Clause 7.—(GENERAL DUTY OF AUTHORITY AS TO FINANCE.) (Hansard, 1 June 1954)

§ Mr. G. Darling
We ought to look rather closely at the Clause. My view— I do not know whether anyone else shares it—is that the income of the programme companies and of the Authority will not allow … the Authority so to conduct their affairs as to secure that their revenues become at the earliest possible date, and thereafter continue, at least sufficient … to meet all sums properly chargeable … and … to make provision towards … necessary capital expenditure —unless the programme companies and the Authority turn out cheap, low quality programmes, thereby debasing the television standards which have been built up by the B.B.C.
I believe that it will be far more expensive to run these programmes than some of the optimistic hon. Members opposite have suggested. I think that, in the rather limited coverage envisaged in the Bill, coverage which will not be spread to the whole country for some time, the cost to cover three, four or five areas will amount to £5 million or £6 million per year. That is more than in the case of the B.B.C. The reason is that the B.B.C. achieves a lot of economies in the running of its programmes because it has the general broadcasting set-up of the country to call upon.
The huge sums which I have mentioned in the case of the Authority will have to come from the advertising allocations of the manufacturers and general advertisers of the country. At the moment when one looks at the problem there is a tendency to look at the very few advertisers, such as the detergent people and the motor car manufacturers, and to assume that all the other advertisers have as much money to throw about as they have.
I do not think that is the case. I believe that it will be very difficult indeed for commercial television to get the amount of money which will be required to maintain programmes of high quality for six or seven hours a day, seven days a week, 52 weeks a year. It will be a very expensive business. The money will have to come from the general advertising allocations of manufacturers 1206 and other advertisers. Already we find that newspapers and magazines are feeling the pinch economically. If the advertising allocations which they now have were taken from them, it would mean the end of some newspapers and magazines.
Therefore, when the manufacturers and advertisers see what is likely to happen with commercial television, they will tend to restrict some of the allocations which they might have thought of making to television, and not be so ungenerous as perhaps they have been thinking of being to the newspapers and magazines. To support the argument which I am putting forward, I would draw the attention of the Committee to a very important speech made by the Chairman of the "Sunday Pictorial" Newspaper Company this week.
Mr. Cecil King pointed out that there are 11 Sunday national newspapers in this country, and that two of them are "slipping very badly." He said that there were eight national daily newspapers published, and that only the "Daily Mirror" and the "Daily Telegraph" are expanding and developing. He said that two Sundays and four dailies are "finding life very difficult." I am paraphrasing his speech in order to save time. Mr. King said that the outlook is pretty grim for some of them, and now newspapers have to face the possible effects of commercial television.
He went on to say that, last year, it looked to him as if the Government would introduce commercial television in a reasonably workable form, but that it now appears that the Government are more afraid of Lord Halifax than their own back benchers, and that they have retreated to a position in which the initial losses on commercial television are likely to be as great as ever, but the chances of subsequently recovering those losses have become more and more problematical. In his own words, he says: The whole story is a shocking one of ignorance and cowardice"— that is, on the part of the Government, and he adds: Where the 'Daily Mail' and 'Sunday Pictorial' are concerned, they might still intervene in commercial television"— in other words, become advertisers, and, although sponsorship is not a very popu- 1207 lar word to use, sponsor a television programme— the outlook is not very encouraging. That is the end of the quotation.

§ Sir D. Maxwell Fyfe
I do not think that Mr. King used the word "sponsor."

§ Mr. Darling
No, he said that they might still intervene in the form of taking up commercial television, but the outlook was not very encouraging, and that was the end of the quotation. In other words, and I speak for myself in this matter, it looks as if the Government have scared off potential competitors in the field of commercial television by setting it up in the way in which they have done in the Bill. Even from the point of view of those who defend commercial interests, this is a bad Bill. It is not clear, straightforward and honest in the development of competitive television in the way which hon. Members opposite wanted it at one time, and, from our point of view, those who wanted—

§ Dr. H. Morgan (Warrington)
May I ask whether this is in order?

§ The Chairman
Yes. It is quite in order on the Question, "That the Clause stand part of the Bill."

§ Mr. Darling
From our point of view, of course—that of those who wanted competitive television set up in a different form—the Bill is very bad indeed, but I feel sure that commercial television, as organised in the Bill, will not be able to pay its way, and, therefore, the terms of the Clause will not be carried out, and the Government have to face that situation, unless they allow the debasing of programmes and they are done on the cheap.
For some years to come there will be in operation only four or five—perhaps six, I do not know—television stations, covering less than half of the population, and I do not think it will be worth while to advertisers who want national coverage for their advertising, and who are willing to pay for it, to take the limited service that commercial television will provide for them. They would have to pay at extravagant rates, as compared with advertising in newspapers and magazines, for half the national coverage that they would like to have.
1208 Many of the calculations upon which the Bill is based are far too optimistic. Clause 7 is far too optimistic. The I.T.A. will run into very serious financial difficulty, and that will be another limiting and restricting factor. We shall see that the trend to monopoly will be encouraged by the great cost of commercial television and that only a few programme companies will be able to come into the business. We shall end up with one programme company in each area and for each station—only one. The trend of monopoly will go on all the time, and the I.T.A. will not be able to pay its way. The Clause will become a dead letter, because the conditions that the Clause seeks to impose upon the Authority will not possibly be carried out.

§ Sir D. Maxwell Fyfe
I should like to divide into two parts the few remarks I have to make in answer to the speech which we have just heard from the hon. Member for Hillsborough (Mr. G. Darling). The first might be entitled "A short homily on the danger of quotations." For the last five days on this Committee we have been told from the benches opposite that we are whittling away the safeguards which we proposed to put in the Bill. I am glad that the hon. Gentleman who has just sat down quoted the effective proprietor of two newspapers supporting the party opposite as saying that this Committee is giving too much attention to Lord Halifax and too little to my hon. Friends. For that I am grateful to the hon. Gentleman.
On the other point, about the structure of the Clause, I do not accept the basis of the hon. Gentleman's argument, or the pessimism that is the foundation of his argument, as to whether commercial television will work or not. We have set a standard which is higher than that set for the usual public corporation. Generally speaking, public corporations are subject to a direction to balance their accounts taking one year with another. We have all discussed that at considerable length in relation to many corporations. The effect of that is that they have to render service at not less than cost but they are not bound to do more than that.
In this case it is positively desirable in our view for a continued surplus to be earned. The Clause therefore lays on the Authority a duty to secure that its 1209 revenues attain as soon as possible a level at least sufficient—I repeat the words "at least"—to cover in full all revenue expenditure and to provide for capital expenditure, at first in part and as soon as possible in full. I believe that it was right to take that healthy and optimistic view of what will happen. To emphasise that point I have stressed that this is the belief on which we base the wording of the Clause.

§ Mr. Blackburn
What provision is there in the Bill if the optimism which the right hon. and learned Gentleman now expresses is not fulfilled? There is provision, if the Authority makes a good profit, to pass it into the Treasury; but suppose the optimistic view does not materialise? There is a great fear that it might not. What provision is there in the Bill to deal with that emergency?

§ Sir D. Maxwell Fyfe
We have provided for the £750,000 a year and the £2 million borrowing powers. That, in our view, is amply sufficient and we do not need to contemplate anything more pessimistic.

§ Mr. Blackburn
But what will happen if it is not sufficient?

§ Sir D. Maxwell Fyfe
We do not accept the premise.

§ Mr. Ness Edwards
My hon. Friend the Member for Hillsborough (Mr. G. Darling) was expressing his own personal view. Many of us think that there are fat pickings in this set up for commercial people.