House of Commons Hansard Debates for 24 Apr 1991

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commercial undertaking, it is not a matter on which Ministers can rule. I hope that the hon. Gentleman will be somewhat reassured, however, by the agreement that has been reached for BSB customers.

Mr. Maclennan : I agree, but I think that that point was fairly widely known. The hon. Member for Erdington was making a new point, which was that BSB had apparently attempted to encourage retailers to continue marketing equipment for which the consumer would have no necessity, in order to avoid its undertaking to replace equipment acquired at an earlier date.

I accept that Ministers have limited power, but if they look with a drooping and inauspicious eye on what important men of commerce do, the men of commerce will notice that. It is not a matter of leverage ; it is just a matter of disapproval. If the allegations made by the hon. Member for Erdington are true, they are pretty disreputable.

Mr. Lloyd : Perhaps I can say sufficient to enable the hon. Gentleman to move on to another point, even if it is not to his complete satisfaction. I listened to what the hon. Member for Birmingham, Erdington (Mr. Corbett) said and I took due note of it. It is not a matter of which I have knowledge, but it is something with which I intend to acquaint myself. From the way he put it, it is certainly not a matter for me, whether I would like it to be or not. I was interested to hear the hon. Member for Caithness and Sutherland (Mr. Maclennan) say that the old squarials are no use and that anybody who is foolish enough to buy one would be making a huge mistake. I hope that that will not be the case. If the hon. Gentleman had any of the optimism of my hon. Friend the Member for Thanet, North (Mr. Gale) and looked ahead to the further development of satellite television, he might make a good bargain with what now looks like redundant equipment. It is for him as a customer to make his own judgment and to make up his mind.

Mr. Maclennan : I have made the point. The Minister may be wise to encourage me to move on to another point, so I shall do so. The background against which the order is being debated is not quite the same commercial background as that which greeted the Broadcasting Bill in its infancy. It is fair to say that we are now in a more competitive situation than we were at that time. Advertising revenue is substantially reduced and those companies which are contemplating bidding for the franchises for Channel 3 are doing so in a cold climate. That makes the cross-ownership provisions that we are considering tonight perhaps more significant. There may be those who are less enthusiastic about bidding than they were. I do not know whether the hon. Member for Erdington is right in speculating about negative bidding--I hope not--but undoubtedly it is a cold climate.

That moves me to ask the Minister about the outcome of the representations that were made to him and other Ministers on 8 April at a meeting with representatives of the Independent Television Association led, I believe, by Sir Brian Bailey, about the severity of the impact of the levy on the revenue of the company. It would be reasonable for the Government to make clear their conclusions on that point before the date of bidding. I hope that the Minister will take the opportunity of this debate tonight to give some idea of the Government's

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thinking on that point. I understand that there have been discussions between his Department and the Treasury about it. I come now not just to the circumstances but to the terms of the order. It may be appropriate to begin by saying that I acknowledge, and with some satisfaction, the fact that the Home Secretary did in part reverse his position as a result of pressure put upon him not only by me but by a number of other hon. Members and companies in respect of the contiguity principle.

It must be said that, when the Bill was enacted last year, it was without any expectation that its provisions, and the assurances that had been given during its passage through the House, would be so radically changed as they were by the present Home Secretary, almost as the first act of taking office in November.

Those who participated in the protracted debates know that the importance of regional television dominated our discussions of Channel 3--who was to acquire the licences and what standards would be required of bidders. It was with those concerns in mind that the Chief Secretary to the Treasury, who was then the Minister responsible for the Broadcasting Bill, gave a clear undertaking to the House that the contiguity rule--not a very elegant description, but it is clear--would be maintained. It was intended to prevent a process of consolidation in regional television production which would lead to the disappearance of the characteristic qualities of the 15 regions.

The hon. Member for Thanet, North spoke about the problems of TVS and told us what was happening to the studios in Maidstone and Southampton--and in Nottingham too, with Central. Hon. Members of all parties were anxious that such pressures should be held at bay. We were all eager to maintain the regional basis of television, especially with Channel 3--that was really the sole justification for its separate existence. I am glad that the Minister found it possible at least to reach this compromise. It is an important step in the right direction and will give the companies in the bidding process the opportunity to establish themselves. It will prevent them from being tested by hostile predatory bids before the end of the moratorium provided for under section 21 of the Broadcasting Act. It is likely that many of the companies, probably most of them, will put this period to good use by fortifying themselves against unwanted attention from predatory neighbours. However, it would have been wiser to have stuck to the Government's original position. It is hard to believe that that could not have been done by way of an amendable order. Then, if the feared adverse circumstances arose, and some of the farthings in the penny- farthing relationships got wobbly and might not be salvageable, the orders could be amended. I assume that this order could be withdrawn and a new order introduced if it were found unsuitable or inadequate, so I shall not press my point too hard, but it would have been sensible to have removed the uncertainties that the threat of acquisition by a hostile neighbour will still pose after 1993.

The provisions concerning the sharing out of companies do not depart fundamentally from the measures that we debated at considerable length during the passage of the Broadcasting Bill. My right hon. and hon. Friends and I expressed at the time our fears about the concentration of ownership. We said that we wanted diversity and plurality of ownership, and that the present

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arrangements allow too great a concentration of power. We would have welcomed a report from John Sadler or the Monopolies and Mergers Commission, for example.

I do not go along with the Opposition's Front Bench spokesman, the hon. Member for Erdington, in believing that it would be sensible, following a general election, to set in train yet again the entire bidding process. That would run counter to the interests of television. We must be mindful of the upheaval that the companies face and the concentration of effort that goes into preparing the bids. It is an irresponsible undertaking of the Labour party to suggest that it would relaunch the process if, by some chance, it were to form the next Government.

Mr. Corbett : There has been some misunderstanding. I did not say what the hon. Gentleman suggests. I said--this is what I meant to say or what I thought I said--that at the end of the licence period, on which we are just about starting, we would go through a bidding process again, and not as envisaged under the Act. The only things that would come under the Act would be via the stock exchange. That is all I said.

Mr. Maclennan : I am grateful for that clarification. If I misunderstood the hon. Gentleman's proposal, I readily withdraw. I am bound to say that I thought that he was talking--I think that others reached this understanding--about relaunching the bidding process on the basis of new ground rules as soon as he became the responsible Minister. That would clearly be adverse to the interests of television.

If the arrangements for television cannot be entirely welcomed, the arrangements for radio seem to be considerably worse. It is clear that radio is operating within tight commercial constraints, with limited prospects of profits. The competition that we are witnessing makes the probability of concentration much greater for radio than for television. It is all too likely that the proposal that one company should be allowed to own up to 20 local stations, so that costs and programming will be shared, will be the pattern. I fear that we shall see the disappearance of the diversity of stations that has been held out to us, tantalisingly, as the object. It is not possible within the scope of the debate to deal with possible remedies for that. I merely note what is proposed in modification of the general principle in applying a point system for independent radio.

I fear that the result of the proposals will be the loss of local services. Most stations will be bland and will offer the barest minimum of local news and stories. As soon as a station starts to attract listeners, one of the giants of local radio will seek to take it over.

That is a pattern that we watched with dismay in France. I guess that we cannot prevent it occurring in the United Kingdom, but it is a reason for taking the view that the order is inappropriate to deal with the problem.

It is deplorable and regrettable that community radio is likely to be the first in line for the chop. In the current climate, it is virtually impossible to set up new and specialised services that will attract advertising while audiences are accumulated. Again, if community radio breaks through, it is likely to be quickly swallowed up by one of its larger commercial rivals. We should have built-in protections for community radio, whose function is quite different from that of local radio.

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On previous occasions, I have said that the 20 per cent. limit was inappropriately large for television and radio stations, and that a smaller limit would be wiser in a pluralist society. We have missed an opportunity to make competition more effective by holding the reins in a different way. I am disappointed that thinking on that matter has not developed with the advent of the new Home Secretary. The issue of non-satellite broadcasting divided the House on a previous occasion. Only domestic satellites are mentioned in the order. Now that Mr. Murdoch has reduced his holding in BSkyB, perhaps the personal reasons for exempting him from the rule of law have disappeared. It might be appropriate to go back to the drawing board and consider introducing legislation consistent with that for other sectors, and so remove the special favours for non-domestic satellites that have shown the lack of power of the Independent Television Commission to protect consumers' interests within hours of the enactment of the Broadcasting Bill. I do not expect the Government to move instantly on that matter, but I should like them at least to think about it. It would make sense in the longer term and it would be in the consumer interest.

The order does not reflect the sort of priorities that we believe should have been protected, and for that reason we shall not support the Government tonight.

9.6 pm

Mr. John Greenway (Ryedale) : I declare an interest as an adviser to Yorkshire Television.

Our debates on the Broadcasting Bill over the past 18 months have been characterised by the shedding of more light on what the future broadcasting scene is likely to be. There was a good example of that a moment ago in the exchange of views between the hon. Members for Birmingham, Erdington (Mr. Corbett) and for Caithness and Sutherland (Mr. Maclennan). There will be rejoicing throughout independent television, not least in the Independent Television Commission, that the hon. Member for Erdington has at least clarified his party's position on the allocation of licences--that in the unlikely event of a Labour victory at the next general election there will not be a wholesale reallocation of licences. That is of some relief to us. I have some sympathy with what the hon. Member for Erdington said about the risks facing Channel 3, and especially regional television. The hon. Member for Great Grimsby (Mr. Mitchell) put his finger on the root of the problem when he referred to the position of newspapers. Certain national daily newspapers have survived only because of the entrepreneurial investment of certain so-called media tycoons. Whether it is commercial television, commercial radio or newspapers, there is no guarantee of commercial success.

Throughout our deliberations on trying to set in place a proper framework for the future of Channel 3, the real difficulty was that we needed a structure that dealt with the most profitable regions such as Thames Television, TVS and London Weekend Television, but also provided a sensible framework for the future of Grampian Television and Border Television in Scotland. That was at the heart of concern over the future of the ownership of Channel 3

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licences and explains why we were unable fully to resolve those matters in Committee, on Report or even on Third Reading of the Broadcasting Bill. Therefore, there was a need for further reflection and consultation on the best framework.

I hope not to appear modest when I suggest that the order, in relation to Channel 3, broadly reflects the compromise proposal that I put to my right hon. Friend the Home Secretary shortly before Christmas. I remain disappointed that there was no agreement between the two adjoining licensees to allow mergers to take place even before the licences are reallocated--but that is history.

Now the bids are about to be submitted. By the end of the year the licences will be allocated. In terms of future mergers or takeovers, the draft order provides a sensible compromise between the conflicting and competing commercial interests of different television stations and the crucial ingredient of protecting the regional commitment of whoever has that licence. That involves protecting not the commercial interests of a specific television station, but the regional arrangements and the regional map of Channel 3--there is a fundamental difference between those two. Mr. Maclennan indicated assent.

Mr. Greenway : The hon. Member for Caithness and Sutherland nods in agreement because he knows that those matters largely affect his constituents. I am glad that he agrees with me on that.

I take the point of the hon. Member for Erdington that the framework provided by the Bill leaves us with much meat to put on the bones. However, my reading of the Channel 3 licence applications suggests--I think that this is accepted throughout independent television--that those who will be granted licences in the allocation, whether existing Channel 3 licensees or new players, will have a stronger regional commitment to Channel 3 as a consequence of the Bill and the order than was the case under the old arrangement. That is largely to the credit of my right hon. and learned Friend the Chief Secretary to the Treasury, who was responsible for guiding much of the legislation through the House. He responded well to our concerns in the regions about the future of regional television. We cannot emphasise too much the fact that Channel 3 will represent regional television in the future. I have grave doubts about whether it will be possible, in the greater competitive world of television in the next century, for the British Broadcasting Corporation to maintain the sort of regional television and local radio service that it has at present. I am not suggesting that it will not fight hard to maintain those services, but Channel 3 is the one television channel required, by statute, to provide a regional service. That is why it is important that we place in perspective the issue of who should in future own some of the smaller licences should the cold competitive world of the future mean that their viability is threatened. That is where I part company with the hon. Member for Caithness and Sutherland. I cannot and never could see the logic of the distanced penny-farthing. I cannot see why Central Television should want to bail out Border Television should Border Television get into financial difficulties.

I can see a considerable advantage, however, in suggesting that Granada Television may wish to bail out Border Television. The hon. Member for Erdington says

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that that threatens to undermine the regional service. It does not, because it is clear from the legislation and what has been said about Channel 3 licence ownership that any company that takes over a neighbouring licence, or any other licence, would be required to honour all the licence obligations, including regional commitments. Those must include the arrangements which the Bill requires and which the Independent Television Commission has strengthened in its draft licences, for the licensees to demonstrate how they will meet the regional programme.

Economies of scale can be beneficial, but there can also be commercial benefits and benefits to viewers. The whole of my constituency in north Yorkshire is one of the overlap areas. Neither Yorkshire Television nor Tyne Tees Television has universal coverage. As we all know from past arguments, that is because of transmission arrangements. However, where a larger licensee acquires the interests of a smaller neighbouring licensee, there can be considerable advantage for viewers in the strengthening of local and regional services. That must not be underestimated.

It will be clear from my comments that I strongly support the order. I shall not mention all the matters with which it deals but will continue to confine my remarks to Channel 3 licensees. In that context, will my hon. Friend the Minister consider the fact that everyone's attention is currently focused on the bid for Channel 3 licences? It is an historic moment for the future of independent television. Contrary to what the hon. Member for Erdington said, we are about to allocate the licences for a period of some 20 years and set the framework for the future of our main terrestrial commercial television channel.

That is why we were right to spend so much time trying to get that framework right. In Committee and on the Floor of the House we argued about the need to maintain quality while not inhibiting commercial opportunity. I believe that we have got the framework right, but it rests on the exceptional circumstance arrangement in the scheme of bidding. None of us wants the highest bid to win at the expense of quality. Will my hon. Friend confirm that the exceptional circumstances provision is there to be used? The hon. Member for Caithness and Sutherland, whose constituency is as far as anyone else's from London, will agree that the further one is from London, the more important is the regional concept of Channel 3 television. The provision deals with the quality of Channel 3 and its commitment to the regions. I believe that the regional commitment can be considered an exceptional circumstance in the scheme of bidding. On local radio, the ownership arrangements in the order are complex. I hope that my hon. Friend can confirm that he does not accept any argument that those ownership arrangements would hamper commercial investment in local radio because local radio will not be involved in big megabucks, money-spinning activity. Many people will have to put much effort into providing independent radio competition locally against the BBC structure. In rural areas there will not be large audiences and some people many well be investing almost on a wing and a prayer. We should not discourage that investment by ownership rules which are too complex.

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9.30 pm

Mr. Austin Mitchell (Great Grimsby) : I declare an interest, in that I present a programme for BSkyB. It is an excellent, high-quality programme of great intellectual rigour in which I speak for freedom, truth and justice and the right hon. Member for Chingford (Mr. Tebbit) dissents, when he can get a word in. That ends the commercial break.

The order closes the stable doors after the horses have bolted all over the place. There is an incantation of magical formula of 5 per cent. of this and 20 per cent. of that being introduced, long after the brew has curdled and all the decisions have been taken. The Radio Authority and the ITC are both trying to catch up and cast a cloak of rationality over the undesirable situation that has developed in television and radio. They have been cogitating for months and now we have their recommendations.

During that time--indeed, over the past couple of years--the whole position in radio and television has changed, in my view for the worse, as a result of commercial decisions. In order to accumulate war chests, the ITV companies have drastically reduced staff levels, and therefore their ability to produce high-quality programmes for their regions. As I argued in an intervention in the Minister's speech, the strength of ITV is that it took television production out of London and established centres of excellence in all the regions--in Manchester, in Leeds and in Tyne Tees, for example. The position of those centres has been undermined, and they are now threatened by the contract allocations.

We want to maintain those centres. As far as I can see, there is no requirement in the regulations that the centres of excellence or the network of skills be maintained. The companies can simply become publishers, farming out programmes to independent companies as long as those independent companies produce in the regions. In a sense, that is wishful thinking in areas like Tyne Tees or Yorkshire, where there is not a vigorous network of independent companies to carry on the responsibility if it is not fulfilled by a strong production centre in Newcastle or in Leeds. Therefore, I see a real threat. I also see a farcical position developing because of the ludicrous system of bidding. If a regional company is not challenged and simply puts in a bid of a penny or a ha'penny, what will happen? If the Government's greedy aspirations cannot be fulfilled because there is not a challenge, what control will the Government or the ITC have? I should like to know, because my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) and I will almost certainly be putting in applications for licences.

Mr. Peter Lloyd : So long as the applications pass the quality threshold in the circumstances that he describes, the hon. Gentlemen will get a good bargain.

Mr. Mitchell : They say that they are a Government of business and commercial rigour, but they have created a daft situation like that. A company that makes an excellent contribution to a region, has a good reputation is not challenged, because of the strength of its productions and what it has done for the region, can get away with making a bid of one penny. The Minister has told us that that is the case. If that is the eventuality, it is daft.

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Mr. Lloyd : If a company wanted to bid in that way, it would get a good bargain, but I do not believe that it would win if it bid only one penny.

Mr. Mitchell : In some areas, it is difficult to get bids because expectations are low and the commercial reality is difficult. Money is tight at the moment. In that situation, if a competing bid is not put together, the company would get a bargain. It is folly on the part of the Government to provide them with that opportunity. However, I shall not grumble. If it puts more money back into television production, it benefits viewers in that region, it benefits television and therefore I welcome it.

The second major deterioration that has taken place in the intervening period is in radio. I am saddened by what has happened in commercial, independent, local radio. Companies are gobbling each other up. They are forming bigger and bigger blocks, providing more and more programmes on a network basis, not for a locality or a community, but for an amorphous, much wider entity. Concentrations of shareholdings are taking over companies.

That saddens me because, in 1975, I was involved in the foundation of Pennine Radio in Bradford, which started out as Bradford community radio. We fulfilled to the letter the IBA's then intentions, which were that there should be locally based radio stations, serving the community, with local shareholders, and with local figures taking an active part, providing a vigorous local news service and a talk opportunity for people in the locality. That is all going by the board.

The regulatory authority has watched over the undermining of every one of the principles under which it insisted that people should bid in the first stage in the 1970s, when those stations were set up. The authority has seen the principles undermined, frustrated and overturned and has witnessed the creation of commercial blocks which are nothing more than juke boxes established in a series of localities, over a wider region. That frustrates the purpose of local radio, which is what it is all about, and we have watched it happen. These regulations are closing the stable door on that process. Indeed, they are closing the stable door in an incomprehensible fashion. I see that section 12 of the regulations entitled "limits", states :

"Subject to the following paragraphs, a person shall not at any time hold licences to provide national, local or restricted radio services such that the total number of points applicable to such services, calculated in accordance with article 11, exceeds 15 per cent. of the total number of points so calculated applicable to all such services in respect of which licences have been granted and have not ceased to have effect."

What does that mean? How is that an effective base on which to provide a genuine local radio service of the type that I and the people at Pennine Radio were so proud to establish in 1975, when--we struggled to fulfil the requirements that were then imposed by the IBA--we set up a local radio station serving a genuine community which was run by people from that community and had a shareholding in the community.

The matter has become a joke, and it is not helped by a regulatory authority which we were told would be a light touch authority--in radio as in television--but which is now going in for more heavy-handed regulation than anything that preceded it.

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I have had a long brush with that authority over their regulations, which state that politicians shall not present their current affairs programmes. It seems to be all right for politicians to preside over radio authorities, but not for them to appear on a radio programme that it is nominally supervising.

One expects a bureaucracy to justify its silly or irrational decisions. It is a civil servant's job to put "Not unwelcome" on the doormat and to phrase things to defend the status quo. However, in my correspondence about that decision, which seems to me to be an unnecessary interference with the freedom of radio stations, the authority has not even understood the point at issue. The intellectual level of the replies is very worrying. If that is the regulator, it is now in an impossible position because of the differentiations in the national radio stations that we are now setting up. If it is true that the authority has received no applications for the first national non-pop radio station and has had to extend the date for applications in the desperate hope of receiving some, how will that body be regulated if the authority has to beg for applicants to fulfil the intentions that the Government have foisted on it? How will it be regulated if the Government are desperate for bids?

Mr. Corbett : Shall we spend another penny on a radio station?

Mr. Mitchell : I am always happy to co-operate with my hon. Friend the Member for Erdington. Let us extend our talents not only to television but to radio stations.

The Radio Authority's intervention in LBC is another classic example. LBC spent a small fortune splitting its frequencies and providing two radio stations. Then, along comes the Radio Authority, which is committed to diversity, to ask it to put them back together again. That is heavy-handed and elephantine regulation, when we were told that the touch would be light. Frankly, the intellectual level is depressing.

We are dealing with regulations that try to freeze a mess, especially in local radio, where the only effective competition now comes from BBC local radio, which provides diversity and an alternative service. I am thinking especially of BBC Radio Humberside. It provides a magnificent service in the area where allocations by the BBC have been cut because it is kept on such a tight financial string. Local radio is therefore less able to serve its community, so competition is being undermined. The intentions of the system are being frustrated and will not be upheld by the regulations.

The third change is the collapse of British Satellite Broadcasting, which was the biggest disaster after the poll tax. That was a tragedy and a folly, because we had an opportunity to get into the satellite market early with a high technical capability, which would have established us as leaders and provided a system that could have been expanded and sold in Europe. The Government's indecision, dithering and inability to decide who should run it meant that the launch was put back again and again. They considered different companies and danced a series of marital gavottes with different partners, all of which broke up.

Engineers imposed standards that were technically too high and therefore, more expensive, thus reducing again the range of choice of those who could provide the service. The Government delayed and British capital, which is

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conventionally nervous in such a situation, was very slow, so the service came too late. It was launched years after it should have been launched, whereas it was vital to get into the market early. It lagged behind and staggered. It went in, even then, with expectations that were too grandiose and with a structure based on the BBC and run by people from the BBC who were used to overspending and to grandiose expectations. It was like the hon. Member for Rochdale (Sir C. Smith) hang-gliding. It was overstaffed, top-heavy and bound to crash because it paid no attention to commercial realities.

BSB failed for two reasons. First, it spent too much money and was too grandiose. It had no idea about commercial realities. Secondly, Rupert Murdoch got in first and scooped the market. Who can blame him? Capitalism is all about taking a risk. Rupert Murdoch got in and did it--successfully. In those circumstances, BSB was bound to fail. It is silly to start complaining--as my hon. Friend the Member for Erdington did--as if Sky had taken over and strangled its opposition. That was not what happened. The shareholders of BSB, alarmed at the scale of their losses, took the baby out of the management's hands and dumped it on Rupert Murdoch's doorstep. That is literally what happened.

How can we then--as my hon. Friend the Member for Erdington did--blame what happened on the man on whose doorstep the baby was dumped? He had taken the risk. About £1.5 billion has been spent so far on the satellite venture. That was enormous expenditure, to provide more choice and diversity for viewers in Britain. So why are we going in for this chorus of blame, praising with faint damns? We "assent with civil leer,

And, without sneering, teach the rest to sneer."

That is our attitude.

I should have preferred a fight--a conflict in which the viewers could have chosen. I should have preferred competition to provide better programmes. That is not what happened, but it is not realistic to blame Murdoch for a situation that was not of his making. The merger was cleared by the Office of Fair Trading, so it is churlish to carp. I do not come to praise Rupert Murdoch but I do not come to bury him either.

The order is a fig leaf to conceal the Government's impotence in the Sky- BSB merger. Our position is intellectually disreputable. However desirable it might be, it is not possible to prevent concentrations of ownership in the media unless the freedom of the press is restricted and the Government close off people's opportunity to enter the market and require people to get out of the market. That is the problem. It is a problem which we must solve if we are to say that the market must be regulated. If we cannot do so, we should not imply that we would deal with the matter.

I have never particularly liked The Sun, but I do not read The Sun. In the heart of every Labour Member of Parliament there is a C. P. Scott struggling to get out. The ethics of The Sun are a matter of taste, but that is not a justification for legislative intervention to expropriate newspapers. The Sun was handed to Rupert Murdoch by whom? We must take that into account. He saved it from closure. The same applies to Today. It is unrealistic to say that we will deal with the monopoly by taking papers away and allowing them to fail. That would be irrational.

My hon. Friend the Member for Erdington said that we would refer newspaper ownership to the Monopolies and

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Mergers Commission for investigation. That is the classic formula for any party that cannot decide what to do. It passes the matter on to a Royal Commission, to take minutes and waste years, or to the MMC. However, if we say that, it is irrational also to say that the 20 per cent. ceiling on, for example, Rupert Murdoch's participation would be enforced at the same time, even before the investigation was complete. What is magical about 20 per cent.?

We have here a system that provides more choice and allows the viewer to choose. That is important. More diversity has been provided. Murdoch has taken a risk and I hope that he will succeed. It is churlish to carp and drag sulkily behind saying, "Naughty, naughty." That is not intellectually credible. In focusing on that issue, we have lost sight of the real issue, which is the undermining of the local roots of production in both radio and television. We are fiddling while the position deteriorates.

I am terribly worried that the failure of the Government to provide in the legislation for local production in centres of excellence, which are the basis of ITV's federal system, will mean that the people bidding for contracts do not establish production centres but farm production out. They will farm that out and become publishers. It may be that they will farm it out to independents in the regions, but those people will not encourage the skills, or establish the centres of training and excellence, in the way that ITV has. I am particularly worried about the maintenance of centres at Border, Grampian and Tyne Tees, where they are important, and about the erosion of local bases in commercial local radio. Local television and radio have been the pride of our system. We are sabotaging the local basis of electronic communications, and this order will do nothing to stop that process.

9.50 pm

Mr. Graham Riddick (Colne Valley) : There is a perfectly respectable case for saying that we should have none of these regulations or controls, but leave it to the Monopolies and Mergers Commission to step in if competition is being stifled or undermined. However, I accept that, on balance, it is probably right that we should support this order to ensure that, from the word go, no such reduction in competition takes place. I see no justification whatsoever in the cross-media ownership controls relating to newspapers and satellites. They are wholly unnecessary.

I am a little surprised that the Labour party should be making a fuss about Rupert Murdoch's ownership of a satellite television station. I am surprised to see them engaging in another round of Murdoch-bashing. The last time we discussed this issue--during the debate on the Broadcasting Act 1990--the Labour party clearly lost the argument. The speech of the hon. Member for Birmingham, Erdington (Mr. Corbett), in which I think he was arguing that a Labour Government would force Mr. Murdoch to divest himself of either his satellite interests or his newspaper interests, was, to say the least, extremely unconvincing. I was astonished when the hon. Member for Caithness and Sutherland (Mr. Maclennan) appeared to suggest that he had some sympathy with the case being made by Labour Front-Bench Members.

The hon. Member for Great Grimsby (Mr. Mitchell) used the word "disreputable" to describe the approach of

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his hon. Friend the Member for Birmingham, Erdington (Mr. Corbett). I shall be a little more rude, although it is not always easy to be less polite than the hon. Member for Great Grimsby. Clearly, there is one source of motivation for everything that Labour Members say about Rupert Murdoch and his interests. That motivation is spite--sheer spite. It was Rubert Murdoch who destroyed the stranglehold that the print unions--some of Labour's paymasters--had over the newspaper industry, and Labour wants to get even. It was Rupert Murdoch who got rid of the restrictive practices in newspapers, which were doing so much damage to the industry. A political party whose policy is based on spite does not deserve to be taken seriously.

I am no longer surprised that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), the shadow Home Secretary, for whom the hon. Member for Erdington has been acting as mouthpiece in this debate, should behave on the basis of spite. Last year, he said that he would never again write for the Murdoch newspapers. That was a spiteful decision, but one which, as a regular reader of The Times , and the Sunday Times , and, I confess, as an occasional reader of The Sun , I welcome entirely.

Applying Labour's approach could be justified only if there were a monopoly. The hon. Member for Erdington tried this evening to argue that there was, but the truth is that there is no monopoly. Mr. Murdoch's newspapers operate in a highly competitive environment, a highly competitive marketplace. Each has robust competition, and nobody forces anybody to read any of them.

It is quite clear that Mr. Murdoch's satellite investment is highly risky. Nobody forces people to watch those satellite television stations. The suggestion that Rupert Murdoch has a satellite monopoly is complete nonsense. Mr. Murdoch now owns only 40 per cent. of British Sky Broadcasting and, as my hon. Friend the Member for Thanet, North (Mr. Gale) pointed out, there is great choice on the Astra satellite system. There are already five English language channels on Astra. More importantly, British Sky Broadcasting is providing competition for the duopoly that has existed in Britain for so long in the BBC and ITV companies.

The real power in broadcasting is not Mr. Murdoch but the BBC. Measured by revenue, the BBC is the largest media enterprise in Europe. It enjoys monopoly access to the licence fee ; it has half the terrestrial broadcasting spectrum at its disposal ; it has the lion's share of the radio frequencies ; it employs 27,000 people and it is the second largest publisher of consumer magazines in Britain ; yet Labour does not advocate dismantling the BBC. Apparently, Labour likes the BBC. I am not suggesting at this stage that we should dismantle the BBC.

Mr. Geoffrey Dickens (Littleborough and Saddleworth) : Does my hon. Friend agree that the Opposition want to dismantle the Broadcasting Standards Council? They complain about the amount of sex and violence that appears on television, yet at the same time they want to abolish the very body that sets and controls those standards. It does not line up.

Mr. Riddick : My hon. Friend is right. The Labour party is very partial in its approach to these matters. As my hon. Friend has pointed out, the Labour party wishes to

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abolish the Broadcasting Standards Council. It would also reverse the impartiality clauses contained in the Broadcasting Act, which I hope will ensure greater impartiality in broadcasting in the months and years to come.

Tonight we have seen an exercise in Labour hypocricy. The Opposition do not like Mr. Murdoch, and what they have been saying about him tonight is motivated purely by spite. The hon. Member for Erdington, who is no longer in his place, should be thoroughly ashamed of himself for that.

9.57 pm

Mr. Norman Tebbit (Chingford) : I regret that I missed the opening Front Bench speeches in the short debate this evening. That was not because, as a television viewer, I detest repeats and it was quite clear that the Labour party would wheel out a repeat of an old show that had failed to improve its audience ratings before, but because the business came on a little earlier than we had expected. I should remind the House of my personal interest in these matters as a working television journalist employed by British Sky Broadcasting, and of course as the co-presenter of a programme with the hon. Member for Great Grimsby (Mr. Mitchell). It is most agreeable to have got through three sentences in his presence without having been interrupted. As those who watch our programme will know, that is extremely rare--as rare as my letting him have his say without interrupting him.

I share the concerns which have been expressed this evening about the possible growth of monopoly or dominance within the media, but I see it at a slightly different angle for some Opposition Members. The order does not relate to the printed media--the newspapers--although there is a clear connection because of the provisions relating to ownership. But for the activities of Mr. Murdoch and his company, aided and abetted by Mr. Maxwell --a former Labour Member of Parliament who is rumoured to be a Labour supporter to this day, and who has been almost as forthright in breaking the monopoly power of the trade unions in the print business--I very much doubt that we would see The Independent or several other titles today. It is possible that The Guardian would have gone under--a tragedy that I would have borne nobly and stoically, without too many tears, I must confess. None the less, one should provide a wide range of choice even for those who are obviously fundamentally unable to take advantage of it. Any suggestion that the activities of Mr. Murdoch in this country have been monopolistic are misplaced. I find it particularly odd that there should be a suggestion that there is any form of satellite television monopoly. There are plenty of channels available at the moment on satellite that could broadcast into this country. It is up to those bold enough to come forward.

If the hon. Member for Birmingham, Erdington (Mr. Corbett) could raise a couple more pennies--like him, I am, at times, overwhelmingly tempted to spend a penny on some of our broadcasters, to use his phrase--and some cash, he could have a channel on one of the satellites. Whether or not anyone would want to watch it is another matter.

Mr. Corbett : Rather like Sky.

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Mr. Tebbit : Well, I am not sure that the hon. Gentleman would normally find a million or so viewers. I suspect that, if it came to it, his hon. Friend the Member for Great Grimsby would have a lot more viewers than the hon. Gentleman. We might have a few more viewers for this debate if the two of them transposed their positions. As we all know, however, the hon. Member for Great Grimsby was sacked from his Front Bench position, for taking a job with British Sky Broadcasting. That was done, I presume, so that we should not have any censorship in the media. It does not matter if one writes for The Times. That is not an offence--well, not if one is senior enough ; it is only if one is a junior, and when one works for Sky, that one gets fired from the Opposition Front Bench. The gainers from that encounter were my hon. Friend--I mean the hon. Gentleman ; I must remember the proprieties of these things--the Member for Great Grimsby, my co-presenter, and the viewers of Sky.

By far the most dominant force in television today is not Mr. Murdoch, but the BBC. That poses the danger of a monopoly. It still has half the terrestrial channels, apart from its publishing activities. My hon. Friend the Minister should keep a close eye on how well the BBC is doing in the process that was set in train by my hon. Friend and others of contracting out more of its programmes to independent producers.

If my hon. Friend considers what is happening, he will discover that many of those contracts are awarded on a sweetheart basis. Some of the restrictions that are placed on the tenderers for those contracts make it plain that it is the intention of the BBC that nothing shall change whatever, except that the cost of the productions shall increase because former BBC employees will be doing that production with an added fee. That was not the intention of placing a requirement on the BBC to contract out some of its work to independent producers. [Interruption.]

The hon. Member for Clydebank and Milngavie (Mr. Worthington) is muttering from a sedentary position. Perhaps he can tell me how the BBC has done in reducing its prices to the consumer, just as British Telecom has reduced its prices to the consumer. If the hon. Gentleman knows the answer, he might have something to say. Would he like to tell us what has been happening to the licence fee, as opposed to telephone charges?

Mr. Tony Worthington (Clydebank and Milngavie) : Can the hon. Gentleman tell me how it is just that people all over Britain are having to pay 17.5 per cent. VAT on their telephone charges when that 17.5 per cent. VAT was not in existence from January to March this year?

Mr. Tebbit : That is a little bit off the broad scope of the debate. I will only say briefly that, so far as it is possible to do, those consumers are not being charged that additional VAT unless it is proper and appropriate that they should be.

Mr. Worthington : It sounds like a racket to me.

Mr. Tebbit : I would be happy if my hon. Friend the Minister were able to tell us tonight that in future the BBC's licence fee would be linked to the retail prices index in the same way as British Telecom's prices--RPI minus 6.5 per cent. It would no doubt please everybody in the House to see prices coming down in that way--or would it? Perhaps not.

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But as I have said, the principal threat to competition in television is, first, the continuing dominance of the BBC and secondly, and more seriously perhaps in many ways, the threat to the independent sector which is coming from the present dearth of advertising revenues. That is the problem which may well force under some of the smaller independent companies, particularly those in radio.

There has been a lot of talk this evening about the dangers of successful companies in television and radio being taken over in predatory bids. But in my experience, it is not successful companies that are taken over, but unsuccessful companies. If there is a danger at all at the moment, it lies first in the lack of advertising revenue, which springs from the considerable expansion in the number of stations spreading the revenue too thinly, and, secondly, in the recession reducing the amount of revenue available. That is where the danger lies, not from the activities of the strong, powerful and well-financed companies.

I hope that my hon. Friend, when he looks at those matters, will be entirely firm and stick to what he has said about the manner in which the restrictions will be applied to cross-media ownership. There is no requirement to strengthen the regulations beyond those which he has proposed. If anything, in the longer term, we should be looking at reducing those restrictions.

I do not find it acceptable to see that there is a monopoly because somebody is a significant operator in the printed press and the electronic media. Those are not the same areas, and I do not think that we should worry too much about it.

10.8 pm

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