Deregulation Bill

Baroness Warnock Excerpts

Thursday 5th February 2015 Lords Chamber

[Lord Storey (LD)]

My Lords, I, too, support the amendment. With the UK now the second largest exporter of television programmes, the commercial PSBs’ investment in content is part of the engine of the UK TV content market, driving the independent production sector and playing a critical role in supporting the rich talent pool, both on- and off-screen, across the UK, including the north-west, where I live.

UK programmes are not only hugely popular with UK viewers but have global appeal. These programmes demonstrate that the commercial PSBs are not only producing high-quality entertainment for viewers in the UK, free at the point of use, but producing a highly valued product that can be exported around the world and contribute to the growth of the creative industries, including in the regions, such as mine of the north-west. To be able to continue making these programmes, the commercial PSBs need to make a return on successful content investment, which my noble friends have clearly demonstrated that Section 73 is undermining.

Many noble Lords have referenced the Ofcom figures that show that between 2004 and 2012 there was a significant real-terms decline in PSB investment in original new programmes of around £800 million, and that between 2007 and 2012 there was a 29% real-terms decline in PSB spend on original new drama programmes. We should be very concerned about these numbers. The drama figure in particular links directly to the impact of personal video recorders and ad-skipping.

As has been pointed out, the UK broadcast market is evolving very rapidly as technology changes and convergence continues, altering the economics of the industry fundamentally. Therefore, retaining legislation such as Section 73, which was designed for the challenges of an analogue era, makes little sense in today’s highly competitive global media market.

Section 73 does not support the growth of the UK’s international television sector. It is putting our commercial PSBs’ ability to compete in a global market at risk. Contrast this with the UK’s main competitor internationally, the USA, which has a system that provides a “retransmission consent scheme”, which means that free-to-air broadcasters in North America are paid for delivering content to competing platforms. These payments, which amounted to $3.3 billion in 2013—nearly 15% of total broadcast television revenue—have been crucial to the continued viability of television broadcasters, contributing significantly to the new “golden age of television” in the US. They also accounted for less than 3% of cable operators’ revenues and have had little or no impact on pay-TV prices.

These fees have helped to sustain programmes that could not otherwise be made, such as regional news. They have also helped free-to-air broadcasters secure rights to sporting events that would otherwise be shown on pay-TV channels and have helped, or are helping, with technological changes such as the move to HD television.

No two television markets are exactly the same, but it is instructive that our key rival in international TV markets is taking such a different approach to maximising investment in original TV content. It cannot be right that we hold on to a system that increasingly does the opposite, particularly given that it has long since achieved its policy objective.

Like many of my noble friends, I have been waiting to see what the Government propose to examine with their intended consultation and, like them, I have been waiting some time to see when the proposed review will be published. I am also eager to know whether the recommendations that result from this consultation have any chance of being implemented. How will the Government ensure that this does not become just another issue kicked into the long grass as part of a consultation doomed never to see the light of day again, with commercial PSBs’ investment being put at risk all the while?

Section 73 has been discussed in detail as the Bill has progressed through Parliament, and I welcome this sensible amendment that would ensure that the Secretary of State has the power to repeal the whole of Section 73 without primary legislation. It seems a sensible solution that would not pre-empt the findings of the review yet would still mean that action could be taken at the earliest possible opportunity.

[Baroness Warnock (CB)]

My Lords, there could hardly be a more learned, well informed set of people than those of your Lordships who have spoken up till now. My connection with commercial television ended in 1980. The amendment before us sets right what was put wrong then. It was put wrong largely out of prejudice against the commercial sector and a failure to believe in the public service broadcasting demands that were even then made on commercial television, which were often regarded with suspicion. It seems to me well beyond the time when this amendment should be accepted. The thought that we have to wait still longer for a review, the contents of which we do not know, is quite absurd. I urge the Government to accept the amendment here and now.

[Lord Stevenson of Balmacara (Lab)]

My Lords, once again, we have had a very good discussion about this topic. Although much stress was placed on the unanimity of view last time, I seem to recall myself being somewhat isolated and not in favour of what was proposed. I plead on this that I was simply arguing for good governance and not for a radical change in approach, because I share many of the views that have been expressed today. I simply think that the complexity of the matter is undervalued. The technological changes and all the other things that people are asserting without much evidence need to be tested by proper evidence-gathering and a proper report.

Like other noble Lords, I think that the way forward is to do something with Section 73 of the Copyright, Designs and Patents Act. There is some obvious logic in having the primary legislation already banked in order that it can be implemented when the time comes, but the right process would be to carry out the review to be absolutely certain that the complexities which are present are properly analysed, that the regulatory structure—in so far as it can be—is made future-proof, and that we come forward with a proposal in a coherent and proper way. I hope that the Minister will be able to shed light on the complicated manoeuvrings that are going on behind the scenes but have yet to see the light of day.