House of Commons Hansard Debates for 24 Apr 1991

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Broadcasting Licences

8 pm

The Parliamentary Under-Secretary of State for the Home Department (Mr. Peter Lloyd) : I beg to move

That the draft Broadcasting (Restrictions on the Holding of Licences) Order 1991, which was laid before this House on 28th March, be approved.

The order is made under the powers contained in schedule 2 to the Broadcasting Act 1990. Its purpose is to supplement the broadcasting ownership rules contained in schedule 2 by introducing certain additional provisions which, no doubt to the relief of the House, I shall summarise rather than rehearse in full.

The provisions in the draft order that are, I suspect, of most immediate interest to the House are those relating to the circumstances in which two regional Channel 3 licences can be co-owned. The order provides, first, that two such licences may not be co-owned if they are both large. For these purposes, we have designated the top nine, in terms of advertising revenue, as large, and the remaining six as small.

When the Government originally announced their decisions on the ownership of Channel 3 licences, we said that, in addition to ruling out co-ownership of two large licences, we planned also to prohibit co-ownership of two licences for adjacent areas. This became known somewhat inelegantly as the contiguity rule. At that stage, the Independent Television Commission had not set out the number or shape of Channel 3 regions that it was going to advertise. However, we were working on the basis that, if the ITC was minded to retain the existing ITV map--which it has now said that it intends to do--we would expect only the top six to be designated as large.

In making general provision for one person to hold two Channel 3 licences, we recognised that in some cases such an arrangement could result in sensible economies of scale without threatening regional identity. We were, however, anxious to avoid circumstances in which licences covering an unacceptably large part of the country were held in common ownership. The proposed ban on contiguous ownership was intended to meet that concern.

We decided, on further reflection, that to impose a contiguity rule of that kind for the full 10-year licence period might be counter-productive, in that it could prevent some combinations of ownership which offered scope for sensible economies of scale, and were therefore potentially attractive in commercial terms. Indeed, given the uncertainties of the broadcasting environment in the 1990s, I simply do not believe that it would have been practicable to rule out for all time the possibility of contiguous mergers which might, under some circumstances, be in the best interests of all concerned, especially the viewers.

Simply to have dropped the contiguity rule, while retaining only six large areas would, however, have left the way open for combinations of ownership which could give an unhealthy dominance to a single company. We therefore decided that if, in the longer term, there was to be no separate contiguity rule, it was right to increase the number of regions to be designated as "large" from six to nine, and the draft order so provides.

In response to strong representations that we received from various quarters on the contiguity issue, we have also accepted that we should offer some reassurance to the

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smaller companies that they will not risk being outbid by predatory neighbours before they have the opportunity to establish themselves. Therefore, we decided that a contiguity rule should apply during the bidding process for the new Channel 3 licences.

The effect will be that a single person or company cannot win two licences for adjacent areas. This restriction will, however, be lifted as soon as the relevant licences have been granted, at the end of this year or early next. From then on, there will be no specific ban on contiguous takeovers, but takeovers of all kinds will, of course, be subject to the general moratorium on takeovers imposed by section 21 of the 1990 Act.

Under that provision, takeovers can take place until the end of 1993 only with the consent of the ITC. The ITC is likely to give consent to takeover or merger proposals during that period in certain circumstances, such as where one of the licensees was in serious financial difficulties, or where a planned merger had the joint agreement of both parties. Hostile takeovers, on the other hand, would almost certainly be ruled out.

I should emphasise that our decision on contiguity does not imply that, at the end of the moratorium period, any or all of the smaller regions will necessarily be co-owned by a company holding a larger region. Moreover, where one company holds two licences, it will still be obliged to meet in full the separate regional requirements for each of the two regions.

The chairman of the ITC is in full agreement with our proposal, and considers that the ITC will have no difficulty in ensuring that where licence areas are co-owned, the licensee provides distinctive local programming for each region.

Mr. Robert Maclennan (Caithness and Sutherland) : If the separate requirements of individual regions have to be maintained--I understand that that is so as to maintain regional identity--how does the hon. Gentleman believe that there could be scope for the sort of economies of scale that might be the only justification for some sort of merger?

Mr. Lloyd : There could be economies in the use of a sales force or in some of the administrative back-up. There are a number of ways in which that might be achieved. However, what could not be altered is the undertaking made and enshrined in the licence about the type of regional programmes that would be provided, the number of hours, the time and the ITC's requirement that 80 per cent. of regional programming must be produced in the region either by the licencee or independents. Therefore, there is a strong safeguard as regards regional broadcasting, but there is plenty of scope for economies of scale.

I believe that these provisions on co-ownership, while different in form from what we envisaged originally, are entirely consistent with the policy intentions that we announced during the passage of the Broadcasting Bill last Session. We continue to attach great importance to ensuring the preservation of the district regional identity of the Channel 3 licences and to the discharge by the licensees of their regional programming obligations, as I have just said.

The ITC has, as I have said, confirmed that it will be able to ensure that regional commitments are fulfilled, even when there is joint ownership of two contiguous

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licence areas. I am not surprised that it should have come to that conclusion, as the Broadcasting Act contains some very substantial safeguards.

For example, the Act requires that a sufficient amount of time should be given for regional programmes. That varies from licensee to licensee but generally it is more than has been the case in the arrangements to date. It follows that if, following the moratorium period, a single person were eventually to own two contiguous licence areas, he would not be permitted to treat them as one mega-region and transmit identical programmes in both areas. Neither could he, as some have feared, simply move the entirety of his programme production base to a single location and produce what purport to be separate regional programmes from there.

Mr. Robin Corbett (Birmingham, Erdington) : The Minister mentioned programme production bases, but perhaps he would confirm that the Act does not stipulate that regional programmes must be made in the region.

Mr. Lloyd : It is certainly stipulated in the requirements set by the ITC. To meet the quality threshold, a bidder must state that he will do that, and it will be written into his licence if he is successful. Therefore, we shall have a copper-bottomed undertaking.

Mr. John Greenway (Ryedale) : Does not the Bill strengthen the regional commitment of Channel 3 licensees by virtue of amendments passed in Committee? Those amendments will require licensees to demonstrate to the ITC what arrangements they are making for regional programmes, which must be made in the region.

Mr. Lloyd : That is right but, if my memory serves me correctly, the Bill did not specify what the figure would be. The ITC has since specified that it is to be 80 per cent., and that figure will be written into the licence agreements. If there is a takeover, the new owner must observe the agreement.

Mr. Austin Mitchell (Great Grimsby) : The issue is where and how such programmes will be made. It is right that there should be a regional commitment. The strength of ITV is that it sets up regional centures of excellence in television production. They are there because of the federal system. Now, there will be nothing to require those centres to be maintained. Programmes could be farmed out to independents nominally in the regions, and those centres of excellence and skill could be disbanded and eliminated.

Mr. Lloyd : Regional programmes will have to be made in the regions. That is not a nominal requirement. Eighty per cent. must be made there because, if not, a company would not be fulfilling the requirement laid down by the ITC, which will be included in the licence agreements.

Mr. Corbett : I wish to clarify one point. It is true that the ITC has stipulated that 80 per cent. of regional programmes should be made in the regions. However, let us be clear that regional programmes--again I speak from memory--may involve as few as five or six hours a week, although the bigger London stations may make more. Nevertheless, the lion's share of the 80 per cent. requirement in the Bill will involve only local news and current affairs. Therefore, some regions could be left with little more than a news studio.

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Mr. Lloyd : I am sure that there will be much greater variety under the new arrangements. There will certainly be greater use of independents. Rather than programme-producing companies, we shall see publishing companies but, as the hon. Member for Birmingham, Erdington (Mr. Corbett) knows, 25 per cent. of ITV output will have to be taken from independents. Where those independents are based will be for them to decide. They will choose wherever they find it most convenient to be located and that is something that we cannot determine, nor should we seek to do so.

Although I understand the fear that the independents will inevitably gravitate to London, it will not necessarily prove to be soundly based. First, there are production facilities around the country. Secondly, other parts of the country are cheaper and thirdly, there is no doubt that a relationship with a regional licensee will be of interest to some independent contractors. Those factors will militate against the counter- attraction of London. However, the hon. Gentleman is right : the independents will locate themselves where, in business terms, they find it most sensible to be.

I deal now with the provisions in the order relating to further concentrations of interest in Channel 3 and Channel 5 licences. The Broadcasting Act 1990 sets out the maximum number of such licences which any one person may hold. The order introduces some additional restrictions. It provides that, once a person has acquired the maximum ownership in two regional Channel 3 licences in accordance with the Act or with the rules contained in this order, he may have a maximum shareholding of 20 per cent. in one further regional Channel 3 licence, provided that that does not constitute a controlling interest, and thereafter, no more than a 5 per cent. shareholding in further such licences. Similar rules apply in relation to national Channel 3 licences and Channel 5 licences.

The order also deals with newspapers shareholdings in broadcasting licences. It provides that national newspaper proprietors will not be permitted to have more than a 20 per cent. interest in any local radio licence, and that national or local newspaper proprietors will similarly be forbidden to hold more than 20 per cent. interest in a Channel 3, Channel 5 or domestic satellite service licence. During the passage of the Broadcasting Bill through both Houses, there was considerable debate as to whether this rule should be extended to cover non-domestic satellite services. We argued then, and I continue to argue now, that it is neither necessary nor desirable for it to do so. Our policy rests on the fact that non-domestic satellite services have developed under different ground rules from terrestrial or domestic satellite services.

Domestic satellite services use broadcasting frequencies allocated by international agreement, of which only a small number--five at present--are available to the United Kingdom. In contrast, non-domestic satellite services like BSkyB face virtually open-ended scope for competition from a diversity of different channels in different hands transmitted from satellites such as Astra, which use telecommunications rather than broadcasting frequencies.

The relative ease with which new non-domestic satellite services can be introduced means that there is little danger of such services being controlled by a few major interests which might represent a threat to plurality of information sources. For that reason, we see no case for limiting

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newspaper investment in them. Were we to do so, of course, we should risk ending the extension of choice already brought about by such channels and jeopardising the 1,000 or so jobs which they have created in this country.

BSkyB does not have a monopoly on television services and we believe that competition among the terrestrial channels, BSkyB and other existing and future satellite televison services is sufficient to ensure editorial diversity.

Under the order, no public telecommunications operator will be permitted to have a controlling interest in any Channel 3, Channel 5, national radio or domestic satellite licence. I believe that it will be generally accepted that it would be undesirable to permit major telecommunications operators like British Telecom to control those key broadcasting licences.

Finally, the order makes provision for a points scheme to determine the maximum permitted ownership of local radio stations. All stations will be awarded points on the basis of their audience reach. It will be permissible to own stations which correspond to a maximum of 15 per cent. of the total number of points in the system, subject to the overall limit of 20 services contained in the Act.

This arrangement, which was announced in the course of proceedings on the Broadcasting Bill, is intended to take account of the likely growth in the number of local radio stations over the next few years, and of the great variety of individual stations, from the major ones such as Capital Radio and other large metropolitan stations, to the smallest community or ethnic services transmitting to a local neighbourhood.

These supplementary ownership rules, contained within the order, represent a reasonable and practical framework for regulatory control over the services which the ITC and Radio Authority will regulate. If the rules are approved by this House and in another place, we intend that they should come into effect as soon as possible. I commend the draft order to the House.

8.19 pm

Mr. Robin Corbett (Birmingham, Erdington) : I congratulate the Minister belatedly--referring to the date of his arrival rather than my congratulations. I believe that I am right in saying that this is the first broadcasting debate which the Minister has taken without someone whom I shall describe in a kindly way as his Svengali friend, who has now gone off to labour in the bowels of the Treasury as a reward for some small assistance that he rendered the Prime Minister during some stormy days in November.

Mr. Peter Lloyd : He is lurking about.

Mr. Corbett : I do not doubt that he is lurking about somewhere. I thank the Minister for outlining the principal effect of the order. I wish to put three points to him. Of course it is true that the Independent Television Commission is advertising the Channel 3 regional licences on the basis of the existing map. However, there is no guarantee that each of the areas will attract bids. I say that seriously. It would be invidious to name areas which might attract negative

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bids. What thought, if any, has the Minister or, indeed, the ITC given to that possibility? It touches on the changes that he has made in the rule on contiguity.

I understand the protection which the Minister has put in place and which will remain until the bidding system is over. But the risk must remain-- this was touched on in some of the interventions that the Minister was kind enough to take--as my hon. Friend the Member for Great Grimsby (Mr. Mitchell) said, that, if ownership of a certain type prevails in adjacent areas, there will be pressure on those Channel 3 regional licence holders who are producing to make some economies in, for example, production and studio facilities. This is not guesswork. It has already happened in Birmingham and the west midlands with Central Television, which, by and large, has moved its major production facilities to an extensive site in Nottingham, which the Independent Broadcasting Authority encouraged it to build.

Mr. Austin Mitchell : Quite rightly.

Mr. Corbett : As my hon. Friend said, that was quite right, in the context in which the company took over the franchise. There must be a risk if a company has two sets of production facilities and one is used more than the other. I do not argue with the commitment to fulfil the 25 per cent. quota for the independents, but it also has ramifications.

We have had experience, especially in the London area, of some of the television stations wanting to start to meet the 25 per cent. production quota. They talked to the independents about making programmes but used their muscle to insist that the independents use the production facilities of the commissioning company rather than their own facilities. So there are some risks.

The other point that I wish to put to the Minister is about something that already happens and which may fit with what he has in mind with economies of scale. To my knowledge, at least three television companies share a joint advertising sales force. That is happening now, before any other alterations have come about. If one company ended up owning two Channel 3 regional licences, its advertising sales force would be one area which it would immediately look at. To that extent, I can see that it makes commercial sense. Is the Minister sure that that would not run foul of competition policy? Has the point been put to the Office of Fair Trading? If not, perhaps it might be, so that everyone might know where he is going. It is fair to say that in all our debates in the House on broadcasting during the past two or three years there has been general and cross-party agreement that democracy is at risk if too much media power is concentrated in too few hands. Indeed, we know that. In spring of 1989, 62 Conservative Members were among 87 Members of Parliament who signed an early-day motion calling for an extension of controls on ownership in the media.

In January 1989, the then Home Secretary, the right hon. Member for Witney (Mr. Hurd), seemed to anticipate that demand, when he said : "We will propose extensive and effective rules to prevent concentration of broadcasting ownership and unhealthy cross-media ownership It is crucially important that we should have such rules Real choice would be undermined if British broadcasting were allowed to be dominated by a handful of tycoons or international conglomerates."

If only the wish had been the father to the deed. But it was not, as we shall see.

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In November 1989, a Gallup survey of 141 Members of Parliament found that 112 of them--roughly eight out of 10-- believed that it was wrong for the same proprietor simultaneously to control newspapers and television stations ; and seven out of 10 believed that safeguards should be applied irrespective of the transmission method used. Again, what a pity that those voices were not listened to when it came to the ownership proposals in the Bill, and now in the order.

Those opinions did no more than echo the claimed aspirations of the Government. In their White Paper of November 1988, right at the beginning of the process, they asserted their determination that ownership in the independent--that is, commercial--sector should remain widely spread and unhealthy concentrations of ownership and excessive cross-media ownership should be prevented. Again, those sentiments were widely accepted, although on this side of the House we question whether ownership is sufficiently widely spread now. However, this order, like the Broadcasting Act 1990, makes a small attempt to honour those ambitions.

Under the order, a company making the highest bid for, and obtaining, a regional Channel 3 licence can end up buying a second franchise after the auction round. But that is not all, as the Minister explained. A Channel 3 licence holder with a non-controlling interest in a second Channel 3 company can go on to have a 20 per cent. holding in a third such company, provided that it is not a controlling interest, and, indeed, a 5 per cent. interest in a fourth company. Again, that underlines the possible danger that a company in that position will look to see what it can do on the basis of the Minister's economies of scale to rationalise the individual facilities within those four companies. The order will not ensure that ownership in the commercial sector is, as the Government's White Paper hoped, widely spread. Nor does it properly protect against unhealthy concentrations of ownership or excessive cross-media ownership.

I believe that the Government looked at the fast changing media industry and the rapid growth of the media mammoths and decided that it was all too complicated. It is late enough as it is to introduce these orders to settle the position finally, just 21 days before the Channel 3 auction bids have to be lodged. We agree that matters of media ownership and cross ownership are complicated and that the commercial arguments for global empires which span print, video, film, television and sound recordings are at one level persuasive, especially in the cut-throat international market. But The Economist of 23 September 1989 had the answer to that. It said :

"The media have moved beyond being mere providers of entertainment and information. They have become a forum that rivals Parliaments. A plurality of opinion in that forum is as essential to democracy as the ballot box."

That language may be a little high-flown, but the sentiments are exactly right, and ones which Opposition Members certainly share. We have had experience, following newspaper takeovers, which should teach us that it would be quite wrong to accept the mere words of safeguards offered by either a powerful media owner or a transnational giant when it comes to the ownership of such a powerful, instant opinion-shaping medium as television, with its easy and quick access to every home in the land.

We in this House have a duty to protect and promote our liberties, not to entrust them to hands that have no

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other motive than the use of them to generate personal and corporate wealth and power. We need ownership and cross-ownership rules that encourage the range of voices and opinions that our democracy needs to hear and listen to. I find it slightly ironic that, just as the formerly monolithic media monopolies of eastern Europe, the Soviet Union and elsewhere are being broken up, we are headed for a concentration of ownership that few other advanced democracies would countenance.

I do not want to disappoint my hon. Friend the Member for Great Grimsby (Mr. Mitchell), but I have to say that no discussion of media ownership would be complete without a mention of those who use the non-DBS satellite, first among them British Sky Broadcasting. It was bad enough that the Government, in schedule 2 of the Broadcasting Act, provided powers to bring the non-DBS satellite services into scope of ownership provisions but then declined to use these powers. That was bad enough when there were two competing satellite services--one controlled, the other not controlled. There was then the takeover of BSB by Sky, done with the reported knowledge of the then Prime Minister, who somehow forgot to tell the then Home Secretary. That deal was stitched together within 48 hours of the Broadcasting Act's getting the Royal Assent--the most noble snook that has ever been cocked at any legislation going through this House.

As a consequence, British Sky Broadcasting now has a satellite monopoly. It is aiming for 1 million viewers, two to three years ahead, rivalling the audiences--indeed, exceeding the audiences--of most the Channel 3 stations. Yet it remains splendidly untrammelled by any of the ownership and cross- ownership restrictions that even this order provides.

There are dangers to democracy here, as The Observer reported on 23 December 1990. That newspaper claimed that Mr. Rupert Murdoch--the person who owns newspapers that sell 35 out of every 100 bought each day in Britain, and half of British Sky Broadcasting--had been refused a knighthood in the resignation honours list of the right hon. Member for Finchley (Mrs. Thatcher) by the august honours scrutiny committee.

Mr. Graham Riddick (Colne Valley) : Ah!

Mr. Corbett : The hon. Gentleman may be interested in the reason that was put forward. That was said in the context of a report that Mr. Murdoch had given funds to an extreme right-wing magazine called British Briefing, which attempted to smear my right hon. Friend the Leader of the Opposition and others at the time of the last election. Behind British Briefing was the right-wing loony David Hart, a former close aide of the former Prime Minister. That is why I say again to the Minister--and I hope that none of us will have reason to recall these words--that the medium of television, whatever the means of its delivery, is far too powerful and far too instant to be left, like those using the Astra satellite, outwith any meaningful ownership controls.

Mr. Roger Gale (Thanet, North) : I waited deliberately before intervening, as I hoped that the hon. Gentleman would qualify or justify his statement that BSkyB has a monopoly. There are 16 channels on Astra, with another 16 to come, and with a further Astra satellite planned. On the Marco Polo satellite, five channels are available but are

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not used. In these circumstances, how can the hon. Gentleman possibly say that BSkyB has a monopoly in satellite broadcasting?

Mr. Corbett : In reply to the hon. Gentleman I shall now say something that I would have said later. Were I an original BSB subscriber-- and I believe that it launched some kind of founders' club--I should be mindful of the fact that in return for my subscription it had promised me five channels. From 15 April, BSB subscribers have had three channels. Nobody could pretend that that widens opportunity or choice.

Mr. Peter Lloyd : That does not make it a monopoly.

Mr. Corbett : It makes a monopoly in one sense. For reasons that I understand, the ITC has required BSkyB to keep broadcasting on the Marco Polo satellite. That makes sense, but its net effect, in popular terms, is that, to all intents and purposes, there is now a monopoly.

There is one consequence of the Sky takeover of BSB to which I want to draw the Minister's attention.

Mr. Austin Mitchell : My hon. Friend has said that there are dangers in monopoly, in concentration of ownership in the press and television. If that is a danger to freedom, what are the measures to deal with the problem, if they too are not a danger to freedom? How does my hon. Friend propose to end that monopoly? Does he propose to shoot down the satellites? Does he propose to prevent people from having receivers in their homes? Does he propose that public money should be provided to support competition? How is the press situation to be dealt with when some of that power comes from continuing newspapers that were failing? The classic example is The Sun. Who gave The Sun to Rupert Murdoch? There is also the example of Today. How are we to solve those problems without restricting freedom?

Mr. Corbett : I am grateful to my hon. Friend for that little GCSE question. He tempts me to go a little wider than this debate. If he is patient for a couple of minutes, his questions may be answered. I have no ambition to send Corbett storm-troopers into any studio at any time for any purpose. Of course, there is no such thing as a Corbett storm-trooper.

There is one consequence of the Sky takeover of BSB to which I should like to draw the Minister's attention. The then Independent Broadcasting Authority, BSB and Sky reached agreement on 20 December 1990 that BSB's licence to broadcast would not be revoked until a suitable alternative user of the Marco Polo satellite could be found. There is some hope that that will happen. Many of us have been fairly surprised, but there are some very exciting ideas for the use of that satellite. However, the understanding was that there would be no material change in the BSB service for another two years. BSB's licence can be terminated as soon as June of this year, and will be terminated by the end of next year. Is the Minister in any position to require BSkyB, as the successor company, to undertake that all of the BSB equipment sold after 20 December--the date of the agreement-- will be covered by a guarantee of exchange for Sky equipment when the change over is made? The Minister and the House will recall that, when that takeover happened, the

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immediate reaction of the new bosses of BSkyB was to give that assurance. But, unknown to many people, there was the cut-off date of 20 December.

I am told that BSkyB had earlier tried to persuade retailers to offer the BSB equipment for sale, knowing that it would not be covered by any guarantee of automatic exchange. Quite rightly, both retailers and manufacturers rejected this as being against the best interest of consumers. I wonder whether the Minister is able to persuade BSkyB to give this assurance of automatic exchange to those who want it. As I said to the hon. Member for Thanet, North (Mr. Gale), it is bad enough that, from 15 April this year, the BSkyB schedules have been changed so that all channels will be transmitted on both Marco Polo and Astra satellites. The original BSB subscribers will be robbed of three of the five channels that they thought they had bought.

Let me now reward the patience of my hon. Friend the Member for Great Grimsby. There is nothing new in what I am about to suggest as we said it throughout the passage of the Broadcasting Act. What the Government should have done--they started with the Sadler inquiry, until they turned it into a BBC-bashing exercise was to have used the time between the publication of the White Paper in November 1988 and now to ask the Monopolies and Mergers Commission to report on media and cross-media ownership. That embraces all the points raised by my hon. Friend the Member for Great Grimsby.

As I said earlier, it is an extremely complicated subject. One could take the purist view of one man, one newspaper and one television station, but that would be rather too simplistic. That is why the advice of a body such as the Monopolies and Mergers Commission could have helped the Government and the House. The Government did not take that chance, but the next Labour Government will consult the Monopolies and Mergers Commission and will legislate on the basis of its proposals well before the new Channel 3 regional and national licences become due for renewal. We shall insist that licences are bid for again in open competition with more stringent quality and regional programming commitments. Even before that date, we may have some proposals to protect and promote public service broadcasting to offer viewers and listeners. Our view is that the Government are taking a needless risk with our democracy because they declined to ask for the advice of the Monopolies and Mergers Commission. The order enables a dangerous concentration of television and radio ownership to grow, although it may not quite match that of the press. That is why we shall oppose it tonight.

8.41 pm

Mr. Roger Gale (Thanet, North) : I should like to pick up a couple of points that the hon. Member for Birmingham, Erdington (Mr. Corbett) made at the start of his speech. First, he referred to the need to protect the two-centre franchises. It may gratify the hon. Gentleman to know that I agree with him entirely and share his concern. I think particularly of two such franchises. Central Television has studios in Birmingham and Nottingham and, in my own area, TV South has studios in Southampton, and built very fine studios at Maidstone as part of the honouring of its franchise undertakings when it took over from Southern Television.

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It is a great sadness for those of us who live in Kent and Sussex that those studios are now lying idle. Although they produce an excellent nightly regional news and magazine service, the production capacity is largely wasted. There is real concern that, when the franchise comes up for renewal, is auctioned and perhaps taken over by another company, or if TV South wins a renewal of its franchise, it might be economically attractive to close the studios altogether or to hive them off so that they become simply an independent production centre. Many of us who live in and represent that area feel that that would be a great shame.

I was encouraged by the emphasis that my hon. Friend the Minister put on the provisions that have been laid down by the Independent Television Commission for local production. It is extremely important that the ITC insists that those undertakings are not simply given in franchise bids but are honoured in the realisation of the franchise. I hope that my hon. Friend and the ITC will keep a watchful eye on the amount of investment in local production once franchises have been awarded. I very much hope that they will insist that production centres such as those at Nottingham and at Maidstone are maintained and developed.

My second point concerns provision for local radio, to which my hon. Friend the Minister referred fleetingly in his opening remarks. The concerns expressed about the cross-media control of local radio when we were debating the Broadcasting Bill in Committee are academic.

Since the Bill was enacted and since the award of wavelengths began, it has become apparent that there are far too few frequencies available for the comprehensive community radio service that many of us envisaged to become established, at least in the short term. The authority has advertised relatively few and will supplement them a little by the end of the year. More stations will certainly be established in the north of Engalnd than in the south.

I am reliably informed today that, in the south-east, the scarcity of frequencies is such that there will be very few community radio stations. That means that stations such as Radio Cabin in Herne Bay in my constituency, which was mentioned frequently during the passage of the Bill, and Radio Woody, immortalised during our deliberations in Standing Committee, will remain a dream in the eyes and minds of programme directors.

I therefore urge my hon. Friend to pay particular attention to the need to release the necessary frequencies as quickly as possible and to encourage those currently occupying them to move to other wavebands, so that the Radio Authority can get on and do the job that those of us who served on the Standing Committee believed that it would do and to enable the development of a genuine community radio service as widely as possible throughout the country.

I now turn to the main thrust of my brief speech--the development of satellite broadcasting. It always saddens me when the hon. Member for Erdington finds it necessary to indulge in the regular bout of Murdoch- bashing. It has become something of a blood sport among the Opposition and no doubt we shall hear more of it before the end of the debate. The hon. Gentleman did not answer the questions put to him by the hon. Member for Great Grimsby (Mr. Mitchell) and myself. No reasonable person could say that British Sky Broadcasting has a monopoly of satellite broadcasting in

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the European skies. The Astra satellite carries a number of channels and more will follow. During the passage of the Broadcasting Bill, I mentioned the fact that the Hughes Corporation of America has plans to launch in 1993 a digitally transmitting satellite carrying 104 televison channels. That will horrify many people, but it is planned.

In that context, it is not realistic to say that Mr. Murdoch and his channel have a monopoly. Sky Television blazed a trail that would otherwise have been followed probably by Ted Turner and his company. Given the choice, I believe that the satellite viewer in the United Kingdom would prefer the offerings of Sky Television--a largely British company--to those broadcast by Ted Turner or any other American company. Sky Television, in its merger with BSB, has not killed off three channels of Marco Polo transmission, as the hon. Gentleman suggested, but has rescued two which otherwise would have gone into the bin. There was no question of both those companies surviving. The merger was no part of a plot to jump on the back of the Broadcasting Act 1990 immediately it became law.

About two years ago in this Chamber on a Friday morning, we had a brief debate on the future of broadcasting. I had the temerity to suggest that, unless those two companies got together, neither would survive. It gives me no pleasure to say that that is exactly what has happened. The choice, as in so many cases, was not between maintaining both channels or allowing one to take over the other. Those companies had to merge, or both would have gone under. If that had happened, we would have had no satellite television service on offer to the United Kingdom viewers. No satellite service would have been provided for the investors in squarials and the receiving equipment already referred to today. The failure of those companies would have meant that we had no satellite service to compete with those services already offered by our continental competitors and American companies.

I find it sad that, in this Chamber and in Europe, we continually debate the control of television, when we should be debating the future development of television and satellite services.

The development of digital transmission was debated in Committee on the Broadcasting Bill. The European Community has spent a great amount of time and wasted effort on pursuing high definition television with a MAC-- multiplexed analogue components--transmission system. That system is already virtually obsolete ; as obsolete as the Marco Polo satellite which relies upon that transmission system. It is an absolute certainty--recent demonstrations in America have proved this--that digital satellite and terrestrial transmission will be with us by about 1993. That is the television of the future. However, the Opposition are seeking to stultify that development by continually seeking to control.

What those behind Sky Television, and now BSB, have done is to take a major step forward. Those same people have invested and lost vast sums of money on satellite technology, but they are still prepared to look one stage ahead. People in this country and in Europe should be prepared to take that step. In Europe, those who have invested heavily, with large pots of socialist money, in high definition television should be prepared to cut loose from that and invest in the development of digital picture transmission.

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Unless that happens, the United Kingdom and the rest of Europe will be left out in the cold as the Americans, who have already developed this technology, take the lead. That is the choice we face. That is why I believe that, for all its many faults, the role that Sky Broadcasting, and now BSB, are playing in the development of television towards the 21st century is so important.

I ask my hon. Friend the Minister to consider the order carefully, and to consider one important fact. Under the order, BSB must divest itself of its broadcasting capacity on the Marco Polo satellite. Unless the House of Commons is mug enough to use that archaic form of technology to transmit the proceedings of the House to those non-existent people who will be able to watch it, the Marco Polo satellite will be a dustbin floating around the sky.

If BSB is not allowed to continue to use Marco Polo because of tonight's order, that company, which has already invested huge sums of money in the development of satellite in the United Kingdom, will have to give to every owner of a squarial a receiver capable of receiving the Astra signal. That would be a complete waste of money, money that would be much better spent investing in the development of the technology of the 21st century. I urge my hon. Friend to reconsider the order.

8.54 pm

Mr. Robert Maclennan (Caithness and Sutherland) : I suppose that many people would share the enthusiasm of the hon. Member for Thanet, North (Mr. Gale) for the development of satellite television, which will widen consumer choice. I am not sure, however, that many would agree with the hon. Gentleman that those who took the decision to buy a squarial should have been the victims of the collapse of BSB two days after the enactment of the Broadcasting Act 1990. Although I share the view that it is not quite precise to describe BSkyB as a monopolistic entity, it has been exercising its market power in a rather unattractive way with respect to its obligations--moral, if not legal--towards those who had already acquired a squarial.

I should like the Minister to answer the points raised by the hon. Member for Birmingham, Erdington (Mr. Corbett) who alleged that the company invited retailers to put BSB equipment back on the market so as to avoid having to pay compensation. That is quite a serious charge and it merits a response from the Minister. The Minister may say that he has no control over the situation, but that only demonstrates some of the weaknesses of the regulatory framework in protecting the consumer interest--a Government responsibility.

Mr. Peter Lloyd : I can give the hon. Gentleman some reassurance. As I understand it, the ITC has agreed with BSkyB that it will replace the squarials that were functioning before the merger took place at no cost to the customers.

The hon. Gentleman is right to say that Ministers do not have the power to require any business to compensate its customers in any particular way. It may have a moral obligation towards its customers, in which case that is a matter for the company. It may have a legal obligation, and that is a matter for the law. The hon. Gentleman will understand, however, that in this case, as with any other

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