INDEPENDENT BROADCASTING AUTHORITY BILL

HC Deb 29 March 1974 vol 871 cc778-820

Order for Second Reading read.

11.5 a.m.

The Minister of State, Home Office (Mr. Alexander W. Lyon)

I beg to move, That the Bill be now read a Second time.

It falls to me to reintroduce into the House the Bill that received an unopposed Second Reading at the end of January and which was aborted by the General Election. I should like to thank the right hon. Member for Bournemouth, West (Sir J. Eden), who was the father of the child, and, even though it was so untimely ripped from his grasp, I appear here as, in the legal phrase, the child's advocate.

I should begin by indicating my own rawness in this field and suggesting that in the initial debate, which goes outside the terms of the Bill, there may be some questions on which I shall need to be further briefed, but I know that there are no malicious minds in the House.

Mr. Arthur Lewis (Newham, North-West)

Will my hon. Friend give way on that point?

Mr. Lyon

Perhaps I could finish this point first, and then I will gladly give way.

I know that we shall proceed as speedily and sympathetically as we can on an issue which appears not to provoke any antagonism from any quarter. Having said that, I will now give way to my hon. Friend to see whether I am right.

Mr. Lewis

My hon. Friend said that if there were a matter about which he did not know, he would like to be briefed, and that he would prefer to be advised of the question so that he could look it up. Do his powers under the Bill take in responsibility for the BBC? If so, will he investigate the scandalous situation last night of the BBC aiding and abetting a convicted criminal in the Littlejohn affair?

Mr. Lyon

I was about to try to explain the allocation of powers, in which the House will be interested. As the House knows, the old office of Minister of Posts and Telecommunications has been abandoned, although the formalities of handing over the duties will have to await the passing of an order by both Houses. Policy matters in respect of broadcasting will be handled by the Home Secretary, while Post Office matters will be dealt with by the Secretary for State for Industry. The detailed day-to-day work will be handled in the Home Office by my noble Friend, Lord Harris of Greenwich, and I will answer in this House on questions relating to broadcasting.

In answer to my hon. Friend's question, in so far as broadcasting policy is a matter for the Home Office, and in so far as this is a matter of broadcasting policy, then it is within our purview. But one then has to limit the power that any Minister has in this area. It is not a power over the detail of individual programmes. Successive Governments have been clear that it would be wrong for Governments to exercise that control over the content of broadcasts.

As my hon. Friend the Member for Newham, North-West (Mr. Lewis) raised the matter so strongly, I may say that I have not the least doubt that the broadcasting authorities will take note of, and will give such attention as they think right to, his expression of what I suspect is probably a widely-felt concern on this matter, and one that I share.

Mr. Lewis

I am obliged.

Mr. Lyon

Having said that, I turn to the matter we are debating.

Mr. Speaker

Order. Having allowed that exchange, which I do not think was strictly in order on this Bill. I hope that the matter will not be further pursued by any other hon. Member.

Mr. Lyon

I am grateful for what you say, Mr. Speaker. I hope and believe that that will he the case, and I shall try to keep within your ruling.

I hope that hon. Members, who have been through this debate once before, will bear in mind that the Bill should now be seen, not as the final act in the Conservative Government's piecemeal approach to broadcasting questions, but as heralding a properly co-ordinated policy on broadcasting which seeks to see individual developments, in a field which still contains an enormous potential for innovation and growth, in the light of their implications for all other aspects of broadcasting.

It is not for me to explain our overall strategy on broadcasting. Announcements are due on that matter, as my right hon. Friend the Home Secretary said yesterday at Question Time. He will be making a statement as soon as he can about our approach to the overall strategy for broadcasting both in 1970 and into the 1980s. We see this Bill simply as the beginning of an approach to that strategy and we shall be announcing it as soon as decisions have been reached.

Mr. Phillip Whitehead (Derby, North)

Do I understand the Minister to say that, apart from this piece of legislation, there will be no further legislation introduced by the Government which might in any way prejudice a comprehensive inquiry, if one were to be carried out?

Mr. Lyon

I do not think I went as far as that, and I do not think that I implied it. I would not wish at this stage to be taken as implying any such thing. All I was saying on this Bill was that it was part of our overall strategy but that the succession in legislative terms, as well as in administrative terms, will have to be decided in due course, and the strategy will be announced by my right hon. Friend as soon as possible. I do not want to evade my hon. Friend's question, but I do not want to be committed by him to any such course of action.

The purpose of the Bill, as my right hon. Friend is aware, is to change the basis on which levy is paid to the Government through the IBA. The levy is not a tax. It is a way of paying, by a contractual payment, for the privilege of using the system which has been devised for purveying commercial television. We are proposing, as proposed by our Conservative predecessors, to change the system from a levy on advertising receipts to a levy based on profits. In practical terms it would mean that in the year July 1972 to July 1973 a profits-based levy on the rates in the Bill would have increased the yield of the levy by about 50 per cent. to £33 million.

The main advantage of this change is that the new system will adjust automatically to changes in the contractors' circumstances. When profits boom, as they did in 1972 and 1973, the public will automatically share in the boom. There will not be the necessity for the cumbersome and uncertain procedure of an order changing the rates applying to advertising income when that becomes necessary.

In lean years, if they return, the burden of the levy will automatically come down. The opposite will apply in better years. The old form of levy was perhaps appropriate when costs seemed to be fairly stable, but in recent years costs and income have fluctuated widely and have led to considerable difficulties with contractors. Coming new to this subject, I am interested to see that apparently nobody seems to subscribe to the old form of levy and that the contractors are anxious to move over to the new form proposed in the Bill.

The Bill achieves its purpose by changing the present levy on advertising receipts to one based on profits by amending the relevant provisions of the Independent Broadcasting Authority Act 1973. There was some resistance initially, when commercial broadcasting was first devised, to a system based on profits—first, because there was some danger that such a system might give scope for avoidance and, secondly, because there was a risk that it might encourage extravagance since increased expenditure would reduce the amount payable in the levy.

The right hon. Member for Bournemouth West, was given assurances in his negotiations that the Authority would be able to control the matter of avoidance. On looking into this matter we accept that the authority is now in a much better position to control what is done by contractors. The authority will be taking on three more teams to assist it in the work of auditing contractors' accounts.

As for extravagance, the monitoring position will probably be satisfactory. We have to learn by experience, but all the indications are that the new system will work effectively. There is a reserve power in the Bill to change the basis of assessment if it is found that there has been excessive expenditure on programmes. I know that in the last debate in the House on this subject concern was expressed about the way in which that power would be exercised. The right answer is that we must wait to see how the matter develops, but on the matter of overall control of the levy so far, the IBA has been careful not to intervene in the way in which costs are allocated to individual programmes. There is no apparent reason to think that it will change when we go over to a profit-based levy. The doubts expressed whether there would be IBA intervention in the amount allocated for individual programmes were unfounded, and I hope that experience will justify that assertion.

The way in which the Bill proposes to deal with the profits is that there will be a free slice of £250,000, or 2 per cent. of the advertising receipts, whichever is the greater. This is intended to protect the smaller companies since they tend to be the most vulnerable when times are hard, and it ensures that no company will have to pay a levy when it makes only a slender profit.

Profits above the free slice will be subject to a levy of 66.7 per cent. This figure was arrived at after careful study of past performance and future prospects of the programme companies. The proposed levy should secure a fairer share for the Exchequer in the companies' profits, while ensuring that the companies retain sufficient profits to provide the confidence and financial stability needed if programme standards are to be maintained and improved. It will make it easier for contractors to raise additional capital if they need to do so and will ensure that television programme contracts remain an attractive proposition for which new companies can be encouraged to compete—which is important. There was some criticism earlier. The National Board for Prices and Incomes, for instance, suggested that the return on capital should be slightly lower than will in the event be the effect of the levy.

There was a nice judgment to be made here on what is the proper return for the State from the sale of this monopoly licence and what is the right level at which the companies can make a fair profit, which will encourage them to continue with the contracts and also encourage others who may wish to take part in these contracts to tender when the licences come up later for review.

In the last levy year, that is, July 1972 to July 1973, the programme companies paid some £22 million in levy on their advertising receipts of £150 million. Over the same period, a profits-based levy at the rate proposed would have yielded about £33 million on their pre-tax profits of about £50 million. What the effect of the present proposals will be on future levy yields depends on the companies' profitability. The companies have been going through a difficult period. It is not yet clear whether they have emerged from these difficulties. With the upturn in the economy, it is quite possible that they will. However, during the period of the three-day week they undoubtedly had a cut in their advertising receipts, and some of the companies, especially the smaller ones, are in some difficulty this calendar year. That is one of the reasons why it is important to try to take the Bill through quickly.

I had it in mind to deal with the technicalities of the Bill. However, as I look about the Chamber, I realise that most right hon. and hon. Members present were engaged in the earlier debate and will be as well aware of the provisions of the Bill as I am—or perhaps even better. I do not, therefore, propose to go through the detail of the clauses unless any hon. Member raises a question.

As the Bill was given an unopposed Second Reading on the last occasion, I hope that it will not provoke controversy on this. I shall do my best, at the end of the debate, to answer any questions raised, and I shall take careful note of all points which require rather wider consideration than we can give in debate on a Bill as limited as this.

11.22 a.m.

Sir John Eden (Bournemouth, West)

May I say at the outset, Mr. Speaker, that the Minister's observations about his allocation of powers, which you suggested should not be pursued today, are matters on which I shall hope to comment further when the order comes before the House next week.

I congratulate the hon. Gentleman on his comprehension of the subject matter of the Bill, as exemplified by the brevity with which he presented it and advised us to speed it on its way. I am glad that the Government have been so quick to reintroduce the Bill. There is no doubt that it is needed. The flexibility of the proposed new system for raising the levy, the need for which is demonstrated especially at a time of falling profits, makes it necessary that the Bill should reach the statute book as soon as possible.

Recent experience has highlighted the imperfections of the system which the Bill is to replace. A short time ago, the companies showed high profitability. The latest published figures showed substantial increases in company profits. Now, however, the situation has changed, and changed fairly dramatically. February and March were bleak months for the companies, and the prospects immediately ahead do not look particularly bright, though one is encouraged to hear what the Minister has to say on this point and one hopes that he will be proved right.

In these circumstances, I have no doubt that, had we kept the old system, programme standards would have suffered. If we can now take the Bill fairly quickly through all its stages, company expenditure plans for programmes will be safeguarded, and the interests of the viewing public protected. That was the primary consideration which encouraged the previous Government to make the change.

Nevertheless, as the hon. Gentleman will recognise, it was not an easy decision to reach. There have been two principal areas of worry. The first was whether the proposed new system would lead to abuse. The second was as to the right rate at which the new levy should be applied. Our worry about abuse was not that we regarded as villains the many able and distinguished people who run the companies. Far from it. While they have a natural and healthy interest in making profits and in providing their shareholders with a good return on their investment, they have amply demonstrated that they are equally concerned to provide viewers with programmes of the quality and variety which they desire.

The present system by which the levy has been applied is plainly too blunt, too insensitive and too inflexible an instrument. At a time of falling profits and uncertain prospects, it is understandable that the companies should make strenuous representations to have the levy rate cut. Under the present system, they would be able to argue with justification that there was no choice but to cut back their planned expenditure on programmes, with a consequent threat to quality. Conversely—this has been the most recent experience—at a time when profits had been rising for a period of years, the Government would come under mounting pressure to increase the rate, and, more often than not, by the time the Government had acted, the industry would be well into a downturn of profitability.

Looking back over the period during which the discussions leading up to the Bill have been taking place, I have little doubt that, had the previous Government decided to maintain the existing system of levy on advertising revenue, a pattern similar to that which I have just described would have emerged. Now, however, with the Bill promising a much more flexible system, a turnround in company profitability is not likely to have such a traumatic effect on programme expenditure. And that is good. This will be so because money spent on programmes is to be deducted before the levy becomes assessable. It is this money, defined in the Bill as relevant expenditure, which it is obviously necessary to safeguard against abuse.

The Bill provides that relevant expenditure and relevant income should be determined by the Independent Broadcasting Authority. The companies, I know, are worried about certain aspects of this provision. In particular, they are concerned that there is no right of appeal to an independent arbiter against decisions by the authority as to the amount of levy payable.

The authority is very familiar with the business of making television programmes. It has an experienced team. I always held the view, and still do, that it was in the companies' best interests that their affairs should be presided over in this respect by people who were so knowledgeable on the whole business of the making of programmes. If it is claimed that the authority has acted capriciously or unreasonably, there is, I think I am right in saying, access to the courts.

But there can be no challenge in the courts to the actual amount to be levied. If that were possible, there would, I believe, be grave risk that the authority would find itself constantly involved in dispute and litigation, and I cannot be lieve that this would enhance the relationship of mutual trust, respect and confidence which must exist between the authority and the companies. I think it right, therefore, that on that matter there is to be no separate appeal arrangement.

However, I should like the Minister, either today or on a future occasion, to elaborate a little on his own views on this subject and to endorse or otherwise comment upon the position as I have stated it.

We need in any case to gain experience of the new system in operation, and I have no doubt that Ministers will be watching the position closely and will be ready to listen to any representations which subsequently may be made to them.

Will the Minister of State also make it clear that the term "relevant income" is to apply to income concerned directly or indirectly with making television programmes? Will he make it clear that it is not in any way to be applied to income derived from subsidiary activities in which a company may be engaged where those profits have no relevance to programme making? I think it important that the hon. Gentleman should take the opportunity to underline this, particularly in view of some of the observations which were made during the course of the debate on this subject on 31st January.

As I saw it, and as I still see it, there exists a special relationship between the companies through the authority and the Government on account of the privilege the companies enjoy in having privileged access to a scarce national resource. That is why the levy system has been devised. The levy is a return for the use of a national asset. It is not a tax, it is not to be seen as a tax, and it should not be treated as a tax. That is why there is no provision for carrying forward losses.

I know that this, too, worried the companies. The levy in its new form is to be seen as a special payment to be made each year on the difference in that year between the money a company has spent on programmes and the income received from programmes. If in any one year the expenditure on programmes is greater than the income from programmes, then no levy will be payable that year. The question of carrying forward losses does not, therefore, seem to me to arise, but here again I think that it is important to have on record the views of the Minister and the present Government.

The second worry that we had when considering this whole subject was how to answer the question—what is the right rate at which the levy should be set? The need was clearly to determine a rate which would require fair payment to be made for the privileged use of a scarce national resource while, as the hon. Gentleman himself made clear, at the same time giving sufficient incentive to the companies to maintain the production of quality programmes. I think that that is a reasonable definition of the twin elements of the public interest in relation to commercial television in this country.

Inevitably, a balance between them must be struck. As the hon. Gentleman said, a judgment must be made. After much discussion, we concluded that it would be right to aim for a division of the difference between relevant income and relevant expenditure to be on the basis of two-thirds to the Exchequer and one-third to the companies. This approach has now been endorsed by the present Government. I presume that they arrived at this decision only after careful consideration of any further representations that may have been made to them.

The companies, of course, want a lower figure. They are worried about the future. They have certainly experienced a considerable turndown in profitability. Figures made available to me show that for the industry as a whole a surplus of £1.6 million in February 1973 has become a deficiency of £1.1 million in February 1974 and that a surplus of £3.2 million in March 1973 should be set against what is estimated to be a deficiency of £1.1 million in March 1974. I have not been able to analyse these figures. Obviously the position that those figures disclose, even in the broadest view of them, requires that it will have to be watched closely. Some deterioration relative to previous years had certainly been expected when the level of the levy was under study. There is little doubt that the levels of profitability in the coming months will be substantially below those experienced in recent years. In addition, the companies will have to meet a higher rate of corporation tax than had been expected.

All these factors serve only to re-emphasise the need for the Bill. Will the hon. Gentleman, if he is to seek leave to reply to any points which are raised during the course of the debate, say how he sees things for the future, and perhaps he will elaborate a little further on the point he just made about the prospects for the remaining part of the year so that we have it clearly on the record why he believes that 66.7 per cent. is still the right figure to go in the Bill.

There are two other matters that the hon. Gentleman might also clear up. First, during the debate on 31st January a number of hon. Members put forward suggestions as to how the levy revenue could be applied, primarily I think with the aim of furthering experimentation in television, although there were one or two hints that it might have something equally to do with the film industry. Will the hon. Gentleman give the Government's views on that?

Secondly, in the debate on 31st January the hon. Member for Islington, Central (Mr. John Grant), then Member for Islington, East, claimed that broadcasters feared that certain provisions of the Bill might be used as a big stick through which programme content could be conditioned."—[OFFICIAL REPORT, 31st January 1974; Vol. 868, c. 651.] At the time I thought that that was one of the hon. Gentleman's more extreme pieces of scaremongering. Will the Minister of State make it clear that, if such a fear does exist, there is absolutely no justification for it? I was glad that the Minister of State gave that reply to an observation by the hon. Member for Newham, North-West (Mr. Lewis) at the opening of the debate. Will he confirm the fact that this Government do not intend to interfere in programme content?

Finally, and fully in keeping with the new spirit of toleration and moderation apparently enjoined upon us all by the electorate, may I say to the hon. Gentleman that upon close inspection I find that this is a most sensible Bill. I am sure that it will come to be so regarded by the industry and that it will, in spite of the many difficulties the industry is now facing, make a real contribution to the further advancement of British television which deservedly is held in such high esteem. I invite my hon. Friends to support the Bill and to give it a speedy passage on to the statute book.

11.38 a.m.

Mrs. Gwyneth Dunwoody (Crewe)

I am somewhat startled to be informed by hon. Members who know—and happily this House is always full of Members who know about everything—that this is apparently my second maiden speech. As the mother of three rather large 6-ft. teenagers I find that an interesting thought, but presumably everything is possible to the Mother of Parliaments.

I am delighted to have an opportunity of speaking on this Bill and to congratulate my hon. Friend the Minister of State on being in charge of such a fascinating and important subject. It would be very remiss of me not to pay a tribute at this point to the right hon. Member for Bournemouth, West (Sir J. Eden) on the efforts he made when he was at the Ministry of Posts and Telecommunications in the previous administration in relation to the whole question of television.

I should declare an interest. I am the director of the Film Production Association of Great Britain and of the Advertising Film Production Association. My members are particularly concerned with the creation of original material for television ranging widely from feature programmes to educational programmes and the provision of advertising material. Therefore, I obviously have a particular concern in the contents of the Bill.

There are, I am sorry to say, one or two rather glaring omissions. Although we all realise the importance of speed to the smaller companies, which undoubtedly face difficulties as a result of the early closing hour of television, I had hoped that the Bill would contain some extra provisions. I should have liked to see some explanation of how the powers given to the Minister could be expanded to include the use of the existing levy to encourage film production, or the addition of an extra clause so that some of the money available through the levy would be an encouragement particularly for the originating of television material.

A very dangerous situation is arising in this country. Television expands all the time. It is one of the most important of our media. I have the advantage of living in Granadaland and I am happy to pay tribute to the work done by that company, but, as one of my brighter constituents said to me the other day, "If you are the proud possessor of a large mortgage and two or three small children, you find yourself watching an extraordinary amount of television." Therefore, it behoves this House to make sure that the little set in the corner of the room is not simply what might be described as moving wallpaper but has a much wider role, not only in entertaining but in educating.

This House has a responsibility to ensure that the companies are aware of those responsibilities and are able to carry them out. One of the hazards that we shall always face in this country is that, at least nominally, we share the same language as our cousins across the water who themselves have a very large television industry. They are able to produce programmes at considerable cost and recoup their costs in their own country. This means that when they come to sell their programme material in Britain they are able to quote prices and talk to the companies in different terms from the person who is originating a television film in Great Britain, because the producer here will find himself faced with considerable costs which are rising all the time and with an audience which requires, happily, a very high standard of proficiency. I should have liked to see an extra clause in the Bill enabling us to use the levy to encourage both film and television production.

I am sure my hon. Friend the Minister of State will accept that many of us were disturbed to see that the reorganisation of the powers within Whitehall meant that broadcasting, which is only one part of the media, had gone to the Home Office, and, therefore, we are talking about only one small segment of the difficulties that have arisen. I shall hope on another occasion to express my views on the need for the creation of a proper Ministry to deal with all the media across a very much wider field, because I do not believe that we can deal with one section of the media in a very narrow way, which is what the Bill endeavours to do.

I had hoped that a Labour Government would be more original and would have made a strong contribution to a different line of thought. I hope that my hon. Friend the Minister will carry back to his right hon. Friend the views of hon. Members on this side of the House that what is needed is a much stronger and much more widely-based Bill which will concern itself with the whole problem of the media, even going as far as creating a Ministry to deal with newspapers and magazines.

I think that in general the idea of having a movable feast in terms of the levy is sensible. I do not believe that there will be too much difficulty about the calculation of expenditure. The rise in the costs of production will deal with any likelihood of the companies wanting to put forward artificial figures. I think that their problems will consist in trying to make the figures look more presentable. Therefore I am not deeply concerned, although I was glad to have my hon. Friend's assurance that this is a topic which will be considered from time to time.

There are some provisions, however, which could unintentionally cause difficulty. Under Schedule 1, for example, and the provision for including a subsidiary's expenditure, some companies which provide programmes in co-production with other nations might suddenly need to consider their expenditure. In the last couple of years we have developed a number of television films and television series in co-operation and co-production with other European nations. This enables us to spend rather more on the production than we would normally do in productions solely for our own internal consumption. It means that we have a product which is capable of being sold abroad at a much bigger profit. These productions, therefore, are hard currency earners. I would be loth—this is merely a minor caveat—to see anything which stopped that trend, given the difficulties that we encounter in production in this country.

However, there are other problems. If we are to originate material, if we are to spend a good deal of money on pro- ducing the programmes of quality of which my hon. Friend and the right hon. Member for Bournemouth, West have spoken, it behoves the IBA to give guidance to the companies on the need for original material. Certainly in the past they have endeavoured to produce original entertainment programmes, but the time is coming when the House will have to concern itself with how much material we can actually require the companies to produce. If we are to have breakfast-time television, with which we are threatened, and if we are to have expanding hours of transmission, we shall need to consider how those hours are to be used.

The producers of advertising films were undoubtedly hit by the cut in television programming and the close-down at 10.30 p.m. To me, however, the really important consideration was the social effect of the close-down at 10.30 and the numbers of people who felt that they had lost some immediate form of friendly communication when their little box turned itself into a blank square early at night. We shall have seriously to consider how the levy can be used. One accepts that it is a payment by the companies for the use of resources, but the responsibility of the House does not stop there.

If the levy could be used to support a production board going much further across the field than the provision of television material to the originating of film material which could be used in many different ways, and to enable problems raised in connection with the use of satellites and laser beams to be faced by the people who administer the IBA or by this House, we should begin to face some of the broader problems in television. At the moment we are dealing simply with one very tiny section of the subject without even thinking of some of its social implications.

I do not intend to detain the House long because I have hopes of contributing on the subject in the future, and it is a wise woman who knows that the time has come to leave the discussion to others. My hon. Friend the Minister of State will find that many of his hon. Friends, in common with other hon. Members, are concerned that his Department is now in charge of such an important matter as broadcasting. He was kind enough to say that there were no malicious minds in the House and I know, therefore, that he will not take any of my remarks in a personal fashion. Nevertheless, it seems that a Department which was responsible in the last Parliament for producing a measure like the Bill concerning cinematographic exhibition, which was widely regarded as exceptionally reactionary and very badly framed, is not the Department which we should like to see carrying day-to-day responsibilty for broadcasting, either by commercial television or by the BBC.

I hope, therefore, that my hon. Friend will not take it amiss if we say that we shall he taking a very active interest in the policy behind decisions which are taken. We shall expect to be able to discuss them exhaustively. More than that, the Government must appreciate that they have before them an enormous opportunity. It will not suffice to let that chance slip away. We are faced with decisions of such magnitude that failure to grasp this nettle at this time will result in a situation in which the whole of broadcasting policy for the next generation may be radically altered, and we shall not be happy if there is inadequate consideration of the issues involved.

11.52 a.m.

Mr. Jeffrey Archer (Louth)

I begin by welcoming the hon. Member for Crewe (Mrs. Dunwoody) back to the House and recalling that when I first came to the House the first Bill with which I was concerned dealt with cinematography. I remember the lion. Lady in those days as an Under-Secretary. She mentioned that her speech today was a sort of maiden speech, and as I have never congratulated a maiden before I do so now. I hope we shall hear much more from her in the future.

I welcome the Bill and I am sure that the Minister of State will not mind if I pay a tribute to my right hon. Friend the Member for Bournemouth, West (Sir J. Eden), because the Bill really is a rose by any other name and if it is to be the rose of York rather than the rose of Bournemouth, West, so be it.

I am delighted to see that both sides of the House feel able to join together on the Bill. When it first came before the House we had before us the major problem of Anglia Television. Since that problem has now been sorted out by an honourable compromise dealt with by Lord Aylestone, I should like to place on record the thanks of both sides of the House to the noble Lord and the authority for the way in which this was sorted out. I know that both Anglia Television and Yorkshire Television are happy and feel that the compromise was fair. I pay a personal tribute to Mr. James Hanson, chairman of Yorkshire Television, and Mr. Aubrey Buxton, chairman of Anglia, for having sorted out the problem cunningly during our absence in the election campaign without finding it necessary to take it to Sir Stewart Crawford and his committee. My constituents are equally delighted.

There are one or two points about the Bill which I should like the Minister of State to consider. They were touched on briefly by my right hon. Friend the Member for Bournemouth, West. The major point is what was described by the hon. Member for Crewe as the movable feast of the levy. I see the point of the Bill in that in successful years the levy goes up and in unsuccessful years it goes down. That is good. However, I am deeply worried about the very bad years when losses cannot be carried forward. I know that the Minister of State will be looking at the last set of three-monthly figures to form his opinion in Committee. However, I hope he will look also at the next set of figures which are now being audited by Peat, Marwick and Mitchell. The figures will reveal the three most disastrous months in the history of television, because advertising revenue is so badly down.

Advertising is not so attractive to manufacturers as it has been. As manufacturers cannot get their goods out to sell, it is pointless to advertise them. The manufacturers feel reluctant to advertise when they cannot keep up with their orders. The independent television companies are being hit in consequence, and the Minister must consider the point seriously. If the companies cannot carry forward losses from a bad or exceptionally strange year, as the present year could prove to be because of the three-day working week, it could take three or four years to recover an equitable position.

If we are to achieve all that the hon. Member for Crewe wanted, which was a very high standard of television, it can be done, as she said, only with courage in expenditure and experiment. That can be done only with money. Some of the finest productions on television today are those that have had a great deal of money put into them in order that they may be sold later. But if the money is not there to begin with because of losses or because the company is on a tight rein, television will deteriorate and not progress. I hope, therefore, that the Minister of State will look carefully at the report of Peat, Marwick and Mitchell, a firm which is independent of the television companies.

I hope that in Committee the Minister will direct his remarks to the levy of 66⅔ per cent. and relate it to the report and not to boom years as has happened in the past. I hope he will give an assurance also about other revenues gained by independent television which have nothing to do with television itself. The classic example is the TV Times. The companies share equally in both expenditure and profit. I do not believe that this activity has anything to do with the levy. If it has, everything that an independent television company does which has the slightest connection with production will be taken into account and a peculiar situation will arise. I should like to be assured that there will be a clear definition in the Bill of what "levy" means. Independent companies are worried that things like the TV Times will be taken into account.

Having praised Lord Aylestone, it is right that I should make one other point about the authority of the IBA. The person concerned is irrelevant because it is the principle that matters. At present he appears to be totally independent, and when he makes a decision the individual companies find it very difficult to go against it. I know that this does not arise very often, but we have experienced it in connection with Anglia Television. On that occasion we had to take the matter to Sir Stewart Crawford. However, Sir Stewart will not live for a thousand years. Will the Minister of State be kind enough, therefore, to consider setting up a small appeals committee to which an independent television company which feels that the IBA is not treating it correctly may go? It could have its case examined by an independent arbitrator.

Such a system would have saved a great deal of trouble in the case of Anglia. It would also be the easiest and quickest way of dealing with cases which arise in the future. My right hon. Friend the Member for Bournemouth, West would, I am sure, tell the House only too willingly that he had three and a half years of Anglia thrown down his throat. The unfortunate man faced about 17 personal meetings and three delegations on the matter. I am sure that the Minister does not want to go through that process.

I am suggesting that a small and independent committee should be called together at any time to judge a matter that one of the television companies feels is unfair. That committee should have nothing to do with the IBA and the independent television companies. The committee's function would be to make judgments on such matters. It might make independent television companies feel that the IBA was not a god and that its chairman was not necessarily a dictator.

The Minister will be able to gain immediate information from his mandarins on the first point which I raised about the levy. He will have to give consideration to my suggestion about a small and independent committee. I am only too happy to wait until that matter arises in Committee.

Many, if not most, hon. Members travel the world. Hon. Members who are present are those who are most interested in the arts, the media and television. None of us has any doubt, at a time when we are criticised for being second rate or falling behind in certain matters, that we have the best independent television companies in the world. The standard is higher than anywhere else and I believe that the Americans envy us when they see our programmes. I see that the hon. Member for Derby, North (Mr. Whitehead) shakes his head. When Americans see "This Week", "Panorama" and our news programmes, I have repeatedly heard them say "If only we could do it that way rather than the way we are now doing it."

Mr. Whitehead

The hon. Gentleman rather undermines me by quoting a programme which I used to produce. There are many other examples in the world of network systems and programme companies which are financed by advertising revenue and which produce good programmes. Sometimes their programmes are better than those which are shown by our independent television. A simple comparison with America is not enough.

Mr. Archer

Today is not the day for erudite and long academic argument on the merits of each company. I believe that the overall standard of broadcasting in this country is very high and something to which we should cling and not let go.

Like the hon. Member for Crewe, I am horrified by the thought of breakfast television or of all-night films such as are shown in the United States. In the United States, if one arrives at a hotel bedroom at 4 o'clock in the morning, it is possible to switch on a cowboy film. That prospect horrifies me. I hope we shall keep away from that sort of television. The kind of television for which we should aim as responsible guardians is that which maintains our high standards.

Our first aim should be to make it possible through legislation for any company to give us the highest possible standards in television. If there is anything in the Bill that detracts in any way from those standards, it should be removed. I ask the Minister to be kind enough to pass on my remarks to Anglia and to all concerned. I ask him to make it clear that we are worried about certain matters which are basically outside the levy. We are worried about losses not being carried forward into another year, and especially this year when the advertising revenue is so low. I welcome the Bill. I hope that it goes through the House quickly and that it will soon become an Act.

12.3 p.m.

Mr. Phillip Whitehead (Derby, North)

It is always a pleasure to follow the hon. Member for Louth (Mr. Archer). On this occasion I can offer him double congratulations. First, he was associated with a number of other hon. Members in the sustained campaign regarding the Belmont transmitter, which eventu- ally resulted in an entirely satisfactory conclusion. It is a pity that that conclusion was not reached a year or more before. Second, I congratulate him on making a different speech from that which he made on 31st January. In Derbyshire we have an old saying—namely, "Never boil your cabbages twice." It is incumbent upon us all to try to avoid restating that which we said on 31st January. If we said anything of value on that occasion, that should mean that we should be much briefer now.

I congratulate the Minister and the right hon. Member for Bournemouth, West (Sir J. Eden) on their respective new roles. It is only a short time since we debated the Bill, and many things have happened in the intervening period. The order has rapidly changed. The right hon. Member for Bournemouth, West is now leading for the Opposition but constructively welcoming his own Bill. I congratulate him on the way he did so. I think that he should go into the Guinness Book of Records as the last independent, in the departmental sense of the word, as Minister of Posts and Telecommunications.

I am delighted to see my hon. Friend introducing the Bill. He is a good example of the principle enunciated by my right hon. Friend the Chancellor of the Exchequer—namely, that in this Government the broadest backs will bear the heaviest burdens. My hon. Friend's back is broad and he bears a heavy burden. That is especially so since the Home Office has now taken over at least a part of the responsibility for broadcasting. I share many of the reservations which my hon. Friend the Member for Crewe (Mrs. Dunwoody) mentioned. The Home Office will have to take many important decisions on broadcasting at a crucial time, along with all the other responsibilities with which it is more traditionally associated.

Some hon. Members expressed some worry that the same Department as that which introduced the infamous Cinematograph and Indecent Displays Bill, which I spent many a happy hour opposing, should be in charge of broadcasting policy. That is no comment on the principles and the perspicacity of my right hon. Friend the Chancellor of the Exchequer, whom I greatly admire, and my hon. Friend. The Bill is the same measure as that which we debated on 31st January. There is one amendment in that apparently a republican gremlin had taken out a few "dutifullys", "loyals" "humblys" and "beseeches" in the preamble which have been most properly put back. It is otherwise the same Bill which we supported previously and which we now support.

The levy is a rent which is paid by companies which on behalf of the community temporarily enjoy a franchise of a scarce public asset. It ill becomes anyone to say that the determination of the levy or the policing of it is not a matter which the House should scrutinise closely. We all accept the principle that the levy should be shifted from overall revenue to profits. We also agree that the IBA is now and has been for some time a body which is properly equipped to police the levy, even if within the Bill there is no independent right of review for complaints against IBA decisions. That is a matter which we shall consider in Committee.

I echo the words of the hon. Member for Louth in the context of a wider review which we hope my right hon. Friend will be introducing in the near future. Many of us have believed for some time that that is a matter which only a permanent and ongoing national broadcasting commission can determine. That applies when there is a dispute over an IBA decision and when there is some public concern about the way in which that decision has been reached.

I accept the principle of the Bill, as I indicated in an intervention, on the basis that in the near future there will be an inquiry into the future of broadcasting and the process whereby decisions about broadcasting are taken, with all their political, economic, social and technological consequences.

I deplored the piecemeal approach of the previous Government. It seemed that it was concerned in bringing into existence small and new elements in broadcasting but not in surveying the whole media and their social and political consequences. It is essential that such a survey should be carried out. It is essential that there should at present be no extension of the Television Act or the BBC Charter after 1976, except for the period needed for an inquiry to take place and for a report to be acted upon. Anything which hon. Members may say in support of the principle behind the Bill, this piece of piecemeal tinkering, is conditioned by that thinking. I say to my hon. Friend that that inquiry must be set up, and speedily.

On a rough and ready basis, the breakdown indicated in the opening speech and on 31st January is about right. I understand why the hon. Member for Louth echoed the reservation about the present position of the Government referred to by many hon. Members on a previous occasion—by the right hon. Member for Howden (Sir P. Bryan), for example—that this year the expectation from advertising revenue is much diminished. The level of activity in the advertising agencies which are generating the next round of revenue for the companies is significantly down. A month or two ago we were talking of the revenue being perhaps 25 per cent. down and that being dismissed as alarmist, but we can now see that it will be that much or more over the first six months of this year.

That does not necessarily mean that we should be deflected from the principle of the Bill in terms of the level of levy that should be charged. I think it is about right that if, in an average year, £50 million, let us say, is the overall level of receipts of the independent companies, £33 million or thereabouts should be the level of the levy, and that 66 per cent. should be the breakdown figure. I do not think that one can argue that programme making will necessarily gain or necessarily suffer in a lean period if the levy is charged at that rate.

We have to see, in the area of heavy programme expenditure—where there will be some incentive if the Bill goes through speedily—that not so much risk is involved and that the only risk involved is in the making of the original boardroom decision that such-and-such programme should go forward or such-and-such series should go forward.

I take as an example—declaring my own interest in passing—the series "World at War", made by Thames Television. In financial and, I should like to think, in programme terms, it was one of the largest and indeed one of the more successful independent television programmes. Incidentally, I produced two of the episodes in the parliamentary recesses. That series, which cost almost £1 million, has already recouped that entire amount. About half of it has come from the internal revenue system of IBA and the rest from overseas sales, spin-offs and so on. Of course, one takes a risk when one commits £1 million to making 26 hours of television, but if one is doing one's job properly the money will come back. It is not just being poured away or put into an experiment from which there can be no return.

I am still a little worried, as I was in the previous debate, about diversification. I will not bore the House by going through another long excursus into the activities of ATV and Lew Grade. I have had a lengthy letter from Lew Grade explaining why ATV has done the things it has done in the area of differentiation of programmes, but the faith that was expressed in the previous debate on Section 27 of the 1973 Act, which allows the IBA to stop artificial diversion, may be a little too all-embracing.

It will be extremely difficult to police the Bill and to distinguish what is legitimate programme expenditure and what is not, and where companies have embarked upon products which can be presented as the necessary consequences of spin-offs of a television series but which were, in fact, the prime mover in the expenditure being launched in the first place. I am not concerned about the TV Times because it will not be covered by the Bill. It is a separate and very profitable organisation. I am concerned about a large television company deciding to launch a series of casettes, long playing gramophone records or paper back books, making the vehicle for them a television series, and then presenting the television series and all the other aspects as coming from a decision about television, and programming the expenditure for television whereas in fact it is not.

In Committee we shall have to look extremely carefully at paragraph 4 of Schedule 1 which is concerned with what is relevant income. I will not go as far as to read the schedule, but I give my hon. and learned Friend fair notice that it is the part of the Bill with which we are most concerned. Normally in Stand- ing Committee we give a sigh of relief when we get to the schedules, but our spirits will not be quite so high on this occasion when we reach Schedule 1.

Finally—and this is a matter of principle which should be discussed now because it is not specifically covered and cannot be inferred from the small print of the Bill—we should discuss the degree to which the resources from the levy are used for purposes connected with broadcasting. I entirely applaud what has been said in that respect by my hon. Friend the Member for Crewe. She was making a special case in one area, and I do not dissent from it.

Although the levy is a rental for a public asset, the Treasury should realise that the receipts should not be used simply as another tax and should not all vanish for ever into the Consolidated Fund. I should like to see part of the levy used in the process of risk and experimentation within television.

The second television channel was mentioned in our previous debate. I see that the hon. Member for Bristol, West (Mr. Cooke) is here, and he may revert to that subject again today. The second television channel is not the basis for experiment that I have in mind. There are many new areas in which programme making should be encouraged and can be encouraged only by public support. The same goes for experiments with cable television which, again, are deserving of public support and a degree of public finance. There are areas of publication of research about which we know little and should know a great deal more and where the transfer of part of the levy receipts could be used to our advantage.

It is utterly absurd that the only two broadcasting organisations in the country produce totally different reviews of audience appeal. We have only the broadest and crudest mass audience measurement, but week after week we are shown figures from the BBC and the ITV companies the so-called JICTAR figures—which produce an entirely different picture of the television audience, its needs, aspirations and satisfactions. There is a case for publicly-financed, independent experiment.

All these matters should be drawn together, and will be, once we have the announcement about the inquiry which we are all awaiting from my right hon. Friend the Member for Birmingham, Stechford (Mr. Jenkins), within an ongoing body of the kind to which I referred following the remarks of the hon. Member for Louth—that is, a national broadcasting commission which is able to examine these problems and to co-ordinate research about future decisions in a way which I hope will make subsequent inquiries, after that which we hope to set up this year, unnecessary and irrelevant.

12.19 p.m.

Mr. Geoffrey Pattie (Chertsey and Walton)

For the past seven years I have been a director and more recently managing director of one of the country's leading advertising agencies, and I therefore have to declare an interest. I also have active first-hand knowledge of the industry. It is well known that for some time the ITV programme contractors have wanted the way in which the levy is computed changed from a reference to profits to a reference to advertising receipts. In that respect there is no controversial element in the Bill.

I should, however, like to make two points. First, it is a matter of regret to me that the Conservative Government did not accept the suggestion about carrying forward losses from one year and setting them against profits in the following year. I was sorry to hear my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) put forward this morning the argument which was previously used, although I appreciate that he feels he must maintain consistency in this matter.

When is a tax not a tax? When is it a levy? In my view, as all the revenue ends up in the Consolidated Fund we could regard it as a tax, and I hope that the Minister will consider this suggestion most carefully before the Committee stage. The key point is that these additional payments can be made only if the ITV programme contracting companies are in a healthy condition. They are more likely to be healthy if they are able to carry forward losses from one year and set them against profits.

My second point concerns the Appropriate rate for determining amount of additional payments". I question whether in the present situation a rate of 66.7 per cent. is a reasonable starting point. There is a tendency in some quarters to regard the ITV programme companies as a milch cow. This feeling arose in the early carefree Klondike days when various unfortunate statements were made, many of which have remained like albatrosses round the necks of the ITV programme companies.

My information is that this year no contractor has made a profit in any month. There is a tendency, when talking about ITV contractors, to think of the big names—London Weekend, Thames, Granada and so on. As the Minister knows, there are many more television contractors, particularly in the regions, and I suspect that they are likely to be in a serious financial situation quite soon. We have recently heard in the House the sorry story of the Scottish Beavercrook newspapers. I very much hope that we shall not see the second leg of what I might describe as "a spring double" in which one of the smaller regional television companies goes under. Because advertising budgets have been reduced this year, all media owners are going in for heavy discounts. This year there has been a 10 per cent. decline in advertising expenditure on rate card. I am sure the Minister realises that that undoubtedly means at least double that decline in cash terms.

We must consider the future health of the media, because the executives responsible for programming in all the ITV programme companies are inevitably bound by the parameters of their budgets. The temptation must be great in many instances to go for second best—to delete André Previn and replace him with Bob Smith and the Kitchen Spoon Jugglers, or something like that. The hon. Member for Derby, North (Mr. Whitehead) has referred to the Thames Television series which cost £1 million. That is a tremendous sum of money to commit in the present very uncertain situation, but the series has been so successful that it has already recouped $1 million from successful sales abroad. I am sure we would want to congratulate Thames Television on that achievement.

However, ITV contractors must ask whether they can take the risk and afford to commit sums of money of that sort. I am concerned that we may end with second- or third-rate or even lower standards in television. We must also remember that an increase in corporation tax is in the offing which will not help the television companies. I hope that a lower figure will be struck and that we shall not endanger the health of the media, which in my view is vital to the maintenance of our great tradition of freedom of speech and the improved enjoyment of our leisure moments.

12.25 p.m.

Mr. Ted Graham (Edmonton)

I am grateful for the opportunity of making a contribution to this debate.

Reference has been made to the debate which took place on 31st January. Hon. Members have indicated today that if anything good was said then, there is no need to repeat it. However, one of the advantages of a new Member is that he has the benefit of being able to read reports of debate such as that which took place on 31st January and to note the learned, interesting and instructive comments made from both sides of the House. It prompts the question "Was it 20 years ago that commercial television was looked upon by many people"—and, I am bound to admit, by many of my hon. Friends—"as an ogre and as something likely to be detrimental to our standards?" In the past 20 years there has been a steady advance in the acceptance and recognition of commercial television not only by the House and other institutions but by the people.

We are concerned today not only to increase Government income but to strengthen and improve television in its service to the nation. I imagine that the House rarely has the opportunity so quickly after a major debate on the subject to go through the same drill again. The actors, scenario and script may be the same, but hon. Members have changed places. I hope that some of the remarks made by my hon. Friends from the Front Bench when they were in opposition will be borne in mind by the Government now that that they have the opportunity of putting them into practice.

I share the view that commercial television companies should make a greater share of their profits available to the Government and to the country. I share the view that some of the additional moneys clawed back from the profits should be available for experiment and innovation. The hon. Member for Howden (Sir P. Bryan), in his speech in the debate on 31st January, which I read with much interest and instruction, said that the Government were becoming not only a partner but a dominant partner in commercial television. He pointed out that only £67 of every £100 made in profit would be taken in the levy but that by the time corporation tax was added the amount would be £83 or even more. However, it is a profitable business which is able to retain that much of its profit after meeting all its liabilities and dues.

I share the view of many hon. Members that the original investors in commercial television have reaped in profits the benefit of their investment over and over again. Although £83 or £84 of every £100 of profit may be taken from the companies, they are still able to operate. I share the view of hon. Members that it is important that the television companies should remain in business and that they should be able to keep their staff employed and to offer them career prospects and to serve the regions and the nation. But we should look sceptically at any cry from some of the companies that they are being badly done by under the latest position. The days of having licences to print money are disappearing, and some phrases which have been used on this point in the past have since appeared to be unfortunate.

I share the concern of hon. Members about our ability to ensure absolutely that profit levels are real or, as the Act says, relevant. This point can be blurred. In the last debate on this matter my hon. Friend the Member for Derby, North (Mr. Whitehead) gave considerable detail of ways in which by diversification it might be possible for costs or charges to appear in one account when they rightly ought to appear in another account.

In the last debate the then Labour Front Bench spokesman, my hon. Friend the Member for Islington, Central (Mr. Grant) said: There must be a nagging fear that profits can be manipulated, probably quite legally, within the books of subsidiary companies."—[OFFICIAL REPORT, 31st January 1974; Vol. 868, c. 649.] I share that nagging fear. We have heard today that the IBA now has three additional audit teams to ensure that accounts are properly kept. I welcome this and hope that the fear is now unfounded.

My hon. Friend also raised the spectre of undue Government direction or control. In the debate on 31st January he cited America and France as two current examples where, in his view, direct Government interference in radio and television programme content was taking place. None of us wants to see Government interference in programme content or in the control of the communications media.

I also share the anxiety shown in the last debate that a means should be found to use some of the increased levy to improve quality and standards by innovation and experiment.

For the particular attention of the present Government spokesman, my hon. Friend the Minister of State, I quote what was said by the Labour Front Bench spokesman, my hon. Friend the Member for Islington, Central, on 31st January. He said that it was a Treasury Bill and that the Government were primarily looking for more cash rather than for better television. He added: Better television is a secondary consideration, although the important aspect of this change ought to be whether it is possible to siphon more cash into programme making to improve the quality of television."—[OFFICIAL REPORT, 31st January, 1974; Vol. 868, c. 648.] I hope my hon. Friend the Minister of State can give an assurance that the drafting of the Bill will enable us to take this point into account.

Mr. Jeffrey Archer

Surely the hon. Gentleman would prefer that finance should be used by people like the hon. Member for Derby, North (Mr. Whitehead) and Jeremy Isaacs rather than by the Minister of State.

Mr. Graham

I am grateful for that intervention, which leads me directly to my next point. I quote from what my hon. Friend the Member for Derby, North said in the last debate on the matter: I hope that in any event we can at least expropriate some part of the money drawn from the profit-based levy for experimental purposes of one kind or another. I should have thought that we could look at the notion—I give the Minister notice that I shall raise this matter in Committee—of a differential rate for educational programmes or pro- grammes designed for the particular markets in this country. I refer to non-mass markets and not the sort of programmes which independent television likes to make catering to the largest possible audiences here and abroad."—[OFFICIAL REPORT, 31st January 1974; Vol. 868, c. 672.] I shall await with great interest the experience and expertise of hon. Members on both sides in giving guidance, as the Bill goes through Committee, on how that can be done.

Mr. Whitehead

As my hon. Friend has just quoted me, may I say that nobody would wish more keenly to see a differential rate than people like the producer Jeremy Isaacs and others who for a long time have argued that experimental programmes should be exempt from overall charges.

Mr. Graham

More money should be made available from one source or another—possibly from the additional levy—for experiment.

The Select Committee on Nationalised Industries in its report on television said: To secure wider showing of programmes of merit, the Authority should sponsor, or be capable of providing, experimental programmes for the network, in addition to those of an educational nature. The terms of the Act should be reviewed to make this possible. I was disappointed, however, to read the former Government's observations on that point. The Government said: This would significantly change the functions of the Authority. From being a purely regulatory body it would become one which also commissioned or undertook programme production on its own behalf. The Government do not consider that so significant a change should be introduced in their proposed extension of the Television Act to 1981. I disagree completely with those observations of the former Government. I see nothing wrong, in my ignorance of the matter in general, in the possibility of changing the function of the authority, if that is needed in order to achieve this worthwhile objective.

While considering the communications industry, I wish to stress the need to strengthen the news-gathering sources. Reference has been made to the sad events of the last few weeks which could lead to an erosion in the newspaper industry. A similar thing could happen with some of the smaller television companies. It is essential that the House safeguards in any way possible the independence of the independent news-gathering sources—the BBC, the ITV and the recent child of the House, commercial radio.

Mr. Jeffrey Archer

A disaster.

Mr. Graham

The hon. Gentleman says that it is a disaster, but it may have relevance where it operates. We must maintain and support as many independent news-gathering sources as possible. We ought not to rely too heavily on a diminished number and thus eventually find that there are only one or two sources.

In the last debate on this matter reference was made to the possibility that the additional money might be used not only for education, and the opportunity was taken to discuss the possibilities of a fourth television channel. In my early days in the House I realised that this must be a complex matter, involving large sums of money, but as I read the previous debate it seems there are competing views about the nature of the fourth channel. I await with great interest the Government's announcement on this. I opt for an educational channel or a channel giving substantial time to education, if possible.

I refer to what a former Member of this House—now a Member of another place—Lord Hill, who has vast experience in the BBC and in commercial television, said on this subject. In an article in the Observer late last year, Lord Hill said: Today the three main forms of educational broadcasting—Open University, further education and schools—are spread over all three television channels. The present weekly output of television education on all three channels is 54 hours, rising to 66 in the next few years. The Open University is a success and has come to stay. At first I was sceptical, but now I am convinced. Within a few years it will be the largest university in the country and will be producing graduates more cheaply than any conventional university can expect to do. Inevitably, the television clement in its teaching has had to be fitted into a general broadcasting service at times of less than peak viewing. To do its expanding job the Open University will need more hours and better times, which the BBC could provide only at the expense of the general viewer. The creation of an educational channel would free 54 more hours, though not peak hours, of air time on the three existing channels. I declare an interest. I am a student of the Open University. I was interested in the comments of the hon. Member for Louth (Mr. Archer) and my hon. Friend the Member for Crewe (Mrs. Dunwoody) about breakfast-time viewing. My viewing of television is at 7.40 a.m. on a Sunday, which is not conducive to getting the best out of what we have to see or of the study in general. I hope that when more time is made available, perhaps on the new channel, the aspirations of the Open University to provide a wider education to a range of people who are now struggling towards that education will be met.

The recent election has produced what could well be seen as a tiny cloud on the horizon, one which is relevant to the future of broadcasting. We are seeing emerging over the years a number of personalities who are broadcasters first and then become politicians—or the other way round, politicians who become part-time broadcasters. The comments of the BBC and ITV should be sought on whether we are moving into a situation in which the incidence of broadcasters in politics or politicians in broadcasting merits the attention of the IBA, the BBC and eventually of the House.

12.42 p.m.

Mr. Paul Hawkins (Norfolk, South-West)

I am grateful for the opportunity to follow up the speech of my hon. Friend the Member for Louth (Mr. Archer) about Anglia Television's settlement. It has been a great joy to my constituents, and particularly to my home town of Downham Market and the surrounding area, which was to have been cut out altogether from Anglia's programmes and to receive only broadcasts from Leeds. Leeds may be a wonderful place—I do not know it well—but we do not speak the same language. We do not enjoy watching the same football teams and we do not enjoy the same programmes as Leeds enjoy. Already I have to suffer from "Look North" on the BBC.

Mrs. Dunwoody

I cannot let that comment pass. "Look North" is probably one of the best regional programmes. I am sure that the hon. Gentleman would not want to be accused of prejudice. We all realise the strong regional attractions of both radio broadcasting and television centred on one's own area, but I do not believe that the hon. Gentleman would want it to go on record that he was inadvertently criticising one of the best television programmes that we have.

Mr. Hawkins

I am not in the least criticising Leeds. Leeds programmes may be very good for Leeds and a wider area. But in South-West and West Norfolk and the Fens we do not appreciate all these programmes from Leeds. That is all I am saying.

I greatly welcome the sensible settlement which has been reached between Yorkshire Television and Anglia Television on the matter. Anglia Television is a first-class, medium-sized company which has produced some wonderful programmes, particularly in its wildlife series, and which has exported a great many, earning a great deal of foreign currency in America and elsewhere. I feared greatly that as a result of the cut-back in Anglia Television's area and its general set-up it would not be able to go on producing these first-class programmes.

I shall not join some others in praising the chairman of the IBA. I had better say no more, because my words would not be of praise.

For the past two years we have been fighting this battle. I want to praise first the people in my area and the area which was served by Anglia Television from the Belmont transmitting centre, the people who were determined not to lose Anglia's best programmes. I also praise the local authorities, all of which wrote to the Minister and the IBA giving the reasons why they wanted to retain Anglia Television.

I also praise, despite his presence now, my hon. Friend the Member for Louth and other hon. Members for the whole area, who, regardless of party, banded together and made the then Minister's life a little miserable and who tried time and again to see the chairman of the IBA and to put our point of view to him. The energy of my hon. Friend the Member for Louth in stirring us all up enabled us to get the campaign over in the right places.

I also praise the former Minister, my right hon. Friend the Member for Bournemouth, West (Sir J. Eden), for the immense pains he took to see us all and the trouble he took, I believe not with the best wishes of his civil servants—though he never told me so—to go to East Anglia and see the situation for himself, finally urging the IBA in a very brave speech to await the Crawford report. The result is good. I shall say no more, except that I am very grateful to all those who played a part in bringing about the present sensible arrangement.

12.48 p.m.

Mr. Edward Milne (Blyth)

I hope that the hon. Member for Norfolk, South-West (Mr. Hawkins) will forgive me for not following up too closely what he said. I was glad that the hon. Member for Crewe (Mrs. Dunwoody) defended the BBC programme "Look North". The hon. Member for Norfolk, South-West should be reminded that those of us in Northumberland look upon Leeds as being in the deep south.

What was particularly welcome was the hon. Gentleman's plea for the retention of the smaller area and regional television broadcasting companies. The whole future of the value and impact of television, particularly in connection with education, lies in the fact that the nearer we keep it to people, the more vital it will become, the more lively it will remain, and the more valuable it will be not only to the area in which it operates but very often to the country at large. What we sometimes forget, on the question of bigness, whether in the comunications media or anywhere else, is that what we lose in the areas and the regions is often a loss to the country as a whole as well. That is why I was also interested in what the hon. Member for Chertsey and Walton (Mr. Pattie) said about the profits of the companies and their present difficulties. I have sympathy with their difficulties—we must have healthy television companies—but he was overstressing the point since it relates only to a limited period and we are considering the wider aspects.

Not only should company profits be looked at on an overlapping basis from year to year, but the Bill should also lead to the income of the IBA being used to assist companies in forward planning. This could be a factor in any later consideration of profits. The survival of small television companies and some of the larger ones may depend on their getting assistance during their difficulties. Their forward planning should be considered so that their survival can be assured.

There might be an argument about the difference between a levy on advertising receipts and on profits. As my hon. Friend the Member for Derby, North (Mr. Whitehead) said, we are now at a halting stage on the way to a complete review of the IBA and its associated activities. My hon. Friend the Member for Crewe made an interesting speech on this wider aspect. We must consider the communications media on a much wider basis, looking at the Press, television and radio as one industry.

When it comes to collecting information or material for programmes, there may be a case—this may be outwith the scope of the Bill at present—for a greater sharing of the research work. There is a great deal of overlapping and competition that could with advantage be eliminated. I do not suggest cutting out entirely competition between companies, but a tremendous amount of time, energy, effort and money is wasted on research which could readily be centrally available, at least as a jumping-off point for the various programmes.

This brings me to the point of the hon. Member for Louth (Mr. Archer) about the IBA. We must consider its strong powers over the programmes that we are entitled to see. I agree with him that where there is a dispute between a company and the IBA, some independent arbiter should adjudicate. In the last 12 months we had the example of the Granada team of "World in Action" wanting to deal with some local government matters in the North-East and being prevented from doing so by the IBA—although it subsequently changed its mind. Much of the information that the public were entitled to have was withheld by the single decision of the IBA—a decision that it made, I believe, without having seen the programme in question.

The Minister now responsible for these matters should also issue instructions to the IBA that when its members have an interest in a programme they should declare it or withdraw from the decision-making area. It is wrong that members with an interest should be allowed to adjudicate on whether a programme is shown.

Hon. Members who were here on 31st January know that the Bill was welcomed. There is much to be done in Committee.

We must regard it as a halting stage on the road to a complete reorganisation of the communications industry in 1976. The whole question of the survival of newspapers and of television and radio companies is an absolute imperative for Government examination in a country which is still striving to become more democratic.

12.57 p.m.

Mr. Alexander W. Lyon

With the leave of the House, I will try to reply to a number of the points raised. Many are strictly Committee points which it seems we shall have to discuss at some length because they raise considerable issues. I shall try to address myself to the issues of policy raised and to give some kind of assuring reply.

I emphasise again that we are open to persuasion on any matters in the Bill and that we shall listen with care to what has been said today and will be said in Committee. There are some matters, however, on which the Government have formed clear views and it would be wrong to lead hon. Members to think that we should be easily swayed from the position that we have taken.

Let me begin with the somewhat acid suggestion of the right hon. Member for Bournemouth, West (Sir J. Eden), in an otherwise generally approving speech, that somehow or other because there has been a change of Government there might be a change of attitude towards the control by government of broadcasting content. Of course there is no such intent. It would be against the convictions of most of us that there should be such intervention.

It brings into play the point made by my hon. Friend the Member for Blyth (Mr. Milne) about the power of the IBA. He went rather wider than the issue in the Bill in regard to the power of the IBA to control relevant income and relevant expenditure, which is a matter which we shall have to discuss in Committee. My hon. Friend sought to deal with the power of the IBA over the content of programmes. But it must follow that if one is to say that the Government have no right to intervene in the content of broadcasting, somebody somewhere should have a responsibility to the public to do so. The way in which this has been done in the past—although this may not happen in the future, after we have considered the whole strategy of broadcasting—is that IBA and the BBC governors have carried the public responsibility for content. It is right that they should exercise this responsibility, otherwise the public will not have confidence in them.

The fact that we have decided in the Bill to have that degree of confidence in the IBA is reflected in the way in which its powers are set out. Our experience over the years has been that the IBA carries out its responsibilities efficiently and well and that it has gained the confidence of public and broadcasters. There have been criticisms of detailed programmes, but overall there has been confidence in the IBA. The Government can now accept that we should allow the IBA to have these wide powers in determining relevant income and relevant expenditure for the purpose of assessing profits. We have proceeded on that basis and it would be difficult to change that structure.

Mr. Milne

This is a vital point. Nobody criticises the overall watchdog role adopted by the IBA to television. Nevertheless, in a democracy we cannot leave the matter entirely to the authority. This was why we first suggested an inquiry, and there is also the point that we are often told that, since the IBA has overall jurisdiction in day-to-day matters, we cannot ask Questions about those matters or debate them in the House. This surely is where the IBA must come back to the House.

Mr. Lyon

My hon. Friend has a public right and duty, as indeed has every other hon. Member, to express his views as a representative of the public about what goes on in broadcasting, and in that way to condition public opinion about it. This obviously is reflected in the attitude of the IBA and of the governors of the BBC. I hope that that is the right balance. It would be wrong for us to go further and to say that we should take power to intervene in what goes into the content of broadcasting. That would give to the Government a power which most of us would not accept was right. I think therefore we have struck the right balance.

The right hon. Member for Bournemouth, West is surely the last person to suggest that the Government might have tried to intervene when it was he who, in the course of the Cinematograph and Indecent Displays Bill, tried to bring pressure on the broadcasting companies on the content of programmes. I noted what was said on that Bill by my hon. Friend the Member for Crewe (Mrs. Dunwoody) but, as my hon. Friend the Member for Derby, North (Mr. Whitehead) well knows, I was not uncritical of that Bill. The fact that I am now in the Home Office may tend to reassure her on that point.

On the subject of personnel, it is right that persons who are now carrying out the Civil Service functions in broadcasting are substantially those who undertook that task when these matters were presided over by the right hon. Member for Bournemouth, West. There has been a movement of personnel, but the Bill is in the hands of my right hon. Friend the Secretary of State for the Home Department. It is quite right that that should be so. Therefore, my hon. Friend the Member for Crewe should not try to draw too quick a conclusion from the fact that a Bill introduced by a Department under one Government necessarily means that that is a condition of mind among civil servants in the Department concerned. It might be that it was conditioned by the political masters of the Department.

Mrs. Dunwoody

I think I made it perfectly clear that I was not seeking to impute to civil servants responsibility for the decisions taken by their political masters—although my own experience leads me to believe that they are usually not uninvolved in the decision-making process. Whichever way one looks at the matter, the change of responsibility seems to me to imply a downgrading of one of the most important forms of communication. I repeat that I regard that sort of change as unhelpful at present and indicative of a movement in the wrong direction.

Mr. Lyon

I appreciate my hon. Friend's fears and we shall do our best to try to assuage her doubts. She will have to judge from experience. We are as conscious of the difficulty as she is, but I do not think that she will have much cause for alarm.

On the issue raised by the right hon. Member for Bournemouth, West—whether we still accept the concept that the IBA should not be accountable in the courts for the decisions made on relevant income and relevant expenditure—the answer is in the affirmative, as we are at present persuaded. We shall listen to all the arguments which my hon. Friend the Member for Derby, North suggests will be raised in Committee, but there is a case for saying that on the whole the IBA should not be the final arbiter.

A licence is given to contractors to make money out of a monopoly of a form of broadcasting. At one stage it was defined in a classic phrase as a licence to print money. It may no longer be quite that, but none the less on the whole a substantial return is reaped and it is right that a substantial rent should be paid for the privilege. A decision about the rent is not one to be equated in terms of a fine tuning of justice, but it must be given as an overall balance which leaves everybody with a sense of fairness. That is the attitude of the Bill and of the IBA in calculating what the levy should be.

On that basis we say that the IBA should be left to deal with the matter as it sees fit in its dealings with the companies. If there is a dispute, its word on the whole should be final, but if it seeks to use its power—and none of us feels that it will—in such an arbitrary manner that it could be said that it had not applied the principles of natural justice to the way in which it had acted, the contractors could have recourse to the courts by applying for a writ of certiorari to ensure that the authority applied itself fairly to the issues involved. I repeat that nobody believes that that is likely to happen because criticism by the general public would be an added restraint on the IBA's powers. There will be difficulties from time to time, and this is at best a rough and ready way of dealing with the matter, but it is a way which has given justice in the past and, we hope, will do so in the future.

Mr. Jeffrey Archer

I am sure that the hon. Gentleman will come to the question of carrying forward losses, but I wish to put this point to him now. It is said that there are still big profits to be made, and I accept that. A company may win year after year. However, if it loses badly in one year, it may be out completely. That is the fear of the smaller companies, that if they have one really bad year it will finish them. Whatever their good years may be like, if they are not allowed to carry losses into the good years, there will be trouble.

Mr. Lyon

I see the force of that argument, and I am coming to it. No doubt, we shall have to consider it at some length in Committee.

In the context of what I have just been putting to the House, one has to recognise that the companies are in a fairly privileged position.

Mr. Archer

Yes.

Mr. Lyon

The experience of commercial broadcasting since its introduction has been that, on the whole, the companies have made substantial sums of money. If in this calendar year they have run into a rather more difficult patch, because of circumstances—spoken of rather bravely, I thought, by a Conservative, the hon. Member for Louth (Mr. Archer)—which revealed how badly our economy has been doing in the recent past, that has to be set against the broad conspectus of fairly substantial profits throughout, and it must be set against this further consideration, too.

The old levy would not have taken any account of a company's losses in a particular year. Because it was based on advertising returns, the company would have had to pay the levy just the same. In a loss-making year now, however, companies will not have to pay any levy at all.

To go further and say that, in addition, they ought to be able to set losses against any future substantial increase in profit seems to me to go a good deal further than either the previous Government wanted to go or this Government want to go. It is a matter for the companies to calculate as a commercial risk, recognising that, after they have entered into their contracts, there may well be occasions when they will make losses.

The difficulty in regard to passing on losses, it seems to me, is that the situation here is different from that of the ordinary commercial company paying taxation, where the carrying forward of losses is allowed in certain circumstances. For that reason, all Governments have made plain that the levy is not taxation and has to be clearly distinguished from it. It is the rent for the use of a privilege, which is widely desired commercially and which is fought over, as we saw in the last allocation of contracts, by large numbers of people who want to come in. This is one of the considerations which companies will have to take into account.

That being said, however, we shall look at the problems this year. Even though it may have only interim significance if the substantial inquiry which has been called for actually materialises, I doubt that it would be right for us to settle the rate of levy and the way in which it is collected simply in terms of the financial conditions this year. We do not know what this year will bring, anyway.

Perhaps I should add in parenthesis on that point that I think that I may have misled the right hon. Member for Bournemouth, West into thinking that we had figures showing that the situation this calendar year was more optimistic than some of the figures so far produced have suggested. I did not say that. What I said was that the difficulties in the first three months of this year, to which several references have been made, were referable to the economic circumstances of the three-day week and the close-down at 10.30 p.m.—for which, I may add, the right hon. Gentleman's Government had some responsibility.

The way in which matters will progress during the rest of the year depends upon the state of the economy and the response of advertisers. Perhaps, for the reasons indicated by the hon. Member for Louth—if there are shortages of materials and difficulty in meeting orders—advertising may fall off. All one can say is that one hopes that that will not be so, and it seems possible at least, if not probable, that there will be an improvement, and we need not fear that most of the companies at any rate will make losses this year.

Overall, I think it right to say that the companies do make profits and will continue to make profits. When they make a loss, they will not pay the levy, and we have allowed for this to some extent in the rate at which the levy will be charged. After all, with 66.7 per cent. going in levy, the rate of return on capital left will be higher than was recommended by the National Board for Prices and Incomes. Although the right hon. Member for Howden (Sir P. Bryan) thought on the last occasion that this was still not very much, it is nevertheless a substantial return on capital. Indeed, it is rather more than he estimated. That is allowed for in the sense that, occasionally, there may be losses which the companies will have to bear.

I shall not take the matter further now. I recognise that I have not replied to all the questions raised, and I hope that I shall have opportunity to do so in Committee. It would, I am sure, seem impertinent if I were to congratulate my hon. Friend the Member for Crewe on a maiden speech. If she is a maiden, she is a maiden of perennial youth, and one cannot regard her as a maiden in parliamentary experience. I remember her work at this Dispatch Box in the previous Labour Government, and I am glad to see her back in the House. I know that she will contribute much to our consideration of these matters, giving us the value of all the experience which she has accumulated since then.

There were two other speeches made by new Members, by my hon. Friend the Member for Edmonton (Mr. Graham) and the hon. Member for Chertsey and Walton (Mr. Pattie). It was not possible for me to know whether either was in fact a maiden speech. Both my hon. Friend and the hon. Gentleman showed such assurance and spoke with such experience and conviction that there was no hint of the usual hesitation of the maiden speaker. All I can say is that, if theirs were maiden speeches, they impressed me greatly, and I look forward to hearing from both of them again.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).