My Lords, I hear often talk about how we need an assembly of the nations and regions, but, as the noble Lord, Lord Bassam, has said, we have
had a great display of that today from your Lordships’ Committee, with contributions from across the United Kingdom.
As I set out on our first day in Committee, His Majesty’s Government are committed to stimulating growth in our world-leading production sector throughout the length and breadth of the UK. As the noble Lord, Lord Wigley, pointed out, there is a long and proud tradition of that happening across the UK; he gave many examples from Wales, understandably, and pointed to the north of England as well. We have this month lost Gudrun Ure, who played the eponymous Super Gran—a production I enjoyed in my childhood, made by Tyne Tees Television and filmed along the north-east coast in Whitley Bay, Cullercoats, Tynemouth and many other places. It was a powerful example of the emotional pull of TV production in inspiring tourism and encouraging people to visit but also in bringing production closer and, I hope, awakening sparks in people wherever it is made.
As noble Lords have alluded to, it is important to point out that the picture at the moment is a strong one. In 2022, all of our public service broadcasters exceeded their regional production quotas, and some significantly so. We have seen good and significant growth in production outside England and outside our capital. Production spending in Scotland is now worth over £266 million, supported by developments including Channel 4 opening one of its creative hubs in Glasgow in 2019. Television production in Wales continues to make impressive strides forward, with the proportion of hours of BBC content produced in Wales increasing year on year, in part thanks to major productions such as “Wolf” and the rest of the menagerie of animals that my noble friend Lady Bloomfield of Hinton Waldrist mentioned. Northern Ireland’s production industry is making a significant contribution, as shown by the rise in hours of content produced there and broadcast on public service broadcasters, which has increased consistently over the past five years. The BBC, Channel 4 and Channel 5 all increased their production expenditure in Northern Ireland in 2022. The growth in production outside London in recent years is a great success story, and our public service broadcasters have been one of the significant contributors to that growth.
We are also encouraged by commitments to go further, such as the BBC’s pledge in its BBC Across the UK strategy to increase its production expenditure outside the capital to 60% by 2027, and Channel 4’s pledge to continue to spend 50% of its main channel commissioning budget outside London. However, it is right that we keep this progress under review, and I welcome the opportunity we have had to debate these issues this afternoon, thanks to the amendments that have been tabled in this group.
Let me start by addressing Amendments 16 and 17 in the name of my noble friend Lady Fraser of Craigmaddie and acknowledge the support that she expressed on behalf of the noble Baroness, Lady Foster of Aghadrumsee, with whom I have had the opportunity to discuss some aspects of the Bill outside the Chamber. The regulatory system proposed in the Bill will continue to support the success of the industry in several ways.
The Bill is explicit in Clause 1 of its intention to recognise the need for programmes produced outside London through our new public service remit. Underpinning this is the detailed system of quotas on which this amendment focuses. This system already creates the mechanisms to hold public service broadcasters to account, and the success of the UK production sector demonstrates this.
The level of these quotas is set by Ofcom, which has broad powers to amend them as it sees appropriate. Should the success of the UK production sector not continue, Ofcom has the power to take action. It could, for example, increase regional production quotas over time, in much the same way as envisaged by the amendments that my noble friend has proposed, or it could tie the quotas to population shares. I can see why it might be tempting to pre-empt or constrain Ofcom’s consideration of these matters and to legislate directly as these amendments suggest and as the noble Viscount, Lord Colville of Culross, set out in his contribution.
I agree with the noble Viscount that there is an important role for Parliament. We are all grateful that the chairman of Ofcom, the noble Lord, Lord Grade of Yarmouth, is in your Lordships’ House and is in his place to hear these debates. Even if he were not a Member of your Lordships House, Parliament has the opportunity to express its views directly and indirectly through the Select Committees and through my department. I hope the noble Viscount would agree that it is also important that Ofcom can act with agility in this dynamic and often fast-changing sector.
It is essential that Ofcom has the flexibility to calculate regional quotas on broadcasters independently, weighing the evidence and balancing the different equities in the sector. That approach allows Ofcom to alter quotas smoothly over time to react to developments that it sees. As the financial position of both the public service broadcasters and the sector more broadly changes over time, we want Ofcom to be able to take this into account and adjust quotas accordingly, without the need for primary legislation on each occasion.
However, I reassure noble Lords that I, and my colleagues in DCMS, have heard the strength of feeling on this issue from the sector, particularly in relation to Channel 4’s “out of England” quota, which is set at 9% of eligible programmes and expenditure. I note that Ofcom is currently consulting on the terms of Channel 4’s next licence, which will come into force from 1 January next year, and also that Channel 4 has said that it would support a managed and carefully considered increase to its programme-making commitments in the other home nations. His Majesty’s Government look forward to the outcome of the licence renewal process and seeing how the sector’s concerns have been addressed.
For our part, the Government will continue our broad support for the screen industries across the United Kingdom through generous tax reliefs, as we saw in the last Budget and previous ones, through investment in studios such as the Crown Works Studios, which the right Reverend Prelate the Bishop of Newcastle rightly reminded us of, supporting innovation and promoting independent content through the UK Global Screen Fund.
We want to see the production sector continue to thrive. When it comes to our public service broadcasters’ contribution to that goal, we believe that the existing system of regional production quotas, which, as I say, our public service broadcasters can and do exceed—some of them significantly—remains the best way to continue to drive the growth that we have seen in recent years in every part of the UK.
For these reasons, I am not able to accept the amendments that my noble friend Lady Fraser of Craigmaddie has set out, but I accept the invitation that the noble Lord, Lord McNally, reiterated on her behalf and, if I may, I extend it to the noble Lord, Lord Grade, or one of his colleagues at Ofcom, so that we can talk in more detail and, I hope, seek to reassure her further about how the existing system provides for the concerns that she has set out.