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Question accordingly agreed to.

Resolved ,

That, for the purposes of any Act resulting from the Local Government etc. (Scotland) Bill ("the Act"), it is expedient-- (

(a) to authorise the Secretary of State to direct a water and sewerage authority established by the Act to pay him such sums as he may direct, being sums not required by them for the exercise of their functions, nor otherwise payable by them under or by virtue of any provision of the Act ;

(b) to authorise the payment into the Consolidated Fund of any sums paid to the Secretary of State, otherwise than in repayment of any loans made by him, in consequence of any provision of the Act ; and (

(c) to authorise the payment into the National Loans Fund of any sums paid to the Secretary of State in repayment of loans made by him to any water and sewerage authority established by the Act.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees).

Rehabilitation Support

That this House takes note of European Community Document No. 6625/93, relating to the European Commission's proposed rehabilitation support programme in developing countries ; and supports the Government's policy towards the proposed programme.-- [Mr. Andrew Mitchell.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) (European Standing Committees).

Fishing Fleets (Capacities)

That this House takes note of European Community Documents Nos. 6888/93, relating to the capacities of fishing fleets in the Community, and 7378/93 and ADD 1, together with the Supplementary Explanatory Memorandum submitted by the Ministry of Agriculture, Fisheries and Food on 19th November, relating to the Transitional Guidance Programme ; notes the Court of Auditors' criticism of Community expenditure on decommissioning ; notes the measures taken by member states under their guidance programmes ; and endorses the Government's view that, in order to conserve fish stocks, a combination of measures designed to regulate fishing effort is required.-- [Mr. Andrew Mitchell.]

Question agreed to.

NATIONAL HERITAGE

Ordered,

That Mr. Alan Howarth be discharged from the National Heritage Committee and Mr. Anthony Coombs be added to the Committee.-- [Sir Fergus Montgomery, on behalf of the Committee of Selection.]


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Newspaper Ownership

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Andrew Mitchell.]

2.1 am

Mr. Richard Page (Hertfordshire, South-West) : Let me begin my expressing my appreciation to my hon. Friend the Parliamentary Under- Secretary of State for National Heritage, who will reply to the debate, and my regret that it is not taking place several hours earlier. Unfortunately, the peculiar and arcane procedures of the House must take their course.

I hope that I am pushing an open door tonight. I am well aware of what was said by my right hon. Friend the Secretary of State for National Heritage at today's lunch, when he addressed the Media Society on cross-media ownership; I have obtained a transcript of his words. I believe that the door is beginning to open, but I hope that what I say tonight will help to push it a little further ajar, allowing some recognition of the changes that have taken place in the world of the media. I hope that those changes will be reflected in the ownership of the various bodies that have an opportunity to provide the British public with news and entertainment.

I often feel that parliamentary legislation is somewhat similar to fighter aircraft. My hon. Friend may think that a rather peculiar analogy; but building a fighter plane means first having to design it--which means a lot of work on the drawing board--then building the prototype and testing it. Eventually, after a successful test, the designer decides to move into production. As soon as that first fighter comes off the production line, it is out of date, because a more modern version is waiting on the drawing board.

The same could be said of the Broadcasting Act 1990. When it was at the design stage, it was up to date; almost as soon as it became an Act, it was out of date.

I served on the Committee that considered the original Telecommunications Bill of 1983 and the subsequent 1984 Act. That legislation split the Post Office from British Telecommunications and allowed BT to operate in the private sector, along with the newly created cellular network and Mercury. At that time, none of us realised the speed at which the development of information technology would take off. We knew that we would change the scene, but we did not know that everything would alter at such a rate.

When we considered the Broadcasting Bill, none of us knew that satellite television would succeed. Murdoch was brave enough to invest millions of pounds in it every week, but there was hardly a queue forming to take over and compete in the satellite market. Only one other competitor then existed, but it soon fell by the wayside. Murdoch has now succeeded in that market.

At that time, there were few radio stations. One could listen to pirate stations, such as Radio Caroline ; now there are more stations than one can shake a stick at. The same can be said of the cable companies. In 1990, the cable franchises were not taken up and only one half-viable franchise was operating in the United Kingdom. Now Britain has been cabled and those companies are taking a bigger share of the market. They are also moving into the voice telephony market. We have witnessed the growth in the development and use of fibre optics. If we allow BT to


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use the twisted pair of wires that go into each home to provide further media communication, the market will expand even more. When the Broadcasting Bill was enacted, the measures contained in it were reasonable. The game has changed, however, and the world has moved on. We must catch up. It is clear that the Government's policy for the media has, for understandable reasons, been unable to keep pace with the technological and cultural changes that have occurred. It is imperative that state regulation does not harm the health of a vibrant United Kingdom industry. I therefore warmly welcome the broad review that my hon. Friend the Secretary of State announced on 3 Janaury and the thrust of his speech to the Media Soceity today. Nevertheless, I am concerned that changes must be made sooner rather than later, which is the theme of my speech.

Such is the pace of change in the industry, and the rate of advance of overseas competitors, that we do not have the luxury of a long gestation period. In just three years, the cross-media ownership provisions of the 1990 Act, have, frankly, become antiquated. At that time, it was thought reasonable to leave the ownership of satellites open, while placing restrictions on terrestrial broadcasting. As my right hon. Friend has said, then there was not a long queue of entrants to the satellite market.

The growth of new means of communication has begun to leave terrestrial services almost literally stuck in the mud. It is no longer tenable for their development to be artificially restricted. Newspaper owners are being prevented from making the investment that would bring about the important synergies. My greatest concern is that, although we have now reached a point when there is a broad acknowledgement of the need for our industry to be updated, there is no real sense of urgency.

The conflict in the Gulf provided the American Cable News Network with a golden opportunity to demonstrate the capabilities of modern communication media. More recently, 60 ft yachts sailing around the world have been able to relay film from among the icebergs of the southern oceans straight to United Kingdom viewers, using digital compression. When one thinks of the length of time that it took for film to be relayed from the Falklands on to our television screens, some 10 years ago, one appreciates that the new developments are nothing short of miraculous. Those examples show how information technology has brought news and comment to the British people, in a manner undreamt of a few years ago.

Why should international media companies with full access to those technologies be allowed to transmit to the British people, whereas our newspaper industry is restricted to, at most, a 20 per cent. stake in any venture based on cable ? Our newspaper industry is the envy of the world. It may not be the apple of the Government's eye at present, but I can think of nowhere else where individuals have such choice. However, for reasons that have no relevance in 1994, those newspapers are prevented from taking a serious part in the communications revolution that is under way.

In most other industries, the United Kingdom is a model of liberalisation to its European partners. It is strange, therefore, that we should choose to be more restrictive when it comes to certain aspects of the communications industry. Having led the way in enabling the provision of


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cable services, we risk allowing that technological lead to dwindle away by refusing to allow the communications industry to evolve on the established base provided by our newspapers.

It is clear common sense that the benefits of integration between media sectors should not be denied to the industry. But, beyond that, the experience of recent years has shown that technological change and the growth of overseas competitors will wait for neither a lengthy review nor a slow implementation of liberalisation. In a world where the creation of a global product that can be marketed to the largest possible audience is so important, the creation of media groupings will bring broad competitive advantages. It would be unwise to prevent United Kingdom newspapers from becoming the hubs of modern United Kingdom media groups. If we do not act to allow that desirable development, I am convinced that the decision will be taken for us, with the media industry that provides services to the British public becoming increasingly foreign dominated and owned.

On the other side of the coin, the development of our newspaper industry will be restricted, providing a service in a highly competitive market where there will be an increasing number of desirable alternatives. Restricted circulation will lead to mergers, closures and reduced customer choice--the very opposite of what we wanted to achieve.

The United Kingdom has a media ownership restriction brought on by information technology advances that have bypassed sectoral regulations. My Adjournment debate is entitled "the future ownership of newspapers", because I believe that, if the regulations are not relaxed, the number and spread of newspapers will be reduced. Why cannot television companies hold satellite licences from the Independent Television Commission--only 20 per cent. of a firm's shares ? If a British company buys a television station anywhere in the world, why will it be disqualified from classification as a United Kingdom independent television producer ? Even Associated Newspapers' 20 per cent. ownership of Westcountry means that it cannot become an independent producer. Why does national commercial radio restrict newspapers and holders of TV franchises to 20 per cent ?

From 1 January 1994, the United Kingdom has the most liberal regulatory regime in Europe for foreign investors but the most restrictive for domestic United Kingdom competitors. Changes are needed quickly.

2.14 am

The Parliamentary Under-Secretary of State for National Heritage (Mr. Iain Sproat) : I begin by congratulating my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) on securing the opportunity to raise this most topical and important subject, and on his extremely well-informed and persuasive speech. He has raised some very important questions.

Last month, during the debate on the new ownership order, my right hon. Friend the Secretary of State for National Heritage said that the Government would be keeping the ITV company ownership rules under review, and that they would consider the wider issues of cross-media ownership. Earlier this month, my right hon.


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Friend announced that the Government would be reviewing the rules that restrict ownership between newspapers, television companies and radio stations.

The increasing convergence of technologies and the recent developments within the international media market suggest that it is now right to re- examine the framework within which United Kingdom media companies are operating. Tonight's debate is therefore most timely.

As my hon. Friend knows, the review has been conducted as a joint exercise by several Government Departments, including the Departments of National Heritage and of Trade and Industry and the Treasury. The two lead Departments are the Departments of National Heritage and of Trade and Industry. Each will take the lead in the aspects of the review which fit most naturally with their wider responsibilities. Other aspects of the review will be carried out jointly.

The Government have invited, and would greatly welcome, contributions to the review from those operating in the various industries likely to be covered by it, and from others with an interest in developments in the media generally. Contributions should be sent by 25 February to Mr. Paul Wright, the head of the broadcasting, film and sport group in the Department of National Heritage.

The Broadcasting Act 1990 was an important step towards deregulating what had hitherto been a highly regulated industry. It was part of the Government's general policy of trying to remove unnecessary burdens on the operation of commercial enterprises. The aim of the Act was to increase diversity, choice and competition in the provision of broadcast services. It also set out to create a new pattern of broadcasting, making it easier to introduce many more new services.

The Act has enabled a huge range of services to be licensed. At one end of the scale, there are the terrestrial television services available throughout the United Kingdom and the new national independent radio services. At the other end, there are local delivery services to bring television and radio services to groups of 1,000 or more homes, via cable or microwave systems, and restricted service licences, which allow local events to be covered by temporary radio services in a limited area.

The main development in the United Kingdom broadcasting market since 1990 has been the growth in the number of satellite and cable services, and the growing audiences for them. The Independent Television Commission has licensed more than 70 such services. There has been heavy investment in new cable distribution systems, and cable companies are now offering telephony as well as programme services to their subscribers.

Meanwhile, the more established media interests, especially the press, are becoming concerned about the limited scope for expansion in their traditional spheres of activity, and now want to take part in the growth of new media services. The present regulations relating to cross-media ownership under the Broadcasting Act 1990 and the subordinate legislation set out to limit the cross-ownership of larger established media interest and to prevent undue concentrations of media ownership in the United Kingdom.

The policy reflected not only the objectives of creative diversity and competition in the provision of services but the importance of having different, independent sources of news, information and entertainment, and thereby maintained freedom of speech and expression. Those


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principles remain very important. However, we need to consider whether the current regulations are inhibiting the growth of broadcasting and other media activities.

Broadcasting is changing from a national and highly regulated activity to an international market. Services produced in one country can already be broadcast directly to audiences in other countries by cable and satellite. With new digital technologies, many more channels will be available. Five hundred television channels has been suggested as a possible figure by the end of the decade.

To fill those channels will need a lot of material. Some of it will come from well-established sources, which include television and radio programmes, films, videos, music, computer games, home shopping and information of all kinds from a variety of sources, including newspapers and news agencies, gathering information from all over the world.

Many services will provide output aimed at clearly defined audiences. There will be specialist services as well as those for sections of the general public. In the foreseeable future, people should be able to choose from a wide range of information, entertainment and education, to which they will have direct access. They will be able to pay for items as well as for whole services. Traditional broadcasting, with schedules of different types of programmes, may be a small part of that multi-media work. A great deal has been written during the past few months about the convergence of broadcasting, telecommunications and computer technologies. At this stage, there are uncertainties about which of the many technical options will be taken up by the public and emerge as the market leaders. Successful developments may not be the most technically advanced. They are perhaps more likely to be those that people find easy to use and which evolve most naturally from their present modes of receiving information, entertainment and education. However, we can be confident that some of the services will be interactive and that there will be profound changes in the present methods of distributing material of all types.

Those changes in the methods of distribution are likely to result in changes in the formats of the material to be distributed. There are already some systems which allow people to decide which of several camera angles they wish to select when watching a television replay of a sporting event. Information, which in the past would only have been available in a printed form, is already available on audio and video cassettes and discs. Computerised encyclopedias include not only capabilities for sophisticated searching of the contents, but also complex visual images and sound extracts, for example extracts from speeches or pieces of music.

It is quite possible that we will be able to receive the latest news in our homes when we want it, in a form which combines written text, sound extracts and moving visual images. It could be a combination of a newspaper and magazine, radio or television news bulletin. People will be able to select which sections they wish to receive and in which form.

It is obvious that, if maximum advantage is to be taken of the developing opportunities, it makes sense to think in terms of developing multi-media services, which can use the various means of production, communication and distribution, either separately or together. It that is to be done effectively, it may well make sense to develop partnerships between those now operating in different sectors. Major media organisations are already combining


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in groups of linked enterprises, with partners in different countries, to co-operate in media production and distribution both nationally and internationally. We want to ensure that there are no unnnecessary restrictions to prevent United Kingdom media organisations from playing a full part in those developments. Some of the developments have happened much more quickly than we expected a few years ago. That is why the Government believe that it makes sense to take a wider look at the present restrictions on cross-media ownership.

As my hon. Friend will be aware, the rules restricting joint ownership of ITV companies, Channel 5, radio licences and newspapers are contained within schedule 2 of the Broadcasting Act 1990 and in the Broadcasting (Restriction on the Holding of Licences) Order 1991, and the 1993 amendment. The Act and the Order also limit the holdings of newspapers in broadcasting services.

National newspaper proprietors are limited to up to 20 per cent. holdings in Channel 3, Channel 5 or local radio licences, but there are no restrictions on newspaper proprietors holding in non-domestic satellite services or licensable programme services. Local newspaper proprietors may not hold more than 20 per cent. in channel licences, which serve an area that is significantly the same as that served by the newspaper. Nor can the proprietor of a local paper hold more than 20 per cent. of a local radio or cable television licence serving an area that is significantly the same.

Links between local newspapers and local radio stations are in practice often quite strong, but extensive cross- ownership might--I stress that word--increase the risk of local media monopolies in the independent sector. Those are among the issues that we shall want to consider. We shall also wish to review the joint ownership of ITV companies, the ownership provisions on radio stations and ITN and the provisions on newspaper mergers and the Fair Trading Act 1973. Indeed, it should be made clear that the review will take a very broad look at all cross-media issues.

We must keep an eye on wider European developments. In December 1992, the European Commission launched a Green Paper on pluralism and media concentration in the internal market. The Commission set out suggestions for


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the way forward, from doing nothing to much greater harmonisation of approach throughout the European Union. Plurality of ownership does not necessarily result in increased choice for viewers, listeners and readers. Equally, experience in the United Kingdom during the past 20 years suggests that, even where there is some concentration of ownership and control, there continues to be some variety in the strands of output whether by newspapers or broadcasting channels.

On the other hand, there is understandable concern about too great a dominance by a group or small number of groups of media interests. For example, hon. Members have in the past often expressed anxiety about the position of News International in the United Kingdom, as well as News Corporation worldwide.

Concentration of media interests can restrict access in a number of ways. It can, for example, limit the choices available to those who wish to advertise goods and services. It can increase costs by limiting competition. Concentrations of ownership could also restrict freedom of expression, making it more difficult for those with unpopular views or new ideas to reach the public. The review will have to take full account of those anxieties. We do not underestimate their importance.

The next 10 years are likely to be a period of rapid evolution. We want United Kingdom media industries to expand in the United Kingdom and overseas, but that expansion must not be achieved at the expense of viewers, listeners and readers at home. People in the United Kingdom are used to home-grown, original broadcast programmes and a wide variety of newspapers and magazines. That should continue. The review will reconsider cross-media ownership issues in the context of fundamental changes that are taking place in the media industries throughout the world. The review will consider the current ownership restrictions for broadcasting and the press, to see whether the current rules do or do not strike a satisfactory balance. The review will take into consideration the need for diversity and choice for audiences, while encouraging the United Kingdom interests to play an active part in national and international markets.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past Two o'clock.


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