New Clause 1

HC Deb 11 April 1972 vol 834 cc1113-71

	SPECIAL PROVISIONS AS TO NEWSPAPER SHAREHOLDINGS IN RELATION TO LOCAL SOUND BROADCASTS
	(1) This section applies to any contract made between the Authority and a programme contractor, where the programme contractor is a body corporate and the contract requires local sound broadcasts to be provided by the contractor and to be transmitted from one or more stations specified in the contract.
5	(2) Subject to the next following section, before the Authority enter into a contract to which this section applies—
10	(a) they shall consider, in relation to the locality served or to be served by the station or stations to be specified in the contract (in this section referred to as 'the relevant locality'), whether there is any newspaper which circulates wholly or mainly in that locality and is a newspaper in respect of which the appropriate conditions are fulfilled, and
15	(b) the Authority shall fix a date before which representations may be made to the Authority under subsection (4) of this section and shall cause notice of that date to be given or published as may appear to the Authority to be appropriate for bringing it to the attention of persons who in their opinion are likely to be affected by it.
20	(3) For the purposes of this section the appropriate conditions shall be taken to be fulfilled in respect of a newspaper if it has in the relevant locality a circulation which, in the opinion of the Authority, represents a substantial proportion of the population of that locality, unless the Authority are satisfied that the broadcasting of the programmes to be provided under the contract in question is unlikely to have a materially adverse effect on the financial position of the newspaper.
25	(4) The appropriate conditions shall also be taken for the purposes of this section to be fulfilled in respect of a newspaper if, on representations being made to the Authority by or on behalf of the proprietor of the newspaper before the date fixed under subsection (2)(b) of this section, the Authority are satisfied that (notwithstanding that its circulation falls short of the proportion mentioned in subsection (3) of this section) the broadcasting of the programmes to be provided under the contract in question is likely to have a materially adverse effect on the financial position of the newspaper.
30	(5) Where it appears to the Authority that the appropriate conditions are fulfilled in respect of a newspaper, then, subject to the next following section, the Authority shall not enter into the contract unless they are satisfied that—
35	(a) arrangements have been made for enabling the proprietor of the newspaper to acquire, on terms approved by the Authority, a shareholding consisting of such number of shares of such description as may be so approved, and
	(b) either the acquisition of the shareholding has been completed, or it will be completed within a reasonable time, or the proprietor of the newspaper has declined to acquire it on the terms approved by the Authority.
40	(6) The number and description of shares to be approved for the purposes of any such arrangements—
	(a) in the case of a newspaper which is the only local newspaper circulating in the relevant locality, or the only local newspaper having a substantial circulation in that locality, shall not be such as to enable the proprietor of the newspaper to obtain control over the programme contractor, but
45	(b) in any other case, or (in a case falling within the preceding paragraph) to such extent as is consistent with that paragraph, shall be such as the Authority consider appropriate, having regard to the adverse effect which the broadcasting of the programmes to be provided under the contract in question is likely to have on the financial position of the newspaper.
50	(7) Any terms approved by the Authority under subsection (5)(a) of this section shall be such as, in the opinion of the Authority, will enable the shareholding to be acquired at a price not exceeding its current market value or (if it has no current market value) a price not exceeding a fair valuation of the shareholding.
55	(8) In this and the next following section 'newspaper' does not include any publication which is not printed for sale or which is published at intervals of more than seven days, and 'shareholding', in relation to a programme contractor which is a body corporate, means a holding of shares in that body corporate.—[Mr. Chataway.]
	Brought up, and read the First time.

7.15 p.m.

The Minister for Industrial Development (Mr. Christopher Chataway)

I beg to move. That the Clause be read a Second time.

Mr. Deputy Speaker

I suggest that it would be convenient for the House to discuss at the same time the sub-amendment (c) in line 55, leave out "seven" and insert "fifteen".

And new Clause 2: "Provisions supplementary to section (Special provisions as to newspaper shareholdings in relation to local sound broadcasts)".

Mr. Chataway

It will be within the recollection of hon. Members who took part in our extended Committee stage upstairs that we gave considerable thought to the rôle of newspapers in sound radio. Two of my hon. Friends felt that the provisions in the Bill were unsatisfactory in that they gave too privileged a place to newspapers, and their view was apparently shared, though for exactly which reasons was not clear, by hon. Gentlemen opposite, and Clause 7 was deleted from the Bill at the conclusion of the debate on the Question "That the Clause stand part of the Bill".

I proposed new Clauses 1 and 2 as substitutes for the old Clause 7. I will come later to new Clause 3, when I shall move to fulfil an undertaking I gave in Committee to table an Amendment to ensure that no group, company or newspaper should have too large a shareholding in the system as a whole.

New Clause 1 seeks to put back the effective parts of Clause 7. There was a fair measure of agreement in Committee that newspapers had a legitimate anxiety about the effect on them of local radio. There were differences of view about the extent to which newspapers would be likely to be affected, but the majority felt that there would likely be some effect.

The advice I have about the likely impact of local radio stations on the revenue of local newspapers is that though some advertisers will try radio and perhaps stay with it in preference to local newspapers, the extent of the diversion is not, in general, likely to be greater than the local Press could bear. It is not by any means certain that a local newspaper will in the long run be worse off because local radio has come to its area.

The stimulus of local interest and perhaps publication of the radio timetable in the pages of the local newspaper may actually be of material advantage. However, as against that, it seems reasonable to suppose that the introduction of a new medium to be financed by advertising will attract to itself some of the advertising revenue now enjoyed by the papers.

At any rate, one could not positively assert that bringing into the local commercial arena this new medium might not result in some hardship in some cases. It would indeed be entirely contrary to Government policy if local radio stations were able to create for themselves a new kind of monopoly by destroying contemporary and competitive local newspapers

The Government also believe that, provided safeguards can be secured against the risks inherent in an undue concentration of the means of communication—I shall be dealing in more detail with this aspect when I come to new Clause 2, which is supplementary to this one—the local Press can make a valuable contribution to the operation of an independent local radio service. Their relevant experience and expertise and the facilities they possess will be very useful to local radio stations, particularly in their early days.

For these reasons—so that the Press and the new service can have the best chance both to survive and to compete—the Government have decided that the Authority should be vested with duties to ensure for local newspapers with a wide circulation in the area of a local radio station and others that would be adversely affected financially, a right to acquire shareholdings if they wish to do so.

Safeguards were proposed originally against undesirable influence being exercised by newspapers as a result of their shareholdings in local radio. If, for example, a local newspaper has a monopoly in the area, then it is not allowed to have a controlling interest in the local radio station. However, I believe it right that we should give to local newspapers some opportunity when introducing this new medium.

This was what we promised to do in our election manifesto. It has been understood by the local newspapers from the start that we should give to them a particular place. As I have said, in new Clause 3, when we come to it, I have introduced a further amendment to the Bill which will ensure that newspapers in aggregate are not able to control the system and that there are proper safeguards against anybody having too large a share of the total equity. But if we are to ensure, particularly over the transitional phase, that newspapers are not adversely affected by the new medium and that they can make their full contribution, I believe that arrangements such as we have proposed are of importance.

My hon. Friends the Member for Hendon, North (Mr. Gorst) and the Member for Brighouse and Spenborough (Mr. Proudfoot), both of whom have been unhappy with the provision as originally proposed in the Bill, will find in new Clause 3 that I have moved some way towards meeting their anxieties. But I hope that they will recognise that the local newspapers believe that a provision such as this is necessary if they are not to be adversely affected.

In Committee, my hon. Friend the Member for Brig house and Spenborough treated our undertaking in the election manifesto in a rather cavalier spirit. He said that there was a good deal of padding in election manifestos. I cannot take that view. I believe that we were right to say that newspapers would be treated in a particular way and that we are right to include this provision in the Bill. In Committee, my hon. Friend the Member for Hendon, North took the view that while newspapers had originally believed that they would need some such provision as this, they no longer thought it necessary and that they had acquired a confidence that would enable them to feel that a provision such as this was not required. I am left in no doubt, however, by the correspondence I have received from hon. Members who have been approached by their local newspapers that that is not so, and that the majority of local newspapers believe that a provision such as this is a sensible one.

Mr. John Gorst (Hendon, North)

It is true that the Newspaper Society has been writing in all directions but, whilst it has been writing in all directions, my right hon. Friend might like to know that it has always been talking with two voices, one saying that it is absolutely essential to have this and the other one saying, "We do not really give a damn whether we have it or not".

Mr. Chataway

If it has spoken with two voices, I have not heard one of them. Only the first voice has come to my attention. The correspondnece I have had with hon. Members has also indicated unanimous local newspaper support for the provisions of the Clause.

I turn briefly to some of the details of new Clause 1. It follows very closely the old Clause 7, but subsection (2)(b) is new. Its purpose is to stop the process of fixing the size of shareholdings for newspapers from becoming a means of delaying the development of the new service. It accomplishes this by giving the Authority the duty of fixing a time limit within which a newspaper can make its representations. This point was raised in Committee. It is right to ensure that this process does not cause unnecessary delay.

Subsection (3), which takes the place of paragraph 3(a) of the old Clause, brings within the scope of the Clause a newspaper whose circulation in the opinion of the Authority represents a substantial proportion of the population of the locality to which the station will broadcast. Such a newspaper is by definition one which fulfils the conditions entitling it to be offered a shareholding unless—and this is a new proviso—the Authority is satisfied that it is unlikely to suffer a materially adverse effect on its financial position.

What this amounts to is that there is a presumption in favour of such a newspaper, though one which is capable of being rebutted by whatever evidence the Authority may adduce. So the only newspaper in this category which would not be entitled, as of right, to some shareholding would be one in respect of which the Authority is satisfied that there would be no adverse effect.

Mr. Ivor Richard (Barons Court)

I am not sure whether I understand the last three sentences which the right hon. Gentleman read on subsection (3). Is the position that if a newspaper has a circulation which is a substantial proportion of the population of the locality, prima facie it is to have the right to buy in unless the Authority is satisfied that the broadcasting of the programmes would be unlikely to have a materially adverse effect on the financial position of the newspaper? In other words, the onus in this is exactly the other way round from the way in which it was set out originally. I think that I am right in saying that. Before the Minister leaves that matter, would he give us his thoughts upon what a substantial proportion of the population the locality might be? I have been trying to consider how it may be capable of being construed, and "substantial" is not the same as "majority". How do the Minister and those advising him approach that particular problem?

Mr. Chataway

Obviously, as the hon. and learned Gentleman will appreciate, it would be bound to be for the Authority to decide ultimately what it considered to be a substantial proportion in this context. It would be wrong to try to fix any set proportion of the population, because clearly there could be very differing circumstances in various towns. In a large town, such as London, where there is a very large number of newspapers, one would want to look at a newspaper which had a circulation way below 50 per cent. of the total population. In another situation in a smaller town where there were only two newspapers a totally different percentage would be appropriate. So that although it seems imprecise, the House will recognise that this is something that one is bound to leave ultimately to the Authority.

The hon. and learned Gentleman formulated exactly the effect of the new subsection (3). It was necessary to make this relatively small change because of an imprecision in the original drafting. It will mean that there is a less absolute right on the part of newspapers than was envisaged in the original subsection, and that if a newspaper with a substantial circulation is felt by the Authority not to be affected by the coming of the new station, it would not have a right to participate. But it would still be open to the Authority to allow it to participate.

Mr. Richard

This is becoming increasingly important having regard to the range of transmission which it appears that these stations are now to have. It one is to have one station for the whole of London, for instance, with a very large number of newspapers included in the locality which will be affected by that one station, on the face of it one will have a very large number of relatively small newspapers which, prima facie, under the Bill will have the right to buy in to that programme contractor.

If the idea is to protect the small newspapers, I can at least see some argument for it; but the saving words which the Minister has now tacked on to the end of subsection (3) would seem to say that in that situation one would exclude the small newspapers because it is unlikely that Radio London will take much advertising away from—I do not know—the Fulham Advertiser or the Barnet Chronicle, but, on the other hand it may take away a great deal of advertising from the Evening Standard or the Evening News. I find it difficult to believe the object of the exercise is to deprive the small newspaper of the right to buy in but to permit the large newspaper an automatic right of entry because of the range of transmission of the new station.

7.30 p.m.

Mr. Chataway

I hope I can set the hon. and learned Member's mind at rest on this, because that is certainly not the intention and nor is it the effect. In the original Clause 7(3) there were two criteria: whether a newspaper had a substantial circulation and whether it was likely to be adversely affected. On the whole, it would be the larger stations that would be able to prove a substantial circulation and the smaller papers, not being able to prove a substantial circulation, who would tell the Authority that they considered they would be adversely affected. If the Authority believed there were reasonable grounds for considering that they would so be affected they too could have the right to participate.

Although it was not noticed in the Committee, there was in Clause 7, as originally drafted, a loose end. In subsection (5) the Authority was not left with any criteria by which to judge how those newspapers with a substantial circulation should have their right to participate determined. Under Clause 7(5)(b) the Authority was required to have regard to the adverse effect which the broadcast of programmes might have on the newspaper in question and it was according to that that it was required to determine the size of participation by the newspaper.

No criterion was afforded to the Authority to determine on what basis it should give a shareholding to those who qualify under the first heading of "a substantial circulation", and it is really for nothing more than this drafting reason that this modest change has been made in subsection (3). Now it is spelled out that the Authority will, in determining how much of a share hold shall be afforded to the newspaper, have regard to the financial effect of the radio station upon the newspaper. It is to have that regard whether or not the newspaper qualifies for a shareholding by virtue of being adversely affected financially or by virtue of having a substantial circulation in the area.

I am sorry this is a matter of complication and I am sorry if I am not able to spell it out more clearly. But I hope that the hon. and learned Gentleman will accept that the effect of this is in no way adverse to the small newspaper. It has no effect on the small newspaper at all. The smallest newspaper in the situation which the hon. and learned Member is describing will want to prove to the Authority not that it has a substantial circulation, because it may not be able to do so, but that it is likely to be adversely affected and it will have all the rights that were considered when we discussed Clause 7 originally.

Mr. Richard

With respect to the Minister. I am not wrong. He is saying that the small newspaper will not have the right to buy in unless it can prove that it is adversely affected. That is what he has just said. A large newspaper will have the right to buy in automatically provided it has a substantial circulation in the area unless, in the Authority's opinion, it is not adversely affected. What is the justification for excluding the small newspaper unless it can show a direct financial disadvantage and automatically including the large newspaper unless, in the opinion of the Authority, it is unlikely to be affected.

Mr. Chataway

The original arrangement was that the large newspaper simply had to show that it would have a substantial circulation—

Mr. Richard

That is still true.

Mr. Chataway

Will the hon. and learned Gentleman allow me to continue? The large newspaper would then have a shareholding. The only effect of the change is that the large newspaper has to show that it has a substantial circulation but if—and this is the change—the Authority believes that it will not be adversely affected, it need not then get a shareholding. That is the only change on Clause 7.

The arrangement for those newspapers which do not have substantial circulation but which are likely to be adversely affected is exactly the same in the new Clause as in the old Clause 7. The reason is that the presumption is that if a newspaper does not have a substantial circulation in the area it will not be affected at all. The smallest newspaper in London circulating in a square mile or two will certainly not be affected by a radio station which is broadcasting over the greater London area. In the situation in London it is obvious that a station will be competing for advertising against the Evening Standard and Evening News and newspapers which circulate right across the area. But if it is not competing for advertising in any way, shape or form with a very small newspaper, there would be no reason to offer that small newspaper the opportunity to participate.

In many parts of the country it will be the smallest newspapers which will make use of this provision because, for example, in the situation of Radio Scunthorpe, to which the hon. and learned Gentleman referred throughout the Committee stage, one could envisage, although I do not know how many newspapers there are in Scunthorpe, that one or two newspapers with relatively small circulations throughout Scunthorpe would wish to participate and would have the right under the Clause.

Mr. John Golding (Newcastle-under-Lyme)

The Minister is referring to advertising revenue. Would I be wrong in inferring that the Clause refers to the actual sales and circulation of the newspapers involved?

Mr. Chataway

It refers to the circulation.

Mr. Gorst

A very important point needs to be explained. What is to be the position of the newspaper in London which has not made up its mind whether it wants to go into the first or second station? Will it be able to go into both? What is the position of a newspaper, say in Birmingham, where there is to be only one station to begin with? If it finds itself with a second station in a few years time could it, if it wished, have a shareholding in that station also? Will it be allowed to choose which station it goes into and how many stations? This is not made clear in the new Clause.

Mr. Chataway

It would have the right to participate in only one and this is, of course, a once and for all right, as has been made clear. If the station were to lose its contract because it behaved unsatisfactorily, then the newspaper which had the right to participate in it the first time would not be able to claim any such right on the second occasion. It is a transitional arrangement. It is a provision to deal fairly with local newspapers which will suddenly be faced with a competitor they might reasonably not have expected.

Mr. Charles R. Morris (Manchester, Openshaw)

What the right hon. Gentleman has said so far may sound comforting, but on mature reflection and examination it will be very disturbing to the small newspaper interests. The Conservative Party gave the following undertaking in its election manifesto: Local institutions, particularly local newspapers, will have the opportunity of a stake in local radio, which we want to see closely associated with the local community. The Minister now appears to be entering a caveat, because he is saying that news papers are to have a stake with the permission of the Authority. That is the new feature of the Clause. In Manchester there is a host of local news papers. In the city alone the Reporter group of newspapers publishes 14 separate editions, the East Manchester Reporter, the Denton Reporter—

Mr. Deputy Speaker

Order. The hon. Gentleman is going on a bit too long. His interventions would be more effective and would help us to understand the situation better if he could made them a bit more snappy.

Mr. Morris

The proposal in the Clause will create an almost insoluble problem for the Authority.

Mr. Chataway

The Authority does not take that view. We have had considerable detailed discussions with it about the arrangements and exactly how they should be drafted. It is very pleasant to have the hon. Gentleman's contribution since he was not a member of the Committee. I am glad that his anxieties are entirely about whether the Clause is strong enough. His hon. Friends voted against the provision, apparently in the belief that no special arrangements for local newspapers were needed. The ultimate judgment must be left with the Authority. It would be impossible to spell out in legislation, and highly undesirable, the proportion of the population that had to be covered by the circulation. These are judgments that must be left to the Authority. This is a reasonable provision which will enable the newspaper to participate.

We have talked about a very unusual situation, the situation of London. There is nothing in the hon. and learned Gentleman's suggestion that ideas have changed about the likely coverage of the stations. I explained at some length in the Committee what the Authority envisaged by way of coverage for the stations that will be introduced. Up to now we have been considering London. I think it fairer and more representative to consider the smaller area where there may be just one or two stations. It would be unreasonable if one newspaper, part of a winning consortium, were enabled to go into local radio and the other local paper in the area, perhaps almost as worthy, but not part of the winning consortium, were left out. It is not a free market situation. It would not be able to compete in kind; it would not be able to start up a local station of its own. The only fair answer is to say that where local newspapers play a major part in the area served they should have this right.

Mr. A. P. Costain (Folk stone and Hythe)

What is my right hon. Friend's provision for a station at, say, Folk stone or Dover, which could cover a French newspaper's area. Does the "Calais Gazette" have the right to take shares in the station? Are we to discriminate against the French?

Mr. Chataway

I hate to disappoint my hon. Friend. We have no plans for providing, even on a minor scale, local radio for France. The catchment areas of the radio stations proposed will be in this country, and therefore only British newspapers will have the right to participate.

7.45 p.m.

Mr. Phillip Whitehead (Derby, North)

The right hon. Gentleman has been defining "small area" in a curious way, as one with one local radio station. That may be a very large area, because this hand-out has nothing to do with competition. Therefore, does he agree that there may be difficulties in those large areas with one commercial radio station if there are several newspapers in the area, possibly under the same management, which can show, under either of the criteria he has mentioned, that they are likely to be affected? If in Nottingham the Guardian Journal and Evening Postboth said they affected, would the proprietors, who are the same group of people, be allowed to buy a double share in the station?

Mr. Chataway

It would be for the Authority to determine what would be a reasonable share for that company. There are provisions which limit the participation newspapers may have in the whole. Therefore it would be impossible for any reasonable man looking at the qualifications in the Bill to suppose that newspapers will be able to exercise any damaging control over the new system. The safeguards are far too tight.

Mr. Gregor Mackenzie (Rutherglen)

The right hon. Gentleman has been asked about a city where there are many newspapers perhaps under one control. That is precisely the situation in Glasgow, which will be one of the first areas to have a local radio station, where there is one large newspaper group which does not own all the local newspapers but has a major and controlling interest in almost every small newspaper in the West of Scotland. How does he see such a situation being dealt with by the Authority?

Mr. Chataway

The hon. Gentleman's concern is obviously that that company should not have too large a share. The Authority will be able to take into account the facts he has described in determining what is a reasonable shareholding.

The procedure is not totally new to the Authority. It has on occasions in the allocation of television contracts believed it was reasonable for the newspaper in the area to be a participant, and even where the newspaper was not part of the winning contractor it required the contractor to make room for the newspaper. These are judgments that must in detail be left to the Authority. We could not spell out in detail in a Bill percentages that would be appropriate in every situation in every area. The hon. Gentleman need not fear that there is anything in the Bill that would inhibit the Authority from dealing with such situations.

I appreciate that those hon. Members who served on the Standing Committee may wonder why there are two new Clauses in place of the original Clause 7. I have made this separation to meet the objections of the hon. and learned Member for Barons Court of the way in which Section 12B of the original Clause 7 was drafted. On reflection, it seemed to me that some of his criticisms of the form in which it was drafted were justified and that there would be greater clarity if we were to spell it out. The text of the new provision is precisely the same, subject to necessary alterations in number references, as Section 12B of the old Clause 7. There were very few Amendments to that part of the old Clause 7, none of which could be claimed to be significant. I do not believe that it was against this part of the old Clause 7 that any hon. Members were voting.

The new Clause has three functions. The first is the basic one which imports in relation to the operation of the previous Clause about shareholdings for newspapers in local radio programme companies the concept, already familiar from Section 12(1) of the Television Act, 1964, that there must not be newspaper interests in a programme contractor which have led or are leading to results against the public interest. That is a formidable safeguard against some of the possible adverse effects which have worried hon. Members.

Secondly, the new Clause establishes that, in a given locality, so long as that locality does not change significantly in size or local geography, a newspaper can benefit from the previous Clause on only one occasion.

Thirdly, the new Clause establishes that, whilst a newspaper will not on more than one occasion have a right under the enactment to fresh shareholdings, the Clause is not intended to stop the Authority from requiring a programme contractor to offer a shareholding to a newspaper if it seems to the Authority that, by reason of special circumstances, it would be just and equitable to do so. This is a simple matter of construction lest it be thought that the limitations on the rights of newspapers were also to be limitations on the power of the Authority to invite a newspaper to participate if that seemed to be the proper course.

Mr. Gorst

Will my right hon. Friend clarify this? If a franchise area were to be changed at a subsequent date—the power of the transmitter extended perhaps—and a new newspaper had a significant circulation there, would it then be open to the Authority to foist yet another newspaper on to the consortium, or the company as it would then be, in this new situation?

Mr. Chataway

In the perhaps unlikely circumstances of a major change in the area to which a radio station was broadcasting, clearly a fresh newspaper might be affected by it. It might be that if a station were to have its area trebled a number of new newspapers would have then a significant and substantial circulation within the area. In these circumstances, where the Authority might then be re-forming the company in order to cover a much larger area, there would be newspapers which would have the once-for-all right of participation which the newspapers participating in the original company had had. But that is obviously a fairly unlikely situation.

These two new Clauses meet the undertaking given in the Conservative Election Manifesto. We have always taken the view that newspapers should be treated in a particular way in the introduction of local radio. I appreciate the argument of my hon. Friend the Member for Hendon, North (Mr. Gorst) that newspapers should simply stand to compete just like anyone else, such as shopkeepers, in the area who may wish to participate. That is not the view of the Government. It is not the view that we took in Opposition. We have always considered that local newspapers make an extremely valuable contribution to the democratic process, that it is important that they should be safeguarded and that we should ensure that we do not substitute one kind of monopoly for another. I believe, therefore, that these provisions are reasonable.

The Opposition have made it clear that they do not oppose in principle commercial radio.

Mr. Brian O'Malley (Rotherham)

Not true?

Mr. Chataway

Not true? I am surprised at that. Time and again when we chided them in Committee that they were in no position to talk about diversity of ownership because they were the champions of monopoly, hon. Members opposite made it clear that they were not defending the B.B.C. monopoly. Indeed, the hon. and learned Member for Barons Court gave an interview the other day to a leading publication called. Cinema TV Today. He was asked whether he was in favour of commercial radio and he said: I would be in favour of a commercial national alternative to the B.B.C. in sound broadcasting I've no objection to that. He went on to relate how he was opposed to the idea of the B.B.C. monopoly. The great majority of hon. Members opposite have accepted that competition is a good thing in radio and they want to see commercial radio, although they differ as to the kind they want. Some want it to be more local, some more national, but all want something different from what the Bill proposes. Nevertheless, they accept the need to safeguard the position of local newspapers. They profess to care about them. They have put forward in Committee and on Report no alternative means of easing the transitional period for local newspapers, however. I hope, therefore, that on reflection they will recognise that, if one is to have healthy competition in radio and the variety of local newspapers which most of us believe to be valuable to the country, a provision such as that enshrined in these two new Clauses is required.

Mr. Richard

After the Minister's speech—perhaps I should refer to him as the ex-Minister—it might be appropriate for me to say something about these two new Clauses. First, I congratulate the hon. and learned Gentleman on his translation, if that be the right word. I also congratulate the hon. Gentleman who is succeeding him in assuming the mantle of responsibility for posts and telecommunications and broadcasting. I assure him that we will treat him with the same unfailing courtesy and attention that we treated his predecessor and that if he produces a piece of legislation as well considered and weighty and as beautifully drafted as the one we have been considering for five and a half months in Committee, we will also give that Measure as earnest, as detailed and as cogent, I trust, consideration as we have given this Bill. We welcome him and wish him well. We are glad to see him here in statu pupillarithis evening. Perhaps at the end of it he will discover, as we in Committee discovered all too frequently, that the longer we consider the Bill, the less any of us understand it.

I re-emphasise the point I made in an intervention. There is no doubt that on the structure the Minister is proposing for commercial network new Clause 1 will effectively debar the small newspapers from participation. It will effectively invite or, indeed, compel the Authority to allow large newspaper participation.

8.0 p.m.

Even the Minister, when faced with this fond farewell—I am sure that his fare well will be very fond—to this delicate piece of legislation, will agree that, if the new Clause excludes the small newspaper and allows in the large newspaper, it is a bad Clause.

Mr. Gorst

Would the hon. and learned Gentleman agree, following what he has said, that the small newspapers will be forced to compete for a place in this system while the large ones will get it as of right, and that this is totally wrong?

Mr. Richard

The hon. Gentleman merely restates the proposition which I am about to prove to everybody's satisfaction. He did so in a different but no less effective way and one which found just as little approval from his own Front Bench.

Initially there are to be five stations, two in London and one each in Manchester, Glasgow and Birmingham. The hon. Member for Hendon, North (Mr. Gorst) gave us in Committee on 9th December a detailed and powerful analy- sis in terms of population figures, a demographic analysis of the country, to show where these stations were to go. His conclusion was that, after starting with the big five, we would discover that the four next largest stations, assuming that they were in the largest centres of population, would be in Tyneside, Merseyside, West Yorkshire and perhaps the Solent area. Each of these has a population of about 1 million to 1¼ million.

The second 10 of the 20 stations, the Minister said on Second Reading, were intended to include "one or two"—not all—of the relatively small cities. The Authority would at that stage be generally concentrating on the large cities, with populations of not much less than Sheffield which, with Rotherham, has a population of 615,000. If these second 10 stations are to have populations of up to 500,000 each and there are to be two smaller towns of 200,000 each, we are considering an additional coverage of 4.2 million. So the first 20 stations will cover 45 per cent. of the country and a population of 4.2 million.

Therefore, we are not talking about local commercial radio. Whatever we are now talking about, it is regional commercial radio. If I am right and that is what the Bill is all about, and the coverage of each individual station will be relatively large—certainly over the half million in those 20, and towns the size of Cardiff or Swansea will not be included—it is a travesty of language to justify the compulsory participation of newspapers in a commercial radio contract by reference to a small local newspaper in a small local town, where the local butcher will cut down his advertising expenditure by putting it on the local radio station rather than in the local newspaper. That is not what we are now talking about under this structure.

Mr. Chataway

I am sure that the hon. and learned Gentleman would not wish to mislead the House. He talked about 20 stations but, as he knows, because we have discussed the matter endlessly in Committee, the Authority envisages that there will be up to 60 stations and that their strategy will be, I should have thought sensibly, to go in the main for the larger areas first and then to go on to smaller ones. If they succeed in getting to 60 stations, they will be catering for populations of 100,000. I do not think that the hon. and learned Gentleman took the view that the B.B.C. local radio stations were a travesty of language because they included London, Birmingham and Solent.

Mr. Richard

One thing I did not say was that the Evening Standardshould have the automatic right of entry into B.B.C. Radio London. The Minister talks of the plan. What is the time-scale? In the immediate future there will be not 60 commercial stations but five, with possibly another four and then possibly another 10. We are therefore talking about a time-scale of six to eight years. By the time we get out of the first 20 and into the next 20, we may be in the next decade.

I do not see why one should try to produce a structure now which, in the initial years, will be applicable to the large cities so far as newspaper participation is concerned and justify it by what might happen in 10 or 12 years, if and when the I.B.A. gets down to towns the size of 100,000 or 120,000. One asks what will happen in the four conurbations which we are discussing.

According to the Bill, before a contract is awarded the I.B.A. must consider the position of the newspapers in the area to see whether there is in that area a newspaper with a substantial circulation. In London, for instance, the Evening News and the Evening Standardwould be able to prove large circulations, as indeed would the national Press. In Birmingham a semi-national like the Birmingham Postcould be said to have a substantial circulation. In Glasgow, papers like the Glasgow Herald, the ordinary daily tabloids and even papers like The Scotsman, could establish a substantial circulation.

If it is established in London, as it clearly can be, that the Evening Standard and the Evening News have a substantial circulation, according to this Clause they will have an automatic right of entry into a commercial radio contract, unless the Authority is satisfied that the broadcasting of the programmes is likely to have a materially adverse effect on the financial position of the newspapers.

It is clearly arguable that some of the advertisement revenue on Radio London will be diverted from the Standard and the News. Thus, they will have the right to buy in. But the local newspapers in the London area, by which I mean the small local borough newspaper like the Acton and Shepherd's Bush Gazette, the West London Observer and the Fulham Chronicle—I am sure that the House will forgive me for being "commercial" about newspapers in my area—will need some protection. Yet those newspapers do not have to show merely that they circulate in the area and have a right therefore to come in unless it can be shown that they are not adversely affected. On the contrary the Government, for a reason best known to themselves, put the onus in exactly the opposite direction. It is easier for the bigger newspaper to buy into a programme contract company with this structure than it is for a small one to do so.

New Clause 1(4) states: The appropriate conditions shall also be taken…to be fulfilled…if…the Authority are satisfied that (notwithstanding that its circulation falls short of the proportion mentioned in subsection (3) of this section) the broadcasting of the programmes…is likely to have a materially adverse effect on the financial position of the newspaper. Unless the little newspaper in London, the Shepherd's Bush Gazette, the West London Observer, or the Fulham Chronicle, can show to the Authority's satisfaction that it will be adversely affected by Radio London, it will not have a right of entry into that programme company. That is right, is it not?

Mr. Chataway

It certainly is right, and I imagine that the hon. and learned Gentleman is anxious that the Evening News and the Evening Standard should be continued, but does he think it reasonable that the Shepherd's Bush Gazette, if it is in no way affected by Radio London, should have a right to participate?

Mr. Richard

No. What I say is that there is no sense in putting responsibility in exactly the opposite direction. There is no justification for saying that all the Evening Standard has to do is to show that it has a substantial circulation and it will get the right of entry, whereas a smaller newspaper does not get a right of entry unless it can show that it is adversely affected. Even on the right hon. Gentleman's approach I do not see why the onus should be put in entirely the opposite place, dependent on the size of the newspaper.

Mrs. Sally Oppenheim (Gloucester)

Does not the hon. and learned Gentleman agree that the type of advertising that is carried in small local newspapers is not in direct competition with the type of advertising which will be carried on commercial radio in the same way as advertising which is carried in large provincial newspapers is?

Mr. Richard

The hon. Lady proves my case. What she is saying is that local newspapers do not need protection—

Mrs. Oppenheim

indicated dissent.

Mr. Richard

With respect, that is exactly what the hon. Lady said, and I suspect by the look on her face that she knows she said it. She said that the little newspaper is unlikely to be affected by a commercial radio station like Radio London because the sort of advertising it carries is different from the sort of advertising carried by Radio London. Therefore I say to the hon. Lady, why protect? Why have it in at all? The hon. Lady need not turn her eyes up to the ceiling looking for inspiration from the roof because the logic of what she said is precisely that. If those newspapers will not be adversely affected, why are we going through all this nonsense of new Clauses 1, 2 and 3?

If the hon. Lady believes what she has said about the sort of advertising that is carried in one newspaper as opposed to another, she is conceding the second part of my case, which is that this Clause is not designed to protect the small local newspaper and neither will it do so. What it will do is to protect the large regional newspaper, and I cannot for the life of me see why the House of Commons should be a party to permitting the Evening Standard, the Evening Newsand other newspapers of that ilk to have a compulsory right of purchase into a commercial radio station. I do not see why we should lend ourselves to it.

If we do lend ourselves to it, let us be open and frank about what we are doing. Let us not kid ourselves, as the Lord Eccles attempted to do in another place, that the Clause is designed for the protection of the small one-man newspaper. One has this delicious picture of an antique press with father and son, one putting the paper in at one end and one writing the newspaper. Out it goes on to the streets containing an advertisement by the local butcher saying "My sausages are 2p cheaper today than they were yesterday". That is not what we are talking about. In discussing the Clause we are talking about the great national newspaper chains. My hon. Friend the Member for Fife, West (Mr. William Hamilton) had a great phrase about the Bill. He said it was the gravy bowl. The more one examines new Clause 1, the more it looks like a bowl and the more it smells of gravy. To those who have, it shall be given by the Conservative Party.

8.15 p.m.

Mr. Gerald Kaufman (Manchester, Ardwick)

My hon. and learned Friend has made a valid point which is perhaps even more valid than he thought. That extraordinary publication the Evening Standard is in financial deficit and will be allowed to suck up revenues from a profitable Radio London, not to save itself from damage by Radio London but to give itself new life which it has not earned and does not deserve.

Mr. Richard It is obviously not a gravy bowl but a blood bowl. The Bill provides a transfusion. The position is no different now from what it was when we discussed the Bill in Committee. If anything it is slightly worse.

Mr. Wilfred Proud food (Brighouse and Spenborough)

The population of London is 12 million and, therefore, the two stations would have a huge listener ship of about 4 or 5 million each, which equals the circulation of the national dailies. I can see a situation arising in which national advertisers would be very pleased to get at 4 million people and I can see the national newspapers saying that some of their advertising revenue has been stolen by the radio stations. The argument could apply equally to the national dailies.

Mr. Richard

I follow the point which the hon. Gentleman puts with his customary clarity and accuracy.

Mr. Chataway

The hon. Member for Brighouse and Spenborough (Mr. Proudfoot) also made this point, with clarity I agree, but not with accuracy. The Clause refers only to those newspapers with a circulation wholly or mainly in that locality.

Mr. Richard

The right hon. Gentleman is right, subsection (2) refers to— …any newspaper which circulates wholly or mainly in that locality… If therefore one had, as one has in London, regional newspapers which circulate mainly in the locality, and in other parts of the country there are regional papers circulating mainly in the locality, they would clearly be covered by the Clause—not the Daily Express, just the Evening Standard.

As I was saying, the Clause is just as objectionable now as it was previously. There is still the same danger of over concentration of power over different parts of the communications media in too few hands. There is still the same obfuscation about the wording of the Clause and the same danger that it will help the wrong people.

If the Clause was designed purely to aid and protect the small local newspaper in a clearly defined and obvious locality, and if that newspaper was obviously going to be seriously affected by a commercial radio station in its area, that would be one position; but I do not see why the House of Commons should lend itself to a structure in which the large newspaper groups will be permitted a share in the profits of an entirely separate commercial enterprise merely because they happen to have a newspaper in that area.

Presumably the new Clause will apply to the London news station as it will to any other station. Therefore, it would give the Evening Standardthe right to buy into Radio London, but would also give the Evening Standard and the Evening Newsthe right—[Interruption.] The Minister seems to disagree, but that is what the Clause says. He may say that that is not how it will operate, but we cannot rely on his good faith in matters about which we know nothing and which we have not discussed. On the face of the Clause, a newspaper would have the right to buy into a news station which was indirect competition with it. That surely is utterly wrong. In due course I shall advise my right hon. and hon. Friends to divide against these new Clauses.

Mrs. Sally Oppenheim

I am happy to intervene briefly in this discussion to express support for the new Clause since I firmly believe it constitutes a very important and necessary safeguard by seeking to provide some sort of financial protection for provincial newspapers against the possibility of loss of circulation or loss of advertising as a result of the introduction of a local commercial radio station. I shall confine my remarks to the principle behind the Clause which, as I see it, accepts that the provincial paper has a very important rôle to play in our society and that some safeguards are necessary.

I cannot emphasise too strongly how vital I believe it to be that there should be some protection given to the financial viability of local newspapers. It must be remembered that the financial soundness of newspapers, whether provincial or national, is continually under pressure.

I should like to deal with the question of the importance of the good local newspaper and the service which it provides in the area which it covers. Not only does a local newspaper represent the character and atmosphere of the area, and often the views of the people in the area, but it also reflects, enhances and preserves the differences in character and temperament between different regions. The local newspaper becomes part of the local scene in a way in which no other medium can.

I am fortunate in being able to give the House an example of what I mean. I have in my hand the 250th anniversary edition of the Gloucester Journalwhich on its front page carries a message of congratulation from Her Majesty the Queen. This was one of the first weekly newspapers in this country and for the past 250 years it has been faithfully recording events and commenting on the history of Gloucester, and has rendered very valuable service to posterity.

Mr. Kaufman

I would not differ from a single word the hon. Lady said both about her own local newspaper—and I admire her for getting a word in about it—and about the value of the local Press in general. But does she not see where this is leading her? It is as though in a Bill seeking to lay down the principle that wives should be beaten she is saying that there shall be a Clause to bring in policemen to protect wives from being beaten. Ought she not to be saying that wives shall not be beaten and that the best way to protect newspapers is not by having a Clause in a commercial radio Bill to stop unfair competition with newspapers, but not to have commercial radio at all since it undermines her local newspaper, which is such an admirable journal?

Mrs. Oppenheim

The hon. Gentleman is seeking to mislead me, first by making me believe that he agrees with what I am saying—and I am sure he does not—and, secondly, in his remarks about beating wives. I do not know whether the hon. Gentleman is married, but I am sure that he would never be connected with the beating of wives. The purpose of the Clause is to increase competition with local radio and not to restrict it in respect of local newspapers.

Mr. Gorst

I fully appreciate my hon. Friend's point about the excellent Gloucester Journal, but I know of two newspapers in Cornwall one of which is extremely good and the other extremely bad.

Mr. Golding

Which one is it?

Mr. Gorst

The Cornish Times. Does my hon. Friend believe that regardless of the merits of the newspaper concerned it ought to have an automatic right—because that is what is granted by this Clause?

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Order. I must remind the House that we are considering this Bill on Report and not in Committee. There should not be too many interventions.

Mrs. Oppenheim

I shall try to reply briefly to my hon. Friend's point and then will quickly conclude. There are of course good and bad provincial newspapers. Sometimes it depends on which side of the political fence one sits as to whether one approves of the views of a particular newspaper. Surely if it is a bad newspaper it will in any case have a poor circulation and will not be concerned in the new Clause. It is important to bear in mind the daily provincial newspaper, because local people often find such newspapers to have the most personal significance for them and they have a greater effect locally than have national newspapers. They also often display a far greater sense of responsibility than either the sound or visual broadcasting media.

I warmly welcome the Clause, and if the Opposition try to defeat it tonight, they will be rendering a great disservice to their own local newspapers.

Mr. Golding

I shall seek to be brief because we have many Amendments before us this evening. I feel I should apologise for not having gone into enough detail in Committee to clear up these matters.

It is pleasing to welcome to our discussions this evening the hon. Member for Bourn mouth, West (Sir J. Eden). His presence is particularly apposite because we are discussing in the new Clause a new form of the "lame duck" principle. The Government have now decided to abandon the principle of rushing in after the ducks are lamed. They have now decided that in the terrible situation of competition they will give hand outs before the competition has damaged one of the competitors. I think it only right that the new Minister of Posts and Telecommunications should join us in the House at this particular point tonight.

8.30 p.m.

I make no bones about it, nor did I on Second Reading: I oppose the newspapers having any part to play in commercial radio. I made that statement on Second Reading, and everything I have heard since has confirmed my view. I shall not be voting tonight because I do not think the Clause is strong enough; I shall not be voting because there are defects in the wording of the Clause; I shall be voting tonight against the participation of local newspapers in local radio.

The point has been made several times by the Minister that this participation under the wording of this new Clause will not give control to the programme contractor, but there is a very narrow line between obtaining control and having undue influence and there is nothing in the legislation that would prevent that undue influence, as far as I can see. It can be argued that the participation of newspapers in television has been harmful, and I should like to give one example of this—not of harmful influence perhaps but of the relationship between the participation of a newspaper in a television company and the policies of that particular television company.

As I understand it, the Birmingham Post has interests in television in the West Midlands, in A.T.V. Other newspapers have holdings in other television companies. It has been no surprise, therefore, with the derestriction of hours to see those television companies that have proprietors of newspapers on their boards coming out against breakfast-time television and against extended news coverage at the times when the newspapers are being sold on the streets or pushed through letter-boxes. It is quite apparent that there has been an undue influence on those boards in respect of the use of the unrestricted hours of broadcasting.

I welcome the hon. Member for Bournemouth, West because he must have heard the arguments about competition before. He must have listened to one of his hon. Friends expounding the idea that in fact this participation was needed to make the newspapers financially viable.

Mr. Norman Fowler (Nottingham, South)

Before the hon. Gentleman leaves the point he is making, which is that newspaper interest in television is harmful, because that is what he said, would he not agree that in fact the newspaper interest in television companies has had no effect upon the editorial independence of those television companies, and that is surely the crucial point?

Mr. Whitehead

Yes it has: London Weekend.

Mr. Golding

My hon. Friend behind me, who is very knowledgeable in these affairs and to whom I have listened with great respect during the Committee sittings, reminds me of London Weekend Television. I do not want to say too much about television because at the present time we are examining very carefully in the Select Committee on Nationalised Industries the working of the I.T.A. and the relationship of the I.T.A. with the programme contractors.

I should have thought that the example I gave was important enough. If by participation a television company is led to pursue a policy quite different from that which it would have pursued had there been no participation, that is sufficient reason for us to indict it. They offer us a different product. Instead of offering us news at breakfast-time they decide that they will not start broadcasting until late in the day when the newspapers are stale. But if we go to America we learn that the American companies earn their revenue before the evening and run their evening programmes at a loss. When we inquire when they make the most profit they say at breakfast-time. When one asks oneself why it is that the programme contractors in this country will not have breakfast-time television, perhaps it is a coincidence that the companies which are opposed are those which have newspaper proprietors represented on their boards.

However, I was discussing competition. It is not many months since the new Minister for Posts and Telecommunications was arguing that the National Coal Board should be allowed to own shares in North Sea Gas. His argument was that North Sea gas was threatening, was competitive, was proving to be complementary and was undermining the coal industry. Perhaps hon. Members would care to read the speeches made from the Treasury Bench on that occasion. There was quite a different attitude towards competition. In that respect, competition between North Sea Gas and coal was good. It was said that if coal was to go under and North Sea gas and oil were to dominate, that was the order of the universe, that was the law of competition, that was what capitalism was about. However, it seems that capitalism is not about newspapers competing with local commercial radio.

Mr. Kaufman

Surely my hon. Friend realises that the newly-appointed Minister comes from the Department of Trade and Industry with an entirely new philosophy which the Secretary of State has imbued into that Department, namely, that the law of the jungle and the law of the market no longer prevail but that now the Department should make large financial grants to any enterprise which shows the slightest chance of failure. No doubt that is the spirit in which the hon. Gentleman approaches the new Clause. However, he comes from a Department which, when it found one specific company failing, did not merely provide grants but nationalised it. Are we to have a new philosophy that not only grants but nationalisation should come into the sphere of the Press?

Mr. Golding

Perhaps the Minister could enlighten us on that subject. I agree that we have a natural sequence of events in Conservative Party thinking at present. Taking the Rolls-Royce example, it would not have surprised me to have found a new Clause in this Bill saying that commercial radio was to be publicly-owned. However, perhaps that will come next year.

I oppose the idea that newspapers should be able to buy themselves into local radio, just as I have opposed in Committee the growth of monopoly capitalism in the entertainment world. I also oppose the growing monopoly of information, especially when that monopoly is privately owned and capitalist owned. I oppose that very strongly. I have supported B.B.C. local radio because it has provided an alternative means of communicating with the electorate.

A good example occurs in my own area of North Stafford shire where Radio Stoke-on-Trent has provided an alternative channel of communication. I have opposed the idea of newspapers being able as of right to buy themselves into local radio, thereby perhaps giving themselves an undue influence, because the very expertise about which the Minister spoke would bring about a stereotyped situation.

In North Stafford shire I want an alternative means of communication to the Evening Sentinel. I want the Evening Sentinel to be subjected to a check and a balance. I know that if the Evening Sentinel were to have a minority interest in a radio station, very quickly the radio station and the evening paper would have the same editorial policy behind them. We on this side of the House know that if papers are privately owned there is a very good chance that their editorial policy will be directed against the Labour Party. Whether it is or not is not a matter of principle. What is at stake is the monopoly of the presentation of news.

Mr. Whitehead

What is even more serious is that these two media, which should be competing, will not thereafter criticise each other, as was the case with London Weekend Television where various periodicals, which were shareholders in it, failed to criticise its manifest weaknesses.

Mr. Golding

I am sure that my hon. Friend is right in what he says about London Weekend Television.

Mr. Proudfoot

Surely the hon. Gentleman knows that there is nothing to stop him individually or his local Labour Party investing in the local radio station. I read in the Australian Broadcasting Report that the Australian Labour Party owned one radio station. I believe in multiplicity of ownership. I believe that the Labour Party or the Conservative Party ought to be able to be participants in these stations.

Mr. Golding

I will not go down that avenue. Recently when I was speaking to the President of the Australian Labour Party, he told me that this carried with it several evil consequences, because one becomes financially dependent upon it and makes compromises one would not otherwise make.

Before we go on our international travels, I should remind the absent Minister—I do not blame him for being absent—that circulation is important when considering the damage that can be done by local radio to the local newspaper. I listened with interest to the contribution by the hon. Member for Gloucester (Mrs. Sally Oppenheim). There is a way in which local radio can be detrimental to the type of advertising to which she referred in a small newspaper. Local radio can make announcements gratis which are of interest to people listening. It can provide for the small advertiser—the club, the church, or the bring-and-buy sale. Radio Stoke has what is called a swap-shop. The local radio station can provide an alternative means of information other than advertising. What is copy to the local radio station is advertising to the local paper. Broadcasts could be as harmful to small local newspapers as advertising sheets have been. It is naïve to suggest that the small local paper would not be hit by local commercial radio.

In my area we have the situation outlined by my hon. and learned Friend the Member for Barons Court (Mr. Richard). We have a group newspaper, the Evening Sentinel, which has a substantial circulation in the six towns of the Potteries, Stafford, my own constituency of New-castle-under-Lyme, and Crewe. It is a very profitable newspaper. It would be more profitable still if it were able to get into a commercial radio station. We have a much smaller newspaper, the Newcastle Times, which is a weekly newspaper. The Kids grove Times, placed against this giant, fights for circulation.

8.45 p.m.

This Bill is unfair. It puts the onus of proof on the Authority to say that the Sentinel will not have shares. It puts the onus of proof on the small Newcastle Timesto demonstrate that it ought to have shares. That is wrong. The onus of proof is in the wrong place. It is for the rich to prove that they are harmed, rather than the other way round.

Paving the way for the Amendment in my name, this Clause defines the newspaper as a periodical which appears at a frequency of no more than seven days.

I—together with my hon. Friend the Member for Manchester, Openshaw (Mr. Charles R. Morris), and my hon. Friend the Member for Manchester, Ardwick (Mr. Gerald Kaufman)—have tabled an Amendment which will extend this periodicity to 15 days. We do so partly because we believe that Private Eye, to take but one example, has been very badly treated by this House. Our Amendment would enable Private Eye to bid for the Radio Neasden Station. It would be a test of the I.B.A. to see if it could control such a Private Eye-run Radio Neasden.

The point made is a serious one. Why should the Minister say that a paper is only a newspaper if its periodicity is seven days or less? What about the situation where the struggle for circulation has been so hard that one can only produce the periodical every fortnight rather than every week? Why is it? What is the logic which has led the Government to say that the weekly periodical can buy itself in but that the fortnightly periodical cannot.

That is why we have tabled an Amendment for discussion tonight: to find out what is the reasoning behind the Government's thinking. I do not think we are going to get a rational explanation, because there is not one.

What this debate has illustrated to me—what the tabling of this new Clause 1 and new Clause 2 has brought home to me—is the fact that the Newspaper Society is obviously the most powerful and important pressure group operating on the Government at the present time. One can well understand why that should be.

Mr. Gorst

This new Clause confers an automatic pre-emptive right upon newspapers, regardless of merit, to have a shareholding. This must, when it is regardless of any merit, be wrong in principle.

If it was not considered necessary, when commercial television started, for newspapers which might equally then have argued, and no doubt did, that they needed protection for their revenues, otherwise they might go out of business, as some of them did, and if it was not argued then—so far as I remember, it was never even contemplated by the Conservative Government of the time—I do not see why it should be regarded as necessary now, particularly as there is not a significant newspaper I can think of that is not already in television if it wants to be. If it was possible for any newspaper that wanted to get into television to do so, why on earth will it not be possible for any local newspaper with merit to get into a local station if it has something to offer?

The justification which the Government have offered to us comes under three headings. The first is that we as a party and as a Government are committed by what we said in our manifesto, and the hon. Member for Manchester, Openshaw (Mr. Charles R. Morris) read the appropriate words. But the significant words are the opportunity of a stake". I do not know what hon. Members on either side of the House understand by the word "opportunity". I do not know whether they regard it as a chance, as a right or as an opening, or simply as the likelihood that they will not be excluded if they have something to offer. But I cannot, in the wildest stretch of language and the meaning of language, see how it can be asserted that the word "opportunity" means a pre-emptive right, because that is what the new Clause is all about.

Mr. Fowler

Is my hon. Friend suggesting that all that was meant in the manifesto was that newspapers would have the same opportunity as anyone else to compete for a part in the consortia which competed for commercial radio. If that is the case, it is difficult to see why it was there in the first place.

Mr. Gorst

I do not think my hon. Friend does himself justice. He is a shrewd politician, and he understands only too well the power of the Press and the great need to succour the fears of the Press, particularly at election time. Let us be honest about it. The fact that the Press was singled out for mention must have something to do with that rather than what my hon. Friend is suggesting.

The second argument in favour of the new Clause—that of political expediency, that one cannot take on the Press and win, one cannot issue D notices, one cannot trifle with the Press over Vassal tribunals—isnot relevant. It is an argument that I have heard. The argument goes that because the Government take on the Press at their own peril and always lose it is wrong to try to take on the Press and put it into some sort of relationship with the media as a whole, otherwise things will go wrong for the popularity of the Government.

What that argument fails to understand is that when Governments are dealing with the structure of communications, that is one thing, but when they are trying to trammel up the sources of information for working journalists, that is another thing and they rightly get clobbered. But there is no foundation for the suggestion that political expediency dictates the necessity for the inclusion of the Press with special rights. That is wholly alien—or ought to be—to the whole concept of our freedom of speech and freedom of communications in a democracy.

The third argument that is sometimes put forward—and my right hon. Friend the former Minister of Posts and Telecommunications, who is not here now, has made this point on more than one occasion—is that if by Government action something is done which subjects the Press to competition that it has not foreseen, the Press is entitled to have a shareholding in it. I remind the House that on a previous occasion my right hon. Friend said: …they have up to now been protected from competition from radio. When, by Government action, one changes this situation, it seems right to give these highly-valued newspapers a degree of priority in the new radio set-up."—[OFFICIAL REPORT, 26th May. 1971; Vol. 818, c. 401–2.] He made similar references in the Second Reading debate later in November.

I want now to concentrate on what are the main arguments against the re-introduction of this Clause. I entirely agree with the hon. Member for New-castle-under-Lyme (Mr. Golding) that it is not consistent with any philosophy of competition that I have ever understood or supported on this side of the House. Secondly, I do not believe that we have made any such promise in our Election Manifesto as is involved in the Clause. I do not believe it is even expedient or necessary because I believe that while the newspaper industry will naturally wish to protect its financial interests it is perfectly capable of understanding the nature of and necessity for competition.

It is more important still to stress that this sets a bad precedent. For example, it is one which could well have been called upon by the Caledonian company in asking for shares in B.O.A.C. if B.O.A.C. were offered route rights which it felt were in competition with it. That would be an act of Government fiat and consequently Caledonian would in similar fashion have been entitled to argue that it should have some sort of compensation through the State organisation.

What also concerns me is that we are now setting a precedent which would allow I.T.V.1 contractors at some stage in the future, if I.T.V.2 comes along, to turn to the Government of the day and say "You are by Government decision setting up competition which will affect our revenues. We are a medium of communication. You did this in the Sound Broadcasting Bill; you should do it for us and give us a shareholding in our competitor I.T.V/". This is a thoroughly bad precedent to be setting.

Why does the Press want these shares? We have an assurance that it will be neither in aggregate nor in any other way a shareholding that would be used to dominate or attempt to run the medium for the benefit of the Press. When the Newspaper Society is asked to say how many shares it thinks it will get to compensate it for the inflated losses it claims it will sustain, the answer is that it really does not believe that that will compensate it. The Newspaper Society tries to have the best of both worlds. On the one hand it argues that and on the other hand I have heard it argue that up to 60 per cent. of the advertisers in the Birmingham area are likely to want to use commercial radio and that this will be a monstrous loss to the Birmingham Post.

We have only to contemplate the amount of advertising likely to be permitted to realise that 60 per cent. of the advertisers could not possibly find the necessary amount of advertising time because it would not be permitted. These arguments do not stand up unless one looks a little more deeply at this as hon. Members opposite have done and asks what are the motives of the Press. Are they to protect revenue or to minimise the amount of competition? Far from wishing to help the new medium, there are many significant newspapers that wish to have a shareholding simply to emasculate it.

9.0 p.m.

The Press must realise that the rôle it has to play in a society in which there is both local radio and television will be different, as it is in other countries in which the three media exist. The rôle of the Press will change from being a medium which sets out to obtain scoops to giving news in depth. But so long as the Government permit it to get an influential strange hold on the new medium, the new medium will not be allowed to find its own feet because it will not be in the commercial interests of the Press to permit it to do so.

I believe that we are setting a bad precedent by favouring any interest, particularly a powerful one. Let us not forget that we have dealt similarly with the Press in the Budget from the point of view of V.A.T. The Press has had it all its own way. The danger of accepting the new Clause is that we may distort a new medium of communication before it has even got off the ground.

I regret that, for these reasons, I must tell my right hon. Friend that just as I was unable to support a similar Clause in Committee, I shall be unable to support this one. Indeed, I shall feel obliged to vote against it if the matter is taken to a Division. I hope that if the new Clause is added to the Bill, the other place will, in its wisdom, reject it later in the month.

Mr. Charles R. Morris

Like the hon. Lady the Member for Gloucester (Mrs. Sally Oppenheim), I did not have the privilege of serving on the Standing Committee. I therefore was not present during those deliberations to listen to the erudite, lucid and brief contributions of my hon. Friends as they conducted a detailed consideration of the Bill.

However, irrespective of the principle of whether the nation should have commercial local broadcasting and irrespective of the deep argument about whether newspapers should have a right of access to the ownership of the shares of local broadcasting stations, we must consider the new Clauses from a practical point of view. When one does that, one arrives at the conclusion that these provisions are impracticable.

I suggested in an intervention that the great point at issue in new Clause 1 was that the House of Commons and certainly the Minister were abrogating their responsibility for determining the criteria on which the Authority will judge the pleas it receives from small newspapers that they may be materially adversely affected as far as their advertising revenues is concerned by the establishment and operation of these new local commercial broadcasting stations. The Government are presenting the Authority with an almost insoluble problem.

When replying to my intervention the Minister was positively comforting and said, in effect, "We have had long negotiations with the Authority and are satisfied that it will be able to deal with this situation." Let the Minister be a little more forthcoming. Let him come to the Dispatch Box and let us have access to what was discussed by the Authority. What led him to believe that the Authority can deal with this situation?

In my intervention I endeavoured to instance the problem concerning the City of Manchester. Manchester is at the centre of the South-East Lancashire conurbation. Within 10 miles of Manchester there are 2 million people and a host of local newspapers. One might very well say that the Manchester Evening News could rightly claim that its circulation covers a substantial proportion of the population in the area served by the envisaged local commercial broadcasting station for Manchester. But within 10 miles of the city lies Stockport, which has two weekly newspapers which are almost in a monopoly position in that county borough, and the Oldham Chronicle, which is in virtually a monopoly position in the County Borough of Oldham.

One can go all the way around the immediate environs of Manchester and highlight thriving local community newspapers which may very well be materially adversely affected by the establishment of a local commercial radio station. Will the Authority allow access to all these local newspapers in an area, such as I have suggested, of 2 million people? Are all these local newspapers which might be materially affected to be allowed direct access to the shareholding of local commercial broadcasting stations?

Regarding local newspapers, in the north of Manchester the Reporter group of newspapers prints 14 separate editions. On the south side of Manchester the County Express group of newspapers is almost in a monopoly position for weekly newspapers. Presumably all these will be materially affected in their advertising revenue.

I reiterate that we are presenting the Authority with this problem but giving it no guidance and establishing no criteria, saying that it is for the Authority to take account of and establish its standards for determining direct access of local newspapers to ownership.

Mr. Chataway

I may be able to reassure the hon. Gentleman a little. He has said that there are no criteria, but the alternative criticism has been made that the Clause is really too detailed and too complex and that we are giving the Authority too much instruction. If the Manchester station were to cover the areas described by the hon. Gentleman, clearly the Authority would have to decide whether the newspapers had a substantial circula- tion in relation to the total population or whether they were likely to be adversely affected and, if they were, the Authority could give them the opportunity of acquiring a stake. Many of them will not want to take the opportunity. Many will be drawing an entirely different kind of advertising if they are small newspapers covering only a small part of the area. It is for that reason, and as a result of the discussions we have had with the Authority, that the Authority tells me that this is quite workable and that it will be able to do it.

Mr. Morris

In reply to that intervention, I can only say that it is a very strange theory to proceed on the assumption that local newspapers will not be seeking to share in what most people believe might very well be a very profitable enterprise of local commercial broadcasting stations. If it turns out to be profitable, they will seek to share in the profitability and in the share capital of the stations.

An interesting feature is that the Authority will be making its decision as to right of access by local newspapers which are materially and adversely affected before the local commercial station is established. The determination as to right of access will be a preliminary exercise.

The Minister has indicated that five major centres of population will constitute the preliminary run-up for the establishment of local commercial broadcasting. Are these standards and criteria established for these stations to determine the pattern for future local broadcasting by commercial stations? The more I examine these new Clauses the more I am convinced that their whole basis is impracticable. On those grounds alone I would need a very great deal of persuasion to endorse the views and arguments advanced by the Minister and his colleagues.

Mr. Fowler

Like the majority on this side of the House I rise in support of the new Clause. Perhaps I should declare an interest because I was a working journalist before coming into the House although I was not a newspaper owner. The first reason I would express my support is because of the pledge that the Government made. It has always been understood that local newspapers would have an opportunity to take part in local radio. It was never understood that this meant that they would simply have an opportunity to compete for a licence on a par with other commercial organisations. There is no doubt that this is how it was understood by the newspapers and, I believe, by most other organisations. If it meant in effect that newspapers were to be given an advantage, it certainly did not mean they were simply to be given the same rights, as for example, the manufacturers of baked beans.

Whatever else the Clause does it destroys the monopoly of the B.B.C. in sound radio.

Mr. O'Malley

That has nothing to do with it.

Mr. Fowler

If the hon. Member, before he jumps to the conclusion that this has nothing to do with the Clause, will try to follow my argument for a brief period he will see I wish to make one particular point. If we were dealing with a situation of perfect competition there would be no reason for giving newspapers a particular advantage. If everyone and anyone was able to open a local radio station there would be no reason to give newspapers or anyone else a particular advantage. But we do not have that state of perfect competition. We have the state in which the monopoly of the B.B.C. is broken; and, although this is not perfect competition, it is certainly much more preferable to the monopoly situation which exists at the moment.

Therefore, we have to devise a way of making up the consortia which control these stations. It is not possible to leave it to the free market because no free market exists. It is of crucial importance that we accept this. It is self-evident that it is crucially important that the aims of each consortium should be to provide a quality commercial radio service.

9.15 p.m.

One of the vital tests of a radio station would be whether it could produce local news, local current affairs and local features programmes. An acid test of the new system must be its ability to serve an area with locally-originated and produced news. The alternative to that concept is a commercial radio station based entirely on pop music or sweet music with periodic news bulletins taken straight from the tapes, a system I could not find much time for.

Therefore, apart from the commercial arguments, I can see some advantage in having local newspapers involved in the companies. They have journalistic experience built up over a number of years. They have the background of gathering news. Perhaps above all they have the interest in having news features and current events in their programmes. There is all the difference in the world between a company which provides news simply because it is forced to do so and a company that is genuinely interested and is historically based in the business of providing news, and has been doing it successfully for a long time.

Therefore, at this stage I very much support the Clauses but I have two qualifications. First, the system proposed prevents new journalistically-based groups emerging in each area. By definition it puts the journalistic content of any consortium in the hands of the local newspaper. To that extent it has a limiting effect upon new journalistic groups in each locality playing a part in the local community. Secondly, there is something in the point of my hon. Friend the Member for Hendon, North (Mr. Gorst) though I do not agree with most of what he said, that there will undoubtedly be some local newspapers, although I think probably very few, which see local radio as a challenge to their position and whose major concern might be to try to blunt that challenge as a member of the consortium.

Mr. Chataway

There would not be much danger of that. First, a number of consortia apply. One is chosen, and it is only thereafter that the newspaper has the opportunity to acquire a fairly small shareholding. Therefore, it will not be in a position to stifle a competitor.

Mr. Fowler

I take the point.

Basically, I support the provision as a transitional move to get the system off the ground for the immediate three-year period. It is sensible, first, because it provides the system with the experience it otherwise would not have and, secondly, because of the pledges already made.

I hope that the system and the way it operates, particularly the journalistic side, will be kept under very close review. I know that this will happen.

Basically, what I should like to see in each consortium which produces radio programmes is not necessarily the local newspaper but a journalistic content—that is to say, a number of people who have proved that they have the experience and ability to provide news, with that proof not necessarily being provided by the fact that they happen to be the local newspaper. That would be the ideal aim for the system to work towards. It should be possible for new groups with some journalistic content to grow up. In an ideal world such stations should, I believe, compete not only with the B.B.C. but with the local newspapers as well in as much as they compete in the news gathering process in their locality. I do not think that this would harm the local newspapers but would be of some benefit to them.

The Government say, rightly, that it is important to safeguard the interests of newspapers. But it should follow, on the same reasoning, that it is also important to safeguard the interests of local journalists, and I do not think that the best solution to that problem is a system where one group controls the newspaper plus a significant share of the local radio station. At the very least we must recognise that there may be difficulties when one has a group which has a controlling interest in a newspaper and a significant share in the local radio.

I do not think by definition, as some hon. Members opposite think under the conspiracy theory, that this is necessarily and naturally going to create difficulties, but I think that it could create some. I urge my right hon. Friend to see how the system goes but with the prospect of changing its basis if difficulties do occur. Above all, we should ensure—this is why I am 100 per cent. behind what my right hon. Friend is doing—that there is a good news service and journalistic content in commercial radio stations. I would keep an open mind on whether local newspapers are necessarily the only way of achieving that goal.

Mr. Richard

The hon. Gentleman will know from studying the Bill that in Committee subsections (5) and (6) of Clause 2 were added. Subsection (6) provides that …in respect of the news content of the programmes broadcast… the Authority shall …ensure that the collection and preparation of such news broadcasts is independent and…shall require—

1. (a) that the collection and preparation of news is performed by suitably qualified journalists; and
2. (b) that a news service shall not, for the purpose of this section, be regarded as independent if it is provided by a newspaper circulating in the locality specified in the contract."

I understand the hon. Gentleman to be agreeing in effect with the sentiment behind subsection (6). He will also know that the Government are seeking to delete it on Report. Can we hope for his support for retaining it?

Mr. Fowler

It is not exactly the point I was making, but I will examine what the hon. and learned Gentleman says. The point I am making is that I believe that the new commercial radio system should be a quality system. It should have within it journalistic expertise, and I ask my right hon. Friend to keep under review whether that journalistic expertise is necessarily by definition always to be provided by local newspapers or whether some opportunity cannot also be given for new journalistic groups to come up and compete at the same time with the B.B.C. and with the local newspapers and thereby get a really good stage of competition in every local city and town.

Mr. O'Malley

I understand the concern of the hon. Member for Nottingham, South (Mr. Fowler) and that of the hon. Member for Gloucester (Mrs. Sally Oppenheim) that the regional and local newspapers should not be harmed by this legislation. They have an important rôle to play in twentieth century society. But the argument of the hon. Member for Nottingham, South was somewhat difficult to follow. He suggested that if anybody or everybody could set up a local radio station, if there were this state of perfect competition, he would no longer have the same worry for local newspapers. He would want his right hon. Friend not to implement the new Clauses.

In that chaotic situation, which I would never wish to see in this country, the local newspapers, if they needed protection at all, would need more than they would under the Bill, which at least contains some restrictions on the number of stations. If one thing horrifies me more than the proposals for 60-plus radio stations, it is the proposals of the hon. Members for Brighouse and Spenborough (Mr. Proudfoot) and Hendon, North (Mr. Gorst) who would have many hundreds of such stations.

I therefore begin, as most hon. Members would begin in principle, I think, by recognising the importance and value of good thriving local newspapers. What we have to decide is whether those newspapers will need assistance as a result of the Bill and, if so, whether the assistance that the Minister proposes is the right way to deal with the problem or whether other alternatives are open.

No one can estimate with any certainty even the general effect of this legislation on local and regional newspapers. However, if we start from the reasonable assumption that at any one time the financial resources available for advertising are not very elastic, at least some of the income of these newspapers will be diverted to local radio stations. While there are some thriving local newspapers others, particularly in the less populated parts, are not financially healthy and their return on capital is not high.

In my area there is a weekly newspaper which goes into almost every house in my constituency. It is a good weekly newspaper. I do not always agree with its political comments but it serves a useful function and I would not want to see it harmed—rather the reverse.

9.30 p.m.

A number of options are open to us. The first and most sensible option is the proposal which my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) made in an intervention during the speech of the hon. Member for Gloucester. The Minister suggested that the Labour Party broadly was in favour of commercial radio. I am completely and utterly opposed to the principle of commercial radio, whether it be local or regional, of the type he is proposing and to national commercial radio—

Mr. Chataway

rose—

Mr. O'Malley

Before the right hon. Gentleman jumps to his feet may I say I am aware of his earlier intervention If a Conservative Government insist that there shall be commercial radio, it would be much more sensible to establish a national commercial radio system rather than the one which is suggested. My hon. Friend's way of dealing with the problem is not to introduce commercial radio at all.

The second option is to give local newspaper companies the right to buy shares in the programme companies. There is another alternative to which I will refer briefly at the end of my remarks.

From what has been said on both sides of the House it is becoming obvious that this is a crude, clumsy and partial way of helping local newspapers which are likely to be affected by the introduction of commercial radio.

The Minister in his opening remarks, which were very lengthy—

Mr. Chataway indicated dissent.

Mr. O'Malley

The right hon. Gentleman must not be so touchy. When my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) made speeches of a moderate length in Committee the Minister became irritable, but he has learned from experience and has today made a speech of great length. I can only conclude, just as in the latter days of the proceedings of the Committee, that the right hon. Gentleman is in no hurry to get the Bill through the House and will not insist on its being finished this week.

The right hon. Gentleman said that the facilities of the newspapers would be useful to commercial radio stations. This statement is in complete contradiction to the opinions expressed by the hon. Member for Nottingham, South. I sympathise with and support the kind of local journalistic news-gathering structure that he was discussing. It is important that a staff of journalists should work for the local radio station than that the local radio station should have to depend, either wholly or partly, on the journalistic news-gathering efforts of journalists employed by local or regional newspapers in the vicinity.

It is disappointing that the Minister is deleting a provision of the Bill which would have achieved what was sought by the hon. Member for Nottingham, South. However, the problems are even more severe than those posed by that situation. If the facilities of local newspapers are found to be useful to commercial radio stations, editors of weekly newspapers could find themselves in a dilemma. Weekly newspapers often carry front page leads based on exclusive information. I can think of one occasion when an article in my local newspaper, the Rotherham Advertiser, on the future prospects for the steel industry contained information which was not to be found in any other newspaper. What is the editor of such a paper to do if one of his journalists receives that kind of information on the Tuesday or Wednesday before the paper goes to press on the Friday? Will he keep that information for his own front page lead on the Friday or will he say, "I will give that information to the local radio station because I have a small interest in that station"?

Mr. Kaufman

There is a further question which arises on my hon. Friend's extremely pertinent point. Will pressure be put on the proprietor of a newspaper to put out such news on the radio station, or will he be able to keep such information for his own newspaper? These are difficult pressures for journalists to deal with. This affects journalists' ethics.

Mr. O'Malley

I need not enlarge on the situation which my hon. Friend has outlined, but this sort of situation puts the editor in a difficult situation. Furthermore, it could have an effect on the journalist's remuneration. He might receive one payment for an article in his newspaper and yet another fee if it is used by the local radio station.

Mr. Fowler

If I may use the same Yorkshire analogy, is any difficulty experienced between Yorkshire Television and the Yorkshire Post which has a holding in Yorkshire Television, and does any conflict of interest arise when stories are used in one or other medium?

Mr. O'Malley

I cannot answer the hon. Gentleman on that matter because I do not read the Yorkshire Post. I read newspapers which are widely sold in my constituency, plus the nationals. I see no reason for reading a publication which is nothing less than an organ of the Conservative Party both in Yorkshire and in the country at large. [Interruption.] I am not avoiding the question. If the hon. Gentleman were to ask me about a newspaper of which I had knowledge, I would attempt to answer him frankly.

This whole question involves not only difficulties for the editor or journalist. There could also be problems involved in editorial influence being exerted on news bulletins on local radio stations. Indeed, I think that my hon. Friend the Member for Newcastle-under-Lyme raised an important point when he said that he could envisage a situation in which the local radio station in which a local newspaper company had shares would not be criticising the local newspaper and the local newspaper would not be criticising the local radio station. If we are to have this proliferation of the media, it is desirable that the newspaper on the one hand and the local radio station on the other hand should feel absolutely free to criticise the editorial policy, the statements and the conduct of each other. That is far from likely to happen with the kind of formula which attempts to assist the local newspapers as the Minister is proposing.

I turn now to a third difficulty and illustrate it by looking at what could happen if a commercial radio station were set up in the Sheffield area from which I come. I am bound to say to my hon. and learned Friend the Member for Barons Court (Mr. Richard) that while I took it from him once that Sheffield had a population of 615,000 including Rotherham, I would not expect him to use that kind of phrase in this House in my presence again, although I know he was led into it by an hon. Member from the South—the hon. Member for Hendon, North.

Mr. Richard

I should, of course, have said "Rotherham with Sheffield".

Mr. O'Malley

Yes, my hon. Friend should have done precisely that, but being a member of a tolerant political party I can easily forgive him.

To use a local example, if a commercial radio station were set up based on Sheffield, there would be to my knowledge certainly four regional or local newspapers which would have a substantial claim to minority shareholdings in the local radio station. What the new Clause does not tell us is exactly what the size of that shareholding is to be. I would have thought that if it is true that particularly weekly newspapers, which have national advertising as well as advertising about the butchers shop—I say to the hon. Member for Brighouse and Spenborough, who is shaking his head, that they have newspapers of that kind—are very badly hit, a 5 per cent. shareholding will be very little use to them. This is particularly true since, once this moves outside the big centres, if programmes of quality are to be produced and the general standards are to be high there will not be the kind of money in commercial radio which there will be in London, Birmingham, Manchester and perhaps in Glasgow. If the members of the musical profession, for example, are to have a fair deal out of this, there will certainly not be enormous profits for these local stations. There for they would be driven into a situation, using the Sheffield area as an example, in which if it were to be of any use to the local newspapers, they would need something like a 10 per cent. shareholding. With four local newspapers this would mean that the entrepreneur, the programme contractor, having done all the work and spent all the money, would quite suddenly find himself landed with four shareholders who had had nothing to do with the formation of the policy of the company, and one could not say to those shareholders that they could have only a tiny shareholding.

I have not discussed this with the local newspapers concerned and I do not even know whether they want to go into commercial radio, but there could be a situation in which each and every one of them would feel justified in asking for a 20 per cent. shareholding. This kind of example demonstrates that the whole structure is a nonsense.

My last point is this. There is a great deal of controversy about exactly how profitable these local radio stations will be. One can take one's pick of the estimates and forward looks that a number of consultancy organisations and interested parties have made in the last 12 months. While I think that there will Certainly be some money coming to operators who are running stations in large conurbations, this will not be the case in some of the smaller stations serving populations of 150,000 or 200,000. I know that a number of newspaper proprietors feel this. There is no guarantee that one will go into an enterprise in which there is sure profit. That may be so in London but not amongst the smaller stations. Therefore commercial local radio in some areas may not only damage newspapers by taking advertisement revenue away from them; the return on capital from those commercial radio operations themselves will be pretty low.

9.45 p.m.

It seems to me, therefore, that the Government's arrangement can be regarded as satisfactory neither to programme contractors nor to newspapers in many areas of the country. I have not been convinced that it is wrong to give local newspapers some assistance. I have in mind my own local weekly newspaper, which is not part of a national group. However, I do not feel that this is the right way to go about it. A problem of this kind should be dealt with through broader policy measures. We all remember the number of Questions asking the Prime Minister for a Royal Commission on the problems of the national Press. There are problems for local weekly newspapers, and this is a subject with which the Government should be concerning themselves broadly rather than dealing with them by giving local newspapers a privilege they should not have.

The problem of maintaining good and healthy communication in local democracy will not be overcome by the shabby manoeuvre in which the Government are involved in giving a degree of unsatisfactory privilege to newspapers in the shape of an element of control of another vital area of communication. This kind of problem could be solved by the Government taking a broader look at the question as it is affected by the country's tax structure and by means of a detailed survey of both the national and local newspaper industry with a view to overcoming difficulties which will be made even worse by the onset of commercial radio.

After all the time that has been spent in Committee looking at possible alternatives, it is a disappointment to find that all that the right hon. Gentleman has been able to do is to come back having to depend on his silent majority on the Floor of the House, having been defeated in Committee where these matters were given the closest attention by hon. Members on both sides.

Mr. Proudfoot

Before launching into my speech, I wish to congratulate my right hon. Friend on his promotion. Perhaps I shall add to his joy when I say that an even bigger interest of mine than this subject is that of the Bolton Committee on Small Businesses, of which I believe my right hon. Friend is now in charge.

I liked the delicate way in which the hon. and learned Member for Barons Court (Mr. Richard) described the drafting of this Bill. I think that I know who drafted it. I believe that it was that famous Parliamentary draftsman, Picasso. Certainly the Bill suggests that he was responsible.

I cannot figure out why it is that in this country we should go to the extraordinary length of giving newspapers the prescriptive right to buy in when in other countries great lengths are gone to to ensure that there is competition in localities between the media. Although the new Clause is a slight improvement on that which we knocked out in Committee, I feel that I cannot support it. I believe that the Minister made at least one irrelevant point when he said that there was expertise in the newspapers. I thought we had said enough in Committee to eliminate that thought. One is the printed word and the other is the spoken word. The techniques in the media are completely different.

The new Clause refers to a substantial circulation within a locality. One of the new phenomena of our society at this time is the give-away newspaper. Nobody seems to have thought in terms of giveaway local newspapers; it has always been newspapers for which the customer paid. On Tees side the give-away newspaper has a circulation of 160,000.

I doubt whether many hon. Members, even the former Minister of Posts and Telecommunications, realise that there is no definition of a newspaper in this coun- try. The only near definition is given by the Post Office Corporation, which defines what we would think of in terms of a newspaper as having 50 per cent. advertising. The only reason that it does that is to give it cheaper postage. Some of these give-aways and some of the local papers which I have seen would certainly have more than 50 per cent. advertising in them. Therefore, according to the only definition of a newspaper in this country, they are not newspapers.

What is the interest of the newspaper? Is it merely circulation, the financial interests of the newspaper, a drop in net profit or a return on capital employed? If I were running a newspaper in a development area and there was the chance of a radio station coming in—it need not be a development area after the Chancellor's budget—I should immediately put in the latest presses, re-equip my business, use the 100 per cent. tax write-off the year afterwards when I was applying for the radio station licence and say, "Look, my profit has dropped" Looking at the criteria, the I.B.A. has to dig deep to find out what is happening to local newspapers. I believe that the newspapers will hardly be hurt at all, even if they are 250 years old.

Mr. Hugh Jenkins (Putney)

Does the hon. Gentleman agree that it would not only be a fair way to make a small fortune but would give control of the entire source of information in that one area?

Mr. Proudfoot

This is what disturbs me more than anything else. I have lived for a number of years in a town which has one newspaper. To think of that town having the ownership of the radio station in the same hands as the newspaper horrifies me. I am not saying that it is evil, but hon. Members on both sides of the House have spoken about ownership of the media falling into single ownership. Other countries go out of their way to avoid it.

We have fallen into the trap of thinking of local newspapers as single entrepreneurial businesses. This is not so. The Associated Press has a chain of newspapers, and so has Thomson. The local goodies who will apply for these licences have been approached by the national chains, which say," We have the know how. You apply for the licence with your local connection, but give us a share in your radio station." The Minister said that it was impossible to put detail into the Bill to make sure of the spread of ownership in these stations.

I repeat the details I gave in Committee about what happened in Australia: (1) A person shall not own, or be in a position to exercise control, either directly or indirectly, of more than:

1. (a) one metropolitan commercial broadcasting station in any State;
2. (b) four metropolitan commercial broad casting stations in Australia;
3. (c) four commercial broadcasting stations in any one State; or
4. (d) eight commercial broadcasting stations in Australia."

This is a simple Clause. I think words could have been written in so that newspaper chains in this country could own more than a minimum amount as they can in Australia. In Australia there are 150 radio stations, which is many more than we shall have.

There was another matter about which I disagree with the Minister. I am sure he did not mean it. He said the system would promote healthy competition. He meant healthy competition between newspapers and the radio.

There will be no competition between commercial radio stations except in London where two radio stations are proposed at present.

The other mistake we make is assuming that the percentage of ownership of a station, in shares, indicates who gets control. I am convinced that strength of personality in a small company counts for more than ownership. A share ownership of 51 per cent. in any company in any country matters only when the chips are down.

I can imagine the local newspaper, with its supposed know-how on radio and on news, having a far greater influence on the radio station than its share percentage indicated.

Looking for practical examples, in my division there is a surprising number of newspapers: the Brighouse Echo, Heckmondwike Reporter, the Telegraph and Argus, the Yorkshire Evening Post, the Halifax Courier, and the Yorkshire Post. Most of them are peripheral. I assure hon. Members that probably I am the only one in my constituency who sees them all.

How one would go about giving ownership to newspapers in an area like that is absolutely beyond me. Looking at newspapers today, one sees that the local newspapers are in a good position. If they go over to offset lithography, photographic setting and computer setting, they are then in business and are doing something totally different from what local radio can do.

I am convinced that politicians on both sides of this House tend to look under their beds for bogy men. This is one of the bogy men that politicians in this House are frightened of. They think that if we offend local newspapers, or imagine we will offend them, by saying they cannot have a prescriptive right, they will do us down. I am convinced that will not happen. Both my hon. Friend the Member for Hendon, North (Mr. Gorst) and I have said that we do not want to eliminate local newspapers; we do not want to give them the prescriptive right.

For those reasons I shall not be able to support my right hon. Friend's new Clause.

Mr. Hugh Jenkins

During the course of the Committee stage of the Bill, a Clause similar to the one the Minister is now seeking to introduce was thrown out. The Committee Stage of this Bill revealed certain difficulties between laissez faire Tories and the libertarian wing of the Labour Party.

I found myself feeling, with the hon. Member for Brighouse and Spenborough (Mr. Proudfoot), a common view of what we ought to do in this respect. That is to preserve a wide variety of sources of information and take no action which would reduce their number. The reason why we threw out the Clause is still as valid as it was in the Committee stage. We felt that the effect of the original Clause, and the effect of this Clause, was to lose a chance of increasing the number of sources of information. It has the effect of running against what in many countries of the Western world attempts have been made to avoid: the gradual reduction in the variety of the media. If we continue the present trend for very long, we shall be able to buy the pro-Common Market newspaper of our choice. It means that a different accent is heard but the same message comes across. We are not very far away from that.

What the new Clause fundamentally seeks to do—and this is why we object to it—is to facilitate mergers on a local level—

It being Ten o'clock, the debate stood adjourned.

Ordered,

That the Sound Broadcasting Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Jopling.]

Question again proposed, That the Clause be read a Second time

Mr. Jenkins

It is not my intention to delay the House for more than a few moments, but the new Clause moves in the wrong direction. Many legislatures have sought to prevent the establishment by merger of a situation which operates in the Soviet Union, where one has a choice of Pravda or lzvestia. We are not very far from that now, through commercial causes. During the last 10 years the number of newspapers has decreased sadly. What the Government are seeking to do is not merely to allow that process to take place, but to give a prescriptive right to newspapers to say that they will be the only source of local information in an area. That is already likely to happen without any help from us.

The reason why we objected to a similar new Clause in Committee, and why we object to this new Clause is that it seeks to do something which ought to be opposed by both sides of the House. It seeks to legalise communications incest, and that is something against which hon. Members on all sides ought to set their faces,

Mr. Kaufman

I ought, like the hon. Member for Nottingham, South (Mr. Fowler), to declare an interest, namely, that I am a journalist and a member of the National Union of Journalists.

I believe that opportunities of employment for journalists should be protected and, if possible, extended.

Mr. Eric S. Heffer (Liverpool, Walton)

Is my hon. Friend a fully paid-up member of his union?

Mr. Kaufman

My card is fully paid up. I pay by banker's order, and I am paid up in advance. Although I wish for opportunities for employment for journalists, and wish their employment opportunities to be safeguarded, I should not regard that employment as satisfactory if they were simply to be the kept men of disc jockeys, which is what the new Clause is providing.

The fact is that the Minister for Industrial Development sits there looking insouciant, as well he may, because he now has this squalid irrelevance off his hands. He detested it when he had ministerial responsibility for it. He has now gone on to something much more important, namely, providing industrial help for Greater Manchester, about which I have written to him today.

The Bill is in its final stages, but that does not mean that the House ought to pass over, in a cursory way, the serious implications of what the Government are proposing in these two new Clauses. What the Government are proposing, and what only the hon. Members for Brighouse and Spenborough (Mr. Proudfoot) and Hendon, North (Mr. Gorst) realise, is a commercial set-up which has nothing whatever to do with safeguarding newspapers, but has everything to do with providing financial help for newspapers which do not necessarily need it.

The implications of what the Government are proposing in these new Clauses bears little examination. The hon. Member for Nottingham, South drew attention to the tie up between Yorkshire Television and the Yorkshire Post. When the Yorkshire Postwas permitted to buy into Yorkshire Television—in the same way as the new Clauses would provide a mandatory opportunity to do with regard to commercial radio—the Yorshire Post was part of a small company whose viability might have been threatened by the introduction of Yorkshire Television. But the Yorkshire Posthas been bought up by a vast and exceptionally prosperous newspaper chain—United Newspapers. It is a much more savoury chain that the Yorkshire Postused to be, but United Newspapers can have no possible need to be assisted by any revenues of Yorkshire Television. Nevertheless, it can now syphon off some of the money of Yorkshire Television to sustain its newspapers in other parts of the country and to sustain, for example, the magazine Punch which is part of what it owns.

In the same way we can go further. My hon. and learned Friend the Member for Barons Court (Mr. Richard) mentioned the London Evening Standardwhich is in a rocky financial position. It is possible that it might be damaged by the introduction of London commercial radio. We have all read in the last few days that Mr. Ruper Murdoch now has 20 per cent. of the non-voting shares in Beaver brook Newspapers.

If Beaver brook Newspapers is allowed to buy into the London commercial radio to help sustain the Evening Standard, which might be damaged, although we do not know, by London commercial radio, Mr. Rupert Murdoch, who has no local regional papers in London but who has two exceptionally profitable national newspapers, will nevertheless be able to profit through the Evening Standard being sustained by being allowed a mandatory right to buy into commercial radio. What the Bill is providing for is not solely to sustain those journals which it is said will be damaged by introducing some necessary and squalid piece of legislation but it is allowing, further, that all kinds of prosperous companies shall be able to siphon off public money because it is money paid by the public.

These new Clauses are not only unnecessary but they have all the disadvant-

ages mentioned by the hon. Members for Brighouse and Spenborough and Hendon, North—the only two hon. Members opposite who any longer believe in anything that is in their election manifesto. [Interruption.] It is no use hon. Members giggling. The Chancellor of the Exchequer two weeks ago introduced a Budget which reversed practically everything on which the Government were elected. [HON. MEMBERS: "Nonsense."] We have seen the Industrial Reorganisation Corporation reintroduced, investment grants, grants for shipbuilding and all the rest.

The only thing that is left is some kind of pledge about commercial radio. It is only those two hon. Gentlemen on the Government side who believe in their election manifesto. The remainder of hon. Members opposite are interpreting the words of the manifesto to suit this miserable piece of drafting, not by Picasso but, I would say, by William Burroughs who has now become the parliamentary draftsman. It will not do for the Government to introduce this. If there are not sufficient hon. Members opposite with the courage and principles of the two hon. Members I have mentioned to join us in defeating this, I hope that another place which still has its existence and its uses will reverse this piece of squalid legislation that the House is being asked to accept.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 179, Noes 154.

Division No. 116.]	AYES	[10.8 p.m.
Adley, Robert	Cooke, Robert	Goodhew, Victor
Alison, Michael (Barkston Ash)	Coombs, Derek	Gower, Raymond
Allason, James (Hemel Hempstead)	Cormack, Patrick	Grant, Anthony (Harrow, C.)
Atkins, Humphrey	Costain, A. P.	Gray, Hamish
Awdry, Daniel	Crouch, David	Green, Alan
Baker, Kenneth (St. Marylebone)	Dean, Paul	Griffiths, Eldon (Bury St. Edmunds)
Baker, W. H. K. (Banff)	Deedes. Rt. Hn. W. F.	Grylls, Michael
Benyon, W.	Dodds-Parker, Douglas	Gummer, Selwyn
Biffen, John	Eden, Sir John	Gurden, Harold
Biggs-Davison, John	Elliott, R. W. (N'c'tle-upon-Tyne,N.)	Hall, Miss Joan (Keighley)
Boscawen, Robert	Emery, Peter	Hall-Davis, A. G. F.
Bowden, Andrew	Eyre, Reginald	Hamilton, Michael (Salisbury)
Bray, Ronald	Fenner, Mrs. Peggy	Hannam, John (Exeter)
Brinton, Sir Tatton	Fidler, Michael	Harrison, Col. Sir Harwood (Eye)
Brown, Sir Edward (Bath)	Finsberg, Geoffrey (Hampstead)	Havers, Michael
Buchanan-Smith, Alick(Angus,N&M)	Fisher, Nigel (Surbiton)	Hawkins, Paul
Buck, Antony	Fletcher-Cooke, Charles	Hay, John
Burden, F. A.	Fookes, Miss Janet	Hayhoe, Barney
Carlisle, Mark	Fortescue, Tim	Hicks, Robert
Carr, Rt. Hn. Robert	Fowler, Norman	Hiley, Joseph
Chapman, Sydney	Fox, Marcus	Hill, James (Southampton, Test)
Chataway, Rt. Hn. Christopher	Fry, Peter	Holt, Miss Mary
Clarke, Kenneth (Rushcliffe)	Gibson-Watt, David	Hordern, Peter
Clegg, Walter	Gilmour, Ian (Norfolk, C.)	Hornsby-Smith,Rt.Hn.Dame Patricia
Cockerham, Eric	Goodhart, Philip	Howell, David (Guildford)
Howell, Ralph (Norfolk, N.)	Morgan, Geraint (Denbigh)	Spence, John
Hunt, John	Morgan-Giles, Rear-Adm.	Sproat, Iain
Irvine, Bryant Godman (Rye)	Mudd, David	Stainton, Keith
James, David	Murton, Oscar	Stanbrook, Ivor
Jessel, Toby	Nabarro, Sir Gerald	Stewart-Smith, Geoffrey (Belper)
Johnson Smith, G. (E. Grinstead)	Neave, Airey	Stoddart-Scott, Col. Sir M.
Kellett-Bowman, Mrs. Elaine	Normanton, Tom	Stokes, John
Kilfedder, James	Onslow, Cranley	Sutcliffe, John
King, Evelyn (Dorset, S.)	Oppenheim, Mrs. Sally	Taylor,Edward M.(G'gow,Cathcart)
King, Tom (Bridgwater)	Osborn, John	Taylor, Frank (Moss Side)
Kinsey, J. R.	Owen, Idris (Stockport, N.)	Tebbit, Norman
Kitson, Timothy	Page, Graham (Crosby)	Thompson, Sir Richard (Croydon, S.)
Knight, Mrs. Jill	Parkinson, Cecil	Tugendhat, Christopher
Knox, David	Percival, Ian	Turton, Rt. Hn. Sir Robin
Lambton, Lord	Powell, Rt. Hn. J. Enoch	van Straubenzee, W. R.
Lane, David	Price, David (Eastleigh)	Waddington, David
Legge-Bourke, Sir Harry	Prior, Rt. Hn. J. M. L.	Walder, David (Clitheroe)
Le Marchant, Spencer	Pym, Rt. Hn. Francis	Walker-Smith, Rt. Hn. Sir Derek
Longden, Gilbert	Raison, Timothy	Ward, Dame Irene
Loveridge, John	Ramsden, Rt. Hn. James	Warren, Kenneth
Luce, R. N.	Redmond, Robert	Weatherill, Bernard
MacArthur, Ian	Reed, Laurance (Bolton, E.)	Wells, John (Maidstone)
McCrindle, R. A.	Rees, Peter (Dover)	White, Roger (Gravesend)
McLaren, Martin	Rees-Davies, W. R.	Wiggin, Jerry
McNair-Wilson, Michael	Ridley, Hn. Nicholas	Wilkinson, John
Maddan, Martin	Ridsdale, Julian	Winterton, Nicholas
Madel, David	Rossi, Hugh (Hornsey)	Wolrige-Gordon, Patrick
Mawby, Ray	Rost, Peter	Woodnutt, Mark
Mills, Peter (Torrington)	St. John-Stevas, Norman	Worsley, Marcus
Miscampbell, Norman	Scott, Nicholas	Wylie, Rt. Hn. N. R.
Mitchell,Lt.-Col.C.(Aberdeenshire,W)	Sharples, Richard	Younger, Hn. George
Mitchell, David (Basingstoke)	Shaw, Michael (Sc'b'gh & Whitby)
Moate, Roger	Simeons, Charles	TELLERS FOR THE AYES:
Monks, Mrs. Connie	Skeet, T. H. H.	Mr. Michael Jopling and Mr. John Stradling Thomas.
Monro, Hector	Soref, Harold
Montgomery, Fergus	Speed, Keith
More, Jasper
NOES
Albu, Austen	Fletcher, Ted (Darlington)	Mackenzie, Gregor
Armstrong, Ernest	Foley, Maurice	Mackintosh, John P.
Atkinson, Norman	Foot, Michael	Maclennan, Robert
Bagier, Gordon A. T.	Ford, Ben	McMillan, Tom (Glasgow, C.)
Barnes, Michael	Forrester, John	McNamara, J. Kevin
Barnett, Guy (Greenwich)	Garrett, W. E.	Marks, Kenneth
Bidwell, Sydney	Gilbert, Dr. John	Marsden, F.
Bishop, E. S.	Gorst, John	Marshall, Dr. Edmund
Blenkinsop, Arthur	Grant, George (Morpeth)	Mason, Rt. Hn. Roy
Boardman, H. (Leigh)	Grant, John D. (Islington, E.)	Meacher, Michael
Booth, Albert	Hamilton, James (Bothwell)	Mellish, Rt. Hn. Robert
Broughton, Sir Alfred	Hamilton, William (Fife, W.)	Mendelson, John
Brown, Hugh D. (G'gow, Provan)	Hamling, William	Mikardo, Ian
Brown, Ronald (Shoreditch & F'bury)	Hannan, William (G'gow, Maryhill)	Millan, Bruce
Buchan, Norman	Hardy, Peter	Milne, Edward
Buchanan, Richard (G'gow, Sp'burn)	Harper, Joseph	Morris, Charles R. (Openshaw)
Butler, Mrs. Joyce (Wood Green)	Harrison, Walter (Wakefield)	Morris, Rt. Hn. John (Aberavon)
Campbell, I. (Dunbartonshire, W.)	Heffer, Eric S.	Murray, Ronald King
Cant, R. B.	Horam, John	Oakes, Gordon
Carter, Ray (Birmingh'm, Northfield)	Howell, Denis (Small Heath)	Ogden, Eric
Clark, David (Colne Valley)	Huckfield, Leslie	O'Malley, Brian
Cocks, Michael (Bristol, S.)	Hughes, Robert (Aberdeen, N.)	Oram, Bert
Cohen, Stanley	Hughes, Roy (Newport)	Oswald, Thomas
Concannon, J. D.	Irvine,Rt.Hn.SirArthur(Edge Hill)	Palmer, Arthur
Conlan, Bernard	Janner, Greville	Parry, Robert (Liverpool, Exchange)
Crawshaw, Richard	Jenkins, Hugh (Putney)	Pentland, Norman
Dalyell, Tam	Jones, Dan (Burnley)	Prentice, Rt. Hn. Reg.
Davidson, Arthur	Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)	Price, J. T. (Westhoughton)
Davis, Clinton (Hackney, C.)	Judd, Frank	Price, William (Rugby)
Davis, Terry (Bromsgrove)	Kaufman, Gerald	Probert, Arthur
Deakins, Eric	Lambie, David	Proudfoot, Wilfred
Delargy, H. J.	Lamond, James	Rhodes, Geoffrey
Dell, Rt. Hn. Edmund	Latham, Arthur	Richard, Ivor
Dempsey, James	Lawson, George	Roberts, Albert (Normanton)
Doig, Peter	Leonard, Dick	Roper, John
Dormand, J. D.	Lestor, Miss Joan	Rose, Paul B.
Douglas, Dick (Stirlingshire, E.)	Lewis, Ron (Carlisle)	Ross, Rt. Hn. William (Kilmarnock)
Dunn, James A.	Lomas, Kenneth	Sheldon, Robert (Ashton-under-Lyne)
Dunnett, Jack	Loughlin, Charles	Shore, Rt. Hn. Peter (Stepney)
Eadie, Alex	Lyons, Edward (Bradford, E.)	Short,Rt.Hn.Edward (N'c'tle-u-Tyne)
Edwards, William (Merioneth)	Mabon, Dr. J. Dickson	Silkin, Rt. Hn. John (Deptford)
Ewing, Henry	McCann, John	Silkin, Hn. S. C. (Dulwich)
Faulds, Andrew	McCartney, Hugh	Sillars, James
Fitch, Alan (Wigan)	McElhone, Frank

Skinner, Dennis	Thomas, Jeffrey (Abertillery)	Wellbeloved, James
Smith, John (Lanarkshire, N.)	Tinn, James	White, James (Glasgow, Pollok)
Spearing, Nigel	Torney, Tom	Whitehead, Phillip
Spriggs, Leslie	Varley, Eric G.	Williams, W. T. (Warrington)
Stallard, A. W.	Wainwright, Edwin	Wilson, William (Coventry, S.)
Steel, David	Walker, Harold (Doncaster)
Stewart, Rt. Hn. Michael (Fulham)	Wallace, George	TELLERS FOR THE NOES:
Stoddart, David (Swindon)	Watkins, David	Mr. John Golding and Mr. Tom Pendry.
Strang, Gavin	Weitzman, David

Question accordingly agreed to.

Clause read a Second time, and added to the Bill.