qualify under the existing rules by the end of the Parliament. They are either right or they are wrong—and if they are right, there is a problem.

[Lord Ashton of Hyde]

I am sorry to keep interrupting the noble Lord; what I said was that the regime is not under threat at this time.

[Lord Wood of Anfield]

Well, I take “this time” to be this Parliament: that is the one I am in, and by the end of it there seems to be a big problem brewing. So I suspect that we will come back to this later. But for the moment I beg leave to withdraw the amendment.

Amendment 224 withdrawn.

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Moved by

[Lord Wood of Anfield]

226A: After Clause 80, insert the following new Clause—
“Public sector broadcasting prominence
(1) The Communications Act 2003 is amended as follows.(2) In the title of section 232, at end insert “and “electronic programme guide””(3) After subsection 232(5) insert—“(5A) In this section “electronic programme guide” means a service which consists of a— (a) linear electronic programme guide; or(b) qualifying connected electronic programme guide.”(4) In subsection 232(6) for “electronic programme guide” substitute “linear electronic programme guide”.(5) In paragraph 232(6)(b) after “for” insert “finding, selecting or”(6) After subsection 232(6) insert—.“(7) In this section “qualifying connected electronic programme guide” means a “connected electronic programming guide” which is used by a significant number of its intended audiences as a means of receiving television programmes or TV-like content.(8) In this section “connected electronic programming guide” means a service which consists of—(a) the listing or promotion, or both the listing and the promotion, of some or all of the programmes included in any one or more programme services the providers of which are or include persons other than the provider of the guide; and(b) the listing or promotion, or both the listing and the promotion, of—(i) some or all of the programmes included in any one or more on-demand programme services, or(ii) some or all of the on-demand programme services, the providers of which are or include persons other than the provider of the guide; and(c) the facility for finding, selecting or obtaining access, in whole or in part, to the programme service or services and the on-demand programme service or services listed or promoted in the guide.(9) The Secretary of State may by order amend the definition of an electronic programme guide in this section.(10) Before making an order under subsection 9 the Secretary of State must consult OFCOM.”(7) In subsection 310(1) for “from time to time” substitute “on 1 December 2017 and at intervals of no more than three years thereafter”.(8) In subsection 310(2) omit “such degree of” and “as OFCOM consider appropriate”.(9) In paragraph 310(4)(a) after “BBC” insert “, including on-demand programme services,”.(10) After paragraph 310(4)(h) insert—“(i) any on-demand programme service provided by a public service broadcaster.(4A) A service is an on-demand programme service provided by a public service broadcaster for the purposes of paragraph 4(i) if it —(a) is provided by any of the following—(i) a person licensed under Part 1 of the 1990 Act to provide a Channel 3 service;(ii) the Channel 4 Corporation;(iii) a person licensed under Part 1 of the 1990 Act to provide Channel 5;(iv) the Welsh Authority; and(b) provides access to programmes broadcast on a licensed public service channel.”(11) In paragraph 310(5)(a) after first “service” insert “, including on-demand programme services,”.(12) After subsection 310(5) insert—“(5A) In making any order under subsection (5) the Secretary of State must have regard for the desirability of investment in original productions.(5B) In this section “original productions” means programmes commissioned by or for the provider of a service for the purposes of subsection (5) with a view to their first showing on television in the United Kingdom on that service.”(13) After paragraph 310(7)(a) insert—“(b) if the service is a public service channel dedicated to children, persons under the age of 16;”(14) Leave out subsection 310(8) and insert—“(8) In this section “electronic programme guide” means a service which consists of the programme service or services listed or promoted in the guide.”(15) In subsection 311(2) for “310” substitute “232(5A)”.”

[Lord Wood of Anfield]

Once again, I am pretending to be my noble friend Lord Stevenson. Amendment 226A concerns rules ensuring the prominence of public service broadcasting content on on-demand services.

The Communications Act 2003 provides a code of practice to ensure electronic programme guides give priority and prominence to PSB channels. For traditional viewing these rules, in the main, continue to work pretty well. But the Act was passed 14 years ago, before the age of digital switchover, the iPlayer, the iPad, a range of catch-up services and connected TV. Recent data show that 70% of adults in the UK say they have watched programmes via catch-up services. About 15% of total programme viewing is now, to use the horrible jargon, time shifted—more than double the amount from 2010. Yet, at the moment, on-demand menus and connected TV homepages that are portals for TV guides are not within the scope of prominence rules, so there is a pressing need for the rules around PSB prominence to be updated to keep up with new technology. In addition, new services with significant PSB content, such as the new BBC iPlayer Kids, are also out of scope of these rules.

A good example of PSB programming that suffers from the absence of prominence rules for catch-up and on-demand menus is Welsh and Scottish Gaelic language services. With connected TV services it can take a very long time even to find these programmes. More generally, if you have Sky, as I do, and press the programmes button, you will see the programme guide in the top left corner, but in the bottom half of the screen—more than twice the size—you will see a “top picks” box tempting you to delve in. In my experience, you would struggle to find any PSB content in that box. PSBs continue to try to negotiate prominence for their output, but they are increasingly finding themselves outbid and outthought by commercial broadcasters that pay for promotion of their own services.

Guaranteeing the prominence of PSB in this new age is in the interest of licence fee payers, who after all pay for PSB and are therefore entitled to ensure it is accessible across platforms and viewing habits. It is also popular: 70% of the public continue to want BBC channels at the top of their listings. Ten times as many viewers want the TV guide at the top of their screen, rather than platform operators’ recommendations to be prominent.

Both Ofcom and this House’s Communications Committee recommended updating the prominence rules by extending them to on-demand services and online menus. The TV licencing laws were updated to cover BBC on-demand services. The amendment would do the parallel work for PSB prominence rules. In addition, we have a specific reference to strengthen the rules around prominence on programme guides for PSB children’s content. I know that we will discuss quality TV children’s programming later, but, for example, at the moment CBeebies and CBBC—the most trusted children’s channels, whose content is funded by us all—sit behind 12 US network cartoon channels on the Sky platform.

Surely the Government would agree with Ofcom and this House’s Communications Committee that the rules guaranteeing PSB prominence need to be updated. We should not tolerate a situation in which people are paying for PSB content but, as viewing habits change, it is getting harder and harder to find it. I looking forward to hearing from the Minister whether he agrees that there are gaps in the existing rules and what steps he would recommend to fill them. I beg to move.

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[Lord Ashton of Hyde]

No, what I am saying is that we do not see that there is compelling evidence of harm to PSBs.

[Lord Wood of Anfield]

My Lords, we have had various contributions across the House of excellent quality. We have the noble Lord, Lord Low, and the noble Baroness, Lady Benjamin, talking about children’s content; the noble Lord, Lord Wigley, and my noble friend Lord Hain talking about Welsh language provision; various comments about innovation and the future from the noble Viscount, Lord Colville, and the noble Baroness, Lady Bonham-Carter, and my noble friend Lord Puttnam.

For the sake of brevity, I will respond to the Minister directly. I am slightly confused by the logic of the Minister’s response. Either electronic programming guides work in pointing people towards PSB—and the general view is that they are absolutely crucial for audience share in traditional TV—or they do not. I find it difficult to know why the logic that has traditionally held for intervention to ensure that PSB content paid for by the public has pointers towards it should no longer apply in an age when viewing habits are changing. I totally accept that it is more complicated, but I do not understand why we should throw our hands up and say, “People will find good content”, when up to now, with linear TV, we have taken great strides to ensure that people are pointed towards the content that is funded by licence fee payers. I find that discrepancy between the two worlds quite baffling.

Secondly, it is not a new set of regulations that noble Lords are asking for; it is updating the existing set of regulations—which has pretty much worked okay, with the exception of children’s TV and a few other areas—into a new age. That will require some imagination and collaboration and thinking, but it is not ripping up everything and starting again that it is being asked for. So I am disappointed that the Minister has closed the door on thinking this through further. I will definitely think more about what to do and where to take this, but for the moment I beg leave to withdraw the amendment.

Amendment 226A withdrawn.