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Mr. Mellor : I have spotted the hon. Gentleman, so he need not worry --in the interests of giving the ITC and prospective franchise applicants a fair chance to do the proper job that we want them to do in weighing up the various quality bids. That is where matters stand.

Mr. Grocott : The Minister has been critical of present networking arrangements. They have not been perfect, but I think he would agree that they have produced outstanding programmes. We are in great danger of putting such programming at risk. He is asking us to take it all on trust and somehow a networking arrangement will come about, but what if that does not happen? What policing does he envisage if there is a free-for-all between the new companies? The new system is so unpredictable that there is no guarantee against a free-for-all. Therefore, what guarantees can he give us that there will be a networking arrangement under the proposals that he has in mind?

Mr. Mellor : The best guarantee is that it is impossible to envisage Channel 3 without a networking arrangement. We must not assume that those who will be running Channel 3 are too foolish to recognise that. I believe that they do. The hon. Gentleman should remember that the issue is who should call the shots on the arrangement. He commends the old arrangement-- fair enough--but he should remember that it emerged by agreement between the companies and was not imposed on them. I am arguing against the need for the ITC to impose a networking arrangement on them.

The old magic circle of five kept out many companies that had a proven capability to make programmes, and


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those companies resented that and squealed about it. Many other people saw the force of that. That is why there is a competition issue involved, and the key question is what role should we assign to the ITC, and what role to the OFT and fair trading regulations more generally. That is the difficulty we have to resolve.

I think that the hon. Member for Great Grimsby is right. In the longer run it would be best to leave it to the companies to determine these matters, as they determined the earlier ones, subject to the right of intervention on competition grounds. By the way, clause 2 gives that right to the ITC, as well as to OFT, on the basis of ensuring fair and effective competition.

What particularly exercises my mind is the need to massage the transition from one set of franchise holders to the next by virtue of setting out a clear networking arrangement for a transitional period. We are still deliberating within Government on that issue. I am sorry it has not been possible to conclude those discussions for the Report stage. Of course, it will have to be scrutinised in the other place and we will have plenty of opportunity to consider the matter when the Bill comes back, so we are not attempting to keep the House out of the discussions.

6.30 pm

Sir Giles Shaw : My hon. and learned Friend has reassured the House. He has agreed that there is a need for a transitional arrangement which will provide a networking arrangement which would be viable for the ITC and at least prospective for every bidder. May I encourage him to recognise that the context in which the cartel became such an obvious restrainer of trade was largely the monopoly of ITV? There will be a much broader competitive base for television than in the past. That in itself will make the market easier. I certainly commend the view expressed by my hon. and learned Friend that ITC should not be the arbiter of what is anti- competitive. The Office of Fair Trading should be the regulator where the market will be more widespread than before.

Mr. Mellor : I am grateful to my hon. Friend. The debate has been helpful. I am sorry that I cannot finally make a categoric statement on how the Government propose to manage the transition. I hope that I have shown sufficient recognition of the problem that those who tabled the new clauses will not feel that they need to press them to a vote.

Mr. Corbett : I have listened with interest to the Minister--

Mr. Deputy Speaker (Sir Paul Dean) : Order. I understand that the hon. Gentleman has already spoken, so he will need leave to speak again.

Mr. Corbett : I beg your pardon, Mr. Deputy Speaker. With the leave of the House, may I say that I have listened with care to what the Minister said. I must confess to being puzzled. I should have thought that an expression of view on one or other of the proposed new clauses might have concentrated the minds of the present ITV licence holders and encouraged them to come up with the voluntary arrangement which the Minister supports, certainly as a transitional arrangement. We are left with the dilemma


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that, without something along those lines being written into the Bill, the best that can happen is that the ITC can give a clear steer. I do not think it satisfactory to leave matters in that way. The Minister and some of his hon. Friends have exposed a difference between us, and it is well to have it out in the open. In our view, this is not a matter of competition policy. There is a competition aspect to it in the sense that any networking arrangement ought to be open and fair. In one breath the Minister is talking about the present rotten arrangement, which at least is voluntary, yet he wants to leave the companies to get on with it so that they may come up with something better. In the trade that is known as an each way bet.

I understand the narrow point about competition aspects, but essentially it should not be about competition policy. It is all to do with the quality of what people can see on their television screens. The quality of range and diversity which we should look to a networking arrangement to deliver will come only on the back of proper funding and proper investment in training and facilities, and in proper investment as well in the new writers who, we hope, will be increasingly attracted to use the medium. The Minister will recall that I have a narrow, vested, sordid family interest in these matters, but I put it in a much wider context. Not a few of those whose works appear regularly on our television screens have been encouraged by initial amounts of development money from television companies, some quite properly in the ITV sector. It is rare that someone can deliver a script and have it accepted straight away. That is why it is much more a matter of quality investment than one narrow aspect of competition policy.

I had hoped that the Minister would look favourably upon one or other of the new clauses, the better to encourage a voluntary arrangement which would have to be overseen by the IBA in the process of awarding the licence. I am sorry that the Minister has not chosen to do so. I anticipate that the hon. Member for Caithness and Sutherland (Mr. Maclennan) will have something to say on the matter.

Mr. Maclennan : I listened with great interest to the Minister. He has taken discussion of the matter a good deal further--although not, I regret, to conclusion. It is remarkable that we should allow the Bill to depart from this House to another place with no real certainty about what is regarded by the chairman-elect of the IBA/ITC, Mr. George Russell, as a matter of crucial importance to the success of the new scheme.

We have had a direct plea for a transitional arrangement and a positive response from the Minister on the need for such an arrangement, but a new idea has been floated today that that should involve the Office of Fair Trading, perhaps. I find that disturbing. It would not be likely to ease the task of the new regulatory authority if another regulatory body could inject its thoughts into the extraordinarily difficult task of allocating franchises to set up the new Channel 3. It would be a colossally difficult complication for the ITC, and perhaps not one on which the Office of Fair Trading could bring any expertise to bear in seeking to decide the competition aspect.

The hon. Member for Birmingham, Erdington (Mr. Corbett) is right : it is not primarily a matter of competition policy ; it is a matter of making sure that the most appropriate programmes are made regionally and seen


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nationally. Although there are competition issues, they are secondary. I hope that the Minister will have that in mind in deciding whether or not the Office of Fair Trading should be involved.

I do not altogether hold it against the Minister that he has not come forward today with a final scheme. I think that he had been looking to the companies to provide him with a scheme. The very fact that they have not done so makes it clear how difficult it is and how important that it should be got right. I think that the ITC will need a fallback power if the companies do not come up with something. It may be needed beyond the transitional period which the Minister seems willing to concede. That may be needed to ensure that the cartel, which the Minister clearly did not like and about which he spoke disparagingly, does not re-emerge.

It was interesting to hear the Minister talk about the possibility of the ITC utilising the guidelines as a means of giving a steer in the matter. I suppose it is possible that the commission could use its powers to attach conditions to the granting of a franchise licence which, in effect, set up a network arrangement. However, that would not be a desirable way to approach the matter. It is better to look at such things in the round and for the ITC to take a proposal only as a fallback in the event of the companies not being able to agree something themselves. I hope that, by putting this clear support to a transitional arrangement on the face of the Bill, the Minister is not at the same time setting his face against a fallback power to set up a network arrangement in the absence of such an arrangement being agreed to the satisfaction of the ITC.

Because of the importance of this matter, and as this may well be the last opportunity that the House has to deal with it, it is necessary for us to register our concern by dividing the House. The Minister may be right, and perhaps there will be delivered from another place an amendment that gives us the opportunity to discuss the matter again. However, we may not have such an opportunity, and we must send a signal to the other place that we attach great importance to this. We must also send a signal to the companies that, if they do not come up with a satisfactory arrangement, it is imperative that an arrangement be imposed upon them.

Mr. John Greenway rose--

Mr. Deputy Speaker : Order. The hon. Gentleman has spoken and he would need the leave of the House if he wished to speak again.

Mr. Greenway : By leave of the House. I shall be brief. I am disappointed that the hon. Member for Caithness and Sutherland (Mr. Maclennan) seeks to divide the House, because the commitment given by my hon. and learned Friend the Minister shows that he recognises that there must be a network arrangement. It would be better to allow further progress on the discussions to which my hon. and learned Friend referred.

Question put, That the clause be read a Second time :

The House divided : Ayes 159, Noes 282.

Division No. 193] [6.42 pm

AYES

Allen, Graham

Anderson, Donald

Armstrong, Hilary

Ashley, Rt Hon Jack

Ashton, Joe

Banks, Tony (Newham NW)

Barnes, Harry (Derbyshire NE)

Barnes, Mrs Rosie (Greenwich)

Barron, Kevin

Battle, John


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Beckett, Margaret

Beith, A. J.

Benn, Rt Hon Tony

Bennett, A. F. (D'nt'n & R'dish)

Bermingham, Gerald

Bidwell, Sydney

Blair, Tony

Blunkett, David

Boateng, Paul

Boyes, Roland

Brown, Gordon (D'mline E)

Brown, Nicholas (Newcastle E)

Buchan, Norman

Buckley, George J.

Caborn, Richard

Callaghan, Jim

Campbell, Menzies (Fife NE)

Campbell-Savours, D. N.

Canavan, Dennis

Cartwright, John

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Crowther, Stan

Cryer, Bob

Dalyell, Tam

Darling, Alistair

Davies, Rt Hon Denzil (Llanelli)

Davis, Terry (B'ham Hodge H'l)

Dewar, Donald

Dixon, Don

Duffy, A. E. P.

Dunnachie, Jimmy

Dunwoody, Hon Mrs Gwyneth

Eadie, Alexander

Eastham, Ken

Ewing, Mrs Margaret (Moray)

Fearn, Ronald

Fisher, Mark

Flannery, Martin

Flynn, Paul

Foot, Rt Hon Michael

Forsythe, Clifford (Antrim S)

Foster, Derek

Foulkes, George

Fraser, John

Fyfe, Maria

George, Bruce

Gilbert, Rt Hon Dr John

Golding, Mrs Llin

Gordon, Mildred

Gould, Bryan

Grant, Bernie (Tottenham)

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Heal, Mrs Sylvia

Hinchliffe, David

Hogg, N. (C'nauld & Kilsyth)

Home Robertson, John

Hood, Jimmy

Howells, Geraint

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, John (Coventry NE)

Hughes, Roy (Newport E)

Hughes, Simon (Southwark)

Illsley, Eric

Ingram, Adam

Janner, Greville

Jones, Martyn (Clwyd S W)

Kaufman, Rt Hon Gerald

Kennedy, Charles

Kilfedder, James

Kinnock, Rt Hon Neil

Lewis, Terry

Lloyd, Tony (Stretford)

Lofthouse, Geoffrey

McAllion, John

McAvoy, Thomas

Macdonald, Calum A.

McKay, Allen (Barnsley West)

McKelvey, William

McLeish, Henry

Maclennan, Robert

McWilliam, John

Madden, Max

Mahon, Mrs Alice

Marek, Dr John

Marshall, David (Shettleston)

Martlew, Eric

Maxton, John

Michael, Alun

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Arg'l & Bute)

Mitchell, Austin (G't Grimsby)

Molyneaux, Rt Hon James

Moonie, Dr Lewis

Morgan, Rhodri

Morley, Elliot

Morris, Rt Hon A. (W'shawe)

Mowlam, Marjorie

Murphy, Paul

Nellist, Dave

Oakes, Rt Hon Gordon

O'Brien, William

O'Neill, Martin

Orme, Rt Hon Stanley

Pendry, Tom

Pike, Peter L.

Powell, Ray (Ogmore)

Prescott, John

Primarolo, Dawn

Radice, Giles

Rees, Rt Hon Merlyn

Reid, Dr John

Richardson, Jo

Robertson, George

Rooker, Jeff

Ross, Ernie (Dundee W)

Rowlands, Ted

Sedgemore, Brian

Sheldon, Rt Hon Robert

Skinner, Dennis

Smith, C. (Isl'ton & F'bury)

Smyth, Rev Martin (Belfast S)

Snape, Peter

Soley, Clive

Spearing, Nigel

Steinberg, Gerry

Strang, Gavin

Taylor, Mrs Ann (Dewsbury)

Turner, Dennis

Vaz, Keith

Walker, A. Cecil (Belfast N)

Wallace, James

Walley, Joan

Wardell, Gareth (Gower)

Watson, Mike (Glasgow, C)

Welsh, Michael (Doncaster N)

Wigley, Dafydd

Williams, Rt Hon Alan

Williams, Alan W. (Carm'then)

Wise, Mrs Audrey

Worthington, Tony

Wray, Jimmy

Tellers for the Ayes :

Mr. Frank Haynes and

Mr. John McFall.

NOES


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