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Local Radio

Volume 503: debated on Tuesday 12 January 2010

May I say at the outset how pleased I am to have obtained the opportunity to initiate this debate and how pleased I am to see that the Minister is here to reply to it?

My motivation in seeking the debate is a series of concerns that have been put to me by a number of local radio operators, particularly by the Shetland Islands Broadcasting Company, which operates in Shetland. In the Northern Isles, we have the benefit of two very effective commercial local radio stations and two BBC radio stations—Super Station Orkney, BBC Radio Orkney and BBC Radio Shetland are the other three. I mention that because for communities with a strong sense of identity, the existence and operation of local radio stations is, as is the case in many communities, an important part of our local ethos and identity. We should be careful before we make changes that may in some way operate to the disadvantage of those stations. Recently, there has been a trend for a diminution in the scope available to local newspapers, and it would be unfortunate if local radio stations were to go the same way.

I want to talk about the future of local radio in the broadest sense, but I will be talking mostly about the switchover to digital radio. As we are also discussing the future of local radio, I should say that if local radio is to have a future, government at all levels will have to be a bit more careful about how they use it. When I was preparing for the debate, SIBC brought to my attention the decision of the Scottish Government to let the radio advertising for their Christmas drink-drive programme through the big boys. As a consequence, SIBC—a very small, genuinely local, independent service, which is the only commercial service that would carry the adverts in Shetland—was excluded from such coverage. That sort of sloppy thinking in government will have to change if local radio is to have a future.

Does the hon. Gentleman agree that a number of these small independent radio stations, such a Time FM in my own area, serve a niche market that is perhaps not served by their bigger neighbours—some of the BBC stations—and that they will need financial help to try to accommodate the new technology?

Yes, I do think that—although I do not necessarily agree with the point about financial help, which is a different matter altogether. The hon. Gentleman is right to mention the nature of local radio stations. I should point out that several hon. Members are present for this debate in Westminster Hall today, which reflects the fact that the subject excites a wide-range of interest. Had I realised how wide the interest was when I applied for the debate, I would have probably applied for a 90 rather than a 30-minute debate.

In a moment. I will accommodate as many of my hon. Friends—indeed, hon. Members from all parties—as I possibly can. The number of briefings that have come my way have borne testimony to the wide range of interest there is in the issue. I realise that the matter is still very much a work in progress for the Government, but the nature and range of the briefings that I have received suggest that there is still a lot of work to be done.

If hon. Members will indulge me for a moment, a briefing I have not read is the one that came my way from Ofcom. I had a quick flick through it and reached the back page, which, for the benefit of the record, has a map of most of the United Kingdom on it—in fact, the map includes the Isle of Man, which is not even part of the United Kingdom. The only parts of the United Kingdom that the map does not include are the islands of Orkney and Shetland. I have a suspicion that somebody at Ofcom might pick up the Hansard report of this debate and read it, so may I just place on the record that if Ofcom wants me to read its briefing, it will have to show my constituency on its maps? If Ofcom cannot be bothered to do that, I will not be bothered to read its briefing.

My hon. Friend has initiated an important debate. Local radio stations have grown up and spread quite rapidly. If digitalisation leads to the closure of those stations, it would be a retrograde step. Would it also be true to say that the BBC has not done all that it could have in relation to local radio in areas such as north-east Scotland? That area has the same population as Cornwall, which gets a 24/7 service, but it gets five and 10-minute opt-outs, which is a long way short of what the BBC should be providing.

Indeed. I was a constituent of my right hon. Friend for long enough to know the truth of that. Certainly, the BBC is very patchy across the country. We are well served in the Northern Isles for the population that we have, but as he says, the situation in north-east Scotland is very different.

May I establish one thing? Does the hon. Gentleman oppose the provisions in the Digital Economy Bill or is he in favour of them? If he opposes the Bill, a possible consequence of that is that radio stations such as West Sound in my constituency will fail.

No, I am not saying that. The purpose of today’s debate is to start the discussion and ask a wide range of questions that have not been properly ventilated. If I may say so, hitherto this has been something of an anorak’s debate, but as the White Paper “Digital Britain” comes forward, it is clear that there will be a wider interest in the matter. I have a lot of questions. I have said already that the matter is a work in progress for the Government, but clearly they have not got all the answers right yet.

My question flows from everything that the hon. Gentleman has said. Does he agree that one of the prime requirements is not just that Ofcom includes his constituency on the map, but that we see greater regulatory flexibility, for example in relation to the ability of local newspapers to enter the local radio market?

That takes the debate to a level beyond that which I had intended to discuss today. If the right hon. Gentleman will forgive me, I will not go down that line. If I am to deal with interventions and get beyond the fact that Ofcom has not included my constituency on its map, I will have to be a bit distant in dealing with the subject.

I must make a little bit of progress first. I certainly do not pretend to be an expert on these matters, but over the past few months, a number of concerns about the Government’s plans for local radio, as set out in the Digital Economy Bill, have been raised with me. Given the importance of local and community stations to the surrounding communities that they serve, I want to raise those issues.

I should also place on the record my acknowledgement of the efforts of the hon. Member for Selby (Mr. Grogan) in relation to his early-day motion 436, of which I am also a signatory. The main area of concern I want to raise is that the Government’s push into digital switchover is in danger of creating what appears to be an unlevel playing field for local stations. That is a consequence of how the market in this area operates and is a recognition of the fact that although we talk very loosely about local radio, there are at least two national companies—Bauer and Global—that are providing local radio in different areas of the country. That is having its own impact on the market.

First, I want to raise with the Minister the issue of the 2015 switchover date. The concern raised with me is that that could leave more than 120 local commercial stations and 200 community radio stations with an uncertain future in analogue. Effectively, the switchover will have created a two-tier radio industry. The “Digital Britain” White Paper proposed that such radio stations should form part of an ultra-local tier of radio. I understand that the decision to leave those stations on FM is driven by the limitations of the UK’s current digital radio network, which apparently lacks sufficient capacity for every station in the area.

Among the concerns raised with me is that it is too expensive for local radio stations to go digital in that way. I hope the Minister will agree that it would be most unsatisfactory if local operators were forced out of business because of rising costs. I know from my own constituency experience that that is a very real danger—I am thinking of those costs associated with going digital. It is important for regions to keep a variety of local operators that often have valuable local knowledge and serve specific communities. I hope that the Minister will agree with me that it is essential that one digital platform is not advantaged at the expense of all other alternatives.

I would also be interested to hear the Minister’s comments on the concerns that, should radio go digital as planned, those stations left on FM will find it increasingly difficult to retain listeners, and as a consequence advertisers, due to their absence from DAB-only radios and their unavailability on alphabetised digital station lists. A combination of reduced listening and lack of digital functionality could make those stations less attractive to advertisers. It is, of course, extremely important that FM does not become irrelevant to radio, especially considering that there is unlikely ever to be a DAB multiplex in the entirety of my constituency, and indeed in many other parts of the UK.

One proposed solution, on which I would like there to be greater debate, is DAB-plus. That has been proposed to allow all radio to go digital and is being implemented in other countries around the world. The representations that have been made to me have indicated that there are two problems with DAB: first, that it has a gatekeeper, meaning that one cannot operate one’s own transmitter; and secondly, that it is on double the frequency of the FM band so that, as a consequence, relays are needed for the same coverage, which will be particularly problematic in hilly areas, such as Shetland. If Ofcom had shown Shetland on the map and shown any of its topography, readers could see that we have a fair number of hills there.

As a parliamentarian who represents thousands of constituents living in hilly areas, I would like some assurance from the Minister that people in such areas will not be forgotten. I hope that he will understand my concern at the comments made to me that current proposals will not provide a digital migration path for stations serving remote rural areas. I am told that AM/FM enjoys near-universal coverage of 99 per cent., but that DAB is significantly below that. I am aware that the Government have required that the DAB outreach should cover 90 per cent. of the whole population before the upgrade timetable will begin, but my suspicion is that when it comes to looking at where the remaining 10 per cent. will be, the communities of Orkney and Shetland will both feature in the list.

I totally agree with what my hon. Friend has been saying, as will those who run my local radio station, Radio Jackie, which is very popular. They also suggested that the Government must make it absolutely clear that FM will not be switched off, that there should be a public information campaign so that the public can be reassured that it will not be switched off, and that the licensing regime should be more sensible, including much longer licences, so that those local radio stations that might have to remain on FM while the digital roll-out is sorted out have viable businesses.

I am alarmed to admit, such is the level of detail I have acquired in the past seven days, that I am familiar with Radio Jackie, having received a briefing from those who run it. My hon. Friend’s points are, for the most part, sound. As he illustrates, what we are discussing is very much a work in progress. Until, and unless, the concerns that he has outlined can be addressed satisfactorily, we should not rush head-first towards a switchover date for which there is no obviously compelling factor, technological or otherwise, other than that it was felt that that would be the only way to get things moving.

Several of the briefings I have received in the past few days mentioned the possibility of being able to upgrade to DAB-plus in future. Is that something the Government are looking at and, if so, why not upgrade to DAB-plus from the beginning, rather than trying to bolt it on a later stage? Where is the Government’s thinking in relation to DAB-plus.

I would also be interested to hear the Minister’s comments on the fact that three quarters of all radio listening is still to traditional FM/AM radio. I understand that there are 120 million analogue radios in the UK, compared with 10 million DAB sets. The average purchase price, I am told, of a DAB set is £85. The Minister said in departmental questions last July that the Government were

“working with industry to come up with sets that are consistently priced at £20 or less.”—[Official Report, 20 July 2009; Vol. 496, c. 563.]

We still seem to be some way from that, so I would be interested to know what progress the Government are making.

I find the question of in-car listening compelling, as I generally listen to the radio while driving around. In-car listening is currently estimated to account for about 20 per cent. of all radio listening, yet DAB is currently in fewer than 1 per cent. of all UK cars. That figure is expected to rise to just 10 per cent. by 2015. I understand that the Government have recommended that all new car radios sold in the UK by the end of 2013 should be digital, but that is just two years before the proposed switchover date. What impact will that have on the 2015 switchover date?

It was recently suggested to me that DAB is 12 times less energy efficient in its usage than FM/AM. Have the Government considered that, and what are they doing to ensure that the energy efficiency of the switchover costs will be taken properly into account?

The hon. Member for Central Ayrshire (Mr. Donohoe) asked me about the Digital Economy Bill, and I say to him genuinely that I do not oppose it. There is much in that Bill that is very positive, particularly clauses 34 and 35, and it seems to have brought with it a whole range of opportunities for local radio. It has been widely and warmly received by the industry. However, it is also fair to say that a tremendous amount of detailed work still needs to be done. I hope that the debate will allow the Minister to at least start to explain how the Government are addressing some of that important detail to ensure that switchover will operate effectively for all parts of the country.

I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing the debate and on his contribution—he said he was not an expert, but I thought that his remarks were well informed and insightful. I do not have much time to reply, so I will try to speak succinctly and will take interventions from Members who have not yet intervened.

Local radio is, without question, important to the Government and to communities, playing an important role in binding together the social fabric. We take it very seriously.

On the point about the importance the Government place on local radio, it seems that local radio stations, and certainly those in my constituency, Pirate FM and Atlantic FM, do not necessarily feel that they have had the opportunity to get their points across at an early stage. That is why they are now contacting local Members to look at some of the issues when the Digital Economy Bill is debated on the Floor of the House. What sort of consultations are taking place with local radio stations?

The hon. Gentleman is quite right; there is undoubtedly some concern in the industry. There has been a bit of a campaign, led by UTV. I recently met at RadioCentre representatives of many local commercial local radio stations from across the country, and some of them will have been those he mentioned from his constituency. There was extensive consultation when the Bill was drafted, so we do take it seriously. During my remarks I hope to allay some of the fears, which may have emerged through misunderstanding.

There are genuine fears that the Bill will lead to a two-tier system, so would the Minister address a couple of those fears? Will clause 34 genuinely lead to deregulation for smaller local radio? Will digital be affordable for smaller local radio, and how can we achieve that? Will smaller local radio get more access to higher-quality FM while it is still around?

I am pretty confident that I shall address all those points in my brief remarks. Let me make some progress before I take any more questions.

Digital switchover provides new opportunities and increases functionality. It is an essential part of securing the long-term future. The total revenue of the commercial sector has fallen from £750 million in 2000 to £560 million now. At the same time, transmission costs have gone up, with stations now bearing the cost of carriage on FM, DAB, online and digital TV. A market facing such rising costs and falling revenue is unsustainable and puts the health of the entire sector under threat.

Although the path to digital may not be easy, we are convinced that it is the only route for securing the long-term future of radio, and that is a view shared by the vast majority of the sector, notwithstanding some of the reservations raised by hon. Members. Therefore, rather than a catalyst for decline, the changes set out in the Digital Economy Bill are essential to secure the survival of local radio.

For the first time, we will have three distinct tiers. First, there will be a tier of national services, both commercial and BBC, with a wide range of content. It will allow the commercial sector to compete more effectively with the BBC, employ high-profile presenters and attract high value national advertising and sponsorship.

Secondly, a regional or large local tier, again comprising commercial and BBC services, will provide a wide range of programmes, including regional news, traffic and travel. The tier will increase the coverage size and potential revenue of many large local stations, which in turn will increase the opportunity for linked advertising between regions so that regional commercial operators can benefit from quasi-national advertising.

The hon. Member for Orkney and Shetland mentioned the issue of advertising being badly commissioned by the Scottish Government, which I understand. None the less, the benefits of linked advertising for regional radio can be very great if commissioned sensitively.

Most important in the context of today’s debate, there will be a tier of local and community radio stations with the specific focus of informing and reflecting the communities they serve. They will be distinct from the national and regional tiers because of the very local nature of their content and they will benefit from less competition for local advertising funding.

People in my constituency and elsewhere who depend on radios will not be able to get local radio if it is purely digitised.

Local radio will not be purely digitised. That tier will stay on FM for the foreseeable future, but it will not be an FM ghetto; it will be an accessible FM, as I shall explain.

Given the time constraints, will the Minister agree to meet Members who are interested in the subject?

Yes, I am happy to meet Members who are interested. I have another meeting scheduled with local radio operators from all over the country, which will be under the same auspices as my recent meeting with them.

I am not sure whether I have enough time to continue. I do, so let me be clear: we see a digital future for all radio eventually. However, with more than 50 BBC services, nearly 350 commercial stations, 200 licensed community stations, the current infrastructure will not support a move to digital for everybody. For small commercial and community stations, the coverage area and the cost of carriage of a digital multiplex are too great. That is one reason why, for the time being, we believe that those stations are best served by continuing to broadcast on FM.

Some of the small stations have already invested in being on digital. Are they not in danger of being kicked off to FM having made that investment, and would that be a fair outcome?

No, small stations are not in such danger. Stations that are already on digital are not in danger of being kicked off digital, but they are suffering the extra cost of running on two platforms. That is one of the reasons why we need an orderly, managed and reasonably speedy transition to an affordable single platform for as many people as can afford to be on it.

The idea of stations on more than one platform is not new, which moves us to a key point that has not been widely understood—it is really important. Listeners have for decades moved between FM and medium wave, and historically also to long wave. The current generation of DAB sets has tended to make that move a rather sharp distinction, which has led to the fear that FM will end up being a second-class ghetto tier. To avoid that, we are committed to ensuring the implementation of a combined station guide, which is similar to an electronic programme guide, that will allow listeners to access all stations by name, irrespective of the platform. Future sets will simply have a list of station names. The listener will not distinguish between FM and digital stations, but will simply select the station by name. We are already working with the industry on that system and encouraging its development and introduction as quickly as possible. That is a crucial difference that has not been widely promulgated or understood. It means that people can stay on FM and the new sets can service the same market.

Only 5 per cent. of the digital radio receivers currently on sale cannot receive FM. It is our intention that all digital receivers should be able to receive FM as well as complying with the World DMB profile, which will ensure that they can support other technologies to accommodate future changes. That crucial distinction has not been widely understood. When I explained it to people in the industry, it made a big difference.

The hon. Member for Orkney and Shetland asked whether we could upgrade to DAB-plus from the beginning. I understand why he says that, but we are not right at the beginning. There are 10 million DAB sets out there for which people have laid out large amounts of money. The BBC completed a study into the issue last year, and concluded that, on balance, it was not worth writing off that technology because of the impact on the 10 million people who had bought DAB sets. We have said that all new technology should be DAB-plus and future compatible so that further change is future-proofed and DAB-plus is not excluded.

As for the switchover date of 2015, the hon. Gentleman asked whether it was the only way we would get things moving. The Government believe that 2015 is an achievable date. The actual date that switchover happens will depend on the criteria for listenership and coverage being satisfied. We think it can be done by 2015, and that it is important to set a challenging target.

The issue of £20 sets was raised. There are already some £30 sets. We have five years to go until 2015, so we remain confident that we will have £20 sets by then.

I am interested to hear what my hon. Friend says about the 2015 date. Can I take it from what he said this morning that 2015 is an aspiration to encourage the industry to move towards digital—to put their house in order and get things ready? However, if the coverage is not there in places such as the constituencies of the hon. Member for Orkney and Shetland (Mr. Carmichael) and the right hon. Member for Gordon (Malcolm Bruce) where there are a lot of hills, will the Government will look at the date again? That date is not already fixed.

As I said, we believe it is an achievable date. If more than 50 per cent. of listeners are not on digital by then, and if coverage is not similar to FM—98.5 per cent.—it will not happen on that date. If for any other unforeseen reason, we are not, as a nation, in good shape to do it by then, we will not do it. We will not switch over at an inappropriate time, but we believe that it can and should be done in 2015.

As time ticks on, let me say that a relatively small and cheap piece of hardware will be available to convert in-car sets to something that works in the future as well as the present.

Sitting adjourned without Question put (Standing Order No. 10(11)).