Transcript of the Second Standing Committee on Delegated Legislation – Draft Community Radio Order 2004.

The Community Radio Order 2004 was accepted in parliament on Tuesday 13 July 2004 paving the way for applications from Community Organisations for long term licences to broadcast. The Committee discussion ranged from the definition of Community Radio through to the ways in which the funding and maintenance of Community Stations should be carried out. Following the successful pilot Access Radio scheme sanctioned by the Radio Authority, Ofcom has now worked fast to develop the framework in which Community Radio can flourish in the UK.

Attached is the transcript of the Committee’s discussions…..

Draft Community Radio Order 2004
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Second Standing Committee on Delegated Legislation
Tuesday 13 July 2004
[Miss Anne Begg in the Chair]
Draft Community Radio Order 2004

9.55 am

John McDonnell (Hayes and Harlington) (Lab): May I declare an interest? I chair a voluntary organisation that is applying for charitable status and that may, in due course, apply for a community radio licence.

The Minister for the Arts (Estelle Morris): I beg to move,

That the Committee has considered the draft Community Radio Order 2004.

This is the first time that I have served under your chairmanship, Miss Begg, but I hope that it will not be the last. I look forward to doing so.

Community radio, as many hon. Members know, is a new and potentially exciting tier of very local radio. Such services will be an invaluable addition to the radio ecology, supporting and complementing the commercial sector and the BBC. We support community radio because it will encourage and support social inclusion, local education and lifelong learning, training and work experience, and wider access to broadcasting opportunities for communities.

Before going any further, I pay tribute to local commercial radio. As we all know, particularly as constituency MPs, it has for a long time provided an invaluable and popular service in the areas that it serves. Whether we are talking about big stations in the capital city or small stations in rural areas, it contributes strongly to an area’s sense of identity and gets involved in all sorts of worthwhile social activities on and off air. We do not for a minute underestimate or undervalue the important role of local commercial radio. However, there is room for an additional tier of very local radio services along the lines of community radio.

Properly introduced and regulated community radio will complement existing commercial radio stations rather than compete with them. Community radio can provide a pool of talent for the commercial sector. It can encourage very local advertisers, which may in due course grow on to the local commercial stations as their business expands. It can also serve different audiences from those served by the commercial sector.

Above all, to have real and lasting value, community radio must be distinctive from commercial radio. There are some interesting examples of that among the pilot radio stations. For example, Takeover Radio in Leicester has broadcast with and to children, and Angel Radio in Havant broadcasts to an older generation. Awaz broadcasts to the Glasgow Asian community. There is also Sound Radio in Hackney, which describes itself as the world service for east London.
I will explain the regulatory regime under which the new sector of radio will operate. The Communications Act 2003 allows the Government to make an order that modifies the radio provisions of the Broadcasting Act 1990, so that they apply differently in some respects to community radio services. That is what this order does. In effect, it says that if someone is dealing with community radio, they should read the existing legislation with the modifications set out in the order.

I will go through some key provisions of the order. It sets out what characteristics community stations must have. They must be primarily for the benefit of the community or communities that they serve, and must deliver social gain, which the order defines. That means, for example, that stations must provide services to otherwise underserved groups, encourage discussion and expression of opinion, strengthen links with the community, and provide education and training opportunities.

Community radio services must be not-for-profit or non-profit distributing. Any profits must be ploughed back into the station or the local community that it serves. Community radio stations must provide opportunities for the community to which they broadcast to become involved in the running of the stations and the production of programming. They must be properly accountable to the communities that they serve. Those characteristics will ensure that community radio stations are distinct from existing commercial local radio services.

The order places certain restrictions on ownership. In particular, it ensures that community radio licences cannot be held by the commercial radio sector. That is another way in which we aim to ensure that the two sectors remain distinct. The order also provides that no one can hold more than one licence, which will prevent the development of chains. The schedule to the order sets out the modifications to the existing legislation, which are in line with the characteristics to which I have referred. I want, however, to draw the Committee’s attention to a few aspects of the order.

First, the licences for community radio licences will be limited to five years. There are good arguments for a longer period, mainly on the grounds that it gives stations a longer period in which to plan. Against that, the demand for licences is likely to exceed supply. Anthony Everitt looked at this question in his excellent evaluation of the pilots and concluded that five years

”would provide sufficient security of tenure for a licence holder both for delivering social gain and for fundraising, while at the same time creating adequate opportunity for new community radio entrants.”

We agreed with that conclusion.
Mr. Geoffrey Clifton-Brown (Cotswold) (Con): The length of the licence is very important because it takes time and investment to get a community radio station off the ground. Will the existing applicant be able to reapply after five years to renew his licence?

Estelle Morris: Yes. We envisage that they would be able to apply again. The hon. Gentleman makes a fair point. We will want to review all the provisions in two years’ time anyway to see whether they are working well.

The schedule sets out a number of restrictions relating to the funding and location of community radio services. The order provides that a community radio service must not take more than 50 per cent. of its income from any one source. This is based on Anthony Everitt’s conclusion that a mixed funding model is best as it avoids undue dependence on one source of income. Stations will not fall under the influence of a dominant funder and will be more resilient if one form of funding ceases for whatever reason.

The order also sets out restrictions on the location of stations and the extent to which they can take advertising and sponsorship. They are as follows: no community radio stations are to be licensed where they would overlap with a commercial radio station with a potential audience or ”measured coverage area” of up to 50,000 adults; a community radio station will not be allowed to take any advertising or sponsorship if it overlaps with a commercial station with a measured coverage area of between 50,000 and 150,000 adults; and, where advertising and sponsorship is allowed, there will be an upper limit of 50 per cent. of total income from those sources.

That is by far and away the most controversial part of the order. Many of those in the community media sector feel that it is too protectionist towards the commercial sector. We understand that view, but we do not share it. We have tried in the order to strike the right balance between the sometimes conflicting wishes and desires of the community and commercial sectors. Taken together, the measures that I have just described would affect only 13.5 per cent of the population of the country. Only 0.9 per cent. would be prevented from having a community radio station.

There is no benefit to anyone in putting small stations out of business or in seriously damaging their business. We are not talking about simple, head-to-head competition. Community radio stations will be able to access various sources of funding, including Government funding, which are not available to the commercial sector. That will amount to £500,000 for each of the next two years. That means that they could sell advertising at a rate that undercuts commercial stations and deprives them of revenue. We need to have in place measures that ensure that the two sectors can happily co-exist.

This document represents a change from the draft order. The draft order placed a duty on Ofcom to have regard to the impact of community radio stations on the commercial sector. Whichever route we took, whether in the draft order on which we consulted or the order before the Committee now, the result would have been substantially the same. There would still have been areas where the existence of a small commercial station would have meant that Ofcom would not license a community radio station in that area.The order tries to make transparent and unambiguous what was implied in the earlier draft. It reflects the responses from both the commercial and community sectors to the consultation document.
The community radio journey is an open one. We have formally asked Ofcom to conduct a review of the community radio sector two years after the first community station is licensed. If that review concludes that the restrictions are unnecessary or too burdensome, we will remove or modify them by bringing forward a further order for Parliament’s approval. I repeat, therefore, that this order is not necessarily the final word on the subject. Once we have better knowledge of how the sector is developing, we will revisit the restrictions in this order to see if they are still necessary and desirable.

We should welcome this order, which is the start of a potentially very exciting journey for local radio. I hope that I have said enough for it to receive the support of the Committee.

10.5 am

Mr. Boris Johnson (Henley) (Con): Conservative Members welcome this statutory instrument and the setting up of community radio. Many of us will have had direct experience in our constituencies of the benefits that community radio can bring to people. I recently had a wonderful time at Huntercombe young offenders institution listening to ”Thug FM”, or whatever they call their excellent radio station. Radio stations in sixth form colleges and in other communities do a lot of good in informing people what is going on in their community and educating them in the ways of the media—I am not sure we need too many more people to be inducted into that profession, but it is good that they get the training.

The Minister has already covered the issues relating to competition and funding, which formed a large part of the debate during the consultation period. I hope that she will not mind if I go over them again. I was fascinated to read in the Department for Culture, Media and Sport paper that there will not be any public funding. However, in one place, it stated that there will be no call on the Exchequer, but in another place it said that £500,000 would be given. Is that an accurate representation of the extent to which public money will be made available to community radio? According to the order, only 50 per cent. of funding for community radio stations will be derived from sponsorship and advertising. It follows that the rest must come from some kind of subsidy, which must ultimately be from the taxpayer.

I echo the words of Baroness Buscombe in another place when she said that she wanted more clarification about what means would be found to push public money into community radio. I can think of a few examples off the top of my head of bodies that might fund community radio—for example directorate-general 10 of the European Commission is always willing to pump out money to those who will pump out good news about Europe. I am also told that there will be a community media fund—I do not know what that body will do or how it will work, but quite a lot of taxpayers’ money will be available.

Mr. Don Foster (Bath) (LD): The hon. Gentleman has hit on an important point and I hope that he will get clear answers from the Minister. However, being the diligent fellow that he is, I am sure that he will have thoroughly read the explanatory memorandum, the last page of which clearly states:

”Costs to the public or the Exchequer. None”.

Mr. Johnson: Those are exactly the words I had in mind when I sought clarification from the Minister. If only 50 per cent. of funding will be attracted by advertising and sponsorship, it must logically follow that public money will be available. Therefore, as the Minister was candid enough to admit, we have the prospect of a great number of community radio stations, which will be pump primed by taxpayers’ cash, being able to compete for advertisers’ limited budgets. Because of their favoured position, they will be able to offer more attractive rates to the advertisers than commercial stations. That would be unfair and wrong. As Juice FM said in its submission to Ofcom, that could severely impact its commercial position. What we do not want is community radio to be a replication of commercial radio. We all agree that it should be qualitatively different and offer a service that commercial radio cannot.
I want to repeat the point made by Fresh Radio from the Yorkshire dales. I do not listen to it myself, but I believe that it was an important focal point during the foot and mouth outbreak. [Interruption.] The hon. Member for Colchester (Bob Russell) intervened from a sedentary position, but I missed what he said. However, people in Yorkshire tuned in to Fresh Radio a lot during the foot and mouth outbreak to find out what was going on: where the epidemic had reached, exactly which farms had been affected and what the Ministry of Agriculture, Fisheries and Food was saying in detail on the ground. It would be hard to think of a more perfect definition of a community radio, in the sense that local services were being advertised and a particular community—in this case, a farming community—was being assisted.

Whatever the Government mean by the oracular phrase ”social gain”, which has been imperfectly defined, it was surely achieved by Fresh Radio. That is why it should be taken seriously when it says:

”We cannot overemphasise the potentially dramatic negative effect, on our own future viability, of the creation of even a single community station within our area, if that station was allowed to draw on commercial revenue from what is already a difficult market place”.

I am sure that everyone agrees that it would be wrong if such a radio station, which I am sure has an independent editorial line, were crowded out of the market by a radio half-funded by the emanations of the state, with all the consequences for editorial independence that that might have.
There will also be a lot of competition over bandwidth, and unless I have misunderstood it, the BBC is not to be plundered of its bandwidth for the establishment of community radio. I see no particular reason why that should be the case and why the BBC’s large share of the bandwidth should not be made available to community radio. Incidentally, I also do not see any reason why the Pentagon, which has a large share of the bandwidth in this country, should not also be prevailed on to hand over to community radio some of the large quantity of our vital national infrastructure that it uses. [Interruption.] Again, I cannot hear the interjection from a sedentary position. [Hon. Members: ''Bush radio.''] Oh, Bush radio. I hope that the Minister agrees with me on that, as I am sure that she does, given her political convictions and origins.
Notwithstanding my support for the order, I have a general concern about how it is set out, the language that is used and the definitions that we are bringing to bear. It says that to qualify for a licence, someone has to show that they are able to deliver social gain to the relevant community. I am not sure what is meant by social gain. Indeed, what is a community and how is it properly defined? It is a sketchy concept, but it is of considerable political importance that we agree on what a community is before we agree to the order.

The order defines a community as either

”persons who live . . . or undergo education or training in a particular area . . . or persons who . . . have one or more interests or characteristics in common”.

That seems a broad definition of a community. A leper colony is obviously a community under that definition, and one could imagine that ethnic minorities or groups of one kind or another could make a community. There may be plenty of communities that the Government and Ofcom would naturally be inclined to look on favourably. However, does the Minister also agree that there may be plenty of other communities, properly so-called under the definition, that would not normally commend themselves to people of a politically correct disposition?
Irrespective of political correctness, there might be communities that the Minister and Ofcom have simply not thought of, but which might nevertheless be very important. Such groups could be classified as communities. For example, there is the community of fat people—or obese people, as we are increasingly asked to call them—of which I am proud to be an honorary member. Obese people have their own representative interest groups, magazines and lobby groups, and the obese community has every right to know what advantages may be available to it from local authorities.

I hope that the Minister agrees that, if ”Fat FM” wanted to inform people of what was going on in the fat community and wanted to make them aware of important things that might be relevant to their lives, it would be difficult for Ofcom to turn down its application for a licence. I hope that she agrees that those people represent a community under the definition. Under the statutory instrument, communities are emphatically not created according to geographical area.

Another community minority that is emphatically out of favour with the Government, although by no means illegal, consists of those who practice country pursuits, or what others call fox hunting. As long as fox hunting is still legal, people might want to set up a community radio station called ”Hound FM”.

Bob Russell (Colchester) (LD): Fox FM.

Mr. Johnson: There is already a radio station called Fox FM. I was going to mention the name, but I would get in trouble with the station if I associated it with hunting. One can imagine a community radio station that wanted to broadcast news about hunting to the country sports community. I do not want the Minister to declare whether she would be in favour of such a community radio station. She does not have to commit herself about whether she personally wants such a body to exist, because I have no doubt that she will say that that is a matter for Ofcom and that it would be up to it to decide whether ”Hound FM” or ”Fat FM” led to some kind of social gain, as the phrase goes.

The question then becomes what happens if Ofcom decides that either of those two putative stations does not deserve a licence. What if Ofcom decides, ”In this particular climate, we are not going to license a station called Hound FM, which speaks expressly for the hunting community”? What happens if it decides not to license ”Hound FM” despite all the information that it provides to the hunting community, all the good that it does in terms of telling huntsmen where to pick up fallen stock, any other social function that it fulfils, and all the claims that it can make to satisfy Ofcom’s criteria for social gain?

Who ultimately decides? Where is the ultimate locus of authority? Does Ofcom have final arbitration over what constitutes social gain? Does it ultimately decide what a community is and therefore what group is entitled to a community radio? Or does a democratically elected politician decide? Where does Minister believe that authority ultimately resides? If ”Hound FM” were turned down for a licence and it came to the Minister, would she be able to overturn Ofcom’s verdict? That is what interests me. I do not know what she thinks but, in the end, I would rather see a democratically elected politician having ultimate accountability for such a serious political decision.

I conclude by repeating my broad welcome for the proposals, but I remind the Minister of the central problem, which she was good enough to address: we do not want community radio stations to compete unfairly—rather like the BBC’s downstream commercial activities compete unfairly with private sector operations—with local commercial radio stations, and, as she set out very well, unfairly take from the small advertising cake. I should like it to be made a little clearer that if Ofcom decides that a community radio station is competing unfairly, it will be able to say to it, ”I’m sorry, that’s it. You’re taking too much of a share of a commercial market, so your time’s up and your licence is revoked.” I hope that she will reassure me on that point.

Other than that, my colleagues and I are happy to welcome the proposals.

10.20 am

Mr. Michael Connarty (Falkirk, East) (Lab): Like everyone else, I have been allocated to the Committee. However, I was particularly interested to come along to this sitting. In a previous existence, I was deeply involved in trying to set up a community radio in the central region, and eventually a commercial station, Central FM, was established. It took on some of these roles, but we never managed to get a proper community radio station.
I have some concerns. One is that this matter is always seen, and described by the Opposition, in terms of competition. In reality, there is a possibility for co-operation. I imagine that a community radio station could be established in the central region that would address a different community, so would not necessarily be plugged into the Forth and Clyde networks, which are the larger combine of which this region is part. It might look for a different source of income from that which commercial radio used, and might not attempt to keep afloat by poaching Central FM’s commercial sponsors but would look for smaller interest groups with less money that wanted to advertise different services and could not currently afford to pay the fees charged by commercial radio stations. I can think of a number of organisations based in the central region that come into that category.

Would it be possible for a body defined in article 6(3) as a ”body corporate”, which could not hold a community radio station licence, to co-operate and work with a community radio station? For example, Central FM might want to co-operate with a radio station based in Stirling or one of the more far-flung communities in my constituency such as Bo’ness—the town of Borrowstounness—on the fringe of its area. There is tremendous potential for that, and it would involve co-operation, not competition. Commercial radio admits that it cannot reach out to all the small groups in a community that would like their wares and their ideas put over on the radio.

The question that the Opposition raised is important. I would be worried that a particular religious group, such as the creationists who might want to push their ideas on ”Vardy FM”, or a group such as the one establishing ”Hound FM”, as suggested by the Opposition, might call themselves a community because they have a particular preference or prejudice and claim the right to have a community licence. I should not want to see that happen, and although the Opposition made a trivial, light-hearted comment on it, we must guard against it. What protection is there against the proliferation of religious-based stations?

Licensing is very important. How do we protect the territory of a community radio? If a station starts to draw a big audience, the temptation is for some commercial enterprise to come along and suck it up in the next round of licensing. In a sense, although it was done in co-operation with Central FM, that is really what happened to community radio in central Scotland. Community radio could not make a go of it, and the commercial radio station saw that there was an audience, and a niche that it could move into, and it moved into it. Good luck to it; it provided us with a service.

Mr. Clifton-Brown: The hon. Gentleman criticised my hon. Friend the Member for Henley (Mr. Johnson) for giving the example of a community of fox hunters who wished to set up ”Hound FM”. The hon. Gentleman said that he deplored that idea, but would he not agree that one person’s preference might be another’s prejudice? Who is to say what objects are preferable and what are not in setting up a community radio? Will he touch on why he has come to his conclusion on that?
Mr. Connarty: I should hate to be accused of criticising the hon. Member for Henley. He is such a jolly chap that I find him very entertaining, and I never criticise people who are so lightweight. I was making the point that communities must be defined in such a way that they are groups linked not just by a preference or a prejudice.

I am serious about religious groupings. A hole in the legislation would be created, and we debated at great length the question of religious radio and religious radio stations in the commercial sector. If we were to offer community radio to people based on their religious beliefs, we would be entirely wrong. If we said that a religious grouping was enough to create a community radio, there would be a massive temptation for the number of community radio stations to proliferate, and that would go against the intentions of the legislation. I do not know whether the Minister and others discussed it at any length, but I would be deeply concerned if the term ”community” had nothing to do with communities in the sense of local areas.

Mr. Johnson: Will the hon. Gentleman give way?

Mr. Connarty: Not at the moment. I have another meeting to go to shortly, so I will not be taking many interventions.

I would be concerned if people claimed that community meant their particular beliefs or prejudices. That is not in the spirit of the legislation. If we allow it, in a couple of years we will be in trouble, because a great deal of time will be taken up by such people wanting to run radio stations. They would find money for those radio stations—possibly from the Vardys of this world, creating creationist radio stations around and about its creationist schools throughout the country. That would greatly worry me.

How do we protect an established community, particularly in a regional area? Once an audience is created for radio in a regional area, the temptation is for someone to think that there is money to be made out of the audience by selling audience numbers. The hon. Member for Henley spends a lot of time in the media, and he knows what it is all about—selling advertising between the written stories to make money for commercial enterprises.

I was deeply concerned when the commercial radio station, Beat FM, was given a licence in Scotland. It was a money-making exercise for several people. Certain famous footballers put up a bond of £100,000 for Beat FM, saying that it was going to produce new beat music, and I think it did. I am very interested in the music scene, and it was a good addition to it. However, it was sold off to Capital Radio after about a year or two, and those who put up the £100,000 bond walked off with £1 million. Beat FM is just another trashy commercial pop station selling advertising. It shows that what one sells and what one thinks is being set up as a licence can be easily amended. No one says, ”That was not the purpose of the licence. We are taking it off you.” They let it run on.
I worry that commercial stations will come in, take over their patch and turn community radio into a commercial enterprise. I would like to see something to protect community radio, and particularly geographical communities, from such intervention. I apologise because I will not be able to hear the Minister’s reply as I have a meeting at 10.30. However, there are still some holes in the legislation, and although I support it, I would be concerned if it were contaminated by interference.

10.28 am

Mr. Foster: May I say how pleased I am to serve on this Committee under your chairmanship, Miss Begg, and how delighted I am to follow the contribution from the hon. Member for Henley? I am disappointed that his hearing is obviously not too good in that he missed several asides from my hon. Friend the Member for Colchester. The hon. Gentleman picked up the reference to ”Bush radio”, but he certainly missed the reference to ”Mrs Dale’s Diary”. When the hon. Gentleman referred to the suggestion of setting up ”FAT FM”, he missed the sedentary comment from my hon. Friend, who pointed out that no doubt it would be run by the fat controller.

I am genuinely delighted to serve on this Committee, because we are discussing an important order that has been a long time in coming. I remember vividly a Liberal activist called Ray Beattie, who back in the early 1980s was constantly pestering me about the importance of community radio. He is still active in community radio, but unfortunately it is in Warminster, where they have had community radio for a long time. As a result of the order, it is one of those areas that will not be able to apply for a licence despite having had a community radio station predating by about five years the local commercial radio station covering that area. He will be disappointed, but many others who have worked in this field for more than 20 years will be delighted, despite some reservations about aspects of the order. At long last, what the Minister rightly called an exciting tier of radio ecology will shortly be with us.

In her introductory remarks, the Minister praised local commercial radio. She was right to do that. I had the good fortune recently to be one of the judges for the Commercial Radio Companies Association annual awards. My task was to judge the competition in respect of the social benefit that local commercial radio stations brought to their communities. I was able to judge some wonderful contributions, ranging from work to combat gun crime to the campaign by the radio station that won the award to make significant improvements in road safety on a major road in its area. However, I was disappointed that the Minister did not, at the same time, give similar praise to the BBC stations—non-commercial local radio stations—which also make a major contribution to the communities that they serve.
The order is about unique radio stations that will provide distinctive community radio activities for much smaller areas. The Minister was right to stress the word ”distinctive”, as such stations will be distinctive. Their programmes will be different from what is offered by many of the local commercial radio stations and local BBC radio stations. It is therefore a pity that, because of the order, six million or more people will miss out on that distinctive provision by community radio. There is no doubt that community radio brings huge benefits. We know that from the trials and on the basis of the short-term licences that have been offered in various communities.

Only yesterday, my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) drew my attention to a short-term licence that was given to Lionheart Radio in Alnwick. The station is on air for short periods—four weeks at a time—and serves only 10,000 people. Nevertheless, 5,000 people responded by telephone, e-mail, fax or letter to one of the activities that it promoted on the radio. That shows the power that community radio can have to address issues that really matter to local people.

I am delighted that the order has been laid, but, as I said, I am concerned that six million people will lose out because of the restrictions that the Minister has introduced. Time is short, so I shall not repeat all the concerns about them that have been expressed by many organisations. I was absolutely delighted by the Minister’s commitment—I hope that she will repeat it when she winds up so that it is clearly on the record—that the order is not the final word but an opening position, and that she will insist on a review of the introduction of community radio so that we can consider once more the restrictions on advertising or even having a licence at all in some parts of the country. I am delighted that there will at least be an opportunity to review them and therefore the possibility that the six million people who are likely to lose out at present will, in future, be able to have a distinctive community radio station. I believe that that would please hon. Members on both sides.

I end by asking the Minister a specific question. Supporters of community radio have raised an additional concern about applications for licences. The Minister will correct me if I am wrong or explain how it will be possible if I am right, but it is necessary for a licence applicant to make an assessment of the impact that their proposals will have on the economic viability of other commercial radio stations. If that is the case, I would be grateful if she would explain how an applicant could do that. They would not have access to the financial information about the commercial radio stations in their area and even though those stations publish their annual accounts, the detail and the fragility of their advertising base or other sources of income will clearly not be made public, or made known to rival organisations. I fail to understand how that will be possible. I am sure that the Minister will have thought the matter through and will have a clear answer. It would be helpful to put it on the record.
Although I have genuine concerns about some of the restrictions that will be put in place because of the order—they will prevent some parts of the country from benefiting from the advent of community radio—I welcome the fact that many people will have the opportunity to benefit from what the Minister rightly described as an exciting new tier in the ecology of radio.

10.36 am

Ian Lucas (Wrexham) (Lab): I, too, welcome the order, and I am aware that some of my constituents are on the starting blocks, waiting for it to come into effect.

In my constituency of Wrexham, there is no BBC local radio station. In Wales, the only local station is BBC Radio Wales. The local commercial station, MFM, directs its attention largely to younger people—my daughter is an avid listener—but its appeal does not extend to individuals in their 40s, let alone those in their 60s, because of its music content. There is a huge opportunity for my community, and different communities throughout the UK, to introduce community radio into their area.

Earlier this year, the opportunity was taken, through a restricted service licence for a limited period, to provide community radio in Wrexham. I am therefore relieved that Wrexham does not appear on the list of areas that will not be able to apply for community radio as a result of the order. I was pleased to hear the Minister say that the situation relating to applications for community radio will be reviewed after two years. It is extremely important that the quite restrictive approach taken in the draft order is examined to establish whether it has a direct effect on community groups in areas making applications.

I do not share the resistance to an element of state funding that has been raised in the Committee. Bearing in mind that the community radio fund is only set at £500,000 for two years, it is essential that other avenues of state funding are available. In Wales, the communities first fund, which assists poorer communities, may be able to aid the development of community radio in such areas. Will the Minister make it clear that there will be no bar to other avenues of funding from state sources? It is important that those should be exploited. Communication within communities is extremely important, and it should be welcomed and extended. Communities are built on the basis of communication; those areas that lack community radio, or local radio, know how important it is.

On the issue of co-operation with other radio stations that was raised by my hon. Friend the Member for Falkirk, East (Mr. Connarty), both BBC and MFM—my local commercial station—have been very supportive of the applications and the effort made by community radio in my area. They consider it to be a possible breeding ground for individuals who are interested in developing the skills needed to move into broadcasting and as a sector with which it could work rather than as a threat. They see the development of community radio as something that can involve schools and people who are learning training skills in the broadcasting sector—a popular one. The potential to work with community radio is very important and one of the most positive aspects of the proposals.

10.39 am

Mr. Clifton-Brown: It is a great pleasure to serve under your chairmanship, Miss Begg. I have a declaration of interest that, in the interests of family harmony, I must make. My daughter was one of the people who recently re-founded the Altered radio in Oxford. Having lived through her experiences of that, I wish to comment on the order.

First, I want to deal with the point made by the hon. Member for Falkirk, East. We will get into great difficulty if licences are rejected on the basis of political correctness or prejudice, because one of the great strengths of this country has, throughout the centuries, been its freedom of speech. Perhaps the Minister can comment on that when she sums up. I think that the hon. Gentleman was fundamentally wrong to say that community radios should not apply to things such as religious groups or, to use the example of my hon. Friend the Member for Henley, to fox hunters. If an activity is legal in this country, I think that it would be perfectly reasonable for people to apply for a community radio to deal with it. I hope that the Minister will say something about that when she sums up.

Many Members have spoken about funding. The community media fund is worth only £500,000. We have received many representations on the matter. For example, the Community Media Association briefing paper says:

”We believe that the limitations in the Order will have to be balanced by a substantial Community Media fund to ensure that communities have a fair chance at establishing viable services that deliver real social gain.”

That is right, but achieving it is difficult. I know from my daughter’s experience that funding is restrictive. Sponsorship is restricted to half the total budget. My daughter was instrumental in setting up a radio station, and she went through the difficulty of getting a licence and the technical difficulties of setting up the radio and staffing it for almost 20 hours a day by students. I thought that it was very successful.
Will the Minister say something about the technical problems? Why are community radios restricted to analogue rather than digital? My daughter’s radio was also available on the web, which is, I believe, a digital method of transmission. With new technologies, I cannot see why community radios should be restricted to analogue. Will the Minister also say something about the cost of regulating community radios? Who will pay for that cost? Will it be her Department?

Will the Minister say something about the definitions of ”social gain”, of which there are eight? My hon. Friend the Member for Henley touched on that. Is it sufficient to meet one of those definitions? It would be helpful if she could say something about that. For the benefit of the Committee, the definitions of social gain are:

”The provision of education and training;
The provision of sound broadcast services to groups that are otherwise underserved;

The improvement of knowledge about a particular community and the strengthening of links within it;

The encouragement of regeneration within a particular coverage area;

The promotion of social inclusion;

The encouragement of participation in cultural activities;

The improvement of knowledge about, and delivery of, services provided by local authorities and other . . . amenities, or

The encouragement of participation in the democratic process”.

Will it be sufficient just to meet one of those criteria?
I am grateful for the opportunity to make those brief comments. In conclusion, I wholeheartedly welcome the order. I also welcome the fact that the Minister will re-examine what many people have suggested are too onerous restrictions in the order to try to help surrounding commercial radio stations. I welcome her assurances that the restrictions will be reviewed in two years.

10.45 am

John McDonnell: May I briefly ask the Minister to clarify the cost of the application? I cannot see any reference to the initial charge for applications.

In 1981, when I was a member of the Greater London council, I chaired and set up the first community radio forum for London through local government. It has taken 23 years to get this far with the development of community radio licensing. However, despite that, the Radio Authority and Ofcom have worked expeditiously, to say the least, because the legislation was introduced only in December and, six months later, we have the regulations. Such speed is not often seen in government, and I congratulate Radio Authority and Ofcom staff on that.

10.46 am

Bob Russell: Can the Minister confirm that, as I understand it, the areas affected by restrictions are geographic. If ”community” means a geographic community, would it not be helpful to spell that out in the order so that everyone would know that? That would, at a stroke, remove the perceived problems that the hon. Members for Falkirk, East, for Henley and for Cotswold (Mr. Clifton-Brown) have made clear. If it is not a geographic community, I foresee the problems that have been envisaged. The Minister should clarify the meaning precisely. Religious communities call themselves just that and if community radio is to mean what it says and if there is not a geographic restriction on community, a religious community could apply.

Mr. Clifton-Brown: The hon. Gentleman has touched on an interesting point. When my daughter set up her radio station, she was limited by the power output, which necessarily limited the geographical area. I would expect—the Minister may confirm this—that ”community” will be defined as a geographical area because of the limitation of power output. Otherwise, there could be interference with other commercial radio stations.
Bob Russell: I appreciate the hon. Gentleman’s point, but I think that a simple definition is needed. What is a community? If it is a geographic community, the order should say so. If it means community in the broader sense of the word, it means exactly what the hon. Members for Henley, for Falkirk, East and for Cotswold have said.

Mr. Johnson: For the sake of clarification, it is specifically set out in the order that ”community” means

”persons who . . . have one or more interests or characteristics in common”

irrespective of their geographic location.
Bob Russell: The debate is widening. Why is there a list of areas affected by restriction of the order? The Minister should firmly clarify today the definition of ”community” because that would answer all the points arising.

In my town and, I am sure, in many other parts of the country, there are successful hospital radio systems that, to the best of my knowledge, are broadcast not over the air waves but down cables. To my mind, those radio stations, many of which have been established for 20 or more years, are as proficient and professional as any commercial radio station. They strike me as ideal candidates for the sort of community radio to which the order refers. Will the Minister comment on that?

Finally, I represent a town that already has four local radio stations, unlike Wrexham, which has none. I do not anticipate that Colchester will be entitled to apply, but I leave a plea hanging in the air for the Minister because one of those four radio stations, which serves the garrison community in Colchester, would very much like, but is barred from having, an FM frequency.

10.50 am

Estelle Morris: This has been an interesting debate. First, I welcome hon. Members’ comments about community radio and its importance. As the hon. Member for Bath (Mr. Foster) said, I should have mentioned the BBC. I did not omit it deliberately, but the debate was about how community radio would affect commercial radio rather than the BBC. I pay tribute to the BBC and to all local radio.

Members of Parliament know, perhaps more than anyone else, the importance of local radio from talking to their constituents. Local radio is the most effective way of communicating with constituents, far more effective than using the national media and, dare I say it, it is often more accurate. However, I shall leave that debate for another day.

On funding, the hon. Members for Henley and for Bath were rather mean in not reading out the rest of the paragraph in the explanatory memorandum. To make it clear for the record, under the heading ”Costs to the public or the Exchequer”, they said that it stated ”None”, but it continues, ”directly arising from the draft Order. However, Ministers have announced that £0.5 million will be available to support community radio . . . Decisions on funding beyond this period will be taken in due course.”

The reason that it states ”none” is because it had already been announced and was from existing Department for Culture, Media and Sport resources. There is nothing in the order that would cause us to spend more Government money than we had already announced. However, that gives me the opportunity to talk more generally about funding.
The key point is that the DCMS or the Government will not be the only source of public funding. It is possible that a radio station could be completely funded from public sources, but not from one public source. No more than 50 per cent. could be taken from one public source, but a number of public funders might contribute to community radio: for example, the local authority, the Department for Education and Skills, which has a commitment to lifelong learning, other Departments, especially the Office of the Deputy Prime Minister, European funds, urban regeneration funds or grants from individuals. Local radio stations might have a plethora of funding from the public purse, but it will not all be from the DCMS or, indeed, from the Government. We do not want more than 50 per cent. to be from one source, because if that is taken away, community radio may collapse.

Mr. Foster: Will the hon. Lady give way?

Estelle Morris: Yes. I suspect that the hon. Gentleman has spotted something in the explanatory memorandum that I have not.

Mr. Foster: I am grateful to the Minister for giving me an opportunity to make it clear that I read out the version of the explanatory memorandum that I was sent. My hon. Friend the Member for Colchester points out that he has a different version of the memorandum, in which the word ”none”, which I quoted, was followed by the words that the Minister read out. There is clearly a problem with communications from the Department about the explanatory memorandum.

Estelle Morris: I assure the hon. Gentleman that we are not so short of resources that we ran out of ink. However, I apologise to him and to the hon. Member for Colchester, who has the same version of the explanatory memorandum as I have. I take back my earlier comments, but I am glad to have been able to enlighten the Committee by reading out the full and proper version of paragraph 25.

The hon. Member for Henley referred to the protection of commercial radio, which is a tough and difficult issue. It is strange that a Conservative Member does not seem to welcome the different activity of injecting competition into the market. I fear that he is becoming a bit over-protectionist.

Mr. Johnson rose—

Estelle Morris: I am happy to give way so that the hon. Gentleman can clarify the matter for the record.

Mr. Johnson: We all welcome competition of all kinds. What is worrying is when a state-subsidised radio can undercut commercial radio by offering advantageous rates to advertisers. That is unfair.

Estelle Morris: It is indeed, which is why we have put restrictions on community radio’s ability to raise money from advertising sources. We are not setting out to create a level playing field; as hon. Members have said, there are different sources. If the hon. Gentleman accepts that, it is difficult to complain about the restrictions that we have included, which is what he did. If he does not believe me, I say to him that I am particularly pleased that the Commercial Radio Companies Association welcomes the structure that we have introduced. It says that community radio

”has the potential to bring great enjoyment and fulfilment to those involved in operating these new stations. The Order sets out an excellent framework for a new tier of radio, and CRCA looks forward to watching the new Community Radio sector flourish.”

I sense that that means that we have got it right as far as commercial radio is concerned.
Responses from both sectors informed the final document. We chose 50 per cent., but it is not always easy to make such a judgment—one could ask why we did not choose 49 per cent., 51 per cent. or 60 per cent. Real politics means that one sometimes has to make arbitrary decisions of that sort, and that is why we want to review the situation after two years.

There are currently not too many complaints from commercial radio. I believe that the commercial radio sector thinks that we have got it about right, which may mean—life being life—that community radio may think that we have not got it quite right. It is a question of balance. However, I think the restrictions on the ability to open a community radio station related to a coverage of fewer than 50,000 adults and the restriction on advertising are right, because community radio has access to public funds. It would be wrong if we were to damage the existing commercial sector by our actions in promoting a new, flourishing form of very local radio. It is not meant to be that sort of competition.

We have asked Ofcom to review the situation in two years not because we think we have got it badly wrong. We think that we have got it right, but that it would be wise to review it because this is new territory. We think that we have got it right, but we need to look at the evidence. I am more than happy to say again on the record that we have asked Ofcom to review the situation; it will do so two years after the first licence has been issued. I do not know what the results of that review will be, but I believe that they will confirm that we have got it right. Only time will tell.

The hon. Member for Henley raised the question of who will decide the allocations for licences. Are politicians ever given the power to decide who has a licence to broadcast? An important part of our activity in the DCMS is that such issues must be independent of Government. Governments composed of any parties currently represented in Parliament would not expect to take such decisions—and I hope that that would not happen in the UK at any point in the future. The first thing that dictators of the left and right have always done is to decide who can broadcast. It is therefore imperative that we have a system in which the Government do not decide on the allocation of licences. Ofcom will decide, and I think that that is right. I am happy—and rather relieved—that Ofcom will have to decide between ”Fat FM”, ”Hound FM” and any other version of community radio.
Mr. Johnson: Does the Minister not consider the criteria on which Ofcom makes those decisions to be a matter of legitimate political concern? The hon. Member for Falkirk, East—who has had to leave the Committee—made a torrential attack on the possibility of creationist radio. What does the Minister think of that? Politicians cannot shirk such questions.

Estelle Morris: It is for politicians, on behalf of the people, to set out guidelines, but it is not for politicians to interfere in the allocation of individual licences. That is why the criteria are set out in article 2(2) and (3), and the hon. Member for Cotswold asked a question about that. A community radio service would have to fulfil all four criteria in paragraph (2), but those in paragraph (3) are optional—there are seven optional characteristics that could determine social gain. Ofcom will have to make the judgment on that, but it will not be easy.

I shall draw out what I think is the most important issue—individuals who are otherwise underserved by such services. It is no good repeating what the BBC and commercial radio do. If fat people were currently underserved by other local services, Ofcom could consider that. For the record, Ofcom will have to make some fine decisions, which could be subject to judicial review, in the same way as those of any other organisation.

I do not, however, share the fears of my hon. Friend the Member for Falkirk, East about religious organisations being able to get licences for community radio. They can, but they are subject to all the other broadcasting provisos. They would be subject to the same code as independent radio stations relating to impartiality, accuracy, standards of tastes and decency and non-denigration of other faiths. Community radio stations operate within that framework. My hon. Friend’s concerns were unfounded. In their licence applications, religious organisations would have to set out the sort of programmes that they would broadcast. If they did not stick to that, they would be fined or would have their licence taken away. Ofcom is a good regulator. Community radio will not act outside the rules that govern standards of taste and decency.

Mr. Clifton-Brown: In my daughter’s case, Ofcom was extremely reasonable. Much negotiation took place and eventually a licence was granted that was acceptable to Ofcom. Exchanges have taken place this morning with the hon. Member for Falkirk, East, and there may come a point at which a licence is refused. What will be the appeal mechanism? The Minister has signed a declaration that the order complies with the Human Rights Act 1998. As she knows, under that Act, there has to be a proper mechanism of appeal. I do not think that judicial review is a proper mechanism. It is extremely time consuming and expensive and it would not be available for most of those applying for a community radio licence. They simply would not have the resources.
Estelle Morris: I am advised by lawyers that judicial review is a perfectly acceptable means of appeal. All Ministers know that it can be exceptionally effective. We all have stories to tell about having lost a case at judicial review. Ofcom is not about to grant 1,000 licences for community radio in the same month. It will be a gradual process. There will always be competition for that bit of wavelength, and it is not a universal right to set up a community radio station. We are not challenging the nature of the legislative framework. Not everybody will get this. It will be for Ofcom to make the decisions. If it is thought to have acted outside its legal framework, it will be subject to judicial review. The hon. Gentleman does not feel that that is right, but I can say no more than that. My advice is that judicial review is perfectly acceptable.

The hon. Member for Bath drew attention to paragraph 3 in schedule 1. I picked that out too as it seemed to go contrary to the changes that we have made since the draft order. Indeed, the new order tries to stop community radio stations having to make a judgment about whether they will have an impact on commercial radio stations. Under the original legislation such stations provide information to Ofcom so that it can make that decision. It is not up to an applicant for a community radio station to get the information and to make that judgment.

The order does not apply to digital radio. Interestingly, that was another point that I spotted when I first looked at the order. Analogue is probably better for the audiences that community radio stations are likely to serve. In view of the current penetration of digital radio into the market there would probably not be any applications for digital licences. I am not hugely technical—I am barely technical at all—but I think that digital radio stations broadcast further than analogue stations, which might make the definitions more difficult. The hon. Member for Cotswold was absolutely right that the order does not apply to digital radio. If it were thought that community radio stations might want to apply for digital licences, it would be the subject of a separate order.

I have tried to answer all the questions.

Bob Russell rose—

Estelle Morris: Obviously I have not succeeded.

Bob Russell: I thought that my question was relatively simple. How is ”community” defined? Does it mean geographic communities or communities of interest? I suspect that communities of interests may invite the creation of radio stations by groups that may engage in the sort of problem areas to which the three hon. Members referred earlier.

Estelle Morris: I should have referred specifically to the hon. Gentleman’s, but I tried to include the answer in my general comments. Community can be used in both senses: geography and interest. If community radio overlaps with existing commercial radio, that is a case of a geographical community—the part of the country that is broadcasted to. However, community is defined in article 2 of the order and should most importantly refer to individuals otherwise underserved by radio services. Ofcom will have to use an element of judgment about whether it thinks that an application for a community radio licence fulfils the criteria in paragraph 2.
If I had to choose between community referring to geography or something else, I would say that it relates to a community of interest; the fact that those individuals are drawn together shows that they were previously underserved. Equally, because of the distance over which the station will broadcast, the individuals are likely to be in a similar geographical area anyway. It is genuinely not an easy differentiation to make.

Mr. Foster: I am conscious that time is tight, but I ask the Minister to comment specifically on an area in which there is clearly a shortage of provision for a particular interest group: children. Would it be possible, under the order, for a channel for children to be established? If so, would it be eligible to apply for money from the £500,000 fund?

Estelle Morris: Yes, because I think that children are particularly underserved by radio. The statistics on the numbers of children listening to radio are not good and we could do more work on that. If my memory serves me, I mentioned in my opening comments a community radio station in Leicester that is run for and by children. Having said to the hon. Member for Henley that politicians should not get involved, I will be careful, but my personal view is that children would fulfil the criteria for an under-represented group.

Mr. Johnson: May I quickly ask the Minister whether she thinks that creationists or fox hunters would fulfil those criteria? Does she agree that, in principle, there is no reason why Ofcom should not grant them a licence under the order?

Estelle Morris: I knew that I had made a mistake in answering a question on one specific group because it means that another one is brought up. Creationists could apply, but whether a licence is granted would be a matter for Ofcom. However, the question about creationists, as opposed to fox hunters, brings up the more generic issue of religious groups. I have been on Radio Ramadan in Birmingham, which was run on a short-term licence by Muslims in Small Heath adjacent to my constituency. Religious groups are already granted short-term licences for broadcasting, so creationists will be eligible to apply for a community radio licence. However, that will be subject to the non-denigration of other faiths and the other things to which I have already referred.

Finally, it will be for Ofcom to determine costs. I hope that I have answered most concerns of members of the Committee and that the order will receive their approval.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Community Radio Order 2004.

Committee rose at eight minutes past Eleven o’clock.

The following Members attended the Committee:
Begg, Miss Anne (Chairman)
Buck, Ms
Clifton-Brown, Mr.
Connarty, Mr.
Foster, Mr. Don
Gerrard, Mr.
Johnson, Mr. Boris
Lucas, Ian
McDonnell, John
Morris, Estelle
Murphy, Mr. Denis
Russell, Bob
Ryan, Joan
Spink, Bob
Stoate, Dr.