House of Commons Hansard Debates for 9 May 1990

Schedule 2

Restrictions on the Holding of Licences

Mr. Mellor : I beg to move amendment No. 315, in page 138, line 29, after means', insert

a director of that body corporate, or'.

Mr. Deputy Speaker : With this, it will be convenient to discuss Government amendments Nos. 316, 317, 345, 346, 349 to 353 and 318 to 320.

Mr. Mellor : Amendments Nos. 315, 316, 317 and 345 are minor technical amendments to part I of the schedule. The other amendments in the group deal with the undertakings which I gave in Committee about religious ownership ; they allow the ITC to waive the disqualification of religious bodies, in the case of licences, to provide non-domestic satellite services and licensable programme services. We discussed the issues in detail last night on the new clause tabled by my right hon. Friend the Member for Selby (Mr. Alison). I hope, therefore, that the House will accept the amendments as sensible and in line with well-known principle.

Mr. Darling : As the Minister has said, we welcome the vast majority of these amendments, and agreed them in Committee. I should like to ask a question about

Column 205

amendment No. 352. Quite clearly, the idea is that, when dealing with religious organisations, the commission can at its discretion waive the normal requirements about restrictions on ownership. What criteria are to apply, and where might one find them? Plainly, there is no intention of preventing an elder in the Church of Scotland or a similar officer in the Church of England from being a director of a company. However, does it go rather further?

It would be helpful if we knew the consideration that the commission would have to apply. We have no objection to the amendment, but it might lead to some difficulty. It would be as well to know the precise position, because it might be necessary to tidy up the matter in another place.

Mr. Mellor : I ask leave of the House to speak again. The hon. Gentleman is quite right to raise this matter, and I am happy to make the position clear. For the reasons that I gave last night, there must be some filter mechanism to prevent either religious cults or unacceptable American religious broadcasters from taking advantage of an amelioration of the rules for religious broadcasting that are designed to benefit the mainstream of religious groups in the United Kingdom. The amendment provides that mechanism, and gives the ITC unfettered discretion to use its judgment reasonably about who to accept and who to reject.

We tinkered with a whole range of ideas about how to provide criteria for the exercise of that discretion. We concluded that it would be much more sensible to rely on the good sense of the ITC to separate the sheep from the goats. The obvious intention is that the ITC would permit mainstream religious groups to take advantage of the new arrangements but would not hesitate to act against organisations such as the Unification Church.

I say again that, with a cheek that I find baffling, the director general or whatever he calls himself of the Unification Church had the temerity to write to The Times saying that Britain needed the stimulus of the religious uplift that would be provided by Moonie television or radio. I trust that I carry the House with me when I say, "No thank you very much." These arrangements, if properly carried through--as I am sure they will be by the ITC--will ensure that that does not happen.

Mr. Darling : I entirely agree with the Minister and, on balance, I see no alternative to giving the ITC the discretion that he wants to give it. Difficult cases which are not as clear cut as the Moonies against the Church of England may arise ; it may be necessary for the ITC to publish the criteria, because it may be taken to court, and there is the possibility of judicial review. The Minister should think about that, because it may be necessary to have another look at the matter before the Bill completes all its stages.

Mr. Mellor : That intervention is helpful. If the hon. Gentleman or any hon. Member has the answer to the conundrum about how we could sensibly fetter the discretion, I should be interested to hear it. Such matters can be further attended to in later stages of the Bill. The ITC will have to make a whole host of difficult judgments on, for example, the rules about religious advertising and religious sponsorship. There is nothing to stop the ITC

Column 206

publishing guidance--and every reason to think that it should--showing clearly how it intends to exercise its discretion. I think that the ITC will do that.

Amendment agreed to.

Amendments made : No. 316, in page 139, line 22, leave out taken into account as a relative or' and insert

regarded as a relative or taken into account'.

No. 317, in page 139, line 31, at end insert--

and, where any such reference has been amended by an order under this Schedule varying the percentage in question, this sub-paragraph shall have effect in relation to it subject to the necessary modifications.'.

No. 345, in page 140, line 5, leave out from 4' to House' in line 6 and insert

An order under this Schedule shall not be made by the Secretary of State unless a draft of it has been laid before and approved by a resolution of each'.

No. 346, in page 140, line 32, after to', insert (e) and'.-- [Mr. Mellor.]

Mr. Roy Hattersley (Birmingham, Sparkbrook) : I beg to move amendment No. 363, in page 140, leave out lines 40 to 44.

Mr. Deputy Speaker (Sir Paul Dean) : With this it will be convenient to discuss Government amendments Nos. 347 and 348.

Mr. Hattersley : I move the amendment in part in preparation for an amendment on a similar and related subject--ownership and concentrated ownership which I hope we shall debate later. I move it in a spirit of inquiry rather than by way of condemnation in the hope that the Minister will explain the exact purpose of the words that I seek to delete from schedule 2.

Let us not mince words. As I understand part II of schedule 2, the words that I seek to delete would have the effect of removing from the prohibitions of part II of schedule 2 Mr. Rupert Murdoch and the companies that he owns in the United Kingdom. I mention Mr. Rupert Murdoch at the outset, because I do not think that it is right to be mealy-mouthed about these matters, and also because he plays a special part in these debates, not because of his character or political allegiance, but because of the size of his ownerships : the number of papers and publishing concerns that he owns, and his interest--specified and made public--in the ownership of other newspapers and magazines.

It is right to remind the House how great Mr. Murdoch's ownership is. As well as his substantial newspaper ownership and his continuous and expanding television aspirations, he owns media companies in other countries. In order to obtain the ownership of American television companies, he found it necessary to change his nationality from Australian to American. If the words that we seek to leave out remain in the schedule, while some persons will be allowed to have major television interests only if they are citizens of the United Kingdom, the Isle of Man, the Channel Islands or a state that is a member of the European Community, a local delivery licence or a licence to provide a non-domestic satellite service will be removed from that qualification. Perhaps I misunderstand the Minister's intention. There may be some general principle--political, philosophical, technical, astral--

Mr. Mellor : Transcendental.

Mr. Hattersley : --or any word that the Minister cares to invent to justify it.

Column 207

I have no wish to discuss it ad hominem if the Minister assures me that that is inappropriate. However, why are so many broadcasting organisations, institutions and corporations to be limited to ownership by citizens of the United Kingdom, the Isle of Man, the Channel Islands and states in the European Community, or to those who are ordinarily resident in those places? If that is the case, why has the licence to provide a non-domestic satellite service been excluded? Perhaps it is purely coincidental that Sky Television comes into that excluded category. I look forward to hearing the Minister explain that it is all a matter of principle and that the idea that it is done with a specific intention is an unworthy suspicion that I should banish from my mind. I have moved the amendment, so the Minister will tell us whether that is the case.

My strong preference is for broadcasting in the United Kingdom to be limited to companies that are owned by citizens of the United Kingdom or the European Community. That is not simply because EC regulations require it ; if we are part of an integrated community, the opportunity should be offered to all member states. I have strong reservations about ownership outside the Community, whoever the owner may be. It was quaint that Mr. Murdoch was prepared to change his citizenship from Australian to American in order to obtain American television companies. I have no idea whether he would be prepared to do it again if our amendment is successful, or what cricket team he would then support, having been Australian and then become British, via the United States.

Can the Minister convince us that it was not done with one specific company in mind, but that there is a principle behind it? If he can at least go some way towards doing that, we can wait for our major argument until we reach clause 110.

Mr. Mellor : The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has raised some fair points. I am grateful to him for doing so, and with such vigorous good humour. I shall endeavour to satisfy him. I entirely agree with his basic proposition that it is right that British broadcasting should be owned in the main by British interests, and--as an inevitable consequence of our EC membership--by European Community interests.

We have gone to a great deal of trouble to ensure, for instance in relation to the allocation of Channel 3 franchises, not only that that restriction applies but that firm regional commitments are built into the franchise allocations that will preserve not just national but regional characteristics, so that the companies concerned are likely to be rooted in the region. I agree with the right hon. Gentleman on that basic proposition. The relevant part of the schedule that he mentioned disapplies that general rule in two instances, not one.

4.30 pm

The first instance is local delivery operators. I recall the properly vigorous view of the hon. Member for Edinburgh, Central (Mr. Darling), expressed last night, that he would like to see more performance and less promise in the cable industry ; I second that, and I believe that it is about to happen. There is no doubt that there has been a great deal of interest in local delivery operators--those who will be cabling the country --from north America, France and other countries.

It is as welcome that they should be involved in this as it is that they are investing in a range of other industries.

Column 208

We should be cutting off our noses to spite our faces if we prevented them from coming in, particularly when it appears that there is no great queue of British and European entrepreneurs ready to make up the difference. For that reason, we disapplied the tight rules about British or European control for local delivery operators.

Mr. Norman Buchan (Paisley, South) : Is it not the case that local delivery services, rather than initiating programmes, merely carry them? Is there not a difference between those who merely deliver--a commercial operation--and those who create programmes? Is this not where we should seek a national requirement?

Mr. Mellor : That is a further distinction that could be drawn, and if I had to justify that exception, I could use that argument. However, I should not go on to say that there is no case in which programme makers, producers or broadcasters should not, if other circumstances are right, also be exempted.

The right hon. Member for Sparkbrook was interested in the second example-- non-direct broadcasting by satellite services. These are international in character. They are not United Kingdom-allocated frequencies. The IBA does not allocate them, and they are brought under the control of the ITC to ensure the appropriate framework for the protection of the public--for example, from pornography and other inappropriate programming--that fits into the European framework. They make use of a non-British satellite, although a number of the channels are linked from within the United Kingdom. Therefore, they do not arrive in our homes by virtue of any arrangement to which the British Government have set their hand.

Having regard to the international character of these services, it seems inappropriate that they should be subjected to the ownership restrictions that would be thought appropriate to United Kingdom-licensed services, where one is licensing for positive requirements and not merely licensing to protect against negative programmes. That is the point of distinction. I appreciate that there are some who think that we should be wrong to do this, but I make one point clear. The best known of these non-DBS services is Sky Television, but there are plenty of others.

Mr. Austin Mitchell (Great Grimsby) : Name them.

Mr. Mellor : I can certainly name them. The hon. Gentleman should not set such easy challenges. After all the months I have had to immerse myself in these matters, I should know. W. H. Smith has two channels. Mr. Maxwell--one would not expect him to be far behind Mr. Murdoch in this or any other game--has one. There is Canal Plus--I may have got that name wrong, but it is a German satellite service that is causing a little controversy.

Mr. Darling : It sounds French.

Mr. Mellor : The hon. Gentleman is a truly international figure. I withdraw my reference to that, because I am obviously misleading myself and the House. There are other services, however, which can be picked up by anyone who has an Astra satellite dish. Given the capacity of that satellite, I dare say that there will be plenty of other services. The question is whether the hundreds of thousands of persons who watch these services will watch

Column 209

services that are uplinked from the United Kingdom or those that are uplinked from countries other than the United Kingdom. I have always taken the view--not because of any slavish subservience to the interests of Mr. Murdoch or of anyone else--that it would be an own goal of fairly spectacular proportions to require Sky Television to be uplinked from somewhere on the continent, with the loss of 1,000 jobs, which I expect Opposition Members are every bit as solicitous about retaining as I am.

That is why there seems to be no compelling reason why the national ownership requirements, which I believe in and have firmly advocated should be part of the United Kingdom directly regulated system, should find a part in what is a truly international service. I refer to non-DBS satellite services that can be uplinked from anywhere in Europe. We should remember that the Astra satellite is a Luxembourg venture, not a British one, and is open to all comers. Many more channels will become available on that satellite before very much longer.

The right hon. Member for Sparkbrook treated this issue as a trailer, as it were, for the main feature to which we are to come. I hope that I have given him an adequate explanation, but it would not surprise me if my explanation has not satisfied him. Nevertheless, I have set out our case for doing what we have done. I dare say that we can return to the matter later.

Mr. Buchan : I shall make a brief intervention in the debate because I accepted the offer which was made last night. I shall speak at greater length when we consider Sky.

The Minister must not believe that he has taken anyone in with his spurious excuse. We know that there is only one effective commercial satellite programme apart from Sky, and that is BSB, which is just getting off the ground, as it were. Those are the only two that matter at present. There is only one non-domestic satellite, and that is Sky. That is why some of us have regarded this measure as a de facto hybrid Bill rather than a de jure one. It seems that it has been designed to exclude Mr. Murdoch, and in the process of exclusion a complete argument has been disregarded in relation to broadcasting within Britain. Wherever it is beamed from, Sky is directed towards Britain. It does not come within the nationality requirements, which the Minister argued were useful for broadcasting within Britain, within which we are creating programmes.

Even more important is the excuse of the other disqualification, which is cross-media ownership. As it happens, Mr. Murdoch owns more than 35 per cent. of the daily and Sunday newspaper circulations. It is a power that no one has had before. Beaverbrook, for example, did not have a satellite station. It is the cross-media relationship that is the danger.

I tried to solve the problem by saying that there should be foreign station status. The Government wish to exclude because jobs are involved, but the Minister has said that we can ignore nationality and level of ownership. If he says that we cannot touch, as it were, a satellite station that is beamed from abroad, let it be treated as a foreign station. Everything else follows from that, and in that way we could proscribe such stations. We must find ways of bringing all stations within the same competitive sphere.

However beneficial the Government's proposals would be to the Tory party, we cannot allow the Government to

Column 210

get away with them. The Minister responded with a Tory answer and I am sure that even he did not believe in it. We shall be dealing with these issues at greater length when we reach the heart of the matter with the Sky amendments.

Mr. Hattersley : I shall not detain the House for more than a few seconds. I accept the Minister's point. Indeed, I accept without qualification his assurance that the words to which I took temporary exception were not intended to benefit Mr. Rupert Murdoch. It so happens that he is the principal beneficiary at the moment, but I accept that they were not intended for that purpose. I thank the Minister for being kind about the spirit in which I moved the amendment. However, I do not find wholly convincing his explanation of why the satellite stations, organisations and operations should be excluded. It is the nature of satellites that they are international. The place from which they are launched is hardly the appropriate criterion on which to judge how their broadcasts should be regulated.

Mr. Mellor : My point was about the place from which the satellite services are uplinked. There are 650 jobs in west London with more to come. As the Labour party has a strong regional base in Scotland, perhaps of more relevance to it are the 250 jobs in Livingston. What would be the point of Parliament passing ownership restrictions that had the effect of transferring those jobs to the continent?

Mr. Hattersley : I did not use the word "uplinked", but I understand the Minister's point. If he is saying that things must be done in this way to protect jobs it is a partial argument that I accept. However, he also attempted to make some point of principle that it would be wrong to control these matters because of the nature of satellites. He does not believe that it would be wrong to control the content--indeed, that is his intention. There is some inconsistency in his distinction between offering ownership, some degree of control over ownership or refusing a degree of control over ownership, but nevertheless believing that, despite the international character, there can be some degree of control over the broadcasts.

Mr. Mellor : The right hon. Gentleman is an experienced political figure who was in office for a number of years. Political arguments are inevitably composed of a combination of principle and practicality. The place where the satellites are uplinked within the international satellite system is very important because that is where the jobs will be. The 250 jobs in Livingston are in the constituency of the right hon. Gentleman's colleague in the shadow Cabinet. Does his colleague accept a policy that would deprive his constituency of 250 jobs?

Mr. Hattersley : The Minister is making it difficult for me to withdraw the amendment. I shall do that when he gives me the chance. If he allows me to speak the operative words, I shall seek permission to withdraw the amendment. I shall first make two points about his latest intervention. He well knows that every member of the shadow Cabinet agrees with every word that I say, as we all agree with every word that each of us says.

The more important point is that there is no reason to assume that if there were regulations relating to control jobs would necessarily disappear. They might go into other ownerships, but the idea that they exist only because some

Column 211

supernatural force--satellite and Mr. Rupert Murdoch--wills them to exist is a misunderstanding of the whole industry.

That is not the main issue in the concentration of ownership. I intend to pursue the principle of the issue when we debate amendment No. 110. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made : No. 347, in page 140, line 41, leave out or'. No. 348, in page 140, line 42, at end insert--

(c) a licence to provide a licensable programme service, or (d) a licence to provide a licensable sound programme service,'. No. 349, in page 141, line 2, after 2', insert

--(1) Subject to sub-paragraph (2),'.

No. 350, in page 141, line 11, leave out and'.

No. 351, in page 141, line 13, at end insert

and

(g) a body which is controlled by an individual falling within paragraph (f) or by two or more such individuals taken together.'. No. 352, in page 141, line 13, at end insert--

(2) If the Commission are satisfied that it is appropriate for a person to hold--

(a) a licence to provide a non-domestic satellite service, or (b) a licence to provide a licensable programme service, being a person who, apart from this sub-paragraph, would be a disqualified person in relation to any such licence by virtue of sub-paragraph (1), they shall make a determination to that effect ; and so long as any such determination remains in force in relation to that person, sub-paragraph (1) shall not apply to him in relation to any such licence.'.

No. 353, in page 141, line 15, leave out

a licence granted by the Authority'

and insert

any licence granted by the Authority other than a licence to provide a restricted service'.

No. 318, in page 141, line 45, leave out or 2'.-- [Mr. Mellor.]

Mr. Maclennan : I beg to move amendment No. 609, in page 142, line 40, at end insert--

( ) community radio service'.

Mr. Deputy Speaker : With this we shall discuss the following amendments :

No. 580, in clause 78, page 60, line 38, at end insert

( ) for a particular area or locality in the United Kingdom for a service that is for community not commercial benefit (a "community service")'.

No. 582, in clause 79, page 61, line 20, after services', insert both profit and non-profit seeking'.

No. 583, in clause 79, page 61, line 26, at end insert

( ) to facilitate the provision of local and community licensed services which (taken as a whole) in any area offer a wide range of programmes calculated to appeal to a variety of tastes and interests ; and'.

No. 595, in clause 97, page 76, line 11, at end insert

(iii) involve persons or bodies both in programming and in the production of programmes and that would benefit the relevant communities ; and'.

No. 596, in clause 98, page 76, line 49, at end insert

( ) the extent to which any such proposed services would involve persons and bodies living in the area or locality for which the service would be provided and to what extent programmes and other services would be provided for the relevant communities.'.

Column 212

Mr. Maclennan : Our debates in Committee were productive of great change, especially in respect of television. I regret that we did not make greater progress towards reforming the provision of radio, and in particular that we did not secure the position of community radio. This batch of amendments is an attempt to deal with that issue. 4.45 pm

The amendments start from the premise that community radio and local radio are not, as the Bill would have it, the same. They are different in structure, in finance, in their purposes and objectives, and in what they broadcast, who broadcasts and who listens. Both local and community radio are worth while and we should support both. They need not be rivals and they need not dip into the same pot for advertising revenue. They can compliment each other. However, unless the Bill provides for their separate treatment, the restrictions to regulate commercial stations will merely stifle the growth of community radio, and those that are successful will quickly fall prey to takeovers by commercial companies which regard community radio's audience, if not its service, as a threat.

We can study the experience of other countries where community radio has been protected in the manner that I propose--such as Australia, where it is thriving--but where there has been an unregulated market, as in Italy and France, community radio has been swallowed up. The French recognised the problem and after eight years of deregulation the responsible regulatory authority has designated community radio as a separate category.

Even since the publication of the Bill, there has been a better understanding of the difficulties of expanding local services. Manchester's Sunset radio has been much in the news with the sacking and then the reinstatement of its founding managing director, Mr. Mike Shaft. In that case, the trouble seemed to have been a classic example of some board members wanting a higher financial return, which required a broadening of the music appeal and cuts in certain other programmes, including the provision of news--thereby making the news team redundant.

Services such as Sunset--which is aimed at an Afro-Caribbean audience--and WNK and London Greek Radio in north London won their licences because of the services that they were offering. The market is quite limited and not necessarily attractive to advertisers. For Afro-Caribbean services, there are not sufficient numbers of business men able to subsidise those services. There is a difficulty with definition because such stations are often founded or taken over by people interested in radio as a business venture. For incremental services, the proper answer would be a radio fund of some sort--we discussed that in Committee--which could be used to enable stations to carve out an audience over a period of time and to aim their rates at small, local businesses.

For such stations, reliance on national advertising would almost certainly lead to bankruptcy. They would fail to attract such advertising. That is why I do not consider that backing community radio would be damaging to local radio. Alternatively, forcing such stations to seek wider audiences will result in their specialist task being whittled away. Building a specialist audience takes time and creditors do not wait. Copyright fees and the interest from the considerable facilities and

Column 213

equipment that the Independent Broadcasting Authority requires stations to install is a burden that many small radio stations find hard to bear.

The market that these stations aim for and the staff who are prepared to work long hours, sometimes without reward, might best be served if the stations were set up as community stations with the limited aspirations and equipment that that requires and the protection that it would bring. Mixing outside commercial ventures and stations providing a service for a particular community, and then treating them in the same way, as the Bill does, more often than not will place intolerable burdens on the less profitable services and lead to their demise.

An interesting example of such a service, which I commend for special treatment, is the proposed Radio Heartland in Perthshire. The service is proposed because of poor reception there due to the terrain and because the cost of improving services is high and beyond the scope of commercial financing. The population is a modest 12,500 people. The radio station will be locally owned and will draw programmes from local sources to reflect the diversity of the population, it will be legally constituted as a non-profit maximising body and will involve the community through training and the use of their facilities.

In Radio Heartland's own words :

"In many ways it will be like campus or hospital radio (Like them, it will be low budget--no hi cost hi-tech!) made by and for a special group, the people of Highland Perthshire."

The service that they intend to provide and are raising funds for could be of benefit throughout rural areas in Scotland, parts of Wales, the south- west or Northumberland and Cumbria--sparsely populated areas to which it is difficult to bring local radio. Such areas are often out of contact with the cultural possibilities offered by local broadcasting.

The amendments which have been selected do not cover finance. That is obviously crucial and we shall have to return to it if the Government accept the principle of recognising the difference between local and community radio.

The provisions that I am suggesting are in keeping with a resolution of the European Parliament passed in April 1989 which, among other things, recommended measures to safeguard and develop local broadcasting and private radio stations, which should be safeguarded at community level and not left to the mercy of market forces. Those objectives of the European Parliament seem to me to be sensible.

The amendments are more necessary than I believed them to be when we discussed the subject in Committee due to the disappointing response by the shadow Radio Authority to the Minister's request, on behalf of the Committee, for a note about how it envisaged licences would be granted following the debate in Committee on community radio.

That revealed that the incipient authority has a restricted understanding of the subject. While it talked about filling in the white areas and meeting the needs of ethnic minorities, it did not mention community radio and made no distinction between commercial and non-commercial stations. It seemed to be almost beyond its

Next Section

Home Page