Satellite Broadcasting (Hansard, 4 March 1982)

§ The Secretary of State for the Home Department (Mr. William Whitelaw)
With permission, Mr. Speaker, I will make a statement about the Government's intentions regarding the future development of direct broadcasting by satellite—DBS.
The House will recall the report of the Home Office study of DBS published last May. Reaction to that report has been largely constructive and positive. The Government now see a need for early decisions if the industrial opportunities which DBS offers this country are to be grasped in good time, in a situation in which there will be keen international competition.
The Government have therefore decided, in principle, that this country should make an early start with DBS, with the aim of having a service in operation in 1986. Because of the importance of making this early start, the Government have concluded that the best course would be to start with two channels initially; the number of channels could be increased up to the maximum of five channels permitted by international allocation, as and when demand justified it. The services would be transmitted at powers sufficient to permit both individual reception and community reception with cable distribution. I intend to make a further announcement shortly about the future role of cable.
As regards finance, the Government expect the capital cost of providing the satellite system to be found in the private sector.
On the industrial side, various interests in the aerospace and related industries have shown that they are ready to play their part in this challenging new venture, and we shall be working closely with them and with the domestic electronics industry to ensure that the economic benefits are effectively realised for the United Kingdom.
On the broadcasting side, it is clear that DBS must develop in a way that is consistent with our existing broadcasting arrangements, especially as regards supervision by a broadcasting authority and maintenance of proper programme standards. The BBC has already put forward proposals for two DBS channels. One would be a subscription service, including a substantial element of feature films and major sporting, cultural and other events not presently available for transmission on BBC 1 or BBC 2. The other would be a service which would draw on the best television programmes from around the world—and indeed from this country. This would be financed basically by licence fee revenue, which would probably include a supplemental licence fee for DBS.
The IBA and commercial television companies have also shown some interest in providing DBS services, but their plans are less well advanced. Additionally, more time will be needed to devise the right framework, which would be likely to involve legislation.
In these circumstances the Government believe that the right course, if the necessary early agreements are to be reached between satellite providers and users, is to authorise a go-ahead with the BBC proposals. However, the Government attaches importance to the participation of commercial television companies in DBS. What we are now proposing would leave ample future opportunities 415 open to them. The Government intend to press ahead with the necessary preparatory work, and would be ready to introduce legislation for the purpose as necessary.
Meanwhile, the immediate requirement is for the BBC and the British space industry to enter into discussions with a view to constructing and agreeing detailed proposals.
I commend these decisions to the House as a sound foundation for a development with major significance for this country's industrial and employment prospects. The House will no doubt wish to have an opportunity of discussing them. My right hon. Friend the Leader of the House will find time for an early debate.

§ Dr. Shirley Summerskill (Halifax)
We welcome the Home Secretary's statement, because satellite broadcasting will allow the BBC further to inform, educate and entertain millions of viewers, and it will provide increased job opportunities in the television, aerospace and electronics industries, but the proposals represent a significant step into a completely new and rapidly changing area of broadcasting, involving public money and an element of financial risk. Therefore, it is essential for the House to have a great deal more information than it has received today about their exact implications.
The fact that neither of the new channels will be financed out of advertising is to be warmly welcomed. Commercial interests will be absent and the BBC will continue to provide a truly public service, financed by public money. We expect a White Paper before the Government introduce any legislation on the participation of commercial television companies in satellite broadcasting.
With regard to the public money involved, it is extraordinary that the Home Secretary did not mention one figure, or even an estimate. The change will not take place until 1986, but we are talking about public licence fee money. The right hon. Gentleman said that the licence fee would finance one channel and would probably include a supplementary licence fee for DBS. What percentage increase on the present fee does he envisage that could be?
What is the right hon. Gentleman's estimate of the cost of his proposal to the BBC during the first few years, even on the basis of a calculation made as if he were starting the service today? At what stage does he expect a profit to be made? Have the Government costed the whole scheme? Will it be cost-effective? If it has not been costed, it is irresponsible of the Government to bring it forward.
With regard to the nature of the programme service to be provided on the new channels, has the Home Secretary received a positive assurance from the BBC that, with two new channels, there will be no consequent lowering of standards in the existing services, that they will not be weakened and impoverished, and that their quality and range will not be sacrificed in favour of the new channels?
We shall pursue all these matters and many others during the debate.

§ Mr. Whitelaw
I am grateful to the hon. Lady for her welcome on behalf of the Opposition for the basic proposition.
I emphasise the vital importance of getting ahead as fast as we can if we are to grasp industrial opportunities that will provide substantial jobs for this country—and to get ahead of our competitors. It is very important that we do that.
416 On the question of cost-effectiveness, the hon. Lady missed the point that the hardware will of course be provided by private industry, as has been made perfectly clear.
The BBC's first duty will continue to be to those who pay the licence fee. Naturally, no one can give detailed estimates of what will happen at the end of the negotiations, four years hence. Such estimates would be impossible to make, and if made would be largely meaningless. In the debate we shall provide all the basic figures and all the other information that we can.
The hon. Lady asked for a White Paper before legislation with regard to the independent companies. I cannot see why it should be necessary to have a White Paper on what would be technical legislation to permit the IBA another organisation or the companies to participate. I cannot give an assurance about that.
I return to the point that I hope that in all these matters the House will realise the great importance of seizing an opportunity and getting on with it.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I hope that hon. Members will be brief. I shall allow questions to run until 4.30 pm , which should allow all those who wish to ask questions to do so.

§ Sir Paul Bryan (Howden)
Does my right hon. Friend remember that at the time of the passage of the Broadcasting Act the Government's policy was to increase the choice of programmes by increasing the number of sources from which those programmes came? Is he now reversing that policy with a plan that puts in the hands of the BBC the overwhelmingly larger proportion of broadcasting—that is, two-thirds of all television, all of national radio and half of local radio?

§ Mr. Whitelaw
First, the Government are not reversing anything. The companies are already engaged in a new outlet in the fourth channel, which will come into effect very shortly.
Secondly, as I made clear, there should be an opportunity for commercial interests and companies to enter this area. We believe that the BBC has put forward its detailed proposals far ahead of anybody else. It is in a position to sign up with those who will provide the hardware, and we believe that it is in the country's interest that it should do so.

§ Sir Harold Wilson (Huyton)
We welcome the right hon. Gentleman's statement as giving British satellite technology and programmes a great boost; and his assurance that there will be a full debate on the allocation of satellite channels before any final decisions are taken is a wise decision. Is he aware that the committee appointed by the previous Government, which I chaired, and which first brought the issue of broadcasting satellites to the notice of the House and the country, warned—I am sure that he is aware of the warning—of the imminent threat to our domestic screens by well prepared and rapacious private operators—pirate operators? Although the right hon. Gentleman has given a hint for the future, what surprises me is the exclusion from the stage of the Government's own sponsored organisation, ITV. I take it that it is held up at the moment only by technological matters. Will he in particular express his support for the proposals for the multiplex analogue component?

§ Mr. Whitelaw
I am grateful to the right hon. Gentleman for his support. I fully recognise, as the Government and the House will, the contribution that he made to bringing these matters forward. I believe that the right hon. Gentleman's other points will be taken up in the debate. I fully appreciate their importance. I shall not say anything further about them today.

§ Sir Hugh Fraser (Stafford and Stone)
I am sure that the House will welcome my right hon. Friend's forward-looking statement, but it is essential that a statement is made on the cable transmission arrangements. That is as important as the statement that he has made. Great advances have been made in cable technology, but it is almost impossible for most people to receive DBS programmes unless they do so by cable. I believe that only 25 per cent. can afford it or are technically able to. I hope that my right hon. Friend will assure the House there will be a simultaneous debate on DBS and cable transmission.

§ Mr. Whitelaw
I entirely agree. The development of DBS and cable go hand in hand. I undertake that before we have the debate there will be a statement on cable.

§ Mr. Charles R. Morris (Manchester, Openshaw)
Does the Home Secretary accept that all those countries that have introduced satellite television have found that it has proved to be a financial bonanza for private cable companies? Why is the statement silent on the involvement of cable television? Can the Home Secretary take the House into his confidence and let us know how he sees the involvement of cable television in the satellite communication system?

§ Mr. Whitelaw
The reason why nothing about cable transmission is included in the statement is that I promised that I would make a follow-up statement on that at an early date, and I shall do so.

§ Sir David Price (Eastleigh)
I welcome my right hon. Friend's statement. Can he tell the House whether he will be going for the L-Sat five channel system or the ECS two channel system? If he goes for the latter and has only two channels, can he explain how he leaves room for a later contribution from the IBA? I also ask about technical standards. Is he aware that the IBA is in many ways further forward than the BBC with its MAC transmission system? I hope that he will not exclude it.

§ Mr. Whitelaw
It will be for the consortium that is providing the satellite to deal with technical questions. That is what will happen.

§ Mr. Arthur Palmer (Bristol, North-East)
As I understand it, the right hon. Gentleman referred to the bringing in of new private capital. What will be the exact mechanism for collecting that capital? Will it be subject to statutory control?

§ Mr. Whitelaw
That will be a matter for the consortium that is coming together to provide the hardware and will be negotiating with the BBC.

§ Mr. Kenneth Warren (Hastings)
To limit the service to two channels by decree from the start denies the opportunity to expand as far as it is commercially possible. Will my right hon. Friend accept the assurance that there should be no technical reason why more channels should not be available and that more companies could therefore come forward and make the whole system cheaper?

§ Mr. Whitelaw
As we said in our first study, we believe that it is right to make a modest start to get ahead of our competitors. There is no decree about two channels. If we can move further and faster forward, we shall do so.

§ Mr. Edward Lyons (Bradford, West)
I welcome the proposal, but is the right hon. Gentleman aware that it will cost a householder about £200 for a new aerial and converter, which together with the supplemental licence fee will make it very difficult to have a good home market? Will he say how he intends to create a strong home market as a platform for exports in this science-based field?

§ Mr. Whitelaw
It is true that cable transmission will come into this, because much of the broadcasting wll be done through cable systems. That is why cable and DBS must go together. On the point of people getting aerials, it is fair to say that the video market has been very strong indeed in the past year.

§ Mr. Michael Marshall (Arundel)
Will my right hon. Friend accept that the House warmly congratulates him on his important statement? It opens the way with cable television for communications development, which can be paralleled only by the development of the railways in the last century. Will my right hon. Friend confirm that he is inhibited today from mentioning in more detail the nature of the consortium that has put proposals to him, that there are private companies that can bring this forward at the earliest opportunity, and that that has been uppermost in his mind?

§ Mr. Whitelaw
I am grateful to my right hon. Friend for what he has said. I believe that the House appreciates that this development will be of great benefit to British industry and jobs. With regard to the private finance of the consortium, a great deal has already been achieved and my right hon. Friend the Secretary of State for Industry will answer further questions on that matter.

§ Mr. Michael English (Nottingham, West)
Many of us welcome the fact that the Home Secretary has made progress on this matter, but, bearing in mind what has been said earlier, the principal cost of cable arises from tearing up our streets and it would be ludicrous if one had only four channel one-way cable, when one could have a 100 channel two-way cable.

§ Mr. Whitelaw
That sounds such sense that there is no reason why I should deny it. I hope that with all these details we will not lose sight of the central factor, which is that it will create opportunities for our industry and jobs.

§ Mr. Geoffrey Johnson Smith (East Grinstead)
Can my right hon. Friend say a further word about the BBC supplemental licence and assure the House that this does not rule out for the BBC or anyone else pay TV as a method of financing this new form of television?

§ Mr. Whitelaw
There was the other side to the BBC's proposals, as my hon. Friend will remember, which was through a subscription service which would go hand in hand with the other services. I am grateful for his general support and for the help that he has given.

§ Mr. Clement Freud (Isle of Ely)
We welcome the basic proposition and the promise of a full debate, in which we hope the Government will justify the allocation of two channels to the BBC and none to ITV, but will the right 419 hon. Gentleman assure the House that in the four-year run up to DBS he will give full support to the four terrestrial channels which exist now?

§ Mr. Whitelaw
The hon. Gentleman asks why the BBC is going forward. I hope that I made it clear that its proposals are well advanced and that it can sign up the companies now. The IBA can take the opportunity when further proposals are put forward. It would, of course, require legislation to do so.

§ Mr. John H. Osborn (Sheffield, Hallam)
Will my right hon. Friend bear in mind that the most important things are compatibility and adequate standards, because we shall be sharing many of the facilities with the EEC and Council of Europe countries? The Commissioners, the European Council and the Council of Europe have looked at it.
Will my right hon. Friend assure the House that the standards will be adequate and that a proper definition will be made, because to go ahead with the wrong standards would be too costly?

§ Mr. Whitelaw
We shall maintain standards as far as it is in our power to do so. If we were to wait for the various matters concerning joint European standard to be drawn up, we might very easily miss industrial opportunities.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I propose to call only those hon. Members who have been rising in their places. The hon. Member for Bolsover (Mr. Skinner) only just got in.

§ Mr. Dennis Skinner (Bolsover)
Is the Home Secretary aware that the longer I have listened to the questions that he has been asked, the more I have become convinced that there might be a little sense in this idea? However, will he give us a guarantee that he will not make Sir William Rees-Mogg the head of this quango?

§ Mr. Whitelaw
The only moment when I might have doubts about the wisdom of what I am doing is when the hon. Gentleman begins to believe that I might be right. However, I am glad to have even him on board. I do not think that the question of Sir William Rees-Mogg arises on this question.

§ Mr. John Butcher (Coventry, South-West)
I congratulate my right hon. Friend on his initiative. May I press him a little further on what he meant by proceeding with the greatest urgency? Does he agree that unless the programme is expanded, accelerated and further deregulated, we may miss a great opportunity in this country, where we have much innate talent, not just in the provision of programmes, but in fibre optic cabling? If he 420 were to proceed with the greatest possible urgency we would see the infusion of massive amounts of private sector money into a huge cable network programme, with great implications for job prospects and exports.

§ Mr. Whitelaw
I am sure that my hon. Friend is right. He will be the first to appreciate that that matter arises with regard to cabling. I hope that I shall be able to make that statement shortly.

§ Mr. Michael Morris (Northampton, South)
In his discussions with the IBA, will my right hon. Friend ensure that not just the existing ITV companies are considered but the whole spectrum of other commercial interests are taken into consideration?

§ Mr. Whitelaw
That raises the problem that, if we are to make an immediate start and sign up with the consortium, only the BBC will be able to take part at present. A great deal of other preparatory work would have to be done before we could make any other advance.

§ Mr. Tim Brinton (Gravesend)
I congratulate my right hon. Friend on his statement and on stressing the urgency of the matter, but I notice that his entire statement was based on the similarity between cable television and broadcasting as we know it. Has he considered that the moment a signal is transmitted, either in scrambled form from a satellite or down a wire, it becomes a service that is much more similar to the telephone than to broadcasting? Therefore, many of the conditions of broadcasting today may not apply.

§ Mr. Whitelaw
That may be so as the development continues. However, it is still important for this country to seek to preserve its standards of broadcasting, which are among the highest in the world. We want to keep it that way.

§ Mr. James Hill (Southampton, Test)
I am sure that my right hon. Friend realises that his statement today is historic and that it is a great leap forward in communications. Will he acknowledge that, were it not for the successful work done by the European Space Agency, particularly in rockets, and the fine research and development by the European consortium, which the United Kingdom helped with funding, this announcement would have been long delayed? There was a debate in Paris in December by the Western European Union on coaxial television and satellite broadcasting, which highlighted most of the legal difficulties. There is a minefield of legal difficulties. I am sure that my right hon. Friend would be only too pleased to read the document.

§ Mr. Whitelaw
I recognise the contribution that has been made by the European space programme and all the agencies concerned.