Digital Economy Bill

Lord Gordon of Strathblane Excerpts

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

This is a very modest amendment and a tiny part of what will surely be a global standard, but it lays down a marker. Although Sharon White is on the record as saying she does not believe that Ofcom should play a part in regulating the internet, I wonder whether her position has as much to do with expertise and capacity at Ofcom as a strongly held philosophical position. It might not be a perfect amendment but I say to the noble Lord that it is a perfect idea because it does not overreach but offers the prospect of transparency and correction. The technology we are talking about brings with it a great deal of creativity and social good but it is, as the noble Lord said, disproportionately powerful and opaque. I urge the Minister to consider what the Government might offer to deliver the intention of the amendment, if not in this form then perhaps in another.

[Lord Gordon of Strathblane (Lab)]

My Lords, I, too, support the amendment. Yesterday, along with many of your Lordships, I attended a meeting with Channel 4 on the subject of fake news. Here we are not talking about opinion, where people can legitimately take one view or another in a democracy, but about things that are demonstrably totally false. Yet there is no mechanism at the moment for screening them out of social media. If in the United States 44% of the population regard Facebook as their primary source of news, there are dangers for democracy.

I do not know whether the noble Lord’s amendment will work. I do not know whether, for example, the companies will regard algorithms as commercially confidential and refuse to release them. I do not know what powers we actually have over these bodies, but it is worth exploring. It would be ridiculous if this massive Bill, which deals very well for the most part with a wide range of subjects, were to leave out the most topical and potentially the most dangerous of all: social media.

[The Lord Bishop of Chester]

My Lords, this is an important amendment because it touches upon the bigger issue of the impact of artificial intelligence on all sorts of aspects of our lives. There is a law called Moore’s law, which says that every two years the power of computers doubles. That has been true over the past 20 or 30 years and we should assume that that power will continue to develop. Artificial intelligence in all its impacting forms will be more and more prevalent in our society and more and more potent in the hands of terrorists in the years to come.

We cannot ask Ofcom to solve all the problems in this area, but I would like to know where the ownership of these risks and the rapid changes in our society falls in the eyes of the Government. Perhaps Ofcom has a role in this regard—search engines or whatever—but it is really part of a bigger picture of how we get ahead of the game with the impact of artificial intelligence. We read in the papers about driverless cars appearing on our streets, and in many other areas of life artificial intelligence will impact upon us. Where is this owned in the corridors of government?

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[Viscount Colville of Culross (CB)]

I declare my interests in broadcasting as set out in the register. I support this group of amendments. I think it is about time that we seriously considered statutory underpinning to protect the independence of the BBC so that it can operate free from the influence of Ministers and other public authorities in the UK.

The last two charter negotiations have both ended up being a smash and grab by the Government on the BBC’s funding and independence. In my view, the negotiations for the 2017 charter have been the most egregious attack by Ministers in the history of the corporation. The new charter has been portrayed as a great victory that has not only saved the licence fee but also extracted an annual inflation-linked increase in the fee. However, the director-general and the strategy team at the BBC spent a great deal of the last three years constantly anticipating and fending off attacks by Ministers—surely a serious distraction at a time when public service broadcasting has been under unprecedented attack by satellite and internet rivals.

I particularly welcome the new clause that would be inserted by Amendment 218, which states that the BBC should be independent in all matters concerning,

“the content of its output, the times and manner in which its output is supplied”.

There is a groundswell of opinion among many politicians that the BBC needs to concentrate on content that cannot be provided by the market. Noble Lords have only to look at PBS in America to see that, although its programmes are very worthy and wholesome, they are watched by a tiny minority of the audience and are not really relevant to national discussion.

What was most extraordinary about the most recent negotiations for the charter was the level of interference attempted by the Government in BBC content provision. Your Lordships should know that the rumours in the press that the Government wanted to interfere not only in the content but even in the scheduling of BBC programmes were true. They wanted to force the BBC to move the “Ten O’Clock News” to another time. Surely that really is none of their business—even if many noble Lords who like to go to bed early might have appreciated the move.

I also welcome proposed subsections (3) and (4), safeguarding the BBC so that it can “exercise its functions” by providing,

“sufficient funds, through the licence fee and otherwise”.

“Otherwise” is an important word for me. As part of the charter negotiations the Government quite rightly demanded that the BBC find sources outside the licence fee to raise revenues. BBC Worldwide, the corporation’s sales arm, has been doing just that—and very well indeed. It promises to return over £1 billion to BBC content provision over the next five years.

As a former BBC programme maker myself, I know that the uplift from worldwide funding for a programme budget can transform its content. The extra money allows an increase in the number of days’ filming, the locations to be used and the ability to work with a craft film crew—all of which means that viewers can see the money on screen and have a better viewing experience. Yet in the last negotiations the Government very nearly managed to privatise BBC Worldwide. I believe that these proposed subsections would stop such a threat in future.

Many attempts to reduce the independence of the BBC were eventually successfully fought off this time round. But the existing charter mechanism allows similar interference by the Government in the BBC in the future. The risk of placing the future of the BBC on a statutory footing is that there are plenty of politicians from all parties who would like to do the corporation harm, or even to interfere directly in how and where the BBC spends its money. Amendments could be made by Peers and MPs which would atomise the BBC so that its content served their own interests or constituency, which would damage one of the great unifying institutions in our country.

However, if noble Lords look at Channel 4 and its statutory underpinning, they will see that it has made public ownership of that organisation more secure. Last year’s threat to privatise Channel 4 was only too real, but in the end it would have needed a very controversial Act of Parliament to carry out that threat. And what did we see? No such Bill was presented to Parliament, and Channel 4 remains in public hands. I am convinced that this group of amendments would give the BBC powerful protection from future government attacks on its independence. I urge the Minister to give them serious thought.

[Lord Gordon of Strathblane (Lab)]

My Lords, I cannot work up the same sort of enthusiasm for the statutory underpinning of the BBC. Although I deplore interference with the running of the BBC and the licence fee, and welcome the promises of better behaviour in future in the recent licence settlement, it seems to me that statutory underpinning creates a platform for statutory interference as well, which could be a lot more dangerous. Things are run quite well and we now have a royal charter that will last for 11 years. That gives us time to reflect on possible changes at some point in the next 11 years—but certainly not at the moment.

[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.

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[Baroness Bonham-Carter of Yarnbury (LD)]

I add my support to these amendments and also pay my respect to the noble Lord, Lord Best, who so ably chaired the Communications Committee, of which I was a member, and produced this report. As everyone in this debate has said, a greater level of transparency must be introduced into the setting of the licence fee. Never again can there be backroom deals.

What these amendments seek to achieve is that in future there will be clarity and public scrutiny. The public, after all, pay the licence fees. These are moderate proposals which will rightly leave an elected Government with the final say in determining the BBC’s revenue, but introduce an important element of accountability into the process, which is surely appropriate for such a vital national institution. There is obviously room for debate as to which body oversees this process, but I hope that the noble Lord agrees that there should be a more open and transparent process.

[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 Gordon of Strathblane]

224A: After Clause 79, leave out inserted paragraph (b) and insert—
“(b) that the service is a service which, in the opinion of OFCOM, is capable of reaching the vast majority of the population and likely to achieve a significant audience.”

[Lord Gordon of Strathblane]

My Lords, Amendment 224A has the same objective as Amendment 224 but takes a marginally different approach. I will not go over the statistics because my noble friend Lord Wood has done that admirably, but I would add that PSBs are responsible for only 5% of sports output on television but 60% of the viewing. Their role in sports coverage is absolutely vital and I fully endorse the need to protect the listed events regime against the risk of becoming obsolete.

I must apologise to the Committee because the language I used in drafting Amendment 224A is more than sloppy. In an age that regards a majority of 52% in the EU referendum as overwhelming and a 55% majority in the Scottish referendum as equally overwhelming, the phrase “vast majority” is wholly inadequate to reflect what I really mean, which is as close to universal coverage as is humanly possible. However, the main point of my amendment is to get rid of fixed targets because they can become obsolete. My noble friend may be right when he says that it might happen to all five PSBs within the next Parliament, so why substitute 95% with 90% which may become equally obsolete in the ensuing two or three years? Why not leave it to the judgment of the regulator, Ofcom? It should reach a decision on which broadcasters could qualify.

The other point on which I slightly disagree with my noble friend is going for 90% in the preceding year. First, that could be overly restrictive, and secondly, it could lead to a situation where an organisation deliberately becomes free to air but hides its main sports coverage behind a paywall. It would be much better to leave this to the judgment of Ofcom. It can determine what coverage is going to be required and who can qualify as a free-to-air broadcaster. Apart from those points, I endorse entirely the need to protect the listed events regime and I beg to move.

[Lord Addington (LD)]

My Lords, I apologise for not having spoken at Second Reading. Free-to-air broadcasting is something that is very good because it helps the entire sporting structure by encouraging people to watch sports events, which in turn may make them actually get out there and play some sport, a point that has not been mentioned yet. The fact is that if you have not seen something you cannot get involved in it, and equally, unless it is culturally acceptable you do not get involved. This is an odd and imprecise correlation that everyone knows about. The effort to build a healthier nation is helped by broadcasting. Oddly enough, being able to watch sports while sitting on the sofa encourages people to go out and try them, and thus makes them likely to spend slightly less time on that sofa.

The most important part of Amendment 224 moved by the noble Lord, Lord Wood, is that the affirmative procedure would have to be used to make any changes. That, along with a commitment to ensuring that Parliament takes an interest in this issue and monitors it carefully, is probably most important in terms of reflecting the spirit of the amendment. If we were to leave this to some sort of outside structure, as we heard from the noble Lord, Lord Gordon, it is going to be difficult to pin down in a fast-changing world. Unless we have something that states that PSBs must continue with this provision, it will come under pressure and people will always be sniping at it. The fact is that sport seems to be something which people want to pay to access and view, so there will always be pressure. Representatives of the big five who came in to talk to my colleagues about this issue said that they are happy with the situation as it is at the moment, but there will always be someone who will think, “We can get so much more money and could do so many wonderful things if we restricted viewing”. As I say, there is always that bit of pressure.

We owe it to the public to make sure that any change that is made to something like this, which is a very good thing, is done in the full glare of public scrutiny. I hope that my comments are taken in the spirit in which they are intended, which is that this regime is bigger than the sports events themselves. It is part of our current fabric and we should take an interest in it. Whichever criteria are used, making sure that Parliament, to which the public have democratic access, is involved in the discussion is essential. If any changes are made, we will want to know why, because a price will have to be paid no matter what benefits are gained for certain sports.

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[Lord Wigley]

My Lords, I am delighted to add my support to the amendment, and to thank the noble Lord very much for the work he has put into this. As one who has campaigned on disability issues over the years in another place, alongside certain other colleagues who are in the Chamber tonight, I know that it is vital, in line with the social definition of disability, to make sure that handicap is not caused by the failure of those who can control our environment, whether that be the social, the physical or the psychological environment.

We are talking about creating a social environment in which it is possible for people who could depend so much on, and enjoy so much, the benefits of broadcasting to get that full benefit—provided that the necessary adjustments are made. I was for some years a member of the S4C authority, and I am acutely aware of the challenges of meeting the necessary standards. It is not a cheap option—but, as the noble Lord rightly said, technological changes are taking place that make it possible for translation, both between languages and with sign languages and other means of conveying information, to be done almost automatically, at low cost. Undoubtedly this will be much more available in the future. I hope that we will look at this amendment with an eye to that future, and that we will harness all the technology that may be available, so as to prevent—as I am sure we all wish to do, where we can—a disability becoming a handicap.

[Lord Gordon of Strathblane]

My Lords, there is a general air of unanimity and approval for this amendment: I think the noble Lord has backed a winner. Any changes that I have in mind I can discuss with him at some point between now and Report, and I am confident that he would probably agree. Reference has already been made to the difference between the linear services—which are already up to speed and are becoming more and more effective, and cost-effective—and some of the online platforms, which are quite complicated. We might need to insert the word “proportionate” into the amendment, but apart from that, I think that everybody in the Committee endorses what the noble Lord is trying to do.

[Lord Grantchester (Lab)]

I support Amendment 225, tabled by the noble Lord, Lord Borwick, and thank him for introducing it. We on this side of the House would claim that it has our fingerprints all over it, as it was introduced and spoken to in the other place by our honourable friend Louise Haigh MP. We agree that people with hearing or sight disabilities should be able to watch catch-up or on-demand services in the same way as they can watch standard linear TV, whether on a traditional television or on a computer, tablet or mobile phone.

We agree that broadcasters have not made sufficient progress—with the exception of the BBC, which has 98% accessibility on iPlayer. I understand that 76% of the UK’s 90 on-demand providers still offer no subtitles at all, that 85% of Sky’s on-demand content via its set-top box is inaccessible, and that only 5% of Virgin Tivo on-demand services have subtitles. I understand that on linear TV 16% of content is watched with the subtitle option switched on. The noble Lord, Lord Borwick, may well be correct to say that other broadcasters are moving in the same direction as the BBC.

This service provision is critical for people with sight or hearing disabilities, who can feel isolated and socially excluded from family, friends and society in so many ways, especially with this new way of watching TV. In the other place the equivalent amendment was withdrawn following the Minister’s commitment to take action.

We are content that this amendment would enable the Government to introduce a statutory instrument to give Ofcom the powers to fix the exact level of the quota necessary, balancing the need to make content accessible with the cost to the industry. Following consultation, Ofcom can replicate the mechanisms used for linear TV, which works on a sliding scale that requires large broadcasters to provide access services on a higher percentage of their content than the smaller ones. Furthermore, Ofcom may cap the total cost of meeting those requirements at 1% of a broadcaster’s relevant turnover.

Two issues remain, both of which the noble Lord, Lord Clement-Jones, mentioned. Both were also raised by the Delegated Powers and Regulatory Reform Committee. First, the “appropriate regulatory authority” should be named on the face of the Bill. My understanding is that the 2003 Act has Ofcom as the default regulator unless an alternative is specified, and that Ofcom has the power to designate an alternative regulator. If the Minister can confirm that this is the position, and that the custom and practice of most modern enabling legislation is similar, we would understand that the recommendation of the Delegated Powers Committee might fall away.

Secondly, we would support that committee’s recommendation that the statutory instrument should be enacted through affirmative resolution, and not by the negative procedure. There are significant reasons why that should be so, which are not limited to mere detail and technical content.

The appropriate regulatory authority, Ofcom, will have significant powers to impose substantial financial penalties for any contravention. The regulations will impose important new statutory duties on broadcasters, which may be required to increase their provision over time. Of course, all this will attract significant public interest, and the interest of both Houses of Parliament. I am sure the Minister will also confirm that Ofcom will consult widely, most notably with organisations representing people with sight or hearing difficulties.

We understand that the Minister will be minded to accept the amendment, for which we are grateful to him. Has he had discussions with Ofcom, and can he give an indication of when Ofcom might undertake, and conclude, its consultation process? I would be grateful if he could tell us when he might expect that this provision could be enacted.