Media Bill

Debate between Peter Bottomley and Julia Lopez

Report stage
Tuesday 30th January 2024 Commons Chamber

[Julia Lopez]

We have concerns about my right hon. Friend’s amendments as a package. One issue is about delay, but another is about some of the smaller publishers that do not wish to be part of a regulator. That has been debated at some length this afternoon.

I am glad that my right hon. Friend the Member for Maldon is pleased about the Government amendment on AM. We discussed the matter together. I note his points about local television. He kindly accepts the unlikelihood of our accepting his amendment, but we will continue to consider his representations.

As always, I am glad of the support of the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone). He suggested that the proposal to privatise Channel 4 was part of a vendetta, but it was borne of a fundamental concern for its sustainability. We have put forward measures in the Bill to give Channel 4 greater freedom. We want the channel to survive and to have the flexibility to continue doing what it does. To the point raised in relation to those new powers, it will be granted the freedom to produce its own content, but it does not have to use them if it does not feel that is necessary.

On public service content being prominently and easily accessible, as is already the case in the linear space, we want PSB content to be as prominent as possible, but there is a question in relation to appropriate language. As has been discussed at length, the core aim is to secure prominence for PSB services and content online, but for it to be flexible, operable and proportionate, so that we can design the Bill for innovation and consumer choice. We are giving Ofcom the power to establish that balance.

The Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), along with my right hon. Friend the Member for Ashford and others, raised the issue of digital rights. We recognise the intent behind the amendment to bring digital rights within the scope of the listed events regime. The Select Committee, ably chaired by my hon. Friend the Member for Gosport (Dame Caroline Dinenage), made a recommendation that would support that outcome. While there is a great deal of support in Parliament for that and I am sympathetic, it is a complex issue.

We have seen how technical just the Government amendments to close the streamer loophole are. Adding digital rights would be a much bigger change, bringing more complexity. It is important that we maintain the right balance between access for audiences and the commercial freedoms that allow rights holders to reinvest in their sport at all levels. We want to get the balance right, and our priority is the impact on the public. It is important that audiences can watch and celebrate major sporting moments, but broadcasting rights provide sports’ national governing bodies with essential income, enabling them to invest in their sports, whether at elite or grassroots levels. We want to fully evaluate the issue, including how it could be best delivered, before considering legislation that enacts any particular conclusion. I assure Members the issue is under careful consideration and we have not yet made a decision.

[Sir Peter Bottomley]

The House will have listened with interest to the Minister’s response to the points made by Members from across the Chamber, but the Government have got to try to sort this out while the Bill is before Parliament. We want to hear from her that the Government are capable of coming to the Lords with an amendment or new clause that does not get rid of the interest for the commercial bidders, but says that, when digital and reproduction rights come up for sale, the interests of people in our country, our team and the sports that we regard as important, whether they are new or old, established ones, are taken into account. The House will not be satisfied unless the Government come forward with a proposal about what they can either agree with the rights holders or the potential rights bidders. The House of Lords will be right to insist on something that addresses that issue, and we want to support them.

[Julia Lopez]

I appreciate that my hon. Friend wants to put down a marker on the issue—I have heard that, and so has the Secretary of State. I maintain that the issue of rights is more complex than one might imagine. We want to get the balance right, and we will continue to look at that.

Moving to the amendments on the issue of age ratings, we are in complete agreement on the need to protect children and vulnerable audiences from harmful and inappropriate video on demand content. I have two children; I have pushed for children to remain in the remit and for there to be protections for them. The hon. Member for Aberdeen North (Kirsty Blackman) talked about the importance of public service broadcasters and access to them. A fundamental driving force of the Bill is that we want children to be able to continue to access public service broadcasters.

For the first time, we are bringing mainstream TV-like, on-demand services in the scope of a new video on demand code, to be drafted and enforced by Ofcom. I welcome the general support for the Bill given by my hon. Friends the Members for Penistone and Stocksbridge (Miriam Cates) and for South West Devon (Sir Gary Streeter). Ofcom will be getting new powers under the Bill to look at broader protection measures and to mandate specific approaches in the code, if deemed necessary, which could be BBFC age ratings. We are trying to move to a more outcomes-based approach rather than a prescriptive approach. We think that there has been great innovation in the space of parental controls, which have often been more effective than a badge rating. However, I have heard what has been said in the House today and we will continue to listen on this subject.

The hon. Member for Aberdeen North also raised the issue of protections for viewers watching on devices such as PlayStations. I simply wish to reassure her that the definition of “on-demand programme services” is not platform-specific; Disney and Netflix viewed on a games console would be covered. She also raised questions about the size of producers of content. Smaller producers are not keen on some of the proposals that she has made, as they are concerned that they might one day be larger producers and therefore be penalised. We would not want to disincentivise their growth.

Let me move on to Scottish broadcasting in general. We believe that the Bill will bring significant benefits to the Scottish broadcasting sector and creative economy. I do not underestimate the vital role that our public service broadcasters play in supporting that Scottish screen sector. The Bill contains provisions to encourage our PSBs to broadcast programmes in indigenous, regional and minority languages, such as Gaelic, by including them in our new PSB remit for television. I know that this is extremely important to numerous Scottish Members in this House, and I hope the Government’s efforts here are recognised. The partnership between MG Alba and the BBC is particularly significant for Gaelic language broadcasting. I can assure Members that the ongoing provision of Gaelic will be a key consideration as the Secretary of State and I progress the BBC funding review and the forthcoming BBC charter review. Of course, Scottish audiences will also continue to benefit from the prominence provisions in the Bill.

The Government are also aware of Members’ concerns about being able to access TV via terrestrial means, and I have spoken to my hon. Friend the Member for Moray (Douglas Ross) about that directly. The Bill does not include provisions on that, but I wish to reassure the House that the Government remain committed to the future of DTT and to protecting the millions of households who continue to rely on it. That is why we have legislated to secure its continuity until at least 2034, but let me be clear that 2034 is not a cliff edge for DTT. We have allowed the renewal of the current multiplex licences so that they last until the end of 2034, but that does not mean that DTT will not continue after that point. Even if the Government simply sat on their hands, Ofcom would still be able to re-advertise the multiplex licences, and our public service broadcasters could continue distributing their linear channels over DTT. Furthermore, specific primary legislation would be required to remove the multiplex licensing regime, for example.

We are always keen to make sure that major sporting events are publicly available as widely as possible, which is why we have the listed events regime, but this is a balancing act. It is another issue where we are trying to find a course through. Sports rights holders use income from the sale of rights to the benefit of the wider sporting sector. A lot of sports do not want the listed events regime to be opened up. I know that the Scottish National party likes the idea of a Government listed events fund, but SNP Members do not acknowledge the distortive effect it would have on the value of rights, nor do they say who would pay for it. I suspect that the UK taxpayer would and, once again, SNP promises would be paid for by everybody else.

Oral Answers to Questions

Debate between Peter Bottomley and Julia Lopez

Thursday 11th January 2024 Commons Chamber

[Sir Peter Bottomley (Worthing West) (Con)]

Will the Minister help the heritage of Victoria Tower Gardens and the voluntary organisations London Parks & Gardens Trust and the Thorney Island Society by getting the UK Holocaust Memorial Foundation to unredact the minutes of December 2018, so that I can quote them when I appear at the hybrid Bill Committee on Wednesday?

[Julia Lopez]

I confess I am not sure about the issue my hon. Friend refers to, so I will do some investigation and we will see what the Department can do to facilitate his request.

Channel 4 Privatisation

Debate between Peter Bottomley and Julia Lopez

Tuesday 14th June 2022 Commons Chamber

[Julia Lopez]

I can account for what the Secretary of State and I have done within our roles, and I think we have pushed forward an extremely ambitious set of reforms in the short time we have been in DCMS. This is an exciting time to be in public service broadcasting. I always thank the hon. Gentleman for his contributions because I know he has expertise in this field.

It is this Government and this Secretary of State who have decided to act, bringing forward a comprehensive package of reforms to support our PSBs through the first broadcasting White Paper in 20 years. It is the next step in a long history of support for our creative industries. It was a Conservative Government—under Margaret Thatcher, no less—that established Channel 4 in the 1980s to stimulate independent production and distinctive content. It has worked, and then some. It was a Conservative Government that encouraged Channel 4’s move to Leeds to spread the benefits of the creative sector beyond London. It worked. And it is a Conservative Government that are tackling the limitations of Channel 4’s ownership structure in this new broadcasting landscape, redirecting sale proceeds into a creative dividend to address the skills challenges of now.

Let me just touch on those limitations, because it is important to remind the House of them. Channel 4 is a fantastic broadcaster that has great management, innovative programming, high quality journalism and a diverse audience, but it is uniquely challenged in two ways. First, the publisher-broadcaster restriction means that it cannot own its intellectual property, so it finds itself reliant for 74% of its income on linear TV advertising revenues. Such revenues have fallen 31% sector-wide between 2015 and 2020, and that trend is set to accelerate as audiences move online and change their viewing habits.

[Sir Peter Bottomley]

Are those the most recent figures that the Department has? Many of us have been asking Channel 4 what its revenues were in the year that finished last year, and the growth in its digital advertising might also be something that the Minister would like to share with the House.

[Julia Lopez]

We would be very keen to get more information on Channel 4’s business at the moment, as it has been rather difficult to extract.

Secondly, should Channel 4 need to borrow money to keep up with the content investment of rivals, that borrowing would sit on the public balance sheet. In the light of those fundamentals, we are not going to apologise for asking the serious and responsible question as to whether this ownership model and structure is the right one for today’s broadcast challenges. That is something that the Secretary of State outlined today, and it has been expertly set out by my right hon. Friend the Member for Maldon (Mr Whittingdale).

I understand why hon. and right hon. Members want reassurance on this plan, and I want to provide it, but before I turn to some of the points raised this afternoon, I want to tackle some of the outlandish assertions in the article by the hon. Member for Manchester Central in The Yorkshire Post today. She claims that our selling Channel 4 could

“kill off independent film production”.

Let us set aside the fact that we believe any new owner would want to maintain Film4, for all the reasons she cites on its value. She completely underplays the strength and depth of the UK’s booming film industry, ignoring all the other players who support it, including the British Film Institute, with its own film fund, the UK Global Screen Fund, into which the Government channel £21 million to promote and distribute UK film around the world, and the fact that our film sector is doing so well that it cannot keep up with the demand for skills and studios.

The hon. Lady says that the sale of Channel 4 will lead to the move of more jobs back to London. I remind her that the BBC has committed to increasing its spend across the UK, that non-London production spend will remain in Channel 4’s remit and that ITV, Sky and Channel 5 all have large operations beyond the capital. There are so many centres of excellence outside London in our production sector that there are huge incentives to keep investing in our regions. She goes on to denigrate channels that are motivated by what she appears to see as a dirty word, profit, over public service. I wonder if she understands that those two things are not mutually exclusive. ITV and Channel 5 are all privately owned public service broadcasters. Indeed, since Channel 5’s sale to Viacom, it has gone from strength to strength, producing some fantastic, distinctly British content. As detailed in the White Paper, she will also understand that Channel 4 will remain a public service broadcaster, with quotas for independent production and the remit protected. We believe that getting private capital into the organisation will allow it to commission more, not less.

I now turn to the contributions of others. My hon. Friend the Member for Folkestone and Hythe (Damian Collins) made the excellent point that Channel 4 itself has suggested a joint venture as a way forward, which would change the relationship with the independent production sector. Implicit in that is that the status quo cannot hold because of the changing dynamic of the market—the strong headwinds he cited—with the shift to online, inflation in production costs and so on.

The hon. Member for Ochil and South Perthshire (John Nicolson), in his waspish speech, suggested that we are trying to make Channel 4 like Netflix or Amazon. That is not the case. We are saying that those businesses are changing the market, and we need to equip Channel 4 to deal with that.

The Father of the House, my hon. Friend the Member for Worthing West (Sir Peter Bottomley), suggested that we the taxpayers, as owners, should listen only to Channel 4 on whether it wants to change. I refer him to the absolutely fascinating contributions from panellists to the Lords Communications and Digital Committee inquiry on the licence fee, and the challenge they cited about small-c conservatism in media organisations.

My hon. Friend the Member for Aberconwy (Robin Millar) touched on this in his superb speech, including on the reticence we often find in organisations about changing and trying to come to terms with some of the challenges they face. I think there is an urgency to this debate on sustainability that we are taking on. He also mentioned Channel 4’s vulnerability to shocks because of its structure.

I enjoyed the speech of the hon. Member for Cardiff West (Kevin Brennan). It was fun, but it was a wholly inaccurate artistic interpretation of the advice of officials who have provided extensive analysis of some of the market dynamics that they think provide a real challenge here. Incidentally, I sometimes find myself imagining alternative scenes in the Opposition offices, with the shadow Secretary of State saying, “Do you know that Channel 4 is the only broadcaster capable of keeping the film, TV and creative industries and the regions going, and also producing content that audiences actually like?”

The Chairman of the Select Committee, my hon. Friend the Member for Solihull (Julian Knight), recognised the importance of getting private sector capital into the business to allow it to grow. I assure him that we want Channel 4 to continue to produce news. It is part of a genuine suite of support for the creative economy. The hon. Member for Luton South (Rachel Hopkins) reduced these critical media reforms to a “petty vendetta”, and I can assure her that that is not the case. Channel 4’s sale is part of a package of media reforms that the sector has asked for.

As my right hon. Friend the Member for Maldon pointed out, it is in our interests to see Channel 4 thrive. It is because of those interests that we want to drive these reforms, and we believe that Channel 4, in thriving, can invest more in content. He talked about the cut in content spend that we have seen over the last year or so, and he also highlighted the superb Lords report. My hon. Friend the Member for Folkestone and Hythe gave an important account of the trends in play and the need for a radical reset of Channel 4’s role.

The hon. Member for Canterbury (Rosie Duffield) talked about the independent producers, and I want to reassure her that we also value the distinctive content and see that as part of the sale process. I also want to assure my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) that we have digested the consultation responses fully. We put a lot of departmental resource into doing that.

In so far as there is any ideological drive, I was interested in the challenge from my hon. Friend the Member for Mansfield (Ben Bradley)—a deeply unfashionable view in this House, it seems, too often—that private sector capital going into a business is a good thing because it can grow businesses, create jobs and drive innovation. Fundamentally, it can also provide content of the kind that audiences—too little discussed, I think, in this debate—love.

The right buyer for Channel 4 will be one that shares our ambition for the business and our belief in what makes it special. As I say, I note the concerns of the hon. Member for Canterbury about its distinctive content. I want to assure her that we are not trying to change the distinctive role Channel 4 plays; we are seeking to give it the best set of tools and the freedom to flourish and thrive long into the future. That is why the Government will move ahead with plans to move Channel 4 out of public ownership to become a free-to-air, privately-owned public service broadcaster.

The Government today have been accused of cultural vandalism, including by the hon. Member for Warrington North (Charlotte Nichols). Let me say that the greatest act of cultural vandalism would be to let our public service broadcasters wither on the vine due to the small-c conservatism of the Opposition or an attitude that there is nothing to see here for our PSBs, particularly given the jobs and the values at stake. We want our public service broadcasters to have a long-term future and, through our media Bill and our broadcasting White Paper, we have the plan to deliver just that.

Question put and agreed to.

Resolved,

That this House supports the UK’s much loved cultural institutions, which are celebrated around the world while creating jobs and growth across the country; in the Jubilee year supports world-renowned British broadcasting which brings the country together in celebration; believes that the Government should reverse its decision to sell Channel 4 as it will undermine the UK’s world leading creative industries and the delicate ecosystem of companies that support them; and calls on the Government to ensure that, if the sale does go ahead, Channel 4’s headquarters continue to be based in Leeds and its remit ensures that it continues as a public service publisher-broadcaster, commissions over 50 per cent of its content outside London, continues its significant investment in new independent British films and funds quality news content which is aired at prime time.

Oral Answers to Questions

Debate between Peter Bottomley and Julia Lopez

Thursday 26th May 2022 Commons Chamber

[Julia Lopez]

I thank the hon. Gentleman for his question, but I know the Secretary of State’s reasoning for this decision better than he does. He also mis-characterises what was said at the Select Committee. He will be aware that Channel 4 is uniquely dependent on linear advertising, that it cannot own its own content, and that its borrowing sits on the public balance sheet. We think we have an opportunity to free it from some of those constraints to allow it to invest more in content to get private sector capital into the business, and we think that that will help to grow Channel 4, so that it can invest more in the businesses that he purports to care about.

[Sir Peter Bottomley (Worthing West) (Con)]

The Secretary of State said that she wanted to remove the straitjacket from Channel 4. Except for the opportunity to borrow, which I did not know Channel 4 had asked for, the only straitjacket is the public service remits. Will those be reduced in any way?

Can the Minister kindly tell the House why the aim to compete with Amazon and Netflix should be one of the purposes of Channel 4, especially if either Netflix or Amazon, or a similar-sized foreign-owned organisation, might buy Channel 4?

[Julia Lopez]

This is not necessarily about allowing Channel 4 to compete in exactly the same way as Netflix and Amazon; it is about understanding the changing market dynamics that those companies are creating. As I said in my previous answer, Channel 4 is uniquely constrained. Its borrowing would sit on the public balance sheet, but it also cannot own its content. We believe that in today’s market, it needs to be able to own its content in order to have much greater flexibility in how it runs its business, and getting private capital into the business would help it to do that. While people can bury their heads in the sand about the fundamental dynamics in the market, we are taking some difficult decisions, which we think are the right decisions to secure not only the future of the business, but the future of the kind of content that audiences in this country love.

Channel 4 Privatisation

Debate between Peter Bottomley and Julia Lopez

Wednesday 27th April 2022 Commons Chamber

[Julia Lopez]

Thank you, Madam Deputy Speaker. It is important to say that tomorrow is a sitting day, and we bid for a ministerial statement on this subject.

We are very keen that the House understands that the Channel 4 sale is not a stand-alone issue; it sits within a very important series of reforms that we as a Government want to make to the public service broadcasting system. Channel 4 is an incredibly important economic asset in that ecosystem, and we want to make sure that it is sustainable not just now but long into the future. We think it is our responsibility as the Government to do that future-gazing and to make sure that Channel 4 has the freedom and flexibility it needs to be able to make changes to thrive.

There are two important things to understand about Channel 4. First, it cannot retain control of its own intellectual property, and therefore it does not have the same financial flexibility as the likes of ITV and the BBC, both of which have their own studios. Secondly, its borrowing sits on the public balance sheet, and therefore if it required greater financial flexibility in the future, the Treasury would need to be content with that.

As I say, tomorrow is a sitting day. We had very much hoped that we would be able to set the sale of Channel 4 in the context of a wider series of incredibly important reforms that we wish to make to the public service broadcasting sector. I regret that the hon. Member for Manchester Central (Lucy Powell) does not think this is an important issue and has dismissed it as some culture war. That could not be further from the truth. The last time that important broadcasting reforms were made was 2003. I hope she will agree that the broadcasting world has changed immeasurably since then, and that the Government would not be responsible if we did not address some of those changes.

We think the public service broadcasters play an incredibly important democratic, cultural and economic role in our nation’s life and we want to sustain that role, so we think the privatisation of Channel 4 is an important part of a wider series of reforms. We will make further details available to colleagues, and I will be engaging one-to-one with colleagues who have concerns as we go forward.

[Sir Peter Bottomley (Worthing West) (Con)]

The Minister may or may not have been convinced by the words that she read out, but I do not think that they convinced the House. Channel 4 is in the best state that it has been in creatively or financially for decades. We were told that it is supposed to be able to compete with Netflix, but Netflix is a loss-making, debt-ridden business whose share price is now $198 when it was $700—an enormous drop.

If the choice for the country is about Channel 4’s specific remit and structure as a publisher-commissioner that does not hold programme rights, the Government could do best by leaving it alone. If they do not, they could engage with Channel 4’s management team about its proposals—I am not sure that we have all seen them in public—and explain why they prefer to go to the United States than to have a state broadcaster that is independent of Government.

Those in government may not like Channel 4 because it may criticise the Government in its news output, but it is better to be in government and criticised than to be in opposition and cheer.

[Julia Lopez]

I thank my hon. Friend for his comments. It is important to understand that the Secretary of State and I went into the entire process with a very open mind—[Interruption.] That is certainly true. We went into this looking at what is best for the public service broadcasting sector as a whole going forward. We looked incredibly carefully at alternatives, and I hope that the material that we will publish tomorrow will assure him of that fact. We think that we can get the right blend by retaining Channel 4’s public service broadcast remit, which maintains its distinct and unique appeal, while enabling it to get the private sector capital investment that it requires to deal with some of the wider challenges presented by the likes of Netflix.

I appreciate what my hon. Friend said about changes in subscriptions. I think that underlines the volatility of the market and the need to be able to compete and invest in content. That is incredibly important. If Channel 4 is to remain uniquely appealing, we need that investment in content, and we believe that the reforms will give it greater sustainability going forward.