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Mr. Sproat: I beg to move amendment No. 39, in page 126, leave out lines 8 to 12.
Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendment No. 40.
Mr. Sproat: Amendments Nos. 39 and 40 are minor drafting amendments that are consequential on the removal of local radio services from the scope of the order-making power in paragraph 14(1) of schedule 2. As local radio is no longer subject to an order made under paragraph 14(1), paragraph 14(4) is redundant.
Amendment agreed to.
Amendments made: No. 40, in page 126, line 23, leave out 'sub-paragraphs (4) and (5)' and insert 'sub-paragraph (5)'.
No. 152, in page 126, line 37, at beginning insert 'Subject to sub-paragraph (1A)'.
No. 41, in page 126, line 38, leave out '13' and insert '13A'.
No. 153, in page 126, line 39, after 'paragraph' insert '12A or'.
No. 154, in page 126, line 42, at end insert--
No. 42, in page 126, line 46, leave out from beginning to end of line 19 on page 128.--[Mr. Knapman.]
Dr. John Cunningham (Copeland):
I beg to move amendment No. 102, in page 129, leave out lines 32 to 37.
Mr. Deputy Speaker:
With this, it will be convenient to discuss the following amendments: No. 260, in page 129, line 32, leave out from 'newspaper' to 'may' in line 34.
No. 261, in page 129, line 34, leave out '20' and insert '10'.
Government amendments Nos. 43 and 44.
No. 262, in page 129, line 37, at end insert--
No. 162, in page 129, line 41, at end insert--
No. 263, in page 130, line 7, at end insert--
Government amendments Nos. 45 and 46.
Dr. Cunningham:
Amendment No. 102 addresses one of the most controversial aspects of the legislation--the regulations on cross-media ownership. The amendment seeks to delete that part of the Bill which contains the limit on cross-media ownership by national newspapers.
At present, any newspaper group with more than 20 per cent. of the national market share is not allowed under the Bill to hold a licence to provide a regional national channel 3 service. In practice, that provision affects only two companies--Mirror Group Newspapers and News International.
In seeking to abolish the limit, Labour has been portrayed as advocating no controls on media ownership. That is certainly not the case. The Bill contains two other important provisions that we fully support: first, the rule whereby no single television supplier may accumulate more than 15 per cent. of the total television audience and, secondly, the important public interest tests that may
be applied by the Independent Television Commission and which are contained in paragraphs 7 to 12 of schedule 2.
In advocating lifting one restriction on cross-media ownership, it is important to spell out why we believe that this is such an important issue. In Britain, we have a large number of newspaper groups which, whether we like them or not, have managed to flourish over a period of years. More recently, there has been major growth in the television market as well as concentration of ownership. The future of the media, which is important to us all, is likely to continue broadly in the same way. Some people believe that newspapers are in long-term decline and that the future lies much more in broadcasting and the development of multimedia companies.
I do not believe that we should commit ourselves to opposing the development of cross-media ownership or the growth and success of large companies. The idea of a Britain where large numbers of small companies make high-quality television programmes for the local area in which they broadcast while the Berlusconis and Bertelsmanns compete across Europe and the world is not a realistic proposition. One of the implications of the Bill as it stands is that Mirror Group Newspapers is denied ownership of a channel 3 licence, while the Berlusconi and Bertelsmann empires are not. Other European multi-media groups could purchase such licences, but Mirror Group Newspapers and News International could not.
The practical implication of the proposals is that a single newspaper group--a successful British newspaper group that wants to expand into broadcasting--is being prevented from doing so. It is a coincidence that it happens to own a newspaper that supports the Labour party; the arguments would be the same regardless. We have been accused of being politically partial in this matter, but, if there is any real argument for political partiality, it is exactly the other way round: the Government's friends are being looked after in the legislation, and the single newspaper that supports Labour is being excluded.
The Government's explanation has been, first, that the 20 per cent. limit was arrived at intuitively: it seemed about right to everyone. Some would say that it is completely arbitrary, while others would argue that it is not arbitrary at all--that it was set deliberately to have the effect that I have described--but there is no rational argument for it. Some will argue that the 15 per cent. rule in television is equally arbitrary, but I do not agree with that. At present, apart from the public service broadcasters--the BBC, Channel 4 and S4C--no broadcaster has more than 6 per cent. of the market. The
15 per cent. rule is there to prevent further market concentration by a single company. The 20 per cent. rule, however, cuts a swathe through an existing newspaper market, placing newspapers on opposite sides of an artificially erected barrier. That is why we have suggested that the limit on cross-media holdings should be lifted, and that other regulatory mechanisms should be used to protect the public interest. That is what the ITC was constructed to do, and that is what the powers in the Bill allow it to do.
If the amendment is not accepted, we shall support the amendment tabled by the hon. Member for North Thanet (Mr. Gale). As is well known, he and I do not always agree on these matters in the context of the Bill, but we both see a considerable case for amendment No. 162, which is intended to allow a newspaper with more than 20 per cent. of the national market to become a television licence holder, and then to be allowed up to 12 months' grace in which to divest itself of some of its newspaper holdings.
On 21 May, in Committee, the Minister said:
My hon. Friend the Member for Sunderland, South (Mr. Mullin), who has taken an interest in these matters, has tabled amendments which--although I cannot encourage the House to support them--would at least be fairer than the current position. They would exclude all the major newspaper groups from owning channel 3 licences. That might not be sensible in other respects, in that it could block the development of multimedia ownership, but at least it could be seen as fair among large newspaper groups. Because we support the development of multimedia ownership, however, we shall not support those amendments.
Unless this change is made, one newspaper group, Mirror Group Newspapers, will be denied the opportunity given to all other media companies in the group's area of operation--in its sector--and its development will be severely curtailed. There will also be a further imbalance in the power, influence and profitability of the British press. That is the long-term implication of the Bill's proposals.
'(1A) For the purposes of paragraph 12 and any order under paragraph 12A, a person shall not be treated as holding a licence to provide a local radio service merely because he is a director of a body corporate which holds the licence.'
'(d) a domestic or a non-domestic satellite service.'.
'(2A) If as a result of a takeover a person who owns or controls newspapers with a circulation market share above the percentage specified in paragraphs 4(1) and (2) becomes the holder of a licence to provide a Channel 3 service, the Independent Television Commission shall not for that reason alone revoke that licence unless a period of 12 months from the takeover has elapsed and the newspaper proprietor has failed to reduce the market share of those newspapers he controls to below the specified percentage.'.
'(6A) Any person who immediately prior to the date of coming into force of Schedule 2 to the Broadcasting Act 1996 was both the proprietor of a national newspaper and the holder of a licence to provide any of the services mentioned in sub-paragraphs 1(a) to (d) of paragraph 4 above shall, within three months of that date, take such steps as are necessary to comply with the provisions of that paragraph.'.
"the hon. Gentleman will none the less see in paragraph 10 of part IV of schedule 2 on page 108 of the Bill that if the Daily Mirror wanted to acquire a channel 3 interest, it could have 12 months in which to divest itself of, for example, The People, or of whatever title it decided upon, in order to bring itself under the 20 per cent. ceiling. It could therefore make the takeover and then divest itself".--[Official Report, Standing Committee D, 21 May 1996; c. 423-24.]
There is indeed a measure of dispute about whether the Bill actually provides for such circumstances, but, in subsequent correspondence with members of the Committee, the Minister wrote that
"while the Mirror Group, or any other group holding over 20 per cent., could make a bid for a Channel 3 licence and indeed have the bid accepted, before they had made the necessary divestment, that Group could not take over and own the Channel 3 station until after the divestment."
That statement directly contradicts what the Minister said in Committee. The Government have apparently gone back on the commitment that everyone--including people outside the House--thought that the Minister had given, and I expect an explanation from him. Amendment No. 162 puts that commitment firmly in the Bill, and, given what the Minister said in Committee, the Government should be duty bound to accept it.
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