NEWSPAPER AND MAGAZINE INDUSTRY

HC Deb 31 January 1961 vol 633 cc781-91

The following Questions stood upon the Order Paper:

48. Mr. WADE

To ask the Prime Minister whether, in view of the proposed merger of Odhams Press, Limited, and Thomson Newspapers, and in view of the continuing trend towards monopoly in the newspaper industry, he will now set up an inquiry in pursuance of the resolution of the House of 2nd December, 1960.

53. Mr. FRANK ALLAUN

To ask the Prime Minister if, in view of the new evidence of the grcwth of monopoly in the Press. he will now act in accordance with the resolution of the House of Commons in favour of an inquiry.

54. Mr. K. ROBINSON

To ask the Prime Minister if he will advise the setting up of a Royal Commission on mass media of communication of news, opinion and advertisement, with special reference to monopoly trends.

55. Mr. GRIMOND

To ask the Prime Minister, in view of continued evidence of a grcwth of monopoly in the Press, if he will take action in accordance with the resolution of the House on 2nd December, 1960.

The Prime Minister (Mr. Harold Macmillan)

With permission, Sir, I will now answer Questions Nos. 48, 53, 54 and 55 together.

The position of a free Press in a free society has always presented a certain problem. Readers of nineteenth century history will recall many instances in which the editor of great newspapers exercised a commanding and sometimes decisive influence. During and after the First War this authority passed from the editors to the proprietors. This phase seems now to be in its turn, passing, partly no doubt owing to the coming of television and the other methods of influencing public opinion. Nor should we forget Mr. Baldwin's successful stand, at a vital moment of his career, against this form of pressure. Nowadays, when their shares are more widely held, most newspaper organisations are concerned, not so much with power, as with profit.

Even so, it seems wrong to many people that too many media of mass communication should be concentrated under a single control. Yet, paradoxically, the same people are concerned, not at the success, but at the failure of certain papers to command sufficient public support to enable them to pay their way. The costs of newspaper production have risen in a most spectacular manner; and, in spite of the increase of advertising revenue, what would previously have been considered to be large circulations are not now enough to sustain a profitable enterprise. Thus, we have recently seen the disappearance of three national newspapers—two Sunday newspapers and one daily.

But we must take a balanced view of all this. After all, we still have something like 150 daily and Sunday newspapers, with considerable diversity of ownership, and there is now the prospect of a new national Sunday newspaper. But the Daily Herald is now again in jeopardy. We should all be sorry, on both sides of the House, if it were unable to carry on—just as we regretted the disappearance of the News Chronicle; and this not only for the loss to the reading public, but remembering the anxieties and perhaps hardships caused to those who live and work with newspapers. Yet, paradoxically again, if a newspaper cannot live on its own profits, its only hope is to be sustained either by the profits of some wholly different business or by being associated in a larger publishing group.

What should the Government do in the light of these developments? What should be their attitude towards the various suggestions that are now being made? First, I think that they should not undertake, with public money, to set up a trust or any other form of holding in order to run a newspaper which the public are not prepared to buy in sufficient quantities. I do not see why the taxpayer should subsidise a journal which cannot stand on its own feet. Secondly, I have seen it suggested that the Government should intervene in order to prevent any of the current negotiations being brought to a conclusion. I cannot find that the Government have any effective power to do this. Thirdly, it is suggested that there should be an inquiry into these financial negotiations. I do not think that we need any inquiry into the facts. They are well known. And as regards the techniques of these operations. I would remind the House that these are within the terms of reference of the Jenkins Committee on Company Law and are already under consideration. Even so, there are some things that the Government could do.

First, I am advised that the amalgamations now in prospect might have the result of establishing a monopoly control over a very large number of magazines and periodical publications. We shall watch this position. If a large proportion of these periodicals came under a single control, there would be opportunities for increase of price or reduction of choice and circumstances might arise which would justify a reference to the Monopolies Commission.

Secondly, there is the question of contracts under the Television Act, 1954, The Independent Television Authority has issued contracts to a number of programme companies in which newspapers have substantial interests. In accordance with the spirit of Section 5 (2) of the Act, the Authority made sure, in issuing the original contracts, that no single company—newspaper or other—had a substantial interest in more than one programme company. It cannot, however, in general, prevent dealings which involve changes in the ultimate control of the companies. The Pilkington Committee on Broadcasting could well be asked to pay special attention to the question whether, when new contracts are to be issued, they should be made subject to review if the effective control of the company undergoes a significant change. On this point, an interim report might well be made.

Finally, it has been suggested that a Royal Commission, or some other form of inquiry, should consider the difficulties affecting the newspaper and magazine industry, and printing generally. I am, of course, aware of the debate which we held some weeks ago. I would remind the House that at that time the Government—although they did not ask the House to reject the Motion—felt some doubts as to the efficacy of this procedure. I confess that I am still rather doubtful whether there is real scope here for Governmental action. I am inclined to think that the might be more value if, as suggested in The Times this morning the component parts of the industry itself were to undertake a review of its current problems and future development.

Mr. Wade

Would the Prime Minister agree that in a democracy it is essential that there should not only be freedom for the Press, but also freedom for the reading public to choose between a variety of opinions, including minority opinions? May I therefore urge upon him to institute some form of inquiry, first, to ascertain the facts and put them fully before Parliament and the public, secondly, to review steps that might he taken under ex-sting law, and, thirdly to consider all possible new measures that might be introduced to create some check on this alarming trend towards monopoly and concentration of power?

The Prime Minister

The Royal Commission expressed the view that it did not think that the concentration of newspaper ownership at that time was so great as to prejudice free expression of opinion, and the only question is how far the position has changed since 1948. The number of chains is the same, and outside the chains there is much the same diversity of ownership. The only really significant change has been the disappearance of the News Chronicle and the Star. I think that inquiries on the technical aspects of take-over bids in general, not the newspaper aspects, is, as I have said, properly the subject for the Jenkins Committee.

On inquiries in general, I do not think that inquiries ought to be used by Governments merely to save themselves trouble and the time of the House and to put it off. We have to see what, if anything, we ought to do, and while I agree it would be a good thing to have the greatest possible variety of opinion expressed, I still do not think that it is the duty of the Government to subsidise newspapers which cannot attract sufficient readers to make themselves profitable.

Mr. Gaitskell

While the Prime Minister's statement that he is concerned about the growing concentration of power in the newspaper world will be welcome, is he aware that the rest of his statement will cause great disappointment? Is he not aware that since the Royal Commission reported there has, in fact, been a substantial number of further closures, apart from the News Chronicle and the Star, and that Sunday newspapers have been closed and, I think, several provincial newspapers and magazines as well?

Is he aware that merely to refer the possible monopoly of a large section of magazines to the Monopolies Commission would very likely be too late before the actual merger was accomplished and that it would be extremely difficult to undo what had been done? Is he also aware that at present four out of every five readers of popular newspapers read newspapers controlled by one or other of three men, and is this not already a substantial concentration of power?

Finally, may I ask him to consider this: when a somewhat similar position developed in the case of the joint stock banks, at the end of the First World War, following the report of a Treasury committee the Government made a simple request that no further mergers should occur without Treasury consent. This request was completely effective and, in fact, no further mergers took place. Would he not consider making an appeal to the parties concerned not to proceed with these existing proposed mergers for the time being and pending the result of an inquiry into the present situation?

The Prime Minister

I have not absolutely closed my mind to an inquiry. I am very ready to discuss with the right hon. Gentleman or anyone else what might be done. I know something about these affairs and I do not think that merely to stop this procedure would have the effect that the right hon. Gentleman requires, because some of these journals will no doubt be forced to cease publication because they cannot be run except at a great loss. It was not on purpose that Mr. Cadbury closed down the News Chronicle. It was because he felt that the amount of money that he was drawing no doubt from other sources was so great that it could not be justified.

As I think the right hon. Gentleman will see, there is no real analogy between this and the merger of the banks. Here the problem is how far a merger may help to keep alive certain journals which would otherwise disappear. On the other hand, there is the problem, to which I called attention, particularly with the magazines, where there is something which I think would fall within the terms of the Monopolies and Restrictive Practices (Inquiry and Control) Act and could be referred to the Monopolies Commission.

As to the concentration of power, I think that the right hon. Gentleman would agree with me—and as I have said, I have lived through many years of this—that the power of newspaper proprietors is nothing like what it was twenty or thirty years ago. In the first place, there was then no radio, no television, no method of communication between the Government or anybody else and the people except the newspaper proprietors. If one reads the political history of the First World War and the years following it one will see how great was that power.

Mr. Gaitskell

Is it not a fact that, as far as the present proposals are concerned, the most serious consequence in the monopoly direction will be in the magazine field? Will the Prime Minister consider my earlier point, that if this is simply left to a possible inquiry at some future date by the Monopolies Commission it could take place too late? This is a very real difficulty if, meanwhile, the merger proceeds.

Would the Prime Minister, secondly, consider another point? We all appreciate the difficulty of finding a real solution to this problem, but we are not satisfied that nothing whatever can be done, and it is precisely on that account that we feel that a more long-run inquiry into the whole situation is really worth while.

Will the right hon. Gentleman consider what is to prevent still further mergers in the newspaper world and whether we are not faced with the peculiarly unpleasant alternative either of a single individual holding a large number of shares and, therefore, exercising very great power, or the shares being so widely held that the companies concerned remain open to a take-over bid? This is a profoundly unsatisfactory state of affairs. In the light of all this, would the right hon. Gentleman be prepared to enter into talks with the Opposition to see whether some inquiry could be held?

The Prime Minister

I would be most ready to do so. I agree that this is a very difficult problem. If we stop some of these operations we might have an effect entirely opposite to the one the right hon. Gentleman wants, because the journals that are not profitable would be forced to cease publication. As I understand them—and they change rather quickly—the present negotiations would have the effect of putting all the power into the hands of a company whose shares are more widely distributed than almost any other company in this business.

Mr. Frank Allaun

Does the Prime Minister appreciate that both the contenders for Odhams Press, that is to say, the Daily Mirror and Thomsons, have powerful commercial T.V. empires? Since this threat to democracy resulting from a private individual or a company possessing both great T.V. and Press domains is imminent, could the right hon. Gentleman not do as my right hon. Friend the Leader of the Opposition has suggested, ask the three parties to hold up transactions pending a quick inquiry, and if this request were disregarded should not the Government warn the parties that any subsequent legislation could be retrospective to today?

The Prime Minister

I agree that the television aspect is an important one. It seems to me that, having set up this very strong Committee under Sir Harry Pilkington, it would be far better to send this question to it and ask for an interim report on this respect of the matter.

On the wider question, I frankly admit that it is a difficult matter. I see dangers in all directions. If the right hon. Gentleman the Leader of the Opposition will be good enough, I will be very happy to discuss with him whether, if any, action should be taken which would be valuable in this matter.

I only thought it right to point out what I still believe to be true, that from the political aspect—the other aspect is the monopoly of magazines—I do not think that today there is anything like the concentration of power which caused so great anxiety to many of us twenty or thirty years ago.

Mr. K. Robinson

Is the Prime Minister aware that the Government are now almost alone in not feeling that an inquiry on a wide scale into the Press is essential? Such an inquiry has been called for by the House, by the Press and the public, and by Mr. Cecil King. If the right hon. Gentleman has not closed his mind to the possibility of such an inquiry, will he give consideration to the wider field suggested in Question No. 54, in view of the growing public concern about the connection between Press interests and television interests?

The Prime Minister

It is that point that I specially mentioned. If the Pilkington Committee makes an interim report, and it is already sitting, it will not be later than a report as a result of setting up a new inquiry to cut across the lines of the Pilkington Committee.

Mr. Grimond

I am sure that the Prime Minister will agree that things have changed a good deal since the last Royal Commission reported. Will he bear in mind that some of these newspapers are not closing because the firms in charge of them are not making a profit? As far as I know, Odhams and the Daily Herald have been making a profit. A paper in my constituency has closed not because it was not making a profit, but because it could not get skilled operators.

I should like to know whether the industry, on both sides, has made every effort to use up-to-date methods to reduce costs. Then there is a proposal worth investigation put forward in the Daily Telegraph this morning, which is that in the case of take-over bids a proportion of the payment must be made over in cash.

In view of all the dangers, which we all realise, would it not be better to look also at the question of advertising to see whether some form of taxation might not be brought in to assist certain newspapers? Could not advertising revenues be diverted to some extent to enable us to support, not through a political body, but through an impartial body, some organs of opinion if it turns out that there is serious danger of monopoly?

The Prime Minister

I will study all three of the hon. Member's suggestions. As for the first, it would be true to say that at present the Daily Herald is being carried by the other more successful items in a large undertaking. Therefore, to destroy any undertaking by some antitrust legislation might have the very effect which the hon. Member would wish to prevent. They are, in fact, carried in that case by money made by other businesses, which a proprietor like Mr. Cadbury chooses to put in, or, as in the case of the Daily Herald and many other journals, by the profits made on one item being used by another.

In the general economic and financial structure of the industry there is possible cause for anxiety and possible room for inquiry, and it is that which I had much in mind in the closing passage in The Times today—whether that should be done by the industry itself or this aspect of it by the Government. I will study the point about advertising, but I would not have thought that to tax advertising was to help a struggling journal.

Several Hon. Members

rose—

Mr. Speaker

Mr. John Hobson.

Several Hon. Members

rose—

Mr. Speaker

Order. I failed to make myself heard. I called on the hon. and learned Member for Warwick and Leamington (Mr. Hobson) for the presentation of his Bill.