Digital Economy Bill

Lord Puttnam Excerpts

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

Moved by

[Lord Puttnam]

229ZA: After Clause 84, insert the following new Clause—
“Mergers: specified considerations for mergers involving broadcasting media enterprises
(1) Section 58 of the Enterprise Act 2002 (specified considerations) is amended as follows.(2) After section (2C) insert—“(2D) The need for those who, as a result of a merger, have increased control of media enterprises (excluding newspaper enterprises) which require a broadcasting licence, under section 3(3) of the Broadcasting Act 1990 or the Broadcasting Act 1996, to be fit and proper to hold such a licence having regard in particular to—(a) the extent of any criminal wrongdoing that has taken place by companies and other organisations under their control; and(b) the extent of any failures of corporate governance and management in such companies and organisations.(2E) The need for there to be, in the governance arrangements of any relevant media enterprise (excluding newspaper enterprises), which provides news services, sufficient safeguards for unrestricted editorial freedom in the provision of full and accurate news services by such media enterprises.(2F) The need to prevent a media enterprise (excluding a newspaper enterprise) from—(a) exercising undue influence over distribution of, and access to, rights, talent and other forms of cultural expression;(b) promoting its own business interests through its editorial outlets, to the detriment of competitors where this is against the wider public interest;(c) exercising undue pressure in the regulatory and political environment, to the detriment of competitors where this is against the wider public interest.”

[Lord Puttnam (Lab)]

My Lords, in speaking to the two amendments that stand in my name, I should first declare my interest both as a content owner and as president of the Film Distributors’ Association. A number of factors encourage me to take up what is in effect the unfinished business of 15 years ago, when I was closely involved in the 2003 Communications Bill. The most recent was something that the noble Baroness, Lady Warsi, said on the “Today” programme 10 days ago. In response to a question regarding the ramifications of the immigration controversy raging across the Atlantic, she said:

“It all comes down to the type of country we want to live in”.


Of course, the noble Baroness was right. Pretty well every decision we make in this House sooner or later comes down to the type of country we want to live in. What we have just heard from the noble Baroness, Lady Benjamin, is about precisely that. What kind of country do we want to live in, and how far are we prepared to push ourselves to get there?

As I am sure the noble Baroness, Lady Buscombe, will confirm, this was repeatedly discussed during the passage of what became the Communications Act 2003. At that time we were by turns both amused and concerned by the antics of the then Italian Prime Minister Silvio Berlusconi and his attempts to muzzle, or better still own, the Italian media. This House was at one in agreeing that the provision of a free, fair and plural media ecology, in all its many and varied forms, was fundamental to the health of any democracy worthy of the name.

As a result, and after a great deal of debate, the general duties of Ofcom in carrying out its functions were finally legislated in this way:

“It shall be the principal duty of OFCOM, in carrying out their functions—


(a) to further the interests of citizens in relation to communications matters; and


(b) to further the interests of consumers in relevant markets, where appropriate by promoting competition.


The wording of those two general duties, and the order in which they fall, along with the public interest test that accompanied them, were hard fought for, and they were won by an overwhelming vote on the Floor of this House—two-thirds to one-third—against the wishes of both Front Benches.

Fifteen years later, we find ourselves looking anxiously across the Atlantic at a new and democratically elected kind of Berlusconi on stilts—and we are jolted into reminding ourselves how very much ownership of both the media and the message matters. The true architect of the public interest test was the noble Lord, Lord Crickhowell, and the engineer who created the double lock that gave it teeth was the now noble Lord, Lord Lansley.

As the House may know, a public interest intervention notice is issued by the Secretary of State, and specifies a media interest. The grounds for referral are listed in Section 58 of the Enterprise Act 2002: the media interest grounds for referral are listed in Section 58 (2A) to (2C). The Secretary of State may specify further grounds for referral by laying an order before Parliament. Ofcom then carries out a report based on the grounds specified by the Secretary of State.

That is what is supposed to happen—but, as we discovered during the misadventures of the then Secretary of State, Jeremy Hunt, there is far too much wriggle room, and a lack of clarity as to the precise grounds on which a referral is based. In this respect, I supplied the Minister with a copy of the five-page letter I sent to Jeremy Hunt on 11 March 2011, setting out the reasons why I believe that the UILs he proposed to set in place prior to waving through the then News Corp—now 21st Century Fox—bid for what was then called BskyB were hopelessly inadequate. Milly Dowler’s death made any response to that letter wholly unnecessary.

Following a meeting that the present Secretary of State kindly agreed to, I recently sent her a copy of that letter, for the consideration of her officials. In my note to her I included a few additional reasons why I felt reference to Ofcom was the only sensible way in which any new bid for Sky could be transparently dealt with. Given that the Government have the world’s most highly regarded media regulator at their service, it is extremely hard to see why they would not be eager to distance themselves from the well-documented suspicions of favours given and favours returned that now, sadly, dog their predecessors.

The purpose of my amendments is to buttress the referral process by adding further and easily understood grounds directly to the Bill. Specifically, they would add a fit and proper persons test, which, somewhat bizarrely, exists only as an ongoing test for licence holders, not bidders, and is thus to be conducted only after the fact of any merger. I say “bizarrely” because I ask: how sensible does it seem to judge the ongoing fitness and propriety of a licence to a higher standard than the one sought at entry? Possibly when she comes to answer the Minister might help me understand what I see as an extraordinary anomaly.

--- Later in debate ---

[Baroness Buscombe]

The Government do not accept that there is a difficulty in this. The important issue is that the powers remain broad in their application. To the best of my understanding, though, there is no difficulty regarding when they are triggered.

[Lord Puttnam]

What I believe the noble Lord, Lord Stevenson, is saying, and it is very important, is that there is an accidental anomaly in the Bill. As someone who, like the Minister, pored over every word of it, I take some responsibility for this, but it is extraordinary— I even referred to it as bizarre—that the bar that is set for an ongoing licensee is higher than the bar for a bidder. Surely common sense requires that someone bidding has to reach the same standards of honesty and probity that are required of an ongoing licensee. There is an anomaly, and I am trying to help the Government to get rid of it because it should not be there. Obviously there should be a bar, but it should apply to anyone applying for a licence just as it does to anyone who has an ongoing licence that is being looked at.

[Baroness Buscombe]

I am going to wait for a reply on that. I would like to be able to respond tonight, rather than saying that I will write to noble Lords; if the Committee will bear with me, let us just wait and see. I understand what the noble Lord is saying about bidders meeting the same standards as those who already have a licence.

It is a long-established condition of broadcast licences in the UK that news be reported with due accuracy and impartiality, as set out in Ofcom’s broadcasting code. Ofcom, as the regulator, governs compliance with this requirement of the code. The matters set out in the amendment at proposed new subsection 58(2F) would be dealt with by licence conditions and Ofcom’s broadcasting code, including provisions on fair and effective competition and the cross-promotion code, as well as matters that would be considered as part of the fit and proper person test. I have been informed that the fit and proper test can be looked at by Ofcom only once they hold a licence, but we believe that the provisions on genuine commitment to broadcasting standards give the Secretary of State the powers she needs in this regard.

[Lord Puttnam]

I think that we all deserve to be very clear about this: can we be sure that the Secretary of State will apply exactly the same standards to a bidder as she would require of an ongoing licensee?

--- Later in debate ---

[Lord Puttnam]

I thank the noble Baroness for an extremely full response. Perhaps I may say several things. First—I probably should have made it clearer—the noble Baroness was extraordinarily helpful and generous to me during the very painful passage of that Bill. On every occasion when I sought some form of compromise, she always came up with a constructive solution. She knows I feel this, because we have discussed it, but I am very happy to pay public tribute to her.

I think that some mistakes were made in 2003. We could not look into the future, and there were things that we were not even allowed to do under our terms of reference. However, it is worth recalling that, yes, it was a government amendment that was passed at Third Reading, but it was passed, as the noble Baroness will remember, because of a crushing defeat on Report.

I have no desire whatever to go through that process again, I promise you. On the other hand, I think I have a sufficient understanding of this House to know that when it comes to the issue of media ownership and any suspicion of undue pressure, this House will again vote overwhelmingly in favour should I press these amendments. I do not think that my amendments as they stand are good enough. The noble Lord, Lord Stevenson, has already hinted at that. I would infinitely prefer the Government to come back and offer the sense of security that I seek. I very much liked the Secretary of State on the one occasion I met her. She is clearly an honourable, decent woman. It would be very helpful for her to be able to say that the standards that she would require of a licensee are exactly the same, and as exacting, as those of a bidder. I think it would be good for the Government.

I was not being silly when I discussed Theresa May’s speech. I found it a very remarkable speech from an incoming Prime Minister. I think she did lay out her stall. I think we have every reason to have expectations that are higher than we had of recent predecessor Governments. I am quite ashamed of some of the things that my own Government did in respect of cosying up to and colluding with media owners. That has got to stop.

There is a wonderful line of Mark Twain’s: “A lie can run around the world while the truth is still trying to put its boots on”. We are living in that world. We are living in a post-truth society. We can no longer afford an over-cosy relationship between the Government of the day and media owners whose job is simply to tell the truth as they see it. That is all I am seeking.

I am very grateful to the Committee. I will happily withdraw this amendment, but I am certain that we will be returning to this subject in the hope that the amendments put forward by the Government will be acceptable to the entire House. I beg leave to withdraw.

Amendment 229ZA withdrawn.