UPDATE

Conservatives in short opposed:

1)     Clause 1. This adds an unnecessary duty to Ofcom.

2)     Clause 29. This allows for the creation of Independently Funded News Consortia (IFNCs) which prop up regional news with tax payer subsidy when we should be looking at long term financially sustainable measures to support local news.

3)     Clause 43. This tries to create a system that would unlock a large amount of digital content primarily held by the BBC and the British Library whose ownership is unknown. It has crucial implications for copyright owners.

We approve of all other measures including:

1) the move towards digital radio (but not a set 2015 switchover date)

2) measures to tackle online piracy (provided there is due process prior to anyone being cut off; this is estimated to take a minimum of two years)

3) single age rating system for video games so that it is clear which games are suitable and

4) updating Channel 4’s remit to ensure it is appropriate for the digital age

More details

 Hunt: It’s time to reboot Britain and only the Conservatives can deliver that

Speaking today during the Second Reading of the Digital Economy Bill, Shadow Culture Secretary, Jeremy Hunt will say:

“This afternoon, on the very day time has finally been called on a weak, dithering and incompetent government, we are faced with a weak, dithering and incompetent attempt to breathe life into Britain’s digital economy.

But you have to admire their chutzpah.

One of the Government’s 5 key election pledges is apparently to build a high tech economy.

Well this afternoon the country will be able to judge them by their record, because we have an entire parliamentary bill setting out their vision. The very last bill this House will debate.

But instead of a big, ambitious vision for this country we have digital disappointment of colossal proportions.

Perhaps we should look at some of the things this Bill does not contain.

It is a catalogue of ducked decisions.

They ducked sorting out digital radio switchover, giving ministers the power to switch over in 2015 – yes - but without taking any of the measures necessary to make it practical or possible.

They ducked reforms to help our struggling local newspaper and radio sector when local newspapers are closing every week and local radio stations are losing so much money their very existence is being cast into doubt.

They ducked reforms to give Britain a credible path towards a next generation broadband network, leaving us languishing with the one of the slowest broadband networks in the developed world.

The ducked public service broadcasting reform, failing both to clarify the limits to commercial activity by the BBC and failing to ensure it has strong competition from an independent sector that will still be burdened by outdated regulations.

And where they have suggested change, all too often they have resorted to the Labour comfort zone of tax, regulation and subsidy as the answer to every problem.

On tax, there is a phone tax to pay for next generation broadband – even though such a tax could make broadband unaffordable for up to 200,000 people.

On regulation, the dependence is so heavy that Ofcom is mentioned 187 times in just 50 clauses in this Bill. Ofcom appears in 27 of the 50 clauses.

On subsidy, there is the misguided attempt to prop up ITV regional news by tapping the BBC licence fee.

As a former US president once said “the trouble with government is that it always thinks ‘if it moves tax it; if it’s still moving regulate it; and if it stops moving subsidise it.’”

Well here it is: new Labour new taxes, new Labour new regulations, new Labour new subsidies. New thinking this isn’t. A new economy this isn’t either.

There is something else about this bill that will concern not just opposition parties but all sides of the House.

Why has debate on such a critically important bill been left to the very last minute, avoiding all possibility of effective line by line scrutiny in committee stage by this house?

The government could have brought this before parliament ages ago because these issues have been in the public domain for years.

Tanya Byron told the Government a new age rating system for video games was needed two years ago.

The Gowers Review of Intellectual Property suggested Government should legislate to tackle peer to peer file sharing nearly four years ago.

And Ofcom warned the Government that “a new model of PSB regulation will need to emerge” six years ago.

As the government has progressively run out of steam, we have had a lighter and lighter parliamentary timetable.

But instead of getting on with it, we have endless dithering and prevarication.

We have had two public service broadcasting reviews.

We have had two consultations on community radio; two on the phone tax; two on product placement; one on video games, one on regional news, one on listed events; and one on spectrum. 

When Stephen Carter took over the broadcasting and communications brief, we hoped it might change.

Instead of which, when he published his Digital Britain Final Report, and we had another 12 consultations.

And even he, despite accepting a peerage, was not prepared to stay even 12 months to see his report turned into legislation.

You see I agree with the Secretary of State about the critical importance of the creative and digital industries.

The largest independent TV production sector in the world.

The second largest music exporter in the world.

The third largest film and video games industries depending on which measure you use.

So when we desperately need to rebuild our economy in proven areas of British competitive advantage, what sort of a way is it to treat them like this?

And what sort of a way is it to treat parliament like this, denying us the chance to debate, scrutinise and amend this vital legislation?

So let me say to the government plainly, whilst we recognise that some parts of this Bill will have to be allowed through in the wash up if we are to avoid serious damage to the economy, other parts to be totally unacceptable and we will use every parliamentary means at our disposal to remove them.

Let’s look at some of them.

1. Ofcom duties

The additional duties placed on Ofcom by clause 1 are at best unnecessary and at worst completely distorting.

The duty to promote investment in communications infrastructure is already covered in the Communications Act 2003 which gives Ofcom a duty to encourage “efficient investment in infrastructure.” Even the Chief Executive of Ofcom seems to agree when he told the Business Select Committee that “The notion that we do not concern ourselves with investment and infrastructure is obviously not the case; we do do that”.

Indeed following a year long campaign by the Conservatives – and no support from the government - they did just that by announcing recently a consultation to allow others access to BT’s ducts and poles to lay superfast broadband fibre.

But where in this Bill are the measures to allow access to sewers, water mains and electricity pylons? Where are the measures to make it easier to get planning approval for fibre? Where are the measures to regularise business rates so they do not discourage investment in fibre?

They aren’t there. Because for this government the answer is not to do something but to lay yet another regulatory duty on Ofcom. That duty is unnecessary, bureaucratic and costly and it will go.

2. IFNCs

Another area of the Bill that is fundamentally flawed are the government’s plans for regional news. This Bill makes provision to subsidise ITV regional news by accessing the licence fee.

Our starting point should be that local media is in crisis. Local newspaper and commercial radio groups are under severe pressure and we have never had proper local television in this country.  London Ontario has 2 local TV stations despite being one twentieth the size of our London, which has none. Birmingham Alabama has 8 local TV stations despite being four times smaller than our Birmingham, which has none.

Will the Bill sort this out? No it won’t.

Instead government subsidies will solidify the old, failed regional news model encouraging media groups to put all their energy into lobbying for more subsidy rather than finding models that attract viewers and listeners in the market place.

Instead of measures that stimulate investment, innovation and change we have regulation and subsidy so flawed that even ITV now thinks it will make a bad situation worse. They are right – and this clause will go.

3. Extended licencing

Another area that is fundamentally misconceived is the clause on orphan works and extended licencing.

We share the government’s desire to unlock the significant amount of content that public institutions such as the BBC, the British Library and many universities currently struggle to clear the rights to. Much of this content cannot be attributed and counts as orphan work – so unless we sort that out we will not be able to unlock enormous public benefit.

But as they stand, these measures will allow internet pirates to grab images and film from BBC and British Library archives, strip them of their identifying marks, claim them as orphan works and use them without permission.

On a small scale this has already started happening.

None other than the image of Lord Mandelson himself is apparently being used to market a Russian vodka with the caption "When only the very best is good enough." If ever we needed proof that captions can be misleading on pirated images then surely this is it. 

The section on extended licensing regimes is even worse. In this case even if the rights holder is known, content can be used without their permission.

We cannot therefore support these provisions as they currently stand. But what an opportunity wasted – with proper parliamentary debate there would perhaps have been time to work out a solution. Digital dithering followed by copyright carelessness is no way to legislate for the vital interests of our creative industries.

So yet again a Conservative government will have to lead a proper review of copyright law in the digital age.

There are other parts of the Bill that we will reluctantly let through.

Digital piracy is a very real problem for our creative industries. One that the Government has neglected since it first looked at the issue in 2006.

We are not sure whether the measures contained in this Bill will be effective, but we do accept that action needs to be taken to ensure the internet is a functioning market place and that copyright infringers do not get away with their actions scot free.

But here again proper scrutiny in this House would undoubtedly have allowed the legislation to be improved and made more workable – and many outside as well as inside this House are deeply disappointed this has not been allowed to happen.

So what should today’s Bill have contained?

It should have asked one simple question.

What needs to be done to stimulate investment in Britain’s digital and creative industries both by domestic and international companies?

Companies that thrive in the digital world tend to be small, nimble and fleet of foot. They thrive on competition and deregulation – not subsidy and regulation.

So a Conservative government will end the micro-regulation of the broadcasting sector.

We will stimulate investment in a new generation of local television, radio and newspaper companies by removing the cross-media ownership rules at a local level.

Because we want these companies to employ more people, we will reverse the tax on jobs which the government plans through increasing National Insurance.

But we will go further, encouraging job creation by saying that start up companies need pay no national insurance at all on their first 10 employees for the first year.

And we will reduce corporation tax by simplifying complicated allowances, aiming for Britain to have one of the most competitive tax rates in Europe.

This will help all companies. But in the creative and digital industries people need something more, which is a proper digital infrastructure.

So by deregulating access to BT’s ducts and pipes, as well as water mains, sewers and pylons, we will stimulate investment in next generation broadband by other players.

Where the market will provide, we will let it. Where it won’t, we have said we will continue with the levy on the licence fee currently happening for digital switchover to ensure no one is left out of the digital revolution, especially in rural areas.

In short Mr Speaker we could have had a proper Digital Economy Bill. We wanted an iPod but got an Amstrad. We wanted digital switchover but ended up with analogue switch-off.

It’s time to reboot Britain and only the Conservatives can deliver that.”

ENDS