All 3 Lord McNally contributions to the Media Act 2024

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Wed 8th May 2024
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Committee stage part two
Mon 20th May 2024
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Thu 23rd May 2024
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Report stage & 3rd reading

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Lord McNally Excerpts
Viscount Colville of Culross Portrait Viscount Colville of Culross (CB)
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My Lords, I declare an interest as a freelance television producer who works for small independent production companies making content for public service broadcasters. I am also an officer of the Channel 4 APPG, so I speak as a critical friend to the channel. I thank the noble Lord, Lord McNally, for putting his name to this amendment. I also thank the many small independent companies to whom I have spoken, as well as Tom Chivers from the Media Reform Coalition, and Channel 4 itself.

I put down Amendments 14 and 15 to Clause 8 because I want to ensure that Channel 4 focuses its commissioning on future support for the SMEs. I hope the amendments will encourage the channel to expand its present commissioning process, which too often rewards large suppliers with large commissions. There will be much argument about the level of the cap below which companies qualify as SMEs. However, subsections (1B) and (1C) of this amendment give the Secretary of State the power to be flexible and alter the threshold figure if it proves to be too low for small drama producers, for instance, but only after she has consulted Ofcom, Channel 4 and independent companies.

Amendment 15 requires the criteria to be extended to an annual revenue of £25 million a year over five years. This would mean that a single large drama commission would not adversely affect a company’s status as an SME by pushing its annual revenue in a single year over the £25 million mark. The information on the company’s revenue will not be hard to find; it will be readily accessible in Companies House.

Channel 4 was set up in 1982 by Mrs Thatcher’s Government in order to break the duopoly of BBC and ITV. Its purpose was to disrupt the television ecosystem, which it did wonderfully well. Its aim was not just to have content different from the existing public service broadcasters and to reach new audiences, but to allow a thousand flowers to bloom. As Mrs Thatcher’s deputy, Willie Whitelaw, said:

“We must aim for a channel that says something new in new ways”.


He added:

“We must seek to provide an outlet for the talent of independent producers”.


Channel 4 has been very successful in encouraging thousands of people across the television industry to leave their comfortable staff jobs in the other public service broadcasters and take the risk of setting up small, independent television production companies. It created a culture in the media where independent producers became risk takers and small business owners, supplying a channel which aimed to reach minorities and poorly served audiences.

For much of the last few decades, Channel 4 has been at the centre of nurturing Britain’s independent television sector, which is the engine of our world-beating creative economy, the seed corn of the industry. But the media environment has changed dramatically in the last few years, both in content commissioning and in the supply side of the industry. Hundreds of small companies, which make up the lifeblood of the industry, have been bought up by mega television production companies such as Banijay and All3Media, which is owned by the American company Warner Brothers.

It is not surprising that these big companies have been so successful. In 2022, over three-quarters of Channel 4’s UK commissioning spend went to production companies with turnovers in excess of £25 million per year, while just 21% went to producers with annual revenues of under £25 million per year, despite these smaller companies making up more than half of all independent production companies in the UK.

Unfortunately, the latest figures, from 2022, show the percentage of Channel 4’s spend on commissioning from those bigger companies to have increased from 64% in 2020 to over three-quarters two years later, while the figures for the under £25 million companies have gone down from 36% in 2020 to 26% in 2022. This has happened at a time when Channel 5—which is privately owned—commissioned an amazing 81% of those smaller companies, a figure which has gone up even further in 2022.

This is contributing to the crisis in the industry, with commissions to smaller indies, and regions, collapsing. The latest BECTU survey of its members estimates that nearly three-quarters of its members are not working. Some 30% have not worked in the past three months, while 34% have had less than a month’s work since November 2023. As a result, there is a dramatic exodus from the industry, which has been one of the beacons of our economy. In February 2024, 37% of the respondents to the BECTU survey said that they were planning to leave the industry, with 40% of women and half of black respondents saying that they were going to look for work outside the sector within five years.

The money to build these small companies comes from the terms of trade, set up to ensure that they get the majority share of the back-end revenue from further sales of these programmes. This comes only from commissions by British broadcasters. US companies pay a straight production fee and keep all the back-end profit, so the Bill needs to focus on ensuring that British broadcasters support the future of up-and-coming content suppliers across the UK. The BBC is carrying much of the burden, but I and many other colleagues have fought hard to ensure that Channel 4 remains in public ownership. That mission having succeeded, the emphasis must be to encourage the broadcaster to support the next generation—the seed corn of television production.

I fear that Channel 4’s attitude can be summed up in its submission to Ofcom when renewing its 2024 licence, in which it said that

“the UK production sector continues to be significantly smaller outside London”,

with

“fewer production companies, often smaller in scale, and therefore with less capacity to develop creative ideas and produce them”.

This statement also relates to Amendments 16 and 17 in the next group, in the name of the noble Baroness, Lady Fraser of Craigmaddie, which will support quotas for commissioning in the regions and nations.

I have been talking to small indies across the country and have been told horrendous stories of the Channel 4 commissioning process—or lack of it. One told me of a series being cancelled just three weeks before filming was due to start. Others had the extreme difficulty of getting programme ideas through the channel’s commissioning process.

I want to balance my statements by pointing out that Channel 4 is capable of commissioning astonishing programmes from small production companies, such as “The Push”, from a small Leeds-based company, Candour, which had good ratings, and told an important story from a diverse community, but there are not nearly enough of these. The channel did point out to me that its emerging indie fund has invested £17 million over the last four years, to identify and nurture emerging talent and to help them grow their businesses. The fund also provides guidance to selected indies about the Channel 4 commissioning process, to provide them with the skill set to pitch for further work. This help must, of course, be welcome, but it is not revenue from commissions.

This great channel, which is still one of the jewels of public service broadcasting, is battling against the headwinds of a fiercely competitive television economy. As it is a publicly owned company, I call on the Government to push it further in supporting SMEs and to help to bolster the future of our creative industries. Channel 4’s slogan is “4 All the UK”, and I ask the Minister at least to look at Amendments 14 and 15, to ensure that this publicly owned channel does just that.

Lord McNally Portrait Lord McNally (LD)
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My Lords, I point out that I did not speak at Second Reading. I was here until 6 pm and then went off to speak at a long-standing engagement at Queen Mary University of London.

It is a great pleasure to follow the noble Viscount, Lord Colville. I put my name to Amendment 14 because I strongly support his campaign, as he has explained it, to make sure that we do not get stampeded or bamboozled into policies because the world is changing, globalising and internationalising and we therefore think that certain things are inevitable. One of the things that we enjoy in the British broadcasting environment is that, for 100 years, we have been bucking the market. It was a Conservative Government that created the BBC as a public corporation safeguarded by a royal charter. It was a Conservative Government that introduced ITV as a confederation of regional television companies. Even today, ITV retains some of the DNA of that regional network; I still consider myself as coming from “Granada land”, and you can still find some of that company’s ethos in ITV today. As was pointed out, it was a Conservative Government, under Mrs Thatcher, that created Channel 4. Let us not be bullied; we have a good record of making television that is national—in the broadest sense—and distinctly British and that sets standards for others around the world.

Unfortunately, I cannot stay for the debate on the next group, but I crept into the meeting that was held on it. I felt like a Sassenach in the gathering of Scots and Welsh and Northern Irish people, putting the point, which has been proved time and again with a little nudging by government, that there is talent out there in the regions. But if you leave it just to the market, you have to make some effort to get results, because London is such a massive black hole of energy.

I am sometimes teased by my colleagues when I refer to the fact that I was on the Puttnam committee that gave pre-legislative scrutiny to the 2003 Act. One of the great advantages of the House of Lords is having that kind of perspective. When I look at that, I see that it was amazing that we got so many things right when we were not just looking through a glass darkly at what was happening. There was no internet and none of the technologies that have been developed in the last 20 years. In that Act, there were still various safeguards for making sure that our broadcasting ecology retained a British stamp to it—a British DNA—and that is why I support this amendment now.

I do not think that the idea for Channel 4 was to create a whole new industry of successful British indies, but that is what it did. It was perhaps too successful, in that many of those indies, as was referred to, were then swallowed up by other companies or themselves became big—not little—minnows.

However, that is the great effort: if we can keep this diversification of commissioning in Channel 4, and in the other countries and the regions, we are distorting the market to a certain extent but beneficially, by forcing it to find the talent in the regions and in the smaller companies. The noble Lord, Lord Vaizey, in his intervention earlier referred to the crude market forces “squeezing out” those opportunities. I therefore hope that Channel 4 will think again.

Lord Dunlop Portrait Lord Dunlop (Con)
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My Lords, I rise briefly to support Amendments 16 and 17, introduced persuasively by my noble friend Lady Fraser of Craigmaddie, and, not least, to add another Scots voice to the many Welsh voices that we have heard already.

The independent production sector has naturally been concerned about the implications for Channel 4’s commissioning role of the removal of the existing publisher-broadcaster division. However, following the decision not to proceed with privatisation, providing Channel 4 with the flexibility to make its own content is a logical step that deserves support. As my noble friend made clear, one of the strengths of Channel 4 is its commitment to represent the whole of the UK in all its diversity. It would be a backward step if, in giving Channel 4 greater flexibility, its role as an innovator and investor, stimulating the production sector in all parts of the country, was compromised. We often question whether our news media organisations sufficiently reflect the full diversity of the UK, and the same concern exists for the making of programmes. That is why we ask the BBC to meet quotas for network programming outside England and in each of the home nations.

As we have heard, there is tremendous creative talent outside the M25, including a vibrant sector in Scotland. That is also why some of the biggest global brands commission programmes from independent producers in the nations and regions, as indeed Channel 4 has done historically. However, if in this new world producers in the nations and regions are to remain at the forefront of the minds of Channel 4 commissioners, quotas as proposed by my noble friend are a proven means of providing them with the right incentives without unduly constraining Channel 4’s future room for manoeuvre.

Channel 4, while commercially funded, is a public asset. I believe that quotas are a proportionate measure to reflect its special place in our media landscape. I hope that my noble friend the Minister will be able to work with my noble friend Lady Fraser to provide the reassurance that the independent producers in the nations and regions are seeking.

Lord McNally Portrait Lord McNally (LD)
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My Lords, one of the great values of Committee stage for Ministers and regulators is that it gives them a warning of trouble ahead if they do not listen to what is said during it. This debate has been a very good example of that. I do not think Parliament is satisfied yet that we have the balance right in the ecology that we are trying to create.

It is interesting to remember that our broadcasting system is a child of Parliament and not of government or regulators. Over the last 100 years, Parliament has tweaked the market to do various good things. It created a national broadcaster under royal charter; most social historians would say that the BBC as created did much to unify the nation—it certainly brought certain accents to the fore, such as those of Wilfred Pickles and JB Priestley, which had not been heard before in London.

We are at a kind of turning point again. Of course, we are going through a revolution, the management of which is perilous for many in the major companies. As has been said in some of the briefings to us from ITV and others, the more we put demands and conditions on public service broadcasters, the more difficult it is for them to compete. It is about getting a balance right between the benefits we get and the benefits we give to PSBs and their ability to compete in this rapidly changing world.

I went to the meeting that the noble Baroness, Lady Fraser, organised, and it was very interesting to hear the passionate interventions from Northern Ireland, Wales and Scotland. However, as has also been said today, the development of talent outside London has also been significant. I still think of myself as coming from “Granadaland”; it is very difficult now to realise just what an impact Granada had on the north-west and on its confidence. In a way, there was no great plan, but it was a magnificent piece of genius to create ITV as a federation of regional companies, and from those regional companies came many benefits.

I am not sure how deeply Willie Whitelaw and others thought when they created Channel 4 and gave it that commissioning role, but it has certainly had a massive impact on the creative sector. I want us to make sure—this is the only intervention I make on this—that the Minister accepts the invitation from the noble Baroness, Lady Fraser, and that Ofcom, if it is listening, also realises that there is deep concern in Parliament that what comes out of the Bill retains what has been one of the great benefits of our development of the media, which is that we have found, nurtured and developed talents in the regions. The real danger in saying that we are going to concentrate on big productions and so on is that we get the bland and the international, and not what has been the great benefit of the development of our television and our broadcasting—the talent and the voice of the regions.

Lord Bassam of Brighton Portrait Lord Bassam of Brighton (Lab)
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My Lords, this debate has been a fascinating example of how the nations and regions are well represented in the Committee. We have heard contributions from Wales, Scotland, Newcastle and across the country.

The noble Baroness, Lady Fraser, argued very persuasively that quotas work. These amendments are aimed in a targeted and precise way at the hours and expenditure on programmes broadcast that are made and produced outside London. Amendment 17 additionally reflects this by reference to

“the nations of the United Kingdom”.

Amendment 54, tabled by the noble Lord, Lord Wigley, seeks to ensure that there is a proper evaluation of companies that claim to operate in the nations of the UK by reference to criteria based on staff numbers, a published commitment to remain and a background of time spent in that nation.

We on these Benches have a great deal of sympathy and offer our encouragement and support to the principle behind these amendments. The last 20 or so years have seen, as we touched on in earlier debates, the growth of production outside London. As the noble Lord, Lord McNally, reminded us, regional production was a great strength of the federated ITV companies. Their big opportunity in the late 1950s and 1960s led to such great companies as Granada Television and Harlech Television. Surely the latter is the only time that a Lord has given his name to a TV company, but the grandfather of the noble Lord, Lord Harlech—who is in his place—was clearly a pioneer. Independent production companies now work from all over the country; although some of them are suffering the difficulties that have developed from the direction of travel for advertising revenue, that is one of the great strengths of our media landscape.

The Government have chosen to change the way in which the provider of a licensed public service channel delivers its regional production quotas. The key question for the Committee and the Government to consider is whether the percentages set out in the amendment are the right ones for Ofcom to work to and how best to ensure that the necessary flexibility is retained within the quota system. We see regional production in the context of reflecting the diversity of the nations that make up the UK—diversity in a wider sense—and the need to reflect better our rich regional cultural diaspora, which a number of noble Lords have made wonderful reference to this afternoon.

It is also important to ensure that we recognise the value that TV production can bring in levelling-up. Why should TV production be concentrated in the wealthier parts of the UK and overconcentrated in the south-east and London? There are big disparities in regional wealth in this country—some of the biggest, largest and most extensive across Europe—and TV can do much to address that. To their credit, the PSBs have all made attempts in the last decade or so to decentralise production and bring about a transformed media landscape—Channel 4 in Leeds and Glasgow, the BBC with its MediaCityUK, and ITV devolving some of its production and major locations. As legislators, surely our role is to strengthen and enhance this. For that reason and others, these amendments are very welcome. I hope that the Minister responds positively to the spirit of these amendments.

On the issue of regional TV and its importance to production, has the Minister given any thought to the future of the 34 hyperlocal TV services licensed by Ofcom? These small operators were enabled by Labour’s Communications Act 2003, but they are not included in the definition of public service channels. These small channels do an important job in local news production at a time when, as we all know, local news is diminishing. Collectively, their reach is considerable, with over half a million viewers. Is this omission an oversight by the Government? If it is, would the Minister agree to meet and discuss this with representatives of the local TV companies to see what can be done to reinstate their public service broadcasting designation? I appreciate that this is not an amendment before us this afternoon, as no such amendment has been tabled, but debates on the Bill might be the opportunity to give a little sunshine to local TV companies and for the Government to put that on record.

Media Bill

Lord McNally Excerpts
Lord McNally Portrait Lord McNally (LD)
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My Lords, I was happy to add my name to this, because it underlines the benefit of Channel 4. I am always a little worried that, if you leave gaps in behaviour, the bean-counters will take opportunities and the good intentions will take a back seat—so I am not afraid of asking for specifics.

It is important to remember—I hope that Channel 4 remembers this—that, when it was under threat not so very long ago, it was many of the people who have spoken today and previously during the passage of this Bill who were strongest in the belief that Channel 4 brings something special to our broadcasting. For me, one of its most special contributions has been seeking out creatives in the regions and giving them the opportunity to succeed. This amendment underpins that good record of Channel 4 so far and helps to see it into the future.

Baroness Benjamin Portrait Baroness Benjamin (LD)
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My Lords, I rise to speak on Amendment 8 in my name with a heavy heart, in the hope that someone out there is listening. I declare an interest as per the register.

The review amendment that I propose is intended not simply as an exercise in public service media management but as a vital contribution to the future well-being of children and young people in this country—that is, to their sense of worth, their understanding, their place in our society, their appreciation of the many and varied cultures of our society, and, in the final analysis, the future of public service media as a whole.

If millions of children and young people are no longer watching the television that is made for them on PSB channels—it is crafted, curated and considered age-appropriate and relevant to their lives as British kids—how can we hope that they will suddenly, on becoming adults, turn to the BBC for their news or even to other public service providers for information, entertainment or programmes for their children? They will not; they will have lost the habit of believing that powerful content that offers meaning to their lives as British people is provided for them by public service media.

I say this because research by the Children’s Media Foundation has found it to be the case. As Ofcom’s statistics prove, children have migrated away from watching linear television. Many are also unaware of the online platforms provided by the PSB broadcasters that this Bill seeks to bring into public service measurement and regulation.

Your Lordships may feel that young children—their grandchildren, perhaps—are still watching dedicated PSB channels, such as like CBeebies and Milkshake!. However, that is not the case for children over the age of seven. Many parents will tell you that their children are now in their bedrooms using mobile devices, phones and tablets to access their media choices, which opens them up to a world of content offered by YouTube and other providers. On demand and immediate, much of it is loud, frantic and attractive but little of it is made with the care that has been the hallmark of public service television for children since the 1950s.

I spoke to a head teacher just yesterday, who told me that many of the children in her school are speaking with American accents because they are influenced by what they watch on online platforms, which is not age appropriate. Despite the Online Safety Act addressing some of the most outrageous harms in these online spaces, nothing is being done to regulate the spaces for good content, which parents need to feel they can trust. Parents are looking to the Government to reassure them that this is happening. That is what public service media is about: it is there to regulate the broadcasters, to ensure that those who have captured the eyes and minds of British children, while being allowed to make a reasonable return on their investment, will always also give back something of meaning and purpose. That has worked since the 1950s, when commercial television started. It was made to work again when cable and satellite channels increased, and it can be made to work again in a new public service environment, which will definitely include shared video services such as YouTube, TikTok and others that may follow.

My amendment seeks to start a process where we can investigate the real future of public service broadcasting in this country, beyond the confines of the current Bill, through a review. It sets down a marker, like those in so many other countries around the world, that says: we are not prepared to carry on burying our heads in the sand; we will investigate the ways in which these devices can be regulated to offer prominence to public service content; and we will explore the feasibility of levies or incentives, to ensure that they share their advertising revenue with producers of content that is relevant, appropriate and local to the UK, and has the power—which all public service content has—to connect people with the world, rather than disconnect them from it.

All my amendment asks for is that we explore possible futures and are open to change. Change has already arrived for our children and young people, who, in ever greater numbers, are watching and being influenced by inappropriate and harmful videos, rather than material that speaks to their lives in positive ways. It is time for the Government and the entire country to wake up to the fact that the algorithms that push that content on our children are not regulated. They work entirely to increase revenue and profit, most of which is not distributed back to the children’s content producers. They do not take into account age relevance or the social value of what they push—and until we at least begin to discuss the potential for regulation, they will not do so. I simply ask the Minister: is that what we want our children to grow up with?

Supporting this amendment is the start of a new way of thinking about how we care for our children in an increasingly complex media landscape—one that, none the less, can be shaped to offer benefits, hope, joy and inclusion, if we are prepared to consider how that could be achieved. We have lost a generation of children and young people, who are not experiencing the high-quality, uplifting and fulfilling content of past generations. They are now meandering online on paths not beneficial to their mental and social well-being. Once again, I feel that it is my duty to plead with the Government, with tears in my eyes, to put children’s current viewing habits at the forefront of their decision-making process at this late stage, as it is already affecting and will continue to affect their future. As I always say, childhood lasts a lifetime. I hope that the Minister will commit to this review, and I look forward to his response.

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Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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My Lords, I rise briefly to associate the Green Party with the remarks of both the noble Earl, Lord Attlee, and the noble Baroness, Lady Hollins. The noble Baroness spoke up very clearly for the people with very little power who are being crushed by those with great power—the oligarchic press and media system, to which I have referred in previous speeches.

To pick up a point made by the noble Lord, Lord Lipsey, I often hear the phrase, “We are a self-governing House” said with great pride. “We are not ruled by the usual channels”—or at least we are not supposed to be. They do not represent large parts of your Lordships’ House.

Lord McNally Portrait Lord McNally (LD)
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My Lords, I thank the Minister and Members from all parts of the House for their good wishes about my health. I went into hospital yesterday morning for a procedure on a long-standing back complaint. It went very well and as I left, the doctor said, “Oh, you might find a bit of discomfort once the painkillers wear off”. Always listen to your doctor. I was really touched to read today’s Hansard. There were good wishes that you usually have to die to get in this House. I feel rather like Tom Sawyer in that respect.

The noble Lord, Lord Lipsey, is right—I am only going to speak to the amendments to Clause 50—as the notes issued by the House on the wash-up period state:

“The wash-up period allows a Government to enact essential or non-controversial legislation”.


Whatever else this is, Clause 50 is neither of those things. We all know it has been put into the Bill like a sore thumb, to fix a deal between the Conservative Party and the major newspaper proprietors. That is the wicked world in which we live.

Having served in government and in this House for well over 30 years, I cannot get excited about wash-up. George Woodcock, the great trade union leader of the early 1960s, said that good trade unionism is a series of squalid compromises; so is wash-up, I am afraid. I understand what we are doing today. If we did not have this rather crude end to a Parliament, even a general election period of six weeks would be eaten up by both Houses debating Bills. It is not the end of the world; there is another Parliament coming.

I can see that the noble Lord, Lord Black, is in his place. Like Don Quixote, he is ready to charge at the windmills of state control of the press. That has never been any part of Section 40, as the noble Baroness, Lady Hollins, explained in quoting the expert on the situation, Lord Leveson. I was the Minister in the Ministry of Justice who had responsibility for trying to put forward a solution to the problem of how you square the circle of press freedom and the power of big money in the press. I find it ironic that, at the end of this Parliament, we are being asked simultaneously to help the titans of the press to escape the bullying of SLAPPs—that is the use of big money to curb freedom—and at the same time those same press bodies are resisting attempts to give the ordinary citizen the protection from big-money press that they are asking for.

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Lord Pannick Portrait Lord Pannick (CB)
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No—please let me answer the noble Baroness. The treatment of disabled people is a very contentious issue on which strong views are held, and I am not going to get into that debate. The noble Baroness also complains about my tone. I am sorry she complains about it. What I am seeking to do—I hope very properly, because we are all grown-ups here—is to deal with the substance of the arguments that have been put in favour of these amendments.

Lord McNally Portrait Lord McNally (LD)
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I had misjudged this debate. I thought that the noble Lord, Lord Black, would be the Don Quixote—I did not imagine that he would be the Sancho Panza. Has he ever heard of the term used in the United States, “a sweetheart union”? That is what IPSO is. It is owned by, financed by and dependent on the people it is supposed to regulate. We are always looking to get IPSO out of the clutches of those it is supposed to regulate—maybe that will be the greatest tribute to the noble Lord, Lord Faulks, during his chairmanship. Then we might believe the silken words that the noble Lord, a very experienced advocate, has been saying to us.

Lord Pannick Portrait Lord Pannick (CB)
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The noble Lord may recall, and the noble Lord, Lord Watson, will certainly recall, that Impress, the authorised regulator, was funded for a long time by the late Mr Max Mosley, who had very strong views about press regulation.

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Baroness Bonham-Carter of Yarnbury Portrait Baroness Bonham-Carter of Yarnbury (LD)
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I have not had the chance to say my thanks and I want to thank the Minister. Apart from anything else, his sense of humour throughout this has been really helpful and refreshing. His genuine passion for the DCMS has also really come through. As I said earlier, I wish this could have gone on longer. I suspect we could have got some more concessions through him. I also thank my friends on the Labour Benches and those on the Cross Benches, although they have gone. This has been a very collegiate event. Of course, I thank everyone on my Benches, although they seem not to be here—well, one of them seems to be here, and of course my noble friend Lord Addington.

Lord McNally Portrait Lord McNally (LD)
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Who is this Bruce Springsteen that everybody has been talking about?

Baroness Bonham-Carter of Yarnbury Portrait Baroness Bonham-Carter of Yarnbury (LD)
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Yes, there was one little thing I wondered. The noble Lord, Lord Watson, said that he was going to have lunch. For a moment, I thought it was with Bruce Springsteen.