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The Earl of Stockton: My Lords, I should declare a mild interest in that between 1964 and 1974 I was an employee of the Daily Telegraph. We have been here before, have we not? Those of your Lordships who participated in our debates on the Broadcasting Act will

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find many of the arguments, personalities and defences entirely familiar. Some of the personalities have changed a little. Instead of the noble Viscount, Lord Whitelaw, now the noble Lord, Lord Harris, goes in to bat for News International. But he also makes the claim that the success of The Times is due in part to its enormous quality. I do not believe that that is a pattern that is familiar to most noble Lords. It seems to have had a most unhappy history. I believe that the phrase is "dumbing down". We saw that happen in the case of the Daily Mirror in the face of competition from the Sun. Under Cecil King the Daily Mirror was one of the great educational and inspirational journals of this country. That was dumbed down by competition from News International. We have seen it happen in the case of both the BBC and some of the independent television companies. They have been dumbed down by competition from Sky. I believe that we should reject the argument of the noble Lord, Lord Harris, on that ground alone. But whether it be television, books or newspapers, surely one of the duties of this House is to resist any reduction in choice, be it in the name of Murdoch, Maxwell or, dare I say, even Macmillan.

7 p.m.

Lord Judd: My Lords, I believe that history will record that the noble Lord, Lord McNally, and the co-sponsors of this amendment have tonight done a profound service for our democracy. I support that thesis for two reasons. First, I hope that noble Lords on the Government Front Bench will understand the anguish on these Benches about the issues at stake in this amendment. Many noble Lords believed that we were emerging in human affairs from a period of political history dominated by ideology into a more creative period when rationality, reason and values would prevail. Those of us who aspired to that hope realised that the essence of good governance, as it had always been, was to try to bring together the disciplines, excitement and enterprise of the private sector with the overriding responsibility of democratic government to intervene for the common good.

The second reason why some noble Lords have been anguished by the issues raised in the amendment is that, coupled with the argument put so well by the noble Lord, Lord McNally, democracy cannot be better than the quality of the information on which it functions. It cannot be better than the diversity and vigorous debate in the media about the issues that face the nation. I do not believe that I speak only for myself when I say that when the Government, whom I greatly applaud, put their hand to the tiller in the cause of the reinvigoration of our democracy they must break free of the technocratic approach which is that the reinvigoration of democracy can be achieved by structural changes alone. The reinvigoration of democracy will be achieved by the quality of analysis, advocacy and debate. I am saddened that there should be any degree of uncertainty at this stage of our deliberations about the commitment of the Government whose approach to a democratic system geared in the fullest sense to the challenges of the 21st century I wholeheartedly support. They should make clear beyond doubt that one of their highest

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callings and greatest responsibilities is to ensure that whatever else happens in our affairs, the quality, diversity and richness of our media are admired and envied by the world as a whole.

Lord Rees-Mogg: My Lords, it is a pleasure to have the opportunity to support the Government this evening. I always like to support the Government whenever I can. I find that surprisingly I am often able to do so in this House. I join in the expressions of interest on various sides. I write for The Times. I have not consulted The Times on this matter, and I have had no business connection with The Times since 1981. Nevertheless, the connection is there. I also have a connection, which matters a good deal to me, with the Independent. I was one of the founder writers at the Independent and worked there for six years. I was very proud of doing so. I believe that the Independent was an admirable addition to the broadsheet press of Britain. I very much hope that it will survive.

However, as the survival of the Independent is regarded as an intrinsic part of this amendment, two questions must be asked. First, are we talking about the survival of the Independent or the survival of the Independent in its present ownership? One can fairly say, although I am sure that some would deny it, that the other four managers of broadsheet newspapers in London regard the management of the Independent, taking into account the twin proprietors, as the least effective of the body of five. I do not believe that in the event that the present ownership, which is basically the Mirror and Irish Independent, decided that it had had enough, that would lead to a closure of the Independent; nor should it. I believe that it would probably fall into other more supportive and effective hands.

Recently, we have suffered the loss of a brilliant editor of the Independent in Andrew Marr. He is a first-class journalist and a man of the highest quality. He was lost because he was not supported. He has been replaced by a seven-day-a-week editor--all experience is that seven-day-a-week editing seldom works--who in my view is a less interesting journalist, although I make no general criticism of her editing of the Independent on Sunday. We are saying that we must have an amendment to stop the Independent being sold. The best thing that could possibly happen to the Independent from the point of view of its competitiveness is that it should be sold.

I should like to analyse what the amendment would achieve. We are making laws. It is perfectly all right for people to have a jig around the question of whom they like and do not like in the British press. But we are making law and trying to get it right. When one considers the terms of the amendment one finds it extremely difficult to believe that subsection (2)(c) is superior to Clause 18(2)(a) of the Bill as it stands. The proposed subsection (2)(c) provides:

    "Conduct may, in particular, constitute such an abuse if it consists in ... imposing selling prices below marginal cost of production on a persistent basis".

I spent 20 years trying to deal with the problem of newspaper pricing. During those 20 years when the Thomson family owned The Times and I was on the

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board of either the Sunday Times or Times Newspapers as far as I can remember we never thought that revenue from sales could be separated from the likely consequences to revenue from advertising. We never asked ourselves, "What is the marginal cost?", and we must get a bit more than that. Neither on the Sunday Times nor on The Times did we usually manage to achieve that. I have not gone back and looked up all the figures, but I can remember a time in the early 1970s when it would have been so difficult to achieve a profit on one's marginal cost that the cost of the newsprint itself was approximately equal to the cover price that we were obtaining.

This is not a viable rule, and it never will be a viable rule, for a number of reasons. It is not viable because of the fluctuations in newsprint cost. Newsprint is an extremely volatile commodity, which sometimes comes up virtually to the value of the whole newspaper itself as sold. It is not viable for another reason: it would stop one enlarging one's paper; it would also stop one increasing one's advertising take. That is a real difficulty. A big paper has a higher run-on cost than a small paper.

A paper which has advertising and publishes extra material editorially has a higher run-on cost than a paper which does not publish much editorially and does not have any advertising. We should be saying that if you ran a successful paper with a lot of advertising that meant you had to push the price up. That makes no sense at all. One can see the extreme example which arises with the free sheets. Those are excluded from the amendment, because it refers only to national newspapers. The principle of the free sheet is that you give away the newspaper and make the whole of your revenue from the advertising. The principle of the free sheet is entirely reasonable. You create greater quality in a newspaper by expanding its services and its advertising. The effect of the amendment would be to cut across the whole of that process in an arbitrary way.

There is a final point that I should like to make. It is the market leader which does not want to have price competition. The market leaders are the Sunday Times--a paper which is controlled by Mr. Murdoch--and the Daily Telegraph--a paper which is controlled by Mr. Conrad Black. Those papers have an immense advantage from having the largest circulation. They dominate their market. They are the papers in relation to which newcomers to the market, or people trying to bring a paper from low in the market to high in the market, have to have a pricing option in order to compete. We should therefore be excluding newcomers to the market, which is the one thing we have been told would be benefited by the amendment.

7.15 p.m.

Lord Ackner: My Lords, during the 21 years that I served as one of Her Majesty's judges, the courts' supervisory jurisdiction--judicial review--has become greatly developed. That jurisdiction is invoked whenever there is an abuse of power. When I listened to the debate in Committee, I intervened because what

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I had heard described seemed to me to indicate a grotesque abuse of power--grotesque because it seemed to strike at the very fundamentals of democracy.

In a democracy one expects to find a vigorous diversity and choice of news and opinion. That abuse of power was striking at the freedom of the press and the freedom of speech by ensuring, if successful, that the diversity would cease, and what the public would have would be the disadvantages of the exercise of a monopolistic power which deprived the everyday reader of the choice to which he was entitled.

Those freedoms to which I have referred are of course not the prime interest of Mr. Murdoch. His interest is not in freedom, but in personal power--power that gives control over the news and opinions which the public read, by the simple process of killing off, by unfair competition, those who wish to offer a choice.

There have been references to the attitude of the Government when in opposition. Quite clearly, a government, when they come to power, are entitled to a volte face when they so desire, but that tends to have an effect on the integrity of the decisions when in government if they do so. It is generally accepted that the abuse alleged, if correct, should not occur, either now or in the future. In those circumstances, why on earth should there be any objection to the amendment?

It has already been pointed out that what is relied upon by the Government as making the amendment unnecessary is open to argument. Why should there be a potential argument on a matter so obviously requiring a remedy as this? The only resistance is, "This is unnecessary". I am bound to say that I am not persuaded that that is the case. I, and the greater part of the public, will say, "It is not a question of it being unnecessary; it is merely the result of a government in power, intent on remaining in power, and intent on doing nothing which may prejudice that prospect", and accordingly ceasing to have the courage to do that to which they aspired when in opposition.

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