Small-scale Radio Multiplex and Community Digital Radio Order 2019

Lord Stevenson of Balmacara Excerpts

Tuesday 23rd July 2019 Lords Chamber

[Lord Storey (LD)]

My Lords, we welcome this SI, but the noble Lord, Lord Kirkhope, gets to the nub of the matter, and perhaps some of our concerns. The Minister will recall that I asked an Oral Question about local independent radio. As we have heard, some of the national companies—Global, for example—have been buying up local commercial radio stations and syndicating the programmes made in London, with an opportunity to break out for local news and weather. This means that the opportunities for people to be engaged at a local level in the radio industry are lost because the programmes are made in London, for example. Community radio gives us that opportunity to allow the local voice to be heard and for local people to be involved in making those programmes, not just speaking into the microphone but in the production of programmes, which is equally important.

We want reassurance on the issue of the 30% in six different companies. There could be a benefit—I shall speak against myself for a moment—where those commercial operators would provide resources for the community radio stations to give them the opportunity to develop. We could also see an opportunity if a big news story broke in a very localised community and the local community radio was there; it could be picked up and used on the larger independent commercial radio station in the area, or nationally for that matter. I can see advantages. I suppose we have to watch this very carefully.

The Minister might have answered this, but could he clarify again whether the order states that a local commercial radio station broadcasting on small-scale DAB will receive an automatic renewal of its analogue licence? Otherwise, we welcome this legislation.

[Lord Stevenson of Balmacara (Lab)]

My Lords, we too welcome the broad approach of the legislation. In so doing, I echo the points already made. Some very difficult questions have been raised by some of the issues the Minister referred to in his opening speech and picked up by the noble Lords, Lord Kirkhope and Lord Storey, but the central one, which I think we all got a fair amount of correspondence about, is how we provide for and support the community activity we are looking for from the digital radio service or services, and ensure the commercial pressures from those larger-scale operators do not squeeze out that initiative. I do not think we will be able to bottom this out in the debate today, but the SI goes some way to do so. Indeed, about four pages’ worth of restrictions and limits are being placed on ownership and various types of constructions that can be made for companies operating in this area, which will try to achieve that balance. We will have to see how that works in practice, but the issue has been well raised.

I will make two points about the broader context. I remember asking the noble Baroness, Lady Bloomfield, when the Private Member’s Bill she supported went through the House what its implication might be for the broader context of digital radio in this country. We have been waiting for some time for some news about the digital switchover date. I am sure the Minister will have a note about that. Could we see whether this brings us a bit closer? Of the two criteria, I think that more than 50% of new cars being bought that had digital radios fitted as standard was reached three or four years ago, but we were also waiting for more than 50% of the listening public to be listening on digital services. I think the Minister said in his opening remarks that that is now well over 50%. The barriers to that appear to be disappearing, and if, as we are hearing, local radio is moving in swarms—even in Harrogate—to digital, why are we not hearing about the switchover date from the Government? Is this not the sort of “get up and go” we have been promised by the soon to become new Prime Minister, taking advantage of the new technology and driving it through for the greater benefit of Britain? I look forward to the Minister’s response.

Of the comments received, there are three small issues I want to leave with the Minister as questions. The question of coverage is to some extent included in the SI, but the broader question of whether all communities will benefit is not. Is there any intention behind the SI? If not, will the Government think about looking at this within a year or two’s time to make sure that all communities, certainly the ones beyond urban areas, are not left behind? True local radio provision has to be local for everybody. This is a step in the process of trying to get greater community radio coverage. I wondered whether there was anything in the thinking that would encourage the point made by Local Radio Group that some areas are still not covered.

The comments from the Community Media Association about making sure that we have a sufficient number of not-for-profit companies organised have already been mentioned. That raises the question of the Community Radio Fund, which is referred to in the Explanatory Memorandum. It has not been uplifted from its current level of £400,000, despite the fact that there are more community radio stations operating and possibly more to come. Does the Minister have any thoughts on how that fund might be moved forward and whether there are any prospects of that happening? It will certainly be an important floor for those wanting to operate these systems to have at least some public money available to get them started.

The third question concerns the impact this order will have on the local commercial radio services that are currently broadcasting, and the question of analogue licence renewal. He said that the extension was going to be made for a 20-year period, to ensure that those currently in it do not feel that they have to go through the process of resubmitting their bids for new licences. The point has been made, and I think we accept, that a balance has to be struck between those who are proposing these services and ensuring that they continue to exist, and not placing undue burdens. However, 20 years seems a long time. Given that this has already been extended once, what will the impact be on trying to drive competition in this area? Surely, if a number of people were interested in bidding for these licences, the opportunity to do so would be when they are advertised. If I am repeating correctly what the Minister said, we are again going to lose out again for another five years on that. Perhaps he will comment on that.

[Lord Ashton of Hyde]

My Lords, I am very grateful for all noble Lords’ comments. I detected a general approval of the order. It provides a benefit to the country, allowing stations specific to local areas and local communities to be set up, which may, to an extent, counter the effects mentioned by the noble Lord, Lord Storey.

Starting with my noble friend Lord Kirkhope, I completely agree that even in this age of Netflix and video-on-demand services, radio is still indispensable. I can provide reassurance to him and the noble Lord, Lord Storey, that the whole point of these requirements is to avoid a concentration of ownership, and that there will be a local interest. In every single small-scale radio multiplex, there will be a firm reservation for community radio. Even though we think that it is beneficial to have a mixed policy of commercial and community, there must always be a reservation for community, which will be a minimum of three. Ofcom has the power to vary that to an unlimited higher amount, depending on its assessment of demand. There are also specific concentration rules stating that no organisation can hold more than 20% of the multiplex licences. This will prevent a concentration.

The noble Lord, Lord Storey, also mentioned national operators. They will be able to hold only a 30% stake in any company, and they are limited to being involved in a maximum of six licences. There are 700 expressions of interest already; I think that is a meaningful limit. There is a strict overlapping rule, which will avoid a local monopoly, and there is also an adjacent area rule. This prevents small-scale radio multiplex licensees holding adjacent licences where the overlap is significant, and avoids operators trying to replicate local regional coverage by holding a collection of small-scale multiplexes.

Lastly in answer to my noble friend, when Ofcom considers a new small-scale multiplex licence, it will look favourably on an application which contains community radio within it. There will be a presumption in favour of community radio if it is combined with commercial radio to set up a multiplex. We set up the rules deliberately to prevent some of the problems that the noble Lord, Lord Storey, mentioned. In many cases, the community and local radio element will benefit from commercial radio as well, because it will be able to contribute to the investment required. Admittedly, the investment required is much less: one of the benefits of the new technology, and the reason there are so many expressions of interest, is that it makes the price of one transmitter, I think, £9,000, and £17,000 for two. It is much more affordable than it was. We have tried to promote competition and diversity of ownership and to address some of the concerns about concentration of ownership; that is why we have taken those steps.