HC Deb 09 February 1961 vol 634 cc625-33
The Prime Minister (Mr. Harold Macmillan)

With permission, Mr. Speaker, I will now answer Questions Nos. 42, 46, 47, 48, 49 and 50 together.

Recent developments have given rise to public concern about the state of the newspaper and magazine industry, and, in particular, the tendency towards concentration of ownership in the industry. This concern was expressed in the House at Question Time last week, and I then said that I was considering whether some form of Governmental inquiry would be useful. I also referred to one or two specific matters on which action might be taken by the Government.

I can now tell the House that my right hon. Friend the President of the Board of Trade has been in touch with Lord Jenkins, the Chairman of the Committee on Company Law, about the suggestion that in takeover bids a minimum proportion of the consideration offered should be in cash. They have agreed that this suggestion comes within the terms of reference of the Committee and Lord Jenkins has said that the Committee intend to deal with it in their report. I am circulating in the OFFICIAL REPORT a copy of the letter which my right hon. Friend has written to Lord Jenkins.

In addition, my right hon. Friend the Postmaster-General is writing to Sir Harry Pilkington, Chairman of the Committee on Broadcasting, about two questions which were mentioned in the House last week, namely, the general question of the relationship of the Press to television, and the more specific question of changes in the effective control of television programme companies as a result of mergers or takeovers. Again, I am circulating a copy of the letter in the OFFICIAL REPORT.

I now come to suggestions for the setting up of some new committee or commission of inquiry. I have already made it clear to the House that the Government have no power to intervene in an individual transaction which is in itself legal. Nor do I believe that any useful purpose would be served by an inquiry into the facts of the proposed transactions which have brought the matter to the attention of the House on this occasion. It has been suggested that I should invite the parties to these negoiations to call a halt, pending the institution of an inquiry. I cannot believe that it would be proper for the Government to interfere even to this extent. To do so would be to affect the interests and legal rights of the employees and shareholders of the companies concerned in a matter in which Her Majesty's Government have no authority to act. Whether it may seem desirable to the parties concerned to call a halt in the negotiations, in the light of what I have to say today, is a matter for them, and them alone, to decide.

At the same time, there is a general feeling that these specific negotiations are symptomatic of some general unease in the industry as a whole. The recent closure, through inability to pay its way, of a national daily newspaper with a circulation exceeding 1 million, clearly came as a shock to the public. And the more recent developments are widely taken to suggest that conditions in the industry are such as to lead inevitably towards concentration of ownership and a reduction in—to quote the words of the Royal Commission of 1949: the number and variety of the voices speaking to the public through the Press". After consideration of the views that have been expressed, I have decided that an inquiry into such questions as these should be undertaken. I think that such an inquiry should have the status of a Royal Commission. I therefore propose to recommend to the Queen the establishment of a Royal Commission with the following terms of reference: To examine the economic and financial factors affecting the production and sale of newspapers, magazines and other periodicals in the United Kingdom, including (a) manufacturing, printing, distribution and other costs; (b) efficency of production; and (c) advertising and other revenue, including any revenue derived from interests in television; to consider whether these factors tend to diminish diversity of ownership and control or the number or variety of such publications, having regard to the importance, in the public interest, of the accurate presentation of news and the free expression of opinion; and to report. I propose to keep the membership of the Royal Commission small. I hope to be able to announce the names of the Chairman and the other members in the near future.

I trust that this approach will commend itself to both sides of the House; and I hope that all those engaged in the industry will do all in their power to assist the Royal Commission in its work.

Mr. Gaitskell

Is the Prime Minister aware that there will be a general welcome for his decision to appoint a new Royal Commission in addition to referring specific points to the Jenkins and Pilkington Committees? Is he, however, aware that if the Royal Commission takes, as some Royal Commissions do, a very long time to produce its report, further developments and mergers in the industry may take place which will prejudice the whole future situation?

Will the Prime Minister, therefore, first ask the Commission to work as speedily as possible, and will not he also reconsider the question of whether the parties to the present negotiations should not be invited to hold their hands for the time being? While I appreciate that the Government have no legal power in this matter, they surely have to have regard to the public interest, which is heavily involved. Will not the Prime Minister, therefore, reconsider this point, since, if he does not do so in this instance, a complete monopoly of these magazines may have been achieved long before the Commission has reported?

The Prime Minister

In reply to the first part of the Question, I hope to have a quite small membership and, therefore, that it will be able to operate quickly. I had considered some other form of inquiry, but on examination I think that it is necessary that the status and authority of a Commission under the Royal Warrant should be given, because it gives it power to obtain information that a Departmental or some other committee without those powers would not necessarily have. It is only for that reason that we thought it best to have a Royal Commission, although it is more in the nature of the committee of inquiry of which hon. Members were thinking last week.

With regard to the second point raised by the right hon. Gentleman, those engaged in this must judge for themselves. Frankly, I do not feel inclined to make this appeal, though I see the reason. There is a situation, there will be perhaps a situation after the report of the Commission, and I feel very averse to making appeals which I have no power to impose.

Mr. Mayhew

While the Prime Minister's decision to set up a Royal Commission will be very welcome, should not its terms of reference include, perhaps, a review of the work of the Press Council and the possibility of strengthening it by increasing the lay element and appointing a lay chairman to the Press Council?

Is the Prime Minister aware of the outright opposition of the board of Odhams to the present merger? Is he aware that the merger is now opposed by an enormous weight of public opinion and of opinion on both sides of this House? Is he aware that there are precedents for the Government giving an opinion that such a thing should not go forward and that there is implied in that the idea of possible retrospective legislation, which makes the matter quite practicable?

The Prime Minister

No doubt, when the Commission is set up, it will certainly consider calling evidence from, or the position of, the Press Council. I hope that hon. Members will feel, when they have had time to read the terms of reference, that they are drawn suitably to the problem that is before us. The problem of monopolies, mergers and take-over bids is being studied by various committees. What we are here worried about is in this field of the printed word, and all that that means in the history of civilisation and liberty. That is why I thought it right to act.

I must remind the right hon. Gentleman that if the Government take the kind of action, whether by threat or appeal, that is suggested, they may make themselves liable for very heavy losses—

Mr. Mitchison

What about the banks?

The Prime Minister

—and all sorts of things that might go wrong in the period supposing that one of these papers comes to an end as a result of my appeal. One has to consider the matter from both angles.

I was asked a question about the banks. There, the Government have powers.

Mr. Pitman

I hope that my right hon. Friend will be able to assure the House that within the terms of reference it will be possible to deal with the question of the closed shop and the highly restrictive practices on entry into the printing profession.

The Prime Minister

The terms of reference, I see, include (a) Manufacturing, printing, distribution and other costs; (b) efficiency of production … and I think that all these questions are perfectly relevant to the inquiry that I hope to set up.

Mr. Grimond

While welcoming the decision to set up an inquiry of this sort, may I ask the Prime Minister whether he will arrange in the terms of reference for the Royal Commission to consider, at any rate, whether there is a need for a permanent body to watch this situation and put before the public any further developments in the industry which may be dangerous in just the way he outlines, that is to say, in blocking out points of view or leading to an undesirable amalgamation of newspapers?

The Prime Minister

I must be quite frank. I distinguish between the general problem which is a very complicated one and into one aspect of which the Jenkins Committee is looking and which if we dealt with it, must be dealt with by the Government on general economic grounds. I think that this inquiry is justified because of the character of the industry. Dealing with the printed word is somewhat different from dealing with an amalgamation or merger of the various forms of buying, selling and manufacture. It is that point I want the Commission to deal with and which justifies dealing with it outside ordinary economic problems which are clearly within the Government's decision whether to legislate on them or not.

Mr. Donnelly

With reference to the present merger, will the Prime Minister ask the Minister of Labour to examine the possibility of the disruption of labour relations that may result in the journalistic profession following the closure of certain magazines and amalgamations that may take place?

The Prime Minister

My right hon. Friend the Minister of Labour no doubt will be watching this. We are very anxious about those who are earning their living in the industry, writers, journalists, photographers, mechanics and others. It is partly because of this that I think it right that there should be this inquiry which, I think, will very much help them to feel that this problem is being carefully examined.

Mr. K. Robinson

May I thank the Prime Minister for his belated acceptance of the Motion which I moved and which was accepted by the House more than two months ago?

On the question of Press-television links, which is a very important one, may I ask whether there is not some danger of overlapping responsibility between the Royal Commission and the Pilkington Committee? In view of its importance, would it not be better for this matter to be wholly referred to the Royal Commission?

The Prime Minister

No, Sir. This, of course, was one of the points that we had to consider, and we have been in touch with Sir Harry Pilkington and the letter to which I referred has gone to him. The Pilkington Committee on Broadcasting is primarily concerned with the future arrangements governing television and radio in this country when the present system ends. It is for that Committee to consider as a whole how the newspaper industry fits into the picture, if at all. This Royal Commission will be concerned with the economic and financial circumstances of the newspaper industry, and so far as television is concerned its interest will be not the broad question of how television ought or ought not to be carried on but the question of revenue earned and its effect on the industry.

Mr. Lipton

Is the Prime Minister aware that, pending all these various reports that we have been promised, a large number of people still remain very anxious about the dangerous possibilities that may arise between now and then? For example, with the News of the World block coming into the take-over bid field, there is still a risk of an unholy combination of Odham and Gomorrah.

The Prime Minister

I would only say that I am very anxious, and we all are, about the jobs of those concerned, but do not let us forget that it is not merely by merger that unemployment may be created or magazines come to an end. It may be, indeed, that only the greater financial power can keep them alive, so we have to be very careful not to do something which might have the opposite result of what we want.

Mr. Jay

Would the right hon. Gentleman confirm, as would appear to be the case from his statement, that the question of the newsprint industry would be within the terms of reference of the Royal Commission, as most of the supplies of newsprint are in the hands of two concerns and the high price of newsprint is one of the chief causes of the newspaper industry's present difficulties?

The Prime Minister

Yes, Sir.

Mr. Farey-Jones

Will my right hon. Friend bear in mind that this is a matter of very considerable importance in the division of Watford, where many thousands of people are employed by Odhams and in the printing industry generally? Would he reconsider how any brake could be imposed to prevent any merger taking place prior to the Report of the Royal Commission, in spite of what he has already stated today?

Mr. Paget

When the Prime Minister says that he has not got the power, can he not look behind him and see quite a lot of Members there to give him that power if he asks for it? Does he not know that we would not object? Is not this pure hypocrisy, because in this case all he has to say is that if these people carry on in these circumstances they do so at their own risk, and if the Royal Commission so recommends they will find themselves unscrambled without compensation? The right hon. Gentleman has only to say that; why does he not say it?

The Prime Minister

I think that in the long tradition of the House I should be pardoned for not answering a question so offensively poised—[HON. MEMBERS: "Oh."]—"Is not this pure hyprocrisy … "I am not so concerned about the unscrambling as it may affect the financial interests. All I am concerned is about taking an action that might lead to closing and not carrying on and putting a large number of people out of work.

Following is the text of a letter from the President of the Board of Trade to Lord Jenkins, dated 6th February, 1961; During the discussion in the House of Commons on 31st January, following the Prime Minister's statement about the newspaper and magazine industry, reference was made to the suggestion that in takeover bids a minimum proportion of the consideration offered should be in cash. We have since been in touch about this and agreed that this suggestion comes within the terms of reference of your Committee on Company Law. I am, further, glad to know that your Committee intend to consider this suggestion and deal with it in their.Report.

Following is the text of a letter from the Postmaster-General to Sir Harry Pilkington, dated 9th February, 1961: You will have noticed the exchanges in the House of Commons on 31st January about the concentration of ownership of newspapers and other media of communication, and the special attention which the I.T.A. contracts have attracted in this context. The question of the television contracts has two main aspects. First, there is the possibility that mergers or takeovers may result in significant changes in the effective control of programme companies which are inconsistent with the intention of the I.T.A. in granting the contracts, Secondly, there is the general question of the relationship of the Press to television, including the question whether control over newspapers and television stations should be vested in the same hands. Similar questions might arise with certain patterns of local sound broadcasting. I am sure that these are matters which your Committee have already noted, and, indeed, the Prime Minister drew the attention of the House on 31st January to the fact that they would fall within the scope of your Committee. He also said that your Committee might well make an interim report on these aspects. The Prime Minister has now decided to recommend to the Queen that there should be a Royal Commission, which will be small in size, with the following terms of reference: To examine the economic and financial factors affecting the production and sale of newspapers, magazines and other periodicals in the United Kingdom, including (a) manufacturing, printing, distribution and other costs; (b) efficiency of production; and (c) advertising and other revenue, including any revenue derived from interests in television; to consider whether these factors tend to diminish diversity of ownership and control or the number or variety of such publications, having regard to the importance, in the public interest, of the accurate presentation of news and the free expression of opinion; and to report. It would, obviously, be a great advantage to the Government if they could have the views of your Committee on the two points I have mentioned above when the Government consider the Report of the Royal Commission. I should be grateful if you would bear this in mind as the work of the two inquiries proceeds. If it would help I should be happy to discuss the matter with you.

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