HC Deb 24 June 1980 vol 987 cc433-7
Mr. Whitehead

I beg to move amendment No. 86, in page 19, leave out lines 31 to 33 and insert 'and at the expiry of eight years from the time of making any contract, the contract shall be treated as terminated; but subject to subsection (1)(a) of this section, nothing shall preclude the Authority from entering into a new contract with the same programme contractor provided that it shall have given public notice of the termination of the proceeding contract and invited tenders for this new contractual period.'.

Mr. Deputy Speaker

With this we may take the following amendments: No. 87, in page 19, line 37, leave out ' if they they think fit.'.

No. 89, in page 20, leave out lines 3 to 14.

Mr. Whitehead

I make no apology for detaining the House for a few moments longer on this last series of amendments. This was the major piece of unfinished business when the Bill came out of Standing Committee E. The reason for that was that there was then, and there persists now, an ambiguity in the extent to which we understand there is to be a full determination of the contracts held by radio and television companies, particularly the former, at the end of the eight-year period that will now be the period specified in the Act.

In Standing Committee the Minister responded to earlier remarks of mine, when I drew his attention to the difference between what appeared to be the Home Office view and the published statements of Mr. John Thompson of the IBA, by defining for my hon. Friend the Member for Halifax (Dr. Summerskill) and myself exactly what the new contracts were. At the eleventh sitting of the Committee he told my hon. Friend the Member for Halifax that a rolling contract after all its rolls have run, must be no more than eight years, after which it is treated,… as being at an end, for the purpose of further consideration of the opinion of the public with a view to whether it should or should not be renewed."—[Official Report, Standing Committee E, 28 April 1980; c. 546.] That still leaves open the question whether public opinion about the renewal of the contract is one that obtains in terms of a decision to readvertise the franchise—opening it up to fresh tender—or a decision simply to go on as before with the existing contractor.

1.45 am

When I raised this question with the Minister at the preceding session of the Standing Committee he said that the arrangement as he understood it was that the break clause meant what it said. He said: I assure the hon. Gentleman that no teleision or radio company will be able by any device or means to have a contract for more than eight years if this Bill reaches the statute book, without the contract being subjected to the scrutiny set out in clause 23, and in particular, to the procedure for ascertaining the opinions of the public. At the end of that eight years the IBA will have to decide whether or not to renew the contract, to whom to give the contract, and so on."—[Official Report. Standing Committee E, 22 April 1980; c. 498.] What was not said there, and has not been said to this day, is whether that obligation means that the contract shall be open for public competition once more.

When we consider how lucrative these contracts are we realise that a large number of the original groups of radio contractors are already paying secondary rental and will have been immense financial successes by the time the eight years are up. In that position it is surely right that the public should not merely express a view upon the performance of these contractors—particularly in view of the fairly diaphanous way in which the public meetings appear likely to be conducted—but should know that a contract is to be readvertised.

Mr. John Thompson, for whom I have the highest esteem—I think that he would not mind my saying this to the House—has told me that he will go as far as the letter of the law. He will do what Parliament says he must do. But when he addressed a public meeting in Bristol recently he would go no further than the phraseology that the Minister used in Standing Committee.

Mr. Thompson said that when the period of eight years was up: The authority at the end of that period will be required under the Act of Parliament to carry out what is described as, roughly speaking, a major review of the franchise situation. What does that mean? Does it mean that the authority will have an obligation not merely to review how the contractor has gone on, and invite public comment upon his performance, but to invite fresh tenders in the way that has always happened—and will happen under this legislation for the television companies—or would it be permitted, in some circumstances, not to allow public meetings at all, which is possible if we retain the phrase "if they think fit"? I suggested in amendment No. 87 that that phrase should be struck out.

If there is a public meeting, would it be open to the authority to go on with that existing contractor with no public opening up of the tender to competition? If that is the situation, I submit that it is very unsatisfactory. These franchises—the air waves—are a public asset, and as such they should be open from time to time not merely to public scrutiny but to competitive re-examination, exactly as has been the situation in television.

It will be difficult enough, with the rolling contract procedure and the immense accretion of influence and interest that the larger television and radio companies have, for any challenger successfully to emerge. To exclude the possibility that a challenger can compete on anything like equal terms by not making it clear that the franchises must be put up for readvertisement seems to me not to be in the spirit in which broadcasting legislation of the past 20 years, regulating the commercial side of broadcasting, has always been conducted.

I hope, therefore, that the Minister will say a little more today than he said in Standing Committee and will indicate that in future we shall see, after eight years, contracts readvertised.

Mr. Brittan

I shall deal first with amendments Nos. 87 and 89, and then move on to amendment No. 86.

I would not advise the House to accept amendment No. 89 because if it were passed I think that it would make it very difficult to be clear what the provision was with regard to the rolling contract system, which we discussed in Committee and which I think is to the benefit of the broadcasting system as a whole.

I would not advise the House to accept amendment No. 87, because, although of course we accept that public meetings have a valuable role to play in the consultation procedures prior to the awarding of contracts, I do not think that they are essential on every occasion, and in some cases public opinion surveys or the work of local advisory committees give sufficient indication of public feeling.

Much the most important amendment in this group is amendment No. 86 which seeks to ensure that when the contract has expired at the end of eight years, before a new contract is entered into not only is public opinion ascertained by means of a meeting or in other ways, but contracts for both ILR and ITV are readvertised. I accept that that is, in principle, desirable. Even on those occasions when there is, in effect, no competition and no alternative coming forward, I think that it is right that the exercise should be gone through. I think that it is in principle right that there should be a readvertising of the franchise of the particular area, whether it is in relation to television or sound radio.

Therefore, I see the value of reinforcing a practice that is very general—indeed, almost universal with television—with a statutory requirement, which I am ready to accept on behalf of the Government, in principle. However, I think that amendment No. 86 as it stands is not the appropriate vehicle for doing that, because as drafted it leaves unclear the position when the IBA has entered into a rolling contract. I think that flexibility in allowing such rolling contracts is desirable.

We therefore undertake to an amendment in another place which, while preserving the position on rolling contracts, meets hon. Members' wishes for a requirement on the IBA to open up each contract to competition at intervals of not more than eight years.

Mr. Whitehead

I am grateful to the Minister. I am very glad that this part of the Report stage is ending on that happy note.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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