On Tuesday November 5th 2002, Dr.Kim Howells MP (Minister for Tourism, Film & Broadcasting) gave our annual lecture at the North of England Mining Institute in Newcastle.

Introduction from Tony Edwards, Hon.Sec

Welcome ladies and gentlemen. Before I introduce our keynote presenter for this evening, I would like to share with you something. I recently had the opportunity to represent this region at the 75th RTS anniversary celebrations at St James' Palace, where we all met Prince Charles. There's no need for any of you to stand! (Laugh)

When we left, they gave us a replica of the very first issue of 'Television' which is the RTS magazine, that was produced and edited in March 1928. I think the editorial comment is worthy of repetition. "It is part of our policy to give our readers detailed technical descriptions of the apparatus and methods used by experimenters the whole world over. For example, as we write these lines, a newspaper dispatch informs us that the General Electric Company of New York has just succeeded in broadcasting television through the world famous broadcasting station WGY to four private homes. This means that the home television set is already in site. In our next number (of this editorial) we expect to be in a position to give our readers a full description of the General Electric Company's apparatus". This is dated 1928.

History in the making in our modern times. At a recent conference of the RTS which I was privileged to attend, the Minister described the advent of television in the way that there are more televisions than homes than people in them. This is a medium which is of the mass communication level extremist in the country. It is a media subject to vast change, and part of that change is the reason our key note speaker has agreed to come here this evening.

The future of the draft Communications Bill, and its impact in regional terms, is a core issue that will affect everybody connected, however remotely, to every aspect of our industry.

Dr Kim Howells is currently Minister for Tourism, Film and Broadcasting. He has other ministerial responsibilities for areas connected with the media industry. Before becoming an MP for Pontypridd in 1989, he worked in a number of industries, including coal and steel, and helped construct a research archive on post-war UK energy policy for University College in Swansea.

He worked for the South Wales miners as their spokesman and research officer, and wrote and presented programmes for radio and television. His political interests include industry, education and European affairs. He enjoys painting, mountaineering, cycling, jazz and literature. Not all at the same time, I hope! He is married with three children. On the topic of the future of the Communications Bill and its impact in this region, ladies and gentlemen, I introduce Dr Kim Howells.

Dr Kim Howells MP

Thanks very much, and thanks for turning up this evening. There's a lot to do these days and I am sure there's far better attraction in this area than coming to hear me. Can I say this, that it's as I sat there now, wondering how am I going to start this speech, and being the world's worst reader of DCMS speeches or from any other departments, it suddenly occurred to me of course, and speakers who have been here before have probably said it, but in a sense where we are defines precisely what's happened to what we do and what we produce. This is a place that was built because it was at the heart of one of the great industries that built this country. It was one of great nodes of world capitalism. It was from this city that a significant part of the empire was built, facilitated, as they put it in the communications industry. This is where the ships were built, men and women went all over the world, and we have seen this extraordinary decline of what looked like, just 25 years ago, a gigantic industry, and now a huge increase in the industry which you are part, and however temporary it may be, I am part.

What I thought I would try and do, besides cut out most of this speech, is try to describe to you why the Communications Bill has ended up looking the way it is. We had a problem in deciding where to draw the frontiers of the Communications Bill. It is a very wriggly line, for example, between us and what we define as the safe communications sector and the Internet. Perhaps in the questions and answers that will follow we can discuss that.

But for all kinds of reasons, we decided that we would not try to deal with the Internet in this bill. Maybe we will be proved wrong for doing that, but I can tell you one thing for certain, we would never, ever have got it through the Houses of Parliament if we had tried to involve the regulation of the Internet. It is already a huge bill. Business managers, doesn't matter what party they are in, they hate big bills, and the Lords hate big bills more. They don't trust them, and we had enough people there to give us the message that it was not the right thing to do, that we should stick to communications and stick of course to that great central task of trying to rationalise regulation, very complex regulation from five different regulators, and put them into one – Ofcom.

Now, the communications industry is probably the fastest moving, and most innovative sector that any of us are aware of, and we were very concerned when we began drafting the Bill, that we shouldn't constrict or hamper this energy and creativity. It's an important thing to say from the outset. It’s why the Communications Bill will put in place a framework that can respond to a pace of change in markets and to develop technology. It will also, I believe, ensure quality and standards in broadcasting, and help confirm Britain as one of the most dynamic and competitive broadcasting markets in the world.

As many of you know, we consulted widely on this draft bill. It was scrutinised by Lord Puttnam's prelegislative committee, which had among its numbers those who have shown the greatest interest in media issues, in both the Lords and in the Commons. We responded to the recommendations, just last week. We received besides that committee’s observations on the Bill, over 300 responses nation wide, and I am sure that there are people present here this evening who may have contributed to the consultation. And the response has made invaluable contribution to our understanding of the Bill and to what’s happened to it. All of the responses are on the Communications Bill web-site.

I think this has been the most accessible piece of draft legislation that I can ever recall in 14 years of being a member of Parliament in the House, and I don't think before that there was ever a piece of legislation that was more open and more accessible than this one, to a public response, to the contributions which people chose to make to it. It's been an invaluable consultation. It's tested our policies and it's a good way of doing it. I would like to see every bill, certainly every major bill go through that prelegislative scrutiny. You can't do it with all bills; sometimes there simply isn't enough time. Because I think that if that kind of attention is paid to it, that kind of scrutiny, it ensures that what we deliver over all is likely to be the best for the communications sector and for viewers and listeners throughout the UK.

I think certainly we all owe thanks to Lord Puttnam and the committee for their work. It was an invaluable exercise from which we learned a great deal. Of the committee's 148 recommendations we accepted over 120 of them, and the result of some of these major and minor changes is that we will introduce a bill to Parliament that is better than the one we started with last May.

We accepted, for example, the recommendation to increase the size of the Ofcom board from six to nine, because it was felt that it would give Ofcom the ability to respond to operational needs and changing circumstances, while retaining its flexibility. I remember I held out for a very long time because I was determined that board should be a very small board and shouldn't be a board which was made up of, if you like, the representatives of certain interest groups, or even of the nations of this country, but ought to be a board of talents, capable of dealing with an industry which, as I say, is so very fast moving.

We have, of course, already acted in response to Lord Puttnam's committee's concern about how broadcasters’ work with independent producers will pan out. The relationship between the broadcasters and independents is a very crucial one. Throughout the programme supply chain we need to nurture creativity so each link can fulfil its potential, and this is why we have asked the ITC to carry out a review of television programme supply and report back to us with its findings.

This report, I believe, will provide the Government with crucial information on the over all economic health of the programme supply market as the bill makes its way through Parliament, and may form the basis for further investigation by the Office of Fair Trading and by Ofcom.

Now the work of the joint committee, together with the extensive consultation that I have mentioned, has already helped to shape and refine our views on how the television industry should move forward. And in talking about the bill, and about the recommendations from the joint committee, I would be hard-pressed, of course, not to mention the debate about the foreign ownership of the UK broadcasters. The Government has made its case pretty clear.

But if I may for a moment recap, I do not believe that to have the quantity of television that currently we are enjoying, and which is likely to grow as we move to digitise our services, I don't believe that we have to make sacrifices on quality. I believe that we can have both. More programmes and better programmes.

An important way of doing this is to increase competition and allow as many opportunities for investments as possible, and that is why we have moved to remove the arcane rules that prevent a big US company from investing in our television and radio. After all, there's no such rule which applies to European companies, even when they turn out to be Vivendi, and as somebody who was in the boardroom of Universal on the day that Vivendi moved in and took it over, to the bewilderment of the Americans, I may add, they couldn’t understand how a French water company could take over one of their great studios. I think that is a very serious observation that we have to come to terms with.

I think it was Alfred Hitchcock who likened American television to a toaster. You push the button and the same thing pops up every time. Now whilst this still may be the case, there's an awful lot of good programmes with high production values which are coming out of America. You have heard all these arguments, and I don't want to rehearse them here tonight, but sometimes you have to speculate to accumulate.

I have to say that I saw last night, for example – I'm rarely in London on Sunday nights because I have a young family, I like to be in Pontypridd – but I watched The Shield for the first time last night and I was very impressed and I was addicted to 24, and there are a lot of other good programmes that have come out, and we could talk about some of the weaknesses in our own programmes and about what I would like to see done about it.

I'm particularly passionate about script development. Ever since I’ve been travelling to LA – and that's many years now – I've been very impressed with the way the Americans team write, and we have a very different attitude in this country towards script writing and script development, and it's something we ought to be very concerned about, especially in terms of the ways in which we try and tap the potential that is out there, in all the regions and all parts of the UK.

I do believe that US companies could bring new skills and new ideas, as well as hard cash, and we are aware that broadcasting is not like any other industry. It has a very special cultural importance. That is why we have regulation in place to prevent any foreign owner diluting the quality and the diversity or indeed the impartiality of the media.

On top of EU requirements for at least 50% of programming to be of European origin, there will be very tough obligations for original production and independent production, to prevent the fears harboured about the possible dumping of American content becoming a reality. Whatever the nationality of our media owners, we will retain a set of key media ownership rules to prevent any one company gaining too much control over our news agenda. There will be cross-media ownership rules at national, regional and local level, to make sure we still benefit from plurality of debating voices and it's just as important to maintain that plurality at a local level as it is nationally.

The draft Communications Bill included a proposal that there should be at least three separate local commercial media voices in every area. That is a principle we still hold to.

We are also still committed to a regional structure for ITV. I can't comment obviously on the nature of the proposed Carlton-Granada merger. That is something for the regulators to look at. But the bill, the Ofcom Bill, the Communications Bill, will clear away the remaining ownership rules that stand in the way of a single ITV, leaving the matter to the competition authorities.

Despite this, of course, ITV will continue to exist as a set of regional licences, all of which will have full requirements for regional programming and regional production. I will say a bit more about that if I may in a moment.

Now, of course, television is changing. You know better than anyone that the stance still in this industry is to move backwards. But there's still an important place in this melting pot for regional programming and production. It is one of the key strengths that our television has been based upon and the draft bill sets out measures to maintain and strengthen regional commitments, so that public service broadcasters can continue to meet the needs of different communities and cultural interests.

Let me remind you for a moment, if I could, what those requirements are. Channel 3 will have targets for programmes produced in the regions for the regions. Programmes made regionally for national audiences and investment in programme production in the regions. It will also have targets for the provision of high quality regional programmes, including news, a sufficient proportion of which must be shown in or around peak time. In addition, Ofcom will be required to publish a review of the regional obligations in each Channel 3 licence, whenever ownership changes hands, and to change licence conditions to meet any concerns which may arise.

Channel 4 will have targets for programme production and investment in the regions. At present, Channel 4 has no statutory requirements in this area only licence conditions. Obligations similar to those for Channel 3 will be applied to the BBC through the agreement with the Secretary of State. I am very pleased that the ITC and the ITV companies have agreed a charter for broadcasting in the nations and regions which sets out detailed requirements for regional programming. Regionalism within ITV is a key component of its public sector obligations and I hope that the charter will continue to emphasise the benefits of quality regional programming.

It's also good to see the BBC is strengthening its relationship with communities in the UK, with news programmes and more local television and local radio services, and I am also looking to initiative such as the Channel 4 Creative Cities Strategy to develop a coherent support structure for businesses in a number of UK regional cities.

This kind of initiative can help companies plan their research and development and allow the broadcaster to get the best out of the nations and regions.

Now our television and radio companies frequently are among the chief generators of investment for the creative industries in all parts of this country. You occupy an enormously important and strategic position across several sectors that have played central roles in helping to encourage and tap the creative potential of people the length and breadth of this country.

I have seen for myself in cities like Birmingham, Southampton, Glasgow and Manchester how the creative industries, music and drama, the visual arts, design, as well as radio and television, and often in partnership with them, have been central features of whole urban regeneration schemes. Quite extraordinary.

Recently I was in Birmingham a week ago and I went to the custard factory where they used to make Birds Custard. Go there if you haven't been there. Take a look at it – Maverick Television is in there now. It's an extraordinary – it's become a creative village, which has begun to develop the most fascinating ways of finding investment for small creative businesses, and I went there last week or the week before, I can't remember, I've lost all track of time, and tried to impress upon the bankers who were there, that the great financial institutions of this country, those who are supposed to guide investment for millions of people, try to impress upon them that television and film is one of the safest bets they can get involved in.

Look at AWOL Time Warner. Look at the way that its share price crashed. The wealthiest and most stable bit of AWOL Time Warner is Warner Films. I know. I went to see Harry Potter at the Premier last Sunday. £200 million they spent in this country making that film. They made almost £1 billion pounds – almost £1 billion out of the first Harry Potter film. That is not a bad investment by any standards, whereas the great geniuses who are supposed to guide our financial investments in this country lost tens of billions and sent Stock Markets crashing the world over because they kept investing in kids of 17 because they had dot.com data bases. Now I don't call that very sensible.

We have to get this one right, I think. We ought to have learned this lesson, that this in fact is a good industry to invest in and that these creative industries point the way forward, and that they can regenerate whole regions and will regenerate and are regenerating whole regions. Now that is how it should be.

We need above all, I think, to nurture and promote talent. That is what this is about. It’s not about protecting jobs. It's not about looking after companies, we have done too much of that in the past. It's not about favouring this sector or that sector, it's about recognising and nurturing talent, and television is the most public expression of talent and one of our most potent means of identifying it, and for it to express itself.

Look at Southern California. In the last 25 years it has lost 300,000 aerospace jobs and it’s gained 400,000 in the entertainments industry, and that industry has taken over from aerospace. Not just California but America's biggest earner of foreign currency. We have to understand those realities, those new realities. There are no frontiers to television.

If we can't get this right, if we can't get the regulations right and we can't get the finance right, and most important of all, if we don't begin to identify, nurture, tap that talent, then I am afraid we will be some kind of colony of this huge American machine, which is so potent and so successful, in the way in which it has recognised what television is, and more importantly probably, how to sell it. Thanks very much.

Q&A Session

Tony Edwards
Thank you for that. Sorry to stop you mid flow, I do apologise. There's a minor issue that, unfortunately due to the pressure of Parliamentary business, our presentation speaker has to leave in approximately 20 minutes, so my apologies on his behalf for this. With agreement with Kim, he has kindly condensed his talk to encourage the opportunity for questions.

So could I ask if there are any questions from the Audience? Could I have brief questions.

Bob Lorimer
I hear what you have to say about the future of regional television. One of the problems we have had in most recent years is that all the Controls, certainly on independent television, have been exercised retrospectively. In other words the ITC will see something on the screen, of which it earnestly disapproves and will make a few noises about it if it’s awake at the time. But what is needed is a prospective control, so that before things get to the screen that ultimately will cause public distress they should be examined by your new control organisation Ofcom. That is the current weakness. We are deluged with game shows, cookery programmes and gardening programme because they are cheap and independent television operates on the basis of the advertising it can attract, and boardrooms are concern about the profitability of a company, so if they can get cheap programming they will get it. But if the controls are introduced before the programmes get to the screen, there's then some prospect of improving schedules.

Kim Howells
Shall I take a few? By all means, yes. Another question from the back.

Bob Duncan
Bob Duncan, Sign Post Tyne Tees Television. I will try and keep it brief. I wasn't going to ask this until you spoke tonight. It’s your Welshness and your position that makes me ask this question. Tyne Tees has become over the years a centre of excellence in deaf programme making. We are now the biggest supplier of British sign language interpretation for digital terrestrial television. Since the days of Olwyn Hocking and now under Graham Thompson, we have become the national centre of excellence, and just as Welsh people want access to all the English language services that are going and want their own Welsh channel – quite rightly – I wanted to voice this concern over the deaf community, sometimes referred to by themselves as the deaf nation, for access not only to English language information translated into British sign language, but to a deaf channel, on which the whole culture could be developed in the media. I wondered if in the changing and growing landscape the Communications Bill is helping us to chart, if you could see a place for anything like that?

Kim Howells
Can I first of all, Bob – I mean Bob here. Bob Lorrimer. I have a very laissez faire attitude about this, about what gets on the screen. Every time I stand up, at questions, DCMS questions, somebody stands up and says will I join him or her in deprecating some programme or other that appears and I always say "No, I won't". Because the day politicians start determining what goes on the screen is the day we kiss liberty goodbye as far as I'm concerned.

I know what you're talking about and I think that we, within the content board that we are going to construct, which is a very powerful board, directly below the Ofcom board, and in our independent kind of viewers' panel, independent consumers’ panel, we ought to be able to construct some means of ensuring that the quality remains high.

Now I never believed that there was a golden age of television. I can remember – I've always loathed soaps, and I can remember that all the kids talked about when we first had TV, which was about 1958, all they would talk about in school was soaps. We didn't watch them in our house. I can't remember why, but we never did. Now I’ve got a warped notion therefore about what is good and bad. My kids think that Eastenders is the best drama on television, and sometimes on the occasions when I take a peep at it and there's a very serious subject being dealt with there, I think well, that's probably the best description I've heard recently of the dilemmas that face a family when incest occurs or rape, or whatever, and so I think it's very, very dangerous for somebody like me to try and define what quality there is.

There are programmes, Bob, and I won't go into them, because I will only get into trouble, like I did at the Tate, that I loathe, which are immensely popular. Some people tell me it's good television, other people tell me it's cheap rubbish. I would stay right out of it. I think, however, we have got to have a – and you have described it as some proactive means of ensuring that those quality thresholds remain high, that we are not just inundated with stuff we are at the moment. It's a very difficult thing to do. I suspect there may be a means of doing it, in the way in which the contents board will be constructed and the relationship it has with viewers and listeners throughout the country.

And if I could turn to Bob Duncan's – Bob, this is the first time I have ever heard anyone me ask me if there ought to be a deaf channel. I have never heard that question before. I have gone out of my way to try to all sorts of organisations and bodies concerned with overcoming impairments and problems that people have when it comes to being a viewer of a television.

Some of it is quite shocking actually. I had lots and lots of letters from the RNIB about description modules. When I pressed them on it, we got them altogether for the first big meeting they ever had at DCMS. I was appalled at how little progress, how the technology didn't seem to be there, nor indeed was there any real hard work being done on what possible market there could be for a suitable product, if and when it was developed.

It seems to me that there was a problem, that were lots of good intentions but very little work had been done to translate those intentions into something that could work, and I don't know, if somebody wants to come to me and say "We need a deaf channel", well, fine. My first instinct was to say "God forbid", because none of us are perfect, Bob, as you know as well as I do, and whilst I can see absolutely the need for subtitling, and whatever other technological advances we can develop and promote and implement, I am always very wary about saying we ought to have some kind of – I'm old fashioned enough to worry about that ghetto thing, and if I could say finally, if there is a demand for it we are going to be in a better position soon than we have ever been because of digitisation. We will be freeing up spectrum, a lot of spectrum and there will be a lot of people who wake up to that fact and will start demanding from us services we have hardly dreamed of now.

Tom Hardy
I have worked in London and Hollywood and in this region, and I know where I prefer. That is why I'm here. I’m not sure if this is going to come out as a question or more to make you aware of certain issues. What you were saying about Hollywood is fantastic. In this region we are trying to develop the media sector. Some of the things that are stopping us state aid rules, that stop us putting more than £60,000 into any media companies, which is a pittance, we can't develop a industry like that. Coming down from the Government, the money we have got the revenue capital mix is backwards, in that it's large amounts of capital and no revenue. We can build art galleries, build theatres, cinemas, we can't fund the script writing we have talked about, we can't fund the content to go in them, that’s our voices on those screens.

We have the Film Council in London that is meant to be about cross media investment in the way you have talked about, but it's just spending on film, and furthermore they are only ring fencing 10% of that spending for outside London, 90% of their budget goes on in London. So there's a number of issues there, and I would be interested to hear your thoughts on that.

Tony Edwards
Are there any other issues or comments anybody would like to make? This would be the last question.

Peter Moth
I expected and approved of and admire the defence of regional production, it is hugely important, but one of the things some of us feel is that after the 1990 Broadcasting Act the television industry missed its way by not looking more seriously at city television and a more local form of production. Are you convinced that the present regions, broadcasting regions are really satisfactory. Most are artificial and based largely on what transmitters do, they really don't relate to the actual communities, is there a opportunity to look at that?

Kim Howells
I will come to that, Peter, because I opened a new city television station last week in Southampton, but I will tell you about that in a minute, which is very exciting. Tom, 90% of the budget of the Film Council is not spent in London.

Tom Hardy
Ring fenced...

Kim Howells
It is not spent in London. It’s – if you don't mind, it is not spent in London, it is spent on all kind of projects. If you think they are London-centric let me know, OK? The money that goes out to the regions is – and it's more money that the film industry has ever had, from the Film Council by miles. The money that goes out the regions is supposed to leave other money out. Now of course there are state, I forget what they called, it's a European term, which constrict us. You can't simply go along and say "You're producing good cars, but if we give you £120 million you will produce better cars", you can't do it. OK. And you can't do it now with relatively small sums of money. There are all kind of rules which I don't want to bore you with. I think that questions like the development – that script development can be tackled in a lot of ways.

A couple of weeks back I went to the Royal Holloway College, part Of the University of London down near Slough. They realised a few years back that they were very close to Pinewood, Shepperton, Elstree, Ealing, and they decided, and it doesn't sound extraordinarily imaginative, but I don't know anywhere else it is happening, tell me if it is happening up here, they decided to put some bursaries aside for young writers and to let them become the equivalent of those people who work in the bungalows on Warners' lot and Universal's lot and Fox's lot out in Hollywood and write, and try and work up scripts and develop them in a way they would not be able to do anywhere else.

Now I am interested in that mix of money that has come from the Department for Education, working with money which has come from us via the Film Council and might come, in small amounts albeit, from the Regional Development Agencies around the country, and whoever else might be interested in those kinds of partnerships, but it does mean that we have to be very imaginative about how we try and locate those sums of money and build those partnerships.

I think it can be done, and I will say this, Tom, we could be talking about what the Film Council does here all night. If you think that there are big shortcomings in the Film Council, tell me about them, otherwise I won't know about them. Be specific about it, because the criticism that generally emerges is very general criticism, and if it is hampering the work that the Film Council ought to be doing, the effectiveness of that work in the regions, I want to know about it, because in the end I have to carry the can for it. And I want to see Britain produce films.

If I could just say this, very briefly. I think what we need in the country is a studio. We are very good at making films, we are useless at distributing them, and it's very interesting that the American film industry was founded and run for most of its life by retailers from New York. They bought and built the theatres, and they understood the potential for entertainment and then they looked for content to film with. That is