Draft Broadcasting (Amendment) (EU Exit) Regulations 2019

Margot James Excerpts

Tuesday 29th January 2019 General Committees

[The Minister for Digital and the Creative Industries (Margot James)]

I beg to move,

That the Committee has considered the draft Broadcasting (Amendment) (EU Exit) Regulations 2019.

It is a pleasure to serve under your chairmanship, Mrs Moon. The Department for Digital, Culture, Media and Sport has worked hard to prepare for the UK’s departure from the EU and to ensure that our statute book continues to function. The draft regulations will achieve three broad aims and were laid before the House on 13 December 2018.

First, the regulations will ensure that Ofcom, as the UK’s audiovisual regulator, can continue to regulate broadcasters effectively. If the UK leaves the EU without an agreement in place, the EU’s audiovisual media services directive will no longer apply. The directive provides for freedom of reception and re-transmission for audiovisual services such as television and video on demand. It also establishes minimum content standards and provides that a service that is regulated in one member state can adhere to that country’s rules while being available across all the EU. This is known as the country of origin principle.

The audiovisual media services directive underpins several pieces of UK primary legislation, including the Communications Act 2003. We are therefore using section 8 powers in the European Union (Withdrawal) Act 2018 to fix deficiencies and inoperabilities in primary legislation to ensure that Ofcom continues to have jurisdiction over services that are available to UK audiences or established in the UK. The draft regulations also ensure that cross-border services that originate from Europe under the Council of Europe convention on transfrontier television can broadcast to the UK. Services from countries that are not parties to the convention will be regulated by Ofcom.

We are not amending the current standards or restrictions placed on UK broadcasters through this instrument; they will continue as before. Should the Government wish to make any changes to the standards or restrictions in the future, that will be subject to consultation and the parliamentary process as normal.

Secondly, the draft regulations will implement the aforementioned Council of Europe treaty in UK law. The European convention on transfrontier television was signed and ratified by the UK in 1993, but it has not been implemented in the UK because the treaty provides that EU member states must apply the relevant EU legislation in their mutual relations instead. The ECTT provides for a similar system of freedom of reception and transmission between the parties to the convention. Both the AVMSD and the ECTT provide that a majority of transmission time on a television channel must be reserved for works of European origin. The AVMSD references the ECTT in its definition of European works, and that in turn safeguards the UK’s status as a producer of European works. The quota system provides a preferential market for the UK’s excellent content across other European states and has benefited our production sector enormously in the last decade.

Finally, the draft regulations will ensure that services with Irish-language content—RTÉ One, RTÉ Two and TG4—will continue to be available in Northern Ireland. The UK made those commitments in the Good Friday agreement and later through the European charter for regional or minority languages. Because those services are established in Ireland, which is not a party to the ECTT, they would need to be licensed by Ofcom under the changes introduced through the draft regulations, but that would not be in the spirit of the Good Friday agreement, so the UK has decided unilaterally to exempt the services from the requirement to hold an Ofcom licence.

[Kevin Brennan (Cardiff West) (Lab)]

Before the Minister concludes, paragraph 7.3 of the explanatory memorandum states that the instrument will remedy the deficiency by amending the Communications Act 2003

“to require that any television service that is available in the UK, whatever its country of origin, is required to be licensed by Ofcom”.

How many businesses that have not required a licence from Ofcom will now have to get one?

[Margot James]

I know what the hon. Gentleman is driving at concerning the risk to businesses that transmit and will require a new licence from Ofcom. I will try to cover that in my concluding remarks, if I may.

My officials have worked closely with Ofcom to ensure that the regulatory regime remains operable and effective in the case of no deal. I believe that the draft regulations are necessary to ensure that the UK statute book works and that audiences are protected from harm.

I can now give the hon. Gentleman something of an answer to his question. Approximately 50 to 60 channels have been identified that may need a licence from Ofcom to continue to be received in the UK. They are mostly specialist minority language channels, religious channels or adult services. I commend the regulations to the Committee.

--- Later in debate ---

[Margot James]

I welcome the hon. Gentleman’s scrutiny of what he rightly calls a complex area post Brexit. The 50 or 60 companies that will for the first time require licences from Ofcom are foreign owned, which is why there is no requirement for an impact assessment, as impact assessments are designed to consider the cost implications of changes in regulations to UK-based companies.

The hon. Gentleman rightly describes the UK’s performance in film, broadcast and television as a great success. A sector that grows at 25% more than the average rate of the economy is certainly a success. In part, that success is indeed down to the very beneficial regime, the AVMSD. As he said, to comply with the requirements of one regulator allows transmission across the entire European Union. The entire European Union’s production in that sector grows by about 18% per annum, following the introduction of the directive. The UK constitutes 21% of the entire European television market, with 1,200 out of 3,000 European channels emanating from the UK. That sector is indeed a great success.

The hon. Gentleman talked about jobs transferring, and some companies have already started to seek licences elsewhere within the European Union. Discovery Channel, NBC, Sony and Turner are all seeking licences elsewhere. Of those four channels, only Sony proposes to move its European headquarters out of the UK. The other companies are content to seek a licence elsewhere, whether in the Netherlands, Ireland or Germany, and move a number of editorial staff so that they have a meaningful presence in the country that entitles them to the country of origin broadcasting privileges. At the moment, it is not possible to assess the number of jobs that are transferring and what will constitute a meaningful presence in a market to get the benefits of the European directive, but the signs are that the majority of companies will continue to operate in the UK, with a presence outside the UK should they need one to qualify for country of origin privileges.

The hon. Gentleman asked about the advertising of junk food and other such issues, which he is right to say that we are looking at, and the question of on-demand services licensed in the EU respecting UK rules on advertising foods high in fat, sugar, salt and so on. The UK has been unable to insist on country of destination rules up until now, either under AVMSD or through country of origin services that adhere only to host country rules. However, the existing standards will continue to apply.

The hon. Gentleman mentioned Netflix and other video-on-demand providers, which are currently regulated differently. In practical terms, Netflix will still be regulated under AVMSD because, as he says, it is based in the Netherlands. The same content standards will apply after exit as now. We recognise that after exit we may need to consider a long-term and future-proofed approach to video-on-demand regulation.

I think that deals with most of the hon. Gentleman’s questions. I hope that the Committee has found the sitting informative.

[Kevin Brennan]

I also asked whether the Minister could tell us about the likelihood that countries that are party to the Council of Europe ECTT would choose to use its provisions? If she needs to write to me, I am happy for her to do that, because I realise that that is a technical question, I would be interested to have an answer. Perhaps she should to other Committee members as well, if that is acceptable to them.

Secondly, which Irish language services are exempted from licensing in the UK by the regulation? Again, if that information is not immediately to hand, I am happy for the Minister to communicate that to me and the rest of the Committee later.

[Margot James]

The hon. Gentleman is very generous. I will write to him with any further information. The ECTT guarantees similar content standards and freedom of reception between signatories, but as he will know, approximately six EU member states are not signatories to it. We will therefore not be relying on that, but I will write to him with any further technicalities associated with the ECTT. The Irish channels exempted from the requirement to seek Ofcom licences for continued transmission are the three that I mentioned: RTÉ One, RTÉ Two and TG4.

I commend the regulations to the Committee. I hope that Members will join me in supporting the draft regulations. I appreciate that the hon. Gentleman has already indicated that he will do so.

Question put and agreed to.