I begin by saying that it is a pleasure to serve under your chairmanship, Mr. Williams. I welcome the opportunity to engage in debate on regional broadcasting.
I wish particularly to talk about commercial public service broadcasting, especially regional production quotas, the provision of regional news and non-news items and the development of local online services. I do so in the light of the Secretary of State’s statement last week that we needed a debate
“to establish the best way in which to sustain the aspects that the public like and on which they depend, which will mean devising a new way of sustaining public service content beyond the BBC in the future.”—[Official Report, 10 November 2008; Vol. 482, c. 478.]
I do so also in the light of a clear statement from Ofcom:
“Regional news and productions from the nations and regions are at the heart of Ofcom’s long-term vision for public service broadcasting—audiences value this programming, so our object is to sustain and enhance it for the long-term”.
Those two statements set out one thing, but in September the chief executive of ITV announced massive cutbacks in regional broadcasting and regional news and non-news items. Then there was a further Ofcom review, the consultation on which will end on 4 December.
The current situation is that ITV receives its television signal spectrum from Ofcom free, in exchange for its public service broadcasting. In addition, it receives its position on the electronic programme guide and the unquantifiable commercial value associated with being a public service broadcaster. When the UK goes digital in 2012, it is expected that that spectrum will be worth considerably less—perhaps only £40 million, compared with £200 million now. The chief executive of ITV has warned:
“In the very near future the various channel 3 licences will start to go negative, the cost of their obligations exceeding their benefits.”
That is why changes have been announced this year, and it is important that Members get an opportunity to discuss them before final changes are made.
The Secretary of State stated on 17 June:
“I’m very disappointed that ITV has missed its regional production quota for two years. These are legal requirements and not things to be negotiated or brushed away.”
The out-of-London production quota for ITV was originally set in 2005 at 50 per cent. Last year it was only 44 per cent., having been 46 per cent. in 2006. Stuart Prebble, a former chief executive of ITV, has said:
“The original ITV network was designed as ‘Britain talking to Britain’, not ‘London talking to Britain’.”
I hope that in the context of what we are discussing, that important principle can be maintained.
To save money, ITV has planned to cut more than 1,000 jobs by the end of next February, including 430 in regional newsrooms. We know that the UK has other public broadcasters—the BBC and Channel 4—but Ofcom’s research has found that the public overwhelmingly want to see regional news and programming as part of what is on offer on ITV. Michael Grade has said:
“ITV does not itself want any direct public money. We wish only to operate as a free-standing commercial business”.
However, we know that the public want regional news and programming to be retained. The question that must be asked is: how we can do that without the use of public money?
In September 2007, ITV announced the reform of regional news in England and the Scottish borders, reducing the number of regions from 17 to nine. That meant abolishing existing sub-regional news bulletins such as Anglia west and east, and the merger of the two smallest regions, Border and Westcountry. ITV is a private business, and those changes will reduce the number of people employed by more than 1,000. ITV plc will prioritise prime-time regional news by reducing the amount of news broadcast in the daytime. Some news-gathering will be shared between large areas of the country, such as the West and Westcountry regions.
The minimum non-news regional quota will be cut from 30 to 15 minutes a week, and I wonder what value there can be in such short segments of programming. I have made the point to ITV that I would like to see that quota lumped together so that there can be longer programmes, although perhaps not every week. For Wales, STV and Ulster, the non-news minimum will be cut from three hours to one and a half hours a week. ITV’s original UK production and peak-time current affairs requirements will remain unchanged, but the non-peak current affairs requirement will fall by 40 minutes a week. The quota for programmes made outside the M25 will be reduced from 50 per cent. to 35 per cent.
For Five, original productions will be reduced from 53 per cent. to 50 per cent., and from 42 per cent. to 40 per cent. in peak time. For Channel 4, programmes from outside the M25 will increase from 30 per cent. to 35 per cent., including a new quota for the devolved nations.
My hon. Friend is making a very strong case. He mentioned the Westcountry and West regions. Although recent negotiations resulted in their altering the proposal for the provision of evening news from six to 15 minutes, they will be providing a threadbare service with the same level of staff and resources as they would have had under the original six-minute proposal. That will give them no capability really to investigate or dig below, with what will inevitably be a thin and reactive service.
I agree with my hon. Friend. Indeed, I understand that in Plymouth, for example, the number of people in the newsroom will be reduced from 100 to six. I question whether any meaningful programmes can be produced by that limited number of people.
Border and Tyne Tees will be merged, but they will have separate 15-minute sequences in weekday programmes and separate late-evening bulletins. Of the 168 workers there, 91 are to go. Sub-regional output in single licence areas will be reduced in volume, but they will retain short sequences in peak time and after “News at Ten”. Fringe areas will see a few minutes of local news each day.
I contrast that with the strong public support that has been shown for regional broadcasting. The recent Ofcom consultation showed the high value that audiences put on the provision of public service content outside the BBC, even if they may have to pay for it. Audiences believe that competition for the BBC is critically important, as has been shown by their rejection of Ofcom’s BBC-only model. According to the Ofcom report, nine out of 10 people do not want the BBC to be the only provider of public service content in the future.
I pay tribute to my hon. Friend for securing this debate. He alluded to a survey. He will be interested to know that 40 per cent. of viewers in Wales watch the Welsh news in preference to the BBC news, and that in the consultation that he mentioned, not one respondent supported the BBC-only model. Does he think that that is a reflection that Wales, in its quest for pluralism, has a separate political institution and a separate political culture that necessitate both channels?
My hon. Friend makes a powerful case. His evidence comes from the reaction on the ground.
We know that the majority of people want ITV to continue to provide regional and national news. Fifty per cent. of consumers say that they are personally interested in events in their region or nation, or events where they live. That confirms that audience support for the accessible and effective delivery of the public services that underpin public service broadcasting remains strong. At the Broadcasting Press Guild lunch in June, the Secretary of State said:
“I do sense at times that the media world talks to itself a lot and misses where the viewers are, at home, in my constituency, watching Granada Reports…We have to route this debate back in the interests of viewers.”
That is an important point.
There has been strong political support in the House for the retention of regional news and production. That is evidenced by early-day motion 2283, which was tabled by the hon. Member for Selby (Mr. Grogan), who is here this morning. It has been signed by 74 MPs, all from the north-west. Early-day motion 2164 has 25 signatures, and several other such early-day motions have been signed.
I question whether the proposals that have been made are sustainable, a short-term fix or the beginning of the long, slow death of regional broadcasting. In talking about ITV’s coverage, I want to compare that with what happens on the BBC. The BBC provides 15 regional news programmes, which are broadcast at 6.30 on BBC 1 every night. The audience of 16 million people is the largest television audience for news. If the BBC can get that number of people watching regional news, why is ITV not able to generate an audience that is similar, if not the same, at its time? What is the advertising revenue minutage for regional news, and why can regional news not be made profitable?
I do not see the situation as one in which we have to accept the proposals that have been made. The BBC plays a central role in public service broadcasting and in regional output but it cannot operate in isolation—it needs competition. If we can get profitability for the BBC, why not for ITV?
Having said that, does my hon. Friend not share the concern of many Members about the use of the licence fee to subsidise local video systems, which are now putting the BBC in competition with regional and local press providers? There is enormous disquiet about the way in which the BBC is straying into areas that may undermine the viability of independent providers.
I agree entirely with what my hon. Friend says. Indeed, that was the third point at the beginning of my speech. This week, the BBC Trust is to make a decision on the future of BBC Local. ITV already provides a similar service, and I believe that it would be wrong for licence fee money to be used to destabilise commercial services—whether local and sub-regional ones such as we have in Manchester or the wider ones provided by ITV Local. If other hon. Members agree, I hope that they will say so.
I congratulate the hon. Gentleman on obtaining this important debate. Does he agree that public service broadcasting has long been a cornerstone not just of the BBC but also of ITV, and that some regional companies have a good track record? I instance Granada, which I believe covers his area. Is it not a pity that, as we move from analogue to digital broadcasting and all the broader technical improvements that will be possible, ITV’s public service broadcasting is going in the opposite direction? This is an opportunity for it, not a problem.
I agree entirely with the hon. Gentleman. It is for this House to set out clearly what we want, as the Secretary of State said, and to signpost some ways forward. We do not want a short-term sticking plaster until 2012, which is what Ofcom’s proposals appear to be. I doubt that when we get to 2012, we will ever be able to get back to what we have now, or to some of the excellent programmes of the past. I think of Anglia programmes such as “Survival”, for example. That small company produced world-class programmes. We have to find a way to protect that level of public service provision.
In the consultation, which ends on 4 December, Ofcom has put forward various models. The first was the BBC-only model for public service broadcasting, which was resoundingly rejected by everyone. There was an evolutionary model, with all terrestrial channels continuing to have public service obligations and additional funding for regional news and news obligations falling on ITV. It is favoured by the Broadcasting Entertainment Cinematograph and Theatre Union, which is opposed to all the other models. It said clearly that commercial public service broadcasters should retain their public service role.
Another model was the BBC-Channel 4 model, with both channels receiving public funding and regulatory assets. Other terrestrial channels would lose benefits, and regional broadcasting could be opened to a number of potential providers.
Another option was a competitive funding model, in which content complementary to the BBC would be opened up to competition, content and distribution methods would not be not specified, and the BBC would retain its central role. It could lead to a reduced role for the BBC. Greg Dyke, the former director-general of the BBC, commented in October that it would take only £300 million to secure the future of Channel 4 and support regional broadcasting. We should say clearly that that is the route we wish to retain.
On possible sources of funding, there could be direct public funding, taxation or spectrum auctions. BECTU opposes that model. The excess licence fee funding ring-fenced for the digital switchover could be used to help with scheme costs and Digital UK’s costs. Regulatory assets include spectrum pricing, advertising and public service broadcasting status for more channels. Finally, there could be industry funding through levies. Those are some of the possible options.
We should be saying clearly that we wish to retain local news, local news broadcasting and regional production. Lots of other countries—for example, France, Germany, Italy and Spain—have developed a range of regional TV stations, the autonomy and independence status of which are fiercely protected. Why can we not do the same here?
We need to find a way forward. It is not acceptable for us to accept Ofcom’s short-term fix. We should be saying now that it seems that the regulatory framework is being rewritten because ITV does not like it. We need to set a regulatory framework that delivers what the public want and what we regard as important. There is a cost to that, and we need to find a way to fund that cost. It is possible, within some of the suggestions that have been made for Ofcom, for that to be done.
If ITV does not want to provide that service using public subsidy, we should suggest that ITN become the arm with which such services are provided, so that there is, and remains, a strong regional news output in the regions, provided by ITN if not by ITV. We ought to be setting higher standards for what is being produced than those in the model advanced by Ofcom. We ought to be looking to the future, not in terms of a diminution in provision, but as an opportunity, using the benefits of the digital dividend, to expand the range of provision. If that means that a subsidy of some sort is put on the use of the digital media, that should be used to fund that public service broadcasting element.
This is an important debate because our constituents want and value regional news and programming. There is a short-term problem with ITV funding, but that should not lead to our losing sight of the fundamental founding principles on which independent television was set up. The value that ITV has given to the regions and the nations of the United Kingdom must not be lost. We need a debate, as the Secretary of State says, and I hope that this is a contribution to that debate. I hope that we can go forward and that, when Ofcom reports in the new year on the results of its consultation, we see something a lot better than what we are being presented with, which seems very much like a fait accompli.
I intend to be brief, which means that we may have an opportunity to give the Minister very adequate time in which to respond to this debate and, perhaps, to take a number of interventions.
I hope that hon. Members will not mind if I remind them that we in Parliament tend to be rightly obsessed about the requirements of a functioning democracy. One cannot take this debate about regional broadcasting in isolation; it is about broadcasting and broadcasting standards generally and the importance of ensuring that our broadcasters are able to provide information and to delve below the surface of what is going on in this country and worldwide. That is essential in ensuring that we have a functioning democracy. We can either accept the model whereby one state corporation—the BBC—fulfills that public service broadcasting function, with perhaps a few add-ons from Channel 4 and elsewhere, or we can accept that if we are to have an effective organ to provide the background, investigative programmes, information and debate that is vital to a functioning democracy, we need independent broadcasters as well.
I am probably one of the most IT-challenged people on earth—I do not understand digital systems—but if this is the brave new world that we must accept with open arms and if this is the inevitable future of broadcasting in this country, we should consider something before we step beyond the precipice and accept the final Americanisation of British broadcasting and fully engage in the multi-channel culture. I fear that such a culture will be an acceleration of the race to the bottom and a continuation of the celebrity game show/makeover programmes that involve the ritual humiliation of the working classes by their apparent betters, or reality TV and “Big Brother” programmes. Broadcasters tend to revert to such a diet of programmes when they can think of nothing else to do. I fear that that will largely be the kind of thing that the multiple channels will provide. If that is what commercial TV is going to provide, before we go down that route I hope that we hon. Members—in the debating chamber of the nation—will engage in the debate and encourage the Government to stop and think and allow us the space in which we might recognise that broadcasters provide a vital service to the nation and to the regions.
When talking about regions it is important that we do not simply accept the Government’s ideas of regions, which are, in fact, Government zones; they are not places that people identify with. There is no internal integrity or community of interest within the Government zones. I speak for myself in respect of the Government zone of the south-west. Those zones are not the basis on which to provide the local news and information input into the kind of debate that we require.
Does the hon. Gentleman agree that it is perverse that, at a time when it would appear that regional TV is retrenching and shrinking, sub-regional digital TV at city level, such as City TV Birmingham, which may be online next year, will be providing a much narrower service to the areas around their studios? Is it not likely that the quality, quantity, reach and range of regional programming will be diminished as a result of what we are seeing?
I am certain that it will be diminished by the results of the decisions that are currently being taken by ITV. It is clear, both in conversation and in debate, and from the pronouncements of Michael Grade on behalf of ITV, that he wants ITV to be a stand-alone commercial company and does not want to accept public subsidy for the service that ITV provides, in whatever form. I am not sure what his and the company’s attitude is to tax credits or tax breaks that might be made available as an inducement to provide public service broadcasting, but by and large ITV’s position is as I have said. As a result of that, as night follows day, bearing in mind the costs of the news gathering and reporting—the investigative work—that are required to broadcast the kind of programmes that we have seen in the past and at regional level, ITV cannot achieve programming at the sub-regional level as it has managed to do in the past. That means that people are less likely to follow the programmes, because they are statistically less likely to get news from the areas about which they are most concerned.
It could be argued that, as a result of the campaigning that I and others have done on behalf of the excellent service provided by a number of companies since the early ’60s, beginning with Westward Television’s coverage of Cornwall and Devon, ITV has agreed to extend the local cutaway within the evening broadcast. That is welcome. However, as I said in an intervention, it will be a threadbare service with hardly any staff and without the studios and resources enjoyed in the past.
It is important that our regional broadcasters should be able to put in the resources and, if they provide a valuable service, to dig below the surface and ask questions, not simply report on press releases and turn up, if they can get there, at tragic events to stand outside and give us reports. We want the service to provide us with more in-depth analysis and with the same quality of information as in the past. Given the resources planned at the moment, I fear that that simply will not happen.
I will now ask an entirely naïve question. If what we are trying to achieve—I believe that we should be trying to achieve it—is a good-quality, well-resourced public service broadcaster in the independent sector, and if ITV is not prepared to provide that, should we not offer channel 3 to someone else? If that is the easiest, most accessible number for people to find on their gizmo—
Their EPG—whatever that stands for. If that is the case, channel 3 should be offered to someone who is prepared to accept the tax breaks, public subsidy or whatever is required to give us the quality of public service broadcasting, independent of the BBC, that this nation and its regions and local parts require to achieve the functioning democracy that we need. My fear, which also underlies the comments made by my hon. Friend the Member for Rochdale (Paul Rowen), is that if there is no independent provider of such a service, the quality of the local BBC service, with the best will in the world, will decline. Without some competitor holding it to its mettle and challenging it, I fear that the BBC will both withdraw services and fail to maintain its present high standard.
Does the hon. Gentleman recall the comment made by the hon. Member for Rochdale (Paul Rowen), in his excellent opening remarks, that it was never the objective for London to talk to the regions? There is a risk that that will happen, with the shrinkage of regional broadcasting. The English midlands have a bigger population than London, cover a bigger geographical area and contribute a bigger slice of GDP. London is a fine city—we spend half our time here—but it would be utterly unacceptable for the only non-London news in the midlands or indeed the south-west to be restricted to a minute and a half or so every evening. It is true that we need a critical mass—ITV would say that it needs a critical mass—but that would be utterly unacceptable.
I agree entirely. A lot of us who feel rather cynical about what ITV proposes anticipate that it will not be many years before the currently proposed regional broadcasting provision will be reduced further, until regional broadcasts are effectively provided from studios in London. That fear may be unrealised, but if ITV is going to find it difficult to maintain the rather bland regional programming planned at present, when that proves unsuccessful—I think that it will, because it will not provide the local news and views required—I fear that a further diminution will occur, and that ITV will justify it by citing falling audience numbers.
My final comment and plea to the Minister—and, through her, to Ofcom and ITV—is that I do not stand here as someone who looks back to the dewy-eyed days when my birthday was read out by Gus Honeybun on Westward Television and I got five bunny hops. It is not about attempting to rekindle the old days; it is about maintaining a vital information broadcasting source in people’s homes that ensures and underpins a functioning democracy. I also fear that ITV will lose out, because its unique selling point is that, unlike all the other channels with which it wants to compete, that produce the same bland stuff—game shows, celebrity programmes and so on—it includes a brand that is local to each area in which it broadcasts.
I congratulate my hon. Friend the Member for Rochdale (Paul Rowen) on securing this debate and giving an excellent introduction to the complex issues with which many people are struggling. I think that he and all Members would agree that public service broadcasting in the United Kingdom is the envy of the world, but for a variety of reasons, we are in danger of losing that reputation.
My hon. Friend made a powerful case for regional programming—both news and programmes produced in individual regions that reflect those regions to the rest of the country—and gave a clear analysis of the concerns expressed by many people about the ITV proposals to cut regional broadcasting. He described it as the long slow death of regional broadcasting, and I share his concern. I have only to look at what is happening in my own region, with the proposed amalgamation of ITV West and ITV Westcountry. As I will describe, there is already a problem with the arrangements for ITV West. There are people in my constituency who are not that interested in regional news coverage for the areas outside Bath, but I am absolutely certain that people in Bath are not very interested in what happens in Truro and other such places in the far south-west.
The amalgamation will diminish a service that many people think is important, and that view is backed up by research. Ofcom’s most recent research shows that 78 per cent. of consumers attach high value to the news from the nations and regions. The BBC Trust’s most recent report showed that 83 per cent. of people surveyed by the trust thought it important that the nations and regions were accurately represented to the rest of the United Kingdom. ITV’s proposals will clearly damage what people in those surveys have demonstrated is important to them.
I urge people not to wear rose-tinted spectacles when addressing the issue. If we look in depth at that research, we can see that only 20 per cent. of the people surveyed are very satisfied with the current regional news programming from both ITV and BBC. The satisfaction level drops even further when people are asked what they think about regional news programming as a way of finding out about specific local issues that affect them. We should not just address the question posed by my hon. Friend about how to maintain current regional programming, but consider more carefully what people really want, and try to find solutions to provide what they want.
There is no doubt that the criticisms of current regional broadcasting are real, and that is before any changes are introduced. The BBC Trust, for example, is critical of the BBC for producing news through a “London-centric prism”. If we are to have proper regional broadcasting, we must address the issues that my hon. Friend the Member for St. Ives (Andrew George) raised about properly resourcing it and ensuring that we have the news gatherers, equipment and so on to provide it. There is then a problem with how to fund that, and I shall return to that shortly.
Another area of concern about regional broadcasting is that the regions that we seek to protect are perhaps not necessarily the best ones. After all, they were developed around existing transmitters, and not to try to reflect particular communities of interest. There are a number of issues to be considered. Is what we are getting providing good-quality material? Answer: there are some concerns. Are the areas the right ones? Answer: probably not. Does provision really meet what people want, which on the whole is more locally focused news that reflects what is happening in their immediate local community?
That last concern was forcibly picked up in November last year when the Select Committee on Culture, Media and Sport produced a report in which it said that
“local television services in the UK are underdeveloped in relation to almost the whole of the rest of the free world”.
I have no doubt whatsoever that in future we must find ways, whether alongside regional news or replacing it—I hope that it is alongside—to provide high-quality, local news, not just as we already have on radio, but on television.
Some people say that local programmes are already beginning to be developed on the web—more will develop if the BBC local video proposal goes ahead—but that is increasingly where more and more people, particularly young people, are looking for news. Indeed, the evidence shows a huge growth in the number of young people who have switched off from watching the ordinary television news, whether national or regional news, and are turning to the worldwide web for news. I shall go further and say that the technology is being developed—it already exists to some extent—to enable material on the web to be placed on our television screens and the miraculous electronic programme guide.
I am listening carefully to my hon. Friend, and I appreciate his point about the use of the worldwide web. Does he agree with the point that I made earlier about the threat that the BBC, with its fat licence fee, poses to the sort of programming that ITV Local is providing on the web? Does he agree that we should strengthen that programming before allowing the BBC, with licence fee payers’ money, to swamp the commercial opposition out of the way?
If my hon. Friend will allow me, instead of giving a quick, glib answer, I would prefer to develop my thoughts about that in more detail in a moment, because it is critical.
Before we move forward, having begun to put together thoughts about what we want—national programming, regional programming and the addition of high-quality local programming—we must be aware of the context in which a debate about how to achieve that takes place. That is why, as my hon. Friend said, Ofcom is conducting a major review and why the Government are simultaneously conducting a review so that proposals for a way forward may be made early in the new year. The context in which we do so has been summed up succinctly and admirably by Ofcom:
“The existing system of public service broadcasting…—a publicly owned BBC with competition from commercially funded broadcaster—is under huge pressure, and will not survive the transition to an all-digital broadcast world.”
That will not survive, so we must do something and not just bemoan the problems facing us. We must come forward with radical solutions to determine what we want, how to deliver it, and how it can be funded.
The same Ofcom report explains why there is a problem:
“With more digital channels and new online, TV-like programmes the market will continue to make a significant contribution to content that meets public purposes, particularly in entertainment, sport, archive programmes and, in one exceptional case, news.
However, the commercial prospects for areas like regional and national news, children's television, UK drama and current affairs are poor. Nor can these most highly valued genres be sustained on ITV, Channel 4 and Five under the existing system as competition intensifies. Indeed, our extensive analysis indicates they will not deliver genres that require large and risky investment.”
That is the context in which we are operating. Simply wishing to retain regional programming as it exists at the moment will not help us. We must talk about how to move forward, so we must have the debate. I welcome my hon. Friend’s debate, as it is the start. It is the first time that the issue has been debated seriously in Parliament.
My hon. Friend the Member for St. Ives asked about the BBC local video. You will be aware, Mr. Williams, that the matter is being considered by the BBC Trust. The result of that consideration will be combined with Ofcom’s market impact assessment, and by Friday it will bring those two pieces of work together and make its judgment. Although I was critical of the hon. Member for Wantage (Mr. Vaizey), who speaks for the Conservative party on such issues, for not having clear views during a previous debate on another issue—he said that he would prefer to see the outcome of research—I confess that on this occasion I shall join him, because the critical piece of work is that market impact assessment, and my hon. Friend rightly said that newspapers, ITV and others are concerned about the impact of the BBC’s proposals. Frankly, I am not competent to conduct that market impact assessment and will have to leave it to others, including the hon. Gentleman, who might have done some of his own research.
Indeed, I was aware of that. I was happy to give way to the hon. Gentleman to allow him to give us the highlight now and the details later on.
The hon. Gentleman and his party have already said that they reject the proposals for BBC Local in all forms. However, I am not as robust in my attack on the proposals. The BBC proposes to attach video news to 60 existing websites and increase the linkages between those websites and the websites of local newspapers and others. It also proposes to limit the number of news stories to a maximum of 10 a day for each of those areas, and it has said that it will work with all the organisations that might be affected to minimise the impact of the proposals. There are people who, like me, believe that local television is important—I welcome the work already done on that subject by ITV—for driving up e-democracy and ensuring that there is greater and easier access to council services and local information about events taking place in the immediate area. We must therefore seriously consider a proposal that mentions 60 sites in areas that are occupied by 1,300 local newspapers, particularly if genuine attempts are made to minimise and support other organisations. As I have said, our response still has to be tempered by the seriousness of the impact on those other local organisations, which is why I am not prepared to say to my hon. Friend the Member for Rochdale that I support his total and outright objection to the proposals; I want to see how serious the impact will be on others.
Having said that we must identify what we want and who will deliver it, I welcome the point made by my hon. Friend that if we are determined to continue regional news in something like existing arrangements, and if ITV is not prepared to do so or is unable to provide it, we certainly ought to look to others to enable that to happen. We must start to consider radical solutions to provide a way forward. I end by pointing out to my hon. Friend that it is very well saying that we simply want to put pressure on ITV to continue to do what it is doing, but last November its share price was 130p; only yesterday, the share price had plummeted to about 30p. Commercial public service broadcasters face serious financial problems, and radical solutions are needed if we are to move forward.
May I say what a pleasure it is to serve under your chairmanship this morning, Mr. Williams? I congratulate the hon. Member for Rochdale (Paul Rowen) on initiating this extremely important debate, which is effectively about the future of public service broadcasting. An important aspect of that is regional broadcasting—both in terms of regional production and of regional news. As usual, it is a pleasure to speak after my mentor, the hon. Member for Bath (Mr. Foster), who finished with a market update on the stock price of ITV. Given that the stock price is only 30p, I was tempted to suggest that perhaps hon. Members in the Chamber could have a whip-round and buy ITV. We would then solve the problem ourselves and be able to carry forward our solutions for regional broadcasting and news.
That slightly facetious remark leads me to a serious point. All of us would like to return to an ideal world. In the run-up to this debate, many broadcasters pointed out how much regional broadcasting and production they do. Channel 4 told us that it has invested more than £100 million a year in out-of-London companies for each of the past 10 years. ITV rightly points out that, hitherto, it has spent about £800 million a year outside London and that, as a proportion of its total spend on broadcasting, it spends a far larger amount outside London than any other broadcaster.
[Robert Key in the Chair]
No one has mentioned the commercial radio companies that exist up and down the country. They have had an extremely tough time and are still stuck with a tough regulatory regime that holds them back from expansion. Of course, all hon. Members have made fond reference to the BBC, which has 40 local radio stations and a now famous out-of-London strategy to increase regional production up to the level of 50 per cent. In any debate about broadcasting, one is tempted to take refuge in some anecdotes. As a constituency MP, I see no particular difference in the regional coverage given by BBC Oxford, Fox FM and my local newspapers.
For example, last week was a typical week for me, during which I worked hard for my constituents. I am regularly on the excellent BBC Oxford programme, hosted by the indefatigable and unique Bill Heine, who is a peer among regional and national broadcasters. However, I receive equal amounts of coverage from other broadcasters—for example, only ITV regional news covered my extraordinarily important debate on proposals for a reservoir in my constituency. BBC television news did not do so—although the breakfast TV programme did cover it. Only Fox FM covered my extraordinary meeting with the Didcot thong rangers last Saturday, who are a group of men who regularly raise money for charity by pulling large trucks through the streets of Didcot dressed only in thongs. I joined them. May I welcome you to the Chair at this important moment, Mr. Key?
I would like to make it clear that for health and safety reasons, I was not wearing a thong—mainly for the health and safety of the people watching. However, only Fox FM covered the important event of young men raising thousands of pounds for national and local good causes in Didcot. I pay tribute to the hard work of those young men.
No one has made the point in this important debate that “The times they are a’changin’”. We now live in an extremely different broadcasting world from the one that existed two or three years ago. As the hon. Member for Bath pointed out, it is in fact the market that has noticed such changes, rather than hon. Members. As we move into a digital environment, ITV is under an extraordinary amount of pressure to make the same profits it used to and to provide the same quality of service. The way in which we gather information and news has changed completely. Almost all young people get their news from the web and social networking sites, and they spend more time on their computers than watching television. We all have hundreds of channels from which to chose to watch our news and broadcasting—whether we have Freeview or a subscription to a commercial company. It is a testament to ITV and Channel 4 that they have been able to maintain anything resembling their previous market share.
There has been virtually no leadership on the issue from the Government. It has been fascinating to watch how they have dealt with it. First, the entire subject of public service broadcasting was handed over to Ofcom, which treads a fine line between being a regulator and a policymaker. Ofcom certainly came up with a series of interesting policies on the future of public service broadcasting, many of which have now been cast aside—including the proposal to have a public service internet site. When Ofcom got too big for its boots, the convergence think-tank was created to enable the Secretary of State to call people together. That has cost the taxpayer the princely sum of £300,000. Not content with a large and expensive building in Cockspur street where he could perhaps call people together to discuss the future of convergence, the Secretary of State hired Arsenal football stadium for his first meeting. The convergence think-thank did not come up with much and the issue then went back to Ofcom.
We now have the land grab by the Department for Business, Enterprise and Regulatory Reform. The arrival of Peter Mandelson seems to have spelled the demise of the Department for Culture, Media and Sport as a force in broadcasting policy. Lord Carter of Barnes is now installed in Victoria street and he has commissioned yet another review of the impact of digitisation on television and numerous other areas. We are told that the Government will come up with their policy in January. We wait with bated breath to see what emerges from either Lord Carter or the Secretary of State; it is not clear who will make the announcement. Government policy is all over the place on this issue, and meanwhile, as every hon. Member has pointed out, we are witnessing the slow decline, potentially, of regional broadcasting and regional news.
I would like to echo the comments made by many hon. Members about the importance of regional news in particular. Four fifths of people say that TV is an important provider of local news; 90 per cent. of people in the devolved nations say that. Eighty-eight per cent. of people say that it is important that the main TV channels provide news from the nations and regions, and 70 per cent. said that it was important for ITV to make programmes in different parts of the UK.
At the same time, it is worth pointing out that in most regions about 40 per cent. of people said that if there was no regional news, they would get their regional news from other sources. It is also important to point out that even with the current set-up of regional news, many of us do not identify with those regions. For example, there is very little coverage of the events in my constituency on local BBC news.
Although many of us in this Chamber will of course regret the cuts being made by ITV to regional news, we cannot, as I think the hon. Member for Bath said, look on this issue with rose-tinted spectacles. ITV is taking what it regards as proper action in the face of the difficulties it faces now in having an analogue regulatory system while competing in a digital world. Again, it is a matter of regret that the Government seem no further forward in easing the regulatory burden on ITV. There are a number of things—I am not saying that they are panaceas—that would make life much easier for ITV. For example, under the audiovisual media services directive, we have a consultation on product placement. Product placement would not necessarily fill the coffers of ITV, but it would make life much easier.
I was lucky enough to visit the set of “Coronation Street” with ITV’s head of public policy, the estimable Jane Luca. We went round and had a good look at the shop in “Coronation Street”, where all products have to be covered up from view. It is impossible in “Coronation Street”, unlike the rest of the country, to buy a Kit Kat or a Mars bar. I do not think that if someone bought a Kit Kat or a Mars bar in “Coronation Street”, the world would come to an end, but ITV might be able to make slightly more money. We live in this bizarre world where people watching “Desperate Housewives” on Channel 4 will see no end of product placement, from an Aston Martin downwards, but in British programming, no product placement is allowed.
What is the Secretary of State’s reaction when he launches the review? It is to say that he is completely against product placement—he has cut the review off at the knees even before it has begun. There is no news on contract rights renewal. There is no news on flexibility on advertising minutage. On all those regulatory burdens imposed on ITV, there is no leadership from the Government. Therefore, ITV has to react. It has to save £40 million a year and to merge regional news operations, but again I counsel hon. Members against sounding like Cassandra. As I understand it, the key bulletins that ITV is planning to drop are the weekday mid-morning bulletins—it would be interesting to know how many people watch those—and the lunchtime weekend bulletins. The main bulletins—the ones that hon. Members and their constituents watch—the early evening and late evening bulletins, will remain.
In addition, ITV is hoping that Ofcom will allow it to drop its regional production quota from 50 to 35 per cent., but at the same time there will be an increase in Channel 4’s regional production quota from 30 to 35 per cent. I am told by Ofcom that although that will save ITV some money, it will also result, if we take into account what the BBC is doing as well, in an increase overall in regional production from all broadcasters. That is a necessary and sensible move to give ITV the opportunity not to go bust.
We would be well advised to take account of exactly what pressures companies such as ITV are under. We learned only last week that almost 2,500 people had lost their jobs in media companies such as Virgin Media, Haymarket and Time Out, and another 4,000 jobs are likely to go not just at ITV, but at Channel 4 and in national and local newspaper groups. That is why the current consultation on local television is so important. As the hon. Gentleman pointed out, this is an interesting issue because the Conservative party has a clear position on it, which is that we firmly oppose the BBC’s proposal to introduce local video. Again, ITV is doing its bit: itvlocal.com provides 1,900 hours of video content viewed by 1 million people a month. It is due to break even next year. That system will be decimated if the BBC gets its way. As ITV points out, it will “jeopardise commercial services”. Local commercial radio companies have called the BBC’s proposals a “damaging intervention”.
A couple of weeks ago, I received a letter from Simon O’Neill, the brilliant editor of my local newspaper, the Oxford Mail, and his colleague, Derek Holmes, the equally brilliant editor of the Herald Series, from which I get my local news and which occasionally I am very lucky and privileged to appear in. They point out that, in Oxfordshire alone, 15 websites are already run by seven local newspapers with local video. They say that if the BBC goes ahead and broadcasts local video services, that will be a serious threat to their business. The point that they make, which I think is one of the most powerful arguments made, is this: why is the BBC allowed to do online what it would not be able to do offline? Let us imagine the furore if the BBC announced tomorrow that it was to publish a national daily newspaper. People would think it utterly absurd that the BBC was choosing to compete in a market that was already saturated, so why on earth is it being allowed to compete with taxpayers’ money, licence fee payers’ money, in a market that is being served by local newspapers, local commercial radio companies and ITV?
Although I remain, as I said earlier, agnostic as to the final decision that will be made on Friday, I fail to understand this point and I would be grateful if the hon. Gentleman explained it. Given that, as he said earlier, a lot of younger people are getting their news online and the BBC has a charter requirement to reach out to all age groups and all sectors of the community, how do he and his party believe that the BBC could meet the charter requirements if it did not at least look at initiatives such as the one that he is discussing?
The BBC is perfectly entitled to look at such an initiative, but we would say that it is not entitled to go ahead with it. There are numerous ways in which the BBC could reach out to young people that all of us would find unacceptable. For example, it could publish a daily newspaper. It could start competing with Metro or London Lite by handing out a daily newspaper at tube stations. [Interruption.] The website is being used by the BBC to impinge on a potentially thriving commercial sector. That commercial sector should be given the chance to grow and thrive before the BBC comes in with its size 12 boots.
Let me set out for the Minister’s benefit—
No, I will not give way. I just want to set out some Conservative policy, which I think is very important.
First, we are clear that we will allow local newspaper groups to own local television stations. We shall ask Ofcom to ensure that, as much as possible, interleaved spectrum can be used for the benefit of local television stations. We shall also provide clear leadership to supply super-fast broadband for most homes in the country. Again, that potentially offers an incredibly important platform for local news provided by commercial stations. As I said earlier—despite the heckling from the Liberal Democrats—we do not believe that the BBC should enter that territory at this sensitive point.
All I wanted to ask the hon. Gentleman was that, if he has concerns—I share them—about the threat to pluralism in online services as a result of the BBC’s activities, why is he not equally concerned about the dominance of the BBC in the broadcasting sphere, particularly with regard to regional news coverage? Does he share my concern that if ITV goes ahead with its proposals, a state news broadcaster will dominate regional news broadcasting?
We can all play the “what if” game. What if a Conservative Government had been in power for the last two years and had grasped the nettle of the threat facing our commercial companies? They could have eased the regulatory burden on ITV, talked to commercial radio companies and removed a lot of the restrictions that they are under, particularly regarding cross-ownership. That might have allowed such companies to thrive in a more lightly regulated environment, and we might have seen ITV regional news surviving, thriving and perhaps even expanding.
Of course, I am massively concerned about the growth and power of the BBC. The BBC has £3.5 billion of licence fee payers’ money with which to compete against commercial companies—television broadcasters and radio companies—which have their hands tied behind their backs by the regulatory environment. My worry has translated into policy, and that is why we do not want the BBC to expand by creating local video content on its website. We must allow commercial companies to thrive and survive.
With those remarks, I bring my speech to a close. I urge the Minister to go back to her colleagues and ask for clarity. The commercial broadcasters can no longer wait for yet another Government review. Perhaps she will close down the convergence think-tank, call a meeting with Lord Carter and the Secretary of State, sit down over the Christmas turkey, make some decisions and return in the new year and tell us what the future of public service broadcasting is going to be.
It is a pleasure to serve under you, Mr. Key. First, I would like to congratulate the hon. Member for Rochdale (Paul Rowen) on securing the debate and on making such a thoughtful and measured contribution to it. It was very valuable.
I want to reassure hon. Members that the Government remain committed to retaining public service broadcasting as an important part of their work, and to preserving free access to high-quality content that reflects the needs and interests of everyone, wherever they are in this great country of ours. As hon. Members have noted, the question for us as legislators, for Ofcom as the regulator and for broadcasters, is how we can create a sustainable model for public service content, particularly for commercial broadcasters in the future.
The hon. Member for Bath (Mr. Foster) alluded to the drop in the share price. It went down by a further 0.5 per cent. while the shadow spokesperson, the hon. Member for Wantage (Mr. Vaizey) was speaking.
I am stressing that there has been a big drop in ITV’s share price; it is something that fluctuates all the time. Hon. Members will know that the economics of the commercial broadcasting industry have changed radically over the past few years. That is a significant challenge to the viability of the traditional funding models that we have lived with since 1955. At the back of that change is the switchover to digital TV, which has broadly taken place in at least one television set in 88 per cent. of households in the United Kingdom.
On the theme of pressure on commercial television, is the Minister aware that today Ofcom has released its estimates of the possible costs of ITV’s various public service obligations? They were put at £5 million for national news, £7 million for current affairs, £5 million for out-of-London production—which the hon. Member for Rochdale (Paul Rowen) mentioned—and £8 million for original British production. If those figures are totalled, they come to less than the residual value of ITV’s use of spectrum and position on the electronic programme guide. Should the House expect ITV at least to keep up its out-of-London and British production and national news? According to Ofcom, that costs less than its residual value and spectrum.
I thank my hon. Friend for that contribution. We must keep up those services. However, we must remember that the licences currently held by Ofcom are worth £200 million today, but in a couple of years’ time they will be worth about £40 million. That is a significant drop and shows that its ability to attract money is lessening rapidly.
The switchover to digital TV, with its greater numbers of free-to-air commercial channels, is eroding and fragmenting ITV’s audience and therefore its ability to attract advertising revenue. That process has caused ITV’s share of the advertising market to drop by more than 10 percentage points between 2004 and 2007. Hon. Members have alluded to the growing popularity of new audiovisual services, from online content to video on demand and catch-up TV. I know that many of us in the Chamber are probably not young enough to understand the mechanics of catch-up TV, but the coming generations use it all the time in the way that we—or at least I—used to switch on Muffin the Mule.
As a result of those and other challenges, Ofcom believes that by 2011, the cost of public service obligations will exceed the benefit that they offer to commercial public service broadcasters. That alarming assessment gives the Government, Ofcom and broadcasters difficult issues to address and I would like to outline how we intend to do that. The hon. Member for Wantage said that we had lost control, and that Lord Carter had moved to the Department for Business, Enterprise and Regulatory Reform. I assure the hon. Gentleman that Lord Carter has not moved—he happens to share a suite of offices with me in Cockspur street, and communication between us remains strong.
We foresaw this problem when we introduced the Communications Act 2003. That Act imposed a duty on Ofcom to report every five years on the state of public service television broadcasting. It also ensured that Ofcom had the flexibility to make changes to a significant proportion of obligations as and when necessary. I reassure the hon. Gentleman that we are in discussion with it about that. Ofcom is currently in the middle of a public service broadcasting review. Such reviews are necessary because today we do not manage top-down but through consultation. We talk to people and try to reach an agreement that is backed by them. In other words, we seek to work by consensus, not authoritarian diktat.
Ofcom’s phase 2 document was published on 25 September and clearly showed, as hon. Members have done today, that the public value public service broadcasting, and want it to continue. The Government and Parliament have the responsibility for designing the statutory framework for the provision of public service content. That includes the purposes, the delivery mechanisms and the funding framework.
As hon. Members said, in its report, Ofcom identified three models that it felt merited further discussion: the enhanced evolution model, a refined BBC and Channel 4 model, and a refined competitive funding model. It is clear from today’s discussions that those three models attract criticism and approval from various groups—the review will weigh up those positions and consider what each model offers. I urge hon. Members, and anyone else who is interested, to contribute quickly to the consultation, which closes on 4 December, because we want everybody to get involved.
It is also clear from Ofcom’s report that certain programme genres are much more at risk than others, especially regional programming and national and regional news, which were the key themes of the remarks by the hon. Member for Rochdale. I assure him and other hon. Members that the Government remain committed to ensuring that programmes are made for, and in, the regions, and not just in London, or inside the M25 belt. That is why we embedded a regional dimension in the Communications Act 2003, which should facilitate the development of a critical mass of production outside London and the M25 area. It should also ensure that broadcasters continue to invest time and money in producing high-quality programming for the regions—I said “should” several times just then, because, disappointingly, ITV failed to meet its out-of-London production quotas in 2006 and 2007. The quotas are set by Ofcom and are statutory obligations, and the Government expect the relevant broadcasters to meet them. However, the possible sanctions for failure to do so are a matter for Ofcom, whose decision on ITV we await.
Currently, the BBC and ITV offer viewers programmes that are made in their region, about their region. As Minister for the East of England, I take the point that local people do not always identify closely with those regions—indeed, living in Hertfordshire, I find it difficult sometimes to identify with content beamed broadly at the East Anglian coast—but that problem probably extends beyond the remit of this debate, so I shall put it to one side for now.
In addition to the regional programming, ITV, Channel 4 and Channel 5 are required to produce a proportion of programmes outside the M25. However, it is clear from today’s debate that the main concern of the majority of people is ITV and its regional programming dimension, which has played a crucial part in ITV’s unique appeal since it was launched in 1955. I am old enough to remember the launch and can tell hon. Members what a change the first commercial broadcasting company brought. Nationwide, audiences gathered around their television sets to watch high-quality programmes, including regional programmes. However, in the 53 years since, things have changed. Although ITV offered a big change from the London-centric programmes that people had been used to until 1955, and although ITV produced a big change in the BBC—it had to up its regional content—things have now changed again, and ITV’s market price reflects the enormity of that change, as the hon. Member for Wantage said.
Popular programmes such as “Coronation Street” and “Doc Martin” continue to ensure that television is not only, or mainly, about London. Although ITV spends about £120 million a year on regional services, and provides around 5,000 hours of regional programming every year, its regional news represents the vast majority of its output in volume and cost. That is what we are talking about today. ITV spends more than £100 million a year on news provision alone. The key question is how sustainable this is in the light of competition from multi-channel television and the proliferation of new media in this country.
In a strategy document on content-led recovery published last year, ITV expressed, and attempted to address, concerns about the validity of its business model. One of the key components of that strategy was a new approach to regional news, which the hon. Member for Bath outlined. However, I shall repeat it quickly. The strategy would provide nine flagship regional news programmes in place of the 17 currently provided and would involve merging some of the smaller regions, such as ITV Westcountry, ITV West, ITV Border and ITV Tyne Tees.
ITV has confirmed, however, that it is committed to ensuring that each region will be fully equipped with journalists, camera crews and news-gathering equipment in order to cover breaking and emergency stories. It will also provide segments within news programmes to provide an even more localised service in areas such as Border and Tyne Tees. However, the Government accept that there is a fear that the quality of coverage provided is under threat and that those stories best covered in the regions will be buried or reported inaccurately. In difficult times—for example, during a flood or a hospital crisis—it is crucial that people get the information for their area. As a regional Minister, I had to deal with the outbreak of avian flu, when we really needed regional information, so I understand fully the high value that people place on regional news services. I am glad, therefore, that Ofcom is consulting on its proposals.
In these difficult times, the fact that people are facing job cuts in all ITV regions must be causing great concern, and I sympathise with journalists whose jobs are under threat. The Government and Ofcom have taken a twin-track approach to the current difficulties that public service and commercial broadcasting is facing. We are looking at policies and the practicalities of the situation, and despite the ominous warnings from the hon. Member for Wantage, Lord Carter is very engaged in this policy area—and in Cockspur street, not Victoria street.
Yes, in fact I shall conclude with that.
Early next year—hopefully in January—the Government plan to publish an interim digital Britain report, and in the spring a final report, which will consider what future legislative and non-legislative measures are required to support the development of the UK’s creative and economic sectors. Unlike the hon. Member for Wantage, I do not favour product placement as a solution. We have enough of that in films today, and I fear my children and grandchildren are becoming too commercially inclined.
I thank the hon. Member for Rochdale again and assure him of the Government’s continuing concern about this matter.