§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]4.20 pm
§ The Secretary of State for the Home Department (Mr. William Whitelaw)
The object of this debate is to give the House, as the Government have promised, an opportunity to contribute to the wide-ranging public discussion that is already going on about the future of cable systems: both the broadcasting aspects covered in the Hunt report and the various other aspects of the question. It is also the Government's intention to use the debate as the occasion for indicating to the House and the public the broad framework within which we see cable policy developing.
I need not stress the significance of the subject of today's debate. Cable technology is with us. The question is not whether to adopt it, but how to adapt it to best advantage for our economy and way of life; how to gain the future benefits that new technology can bring, and yet avoid damage to valued national traditions and institutions.
As Home Secretary my particular concern with cable systems is where they impinge on broadcasting policy, but there is much more than that to cable policy. There is the whole area of interactive services such as teleshopping, telebanking, and burglar alarms. There are technological questions relating, for example, to the rival merits of tree-and-branch and switched-star systems, coaxial cable and optical fibre. I shall not embark on a detailed account of those matters, but shall leave them to my hon. Friend the Minister for Industry and Information Technology, who will conclude the debate for the Government.
In setting the scene for today's debate, I am struck by the rapidity with which public awareness of cable has developed. A year ago, perhaps few of us had any keen awareness of cable, of its existing function—largely broadcast relay—or of its future potential in both entertainment and advanced information services. The increase in interest and understanding over the past 12 months is indeed striking. Many conferences, seminars, articles in the press and broadcast programmes have made a big contribution to a growing public debate.
More specifically, the publication in March of a report on cable systems by the information technology advisory panel, set up by my right hon. Friend the Prime Minister, was an important stimulus. The panel foresaw welcome opportunities for this country—opportunities for employment, industrial growth, technological development and overseas trade—that could lie in an expansion of the extent and scope of broad-band cable systems. That report, welcomed wholeheartedly in some circles, prompted doubts and reservations in others, chiefly perhaps because it was seen as having profound implications for our system of broadcasting which the panel—as it freely admitted—had not been able to tackle.
Accordingly, on the day of publication of the panel's report, I announced the setting up of an inquiry, under the distinguished chairmanship of Lord Hunt of Tanworth, to consider those broadcasting implications. The inquiry was asked:To take as its frame of reference the Government's wish to secure the benefits for the United Kingdom which cable technology can offer and its willingness to consider an expansion of the cable system which would permit cable to carry a wider 412 range of entertainment and other services (including when available services of direct broadcasting by satellite), but in a way consistent with the wider public interest, in particular the safeguarding of public service broadcasting.
§ Mr. John Gorst (Hendon, North)
In the context of carrying all four existing channels, will my right hon. Friend make it clear to the Independent Broadcasting Authority that a fourth channel that is composed of bad language, political bias and many other undesirable qualities should not be carried by a cable television system?
§ Mr. Whitelaw
My hon. Friend will know that that is not part of this debate. However, I recognise that there is widespread public concern about what my hon. Friend has said. No doubt the members of the IBA who are responsible for the programmes on that channel will note the widespread public concern expressed both by my hon. Friend and throughout the country.
§ Mr. Whitelaw
That is the right hon. Gentleman's opinion. I can only say—from what has been said to me and from correspondence that I have receixed—that concern is widespread. I am entitled to my view, and I believe that that is so. I wish to leave the matter there, but I can tell the right hon. Gentleman that the fourth channel has generated considerable concern and correspondence, as the Home Office well knows.
Concurrently, groups within Whitehall were set up to study other aspects—economic and industrial implications, technological matters, and the interaction with other parts of our telecommunications policy. The Departrnents concerned have consulted widely with industry and outside organisations concerned.
Lord Hunt, Sir Maurice Hodgson and Professor Ring deserve our thanks for the speed and diligence with which they worked in order to complete their complex task within the six months allotted to them. Their report was published on 12 October. Barely three weeks later, the Gracious Speech signified the Government's intention thatProposals will be prepared for the development and expansion of cable systems.In today's debate, the Government take the first steps towards fulfilling that commitment. I say "the first steps", because today's debate has a dual object. The first object is to indicate to Parliament, and to others concerned, the broad lines of the Government's approach to cable. Secondly, we wish to give the House the opportunity to express its views both on the broad framework of policy and on the many matters of comparative detail, albeit important, that the Hunt report raises.
§ Mr. Phillip Whitehead (Derby, North)
Will the right hon. Gentleman confirm or deny that the Hunt committee was asked to accept, as one of its assumptions, that there had to be a split between the carriers of the cable systems and the providers of programmes?
§ Mr. Whitelaw
The committee was allowed to consider all the matters involved, as its terms of reference made clear.
On a number of these matters my intention today is not to announce a Government preference, but simply to identify the issue and focus discussion on it. Thereafter our aim is to publish, in the early part of next year, a White Paper. This will set out a detailed scheme for cable 413 systems as a basis for legislation as soon as possible, although clearly not in the present Session. As I shall explain later, that does not necessarily mean that nothing can happen until a Bill has been enacted. There are possibilities of interim action, to which I shall refer.
§ Mr. Alexander W. Lyon (York)
It has been widely reported that the Prime Minister will make an announcement about that aspect of cable at a public meeting next Tuesday. How can it be said that we are being given the opportunity to consult and debate if the right hon. Lady intends to decide for us next Tuesday?
§ Mr. Whitelaw
Frankly, my right hon. Friend the Prime Minister will not decide for us next Tuesday. She will make a speech on the matter. I am sorry—I should have said Wednesday. However, whether the day is Tuesday or Wednesday, my right hon. Friend will not do so. I have made it clear that we are having a debate to hear the views of the House. I have said that the Government will publish a White Paper after the debate. If I say that, it is what I mean. I assure the hon. Gentleman that that is the way in which the Government intend to proceed. It is important to make that abundantly clear. Otherwise, people may feel that this debate is not worth while. It is. By referring to some of the problems, I hope to show that I recognise the importance of discussing these matters in the House and of deciding on many of the extremely difficult issues involved.
§ Mr. Ian Wrigglesworth (Thornaby)
Is the right hon. Gentleman saying that he intends to follow the recommendation in paragraph 98 of the Hunt report, about which many hon. Members are unhappy, which suggests that, in the absence of the time for legislation, progress should be made without the authority of the House behind it?
§ Mr. Whitelaw
I promised that I would raise that issue, and I shall do so later. The House will decide this matter. I shall listen to the views expressed today and a White Paper will be published in February. No decisions on how we shall proceed will be taken until the House has pronounced its opinion and has had another chance to look at the White Paper. That is surely a fair way to go forward.
Starting with the general aspects of cable policy, I begin by declaring the Government's belief that opportunities should be created for the development of cable systems and their intention to provide those opportunities. By providing opportunities, we mean removing unnecessary obstacles and restrictions; creating an appropriate statutory framework that encourages and does not constrict development; and laying down such minimum technical and other standards as are necessary for orderly growth in the general interest.
We want cable to be free to provide a wide range of programmes of entertainment, information and education, and interactive services, but we do not mean to prescribe a detailed plan or to create a new area of public investment. Here, as elsewhere, we believe that in many respects private investment and market forces should determine the pace at which and the directions in which there is development. The Government accept the Hunt committee's recommendation that there should be no mandatory separation between the cable operator and the cable provider.
§ Mr. Gwilym Roberts (Cannock)
Does the right hon. Gentleman accept that the technical specifications are all important and that, if this development is to depend on market forces, we shall have a patchwork of cable systems that will not relate to each other? If so, we shall not have the interactive network that he mentioned. It is essential that the Government, apart from being neutral, should at least lay down some hard technical guidelines.
§ Mr. Whitelaw
As I said earlier, my hon. Friend the Minister for Industry and Information Technology will deal specifically with the point raised by the hon. Gentleman.
Secondly, we do not believe in totally random developments. There is a public interest to be asserted. There is the interest of consumers—those who will use cable services and those who will continue to rely on conventional broadcast services—and the interests of the cable providers and operators.
With the Hunt report, we believe that a statutory cable authority is needed—
§ Mr. Charles R. Morris (Manchester, Openshaw)
Bearing in mind recommendation No. 46 of the Hunt report and the fact that the envisaged cable authority will award franchises and monitor performance, to what extent will the duties of that body differ from the functions and powers of the IBA?
§ Mr. Whitelaw
The House and the Government will have a chance to consider the extent to which it differs when we debate the White Paper and, thereafter, any legislation. Part of the reason for the debate is to decide the sort of authority that we ought to have.
§ Mr. Whitehead
The Home Secretary said that the Government accepted the Hunt recommendation that there should be no separation between the cable provider and the programme provider, but he did not say why. Surely we have a right to know.
§ Mr. Whitelaw
I said "no mandatory separation", and that is what I believe—[HON. MEMBERS: "Why?"] Simply because I believe it to be the correct decision—[AN HON. MEMBER: "That is a circular argument."] It may be a circular argument, but it is none the worse for that, because circular arguments are sometimes very good.
With the Hunt report, we believe that a statutory cable authority is needed to consider applications to cable, to award franchises and to exercise sufficient but not excessive supervision over the services—programme services in particular—that cable operators will provide. Again with Hunt, we take the view that a new authority is required. We do not favour adding the function to those functions already exercised by the IBA.
In reaching that conclusion we are far from ignoring the willingness of the IBA to undertake this new function or the pointers in favour of its doing so. Nevertheless, we are persuaded that the regulation of cable will be a new task requiring a new approach, and we believe that this newness is best achieved and marked by setting up a new authority.
§ Mr. Whitelaw
I am afraid that I can give no such indication. This will depend entirely on the type of authority that we finally decide to set up, on exactly what functions it will have, on exactly how many people it will need to perform those functions, and on many other matters. Were I to pronounce on them now, I would be denying the House the right to say what sort of authority we should have. I cannot, therefore, give my hon. Friend the answer for which he has asked.
Next, there is the framework in which the authority will operate, the tasks that will fall to it and the style that it should seek to establish. The Government are broadly in accord with the general approach and particular recommendations of the Hunt report.
On the authority's style and approach, we endorse the Hunt committee's view that cable should be seen—and we hope it will develop—not as another form of public service broadcasting, but as something different from but complementary to it. This will require a different approach to regulation from the form that the IBA exercises in relation to ITV. However, it would be a mistake to suppose, as some people seem to have done, that the Hunt committee or the Government envisage a "toothless" authority. Through its franchising and refranchising function, its monitoring of cable output and its reserve powers of intervention, if it became worried about an operator's performance it would be able to exercise very considerable influence.
§ Mr. Hattersley
The nature of such intervention is crucial to the debate. As I recall, the Hunt committee does not talk about the reserve powers of intervention between franchises. What does the Home Secretary mean by "reserve powers"?
§ Mr. Whitelaw
I stand to be corrected, but I think that Hunt does talk about reserve powers. It will be for the House to decide, after a long period of discussion, including discussion on the White Paper and the legislation, what powers the authority will have. It is important that we should not decide now exactly what we want the authority to do. As always, I stand to be corrected by the right hon. Gentleman, but on this occasion I think that I am right.
As I indicated earlier, it is not the Government's intention in this debate to take the Hunt recommendations in detail and give a decision or even a view on each. That stage will come later—[HON. MEMBERS: "Wednesday?"] I hope that I have shot that bird, if hon. Members know what I mean.
§ Mr. Whitelaw
What I mean is that the argument that all will be announced on Wednesday is not true. I hope it is understood that way. We shall then promulgate our detailed proposals in a White Paper. But I believe it will be helpful to the House if I comment briefly on certain Hunt recommendations that have attracted particular interest, and on which the Government would welcome the view of hon. Members.
The specific task of the Hunt inquiry was to considerthe safeguarding of public service broadcasting".416 A number of its recommendations contribute to that object—for example, the whole framework of a franchising and supervising authority, which the Government believe is right. At a more specific level, we think it right that cable systems should be required to carry the public service broadcasing programmes transmitted by the BBC and IBA.
Another important safeguard for public service broadcasting is that cable operators, like broadcasters, should not be able to obtain "exclusive rights" for national sporting events. The mechanism of such a restriction, and the list of events to which it should apply, will need careful working out, but the importance of the principle is clear.
The Hunt report recommended a ban "for the time being" on "pay-per-view". That is a system under which the subscriber can be offered for payment particular individual programmes—for example, sporting events outside the ban on "exclusive rights". The public service broadcasters, who have to finance channels as a whole, see a particular threat in this kind of programme finance. They would find it hard to compete, so that either general programme budgets would be starved or the general viewing public would be deprived of particular key events or pieces of entertainment. Conversely, cable interests see "pay-per-view" as an important source of finance. They suggest it could be confined to programmes which otherwise would not be seen on the television screen at all. These are difficult matters requiring further thought, on which we shall welcome the views of the House. It may be that some way can be found of giving cable operators and subscribers the benefits of some limited form of "pay-per-view", but I stress that any such solution would need to add to what is available through public service broadcasting, not subtract from it.
"Pay-per-view" apart, Hunt recommended that cable should be able to finance itself by rental payments, subscription, advertising and—with safeguards—sponsorship. The Government accept this recommendation. The main point of controversy here is whether, as Hunt proposed, cable should, at least for the present, be unrestricted as to the amount of advertising shown. That would be in contrast to ITV and independant local radio, where the number of minutes in an hour allotted to advertising is regulated by the IBA. Clearly, on some cable channels—for example, one dedicated to "classified advertising"—a time limitation would be out of place, but other channels may be of a more general entertainment type comparable with ITV. Hence the ITV companies argue that they should not be placed at a disadvantage. We shall have to consider whether restrictions should be imposed on that sort of cable channel; whether the present restrictions on ITV should be modified or removed altogether; or whether different regimes can be justified.
We shall also have to consider how to give effect to what seems the sound Hunt recommendation that the IBA advertising standards and code should apply to cable advertisements. The IBA code is operated through pre-vetting of advertisements, in some cases by the programme company, but more usually by the Independent Television Companies Association, which takes much of the load off the IBA. It is difficult to see how it could work retrospectively, as Hunt suggests.
An issue on which a sharp divergence of view has already developed is whether there should be specific requirements regarding the amount of British and other 417 European Community material to be shown on cable. The BBC and ITV are obliged to show a "proper proportion" of British and European Community material—interpreted in practice as 86 per cent. Hunt considered that such a requirement would seriously inhibit cable operators and was inappropriate. However, the cable authority should encourage the production and use of British material on cable. Certainly the current BBC and IBA requirements could not, as they stand, be applied to cable. But if cable were placed under no restriction, it would be necessary to consider whether the present restrictions on the BBC and ITV—which undoubtedly add to their programming costs—could be maintained.
§ Mr. Barry Sheerman (Huddersfield, East)
This is the point about which I have received most letters. Many people are seriously worried that we shall be entering an era of wall-to-wall Dallas, which is a serious matter to contemplate. Will the Home Secretary give an assurance that this matter will be seriously considered? Compared with other industrial nations, we are good at producing television. The Japanese allow only five per cent. of foreign content in their programmmes. It is a pity that we do not insist on such a percentage of video recorders coming into Britain.
§ Mr. Whitelaw
In saying that there was a sharp divergence of view, I must make it clear that this matter will be studied by the Government and by the House with the greatest care. The position in other countries will also be considered. I can give the hon. Gentleman the assurance for which he asks.
In the area of programme content, attention has concentrated on the risk of pornography being carried on cable. The main Hunt recommendation here is that cable operators should be subject to the same requirements as the BBC and IBA to ensure that their programmes do not offend against good taste and decency, encourage crime, lead to disorder or offend public feeling. The BBC and IBA are required to take special care with regard to programmes broadcast when children are likely to be watching. Certainly there are considerable arguments about the success of the BBC and IBA in maintaining these standards at the present time. Be that as it may, it seems clearly right that no less a requirement should attach to cable programmes. It is an aspect of cable operation in which, no doubt, the cable authority will find itself taking a close interest.
The BBC and IBA interpret the taste and decency requirement, and their obligation to have special regard to programmes shown when young people are watching, as allowing the showing, late at night, of programmes which are unsuitable for children, including some—but not all—X-certificate films. Hunt recommended that this restriction as regards time need not be applied on a cable subscription channel which had an electronic lock embodying a personal code, such as to enable the adult subscriber to control the programmes that children could watch, even in his absence.
§ Mr. Whitelaw
If I were to refer to my grandchildren, rather than myself, the answer would undoubtedly be 418 "Yes". The hon. Gentleman has a serious point. I was asked the question and I gave the honest answer. I am entitled to do that.
Furthermore, Hunt said that it was arguable whether, on such a channel, the ordinary taste and decency requirements need apply at all, provided that films could be shown only if they had been approved for public exhibition through the film censorship system. This proposal, which, like the rest of the scheme, can be seen as enlarging individual choice, has undoubtedly caused anxiety—not to say scepticism—in some quarters, and will require further consideration. It is not integral to the scheme as a whole.
There are other specific recommendations to which I could devote time, but it will probably be more helpful to the House if I look ahead towards implementation of a programme of cable expansion. I have spoken already of a White Paper in the spring; of legislation, though not in this Session; and of the establishment under statute of a new cable authority with franchising and supervisory functions.
That is an orderly way ahead, but it will take time. I recognise that there are those who will argue that we cannot afford to wait. There are consortia already working up plans. There are existing cable operators anxious to be relieved of their requirement to carry BBC and IBA programmes on their cable—they would provide off-air reception instead—so that they can offer revenue-earning services on their existing obsolescent systems.
The question is asked "Can we now go ahead on an interim basis?" Technically, the answer is "Yes, we could." There are licensing powers—those under which cable operators are licensed to relay BBC and IBA services and to provide the existing subscription pilot schemes, and the powers of my right hon. Friend the Secretary of State for Industry. However, these powers have been devised and used in a context very different from the one that now confronts us.
We now face the prospect of large and, it must be hoped, profitable investment, competition for franchises, and wide-ranging programming. The Hunt report is surely right to see it as the task of a cable authority to shoulder the responsibilities for franchising and programme supervision, thus distancing the Government from these decisions in much the same way as the IBA has successfully done with regard to ITV. If the cable authority approach is the right and necessary one, I see great difficulty, even for a limited interim period, in managing without an authority and doing it all through ministerial licensing powers.
There is a halfway house, hinted at in the Hunt report. Once a detailed scheme for cable had been published in a White Paper and given parliamentary authority, a future cable authority could be appointed in the form—technically—of an advisory committee. This advisory committee, with its staff, could begin work on some initial franchising of new systems and of new services for existing systems. Formal effect could be given to the advice of the advisory committee through the granting of ministerial licences.
While this approach would hasten work on cable franchises, it has obvious disadvantages. In particular, it would leave Ministers with formal responsibility for matters—both franchising decisions and programme content—which we, like Hunt, believe are properly 419 entrusted to an independent authority. The Government will be interested to hear the reactions of right hon. and hon. Members and others to it.
Our task today, as I said at the outset, is not to debate the pros and cons of whether cable systems should exist, but to accept the fact of the technology and to determine how to use it positively and to best advantage. The Government, for their part, are keen to develop plans for the expansion of cable that will enjoy widespread support and inspire investment confidence. I hope I have made the broad framework clear. Much of the detail requires further thought, but, backed, I hope, by support in the House today, we shall press ahead and bring a White Paper before the House in the early months of 1983.
§ Mr. Roy Hattersley (Birmingham, Sparkbrook)
I begin by echoing the classic understatement contained in the opening lines of Lord Hunt's inquiry into cable expansion and broadcasting policy. The document starts by saying:The decisions which must be taken in relation to cable expansion are of great significance.No one will be disposed to argue with that. The expansion of cable technology and all that it implies for broadcasting, for industry, for communications and, therefore, for society as a whole, is absolutely irresistible. No one on the Opposition Benches has the slightest wish to stand in the path of history. The error of the Luddites was that they wished to smash the new machinery. We want to accept and welcome the existence of the new technology, but to make sure that it works on behalf of the community as a whole and not simply in the interests of a narrow group of speculators.
I must confess that I was initially prepared to express fears which my hon. Friends behind me have already offered to the Home Secretary that every decision has been taken and that all we had to do was to wait until Wednesday, the Barbican and the Prime Minister, and every dot and comma of this policy would be announced. I am delighted that the Home Secretary has unequivocally made it clear that this is not the case. I accept without reservation that if he says that that is so, it is so. The right hon. Gentleman will, however, forgive me for saying, as good naturedly as I can, that for a policy that is not decided, it contains a number of immutable elements that were announced to us today.
I give two examples. One is that there should be no statutory separation between cable companies and programme companies. I disagree. The other is that the statutory authority eventually created should not be the IBA. I agree. However, whether I agree or disagree, the Home Secretary will concede, I am sure, that some of the fundamentals of policy have been decided before the House was given the technical opportunity for the consultations that the right hon. Gentleman claims are taking place today. My fear about the policy is that the Government's fundamental position on operating a virtually laissez-faire cable system was decided before the Hunt committee was set up.
It seems to many of us that as soon as the Information Technology Advisory Panel which, described honestly, is simply a conglomeration of vested interests had prepared the way for unregulated cable systems, the Government decided to act within that framework. There was a brief and limited report from Lord Hunt. We are now going 420 through a token period of consultation. It is clear that the Government will press ahead along the laissez-faire lines which have been leaked to newspaper after newspaper and which the Home Secretary, in his statement, has confirmed categorically is the Government's intention. That is the only possible interpretation of the manner in which the Hunt committee behaved and the nature of its report.
I must say, with great respect to the three distinguished gentlemen who produced the document, that they so circumscribed their investigation that what they produced in the end was the most intellectually inadequate document of this sort that I have ever read—[Interruption.] The Secretary of State for Industry describes my comment as "Rubbish". I should therefore welcome a comment on the two points I wish to raise. The Home Secretary has been a great deal more reasonable and his actions a great deal more acceptable by democratic standards than the approach adopted by the Hunt committee. I refer to the possibility of introducing cable by the back door. The Hunt committee is the first statutory committee whose report I have ever read that has actually offered the Government the opportunity of bypassing Parliament. In paragraph 98, the committee actually says that, to fulfil all the obligations it thinks necessary,The new authority will need to be established by legislation.It goes on to say, in broad terms, that if the Government do not feel that they can get the legislation this Session, they may choose to operate under powers that Parliament provided for quite different purposes.
If the Secretary of State for Industry regards that as the way in which official committees should behave, he will astound hon. Members on both sides of the House. I can only be pleased that it is the Home Secretary rather than the right hon. Gentleman who is in charge of these things and that he has decided or has got near to deciding, I hope, that we are not to have cable by the back door but that if there is to be cable and the cable authority, then the Bill to provide that authority must be properly presented to Parliament.
There is another question concerning the Hunt committee's behaviour in this regard. Its report contains another example of what I must describe as its willingness to sing the Government's tune. In chapter 3 or page 8, paragraph 22, there is this extraordinary sentence:Although not within our terms of reference, the national common carrier model appears unlikely as it is inconsistent with the Government's policy".Clearly the examination of a national common carrier model was within its formal terms of reference. Any hon. Gentleman who reads page 1 of the report will find the terms of reference laid down by the Prime Minister, which make it clear that had the Hunt committee wanted to consider the national common carrier model it would have been entitled to do so. It did not do so, because it knew that that was not what the Government were after. It seems extraordinary that we have an official committee of this type saying in its report that it produces for Parliament that it did not examine some options because to do so would have displeased the Government.
The Labour Party is in favour of a national common carrier. We believe that it should be run by British Telecom. That is the way to ensure that eventually we have a system laid that is appropriate to the nation's future needs rather than having a system that produces a quick profit in 421 some areas, and a diminishing return in others. That is the way to ensure that eventually, although not within the next five to 10 years, a national network is available for all the country.
I shall ask the Home Secretary a specific question about the national network. Can the Government tell us whether it is their belief that, under their laissez-faire scheme, the whole country will be covered by cable? At the Edinburgh international television festival, I had the pleasure and good fortune to hear the Minister for Industry and Information Technology. He said repeatedly that the Government's private enterprise scheme would eventually result in the entire country being covered. I must say in defence of this proposition that nobody at the conference believed it—not the programme makers, or those who wanted to make large profits out of cable.
The Minister's question time was made up almost exclusively of questions about how he could come to such a conclusion to which he blandly replied—the best description for the Minister in general is bland—that he was more optimistic than the rest of us, and had hope, confidence and faith.
I hope that between 9.30 and 10 o'clock we may have a little more than hope, faith, confidence and optimism, and that the Minister will tell us whether he thinks that his scheme will one day cover the entire country, or whether the Government are embarking on a cable system for limited parts of the United Kingdom.
§ Mr. Gorst
I hope that I can set the right hon. Gentleman at ease on this matter. He has nothing to worry about because if the Government are determined to accept the recommendations from Lord Hunt, the length of the franchise will be only about eight years and no one in private enterprise will come forward with any type of investment. The franchise needs to be at least 15 or 25 years.
§ Mr. Hattersley
At half-past nine the hon. Gentleman will find that the Minister is a good deal more optimistic and confident, and has a good deal more faith and hope, which he will wish the hon. Member for Hendon, North (Mr. Gorst) to emulate. However, I wish to hear what the Government believe about these matters, what they think will be the outcome of the scheme, and where they think cable will be laid.
My fear is that cable will be laid in only a few limited areas, where it is immediately profitable for cable to be put down. That will be particularly so if the Government will allow franchises to be given without requiring those companies that choose to lay cable in the most profitable areas to extend their enterprises into other areas nearby where the profit may not be as great but the need is virtually the same.
§ Mr. John Browne (Winchester)
Surely that is the answer. If an area is likely to be unprofitable, then it is likely that people in it do not want cable. Why lay in areas where the cable is not wanted? That is the whole point, and it is the freedom of choice that is being offered to the individual.
§ Mr. Hattersley
I accept that what the hon. Gentleman describes is a rough approximation of what will happen, 422 but I wish to know whether the Government support that view, whether that is what they want and whether they are with the hon. Member for Winchester (Mr. Browne) in his abrasive view that cable is for those who can afford it and for those companies that are prepared to market a cheap product in areas where it can be bought expensively.
§ Mr. Tim Brinton (Gravesend)
I am interested in the development of this argument, because, if we think back to the arrival of BBC television and then of ITV, we remember that many people could not receive either for years. Many could not afford colour television for many years either. Will the right hon. Gentleman limit advancement and progress on the basis that everyone has to have it at the same time?
§ Mr. Hattersley
That is wrong in two different ways. It is factually incorrect because only a very small proportion of people were unable to receive ITV after five years. Secondly, the hon. Gentleman must attempt to understand that the provision of cable in some areas, as I have attempted to demonstrate, not only denies the areas that do not have cable the programmes that cable is putting out. Because of the way that cable is likely to be financed, it will, in some areas where cable is not installed, deny listeners the programmes that they presently receive from BBC and ITV.
I give the hon. Member for Gravesend (Mr. Brinton) credit for having read the report, but from what the Home Secretary has said, both Hunt and the Home Secretary are only offering a cable limitation on national sporting events. That will mean that cable in prosperous South-West England will purchase some broadcasts that are normally transmitted to all the United Kingdom, and the broadcasts will not be available in areas where cable does not exist. The choice that the hon. Member for Gravesend is advocating is a denial of choice for some who already enjoy it.
Our fear is that if we are to have this patchy laying of cable in area by area, with no attempt at network, and our wish for a national common carrier run by British Telecom is the way to obtain the national—[HON. MEMBERS: "Ah".] Hon. Members must not sigh as if I had given away some extraordinary secret. I gave that extraordinary secret away 10 minutes ago.
Of course the Labour Party wants a national common carrier owned and run by British Telecom, because it will meet the needs of the community rather than meeting the needs of small areas of private profit. If we do not have the national common carrier, there will be two problems. One, which I have described, is the creation of two television nations, the prosperous areas having cable and the prosperous companies buying programmes that would otherwise be nationally distributed, and the non-prosperous areas being denied them.
There is a second problem, which company after company has honestly admitted when it has taken part in the innumerable seminars on this subject that have been a characteristic of our lives for the past six months. There will be some areas where the profitability of cable is so marginal that the companies after a year or so are teetering on the edge of viability. Then they will have to buy more and more low-cost, low-quality foreign films. That will happen if we do not have a national system but one that operates in various parts of the country according to the demand provided commercially in different regions.
423 If it is simply left to the free-for-all, the best understanding of what will come about is demonstrated and exemplified by the extraordinary lobbying that hon. Members from all parts of the House have had to endure during the past six months.
§ Mr. Hattersley
Of course, it is the duty of the trade unions and British Telecom to express their opinions on the matter. However, on no other subject have hon. Members on either side of the House been subject to the number of glossy booklets, offers of hospitality and promises of good things to come that they have been offered during the past six months while the cable franchises were discussed.
To those who are lobbying so hard I want to say two or three things on behalf of the Opposition. I suspect that the Government will go ahead with undue and irresponsible haste and encourage the creation of a generally unregulated cable system. What the Home Secretary said this afternoon made that clear. I suspect that the outdated coaxial cable will be preferred to modern fibre optic because it can be rushed in more quickly. I suspect that foreign technology will be allowed to dominate the market as it has a head start. I suspect that the most profitable areas will provide programmes that poach from the national network. I suspect that the providers of programmes and the providers of cable will, as the Home Secretary says, be allowed to have concentrated power. I suspect that the content of programmes will be subject to virtually no effective supervision.
However, the prospective companies ought to know that a Labour Government intend to rectify those mistakes. We want to see a successful cable system. We want to see the jobs that it can create. We want to see the social and technical benefits that it can bring about. However, we want all the benefits to be enjoyed by all the people, not to be exploited by a handful of foreign-based companies and not used to dilute the standards and content of British television.
Anyone who doubts the outcome of the present system as envisaged by the Government needs to do no more than look in his or her file for a letter that he or she has almost certainly recently received from the hon. Member for Havant and Waterloo (Mr. Lloyd). His writing paper was headed with the proclamation that cable was "a great opportunity for British industry." The only thing that slightly diluted the message was that it was written on the paper of the Sony television company. If one wants to comment on what it is pretended will happen as distinct from what will really happen the hon. Gentleman drew our attention to it exactly. That is what we fear and that is what a large proportion of people concerned with standards as well as employment prospects fear as well.
§ Mr. Ian Lloyd (Havant and Waterloo)
The right hon. Gentleman gave me notice that he would raise that point. The arrangement for the Sony people to come to the House of Commons and tell us what they thought was in the interests of British industry was one that I made on my own decision. An all-party group of Members turned up to hear what the Sony people had to say, which was thought by all present to be in the interests of British industry. The Sony people said that, whatever happened, they would do 424 well out of it, which is fair enough. However, there was one way, which they advocated openly, by which the advantages to British industry would be substantially greater. As employers of 1,500 British people in Wales they took that view. I have no reason to regret asking them to come here. Let us have the benefit of their judgment.
§ Mr. Hattersley
I am not questioning the hon. Gentleman's intentions or integrity. I am merely saying that few hon. Members believe that Japanese assemblers are normally prepared to provide their time, money and resources to offer advice to British industry on how we and they can beat the Japanese. I believe that the Japanese are almost certainly in favour of something other than the greater success of British industry. They were right. What the Government are doing will be of immeasurable benefit to Japanese industry. The Government are rushing in in a precipitous way.
The Government are encouraged in so doing by the Hunt report, which generally recommended neither supervision of programme content nor supervision of the behaviour of companies. I make it clear that it is our view that it is absolutely essential that supervision be provided. That is supervision in two senses—supervision of the companies that lay the cables and supervision of the companies that eventually broadcast the programmes.
I shall deal with what I mean by supervision. I accept, of course, that with a number of channels and buttons to press it is not possible to have a new authority, perhaps modelled on the IBA but separate from it, previewing and prevetting the output of every channel. That new authority should be given the right, when there are constant complaints and difficulties, to require a broadcasting company to submit all its programmes for a limited period for previewing and prevetting.
The Home Secretary and I had a genial dispute as to whether he or I was wrong, both of us conceding the likelihood that we were wrong. The Home Secretary seems to believe that a residual and back-up power is recommended in Hunt that would enable, if the recommendation is carried out, the new authority to excerise the supervision that I have described. I cannot find that in the appropriate paragraphs. Perhaps the Minister of State will tell us not so much whether that power appears in Hunt, because my fallibility in these matters is well known to the House, but, more importantly, whether the Government intend to implement such a power. The important thing is not whether it is in the report—I am probably wrong—
§ Mr. Nigel Forman (Carshalton)
May I assist the right hon. Gentleman? Paragraph 89 of the Hunt report refers to the approval subsequent to the initial franchise. It states:The approval of the franchising body would however be needed if it was subsequently proposed to modify the basis on which the franchise had been granted".The report continues in that vein.
§ Mr. Hattersley
If the hon. Gentleman thinks that he has helped me, I must tell him that he has not. That is not the power that I hoped for and that the Home Secretary hinted existed. I want a power that allows a body such as the IBA to say to a company that there is so much concern about its programmes, the quality appears to be deteriorating and there are so many complaints about their 425 nature and content that it requires that company from now on to submit each programme to it before it is broadcast. Apparently, that does not appear in the Hunt report. I want to know whether the Government find any merit in and have any sympathy for that point of view.
§ Mr. John Browne
Is not the right hon. Gentleman confusing an important fact? Broadcasting over the air must not be confused with narrowcasting over cable. Therefore, his general concern is not appropriate. How much does he think it will cost for the whole country to be cabled by British Telecom, and who would pay?
§ Mr. Hattersley
There is great confusion because of absurd conventions of Treasury accounting. If it is possible to do so profitably in some areas privately, British Telecom could do it on the same basis over the same period—
§ Mr. Hattersley
In the same way, as my hon. Friend said. The difference would be that British Telecom would have the intention and aspiration to go on to cover other parts of the country—
§ Mr. Hattersley
Initially it would get the revenue that was available to, and apparently to be received by, private companies.
The second point that the hon. Member for Winchester made is equally important. I do not concede the point that because it is narrowcasting there is no reason why there should be any supervision of programme content. Anyone who has seen the programme content in other countries on cable must have a legitimate concern about the material put out.
§ Mr. Hattersley
I do not mind giving way to the hon. Gentleman. I wish that he would not talk to me all the time from a sedentary position. I want to explain to him why he is wrong.
There is a romantic view about cable that as long as we have the concept of freedom of choice, which in my view is not freedom of choice at all, all sorts of desirable things will come about, such as a 24-hour news service. If the hon. Gentleman considers the New York experience, he will see that the major 24-hour news service has collapsed through bankruptcy, but a gentleman called Ugly George prospers by transmitting low quality pictures of girls whom he has persuaded to undress in Central Park. I do not mind whether it is called broadcasting or narrowcasting. I do not want transmitted on British television low quality pictures of girls who have been persuaded to undress in Regents Park.
Before I am interrupted, let me say that nothing in the Hunt report, or in the Home Secretary's speech today, has convinced me that there will be adequate supervision. There is clearly a confusion between the standard expected of independent television companies and the need to have a key which theoretically enables some unpleasant programmes to be switched off. We have not had a clear statement from the Home Secretary whether the standards that we expect from the BBC and ITV will be required of the cable companies.
§ Mr. Julian Critchley (Aldershot)
The right hon. Gentleman will be aware that, whereas Ugly George succeeded in Manhattan, he failed in Edinburgh. That was not because of the girls' rectitude, but because of the prevailing east wind.
§ Mr. Hattersley
The hon. Gentleman has more faith in the British climate than I have. My suspicion is that in warmer climes, in the sort of place that he inhabits, Ugly George might be very successful indeed. I do not want to name any of those military towns where he might find himself but—
§ Mr. Sheerman
Hon. Members may make light of this, but a serious point is being made. I was quite chilled, as I am sure other hon. Members were, by what the Home Secretary said. He said that the traditional safeguards on advertising, on British content and on taste and decency will go. If that is not what he said, I hope that I shall be corrected.
§ Mr. Hattersley
I understand exactly why my hon. Friend is confused. I have already tried to say, and I shall now say again, that it is by no means clear what the Home Secretary did say about the traditional standards of taste and decency. On the one hand he said that he wants them preserved and on the other that he will make some arrangements whereby people who do not want low standards and indecency can switch the television off by a mythical device. We are not clear what he believes.
§ Mr. Whitelaw
I stand, as the House knows, as firmly as anybody else for decent standards in our television programmes. I can be shown over the years to have done so. When I put forward various proposals for the House to consider, I am supposed to answer everything. If I do, I am told that I should not be prejudging the matter and if I do not I am told that I should. I cannot do both.
§ Mr. Hattersley
Let me try to explain why Labour Members think that the Home Secretary is remiss. I understand why he argues both sides of the case. However, when he appears to close down the option of all pre-vetting, he is making it clear that some undesirable programmes will be allowed. That is against the beliefs, wishes and principles of my right hon. and hon. Friends and myself.
§ Mr. Hattersley
If the hon. Gentleman thinks that I am misleading the House, I had better let him intervene.
§ Mr. Rathbone
It is not critical, but I think what the right hon. Gentleman has just said could be misunderstood. Just because prevetting is done away with does not mean that lower standards are condoned. There can be postvetting and franchises can be withdrawn for any period. That can be done for any transgression of the rules. There is no parallel between prevetting and the lowering of standards.
§ Mr. Hattersley
I am not sure of the sort of world in which the hon. Gentleman lives. Let me give him an example. A company with a 10-year cable franchise which has been running for five years may have two 427 options—one to go bankrupt immediately, and the other to risk the renewal of its franchise in five years' time. What does the hon. Gentleman think that it will do? It will lower the standards, bring in cheap and nasty material from outside and it will hope, as happens in the United States, that it can survive for another five years. To say that the possibility that a company will lose its franchise in five years will cause it to maintain its standards is romantic nonsense. To say that the renewal of the franchise is a sanction is the same as saying that there is no sanction.
§ Mr. Whitehead
If there are to be split franchises, as has now been widely leaked, and the longer franchise is for the operation of the cable system and the shorter one is for the provision of programmes, surely that will remove the sanction if the provision of programmes is inadequate.
§ Mr. Hattersley
Of course it will. That is why Labour Members want a statutory distinction between the cable layers and the programme companies. I made that clear 20 minutes ago. To allow them to operate in tandem is to give them an enormous power that will enable them to defy the standards that we attempt tentatively to lay down.
We want to see a regulation, not simply of the standards and quality of output but of the effect that cable will have on the established national programme producers. That is the point raised by my hon. Friend the Member for Huddersfield, East (Mr. Sheerman). Some form of regulation is essential if the BBC and ITV are not to suffer appallingly as a result of the freedom given to cable.
The Home Secretary gave an example. He said that the BBC and ITV are required to transmit 86 per cent. of British material. I think of that as being allowed to transmit only 14 per cent. of foreign material. If they are to compete with cable companies which can buy low budget, low quality foreign films which they can run for 100 per cent. of their time, the problems for the BBC and ITV will be enormous. I was going to say that they are so enormous that I fear that the next step will be that the BBC and ITV will start pressing for the right to show more foreign material. However, that is not the next step; it is today's step. The Home Secretary has announced already that he will consider the possibility of more foreign material going to ITV and BBC. I can see why, if they are to compete with the cable companies, that is necessary in equity, but the disaster that that would mean for the home industry is incalculable.
I am horrified that instead of that being a prospect for the future, about which we should all be afraid, the Home Secretary should have floated the idea today that there shall be more licence for more foreign products on the BBC and ITV.
§ Mr. Wrigglesworth
Does the right hon. Gentleman agree that the point that he has just made about equity is reinforced by what the Government are doing to the film industry? Again, the floodgates are being opened to foreign films and the Eady levy is being removed.
§ Mr. Hattersley
That is only obliquely relevant to what I have to say this afternoon, but the hon. Gentleman has made a fair point.
My next point is intimately and directly related—the control of advertising. I hope that the Home Secretary was saying—it was not altogether clear, but perhaps that is because of the nature of today's consultation 428 exercise—that the advertising regulations which apply to ITV will apply to the cable companies. Again, it would be intolerable if the ITV companies, attempting to maintain adequate programmes, were forced to compete with cable companies which could flash advertisements on at any part of a programme and which could produce the sort of advertisements which the IBA would not pass for a moment.
If there are to be several advertising channels, whether broadcast or narrowcast, they must fulfil the same advertising criteria. Great problems will arise in the raising of advertising revenue for cable in any event. The evidence of the Advertising Association that there was an unlimited amount of advertising waiting to spring out and finance all sorts of desirable projects was pathetic and does not bear a moment's analysis. The fear will be that the only advertising that cable gets will be the sort of advertising no hon. Member wants to see, at times in a programme when no hon. Member wants to see it. I hope that the Home Secretary was saying that he will ensure that there will be some regulations to put both ITV and the cable companies on a common footing.
I hope that the Home Secretary has got his ears open—I believe that he has—not only to wishes and expressions of opinion from Labour Members but to those from people outside—the growing number of people—who are becoming more and more concerned about what cable will do to Britain if it is allowed to go on unregulated.
The claims for cable are made by people who insist that it is an addition to our traditional freedoms, who frankly confuse the idea of pushing buttons with more choice. The way that many companies will develop will not increase choice. I personally find something distasteful in all the vested interests surrounding cable's laissez-faire development, dressing up their case as if it were something to do with the liberty of the subject and the freedom of the individual. In my view, it is nothing to do with that. It is to do, very often, with promoting cable in a way which meets sectional—not community—needs, which does not improve the quality of choice but improves the profits of some limited companies.
We want the cable revolution to meet the country's needs. That requires an amount of regulation, regulating the companies that lay the cables, the companies that transmit the broadcasts, and the broadcasts and advertisements themselves. We shall go on pressing for that to the White Paper and beyond.
§ Sir Paul Bryan (Howden)
I declare my interest as a director of Granada Television.
Since our debate on cable on 20 April much has happened. Hunt has reported and, as the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said, we have been to countless seminars and we have been saturated with cable lore from scores of interested parties. Some of us have looked at cable in America. From what we have gleaned, we now have to decide whether we want cable television to be the means by which a cable system is established in this country.
My answer to that would be "Yes", provided, first, that our cable programmes can be as superior to American cable television programmes as our television is to its television, and, secondly, that cable television does not have the effect of lowering the quality of BBC and ITV. By that, I do not mean that they must be entirely insulated 429 from any technological change, any more than the BBC could be insulated from the healthy shock of the advent of ITV 25 years ago.
In the long run, we need cable for the reasons often and admirably expounded by my hon. Friend the Minister for Industry and Information Technology. We must keep ahead in technology so that we can establish a modern industry, giving direct employment to thousands and indirect employment to many more. In the short run, cable should improve the lot of the viewer.
Before a recent visit to America, I was convinced that British television was the best in the world. Having been there, I remain so convinced. However, I have also discovered that, with the addition of cable, the American viewer is better off than his British counterpart here.
Andrew Neil, in a booklet, recently published and edited by him, called "The Cable Revolution", says:It may hurt British pride to hear that the average American Cable viewer now has a far wider choice of quality programming to choose from than the average British viewer.He then reviews in detail the choice available to a viewer in Manhattan at 9 o'clock on 7 June 1982 and that available to a viewer in London at that moment. In London he was offered the 9 o'clock news on BBC1, on BBC2 "The Hitchhiker's Guide to the Galaxy"—repeat—and on ITV "Minder"—repeat. The viewer in Manhattan had a choice of 27 programmes, which included five movies, three sports programmes, two plays, one ballet, one opera, one variety show, two documentaries, a soap opera, and three educational channels, plus two news channels and a programme on cooking.
§ Mr. Critchley
My hon. Friend has left out of his list soft porn, hard porn, and adventure, which I am told is the best of the lot.
§ Sir Paul Bryan
My hon. Friend may have studied these matters, but I shall continue with my speech. As one flicks the switch through such a mass of programmes, one's general impression is that one never wants to see it. However, the viewer soon knows which channel he likes, and the net result, on a fully developed station, is a remarkable choice of programmes. One cannot get away from that.
§ Mr. Hattersley
Perhaps I may point out that the hon. Gentleman has also left out, as did Mr. Neil, what is available to the viewer in Des Moines compared with the viewer in, say, Coventry. The great advantage for the viewer in Coventry is that he gets as good a programme as the viewer in London. That same rule does not apply in the United States.
§ Sir Paul Bryan
That is correct. I said earlier that our system has to be better than the American system. In that, I agree with the right hon. Gentleman.
Nevertheless, one is still tempted to ask whether there would be a demand for such a choice in this country. To my mind, the answer is given by the quite astonishing explosion in video tape recorders, which are now to be found in one in six British homes, according to the latest figures. No one doubts that within five years these will be as common as colour television sets in this country. One buys a video tape recorder for only one reason—more choice: more choice of the times at which to see programmes, and more choice of programmes.
§ Mr. Whitehead
Research shows that 85 per cent. of the use of video recorders is for films which are hired in the high street. That cuts into the home box office market, which Hunt believes will be the most profitable for cable television.
§ Sir Paul Bryan
I shall expand on that later.
I want to say a word on the important question whether cable television would damage the high standards of BBC and ITV. Financially, I do not believe that they would be substantially affected. The BBC would still be financed by the levy.
There remains the question whether ITV would lose significantly in advertising revenue to cable. American experience and every survey carried out in this country show that advertising revenue from cable is derisory, compared with the income enjoyed by the television companies here, with their monopoly franchises. On ITV, an advertiser has a shrewd idea of how many viewers will see his advertisement. On cable, with its many channels, the audience is fragmented, and presents an uncertain and therefore unattractive proposition to an advertiser. What is more, the very appeal of many of the cable channels is that they do not carry advertisements.
The main income of cable comes not from advertising, but from subscriptions: subscriptions from the viewers who take the basic service of 10 or 12 channels; premium payments from subscribers who are willing to pay more for a particular extra channel of their choice; and—where the cable system is fully developed—"pay-per-view" payments for individual programmes selected by the viewer. The business objective of the cable operator is to increase the number of subscribers rather than the number of advertisers.
To placate the BBC, as we have heard, the Hunt report has banned "pay-per-view" for the time being. That decision is based on the misconception that a cable company might outbid the BBC or the ITV for a national event.
§ Mr. Michael English (Nottingham, West)
I am interested in what the hon. Gentleman says, and I thank him for giving way. He said that the Government had given way to the BBC's view. I understood that the Government had given way to the broadcasting organisations—that is, the ITV companies and the IBA as well.
§ Sir Paul Bryan
I suspect that the BBC is fearful of the effect it will have on its satellite programme when it comes on in a few years' time.
I come back to what I was saying about cable possibly outbidding the ITV and BBC on a national event such as the Cup Final, thus denying to the general public events that they are accustomed to seeing without charge.
There is no difficulty in specifying events of that type for retention by the BBC and ITV. Moreover, there are many ways in which "pay-per-view" can be valuable to the cable companies without damaging the off-air companies. For example, the distributor of a feature film might be willing to let it be seen pre-release to a limited audience through "pay-per-view" for publicity purposes, whereas he would certainly not allow it to be exposed on a general network before it was shown in the cinemas.
Manchester United fans would be delighted to pay for the showing of away matches, but that would not be attractive as a general proposition to the BBC. The cable 431 operator might sponsor or produce his own programmes. At the moment, public broadcasting services can give most individual sporting events only limited coverage whereas, by "pay-per-view", that could be full coverage.
"Pay-per-view" in America is in its infancy. Only about 5,000 homes can receive it. Nevertheless, it is a rapidly expanding method of cable financing and it will be a major factor in future. Gus Hauser, the chairman of Warner, forecast that 20 million homes would receive such a service in five years' time.
§ Sir Paul Bryan
I shall deal with that point a little later.
I should like to stress once more that too little has been said in the general debate on cable about the place of the video tape recorder. By the time cable gets under way, the video recorder could easily have penetrated 80 per cent. of British homes. In other words, the penetration of those machines will be several times greater that that of cable.
It is impossible to forecast what effect that will have on the development of cable, but it is bound to be considerable. By the time video libraries are built up, the video tape recorders will be the perfect "pay-per-view". The viewer will be able to take his pick from literally thousands of titles and take them home for the weekend at no great cost. Moreover, the titles will not be confined to feature films and the like. They will cover every conceivable aspect of entertainment, education and "do-it-yourself". There will be choice on a scale that has never before been available on the television screen.
With regard to the point made by the hon. Member for Isle of Ely (Mr. Freud), piracy and the explosion in demand have thrown the video tape industry into temporary disarray. However, the Private Member's Bill that is to be introduced by my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) will put an effective check on piracy. It will be a question only of time before the trade is organised to offer the type of service that I have described.
When I was in Washington, I asked the chairman of the Federal Communications Commission what controls he would impose at the outset of a new cable television service. He answered "I would impose the absolute minimum. I would then add any regulations that experience proved to be necessary." That was the result of his experience.
That is also the approach of the Hunt committee. I applaud it. Paragraph 89 states:We have already made clear the extent to which we think that cable programmes should conform to the traditional requirements as to taste and decency, and also that advertising should conform to the IBA code of advertising standards and practice.It is a good start and an answer to those who complain that the BBC and ITV are being asked to compete with an utterly deregulated service.
I shall now deal with the difficult problem that the right hon. Member for Sparkbrook raised. The regulating authority must consider how much overseas material should be allowed on the cable television channels. The 14 per cent. rule that operates fairly satisfactorily in the off-air services cannot be imposed across the board on a 432 cable station with, for example, 20 channels. A sports channel would probably be 100 per cent. home product, whereas a channel of the American box office type will be mostly American. I agree with the right hon. Member for Sparkbrook that a system that allows sufficient American material to sustain its programmes but which stimulates rather than kills our film industry must be worked out. That is not out of the question.
When trying to foresee the shape of things to come in Britain, we should take note of the American scene, but we should not be overinfluenced by it, for the two situations are very different. The cable television explosion in America was based on the use of an already existing cable system that had been put there for other reasons. We shall be starting almost from scratch with the consequent advantages and disadvantages.
The absence of advertising on many cable channels has proved attractive to an American audience already frustrated by the grossly excessive quantity of crude advertising that afflicts its television network. That will not apply here. American cable has much less competition from the video tape recorder which will affect the cable system in Britain.
One substantial advantage that we shall enjoy over the Americans is a simpler system of franchising. There a complicated mixture of State, city and FCC regulations can mean delays of literally years in the granting of franchises. It can involve reams of paperwork, legal presentation and far too much corruption.
The American system of having 30 low-powered satellites, from which a channel can be beamed down to the 4,000—plus cable operators, is a much cheaper way of distributing programmes than the trunk system for which we shall have to pay.
I look forward to my hon. Friend's forecast of the pace at which he hopes to see our cable system develop. One school of thought opts for caution, pilot schemes and so on. I believe that speed within reason is essential. It is a case of the chicken and the egg. While there are no programmes, there will be no subscribers; while there are no subscribers, there will be no programmes. Until the number of subscribers reaches a critical level, much money will have been lost on programme production; and many will have been discouraged from going into programme production.
The first years will be difficult ones. The sooner franchises can be allotted, the better. I suggest that in these early stages everything should be done to attract the vast investment that will be required. For example, until there is practical evidence that profits can be made in a reasonable time, the franchises should be for longer than the 10 years recommended in paragraph 87 of the Hunt report.
§ Sir Paul Bryan
I do not know, but longer than that.
At this stage it would be rash to lay down the obligation that some people have suggested—that a cable operator should be obliged to take on an unpromising area as well as a prime one. The condition dear to the IBA—that stations should be locally owned—should be avoided as it is both discouraging and ineffective.
Experience may show, as cable develops, that more rules, regulations and conditions are necessary, but my advice at the start is "When in doubt, cut them out".
§ Mr. Barry Sheerman (Huddersfield, East)
The debate on cable and satellite broadcasting has been marked by considerable confusion. Whether that confusion has been deliberately fostered is for hon. Members to judge.
There has been confusion between questions relative to cable and satellite technology and the rival merits of certain systems and questions relating to the future of broadcasting and the social and political implications of the revolution in communications that we are told is about to burst upon us. False dichotomies have been drawn between primitive, reactionary Luddites and backwoodsmen who are suspicious of the new technology and progressive, dynamic entrepreneurs who welcome change and expansion with optimism and courage. Coming from Huddersfield, where the Luddites were very strong, I hope that I shall not immediately be accused of being firmly in one camp.
There is also an undertone of fatalism—a sense that the coming of cable is an inevitable act of God to which we must accommodate as best we can. To believe that is to believe that Parliament is powerless, and if we convince ourselves of that democracy is a frail flower indeed. We are not the victims beneath the juggernaut of technological progress. If communications services in this country develop in a way that is detrimental to the public good, it will be because we have taken the wrong decisions.
If we are to act rationally and responsibly, however, we must allow time to acquaint ourselves with all the issues involved, both technological and social. This is at the heart of most of my hon. Friends' questioning of the Government's undue haste. If we are really at the beginning of a new age, we should not be called upon to create the world in six days. We must make haste very slowly. There are very good arguments for taking more time. That is not something that we on the radical side of the House often urge—we usually want to do things very quickly—but in this case more time is needed.
We must ask ourselves what we intend to achieve before we decide on a particular course. Does the British public want an expanded communications service, and, if so, what kind? We have heard very little from the Home Secretary or from any Conservative Member about whether anyone actually wants the new technology, diversity and competition that we are assured will benefit all mankind. Indeed, a recent survey showed that there has been a decline in television viewing in Britain recently. We have not yet even assessed the cause of that.
§ Mr. John Browne
There has been the advent of the video recorder. It is a new industry, so how can anyone give accurate figures?
§ Mr. Sheerman
I take that point. I am simply saying that the demands of the consumer have not yet been gauged. Viewers may be dissatisfied with the quality and variety of material at present offered. The advent of the video recorder may have made a substantial dent in the market for traditional television. Indeed, I was told recently that 70 per cent of the Asian community in Bradford now have their own video recorders and watch films in their own languages most of the time. To some of us, that is a disturbing change in viewing behaviour in this country. On the other hand, people may have switched to less passive interests, which is surely to be welcomed.
Steps must be taken to ascertain the facts. Viewing needs may be adequately satisfied by the existing four 434 channels. The proposed satellite channels coming on stream in 1986 may meet all the requirements that we can envisage. There may be a demand for data transmission services, two-way communication systems and commercial transactions that could usefully be provided by cable while leaving the provision of programmes of entertainment, news, current events and so on to the existing television authorities.
Unless the appropriate consumer research is carried out to discover what people really want, how can we answer those questions? I do not think that they have been seriously considered at all. Are we to be ruled by vague intuitions or, more probably, by crude commercial interests in reaching these decisions, or shall we allow reason to prevail and to govern our decisions? Hon. Members will no doubt have noted that a recent small-scale survey showed that, although the public were mildly interested in the idea of an expanded television service, they were not at all interested in footing the bill for it.
It sometimes seems all to easy to invent a new technology but very difficult to invent a need for it. We are in danger of forgetting that now, and in the future, the entire broadcasting network must exist for the benefit of the public. Television services must develop and adapt to public needs. It is not for the public to be moulded to the needs of a wildly proliferating television network that they did not want in the first place. The new technology was invented to serve the public. Yet we behave as though the public had been invented to serve the requirements of the new technology. The Minister is a leading advocate of information technology, but he sometimes seems to get those two aspects of the question somewhat out of kilter.
§ Mr. Gary Waller (Brighouse and Spenborough)
The hon. Gentleman makes an interesting argument, but before the existence of the telephone there was no great demand for such a service. Indeed, even when it was introduced, many people thought that it had no real future. It is only after a great new technological development has arrived that people see the benefits offered by it. As the hon. Gentleman rightly says, there is a great deal of doubt about the future. That being so, should we not try to be as nonrestrictive as possible and allow as many developments as possible to proliferate so that people can choose? Those services for which there is no demand will surely wither away.
§ Mr. Sheerman
Sometimes when I am sitting in a room I wish that I could disinvent the telephone, but I take the hon. Gentleman's point. I am trying to get the balance right. I shall return later to that point and to the social and political implications of the new technology.
First, however, I wish to examine more closely the technical and commercial considerations, which are very complex. We face a multiplicity of choices at a time when technology itself is developing at a bewildering rate. The crucial point is that development is taking place at such a rate that a wrong decision now will probably put this country in the wrong technological age for the rest of the century. Even with careful and painstaking consideration we may find that we have made the wrong choice, but without such consideration we are almost bound to do so.
In satellite technology, we have the choice of adopting the multiplex analogue components system,, favoured by the Part committee, or the PAL system favoured by the BBC. The PAL system has already been adopted by many 435 European countries. If the MAC system, which I understand has already been accepted, is adopted in this country, it will isolate Britain from the rest of Europe. That would have serious financial implications as it would limit the BBC's scope for exporting its services. I believe that the choice of that system will seriously undermine the viability of satellite television before it even comes into operation.
A choice must also be made between individual reception of direct broadcasting by satellite through home receiving equipment and community reception via the cable system. In the short term, individual reception might be cheaper, but ultimately community reception would probably be more cost effective, especially in the more densely populated urban areas. Community reception would also obviate the need for the unsightly proliferation of dish aerials that one sees in the United States and which are certainly no blessing to environmental beauty. On the other hand, the facility to provide for individual reception of DBS could stimulate industry to produce increasingly sophisticated and effective household receiving equipment. Handled correctly, that could be of great benefit to the British economy as a whole.
One thing is certain. The introduction of satellite and cable technology will not by itself drag the British economy out of the stagnant mire into which the Government's policies have sunk it. I believe sometimes that the Information Technology Year and the tremendous gung-ho attitude towards cable is an illusion designed to take our minds off the reality of the grim fall of 15 per cent. in our manufacturing production since the Government came to power.
American experience shows that the provision of cable services is costly and there is no guarantee of success. The Prime Minister may like to believe that the British economy will be revived by the simple expedient of running copper cable across half the country. That is touchingly naive. CBS Cable folded this year having sustained a loss of $47 million in 11 months. Only one company in the United States, Home Box Office, which is a film subscription company, is making a reasonable profit. British entrepreneurs will doubtless take note. The Prime Minister's goose is unlikely to come up with any golden eggs at either the next election or the one after.
§ Mr. Sheerman
That is correct. The unseemly haste with which the Government are precipitating us into this new electronic nirvana is likely to prove disastrous in the long run. If we are to adopt a system of cable technology, we must ensure by all the best possible methods that it is right. The system that we choose will have to last for a quarter of a century.
The choice is between coaxial fibre cable and fibre optic cable. Vested interests seem to support coaxial cable. By showing a preference for that system, the Government are demonstrating once again their capacity to gaze fearlessly as far as the end of their nose. The fibre optic system is more expensive because of the cost of amplifying signals in optic form. It is reliably predicted that that will soon cease to be the case.
Fibre optic systems are technically superior and may soon prove to be the right answer. They carry no fire risk, are more compact and versatile, are easier to route round difficult corners and less susceptible—I am sorry that my 436 hon. Friend the Member for Keighley (Mr. Cryer) is not here—to bugging, are practically impervious to electrical interference, can carry a greater volume of traffic than coaxial cable systems and will also allow the introduction of an inter-active communication system.
The most important point is that Great Britain leads the field in the manufacture of optic fibre. If we choose this technology for our national network, we shall boost our export market in fibre optic technology, and that would be profoundly important.
§ Mr. Brinton
Has the hon. Gentleman considered that one can perfectly well combine coaxial cable and fibre optic in their present state of development anc achieve inter-active operation, as he has described? When fibre optic catches up in three or four years' time with its switching mechanism, which is the problem at the moment, the system can be converted comparatively cheaply.
§ Mr. Sheerman
I take that point, but all the information I have from the experts is that that would be a clumsy and difficult way to do it. It is better to start as one means to continue and choose a fibre optic system.
§ Mr. Sheerman
The technology is complex and fast moving. The experts who advise me suggest that that is a problem that will be solved in months not years.
§ Mr. John Garrett
Within the next few weeks British Telecom will place orders for switches capable of operating through fibre optics to groups of 30 homes at a time. That is a useful step towards a fibre optic system.
§ Mr. Sheerman
I thank my hon. Friend for his intervention.
The choice of coaxial cable would not benefit our economy. The export potential of coaxial cable is virtually non-existent. There are two ways of distributing cable services. The pilot schemes which have been carried out in this country have utilised the American tree-and-branch technology which is extremely limited in its application, and which I do not think will be considered seriously.
The alternative is the star system, which was developed mainly in this country and Japan. It is far more adaptable and has a far greater capacity. If research discloses a genuine demand for inter-active communication in Great Britain, we should clearly need to engineer a cable system on the star pattern.
If we are to secure for the United Kingdom the economic and commercial benefits which can be derived from the introduction of cable, we should choose a system capable of expansion to meet future demands. With their precipitate and myopic commitment to copper cable, the Government seem once again to be about to impair the export potential and long-term prospects of British industry and to dissipate the prospects of future economic success. I do not believe that the Government intend to do that, but that will be the result of their proposals.
There are a number of fundamental matters underlying the debate. Are we convinced that in planning the introduction of the technology we are fulfilling a public need? If so, are we confident that the proposals contained in the Hunt report will provide adequate safeguards for the 437 welfare of all sections of society? It is blatantly clear that the Government are not interested in the public's opinions and desires.
The proposed cable network is not designed as a public utility. It is to be financed wholly from private money and consequently it will be governed solely by commercial criteria. The hon. Member for Gravesend (Mr. Brinton) said that commercial television could not be received by all houses in Great Britain for some years, but the enterprise was pioneered with the intention that they all would. The present proposal is different. If we have 30 channels available to us at any time, will our freedom of choice increase thirtyfold? No one is deluded to that extent.
Most channels will offer the cheapest, imported trivia that they can get away with. The market will eventually colour the output of the entire television network, including that of the public service channels. When we speak passionately about this matter, we do so because we have the best broadcasting system in the world. That fine achievement and output is at stake.
A comparison was made recently by a producer in America who said that the difference between American television and British television was that in Great Britain money is provided to make television but that in America television is provided to make money. That is an important fundamental difference between the two systems. The Government's proposals will not serve audiences in all their diversity but will maximise them. The IBA will fight for advertising revenue with the cable sector. The BBC will struggle to justify its licence by maintaining its place in popularity ratings. It will be expedient to provide material which is broadly acceptable in a superficial way rather than risk the transmission of programmes which are deeply satisfying to the various minorities.
The future is gloomy for British actors and writers who work on television. Unless a strict quota is imposed on the import of foreign programmes, outlets for British talent will be restricted to a crippling extent. Nick Mellersh of Rediffusion states that cable will not generate enough British production to fill one channel, let alone 30.
The Hunt report, with its deceptively open-minded, laissez-faire approach, has not suggested any mechanism that might actively promote diversity, creativity and flair. It merely gives hope and sustenance to the people who would provide us with an undemanding diet of old films, soggy soap operas, repeat sit-corn and commercial claptrap, perhaps leavened by a little pornography which we can lock away from the children or the domestics, according to our social class—or perhaps our children, being more at ease than we are with electronic gadgetry, will lock it away from us.
The television actor Peter Bowles suggests that we might charge a levy on every foreign programme transmitted on all television networks to go towards a development fund for independent programme makers based in this country, who would then be adequately funded to compete in the market place. We should seriously consider the suggestion. Let us hope that we have time to do so. Even with the assurances that we have been given, the Government still seem hell-bent on pushing the change through. Let us hope that we also have time to 438 consider other suggestions from actors, writers, producers and other creative contributors to the British media who have made it the best in the world.
Let us not be under an illusion that the regulatory body envisaged by Hunt will effectively guard the public interest. Now is the time for an ancient relative in need of a quiet sinecure or a Tory tired of the responsibility of being a wet to offer his services to the new cable authority. The duties will not be onerous. There will be no fuss about exerting control over the quality of programmes and advertising matter; the authority is merely tokeep in touch with what is going on".It will not have to supervise a quota for imported programmes, foster British talent or encourage innovation; it will merelykeep an eye on the amount of foreign material".It will not have to attempt to ensure that programme content is not offensive; it will wait patiently to receive complaints. We are told—unnecessarily—that it willremain in the background".There are no requirements for balance, but local authorities, religious bodies, political parties and foreigners—who are all inclined to be dangerously unbalanced—will not be allowed directly to participate in the ownership of companies operating cable systems. With that proviso, cable will be free to air whichever prejudices it chooses, unhampered by authoritarianism.
I said that if we were to embark on the massive and costly enterprise of cabling the entire British Isles we should choose a system that allowed the development of inter-active services, if that is what the public demand. That is commercially and economically right. It is impossible to tell how demand will develop. But before we rush to embrace the new technology, we should think a little about what it might mean. Peter Ackroyd recently wrote:Every revolution has its victims and casualties".The new two-way technology could replace the postal services, make shopping excursions a thing of the past, enable people to transact business from home and abolish the communal workplace. It could totally obviate the need for social contact. I am reminded of E. M. Forster's novella "The Machine Stops", which depicts a society whereThe clumsy system of public gatherings had long since been abandoned".We are on the edge of a revolution; it may greatly enhance our economic well-being and our capacity to communicate, but this may be the start of a black time, where the artificial replaces real information and where the standards and qualities that we most value are sacrificed. We must steadfastly refuse to be precipitated in the latter direction.
§ Mr. Speaker
Order. At least 16 hon. Members wish to catch my eye. If every speaker takes 26 minutes, only a few will be called.
§ Mr. Julian Critchley (Aldershot)
I am not a liberal—not even a Hampstead liberal. I shall never be described by my right hon. Friend the Secretary of State for Defence as a nineteenth-century liberal, which is the flavour adopted by our great party since 1974. I am a high Tory.
§ Mr. Critchley
I have been everything in my time.
As a high Tory at this moment, I believe in the defence of our institutions, in which, for the purposes of the debate, I include the BBC, the IBA and the programme companies. I fear that entertainment-led cable might be the end of broadcasting as we know it.
I wish to focus on four points—regulation, equipment, programming and production. The other night I attended the Granada lecture at the Guildhall. It was dinner and not lunch, and I was pleased to have it. Lord Hunt stated that if we want cable it will survive only with the minimum of regulation. For that reason, I am in favour of more regulation than he has proposed. I wish to keep the standard of the cable programmes similar to that which we at present enjoy in what is, with some exceptions, the best broadcasting service in the world.
I agree with those, including Lord Weinstock, who assert that were we to go ahead with existing technology foreigners would become rich at the expense of our technology and of British manufacturers. That may be an argument for delay.
I suggest a quota of 30 per cent. for foreign programmes, with no more than 10 per cent. coming from any one country. Cable operators should be obliged to order programmes from British producers. They should not just broadcast; they should inspire and commission programmes to be made here.
§ Mr. Critchley
Whether my proposals are practicable is for the House to decide. I am suggesting amendments to the Hunt proposals which might at least improve the standards of cable television.
I read to my horror that 11,000 American television programmes are stored in a Californian Fort Knox ready to be sold to British cable operators—a lifetime of "Starsky and Hutch". Were the 11,000 programmes to be unloaded upon a virgin Britain, only rich Americans would become richer. There is a strong argument for a quota.
I revert to my high Toryism in the defence of institutions. We wish to defend the broadcasting institutions from those who might devalue the services that they offer. No fair comparison can be made between broadcasting and Fleet Street newspapers. Newspapers have never been accorded the regulation and control that Parliament has always exercised over the broadcasters—BBC and IBA. We cannot argue "Give the people what they want". I do not believe in giving the people what they want. I am sufficiently Tory and sufficiently Reithian—although I am not a Scot—not to fall for that element of the Liberal heresy. One newspaper of the character of The Sun is one too many, and I wish to see our broadcasting standards maintained.
§ Mr. Clement Freud (Isle of Ely)
I welcome the Hunt report. Unlike the shadow Home Secretary, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), I think that it is good because it is clear and, unlike the speech of the hon. Member for Huddersfield, East (Mr. Sheerman), it is short.
The report is a good thing because British industry can benefit from cable television at a time when the creation 440 of jobs must be a priority. Not only will cable television create jobs—a conservative estimate is above 20,000—but it has already created a substantial number. Those of us who have been invited to lunches, dinners, seminars and meetings and received letters, circulars and glossy catalogues about cable television have provided opportunites for chefs, waiters, printers and designers as well as for doormen, who tell us to go this way or that. If that is a foretaste of what cable television will provide, I welcome it. Let me tell the House that no one will become tremendously rich as a result of cable television. If one goes to the other side of the Atlantic, as I did recently, one learns that the disenchantment factor with cable television is exceedingly high. About 30 per cent. of those who subscribe one year opt out the next. The industry in America has not yet covered enough ground to create a long-term boom.
I have always listened with interest to Opposition Members who complain bitterly about "licences to print money" and who oppose measures because others might become inordinately rich as a result of them. I have never found any reason why people should not become rich, especially because, as they do, others mount the bandwagon and gather wealth as they go.
Quality—a word on which much verbiage has been spent so far—is crucial to this debate. If cable television shows the four existing channels and the quality of the programmes is poor, so will the viewing figures be poor. I was astonished to hear the Home Secretary's contention that he received many letters about Channel 4 and that much anxiety was expressed when we all know that nobody watches Channel 4. We seem to be being persuaded that the viewing figures are nil and that for nobody who watches there are 1,000 who write Letters to the Home Secretary complaining about bad language on Channel 4.
I wish to see a minimum of regulations because we already have sufficient laws. Cable television will be bound by the Indecent Displays (Control) Act 1981 and by the Obscene Publications Act 1959. I can never quite understand the anxiety of those who complain about seeing something on television which may be offensive when they can see page 3 of The Sun and walk through Soho and see obscene pictures; there is genuinely overt obscenity in our towns and villages. If someone buys cable television, pays to have his house linked to the system and finds the porno-channel, which Heaven knows is not easy to find—unless one is a bright child—I cannot see that we have much to worry about in the way of perverting public morals.
I hesitate to support the origination of yet another controlling body. The IBA has done a great job after a difficult start. If it is the will of the House that there should be yet another quango set up to control this new industry, I hope that it will be similar to the IBA, which has expertise. Vigilance is required, and the IBA knows about viligance. It knows also that promises that are made in franchise applications tend to be breached. The IBA found out how to deal with that. What is crucial is that the authority retains the ultimate sanction —to withhold or to withdraw a franchise.
I intervened in the speech of the hon. Member for Howden (Sir P. Bryan) to draw attention to the ludicrously ineffectual punishment that we have for piracy. The hon. Gentleman referred to a Private Member's Bill that seeks to deal with the problem. That is true, and I am a sponsor 441 of that Bill. However, I still think that it is wrong that piracy, which is as rife in Britain as anywhere in the world, is punished in so paltry a manner. I am surprised that the Department of Trade, the Home Office or the Department of Industry, in the form of the Minister for Industry and Information Technology, who is now on the Government Front Bench, choose not to introduce quick, effective legislation. If ever there was a cause which was wrong for a Private Member's Bill, with all the difficulties, queues and problems that they face, this would seem to be it.
Installations must be independent of programme making. I was fascinated to read the speech which was delivered in another place by Lord Glanusk, who has been in the other place for 34 years. He made his first speech last Tuesday. Presumably one looks forward to the year 2016 when he will make his second speech. He said that 96 per cent. of all houses in this country are connected to the main drains. He asked whether anyone had considered the viability of putting cable through the sewerage system. That is not necessarily an ideal method but it is one that should be considered. Lord Glanusk's speech, after 34 years of silence, is probably not a bad speech to read once more.
I know little of the relative merits of coaxial copper cable and fibre optics, but I know that fibre optics are made in the United Kingdom. It is high time to introduce some United Kingdom input into the many forms of television. Video tapes and video recorders come to us from other countries. If we use fibre optics, they will come from our own national industry and we shall be helping to increase the prosperity of Britain.
Liberals believe in choice. We have heard talk about 11,000 programmes being held in some televisual Fort Knox. But each of us can watch only one programme at a time. There are now four good channels of British television. We need have no great fear of having no quality programmes to choose from. The marketing of video tapes will be extended. Quite soon, we shall probably be able to obtain them in filling stations, just as people can in other countries, so I am not too worried about the great amount of bilge that might come to us, because I doubt whether it will find a ready audience. If private enterprise is prepared to put up the capital and take the commercial risks, we should not stand in the way.
§ Sir Geoffrey Johnson Smith (East Grinstead)
It is not often that I can say that I have much more in common with the liberal view of the hon. Member for Isle of Ely (Mr. Freud) than with that of the newly discovered high Tory on these Benches, my hon. Friend the Member for Aldershot (Mr. Critchley). It is about the only subject upon which I find my hon. Friend a high Tory, and it is a rum do. This sort of debate leads to strange bedfellows.
I thoroughly agree with the Government's intention to introduce cable. I do not regard it as an exercise only in television. Judging from the debate, one would imagine that that was the sole reason for having cable in Britain. However, it is not. The only reason for cable television is that it is one way of helping to finance the cabling of Britain. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) no doubt wants the cabling to be carried out by the State, or by British Telecom. That suits him and his Socialist Luddite mind. With all his 442 fears, he sounded very like someone warning us of the awful terrors of commercial television. The same rubbish also goes for the hon. Member for Huddersfield, East (Mr. Sheerman).
We are not talking about something that is completely unregulated. I am surprised at my hon. Friend the Member for Aldershot—the high Tory—for thinking that we shall be flooded by rubbish from California. Such an organisation is not being set up. As it is a British system, there will be an authority. An authority will say that someone can have a cable provided that certain criteria are satisfied. The cable operator will then make an offer. If he transgresses that offer and floods the screen with porn or goes back on the programmes that he said he would provide, he has had it. His programme will be watched and he will have to submit everything in advance. That is tedious for him, and he knows that at the end he will be for the chop.
§ Sir Geoffrey Johnson Smith
I do not want to be interrupted, because I am making a serious point. Mr. Speaker asked us to be brief, and I have far too much too say anyway. The hon. Gentleman will only lead me astray.
§ Mr. Mitchell
I want to know what happens to that person's cable. Does he have to dig it up and take it home with him?
§ Sir Geoffrey Johnson Smith
I would not have given way if I had known what the hon. Gentleman was going to ask.
I think that the television system in Britain is pretty good. I have worked on both sides of it. Indeed, I must declare an interest that I should have mentioned earlier. I am a non-executive director of London Weekend (Holdings) Ltd., and a consultant to Philips Business Systems. Having got that off my chest, I remind the House that I have seen both sides of British television at work. I have been employed by them.
The system is pretty good, but we should stop the awful trumpeting—"Britain leads the world"—that reminds me of Lord Beaverbrook of the Daily Express. We are pretty good at leading the world in good trash or rubbish on television. The right hon. Member for Sparkbrook is really an old-fashioned Socialist about such matters. I thought that it would be interesting to look in the New York Times and to see the type of fare offered to the poor downtrodden American viewer in New York City. There is no mention of porn in the Monday prime time cable highlights and there is no mention on Tuesday, and so on. We are on short commons compared with the variety offered in America. The Americans can get Sadlers Wells twice a week. On Monday, a typical night, there were four arts programmes, two plays, eight films, and sport is on two channels. There was also ordinary off-air television, including "Smiley's People", "The Charterhouse of Parma"—something to do with a Stendhal novel—and, for good measure, "MASH".
§ Sir Geoffrey Johnson Smith
The Americans have got a great series. Nothing in Britain can possibly compare with the rich variety and quality offered to those in New York City, through both ordinary off-air broadcasting and cable. That is pathetic. People are probably becoming bored with British television, because it pumps out too many boring programmes. We are discussing not only 443 television, but cable, and the entertainment that it can provide. I agree with Peter Jay when he invites us to look at the provision of entertainment on cable. An analogy can be drawn with bookshops. Indeed, Hunt does not close his eyes to that point. Cable releases us from the tight control that we would not tolerate for a moment if it were applied to the printed word. Indeed, it was once applied to the printed word. Church and State told us what to do. The country was full of high Tories. At that time, the Church of England was the Tory Party at prayer. My hon. Friend the Member for Aldershot will remember that. The great British public was allowed to read only certain things.
Someone remarked that my hon. Friend the Minister for Industry and Information Technology should go down in history as the Caxton of modern information technology, because he has made it more possible for the ordinary British citizen to exercise his choice about what he wants to look at and at what time he wishes to do so. After all, he is allowed to go into a bookshop without being censored by a guardian authority that tells him the books that he should buy and the time that he should read them. Therefore, there is an analogy.
We deal appallingly with our minorities. As has been said, the people in Huddersfield cannot see programmes in their own languages. If someone in America wants to see an Italian programme, he can do so. In my wife's home town of Fresno, California, there are many people from Mexico. They like to hear their own language. They like to watch plays in Spanish. They can jolly well see them, because they have their own programmes. There are no programmes for minority groups in Britain. I think not only of Asians and the black community, but of many others.
I am desperately fond of fishing. There are no decent sports programmes in Britain that cater for those who are interested not only in watching the programme but in being instructed on how to improve their skill. There should be more fishing programmes on television.
That is not so say that I do not believe that everything that Hunt proposes is right. However, the right hon. Member for Sparkbrook repeated one of the most ridiculous canards— probably principally inspired by the BBC—that cable will be socially divisive, unfair to rural areas and favour the rich. The BBC is so nice and has so many intelligent people at the top that it would be churlish of me to take such criticisms seriously. However, it comes up in funny forms.
The BBC never hangs back. Before the Second World War television was for the rich and for those in London. After the war, when people wanted better quality radio in remote areas the BBC scattered its licence money plentifully on the local radio stations in our more densely populated uran areas. What is more, it competed with ITV for the ratings. Ultimately, the BBC gradually caught up with the needs of the minority groups. That is true of anything. However, that will not happen if it is planned. If people say that such things must be managed by the State and at the time of the State's choosing, it is like saying to Mr. Morris that the car is a very powerful machine that will kill people and that we must plan its use.
Everything that has benefited modern society began by catering for a minority. That minority has largely been composed of those who have got the money to spend on what they want. To begin with, refrigerators were expensive. Indeed, motor cars, washing machines and television sets were also expensive. As with tape 444 recorders, so with cable. If time is allowed for demand to express itself, the wider needs of a greater number of people will eventually be served.
Some reasonable fears have been expressed by those whom I have come across in industry. I am concerned about the lack of limit on the amount of advertising. There is not an endless crock of gold at the end of the advertising world. I agree that new sources of advertising will be attracted. Indeed, the Sunday supplements attracted new sources. However, Hunt has doubts about this issue. I ask the Government not to rule out "pay-as-you-view". If the existing companies find themselves short of revenue, it will be serious. Whatever code is adopted, it should be flexible enough for the cable companies not to be wholly dependent on advertising.
I am not keen on the proposed no limit on the amount of overseas programmes. ITV is limited to 14 per cent. of foreign programmes, and it should not be put at an unfair disadvantage. The proposed ban on ITV companies becoming owners, or at least majority shareholders, of cable companies should not necessarily be adopted. At any rate, ITV should be allowed to seek opportunities in this area.
We should not deny to ITV companies the right to enter into commercial arrangements with the cable operators as providers of programmes. The BBC has told me that there are areas of overlap between broadcasting off-air services, DBS and cable. They overlap because the programme providers want a share in the money generated by all three services. Therefore, the BBC and ITV will need to be involved, particularly ITV, which, unlike the BBC, has no licence fee to buttress its finances and which must operate within entrepreneurial financial disciplines.
Most of what the hon. Member for Huddersfield, East said about the technology of cable is wrong. It is important that the Government should encourage an early start, but on the right technological basis. A balance must be struck. If we go ahead too quickly on the basis of, say, the American tree-and-branch technology, which is now ready and could be ordered off the shelf, we shall be swamped, because it will be a cheap technology that will soon be out of date and bang will go any opportunities for British industry. We are all pretty well united on that point. I know that Rediffusion does not want to go ahead on the basis of such technology. Standards must therefore be set that prevent that.
On the other hand, if we delay until all these wonderful problems are sorted out, we shall be left behind. As in all things, perfection is the enemy of the good. Nothing is more likely to stimulate investment and lead to the development of fibre optics than for a start to be made. Paper plans prepared by politicians are just the stuff that lead to procrastination—and this country certainly knows how to do that. In such a climate, industry and private finance will wait until the politicians have sorted things out.
The economic development committee for the electrical engineering industry says some wise things in its report, which we ought to heed. If we do not, we shall make some serious mistakes. It states:We note the Hunt Committee's recommendations; we do not comment on them, except to say that the worst decision would be to procrastinate. To delay the start of cable TV systems might give United Kingdom manufacturers time to do some more development work; but without the opportunities of an expanding 445 United Kingdom market, and the knowledge of the administrative framework determining the characteristics of that market, progress would be half hearted.The people on that committee are in the business, and they should know. The committee adds:Immediately, the benefits of fibre optic cable do not outweigh the costs except for a minority of cable TV systems applications … For Government to make the use of optical fibre cable mandatory throughout would be to raise the cost to uncommercial levels, and unreasonably delay the introduction of cable TV systems … We would not, therefore, advocate a rigid approach on the lines reported to be being developed in France where it seems likely that a 'star' system with the maximum use of optical fibre cable will be mandatory. We would, however, expect all cable TV systems to meet certain requirements.One of our requirements should be the star system, subject to certain definitions of what that means. Although this is extremely technical, it should put us on the right road.
§ Sir Geoffrey Johnson Smith
Yes. I shall quote from a letter that I received from a gentleman who was general manager of the European operation of the United States Jerrold company and who is now manager director-designate of a new company being established by well known companies in the United Kingdom. He is concerned about the recommendation that the franchise should be eight to 10 years, and he adds:A cable system typically takes five years to build and an initial ten-year franchise will only provide the operator with a maximum of five years' full revenues while many of his costs will have been incurred at day one … A second, and potentially far more damaging, effect of a short franchise period will be that this will encourage the construction and installation of the cheapest systems possible since no commercial organisation will be able to take a longer view. This is certain to lead to a flood of imports of cheap conventional technology".Let us establish the technological requirement and give those who are prepared to invest their money a fair crack of the whip. If it means a franchise longer than eight to 10 years, we should be prepared to give it to them.
I congratulate the Government on the initiatives already taken. I hope that they will adopt some of the suggestions that I and other hon. Members have made. They should certainly take them into account, because they reflect the genuine concern that has been expressed by those who work in the broadcasting industry and who have rendered good service to our country. If those suggestions are adopted, it should be possible to create new investment in the cabling of Britain—one of the more exciting ventures now facing us.
§ Mr. Michael English (Nottingham, West)
I fear that this is bound to be a somewhat superficial debate; most of us are restricted because of the time available. The very nature and complexity of the subject compared with one debate on the Floor of the House also leads to the conclusion that we shall be somewhat superficial. I therefore hope that, between now and the publication of the White Paper, the Select Committee on Home Affairs will take an interest in this complex matter, to which in this debate none of us can refer in any great detail.
The Hunt report is also rather superficial, even though it took longer than we can today. I do not blame Lord Hunt for that. He reached the highest rank in the British Civil Service and is now a high ranking French civil servant in 446 his capacity as British chairman of a French nationalised bank; he is a functionnaire. It was asking much to expect three people to cover the complexities of this subject in much less than a year, because I believe that the committee was set up only in April.
The Government seem to be proposing that we go about this matter in an almost opposite way to the French. I understand that the French are swamping the town of Biarritz with all sorts of equipment and trying out all sorts of ideas, so that at the end of two or three years the French Government will say "All France will do this". I do not think that they have yet decided on a particular system, but they will do so. If, as a result, they are able to tell French industry what it can sell to Germany and the rest of the EEC, and if we cannot, we shall know whose system is the better.
The Government are taking a tremendous risk. They are making the assumption that if we go ahead quickly without that depth of investigation, we shall be able to sell our technology to Europe, but, in the light of all that has happened to British industry in the past, I have an awful feeling that they may get it wrong. In the debate, we do not seem to have made a sharp enough distinction between the technology and the ownership and programming implications of what is undoubtedly a somewhat new world.
We cannot stop the advance of cable television and I do not want to do so. I do not want to stop the advance of cable broadcasting, narrowcasting—or whatever one may wish to call it—nor do I want to stop the advance of inter-active cable. I have good reasons. In television, cable can provide what has not been provided in the past. In Britain, we have absolutely failed to provide local programmes. We had local radio stations in the 1920s, but they were abolished by the BBC because it was set up as a unitary corporation covering the whole country. Local radio stations did not appear again until the 1960s.
We have never yet had local television in the way that the United States has it. As a result of the setting up of the ITA, as it then was, and the independent companies, we have regional programming but we have never yet had local programmes. In the United States, a city the size of Nottingham would probably have two local television channels apart from being able to use the national network. We have failed in this respect.
Local broadcasting is popular—at least among people outside central London. People are listening to their local stations—be they public service or commercial—and they are taking a large share of the total radio audience. It is not so much whether Covent Garden opera is broadcast but whether the Huddersfield amateurs can be broadcast. People should be able to watch Rochdale Hornets rather than only a "rugger" match at Twickenham. All those programmes are highly desirable, but people should be able to decide for themselves whether they want to see a national match or their friends playing in their own locality. Local broadcasting expands choice and it would be foolish for hon. Members to say that it does not.
I am in favour of getting on with cable as quickly as we can, but I am not in favour of completely ignoring what is a change in society. After all, it took about 50 years to introduce the printing press into Britain after it had been invented in Germany. We need not take so long with cable. There is a balance in these matters.
I should like to consider some of the points about ownership and licensing in the Hunt report. Again, typical 447 of the highest Governmental and Civil Service minds in our land is the suggestion that licensing should be done centrally. We are back to centralism again. I can see the desirability of not having the great wayleave arguments that occur in the United States whereby local authorities battle it out to give franchises. Surely there is a happy medium in these matters. Surely the local authority should not be totally excluded. The Association of District Councils does not think so, and there is no reason why it should be so.
A local authority knows more about what lies under its streets than any person. We have every reason for involving local authorities in what is proposed. On the engineering aspect, the local authorities know what cables and pipes lie under their streets. I offer the Minister planning authority as an analogy. Local authorities deal with the initial planning application, but there is a right of appeal to the central authority, in that case the Department of the Environment. It would seem to me not beyond the wit of man to create a dual system which would allow some share of influence to the local authority and some share of control to central Government.
No one can be completely happy with the present way in which the IBA hands out its franchises. It is done almost secretly. It does not hold public hearings, as happens in the United States.
§ Mr. English
The IBA holds consultative meetings at which the people it invites may speak. The IBA then discusses the matter with the franchise applicant in total secrecy. It then goes away again, and in total secrecy from the franchise applicant it decides what to do. The position is different from the United States, and if the hon. Member for Thornaby (Mr. Wrigglesworth) does not realise it he should go away and check before he takes part in this debate. There is no doubt that there is room for improvement in the present method of giving out franchises. If that is so, let us work out a rather better method.
With regard to ownership, Hunt, because it is rather a superficial report, has not distinguished between the reasons for some of his decisions. He says, for example, that a local authority should have no share. If we mean the ownership of the cables, I can see every reason for a local authority having a share. I do not mind whether it is a Conservative-controlled or a Labour-controlled authority. Local authorities are not incapable of dealing with the engineering involved.
An interesting analogy is the commencement in Britain of electrical distribution, the commencement of the telephone service and the commencement of the gas service. They began in the way that the Government propose for cable, higgledy-piggledy and all over the place. Some started in central London and some in other cities. They were put together as a nationalised network not by radical Socialists but by Conservative and Liberal Governments because they needed to be a complete national network. Some were started by local authorities, and some of those services continued to be operated by some local authorities until well after the war.
There are good reasons for allowing local authorities to participate. Hunt says "No", because he does not want churches, political parties or local authorities in on the act but he has in mind programmes. I am thinking of engineering. Hunt did not make the distinction.
448 The Secretary of State went out of his way to say that the Government would not require cable operators to be separate from the programme providers. That is well and good, but if they happen to be, what is wrong with local authorities taking part in cable provision?
Another important point is minority interest, even if it were the programme company. Surely a local authority is at least as well informed about its area as any other organisation. I cannot see the objection to a local authority having a minority interest. If we are to allow foreign minority interests, why can we not allow domestic minority interests, even if they happen to consist of elected representatives and their officials?
I should like to know what minority interest is proposed. Technically, a minority interest is up to 49 per cent. and some local radio companies are 40 per cent. owned by foreign interests—English-speaking foreign interests though they may be but foreign in the technical sense of the word.
It is usually held in industry that if somebody holds between 10 and 20 per cent. of the company he has the beginnings of a powerful interest. But 40 per cent., especially when all the other shareholdings are smaller in individual amount, would usually be considered to be a dominant interest. It is not desirable that cable, with all its social implications, should be dominated by foreign interests.
Hunt has completely missed out the issue of local press monopolies. Hunt did not see any reason why the press should not have minority interests in cable companies. I agree with that, but Hunt never discussed local monopolies. I do not mind in the slighest if the Leicester Mercury has a share in Nottingham cable. If the Leicester Mercury wants to protect its share of advertising revenue by having an interest in a cable company, I see no reason why it should not. I see every good reason why it should. If, however, the Leicester Mercury wants to have its shares only in Leicester where it already has a dominating influence, that is a different matter.
The situation in Nottingham is even worse. Our only local daily in Nottingham, the Evening Post, has been flung out of its own industrial employers' association for not obeying the rules, amongst other things, of Conservative industrial relations policy. Is the Nottingham Evening Post, which even the Minister's industrial colleagues will not have as a member of the Newspaper Society, to be the only supplier in Nottingham? If that is so, it is highly strange.
On the content of programmes, hon. Members have talked about pornography but there has been no reference to violence. We do not talk about violence in relation to existing broadcasting, either commercial or the BBC. In the United States, a 10-year study, recently completed, shows that the influence of violence displayed on television is adverse to the community as a whole. There has been no mention of this subject by the Government. What will be their controls on the display of violence? It is possible that the display of a couple engaged in the sexual act on television will not have nearly the same evil effect on society as the display of violence, even though some violence associated with the sexual act may be shown.
Hon. Members have talked about foreign material in terms of this being solely a question of encouraging British suppliers against American or other suppliers of material. That is not solely the issue. It is a question whether we 449 wish to encourage our own British culture as opposed to the culture of other countries. It is not simply a case of subsidising British producers. I hope that they are not subsidised. I should like to think that they are good enough to make a profit on their own. It is a case of keeping out undesirable foreign material—for instance, material from the United States that shows a much greater use of guns than is permissible in Britain.
There is a need properly to examine the issue of copyright. We should start to think about creating a distinction between the man who creates and the man who is merely the executant. I can see every reason for the works of composers and authors being protected. I cannot see why Agatha Christie's nephew should have her works protected because she was bright and he inherited them.
Copyright is a strange world. It is neither one thing nor the other. It is neither a heritable property in perpetuity nor does it expire with the lifetime of the man for whose benefit it is supposed to exist. It continues for 50 years, which seems an odd period to choose. A more sensible period of 20 years was chosen for public lending right. It is not sensible to have a massive blanket set of copyright laws that protect everyone down to the least efficient musician or actor in the world. There is a difference when a man is merely executing the thoughts of others. The matter needs to be examined.
I can understand the BBC's feelings about "pay-per-view". If the screening of the World Cup was sold to the highest bidder, it is fairly obvious that certain organisations, public service organisations and ITV companies would be almost wiped out. I am not sure, though, why one cannot have "pay-per-view" for subsidised performances. Why cannot some of the taxpayers' money being spent on subsidising opera at Covent Garden be recouped by allowing those operas to be broadcast more readily? I agree, however, that because of copyright laws there are many restrictive practices of the Musicians' Union that would stand in the way. All these issues need to be examined together.
It is extraordinary that we probably cannot have "pay-per-view" for subsidised performances which do not make money because of copyright laws that lead to restrictive practices. We cannot have "pay-per-view" of things that make money because it would destroy our existing broadcasting quality. I hope that the Minister will investigate this more seriously than Hunt and recognise that "pay-per-view" is a complex subject requiring a complex answer. It requires more than the simple answer of "Don't do it" or "Do it".
There is another issue that has not been mentioned. A few years ago the Russians decided to embark upon cabling for the good reason that it enabled them to control more readily what the population was watching. Anyone can pick up broadcasts. With cabling, it is different. Those sitting in the Kremlin can decide not to show in central Asia, where there are Moslems, some things which are shown elsewhere in the USSR. There are all sorts of advantages for an authoritarian State.
It is interesting that a Conservative Government should be advocating the cabling of Britain as fast as possible. I hope that the Conservative Government will remember that, once Britain is cabled, it will provide anyone who wishes to act in an authoritarian manner with a weapon that 450 hitherto has not existed. That is only one of many implications that have to be considered. There is not much time.
I was glad to hear that the Government are not proposing to legislate this Session. They are presumably proposing to legislate in the next Session if they can. It does not seem to me that all the social implications have been considered. Printing led to the Reformation. I do not know what cabling will lead to. I suspect strongly that television throughout the developed world is one of the causes of the rise in crime. This is general on both sides of the Atlantic. Cable will lead to a different society. The march of technology should not be stopped. Its advance should, nevertheless, be considered carefully.
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
Order. I understand that Mr. Speaker drew attention to the fact that a large number of hon. Members wish to speak. No fewer than 10 hon. Members have been present throughout the debate and are anxious to take part. If speeches last for rather less than 15 minutes, it will be possible for all those hon. Members to be called.
§ 7.7 pm
§ Mr. Tim Brinton (Gravesend)
I shall endeavour to speak for less than 15 minutes, although that may be an ambitious statement. The remarks of the hon. Member for Nottingham, West (Mr. English) take me conveniently to the point that I wish to emphasise. I read with great interest the report of the debate in the other place and the wise words expressed about many of the problems associated with extension of cable television. What strikes me about that debate and about our proceedings today is that insufficient emphasis has been given to all the ramifications of cabling. We have talked almost entirely in terms of further television channels as they have been known.
Many hon. Members have stated rightly that we have the best broadcasting system in the world. I agree. Now we are beginning to work out how to achieve the best narrowcasting in the world. It is not sensible to start by assuming that we shall follow everything that has happened in the United States. In the next 20 years television pictures as we know them will be a minor part of the cable system. There may be 10 or 20 channels. Many more channels will be performing other functions. There has been mention of banking and shopping. It is an awful thought that progress towards the videophone might be achieved quite quickly by this means.
If one looks back over the past 20 years of progress in technology, I do not think that one would have imagined 20 years ago that we would have reached anywhere near the stage that we have reached with our broadcast television. As the whole process of technology moves faster and faster, it is unimaginable to see where cable will have taken us in 20 years.
As I understand it, the urgency that has been criticised by many Labour Members is an urgency to be started before we are beaten. As a nation, we have a choice which is quite simply to opt out of the race and not go in for cable. However, if we go in gradually, slowly and hesitatingly and over a period of longer years so that British Telecom can cable the whole country, we shall be doomed to be beaten on technology by other countries.
451 That is an inevitable part of the process. France, Germany and even Argentina have recently pressed the trigger to go on cable. I used that word unintentionally. It is essential to start the momentum, but that does not mean that we cannot spend a great deal of time talking about how we shall control the issues that are involved and how we shall allocate the franchises.
I listened with great interest to my right hon. Friend the Secretary of State. I hope that the Government will not delay the introduction of starting this important process. Even if, like Biarritz in France, we start only one or two towns going urgently, we shall then be able to test the technology, find the answers and the adaptation between proper coaxial and fibre optics and so on. The two things will link together in a way that will sell British technology all over the world, which is the objective.
The BBC sees a threat. The IBA also spoke of a threat, but it was more a wish to be able to control cable. Like my hon. Friend the Member for East Grinstead (Sir G. Johnson Smith), I should have declared an interest. I am a broadcaster and I have recently been involved in a failed application for an IBA radio station. It is not because of that failure that I have believed for months that to give control to the IBA of the operation of cable would be wrong.
I mean no criticism of the worthy work that the IBA does, but I see cable as a different animal. To expect the IBA, which has grown up with its own traditions of fairly severe and stringent control and—to echo the hon. Member for Nottingham, West—of matters being decided in secrecy with no reason being given to the applicants is the wrong approach. Cable should be intensely and openly competitive. Everyone should know what is going on. When spoke before on this subject, I was a little grudging about control but I now see that we must have some type of quango to control cable. This should, as the Hunt report suggests, have an oversight role rather than anything more elaborate.
I hope, too, that the other interested parties in the television performance of cable will not be quite so grudging and hesitant as they are at the moment. I am thinking of the trade unions of which I am a member—the Actors' Equity and the Association of Cinematograph, Television and Allied Technicians. They have both taken an attitude of extreme caution. When I think of the number of their members who are unemployed at any given time, I believe that they should be more forward thinking and realise that cable television, if it is to compete and succeed with broadcast television, cannot get away with presenting continually "Dragnet"and "Dallas". We must remember that the subscriber has to pay extra if he wants cable, and people will not pay extra for that type of programme. They will pay because they get a good quality and variety of programme. Therefore, more British technicians and performers will be employed by cable.
There is a general level of standards, and there has been in the film industry since it began. Out of this, great films come, and the same will apply as television, in whatever form, multiplies. The position of the British film industry in this exercise is also something that deeply interests me. I am a member of the Select Committee on Education, Science and Arts and was associated with its recent report. In it we made strong suggestions that television, cable television and video tape showing of feature films should be included in some form of Eady levy to recreate the basic capital that is needed in the British film industry.
452 At the moment, we have no British film industry, and hon. Members who ask about quotas put everyone in a difficult position. If we insist on quotas we shall find that we have no feature films for a home box office channel that are of British origin. We must somehow create a fund to get that going again.
The BBC resists "pay-per-view" strongly. I accept that the great national events should be specified and expected, but I fail to understand the suggestion that all "pay-per-view" is bad. Certainly, as one or two hon. Members have suggested about opera and other programmes such as plays, "pay-per-view" would be the ideal way to recoup money. I do not see why it should not extend itself to football matches. Where major sports events are taken at length on cable, the edited highlights could be provided for the broadcasters if they wanted them. At the moment, because of the limitation of channels, all one gets on broadcasting are almost always edited highlights or the final furlongs.
In bringing a very delicate child into this world in the shape of cable television, we have nothing more to fear than we had all those years ago when ITV was born. Fearful voices will be raised, and it is astonishing how the scripts from the BBC and others are almost the same as they were 30 years ago in the early 1950s, except that they now say "cable television" instead of "commercial television". The moment that cable television comes in, we shall find the BBC and everybody else anxious to get in with it and get on with it.
That cable television is an advance in our civilisation is undoubted, and we should think more about what that will do and perhaps a little less about a Reithian concept of controlling moving pictures and sound on a television screen. Let us impose controls gradually, because this is a highly expensive investment, as many hon. Members have pointed out. We must ensure that investors are prepared to put their money into cable.
The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) at one stage implied that cable would be a get-rich-quick scheme. At the next moment, he was saying how difficult it would be for the cable companies to make money. In the short run, it will be hard for cable companies to make money, and they will not make money by putting on low-quality stuff. Therefore, I support the longer franchises.
The display of porn and such things is a temporary phenomenon. In Denmark when the laws on porn were released, people became bored within a year. It no longer happens to the same degree in Denmark. Porn is not the popular, long-term money maker that has been suggested. The appeal is that porn is faintly illicit, illegal or whatever. The moment that that ceases to be, it ceases to be interesting.
I hope that the Government will allow cable television to advance into and towards the twenty-first century, and to start soon and effectively. It will create some jobs, and it will create a new spirit because we shall have something very magical to look forward to.
§ Mr. Ian Wrigglesworth (Thornaby)
It is unfortunate that the slant of the debate has been so much towards broadcasting and all the aspects that have been raised in the Hunt report.
I do not agree with the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) that the terms 453 of reference of the Hunt report were broad enough. What the debate is and should be about is this country's future communications strategy. That is about much more than just our broadcasting. I remind the House that if one looks at existing television and video text distribution systems one realises that one is talking about much more than most of the matters that have preoccupied the attention of the House in the debate.
We have four UHF channels, and two VHF channels, currently carrying 405 line black and white television. We have the possibility of low power television. DBS is coming along, with a potential of five channels. There is the possibility of small master antennae television. We have multi-point distribution services. As hon. Members have mentioned, the video cassette recorder has burst forth. We have video discs. These matters have not been mentioned, but they are germane to the issue. We have teletex, viewdata and telex. It is unfortunate that cable is not being discussed in the context of all the distribution systems that are available to us at the moment and that may come on stream in future.
The future distribution and communications system of the country is the central nervous system of the modern economy and is vital not only to the future of our business life but to our social life and virtually every other aspect of our lives. It is not surprising that the Home Secretary said that in recent months this matter had stimulated interest and understanding. There has been the information technology advisory panel report, which dealt with one part of the issue, and the Hunt report, which dealt with another part of the issue, and the Part recommendations. The debate has been bitty. No broad consensus has developed.
I am in favour of speedy action by the Government in this and other matters. The great criticism that the British people have of the Government and the House is that it often takes too long to get things done. It is welcome to see the speed with which the Government have attempted to move. They have set going a juggernaut. There is a danger of its getting out of control, running too fast and doing considerable damage.
I have no doubt that we must go ahead as speedily as possible. Irrespective of anything else, if we do not go ahead, we shall lose out in the race against the other countries. We are talking not just about broadcasting but about the central nervous system of the whole modern economy. Industry, commerce and every other aspect of our lives will be dependent on the future communications system. If our communications system is second rate compared with the system in France, Germany, America and Japan, our industries will be disadvantaged as a result. We cannot ignore the developments in other countries. We cannot hold back. With regard to the pace of the development and the sort of development that we must have, we must try to ensure that as far as possible we get it right both technically and in terms of broadcasting standards.
There is no doubt that we should have our sights firmly set upon establishing a national electronic grid. My colleagues and I have great sympathy with the arguments that were put forward by Lord Weinstock in the Financial Times the other day. On the other hand, I see no reason 454 why we should follow the course advocated by the official Opposition of giving British Telecom a monopoly in laying down the national electronic grid.
That may be what Lord Weinstock seemed to imply but he did not explicity say that.
We should have a national electronic grid, but we should not exclude the possibility of other people providing parts of the grid. What BT almost certainly will provide is the inter-city switched network that will be the whole basis of the national network. It is important that the terms of the franchise that is given to cable companies, which lay cables that will be attached to the grid, lay down standards and conditions that ensure that we have compatible systems that will build up eventually into the national grid.
It is difficult at this stage for hon. Members to determine what is the best technical system. I guess that there is broad consensus that we should go as far as possible for fibre optics, for obvious reasons that have been stated. Listening to what has been said by some of the most senior engineers over recent weeks and months, I have become slightly bemused about what potential there is and what technical possibilities there are.
There seems to be considerable argument between the technical experts about what can be done both by fibre optics and a combination of fibre optics and coaxial cable. We do not need to follow religiously one or the other. There is no doubt that a substantial interactive cable network could be provided on coaxial cable. I hope that that will not happen as there are great advantages in fibre optics. Perhaps a combination of the two to start with is the way forward to get ahead speedily. We can ensure at the end of the day, when the technology is available, that we can move over entirely to fibre optics.
There has also been a great deal of confusion in discussions over recent months between the needs of the domestic market and the business market. Much of the interactive work that could be done on the cable network will almost certainly be predominately for the business market and not for the domestic market. However, some facilities—for example, security services, which could be provided in people's homes—will be welcomed by many people, particularly those who are living by themselves.
One of the powerful arguments for introducing a cable system with those facilities is that it would ensure that those who are home-bound, some of the most underprivileged in our society, have available shopping, bank and other facilities to enable them to live a much easier life than if the facilities were not available. Many would welcome security facilities for old people.
The services that some people envisage are already almost here. I have mentioned some that are in existence. We have the interactive Prestel service. Through the Prestel service one can make orders for a variety of things. We will need considerable convincing that there will be an immediate vast market for that service. However, one can see its enormous potential. There is great advantage in going ahead with cable as quickly as possible.
I am much less enthusiastic about, but not opposed to, the development of the new entertainment facilities that are being suggested. I agree with the hon. Member for 455 Nottingham, West (Mr. English) that it will be good to provide some of the local television services that he mentioned for people.
There are undoubtedly gaps in the market that are plain for all to see. Video tape has filled them to some extent but gaps remain that an entertainment service could fill. The British market is different from that in other countries, not least because of the vast and rapid development of video. That has provided people with the opportunity not only to look at tapes but to use the time shift facility which is a great attraction to many people, not least to hon. Members.
We shall shortly have breakfast television and the satellite services, as well as the existing channels. There is a wholly different broadcasting ethos from that in other parts of the world. If people wish to invest their money in providing a wide range of services, it is wrong that they should be stopped from doing so. As hon. Members have said, we must ensure the maintenance of good standards and services.
I do not want to talk at length about quotas, but it is important that we should seek to protect the British film industry. The Government are already removing much of the film industry's protection. They are removing the Eady levy and are reducing quotas in British cinemas. It would be a retrograde step if the 14 per cent. quota were removed. That has protected our industry in the past and has given us what is widely acknowledged to be one of the best facilities in the world.
In order to ensure that standards are maintained at a reasonable level, we need a slightly tighter control than that envisaged by the Hunt report. I do not accept the arguments against the IBA carrying out such a supervisory role. I want to see not the control that IBA exercises in relation to television companies—that is relatively simple to exercise with the number of companies that we have—but the type of control which the IBA exercises over local commercial radio stations. If the Government are anxious to press ahead quickly in introducing this service, it seems to me that that is a ready-made system for monitoring cable television which could quickly come into operation and create public confidence in the services that will be provided.
I sound a note of caution. There has been a substantial reaction against the prospect of low standards and pornographic services. That was particularly drawn to the public's attention by the idea of the electronic lock. That is a silly proposal which I hope is not implemented. It has created a great deal of opposition to the introduction of cable, networks which, I hope, will not be justified. However, in order to restore confidence to those who are anxious, one hopes that the regulatory body will have slightly tighter control than the Hunt report envisages—the same sort of control as the IBA exercises over local commercial radio stations.
We have been told, rightly, that cable is potentially important in maintaining, and possibly providing, jobs. It is unlikely that unemployment will be reduced unless the Government change their economic policy. The introduction of cable however, will ensure that we do not lose more jobs because of the competition that will inevitably come from other countries.
There is a case for proceeding relatively rapidly, even if we slow down the juggernaut from the speed that it has picked up over the past six months. The speed with which the Government have come to a conclusion on the 456 recommendations of the Part committee is staggering. I am in favour of quick decisions, but to make such a decision in 48 hours on MAC rather than PAL without. as far as I am aware, any consultation with our European partners is potentially disastrous. I do not know whether the decision is right or wrong, but there have been few opportunities for it to be discussed in a wider forum. To make a decision in 48 hours seems to me to be dangerous.
I hope that, while proceeding as rapidly as possible, the Government will concentrate their efforts on developing a strategy for communications and not rush headlong into something that may be regretted later.
§ Mr. Kenneth Warren (Hastings)
I listened to the hon. Member for Thornaby (Mr. Wrigglesworth) with interest because he got half the story right. He is correct to set the debate within the context of Britain's whole communications needs. However, he is wrong to make the reservation that we must not rush headlong. I do not suggest that we should, but we need to move ahead a bit faster than perhaps the Hunt report appreciated.
It was said that the Hunt committee would study an expansion of cable systems, including, when available, services of direct broacasting by satellite. That was one of the terms announced by my right hon. Friend the Home Secretary on 22 March 1982. One wonders whether his Department, as opposed to the Department of Industry, had appreciated that direct broadcasting by satellite had already been available for a decade. It is within the context of direct broadcasting by satellite and cables that we must consider the Hunt report. They must be considered together. Only in paragraphs 56 and 57 of the Hunt report is there any reference to our ability to use satellites as a complement to cable services.
If we do not take those into account as complementary means of communication, we are ignoring the experience of the United States, from which it would be to our advantage to learn. We recognise that the United States has large areas across which to communicate and that therefore a satellite immediately appears more viable, particularly when it can be rooted back into local area networks for cables.
The Hunt report then dismisses the American experience as irrelevant. Paragraph 57 says:The need to use satellites for this purpose is less in a country the size of the United Kingdom".The Hunt Committee has not taken the technologial advice which it should have done about the problems of communicating within the United Kingdom. My hon. Friend the Minister for Industry and Information Technology told me this week that he had at the forefront of his mind the need for workable legislation to be available in order to ensure that communication systems using fibre optics could be laid along public ducts using existing services such as the routes of telecommunications, the water mains and even sewers. Those are essential below-the-surface communications.
However, Britain is crossed backwards and forwards with so many forms of communications that would be interrupted that there is a strong case for using direct broadcasting satellites to communicate not only between London and Glasgow, between Huddersfield and Penzance, but from one side of the street to the other.
When one reads the Part committee report, one becomes even more gloomy about the understanding of the 457 technology that should be available. That report came down heavily on the side of the MAC system. It is supposed to be a unique British system. I have been involved in many heroic engineering works in this country, which in the end do not seem to tie up with what customers throughout the world want, to make the market base viable. Information about the MAC system that I and my other colleagues received recently shows that to use that system would cost £100 more per domestic television set than to use the extended PAL system. Furthermore, the MAC system would not allow access to and from Europe. It is further suspect in that it would allow the Irish to put into this country—if we can have the cheaper system offered by extended PAL—the very items of American programmes that many hon. Members fear will be the prime motivation of cable television producers. Lastly, one has only to look at the advertising style that is required in the United States to promote those poor quality programmes to see that, by going just for the MAC system, or by putting it foremost in our minds, we could end up with a one-off which no one in the rest of the world wants to buy.
On the question of whether cable should be coaxial or fibre optics, I suggest that if my hon. Friend cares to search through the lower regions of the Department of Industry he will find records of work done in the British aerospace industry in this country 10 years ago, when fibre optics were used not in the quiet environment below the streets of London but in aeroplanes. Those aircraft, operating in temperatures between minus 70 degrees centigrade and plus 150 degrees centigrade, well outside the environment of our homes, proved that fibre optics were a satisfactory signalling system. It was found to be a satisfactory signalling system 10 years ago. However, engineers in this country did not stop at using analogue signals, which are of poor value, for a fibre optics signalling system. They used digital signalling which can carry much more information and can time share various types of information.
It would be useful, therefore, in the time between now and the promised White Paper, if the Department were to look carefully at the kinds of technology that are available, and to study carefully the impact of the implementation of the Part report on our ability to establish a viable export market base in this country.
There has been much talk about the quality of programmes that will be available on cable television. Most people see it primarily as an entertainment system. As my right hon. Friend said earlier this afternoon, there is a growing market demand which probably could only be satisfied by the ability to use cable and satellite for the transmission of data.
CIT Research Limited produced a report recently which had 33 sponsors, including the Cabinet Office, NEDO, the BBC, and most of the European PTTs. The report concluded that only one in 20 consumers would be prepared to pay £8 a month for a cable service, and only one in four would be willing to pay as little as £1 a week. To paraphrase what an infamous young lady said a while ago, "They would, wouldn't they". It depends what one gets for the money one pays.
I asked a young man what he, as a young person, would like to see in cable television. He had no problem at all. He quickly listed six items, some of which have been 458 mentioned here today. First, there was sport—the ability for an enthusiast to watch a whole programme and, as my hon. Friend the Member for East Grinstead (Sir G. Johnson Smith) said in a very fine speech, the ability to learn something about how to play a sport. He mentioned fishing, and Opposition Members laughed. The largest single sport in this country is fishing. More people take part in fishing than in any other sport. Open golf tournaments have been mentioned, and the possibility of seeing a whole tournament. That is where pay television comes in. As my hon. Friend the Member for East Grinstead said, we must consider what people want, not what we believe is good for them.
The second item was films. Networks usually show only one film a day, while a cable operator can show five or 10. Many of us never have a chance to see high quality foreign films, which are available in only a few cinemas in London.
The third item was education. Old and young would have the chance to see what was being taught and to learn for themselves, particularly as the time scale of technology is getting shorter all the time, in their own time about new opportunities, and to build up expertise. Cable television could provide a valuable school service. Most school programmes are aimed at the under-12s, because it is more time-consuming and complicated to aim at O-level and A-level students. Cable could give the opportunity for people to broaden their education, discover the finer aspects of learning, and listen to the best teachers in the country. Adolescents do not get much time on television now. If Channel 4 is anything to go by, the "off' switch is the thing to use.
Major foreign events were the young man's fifth choice. He talked about the Royal wedding, which got major cable coverage in the United States. Certainly we should like to have more coverage of important speeches in various parts of the world—perhaps those of the United States President—or even to watch the latest military equipment in Red Square in Moscow. That would be not for entertainment purposes, but to learn about the nature of people or important occasions abroad.
The hon. Member for Nottingham, West (Mr. English) has already stolen the sixth item on my list, theatre productions, so that people need not come to London, and could see good plays, operas and ballet in their homes.
I should like to add only one more item, at which I am sure no one in this place will laugh, but at which people outside will certainly laugh, and that is the ability to see Parliament. One may not want to pay to see Parliament, but it would be valuable to see a debate such as the one we are having on communications, and hear, on the basis of a whole debate, what people on both sides of the House feel in a discussion which to me, at least, does not seem in the least acrimonious.
We have here a big opportunity, and we should move forward as quickly as possible, using the best of our technology. If people are afraid of what will appear on 44 channels, I commend to them the magical critical ability that they have of using the "off' switch. The IBA should be a perfectly satisfactory regulatory agency, and there is no need for us to invent another. We are faced with a technical challenge that is worthy of parliamentary encouragement. It will give job opportunities, the ability to export, new ideas and, above all, a better choice for the individual.
§ Mr. Philip Whitehead (Derby, North)
I agree with the hon. Member for Hastings (Mr. Warren) that cable television and all the other adjuncts of the communications revolution can be either a threat or a promise. The hon. Gentleman chose to concentrate on the promise, and rightly so. There are many things on the shopping list that he gave the House which we, too, would find desirable. However, we must also concentrate to some extent on the threat.
This is a crucial debate. If the House and the Government get it wrong in the next few months, we shall be stuck with decisions, the consequences of which may well throw out necessary development in technology in this country over the next few years.
The debate is not, as some hon. Members have tried to suggest, on the one hand, baying Luddites, knuckles thumping on the floor, determined to smash the machines and drive us back to the Stone Age, and, on the other hand, heroic entrepreneurs trying to bring sweetness and light to the general population, if only we give them a sufficiently long franchise. The reality is rather different.
I wish that the Prime Minister had been here to listen to the arguments that have been put forward. Whatever the Home Secretary may say, we know that the speech at the Barbican next week will be crucial. Gloriana will appear, suspended no doubt from glittering coaxial cables as rigid and obsolescent as she is herself, to give the speech that will determine the thrust of the Government's policies. Much has been pre-empted before today's debate.
The least that the House can do is to express an alternative view which has some force. The decisions that we are now being asked to take could mean a bonanza for American programme providers rather than for the British, for Canadian entrepreneurs and hucksters rather than for the British, and for Japanese peddlers of out-of-date technology, however efficient at peddling it they may be, rather than for the technology of the future that the Minister of State, like me and most other hon. Members, would like to see given an advantage and a competitive edge.
My first point is about the central issue of regulation. It is at the heart of the matter. However Lord Hunt's committee regarded the matter and however some people may wish to believe that, in the wide society of electronic publishing and other easy phrases and slogans, we do not need regulations, we do need them for both negative and positive reasons. Television will be only a small part of the cable revolution.
The television set is already used by my children—and probably by the children of other hon. Members—for many other purposes than watching the box. It is a VDU for their home computer, and soon it may be the screen for the new viewphone system. If we are to examine the cable element of the broadcasting system, we should examine the interactive element. Many hon. Members have babbled glibly about interactive systems without knowing what they are. I shall deal with the interactive nature of what we have at the moment and the choice that that offers as against what we are being told we might need, and what that, in turn, offers.
The development of the broadcasting system in Britain has proceeded along the route of public service under 460 public regulations, because that is the best way to ensure that all citizens in the country get there in the end. They all get the same range of choice.
The hon. Member for Gravesend (Mr. Brinton) and others have said that, of course, these things begin with the luxuries. He said that in the beginning came the luxury device that sooner or later became accessible to other people. Cable television is not quite like that. There is no analogy with the systematic provision of a nationwide system of transmitters and the emphasis upon them that brought the broadcasting services over the air to the whole country. Nor is there any easy analogy with the way in which the Government have set about introducing DBS services. If we consider television channels—channel 4 having just started, breakfast television about to start, and competition for advertising—and the enormous investment for genuine programme-making and the intrusion into that scene of an essentially parasitic group of cable entrepreneurs without regulation, we can see some of the dangers to the system. That is why protection is needed for genuine choice.
The Home Secretary said that cable television is complementary to public service broadcasting. I suggest that it is a form of public service and that there must be a public service element within it. There must be controls on the proportion of foreign ownership and programming for reasons with which any hon. Member would be familiar if he had witnessed what has happened in the United States and elsewhere where the principal multinational cable entrepreneurs are dominant.
Several hon. Members, including the hon. Member for Hendon, North (Mr. Gorst), said that franchise operators want 25-year leases. They believe that is what they need. Why? Franchise operators want 25-year leases because they suspect that what is on offer in the Hunt proposals, which the Government may accept, is not sufficiently profitable. Therefore, they want rather more.
Professors Ehrenberg and Barwise of the London Business School conducted an interesting survey of the system's profitability and what it was likely to offer. It was given in evidence to the Hunt committee. They suggested that it was predominantly mass entertainment programming that would make money for the cable operators. Many of the other matters that have been referred to wistfully today were considered unlikely to be so lucrative. The operators know that well.
Professors Ehrenberg and Barwise also said that an unregulated cable system would produce largely unwanted social side effects, among which they included the social divisiveness between cable subscribers in profitable areas and the rest and the desperate struggle for market share and revenue by and with the networks. We should look at those matters when we consider how long the franchises should be and how much regulation—whether at a distance or much more direct—there should be.
Revenue for the cable stations will, as the Home Secretary said, come from a mix of subscriptions, advertising, pay television, "pay-per-view" and sponsorship. Some of those sources of revenue are under threat from the outset. No one knows how much revenue can be generated by advertising. In the immensely richer United States, cable systems that have relied on advertising have shown a loss. Some of them, including the prestigious CBS cultural service, mentioned by hon. Members who obviously believe that it is still offered to the people of Manhattan, has gone bust. What is more, as I tried to 461 explain to the hon. Member for Howden (Sir P. Bryan), the video explosion in Britain does not necessarily mean that there is a terrific appetite for films by subscription cable television. If one hires a film for a video recorder, one does not necessarily want to pay a large subscription to a cable company to get the same service.
The companies may soon demand two things. The first will be much longer licences than the proposed eight or 10 years. The second will be a rapid relaxation of the rules about "pay-per-view" services.
The Ministry has been extremely diligent in his attendance. As he is here, I should like to ask him a question. There was a leak in one of the Sunday newspapers that the Government are now attempting to lure the hucksters back into the system by suggesting that they may have 25-year franchises and that those franchises will enable them to carry out data transmission services and television programmes. If so, where does the sanction lie if the provision of the cable television service is unsatisfactory? Like the Minister, I am familiar with paragraph 22 of the Hunt report and the suggestion that if in those circumstances a cable operator were providing unsatisfactory programmes he could be made to sell off his cable system. It is extremely difficult to do that once the operator is providing other services, which he may be producing efficiently, and once he has made the initial investment in hardware and software. We are left with a weakness in the proposals for the regulations, and it should be examined closely.
The problem is that operators are likely to give us a mix of programming. Mass entertainment will predominate. This is the home box office concept—films and so on. There will be a determination to move towards the type of programming that will draw in the viewers, whatever reservations hon. Members may have about some of it.
The hon. Member for Hendon, North and others have been bleating about Channel 4. They want it switched off after only two or three weeks because they do not like some of the programmes that appeal to minorities. Yet they want 25-year licences for the cable operators and they pray in aid some of the same minorities who, they say, may be well served by the system. I shall tell the House who will be served by the system if profitability is in doubt—those who want re-runs of old movies, old television programmes and pornography.
I am sure that the Minister will not try to tell us that the magic electronic key suggested by the Hunt committee will stop any 10-year-old watching pornographic programmes. It certainly would not stop my children, who can work the machinery far better than I can. By the time I came home, they would not only have watched the programme but recorded it in slow motion on video tape so that I could have an action replay. That is how useful such safeguards are when children are about.
Cable operators ask for long franchises, saying that they will not take the risk without them. They will not take the risk because there is no public service element in what they are required to do. That leads me to the conclusion that we should have a national system. I think that the hon. Member for Thornaby (Mr. Wrigglesworth) did Lord Weinstock a disservice in suggesting that his proposals simply handed over the installation of cable to British Telecom. I believe that Lord Weinstock wanted—rightly—a consortium in which British Telecom 462 would be the market leader, providing the national electronic grid and able to see that it was transferred to optic fibre as soon as practicable.
§ Mr. Wrigglesworth
Perhaps I may clarify that point. I certainly did not intend to give the impression that that was my understanding of Lord Weinstock's proposals. I hope that the hon. Gentleman will accept that.
§ Mr. Whitehead
Yes, I accept that. Lord Weinstock saw a role for British Telecom and I believe that he was right. It is no use Conservative Members simply attacking British Telecom and Opposition Members attacking private industry. Unless there is a partnership in the best spirit of a mixed economy, the kind of national grid that I wish to see will not be installed.
I hope that the Minister will tell us that at the very least a convertibility stipulation will apply to the systems introduced, so that we are not stuck with out-of-date coaxial systems when we could transfer to switched-star and optic fibre, in which this country could be a market leader with a high export potential for years to come. If those assurances are given, if there is some glimmering of understanding that some of the people going into cable intend not to enrich public choice but merely to enrich themselves and that that is not a necessary corollary to the kind of public service input that we want, today's debate will not have been wholly in vain.
§ 8.3 pm
§ Sir Philip Goodhart (Beckenham)
The hon. Member for Derby, North (Mr. Whitehead) always brings great expertise to debates on broadcasting and television. He was, of course, a member of the Annan committee. If there is any common ground between those who have taken part in debates on cable television within and outside the House, it is that in considering the matter several years ago the Annan committee entirely underestimated the pace of the technological revolution that was to overtake television. It is a pity that that comittee did not turn its mind to these matters then, as these debates could have taken place at any time in the past three or four years and we should now be further along the road.
I go at least part of the way with the hon. Member for Derby, North in his comments about the problems of franchise control. It is understandable that those contemplating applying for franchises want a franchise longer than eight or 10 years. Nevertheless, I share the misgivings of the many people who do not want them to have 25-year or lifetime franchises.
The amount of capital that will have to be invested, however, is clearly very much greater than in the case of an ordinary independent television franchise. In the latter case, if the franchise is removed after a few years, the studios, cameras and other equipment can be disposed of fairly simply. In the case of cable television, however the cable, switching equipment and so on will be worth many millions of pounds. If removal of the franchise is to be a real threat, we must agree an evaluation procedure at this stage so that the cable and other equipment can be transferred from one franchise-holder to another. The threat will then become a real possibility rather than some kind of nuclear deterrent so horrendous that it will never be used.
On controls falling short of removal of franchise, I am sorry that the Hunt committee turned its back on the 463 financial penalties involved in the performance bonding system so common in the United States. If the franchise-holder does not put in equipment to the agreed standard or does not cable the area quickly enough, he is subject to financial penalties through the performance bond. I believe that we can and should develop that kind of minor financial penalty in this country. I hope that the Government will consider that, as the Hunt committee's view is clearly not the last word on the subject.
A certain amount of disquiet has been expressed today about the Hunt committee's proposals on pornography. I do not believe that we should devote too much attention to this, as the parameters of the debate have been greatly changed by the video cassette revolution. To paraphrase an old cliché, we should be locking the brothel door after the whore has bolted. Some 20 per cent.—certainly 15 per cent.—of homes with television in this country already have video recorders and it is estimated tht that proportion will rise to 50 per cent. in the near future. Thus, anyone who really wants to see pornography on the television screen has only to buy or hire a video recorder, go down to the friendly neighbourhood sex supermarket and rent a pornographic film without any controls applying. I suspect, therefore, that there is no need to devote a great deal of attention to that aspect.
We should not lightly accept the Hunt committee's recommendations against "pay-per-view". I believe that such a system has substantial importance for the sporting life of this country. Naturally, the BBC is terrified that cable television may gain a foothold in sports television. For the past 25 years, while the country has been mad about watching sport on television, television has had sport on the cheap. It would not be an exaggeration to say that the television authorities have short-changed the sporting establishment. If one looks at the penurious state of athletics, rugby, racing, football or cricket, one sees that the television authorities have raped and pillaged sport. Pay television is the one way in which the sporting organisations can hope to recoup their fortunes.
Football stadiums are decrepit and prone to violence. Many football clubs are on the verge of bankruptcy. On the whole, football players are comparatively badly paid. In a good year the BBC and ITV paid football no more than £5 million. In America, the national football league has recently signed a contract with ABC and CBS to cover the full programme for a four-year period for $2 billion. The two networks are paying the national football league for the right to carry football a sum equivalent to the price for putting out every programme on BBC1 for a year. The result is that the American sporting establishment has rich players, luxurious stadiums and prosperous clubs. The only way in which British sport can hope to recoup its fortune is by some form of "pay-per-view". I hope that the Government will look at the Hunt committee's recommendations on that.
Cable television, like any changing communication, will produce as many bad programmes as good ones. There is always the risk that expansion will produce some lowering of standards. It is worth remembering that in civilisation's long history the greatest single decline in cultural, aesthetic and philosophical standards was produced by the printing press. Until then, monasteries were the major suppliers of books. The monks diligently produced bibles, prayer books, hymnals and works of theology and philosophy. The printing press came and lesser works were immediately available to the public and 464 it became possible to publish works of casual playwrights like William Shakespeare—a decline perhaps from the bible.
The expansion of communication carries the risk of some lowering of standards, but it also contains the promise of wider choice and much that is excellent. I am sorry that the Home Secretary seemed to suggest that all legislation on this point will be delayed until next Session. I hope that, following publication of the White Paper, we shall move a little faster and have the necessary legislation in this Session.
§ Mr. Geoffrey Robinson (Coventry, North-West)
I am fortunate to follow the hon. Member for Beckenham (Sir P. Goodhart). He ended with a request for speed. I believe that I have heard every speech in this debate, but I have heard nothing to justify the great haste with which the Government are embarking on the cabling of Great Britain. A case for speed can be made if the matter is approached correctly from the technological point of view. The interests that have been declared have been those of the programme organisers. They wish to use cable to advertise or reap the benefits of advertising revenue, and I do not believe that those are good enough reasons.
No one who is close to the British public can say that he has detected a crying need for the range of programmes that cabling will make possible. I have not detected that need among my constituents or the people of the area in which I live. The most puzzling feature of the debate is the speed at which it is taking place. There was a rather disgraceful report by the information technology advisory panel which is composed of an opinionated, self-interested and culturally disinterested group of people who urged that we go ahead with the cabling of Britain. As far as I could make out, they gave no good reasons for that. The Government, however, are quickly implementing the proposals.
Recommendation 8.11 of the report states:The Government should announce as soon as possible its approval for an early start on DBS services.That is all part of the same argument. There is a footnote which says:The Home Secretary announced the Government's approval in principle for a two-channel operational DBS service starting in 1986 in a parliamentary statement on 4 March 1982.This came as something of a surprise to those of us who have some experience of the excruciatingly slow and grinding processes by which Government decisions are made. Equally surprising was the fact that hot on the heels of that report the Hunt committee was set up. It was comprised of three members only because more members would have needed longer to reach a decision.
Within about nine months we had the Hunt report with its conclusions. One cannot start DBS until a decision has been made on which system should be used for transmitting from the satellite to the receivers. That is a difficult decision. A choice has to be made between two powerful lobbies—between the BBC and its PAL and extended PAL and the MAC system proposed by the IBA and its engineering directorate. It is a decision about which Governments would normally agonise for years. That problem was resolved without any trouble. Sir Anthony Part then crops up. I do not know what he knows about technology, but he has a good, independent and incisive 465 mind. Within a matter of weeks he made recommendations. Despite many pleadings from the BBC—with which I do not agree—that it would cut us off from our European audiences, a decision was reached. Come what may, we shall have MAC. It is almost unprecedented for a Government to wish to push through so quickly a series of decisions in such a complex and difficult area. I can find no good reason for the speed.
No one has yet mentioned the inherent conflict in what we are trying to do. Those in favour of television by cable urge the maximum speed; with equal emphasis, we are told that it is a high risk activity and needs a long franchise period. Hon. Members have referred to the period being between 20 and 25 years—some with anguish and others with delight.
The two arguments do not go together. If we push ahead as quickly as we can and give a franchise for 25 years, with the technological state of the two alternative systems—coaxial and fibre optics—we shall tie in a major part of our cabling to the coaxial system.
§ Mr. Robinson
No doubt if the hon. Member for Wycombe (Mr. Whitney) catches your eye, Mr. Deputy Speaker, he will make his point.
My hon. Friend the Member for Norwich, South (Mr. Garrett) said that British Telecom is already advanced with its switching system, but I believe that it would be optimistic to commit ourselves to the time scale that it believes possible. Such things inevitably take longer than predicted, even in war. To meet the time scale that the Government have in mind for a national electronic grid it would need to be given the priority that Churchill gave to the development of radar in the Second World War.
In an article in the New Scientist I read that Churchill told Sir Bernard Lovell, among others, in April 1943 that he wanted 40 bombers equipped and flying with radar by October 1943. People worked night and day and there were a lot of failures but the bombers were equipped and flying by December 1943. If we gave this proposal the same priority, I am sure that we could achieve the objectives.
Other hon. Members have concentrated on the need to evolve a regulatory mechanism for the cable era, but I am not so worried about that. We have a national genius to evolve such bodies. I am sure that we shall find a suitable mechanism to control cable, as we did with the IBA and similar bodies. I am more interested in planning the technological implications of what is being done. The British public will decide what programmes they want; I have confidence in their judgment, but I have the gravest doubts about the Government's judgment and approach and about the speed when it comes to the technology to be used for cabling.
Lord Weinstock has been quoted to great effect. In case my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) does not catch your eye, Mr. Deputy Speaker, I shall quote what the Post Office Engineering Union says:On any objective criteria British Telecom is the obvious and most qualified authority to provide the actual cable for television systems in this country.It is open to fair party political and technical debate whether it is a total monopoly or a mixture.
466 The union's comments could almost have been written by Lord Weinstock. He used similar words in his article in the Financial Times. I hope that the Prime Minister will listen to him with the same attentiveness on this as on other issues. By doing so, she would also be listening to the views of the Post Office Engineering Union and British Telecom.
The union further states:It has the wayleaves and physical infrastructure; it has the technically-trained workforce; it has the knowledge of both coaxial cable and optical fibre systems; it already operates a national switched communications network; and—perhaps above all—it is an existing organisation with decades of actual experience of carrying our large-scale technical projects and it is geared to start the re-cabling of Britain immediately.We are not immediately ready to move to what we really need—the most advanced fibre optic technology.
My hon. Friend the Member for Huddersfield, East (Mr. Sheerman) in his copius speech and other hon. Members spoke of the advantages of fibre optics over coaxial cable in providing the national electronic grid. But fibre optics is important not only in that area. The Japanese are no slouches at picking winners. The technical and major national newspapers report that they see fibre optics as a major growth area. Previously they have identified other such areas—cameras, information technology, micro-electronics and, for the future, biotechnology.
Let us take just one example—endoscopy, which is the means of viewing and filming the inside of the stomach by gastroscope or colonoscope. That multi-million pound international market which is based on advanced fibre optics is already dominated by the Japanese. Another massive multi-million pound market is road and rail signalling throughout the Arab-speaking world. Once we get the definition correct and sufficiently minute, it is another massive market that will be taken up in fibre optics. The whole potential for fibre optics comes from a great British invention. Professor Hopkins of Reading did the work in the early 1950s.
We should not be worrying in the short-term about immediately providing pornographic films or a news service. The nation needs long-term provision, to the highest level of technology, of a comprehensive electronic grid. We should not be pushing ahead to license the first flush of films on coaxial cable; we should be planning how to push the technical and marketing aspects of fibre optic technology.
The debate is the wrong way round. We do not urgently need to push ahead with cable television along the lines and in the time scale that the Government wish. But there is an urgent need for the Government to discuss with British Telecom and other cable manufacturers the time scale and standard of advanced internationally competitive technology for establishing a national electronic grid. The Prime Minister every Question Time harps on about international technology. If we were to do that, we would meet the needs of the consumer and the nation at one go. A great British invention would be exploited comprehensively to the benefit of British industry and the British consumer by using the most advanced technology.
I hope that we shall have a categoric assurance from the Minister for Industry and Information Technology that there will be no new major investment in coaxial cable. There must be no diversion of capital or intellectual resources.
There are those who say that the only way in which we shall secure the development of fibre optics is to go for a 467 franchise of 25 years that is based on coaxial cable. They are talking rubbish. That approach is a paradox and a contradiction. Fibre optics will be developed only by granting a 25-year franchise to an operator on the condition that he will use the most up-to-date fibre optic technology. That would be a deal that many of my hon. Friends and I could accept. It is that sort of deal that we wish to hear about. That is what we want to hear from the Minister for Industry and Information Technology when he replies. Anything else will be a second-rate decision taken by a Government in undue and unnecessary haste for reasons that I for one, having read all the relevant documents, am unable to discover.
§ Mr. Raymond Whitney (Wycombe)
The hon. Member for Coventry, North-West (Mr. Robinson) rightly said that at one stage in his speech I was shaking my head in disagreement. That was on the issue to which he returned at the close of his remarks, which is, in his view, the impossibility of making progress until everything is clear about fibre optics and associated technology.
The hon. Member for Derby, North (Mr. Whitehead) talked about the possibility of evolving from the coaxial tree-and-branch system into fibre technology. I note that the hon. Member for Coventry, North-West is now shaking his head. It seems that we shall have to agree to differ. His hon. Friend the Member for Derby, North talked about evolving into optical fibre and a switched star system. Most experts estimate that the initial costs of this evolutionary possibility will be 5 or 10 per cent.—I agree that that is an entirely sound judgment—in return for a significantly longer franchise than the eight-year or 10-year agreement that is now proposed. That would be a fair balance to strike.
The hon. Member for Coventry, North-West quoted with approval Lord Weinstock. It has been suggested by a number of British cable manufacturers and industrialists that Lord Weinstock's present stand, which is closely allied with that of the Post Office Engineering Union, may have a little to do with the fact that GEC is rather behind the play. In effect, the noble Lord is asking for the play to be halted so that his company can catch up. That is a possibility.
§ Mr. Whitney
I should declare a putative interest in the cable industry. When the progress is achieved that we all hope will take place, I hope that a group of friends will launch into cable technology. Why not? This is surely what we are looking for. The putative nature of the project was somewhat increased by one or two of the echoes that came from my right hon. Friend the Home Secretary. I hope that the dead hand of the Home Office will not weigh too heavily in this complex decision. It is an area in which the Home Office is not well fitted to take decisions. In so many areas of our national life the Home Office has its contribution to make, but it is generally a bastion of reaction. The challenging world of cable technology is not a natural habitat for the normal inhabitants of the Home Office. I hope that my right hon. Friend will struggle free from his Department's protective embrace. I hope that the initial thrust given by my right hon. Friend the Prime Minister, and especially by my hon. Friend the Minister for Industry and Information Technology, will be maintained.
468 The hon. Member for Coventry, North-West asked "What is the hurry?" There is a hurry because we must give this tremendous opportunity to British industry, which it will lose if we are slow. We must give the opportunity for jobs because it is probable that tens of thousands of jobs will accrue from this development. We must also provide the opportunity of choice, something which has not had a sufficient airing in the debate. We are reflecting the influence of the BBC and the public service of broadcasting generally.
Labour Members have asked for evidence of the need for choice. Video sales in Britain have outstripped those in any other country. That shows that there is not satisfaction with what is on offer in the public service of broadcasting. The choice offered to the public is not regarded as adequate. I shall refer again to the point admirably made in that splendid speech by my hon. Friend the Member for Howden (Sir P. Bryan). The choice available in Manhattan—brought to us by Andrew Neil, the editor of The Economist—was challenged by the hon. Member for Derby, North. The hon. Gentleman attempted to dismiss the proposition that on 7 June 1982 viewers in Manhattan had a choice of 25 channels. The hon. Gentleman suggested that the CBS cable was no Longer operating. Even if that is accepted, there are 24 channels showing six feature films, yet another ballet, the news, documentaries, two plays, two sports programmes and so on. At that time we had yet another regurgitation of "Hitchhikers Guide to the Galaxy" and the 9 o'clock news.
If we are kind and include last Saturday's viewing on Channel 4 at that time, we should have had one more choice. At 9 pm last Saturday, Channel 4 offered something called the "Norman Gunston Show". According to "TV Times", he isa silver-tongued Australian comedian who specialises in practically incoherent interviews".Therefore, we should not take too seriously the proposition that the public service broadcasting that is on offer is so wonderful that it cannot be improved.
In the past three months there has been an important development. There has been a counter-attack. There was a splendid initiative on the part of the Government that was followed by an organised counter-attack that was led, in particular, by the BBC but also by the IBA. I do not know what it is about Australians, but we have had, for example, Mr. Clive James dragging up Ugly George. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) referred—not inappropriately—to that programme. Mr. Clive James gave us several doses of that, half hour by half hour, on, I believe, Sunday by Sunday, seeking to prove that cable was a bad thing.
The quality of British television must be capable of improvement. I would not commend watching, for instance, "The Dukes of Hazzard" on BBC. If hon. Members are worried about low quality imports from the United States of America, the BBC has one or two things to answer for.
§ Mr. Critchley
Surely my hon. Friend is aware that there is a 14 per cent. restriction on the BBC's imported material. If he had his way, there would be no quota on cable.
§ Mr. Whitney
If I had my way, there would be so many cable channels that the 14 per cent. would be irrelevant. Most of the material would be locally produced, anyway. Therefore, the whole quota system 469 falls to the ground. People have not grasped the local nature of what is offered by the narrowcasting of cable. The whole equation of 86 per cent. to 14 per cent. ceases to be relevant.
The House has not given due weight to the amount of talent in the British entertainment industry that is going to waste. Eighty per cent. of Equity's members are unemployed. If they are clever enough not to allow Mr. Sapper or the Equity bosses to keep them out of the picture, there will be tremendous opportunities for them. I have every confidence that more television will not mean worse television. It could well mean better television.
I have already dealt with the exaggeration of the technical problems. However, I am worried that the temperature is cooling over cable. We expect the forces of reaction that always assemble on the Opposition Benches and added to that we have the vested interests of the public service broadcasting system. The trouble is that they are now dragging out the difficulties and financial problems of some cable interests in America to try to prove to the City that this investment is not worthwhile. That is a danger of which the Government must take clear note. If they allow the foot-draggers who still exist in parts of the Government machine to coalesce with all the other vested interests, the whole project will be lost.
I therefore urge the Government not to allow this braking of the system. They should seize the opportunity to which the Home Secretary referred when he suggested that there was a possibility of pursuing an interim solution. I very much hope that my right hon. Friend, aided by the Minister for Industry and Information Technology, will cut through the undergrowth and strive hard for that interim solution.
I also hope that the promised further thought about "pay-per-view" will be further positive thought. As a number of my hon. Friends have said, we are not talking about the Derby or great events such as that. We are talking about the football matches of the away team and the cultural events for ethnic groups for which people will be willing to pay.
This is a challenge that we must not resist. The attitude in British society has been "Better not, do not do it, let us wait". Time and again, we have lost opportunities. We lost the jet and nuclear reactors. Let us not lose the cable opportunity.
§ Mr. Austin Mitchell (Grimsby)
As a foot-dragger, I am reluctant to come between the hon. Member for Wycombe (Mr. Whitney) and his putative quick buck, but I dread the prospects for the 14 per cent. of Equity members who are in employment if his kind of cable television is what we adopt nationally.
I am in two minds on this issue. The first is attracted to the excitement, prospects and pluralism of a multiplicity of channels, but at the same time there is a real fear about the dangers we face if we take the wrong decisions, and all the indications are that we are heading towards wrong decisions. That is because we are not having a great debate on cable television. We are having much more of a bum's rush into cable television by the most underhand methods imaginable. In fact, if this is to be a renaissance, it will 470 be preceded by the dark ages, given the manipulations and intellectual shoddiness of the arguments that have been put forward for the kind of cable that seems to be on offer.
The report of the information technology advisory panel is a disgraceful piece of special pleading on behalf of the interests that are strongly represented on that panel. Mr. Mike Aldrich, the managing director of Rediffusion Computers, is specified in several places to be the author of that report. That is tantamount to getting criminals to write their own judgments or special interests to agree to their own demands.
That report was immediately followed by a quick reply from the Hunt committee, which is a classic example of how to get what one wants without specifically asking for it. This is a tame committee, with a former Cabinet secretary, whose whole experience is to put into far better words what politicians would like to have said but did not say. That committee was given the job of saying how, not whether, cable should be introduced, and how it would affect the existing media. All the important considerations were excluded, as were the possible restrictions.
As a result, I was not surprised at the reactions of the advertising industry. Mr. Roy Langridge, media director at J. Walter Thompson, said "It's great news", and the response of IPA director David Wheeler was "extremely encouraging". Mr. Wheeler added:Virtually all the figures in the section of the report relating to advertising come from our report.That is another prejudging of the issue, which has the dreadful indication of Aphrodite emerging from the cable at the Barbican Centre next Tuesday. Now that the miracle arising from the Government's economic policies has been indefinitely postponed, here is an indication that they have a strategy for some entertainment to while away the hours until the miracle occurs.
The basis of the argument for rushing in cable is that entertainment will carry the other purposes and objectives for which cable is available and will fulfil. That is an inadequate argument. Yet that is the basis for rushing through crucial decisions which, if taken wrongly, will not give benefits but will cripple us with outdated technology.
The Government's argument appears to be that entertainment will carry the other purposes. One has a vision of the Minister for Industry and Information Technology riding into silicon valley on a donkey. I doubt whether entertainment has the strength to carry the weight of the Minister and the other purposes, not because people will not be willing to pay or that they do not want further channels, but because there are so many alternatives—for example, direct broadcasting by satellite, the fifth channel from the re-engineered VHF to UHF, the low-power transmissions, and video, which is rapidly catching on. With all the alternatives and the lack of clear demand for the extra channels, I doubt whether entertainment will be able to carry the burden that is being put on its shoulders by the Government's strategy.
If entertainment fails to carry that burden, the case for rushing ahead, and doing it so overwhelmingly in the private sector, collapses. If entertainment cannot carry the burden, there will be a stronger argument for having British Telecom as the carrier and provider of the cable and using it for its own purposes.
There is a stronger argument not for rushing, but for making the decision in a calm, rational and calculated fashion. A crucial decision must be made about technology. A clear preference has emerged in the House, 471 first, for the switched-star system rather than for the tree-and-branch technology, which will be adopted if we go ahead at the present speed, and, secondly, for glass fibre rather than coaxial cable. Conservative Members have pointed out that glass fibre is more expensive at the moment—but sand is cheap. I will offer Cleethorpe's beach to the Government for their industrial miracle. But will they take it? A great demand would come through ordering from British Telecom—Government ordering—and through a decision to go for that technology. Costs would come down. Indeed, they would plummet. The cost of the switching gear, which would be quickly developed as demand materialised, would also come down.
A mistake on either of those two crucial decisions—tree-and-branch versus switched-star or coaxial versus glass fibre—will be costly. Only by waiting and taking the right decision will we get the best technology.
A second mistake, into which we are being rushed, is the creation of local monopolies. If entertainment does not carry the burden asked of it, a local monopoly which has installed the cable will be asked after eight or 10 years to give way. Once the cable is installed, it cannot be taken up again. It would be difficult to tranfer it to someone else. The franchise will be lengthened, or the inevitable will happen as has already happened with commercial television—the companies will demand that conditions imposed on them must be revoked.
We shall finish up with wall-to-wall orgasm, constant pornography and potential trivialisation. Cable is a devourer, not a creator, of programmes. It does not contribute to television. It uses television parasitically. If restrictions are removed—the Government's only answer should entertainment be unable to carry the burden—we shall finish up with all the worst features that Opposition Members dread.
The argument is clear. A public commitment should be made through British Telecom, which has the expertise and is wiring the country anyway. There will be a need to wire the country with fibre optics. British Telecom can provide the investment. It seems logical that there should not be competing systems or local monopolies. To allow British Telecom to be the carrier will mean adequate control over those who will handle the entertainment aspect of programmes. That is only one aspect of the whole purpose of cable.
The Government accuse the Opposition of being doctrinaire. What we are presented with tonight is a doctrinaire argument for private enterprise that is totally unrealistic. It has the potential for making wrong decisions and leaving us with the legacy of an outdated system and bankrupt communicators who will be forced to relax every standard which even this Government, with their low demand for standards, will impose.
§ Mr. Nigel Forman (Carshalton)
The Hunt report took as its terms of reference the Government's wish to secure for this country the benefits of cable technology and the Government's willingness to consider an expansion of cable systems carrying a wider range of entertainment and other services but also the caveat that proposals should be framed in a way that was consistent with the wider public interest, in particular by safeguarding public service broadcasting. Judging by remarks made in this debate and the views of experts who have spoken in my hearing on this topic, it seems that the key factor in the Government's 472 decision making must be topology—in other words, the kind of system that we go for. The technology, important though it is, is secondary. Both the topology and the technology are, in a direct way, more important and more vital to this country than any of the commercial imperatives or the political gee-whizzery that is sometimes associated with information technology.
If the Government take the right decisions, it is clear that some of the benefits of cable technology will show up directly for those who use the system as customers. There will be benefits for existing television watchers who may well appreciate the wider range of programmes than is now available on four channels. These benefits will materialise so long as those who do not subscribe to cable systems are not thereby deprived of some of the programmes they can now get by the financial pulling power of cable programme services. This underlines the importance of the "must carry" rule mentioned in the Hunt report.
The benefits can also materialise for the viewer so long as cable programmes extend the range of programme choice for the viewer. I am not absolutely convinced that the evidence from the United States which may provide a model necessarily suggests that this will be so. I noticed with concern the programme schedule for the Home Box Office cable channel in the United States, which I believe is the only profitable one. It included such wonders as "Arthur", "Body Heat", "Halloween II", "Private Lessons", "The Commodores in Concert", "Camelot", "Not Necessarily the News", "Strange Creatures of the Night", "Race for the Pennant", "Looney Bugs Bunny Movie", "The Man Who Loved Bears", "The Great Muppet Caper", and so on. I am not convinced that that sort of programme content is necessarily for the best. I fear that there may be a Gresham's law in these matters whereby the bad drives out the good.
With regard to the benefit for cable operators and programme providers, one is right to be a little cynical as so much of this argument will depend on the length and terms of licences, on the range of obligations imposed, and the strengh of competition from such things as home video. Above all, it will depend upon the enthusiasm or lack of enthusiasm of the public response.
I note that both Mr. Arthur Taylor of the United States cable television entertainment channel, who has recently been in this country, and the communications and information technology survey poured a great deal of cold water on the commercial prospects. There are two possible interpretations of that. One is the cynical one that people who want something from a Government often get into the habit of pouring cold water on the matter beforehand, saying how difficult and impossible it will all be, so that they can secure better terms from the Government and better consequences. It may be that these people are right, and that Lord Hunt was wise to warn us on a number of occasions that nothing will happen so dramatically, fast or disastrously as some of the proponents of both sides of the argument have tended to suggest.
I wish to concentrate on the potential benefit for the system providers and British industry generally, as that is the most important consideration of the debate. This is the point that has developed. Although the Home Secretary opened the debate, correctly, the aspect of industry is one that the House has begun to focus upon. It is unfair to accuse Lord Hunt of not focusing on this aspect sufficiently, as paragraph 102 of his report makes it clear that he was not asked to do so. However, the Government 473 would be wise to proceed on a more cautious and measured timetable, as was suggested by the Home Secretary today, since that would fit in well with the time scale of the Eden committee which is considering industrial standards.
The key consideration is that Britain has a potential world lead in fibre optics which is the lead technology for the cable systems, and in the switched star network, which is the lead topology. It is a pleasure to see that companies such as GEC, Plessey, and STC, not to mention Mullards in my constituency, are making great progress in fibre optics. It is also a pleasure to see the Under-Secretary here, because I know that he paid a visit to Mullards recently.
British Telecom is also developing the switched star topology through its feasibility study at Milton Keynes. This is where the greatest opportunities lie for home and export markets, provided that the Government give more backing to fibre optics. In that connection, I was delighted to read in the Financial Times today of the support for fibre optics being raised by £30 million. I congratulate the Minister on that.
The Government must give support to the important technology of laser semi-conductor technology so that we can do the switching on a more advanced basis similar to that planned in Japan.
Provided that we do not make a false, economy of deciding now to do in a hurry something that would be based essentially on yesterday's system by the time it got going, we should do well to eschew what is called the American tree-and-branch coaxial choice. We should go as hard and as clearly as we can for tomorrow's system, which is the British star system based on fibre optics. That carries the agreement of both sides of the House, and I have noticed that a number or hon. Members have said that in the debate. It would do more for jobs and growth and would improve our export prospects.
It has been suggested that this system would be dramatically more expensive, but the information given to me is that it would be about only 15 per cent. more expensive, which over the long term is not significant, and there might be a differential in time of between one and two years. We are talking about technology that is likely to be with us for the rest of the century, and into the following century, so it seems to me that it will be a small adjustment for the benefit of this much greater long-term advantage.
The Government are right not to allow themselves to be bounced into premature decisions that we might live to regret. We should proceed with all deliberate speed. If we do so along the technological lines that I have suggested, that would be in the best, wider public interests, which was the main thing that the Hunt report was set up to look into.
§ 9 pm
§ Mr. John Garrett (Norwich, South)
The method, speed and technology of cabling in Britain and the future course of cable systems in this country are the most important industrial policy decisions to be taken by any Government since the war. The consequences will roll ahead beyond our time and into the next century. The prospects and progress of new industries far over the horizon will be determined by the decisions that we take. We must have a systematic and objective discussion of the options. Britain's success in international markets will be influenced massively by those decisions. They will 474 determine other areas of policy in data processing, transmission, telecommunications and publishing as well as having widespread social and economic consequences.
The technology of cabling is a critically important subject in its own right. I think that it should have been debated separately after the Government had produced a consultative paper. The issue of the effects of cable television on public standards in broadcasting is itself the subject of the greatest public concern and should be disentangled from the technological issues. They have been confused intentionally by the Government, who wish to quieten genuine fears about the quality of entertainment and broadcasting with the promise of a great new industrial advance.
The Hunt committee was not asked to address itself to those issues. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said, it quickly dismissed the idea of British Telecom as a common carrier asunlikely, as it is inconsistent with the Government's policy on competition and its expressed view that cabling should not make significant demands on public expenditure.In other words, the idea is inconsistent with a transient political ideology and a probably transient set of accounting conventions.
Our national policy on cabling Britain must be viewed more seriously than that. Apparently, next March the Eden committee will report on the technical considerations of cabling. So far, it has issued an interim report of just two sentences. The Library tells me that it is so short that it was never published. It states:Subject to one or two areas requiring subsequent infilling, appropriate drafts of British Standards will be available on or about 1 March 1983. The working group assured Ministers that these gaps would not prevent new systems from being designed and installed.That is all that we have to go on in the crucial area of technical standards.
The letter inviting Dr. Eden to chair the committee asked him to consider the principal topological and technical options by March 1983, but began by saying that Ministers intend taking decisions on wide-band cable systems by the end of the year.
The significant feature of the handling of the issue is the tremendous hurry that the Government are in, matched or prompted by the hectic pressure from existing cable interests for permission to proceed. The Government are in a rush because they want to look progressive and imaginative. They also have the real problem that Britain's share in world trade in information technology equipment is falling as the market for the equipment is rapidly expanding. Currently, we have 3.8 per cent. of world exports and on one reliable estimate the figure will fall to 2.4 per cent. by 1990 unless we innovate. By that time the market will be worth £150 billion per year.
British industry has already missed out on the video recorder boom. The domestic market will double again this year to £400 million, making our video recorder market the fastest growing market in the world. We have no significant domestic manufacturer.
The Government also need a tangible success in information technology. The Government's schemes are taking a long time to pull through manufacturing investment, as one would expect in a recession. What is being done by the Department of Industry is largely being undone by the Department of Education and Science.
475 The existing cable companies are also in a rush because they see multi-channel networks arriving in the nick of time. According to the chairman of British Electric Traction, which owns 63 per cent. of Rediffusion, that company's cable operations are now running at a loss, andplans for dismantling are lying on the table".Some 70 per cent. of its present cables are 20 to 30 years old and are obsolescent. The cable companies think that once direct broadcasting by satellite is in operation in 1986 it will be more difficult for new cable systems to be established. The viewer with a £200 dish antenna will be able to receive two BBC channels, up to three commercial channels and foreign signals, including, I understand, the five, probably leased to Americans, via the Irish satellite wavelengths. Paying for cable looks a much less attractive proposition in that situation. By 1985 there will be 50 per cent. market penetration of video recorders as well.
The cable companies also want the franchises before a change in Government policy can occur. The result has been a gold rush by the cable companies. I have never received so many expensive brochures or been invited to so many meetings by so many people who sincerely want to be rich.
Those companies are urging on the Government what Lord Weinstock, in an excellent analysis in the Financial Times last week, calledthe quick buck option … apparently based on the twin assumptions that advertising revenues are unlimited and 'adult movies' will always find a ready market.To digress, not long ago I heard a cable company executive explain that his company would provide a channel devoted entirely to adult movies which he exemplified as such productions as "The Bitch", "The Stud" and "Emmanuelle". I understand that those are what are known as "soft porn", as distinct from what the hon. Member for Aldershot (Mr. Critchley) described as mid-porn and adventure porn—which I suppose has something to do with outward bound courses—as supplied by American cable television. Whether they are titillating or not is in dispute, but it seems to be generally agreed that they are grossly demeaning to women and an outrage to family viewing. The Hunt report's suggestion that they could be controlled by means of a daft electronic lock is wholly objectionable and inapplicable.
However, the quick buck option also has technological implications. It means handing out franchises to cable companies not only as cable operators but as cable providers, builders and owners of the distribution network. That in turn is likely to mean a network design or topology—the so-called tree-and-branch system—which will soon be technically obsolete and, in Lord Weinstock's words,is simply incompatible with a national broad band interactive network.That is to say, it is incompatible with the national structure that we shall require if we are to exploit the potentialities of cable to the full.
The technology wanted by the cable companies was cheaper—it may no longer be so—is available now, that is for sure, but depends on imported equipment and has no future.
In yesterday's Financial Times the chairman of Visionhire wrote that it did not follow that private sector investment would lead to the adoption of tree-and-branch technology. However, Visionhire's evidence to the Hunt committee was that operators wouldwant to use proven systems that justify investment.476 We can draw our own conclusions from that.
Before succumbing to the quick buck merchants, the Government should stand back and consider our national aims. I understand that the Department of Industry now has management arrangements for doing so. I read that the Minister has set out his Department's policy aims and is now requiring the divisions in his Department to set out their objectives. In other words, he has instituted management by objectives. That is progressive. I commend it to my right hon. Friends. In the late 1960s I spent years trying to get Government Departments to adopt management by objectives. It is an excellent vehicle for systematic management and policy making. Let us follow the logic of management by objectives now.
I read in the same article that one of the Minister's aims with the highest priority—aim number three—is innovation to apply technology on the scale necessary to ensure United Kingdom competitiveness. That breaks down into two sub aims. First, to gear research and development to United Kingdom needs, and, secondly, to develop awareness and rapid adoption of key technologies.
Surely a strategy that follows from that group of aims would be to construct a broad-band national network, an electronic grid—what Lord Weinstock calledthe communications equivalent of the electrical power grid and distribution system—as the basis for a coherent broadcasting, telecommunications and information technology strategy. In that way broad-band networks provided initially for television entertainment could be developed to sustain future communications services using the latest British technology.
Such a strategy need not be implemented in one massive effort but could be developed as demand and resources allow. First, there could be local networks, then satellite bands and telecommunications carried through the same cable systems, and then the integration of local networks into a national system. This strategy, like the quick buck option, also carries with it a network design or topology. This is the switched multi-star network, which is most suitable for the technology of the future, using optical fibres, and it is infinitely adaptable for every imaginable use.
Whereas the tree-and-branch system proposed by the cable companies uses the outdated American technology of coaxial cable, for which virtually all the attachments such as amplifiers and set-top descramblers will have to be imported, the switched multi-star system uses British optical fibre technology in which British Telecom leads the world. Indeed, optical fibre development has been supported by the Government to the tune of £25 million—until today, when it was raised to £55 million.
The electrical engineering Neddy has drawn our attention to the advantages of a star network over a tree-and-branch network. First, there is the ability to increase the capacity of the network easily, by increasing the capacity of the trunk route only, without needing to replace the distribution cables in the subscriber network. Secondly, the star networks can be upgraded to offer interactive facilities, up to and including two-way video. Thirdly, there is security of information, as bank balances and credit ratings do not pass down the neighbours' cables. The subscribers do not need the descrambler which is required on the tree-and-branch system. Therefore, there 477 would be no black market in illegal descramblers, which could steal programmes. Moreover, the quality of the television picture should be better.
The Electrical Engineering Neddy goes on:In the US nearly all networks are 'tree and branch' design … and when requirements for more sophisticated services have emerged, these have had to be grafted onto the existing entertainment service as best they could".
§ Mr. Garrett
The time scale for cabling half of the United Kingdom by the method I describe is about 10 years. I have no idea of the time scale of cabling Britain by giving one cable company Wigan, another one Norwich and another one Manchester. What does that matter, if those companies adopt the wrong technology, which would give us no lead in world markets?
If we follow the route advocated by the cable companies, we shall be locked in the technological past. If we take the optical fibre and star system route, we shall have a network that can evolve into interactive and comprehensive communications services.
It is true that the optical fibre technology is not sufficiently developed for the implementation of a full multi-star system, but it soon will be. In the next few weeks, British Telecom will place a contract for the production of several hundred switches, each capable of serving about 30 homes. In the meantime, British Telecom's hybrid system, using mixed coaxial and fibre cabling, can be used now and converted fully to fibre optics in two to four years. That is the approach recommended by the electrical engineering Neddy last week, which concluded:It is only by this means that the full benefits for both the cable and equipment suppliers and the UK as a whole can be achieved".
§ Sir Geoffrey Johnson Smith
I know that the hon. Gentleman does not want to mislead the House, and I go along with much of what he says—in fact, I said as much in my speech on the technological aspects—but he should not say that all the private enterprise companies which are involved in cable television want to go for a tree-and-branch system based on American conventional technology. That is not true. Rediffusion, for example, is quite happy to accept the star system, as he has outlined it.
§ Mr. Garrett
It will not be able to. I quoted the managing director of Visionhire in yesterday's Financial Times as saying—contrary to his evidence to the Hunt committee—that he was no longer necessarily wedded to the tree-and-branch system. Companies such as these will have to go for the tree-and-branch system to get off the ground quickly enough to get the market lead that they want, here and now. That is what the rush is all about. If they do it as quickly as possible, they will buy imported American technology off the shelf.
Who will provide the cable? The technology and even the aims of the Minister's Department lead directly to BT 478 as the common carrier, developer and owner of the cable system or as the cable provider to the individual franchise holders.
First, BT has the statutory authority to lay the cable and the ducts and cabinets that will be necessary. There will be no need for local authorities to grant new wayleaves or for substantial new trench digging. BT already has the necessary trunk network to transfer programmes from one cable network to another.
Secondly, BT has more experience of the installation and maintenance of cable than any other organisation in the country. It is the world leader in fibre optic technology as a result of the research that was carried out at Martlesham Heath. I suspect that all hon. Members agree with that.
Thirdly, if BT provides the cable, ownership problems are avoided if the franchise holder loses his franchise. The separation of cable operator and programme provider would also facilitate a multiplicity of programme providers on each cable system. Channel 4 evidence to Hunt was:to avoid permanent local monopolies of programme provision we consider it essential that means are found of separating the two functions.The cable lasts for 20 to 25 years and Hunt suggests that franchises should be for 8 to 10 years.
Finally, BT will cable Britain with a superior fibre optic system anyway. It has already commenced such an investment programme. It has started with a trunk network and it is now moving towards a local network, covering Britain with just such a fibre optic system. If we allow cable companies to go down the dead end of copper technology, in order to get into the market fast, we shall have an inferior cable network alongside BT's optical fibre network which will carry all the same data.
There is another reason for having a national cable grid run by BT to BT standards. The conventional wisdom is that multiband cabling will be for entertainment and for domestic interactive service, such as home to bank, home to shop, meter reading and security services. The development of domestic interactive services is overrated and oversold. It was oversold in the ITAP report—an exceptionally poorly researched piece of work. As The Guardian pointed out, it was written entirely by people with vested interests who stood to make a hefty profit out of a privately run system. That report said thatone of the most popular applications of cable systems in the USA is security services".On examination of the facts, it transpires that less than 0.001 per cent. of cable systems are used for that purpose. Only 16,000 homes out of 24 million connected to cable have a security system. It is not in interactive systems within the community that cable systems will grow in the medium term. The demand will come from interactive data transmissions between the professional and commercial communities—the creation and organisation of access to data bases or reservoirs of specialist information. The legal community already has Lexis and Eurolex. They are data bases on legislation and case law. They are a commentary into which the legal profession can tap to carry out research.
Before long, there will be the Adonis system—a data base of technical and scientific material from journals and publications that can be interrogated. It will include 479 journals and publications published anywhere in the world. Research units at universities or anywhere else will be able to tap in to that information.
There should be a data base of consumer law and DHSS consumer regulations for citizens advice bureaux, lawyers and Members of Parliament. There will be others for engineers, architects and doctors. Publishing and library services will be revolutionalised by that type of interrogation of data bases. That will not follow the use of cable for entertainment; it will happen almost in parallel with it. It is almost happening now.
Cabling Britain by small-scale cable operators makes no contribution in that area. The cost of developing a national network on the ITAP calculations will be about £70 a household, and the cost of wiring up the country will be about £700 million. In the early years it would cost about £50 million a year. That is an increase of 2 per cent. on BT's current investment programme of £2.38 billion. British Telecom will be spending sums of that magnitude in any case to modernise its systems.
Let us compare such a strategy with the view of one cable company, Visionhire, as given to the Hunt committee:BT has proposed that cable be extended to almost every home … This is an uneconomic waste of resources, will force city-dwellers to subsidise others and inevitably slow the pace of development. Cable television should not be regarded as a service to be universally provided".That is certainly a novel view of the national interest. Visionhire further states:BT have no experience of laying down modern speculative commercial networks. Cable networks are not laid and forgotten. They require constant attention and activity".The idea that Visionhire has more technical expertise than British Telecom in running modem cable networks must surely be a joke. Certainly the electrical engineering Neddy does not agree.
§ Mr. English
My hon. Friend is perhaps being a little unfair to Visionhire. The idea is not so novel. It is exactly the nineteenth-century view—that telephones, electricity, gas and so on were to be provided only in the centres of the cities for the prosperous.
§ Mr. Garrett
It is certainly wrong, but I always take the advice of my hon. Friend the Member for Nottingham, West (Mr. English) on the nineteenth century.
Some cable operators are looking wider. The Merseyside Cablevision Consortium, for instance, proposes that British Telecom should be a member and main contractor or "cable provider". It proposes a hybrid network of tree-and-branch and star systems, gradually changing to a full interactive star system between 1985 and 1990, providing 30 channels, of which five will be two-way or interactive. The Merseyside solution with BT as a member of the consortium and the cable provider may be a way forward.
Another issue which may arise from the activities of independent cable operators was referred to in the Financial Times yesterday by the chairman of British Telecom. A cable operator may have spare capacity. His cables will pass business premises. What is to stop him offering voice telephony, data and text transmission facilities and other British Telecom services from business to business within his network? He will wish to skim the most profitable business from British Telecom, which will 480 still be expected to maintain the basic local network. That is potential "liberalisation" on an unprecedented scale, to which no Minister has ever referred.
An article in The Observer on 28 November said that the key bait already decided on is that cable operators will be allowed by their licences to operate British Telecom-type services. That is a very important matter, and I hope that the Minister will refer to it today.
Britain is not the only country on the verge of cabling. As usual, we can learn from the French. They have set about the matter in a way that serves their own national interest, as my hon. Friend the Member for Nottingham, West pointed out. They have decided to cable the city of Biarritz using optical fibre cable, a star system and every available type of terminal—all provided by the French national telephone company. After a three-year trial period, they will assess the results and decide upon a standard system to be applied throughout France.
Thus, the French will progressively introduce an advanced and tested system based on experience of the services that individuals and businesses want, while we, if we take the independent cabling route, will have only bits and pieces—and they really will be bits and pieces. Cabling by independent companies all doing their own thing will be a mad rush, followed by a number of collapses and withdrawals, as in the United States. Market research shows that cable television will cost £10 to £20 per month, but that only 27 per cent. of viewers would be willing to pay as much as £5 per month. No doubt that will change. Nevertheless, after the shake-up that will almost certainly follow the initial rush, we shall be left with a piecemeal, obsolescent and backward system that will be enormously expensive to build into by electronic grid. Our system will be local, parochial and backward looking.
The choice for the Government is therefore to go for a broad-band switched-star fibre optic national network, which gives Britain a world lead, uses British technology and is capable of expansion to cope with every kind of transmission of information, or the quick-buck, out-moded, imported technology, inflexible, dead-end system that merely suits a clutch of desperate cable operators. I am trying to follow the logic of the Minister's aim as stated in his management by objective system. I am not snaking political points. This is a technical discussion. The logic leads to the former—the national electronic grid. I have no doubt that the Government will choose the latter and put private profit first and the national interest second.
We have made it clear that we shall entrust the provision of the national cable system to British Telecom. We shall re-establish control of any national cable system by British Telecom.
Despite what the Home Secretary said about the options remaining open and the speech that the Prime Minister will make next Wednesday being another opportunity to test the market, I fear that at the information technology conference on 8 December, to which none of the Opposition Front Bench has been invited, which is a grave discourtesy, the Prime Minister will indicate, if not announce, a charter for the private cable interests—the cable cowboys. It will be a charter to pour audio visual rubbish into our living rooms through systems which will qualify as industrial archaeology. If so, in years to come, the Government will be seen to have betrayed the national interest.
§ The Minister for Industry and Information Technology (Mr. Kenneth Baker)
This is the second occasion on which the House has debated cable. I believe that there is probably broad agreement on the fact that cable will come and that it will be welcome, but there is considerable disagreement as to how it should come, the time it should come and who should do it. There is not complete agreement, although I believe that my hon. Friend the Member for Aldershot (Mr. Critchley) is the sole exception. He finds the whole business of cable so distasteful that he would like to see it go away.
§ Mr. Baker
However, most other hon. Members would like to see it happen. In my enthusiasm for cable, I am sometimes portrayed as dragging my right hon. Friend the Home Secretary kicking and screaming into the cable revolution. That is not just physically impossible; it is temperamentally unnecessary. I assure the House that we would not have reached as far as we have with this cable debate and proposal to move into cable if it had not been for the Home Secretary's enthusiastic support.
I want to make it clear at the outset that the Government are not prepared to see the introduction of wide-band cable systems merely in terms of the provision of entertainment. The range of new non-broadcasting services is the raison d'etre for the expansion, and that is why, as Minister with responsibility for information technology, I am so enthusiastic.
The main characteristics of cable systems that we should like to see are, first, they must from the outset have a two-way capability—that requirement will be mandatory. In particular, they should be able to provide subscribers with access at a minimum to 25 to 30 downstream video channels, including teletext and direct broadcasting by satellite services. They must also provide audio channels and at least one return video channel and two-way data channels, some of which should have a signalling rate of 80 kilobits per second. Those are high standards.
For the return video channel and the data channels, systems must allow for more than one subscriber to have simultaneous access. We are not talking about tired old systems; we are moving to an entirely new generation of technology. British industry is well placed to meet the home demand and to capitalise on that to build up export markets.
Cable systems are of course telecommunication systems, so I must deal with the important question of telecommunications policy or, to put it another way, the role of British Telecom and Mercury. It would be appropriate for me to outline what we shall say in the White Paper.
§ Mr. Hattersley
Is the hon. Gentleman still taking part in the consultative debate described by the Home Secretary or announcing what will be in the White Paper?
§ Mr. Baker
I am trying to show what the Government's thinking is. That will help all the interests, including BT, which has pressed the Government for some time to clarify the policy.
BT undoubtedly has many strengths and advantages in cabling. It is experienced in operating telecommunications networks, including the networks by which the BBC and 482 IBA programmes reach the transmitters. It has an infrastructure of underground ducts which covers most of the country. Its research laboratories at Martlesham are the most advanced in Europe, and it has highly experienced and qualified staff.
During the past few months we have received many representations about BT's involvement in wideband cable systems. There have been strong arguments that BT should not be allowed to have any role whatsoever in the expansion. The legal constraints placed upon A T & T in America, which prevent it from joining in cable operations, have frequently been drawn to my attention. On the other hand, many argue—including the Opposition, BT, the Post Office Engineering Union and Lord Weinstock—that BT, or possibly BT and Mercury, should be the only organisations licensed to instal new cable systems and to operate them on a common carrier basis.
Incidentally, the most amazing part of the debate was the fulsome praise larded by the Opposition on Lord Weinstock. It must be one of the most remarkable conversions of the year. Only recently they said that his stewardship of GEC was so bad that GEC should be nationalised. No doubt they would have sacked him on the first day. Now he is a Daniel come to judgment.
Both BT and Mercury would welcome the exclusive right to provide switched two-way services, even on cable systems in which they have played no part in financing. The Government cannot accept the case for giving to BT and Mercury the exclusive privilege of either installing switched cable systems or providing switched two-way services; that is a mandatory or statutory role in every consortium.
However, it would be wrong to exclude either BT or Mercury from competing freely with others for the provision of cable networks throughout the country. Their skills will bring out the best competitive spirit in other would-be cable providers, and the pressure of the market place will be a spur to BT and Mercury. I think it likely that many cable consortia will wish to have BT or Mercury as a member or to provide the cable infrastructure. That is good. But those consortia that do not wish to link up with BT or Mercury must be free to act as they wish, subject to two important provisos.
First, we recognise that BT and Mercury are uniquely well placed to link individual cable systems and we intend that the inter-city or inter-network trunk linking of cable systems, for example, linking the Bristol and Newcastle cable systems, should be the exclusive province of BT and Mercury. Secondly, we have had to consider whether there should be a limit on services that the cable operator can provide.
We have had to weigh up the stimulus to the development of new information services which this would provide with the impact which this competition might have on the revenues of BT and Mercury. This may well be small and more than balanced by the additional revenue which will accrue to BT and Mercury by allowing them the sole right to inter-city or inter-network traffic. However, we have recognised their concern and have decided that only where BT or Mercury is involved in a cable network may a cable operator provide voice telephony services. With the exception of voice telephony, however, a cable operator may offer an unrestricted range of switched two-way services on the cable system for which a franchise has been granted.
483 My hon. Friends the Members for Carshalton (Mr. Forman) and East Grinstead (Sir G. Johnson-Smith) and many other Members talked about the complicated subject of network architecture. A great debate has been taking place on network architecture and the sound of the grinding of axes has sometimes been deafening.
The matter is by no means as simple as the hon. Member for Norwich, South (Mr. Garrett) said. He suggested that the cable interests want tree and branch and that the telecommunications interests do not. There are some cable companies that are advocating switched star systems. I apologise for the technicalities in this part of my reply. I have great sympathy with Members who get bogged down in the talk about rings, stars, hybrids, trees and branches.
The tree-and-branch system, as the name implies, is like a tree with a head-end—the base—and signals are fed in and transmitted along the trunk. The signals are split successively at branches and delivered to each subscriber. A key feature of the system is that all the services are available at the same time over the whole of the system. The subscriber at his home has an elaborate decoder at his television set with which he selects the channel. The decoder could also be a descrambler, which could restrict access to certain facilities.
I remind hon. Members that tree-and-branch systems were invented in Britain, although they are often referred to as American technology. Much of the technology remains in Britain. They were invented in this country as an effective means of using coaxial cable to carry simultaneously a number of television and radio channels instead of devoting a pair of copper telephone wires to each channel.
Many commentators have overlooked that tree-and-branch systems have by no means reached the limit of their development and that they are capable of providing virtually all of the interactive services with the exception of viewphone. For example, a tree-and-branch system comprising half a million subscribers—a very large system—can relay the contents of an A4 page from any 5,000 subscribers to any other 5,000 subscribers within three seconds, and by "polling"—checking the whole network—the system can check the burglar alarms of 500,000 subscribers once a second. Furthermore, at least one British company considers that it could adapt the technology of teletext, in which Britain has a world lead, to provide the functions of control and addressability that would be central to new cable systems.
The rival to the tree-and-branch systems is the star-switched system which the ITAP report mentioned. In this, only the trunk part is fully wide-band cable and this leads to a number of switching points which in turn are linked to subscribers. This means that the selection of the service is done at the switching point—not at the set—and therefore there is no need for a decoder at the television set. Such a switched system will be more expensive to install, partly because it would use more cable and require more ducting. Estimates that I have received suggest that the overall cost of fully switched systems exceed those of tree and branch by between 50 and 150 per cent.
Supporters of switched systems claim that they are easier to maintain, need less sophisticated converters and give greater security for the development of two-way services such as home banking. Furthermore, as a newly emerging technology, it offers British industry an early opportunity for exports. A star configuration for all 484 systems will stimulate optical fibre development, encouraging the introduction of optical fibre at the earliest possible moment. I think that that is probably agreed by all hon. Members.
However, the technology is still under development. I believe that star switched systems will he the pattern of the future, but it is always difficult to predict the direction in which technology will go. If we were to require all systems to be star switched, we would delay the expansion of wide-band cable systems by two to three years or even longer.
We must be aware of what is likely to happen and we have it in mind that the ducts for all new cable systems should be laid out in a star configuration so that they can evolve without undue difficulty into fully switched systems once switches are available. The ducting arrangements would need to be designed to enable this. This approach means that the initial construction costs of the systems are likely to be a relatively small amount more than they would otherwise be.
We do not believe that it would be right to require would-be operators to use a particular technology, whether tree and branch or fully switched star. They and not the Government should decide on the system to be installed. Operators, therefore, will have a choice of providing a tree-and-branch system in star configuration or laying down a switched system from the start. We want to encourage the most advanced technology and we therefore have it in mind that licences for the cable provider—not the cable operator—will be of differing lengths.
This would work as follows: the initial licence for a tree-and-branch system laid down in the star configuration but without switches would be for a period of 12 years. If at a later date a cable provider were to install switches, the licence could be extended to a total of 20 years. A cable provider installing a fully switched star system from the outset would receive a licence for 20 years.
I am sorry to have dealt in such detail with these technicalities. We have tried to weigh all the different considerations. I think that we have arrived at the right answer. I am confirmed in that thought by the view expressed by British Telecom in the application that it has made, with others, to lay cable on Merseyside. It has stated:BT's long-term strategy is to develop a hybrid network which combines tree and branch and star elements.That is exactly what our proposals would achieve.
Much of the pioneering work in optic fibres has been done in the United Kingdom. The breakthrough was made by a British mathematician of Hong Kong birth in 1966 in England. We still retain a world lead in much fibre optic technology. Optical fibres have many advantages. They are small and light and they are not affected by external magnetic fields. They have a wide band width and so can carry a wider range of telecommunications services than copper cables. However, modern copper coaxial systems can carry 30 or more television channels and literally thousands of narrow band services such as teleshopping and audio.
Fibre optic cable is particularly effective over long distances because it needs fewer repeaters. For the short local distribution links from the local switching points to the home, which comprise a high proportion of the total cable in a system, fibre optic cable at present is still more expensive than coaxial. Fibre can be used for local distribution, but the economics are not yet right. More 485 technical development is required as well as the development of the high volume production of optical components and devices.
It is not just a question of laying fibre optic cable. The most elaborate devices, such as optoelectronic and laser devices, are needed to drive the signals along. One cannot have the fibre without all that. A great deal of research is being done on optoelectronic devices in Britain. In the longer term, I have no doubt that fibre optics will play the dominant role in cable systems. Last year, the Department of Industry committed £25 million under the fibre optics scheme to support the development of the industry. Yesterday, I increased that to £40 million and, in addition, I launched a further scheme of £15 million for joint industry and university development. The scheme was new last year. I increased it yesterday because applications from industry had exhausted the funds. I remind the House that the money we are spending in that respect is very good seed-corn, because it must be matched by twice as much from industry. I was very pleased that industry applied for the funds on that scale.
However, to require all cable systems to use fibre optics as a transmission medium throughout the whole system—I emphasise that-from the cable head-end to the television set in the home, would delay the introduction of wide-band cable systems for several years and would be of no service to the industry. Indeed, the existing British fibre optic suppliers have urged a market-led demand for their product, rather than a requirement that fibre optic be used throughout. That is wise and has been confirmed by my observations in the past year.
Last year I went to Germany and saw Bundespost and Siemens. It was planning, and is still planning, a total fibre optic network across Germany, with the full facilities. However, it said that it was unlikely to be laid until the latter part of the decade. The new German Government, realising the opportunities that exist in cable, have not abandoned that scheme, but have said that they wish to proceed with cable on a mixed fibre optic and copper coaxial network. That is the only way that cable systems can be laid in the course of the next two, three or four years. Some play was made of Biarritz but, as with most things French, rhetoric must be divorced from reality. The French talk a lot about laying down fibre optic cable systems, but when I talk to their Ministers they say with a nudge and a wink that they will put down a lot of copper coaxial as well to link in. The technology does not yet exist to take fibre optic on a commercial scale right through to the home.
§ Mr. Wrigglesworth
How many manufacturers of fibre optic cable does the Minister envisage in Britain?
§ Mr. Baker
At present, there are four manufacturers of fibre optic cable in Britain. Several other companies—both large and small—make optoelectronic devices. We are totally self-sufficient in fibre optic cable and have a capacity to export. Therefore, we are not inclined at present to require optical fibre to be installed throughout all cable systems. The continuing improvements in price and performance of optical fibre will, however, make it only a matter of time before the choice of cable material becomes academic. The decisions that I have announced on fibre optic will make it very attractive in the long runs of cable systems. The star configuration 486 in which cable systems will have to be laid out means that it will be very economic to lay fibre optic in them. I emphasise, however, since I have seen some misleading reports that suggest otherwise, that in adopting this attitude we are not limiting the development of cable systems; there is no service, irrespective of band width requirements, that cannot be satisfactorily carried out on either type of cable.
§ Mr. Forman
Is my hon. Friend able to say any more about support for laser technology, which he referred to earlier? I am sure that that must play an important part.
§ Mr. Baker
Support for research and development in laser technology is covered by the fibre optic scheme and several of the proposals that we have approved have involved laser technology.
Technical standards are critically important for the systems. The present standards are not suitable for the new cable systems and we cannot read across to the American standards, where the systems are very different. We aim to produce standards in a suitable draft form that will be available by March 1983. It is a tight timetable. We have established a technical working group that has been in operation since the summer under the chairmanship of Dr. Eden. It has been asked to provide standards for every service, including interactive services other than voice telephony. Those standards will become the appropriate British standards once they have passed through the normal consultative procedures of the British Standards Institution.
I should like to draw the attention of the House to two particular requirements that I have asked the technical working group to observe. The first is that existing UHF television sets should be compatible with all approved cable systems. The reason is that if a television set is attached to a cable system in one town and the owner moves to another town, it must be compatible with the cable system there.
§ Mr. John H. Osborn (Sheffield, Hallam)
Will the signals be digital, and will there be a transfer to normal signals so that they can be picked up afterwards, or will digital wait?
§ Mr. Baker
I think that the answer to my hon. Friends first question is "Yes", but I shall confirm that. That is the sort of question that the Eden committee is looking into.
Secondly, I am sure that the House would not wish to see cable systems develop as a series of islands that cannot be linked to one another. This was raised by some hon. Members, including the hon. Member for Isle of Ely (Mr. Freud). This has happened in the United States, and is one of the reasons why interactive services have been relatively slow to develop there. I have therefore required that every cable system must be compatible through its head-end with the standards of the trunk transmission networks of BT and Mercury. In this way, over time, the development of a nationwide wideband cable network should be assisted.
When we have this menu of standards, we then intend to specify to would-be operators those standards that must be met by their systems and those standards that need to be met only if and when certain services are offered. In this way, British manufacturers will also be given the earliest possible guidance in the development of related equipment.
487 I assure the House that when we come to determine the capabilities to be incorporated into cable systems we intend to take a very firm and long view. We would be mad to see the streets dug up now for the installation of cable systems only to have the process repeated in a few years because demand had outstripped cable capacity. The physical lifetime of wide-band cable switched systems is 20 years or so, and the standards that are set must ensure that technological advances during that period can be accommodated.
Let me now deal with some of the points, other than technology points, that have arisen, particularly those relating to public broadcasting.
The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) argued that cable would divide the country between the rich and poor and the urban and the rural. I do not think that I misinterpreted his argument. I am surprised that he made it, because the same argument was made by the BBC about three months ago. It has now stopped making it. The right hon. Gentleman must have got hold of a rather old brief. This is an old argument that does not stand up to any examination. When I heard him speak about how this would divide the country, I could not help recalling some of the debates on independent television in 1953. A former Labour Cabinet Minister then said:People are only a market when they are gathered together in big centres of population, and it is only there that commercial television will have any interest at all".—[Official Report, 15 December 1953; Vol. 522, c. 319.]Events have shown that forecast to be totally valueless and discredited. I believe that forecasts that cable will not spread to the rural areas are equally wrong. In fact, the development of technology assists the spread.
When the BBC has its DBS, it will be able to bring to remote areas the DBS services on that satellite and send signals down to a small town or village from which the cable can go out from that head-end. One of the largest and most geographically spread countries—Canada—has one of the highest levels of cabling in the world. That is available by satellite communication to small settlements and villages in the Yukon and cabling out from a cable head-end. Therefore, I do not subscribe to the view that cable will not spread to the rural areas.
The other argument that has tended to flit in and out of the debate is that cabling will hit minority interests. Once again, going back to 1953, it was another Labour Minister who forecast that many of the services to which people had become accustomed would go to the wall. The services that he predicted would go under were Shakespeare, ballet, tennis and snooker. Those four areas have grown the fastest since independent television came along.
§ Mr. Hattersley
The hon. Gentleman has done well in replying to the debate in 1953. Will he identify the hon. Members who have today made the point to which he now imagines that he is replying?
§ Mr. Baker
The other argument that has tended to wend its way through the debate was mentioned by the hon. Member for Derby, North (Mr. Whitehead) and by 488 my hon. Friend the Member for Aldershot. [HON. MEMBERS: "He is not here.") My hon. Friend has cut himself off. He has disappeared. It is clear, however, that the shadow of Lord Reith stalks in Aldershot. My hon. Friend was very much in favour of improving standards and of ensuring that they should not fall. He argued that the only way to retain standards was through close regulation. The argument about what people should be allowed to watch and what they should not be allowed to watch has been raised many times today. Hearing that argument, I cannot help recalling the views of Harold Laski on one occasion—
§ Mr. Sheerman
On a point of order, Mr. Deputy Speaker. Harold Laski, a person of whom I am fond, died in 1950. This is a phoney point—
§ Mr. Deputy Speaker (Mr. Paul Dean)
Order. The hon. Gentleman knows that that is not a point of order.
§ Mr. Baker
Before Mr. Laski died, he made this comment on "The Archers". I quote it only because it sums up the attitude implicit in that of many Opposition Members. The attitude still prevails. He said:If the BBC does not give people what they want, it should be exterminated. If this"—meaning "The Archers"—is what they want, they should be exterminated.The attitude which he expressed and which was redolent in the views of several Opposition Members today is that they know best and that they should choose what people look at. I have much greater confidence in the choice and discrimination of the viewing public than do Opposition Members.
§ Mr. Baker
Finally, I should like to say to the House why the Government want to press on with cabling. We have been challenged many times during the debate about the speed at which we are moving. The reason we want to move quickly is that if we get ahead with cabling more jobs will be created. There will be jobs in making cable and laying cable, in creating programmes and in making equipment. Every time the Opposition seek delay, they will be putting off the day when jobs can come to places like Merseyside as a result of cabling. When the Opposition ask for delay, they are asking for fewer jobs because the jobs opportunities of cable will be considerable.
When the Labour Party says that it wants a winter of debate, that will lead to a spring of analysis, a summer of indecision and an autumn of postponement. We much prefer to get on and provide the opportuntities that cabling will give. I am certain that the programme we have debated and discussed today represents one of the great opportunities that lies before our country. We must not lose it. We must seize it, and we must get on with it as soon as possible.
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.