Reuters (Flotation)

HC Deb 27 January 1984 vol 52 cc1173-235 9.38 am

Mr. Austin Mitchell (Great Grimsby)

I beg to move, That this House, concerned at the proposed termination of the Reuters Trust agreement, considers that the flotation of Reuters as a private company will threaten the independence and integrity of the agency and that the proceeds from the sale of shares will merely entrench and enrich the present limited, unrepresentative and monopolistic ownership of the British national press; and therefore calls on the Government to recognise its responsibilities by intervening to ensure that the public interest world-wide is fully and permanently safeguarded and that the integrity and independence of a major news service is not undermined by a greedy and short-sighted attempt to make a quick profit for a few newspaper proprietors.

Had the Table Office not been unduly purist about the title of the motion, I should have had it called "The Raffling of Reuters." That is what is proposed. We have the spectacle of greedy men — the press barons — clutching for the glittering cash prizes in this raffle. They are acting irresponsibly and in defiance of solemn commitments that their predecessors gave. In defying those solemn principles, they are plotting to get round the technical and legal obstacles. In so doing they are defying a principle on which Reuters was founded and the ethics and morality with which it has been run for decades.

I have a strong interest, as do all journalists and laymen, in the integrity and independence of this news agency. News is a precious commodity that must be handled with integrity by an independent agency. It should not be distorted, coloured, or subject to the commercial pressures that are likely to result from the flotation. We all know the commercial and political pressures placed on news agencies. One example is the new information order for UNESCO.

The national interest will also be affected by the flotation. If Christies can be regarded as a national institution, and its proposed takeover referred to the Monopolies and Mergers Commission, surely Reuters is a far more important national institution, one which keeps London as the news centre of the world and keeps news flowing through London.

Parliament should debate the flotation. Discussions in the newspapers are naturally coloured by their vested interests, with the honourable exceptions of the courageous campaign carried on in the Spectator and the independent view taken by the Daily Telegraph and The Observer. The flotation, which has caused widespread anxiety among the journalists working for those newspapers, has been handled almost as a side issue by other newspapers. The matter has been completely absent from the correspondence columns of The Times, which is an interested party in the debate. Others have focused on the titillation of the hunt for the golden prizes, transforming a tragedy into a treasure hunt. There has been no adequate serious coverage of the matter even in newspapers that are interested parties.

Parliament should discuss the matter because it is the forum in which the national interest is expressed. Such an important matter should not be treated in a hole-in-corner fashion, but should be brought into the public domain. The House should express its views on such a vital national matter.

This problem arises because Reuters is a unique institution which has now been placed in a unique position. I need not rehearse the agency's history—it is 132 years old, which is a little too long even for one of my speeches. Reuters experienced difficulties during the second world war because of the loss of European markets for news, which imperilled its financial position, and because of the political position, which led the then chairman, Sir Roderick Jones, to accept Government transmission facilities. That was in effect a Government subsidy, which endangered the independence of the agency. That unjustifiable arrangement was kept secret, but when news of it escaped it caused protest. The agency then had to bring in more finance than that of the Press Association, which was the controlling organisation at the time. The extra finance came from the then Newspaper Proprietors Association—principally from Lord Kemsley and Lord Rothermere — with Lord Beaverbrook tagging along reluctantly. That contrasts sharply with attitudes towards the agency today.

The Press Association and the then Newspaper Proprietors Association formed an equal partnership. To consolidate that partnership, and to confirm the independence of the agency, it was formed into a trust, which the Press Association wanted, and which was a result of concern expressed in a debate in the House on 22 October 1941. As Parliament, the Government and the Press Association wished Reuters to remain independent, the trust was formed. It specified that ownership was to be regarded as being in the nature of a trust rather than an investment. That casts a strange light on what has happened during the past few months. Secondly, at no time was Reuters to pass into the hands of one interest, group or faction. Its integrity, independence and freedom from bias was to be fully preserved at all times. Its business was to be administered so that it would supply an unbiased and reliable news service. The basis of the trust was that the agency would provide an independent, unbiased news service as its focus of activity. The news was to be paramount.

The trust was revised in 1946 to include the Australian Associated Press and the New Zealand Press Association. However, the present trust is essentially the same as it was in 1943.

Attempts are now being made to play down the importance of the trust and to say that it is a commercial agreement between shareholders. However, at the time and ever since it has been regarded as a trust establishing the fundamental independence and integrity of Reuters. It was a solemn undertaking intended to institutionalise an essentially co-operative arrangement, and it was intended to impress the world. The trust was the rock on which the independence of the agency rested, and it was sold to the world as such. Representatives of Reuters went round the world to establish the importance of the trust and the independence that it conferred on the agency. It was offered as an example to European countries in the process of reconstruction after the war, and as Third world countries began to develop news services it was presented as an example of how an independent news agency should be established.

The father of one of the present grabbers, Sir Keith Murdoch, said: The principle of sharing responsibility for what we put before the public of Australia is highly important, and I think Australian newspapers have advanced in stature and integrity as a result of this new development. This unique institution was regarded as an extremely important commitment. The Lord Chief Justice was involved in the formulation of the trust in 1941, and he also readily gave his advice on it in 1946 and 1950. It was consecrated by the fact that he appointed the first chairman of Reuters Trust. From that foundation, Reuters became one of the greatest—some of us say the greatest—news agencies.

There are only four free serious news agencies. There is the United Press Association of America, which is powerful and independent because it is based on the strength of about 1,400 prosperous newspapers, a firm basis for an independent and successful agency to rest upon. There is Reuters. There is the Agence France Presse, which is effectively subsidised by the French Government and is therefore not in the same category as Reuters or the Associated Press. Finally, there is the United Press International, which has had a somewhat fluctuating financial history. Therefore, it too does not have the firm strength and independence of the first two.

Reuters markets most of its news outside the United Kingdom. It serves the whole of the world, but it is basic to the British press, the British electronic media and the BBC as the source of world news.

The second feature of Reuters, and the one that has caused the present anxiety, is a more recent development — the decision in the 1960s, as one of a number of efforts at diversification, to provide the financial information service that has always come from Reuters by electronic means — in other words, to harness the computer and modern technology to the agency. There was a form of lateral thinking, and instead of the agency paying people to get in news and being paid to transmit it to the newspapers it found that it was easier to get people to pay to get their news transmitted to other financial institutions.

Here was the beginning of a new development and the result was Monitor, the communication of international finance and news, which has built up, as a result of its outstanding success, what must be the biggest communications network outside the American army. Therefore, this is an issue of national security as well. We must be clear that this development was sold on the back of Reuters and the world news-gathering agency. News is an integral part of this operation, as political, economic and energy news is an essential part of financial decisions. Monitor is served by the same correspondents and rests on the trust, as does Reuters.

However, unlike the news agency, the financial service has turned out to be a money spinner on an enormous scale, producing a £38 million profit in 1982 and a £50 million profit in 1983. In 1982, for the first time, it produced a dividend, upon which the trustees do not appear to have been consulted.

The huge explosion of this financial service, the Monitor, is viewed by some of the journalists on Reuters as a threat. It is not exactly a cuckoo in the nest, although it bears some resemblance to that image, but it is a new slant to the operation of the agency and it has become more central to management preoccupations in Reuters than the basic business of Reuters, which is and should be that of a news agency. After all, it is providing 90 per cent. of the business of Reuters, so it is bound to take a larger and more important part of management time, in its perspective, than the news agency.

There is potential for conflict. One can imagine a small oil-rich country where the Government are considering investing and financing the financial service through Monitor, but which has a troublesome Reuters reporter who is carrying accurate news of what is going on in the country. That would open the agency to pressure that did not exist before and there would be potential for conflict.

Mr. John Gorst (Hendon, North)

Has the hon. Gentleman considered the circumstances that might arise if the very profitable financial service which Reuters provides did not exist, and what the viability of its news service of great integrity might be if it were shorn of the support produced by the resulting finance?

Mr. Mitchell

The viability would be the same as it was before the financial service developed. News is part of the financial service and is essential to it. It would seem desirable for an agency to have a firm financial base to establish its independence.

I am not pursuing the argument about the cuckoo in the nest. I am saying that Monitor produces problems but also the benefit of real independence such as that which the American agency has because it represents a large number of wealthy newspapers. It is important that the agency should have a firm financial basis, and as such Monitor is to be welcomed. I accept that. The problem is what this has done. There has been a enormous explosion of revenues and prospects, which not only has caused potential conflict inside the agency, but is putting out a tempting pot of gold for a new generation of newspaper moguls who are, in many cases, without the integrity of those who went before them and who are facing financial difficulties that make this pot of gold particularly tempting. [Laughter.]

Conservative Members may laugh, but in Fleet street, although the mighty have not fallen on hard times, certainly not personally, they need money to finance a circulation war of ridiculous dimensions.

Mr. Kenneth Hind (Lancashire, West)

Will the hon. Gentleman concede that many of the problems in Fleet street, and what the hon. Member describes as "hard times", have been brought about by the behaviour of unions such as Sogat '82 and the National Graphical Association 1982, which have rejected modern technology? As a result, investment is required and if the management in Fleet street sees the opportunity to capitalise on one of its major assets it does so only to repair the damage that the unions have inflicted upon it.

Mr. Mitchell

I thank the hon. Member for making that point, but we should not get involved in that argument. I concede that there has been in. Fleet street a conspiracy in which all sections—unions, management and publishers — have done well financially to the detriment of the financial independence of the newspapers. Problems of wages and salaries result not only from union pressure, but from management responsibility. The way in which the newspapers have been managed — buying off trouble wherever possible, without facing the fundamental problems—has contributed to the disastrous situation in which Fleet street finds itself. However, today we are concerned not with that but with its effects on Reuters.

A circulation war is being financed by the millionaires' club, from which I do not expect any millionaires to emerge—not even the proprietors. Such events as the Reuters war are a result of the need to finance that conflict and the acquisitive trail on which Sir Rupert Murdoch has embarked of building up through pyramid selling without the capital to justify such acquisitions. Fleet street needs the money for the circulation war, the acquisition programme and the desire to float off what are regarded as financial liabilities by the organisations that own them — the newspapers. The need-the-money syndrome is most important.

The press barons' priorities have fallen. Their priorities are no longer newspapers and the importance of newspapers. Whatever the argument against Beaverbrook, being a newspaper proprietor, he was passionately attached to newspapers. These are financial moguls with a different perspective from those of the generation which set up the Reuters Trust.

Mr. George Walden (Buckingham)

The hon. Gentleman began his speech by referring to history. May I remind him, on the point about financial services, that Paul Julius Reuter, in 1851, set up Reuters as a telegraphic exchange, near the stock exchange, to provide stock prices for clients in London and Paris, using the new technology of the time. So let us be clear that, from the start, thank goodness, a business element was involved.

Mr. Mitchell

I thank the hon. Gentleman for that footnote from the English Historical Review, but it is largely irrelevant to the argument. I have conceded that point. The question is the electronic transmission of those financial services and the cash bonanza that that produced for Reuters.

So here we have a Fleet street that needs the money, is poor in integrity, on whom honours have been showered by this Government in a fashion that appalls some hon. Members, but whose perceptions are very different from those of the men who set up the trust. The contrast between Lord Matthews and Lord Beaverbrook is a generation effect in press ownership.

Mr. Jonathan Aitken (Thanet, South)

rose—

Hon. Members

Hear, hear.

Mr. Aitken

I was moved almost to tears by the hon. Gentleman's encomium for the old generation of newspaper proprietors and, in particular, by his praise of Lord Beaverbrook, my great-uncle. However, may I point out to the hon. Gentleman, as a matter of historical fact, that during his lifetime Lord Beaverbrook was the first to say—among other places to a Royal Commission on the press — that he ran his newspapers purely for the purpose of propaganda. To hear him now beatified by the hon. Gentleman as the personification of integrity is a new experience in my historical reminiscences of Lord Beaverbrook.

Mr. Mitchell

I thank the hon. Gentleman for what he said. It was the exact reverse of ancestor worship. The fact that anyone connected with the finances of TV-am could be moved to tears by me is a testimony to the power of my oratory.

In fact, I was about to quote Lord Beaverbrook. He did say that he ran his papers for propaganda, but what is important is that he was interested in them as papers and for the influence that they conferred on him and the type of propaganda that he put out. The interest in them now is as generators of money, as financial organisations. That is an entirely different preoccupation, with an entirely different attitude to papers, agencies and the news itself from that of the previous generation. This new generation of press barons woke up to the potential of Reuters, and the first to announce that potential publicly was Lord Matthews, followed rapidly by Mr. Rupert Murdoch and then by the Daily Mirror. They saw in this pot of gold that Reuters had generated — without having participated in the generation of it — at the end of the Fleet street rainbow, an opportunity to boost their assets and an opportunity to float off liabilities — not to see those liabilities sink, as some were in danger of doing—and an opportunity to assuage their own incompetence with the balm that they most esteemed, money.

The grab began. The trust was to be detrusted. The institution that had been set up in 1941 was to be discounted, run down, and not to be regarded as important. Reuters was to be floated—70 per cent. of the equity to be floated off and sold to the public. The result will be a huge cash bonanza. It is difficult to estimate the worth of Reuters, but it would appear to be worth between £1 billion and £1.5 billion. The £1 billion puts it on the same scale as Lloyds Bank, and £1.5 billion on the scale of the National Westminster Bank. We are talking about one of the 25 biggest companies in this country. It is a huge pot of gold, in which the United Kingdom's share would be £820 million, that of Australia £137 million, New Zealand £27 million. Rupert Murdoch's share would be £114 million of Australian and British interests, Lord Rothermere and Lord Matthews £120 million, and the Daily Mirror £80 million.

Perhaps it would be of interest if I give the exact shares in this pot of gold that people are now jostling for. It involves the following: Associated Newspapers Group Ltd. 12 per cent., Fleet Holdings 12 per cent., News International about 11 per cent.—of which 9 per cent. is in this country and 2 per cent. in Australia — Reed International 8 per cent., John Fairfax Ltd. group (Australia) 6 per cent., Herald and Weekly Times Ltd. group (Australia) 6 per cent., the then Manchester Guardian and Evening News—poor old provincials—5 per cent., the Daily Telegraph 5 per cent., International Thompson organisation 5 per cent., United Newspapers 3 per cent., BMP Holdings 2 per cent. That is the share-out of the pot of gold.

Mr. Hind

Will the hon. Gentleman accept that, in fact, 41 per cent. of the shareholding in Reuters is owned by the provincial newspaper groups? The hon. Gentleman referred to the poor provincial groups, but that is not so. Am I right?

Mr. Mitchell

I am afraid that my joke about the then Manchester Guardian did not come off. I apologise if I have caused the hon. Gentleman any confusion. The holding is 41 per cent. for the Press Association, which represents provincial newspapers—the more honourable section of this coterie — and 41 per cent. for the Newspaper Publishers Association.

The initiative in this grab for the pot of gold came from outside, not from inside Reuters. It was not an imperative dictated by the needs of the company or the pressures on it. It came entirely from the Fleet street moguls, who saw a chance here. They would be the main beneficiaries, not the company. I think that Reuters, in an operation of this nature, because of the profits and the opportunities that they present, can raise the cash that it needs for expansion—it wants to expand—from profits and loans. Certainly it has no debts. The management has said that expansion could be carried out from profits. Of course, that could not be done if this flotation goes ahead, because it would then be done from the flotation. Indeed, Reuters could benefit from the flotation. It is difficult to say that Reuters does not need the money, because any financial director of any large organisation, presented with a windfall like that, would welcome it with open arms. After all, he has only to invest it on the money market to have a profitable use for it. However. Reuters does not need it for expansion, because it can generate money from its own revenues.

Mr. Tim Eggar (Enfield, North)

The hon. Gentleman has admitted that Reuters has been spectacularly successful in developing information technology. It has probably been the greatest success story of any United Kingdom company in this sphere. Perhaps that success has been all the more difficult to achieve because of the nature of the management and the historical involvement of Reuters. Surely, at a time when, for the first time, Reuters is coming under intense competition from other services, mainly from United States companies, it is right that Reuters should have independent management, totally separated on the information technology side from the trust imbroglio, ensuring—we hope—that the new side is still governed by the trust and all that that means. I agree that there is much to be said for the trust. Would it not be wrong if hon. Members tried to stop Reuters competing successfully with other international companies?

Mr. Mitchell

There are a number of replies to what the hon. Gentleman says, but I shall answer the point later. It has not been suggested that the agency and the financial services, the Monitor, should be split off, because they are independent. Indeed, the selling point of the financial services has been the independence and integrity of the news agency, and the fact that the financial services carry this type of political news, which is important to investors. That is the advantage it has over other financial services. So, news is important. It is fair to say that in the attempt to develop interactive services it has not been as successful as it was in the initial development of the Monitor service. That might be because of the state of demand in the financial sector, but I do not know. It has been stickier than the initial development. Given the profits that Reuters is making and the inflow of money, it could expand from revenue and borrowing and that would be better than this sort of flotation.

It is argued that the pressure for the flotation comes not from the company, but from outside. That is the important point. Floating shares could be a threat to Reuters as an institution, because a news agency is not a particularly profitable organisation. News is vital to us and it is important that it should be independent, but it is not a great money spinner. That is why Reuters was set up as a cooperative and trust in the first place. It represented a commitment by the newspapers to financing the supply of news to themselves. It was an effective way of handling the difficulty, but it was not profitable or a big money spinner.

As soon as Reuters is floated and becomes a commercial organisation, news—the paramount purpose of the whole organisation under the trust — will automatically be discounted. As soon as commercial imperatives become important in the running of that company, the news service can easily be run down because it is expensive. The financial services could be built up while the news element was slimmed down to the level essential for those services. Indeed, there have already been pressures in Reuters to do fewer "newsy" stories and to concentrate more on the sort of service that is important to the financial institutions. That pressure will be much greater if Reuters becomes a commercial organisation that is floated on the stock exchange. The trust, which makes news of primary importance, is basic to the institution's independence.

Mr. Nicholas Lyell (Mid-Bedfordshire)

Is there not a logical inconsistency in the hon. Gentleman's argument? He has acknowledged that Reuters was built up by Baron Reuter on the basis of the financial services that he offered, which paid for that news service of high integrity. It was saved in the first world war as a holding operation, and was then held in being by the Press Association from 1924 until 1941. Then the NPA joined in, together subsequently with the Australian and New Zealand groups, to hold it together throughout the intervening period. Now Reuters is once again profitable for financial services. How does that accord with the hon. Gentleman's argument that if the financial services once again became less important and if all the vast profits from such services were not put into its news services, Reuters would fall back into a dark age and cease to offer a service of integrity?

Mr. Mitchell

I am trying to make the important point that, under the trust, news is the central purpose of the organisation. The danger is that the financial flow that is generated by the Monitor service and the electronic transmission of financial information could become the main purpose of the organisation, and the news side of it might atrophy and sink, and have the life drained out of it as a result. The logic of the financial services is to sell information to fewer people for more money. If financial services became the organisation's main purpose, it would be entirely logical to sell information to banks and financial institutions for high fees and not to sell it to newspapers for less. Thus the important factor in speculation — news priority — would be provided. That could be the logical consequence if financial services became of paramount importance. That possibility has always existed, but until now news has been the central purpose of the organisation.

Mr. Gorst

I do not want to interrupt the flow of the hon. Gentleman's speech, but his answer to my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) is most illogical. If the substance of his reply was true, it would follow that because of ITN's relationship with money-making television contractors, it equally lacks integrity. However, we all know that in many respects the service offered by ITN is superior to that of the non-money-grabbing services of the BBC. Therefore, the hon. Gentleman's argument does not stand examination when applied to another organisation.

Mr. Mitchell

I apologise to the hon. Gentleman, but I do not follow the logic of his argument. Reuters provides the basis of news for both ITV and BBC, as well as for the newspapers. They then develop it in their own way. I am concerned with the value of news. If the number of outlets to which it is communicated is restricted, those outlets will have the advantage of priority of information. That is my point. I think that it is a valid point, even if it is not understood.

The journalists in Reuters feel threatened, in particular, because of the lack of information communicated to them about what is happening. High-level manoeuvrings are going on and there is speculation, but they have no information about their fate or about the way in which the news will be treated in their institution. They feel that there could be a threat—and, indeed, there could be—to the independence and integrity of the news agency.

If Reuters is floated, who will control it? How can we guarantee what has been central until now —British national control? In the first draft of my motion, I used the phrase, "keep control in this country". Reuters is largely controlled from this country, and is a British institution in the sense that Australia and New Zealand regarded themselves in 1946 as British. Indeed, Australian and New Zealand passports claimed their citizens to be British. Therefore, it is a British institution that is controlled from Britain. I did not emphasise that because its operation is genuinely international. However, what is to stop that control leaving this country? What is to stop control of influence in the shareholding being used to influence the news-gathering operations and the opinions transmitted through the agency? What is to stop organisations buying a stake? How can we effectively limit the stakes taken by organisations, and will they become a base for influencing the agency?

I have already mentioned the example of Rupert Murdoch bidding for Warners. It is rumoured—although I do not know how much truth there is in it — that Warners wanted to take a stake in Reuters. It is possible for one person to hold a stake individually and through another organisation, and to use that stake, if flotation goes ahead, to influence that organisation and turn it into something quite different.

That puts newspaper proprietors in a dilemma. If they observe the principles of the trust and of their commitment to the organisation and keep some control of it, they will also dilute its attractiveness to the market. The more they keep control of votes, the less attractive the investment will be to the city. However, they need the money. They are, therefore, torn both ways. That is shown by the Warburg report. The copy that I have with me is dated 7 October 1983. It demonstrates the way in which thinking has been going about the flotation.

Warburg was presented with four principal options and was asked to report primarily on two of them. The first option was a financial restructuring to separate editorial activities from trading activities. That was ruled out at an early stage. The report states: Management have prepared and circulated a paper to all Board members explaining why they believe Option 1 is not practicable. This matter was discussed at the meeting on 20th September when it was agreed that it was not necessary for us to look into this matter further. Obviously, all sorts of avenues have been tried. The second option was an issue of marketable non-voting shares. The report states: The implications of Option 2 were fully set out in our memorandum prepared for the Board Meeting of 14th September. It would limit substantially the amount of shares which could be sold and would have an adverse impact on the price obtainable for them. That is of paramount importance to those people, because they want their hands in the pot of gold, and the maximum return for their sticky fingers. Therefore, they would not go for option 2.

Option 3 was the issue of marketable shares with restricted voting rights, with the existing owners retaining 30 per cent. of Reuters' equity. Option 4 was an issue of marketable shares with restricted voting rights, with the existing owners retaining a minimal equity interest.

The Warburg report states: The options have been prepared on a basis that should involve a minimal diminution in the value of the listed shares to be offered in comparison with full voting shares. We have understood Option 4 to involve a master share or small class of shares, the votes attaching to which would be exercised by Trustees. Such votes will be exercised to preserve the independence and integrity of Reuters by preventing any one party gaining control, but could not be used to exercise positive control. Although the proposal for Option 4 should prove acceptable to United Kingdom institutions, the acceptability of the proposal for Option 3 cannot be assured at this stage. Discussions are apparently being held with the British Assurance Association and the National Association of Pension Funds. That illustrates the dilemma. Maintaining the principles and retaining the trustees' control reduces the price that will be obtained for the flotation of the shares. That is the dilemma on which the trustees have been pirouetting for the past few months. One can sympathise with them in that tragic dilemma.

The essential argument against floating and against shareholdings outside the newspaper industry is not only that that will remove control from the consumers—the co-operative aspect—but that it is possible that the EC will insist on enfranchisement of shares. I hope that it does. That means one share, one vote and no separation of voting shares, which is all too common in British industry and commerce. It is not possible to guarantee that control, if it remains with the newspaper proprietors, will stay there permanently because enfranchisement is a spectre on the horizon.

The whole proposition removes the primacy of the news agency and eliminates the trust. Against all the threats the safeguard is the trust set up in 1941. It was crucial for the grabbers to discount the trust. They employed highly paid lawyers to pick holes in the document so laboriously prepared as a call of duty in 1941. The trust was transmuted to a mere shareholders' agreement which can therefore be terminated by the unanimous decision of the four shareholders … without reference to any third party". There is no reference to the Lord Chief Justice, yet the trust is specific on that point. As a non-lawyer I fail to see how anyone can get round the solemn commitment that the trust would be maintained for 21 years. The agreement states that thereafter it shall not be terminated or amended … unless the proposals for such termination or amendment have been submitted to and approved by the lord Chief Justice of England and it shall not be terminated unless he is satisfied that by reason of the circumstances then existing it is impracicable to secure the objects of this Agreement by continuing its operations in its then existing or any amended form. I do not see how that can be ignored.

The Lord Chief Justice has not been consulted and there does not seem to be any propensity to consult him. On 19 January he wrote to the National Union of Journalists, following an interview in The Observer in November.

Lord Lane told The Observer: This is the first I have heard of any involvement with the Reuters trust. The letter to the NUJ confirms that. It states:

I have read in the papers of the terms of clause 12 of the 1953 agreement of trust. I have no idea whether this clause is effective and no one has yet approached me with regard to the duty which it apparently casts upon the Lord Chief Justice.

Mr. Walden

If the integrity of Reuters over the last few decades has rested successfully on a document which turns out to be a document more of good intent than of legal standing, given that the trust is to continue, why will the integrity not also continue?

Mr. Mitchell

We do not know. That is our concern. The institution was based on the trust and the trust has been sold round the world. The trust is the rock on which the institution has rested and now people are trying to get their hands on the money. They say that the trust is not important, but merely a shareholders' agreement. The House must express its concern and insist that the trust is maintained. I should be grateful for support on that. Surely it is wrong to carry on in such a fashion when the intention is clear and specific.

The trustees of Reuters are being consulted on the proposed new arrangements and are receiving independent legal advice. Mr. Angus McLachlan, the chairman of the Reuters trustees, has issued a statement. He is an Australian and a unique man in the tawdry politics involved because he is the only man who has nothing to gain from the proposal to float. The rest are judge and jury in their own case because they stand to benefit enormously from the flotation. On 14 November Mr. McLachlan said: My fellow Trustees and I have noted with some surprise the public controversy that has arisen in the United Kingdom"— not the statements by Lord Matthews, but the controversy— concerning a possible capital reconstruction of Reuters and its subsequent public flotation as if it were something over which we, as Trustees, have no control. We have, of course, been informed of the general concept but we are still awaiting its details. As individual Trustees are based either in Australasia or the United Kingdom it is impracticable to call meetings merely to consider interim reports. It has been inferred that since we are all in the first place nominated by newspaper companies that we shall rubber-stamp anything that is formally proposed by the Board. That is a legitimate suspicion because of the benefits that they stand to accrue.

Mr. McLachlan continues: On the contrary, on becoming Trustees we, all of us, accepted an obligation to conserve the objects of the Trust which are, in brief, to maintain the integrity and independence of Reuters and to ensure that its control does not fall into the hands of any one interest, group or faction. When any scheme is presented to us we shall seek independent legal advice as to whether that scheme is one with which we, as Trustees, should concur. The anxiety is still there because we are still being told that the trust is not important but merely a shareholders' agreement. If that is so, what on earth have the trustees been doing all this time? Why has everyone laboured under the misapprehension that a trust was involved? Why has Reuters been sold round the world as an independent institution because of the trust? Reuters was intended to be a trust. It is a trust in the sense that it is a co-operative undertaking by organisations to maintain the integrity of a news service. It has always been regarded as a trust and should go on being a trust.

Reuters sold itself as a trust and it cannot now say, "I am sorry, chaps, we were wrong when we told you we were a trust; it was just a little mistake. We are not really a trust and we have been telling lies." That is no position for an independent news agency.

Great harm is being done by the attempt to get at the money and by discounting the trust. Harm is being done to Reuters' reputation around the world. That reputation is based on the independence of the trust. The events can be compared to a cathedral in which oil is discovered. One can imagine the episcopal agonies suffered by the moguls of Fleet street.

The prime blame rests with the press barons, although Reuters' management cannot escape all the blame because they have not stood firmly against the vested interests clamouring at the door. Perhaps they have not done so because of the decision to make shares available to some of the Reuters' management. That decision gives people in Reuters a vested interest in the flotation which will enrich them.

Since shares were issued in 1981, they have been taken by five administrative staff, 16 editorial staff — not working correspondents, who are not important to that organization—15 financial staff, 34 general management staff, 28 sales and marketing staff, 22 technical staff and four other staff. That creates a vested interest within Reuters in going ahead with flotation. Indeed, those who took shares in 1981, when the Inland Revenue assessed their value at £147 compared with the present Inland Revenue assessment of £6,400, have made a 4,300 per cent. profit. And there is further profit still to be made if the shares are floated.

Reuters is a somewhat divided organisation. It is a sad and sorry spectacle. The question of morality is one not only for its shareholders' consciences, but for this House. Our major responsibility is to speak for the public interest and for the need for an independent, honest and uncorrupted news service.

Those taking the decision whether to float or not are, to say the least, people with divided loyalties because of the financial benefits that will accrue to them for flotation. The Spectator asked this week: why … should we trust the assurances of Reuters' shareholders who have discarded as worthless a trust agreement which until recently they were praising as sacred? That question must be answered.

Mr. Peter Lloyd (Fareham)

I should be interested to hear the hon. Gentleman's comments on certain items in the trust. The integrity of the trust is determined by whether those items are maintained. The hon. Gentleman speaks about flotation as though that is likly to go against the interests of the trust. Item A states: Reuters shall at no time pass into the hands of any one interest, group or faction; The likely effect of flotation is to extend ownership, not concentrate it—

Mr. Mitchell

The hon. Gentleman does not know that.

Mr. Lloyd

Nothing is certain in this imperfect world. The hon. Gentleman is saying that it is likely that there will be a concentration of ownership. I submit that that is unlikely. I have been waiting for him to explain why his fears—which I accept are legitimate—are likely to be realised and also to tell us why we should be supremely worried about what is happening.

Item E of the trust—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. The hon. Gentleman's intervention should be brief, especially if he is waiting to catch my eye.

Mr. Lloyd

Will the hon. Member comment on item E, which states that no effort shall be spared to expand, develop and adapt the business of Reuters"?

Flotation may well lead to the fulfilment of that aim.

Mr. Mitchell

The point is that the present independence was established by a co-operative ownership based on a trust. The risk of other control and other influences is enormously amplified by flotation. The present arrangements have worked well, so why change them? Reuters can raise money for development from internal revenues. Why must there be any change? That is the main point of my argument.

As a non-financial person, I find it difficult to envisage what must be done. Should the news agency be split off from the financial services and retained on the present basis? Unfortunately, the agency is not profitable. As newspapers are carrying less and less news and more and more other features, especially of females, it may become less profitable as time passes. It would have to raise its charges, which would increase the pressure on newspapers and news media in other countries to turn to the free services provided by such agencies as TASS. Surely we do not want a developing world to see world affairs through a TASS darkly. That may happen if Reuters has to raise its charges because its service becomes less profitable.

The two parts are also interdependent. The financial service depends on the news service. The journalists provide the news for the financial service. That service is sold on the news base and the independence and integrity of Reuters. The hon. Member for Fareham (Mr. Lloyd) is shaking his head. He can enlighten us on his views later. Splitting Reuters would not work.

I do not want Reuters to be floated. Something that has worked so well for so long should be retained. There is no reason why it should be floated to meet Reuters' internal development and expansion needs. It is possible that the Gadarene rush has gone too far, especially if it has even infected newspapers in New Zealand, where speculation appears to be rife about who will get what.

If Reuters is not floated, the effects of that might filter through to the newspapers themselves. In other words, they will be subject to bids on expectations of a stake in Reuters that cannot be quantified or assessed. The Guardian made that point today. It pointed out that Fleet Publications, which was worth £12 million before news of the Reuters gold pot, is now worth £120 million—someone is benefiting—of which £100 million concerns the Reuter stake.

The Guardian suggests that Reuters must be floated because of the bids for newspapers with a stake in Reuters that is unquantifiable and because of a wish to diversify investments. That windfall sum of money was wholly unexpected, and not in any way due to the efforts of the newspapers. So I do not accept the argument that Reuters must be floated because of the effect on newspapers if it is not floated.

If Reuters is floated, why should the benefit from that go to the present owners of the Fleet street newspapers? There is a problem with the financial viability of the Fleet street newspapers, but any benefit should be used for the press as a whole and not for the enrichment of the press barons. It should be there for newspapers both present and to come. It could provide a fund to be used for establishing new newspapers, which cost about £20 million to establish. If Reuters is to be floated, the benefits should accrue to the newspaper industry to encourage diversity in Fleet street. It should not go to specific newspaper proprietors who are greedily grabbing at the money.

The House should express the view that what is taking place is undesirable and immoral. It is being done behind closed doors, with nothing but rumours for the public. The case for the public interest, as maintained by the press, must be voiced in this House. I urge the Government to intervene in this matter. The Government have a responsibility to intervene now, in the light of what is happening to Reuters, just as in 1941, in a similar crisis, they intervened to urge the establishment of the trust, as it then was, on Reuters and on the newspaper proprietors.

Here are people with too strong a vested interest in their own enrichment to be able to judge adequately the best interests of an independent news agency. This is an important national institution and the Government should take an interest in it and intervene in what is going on so as to put the viewpoint of the national interest and of he integrity of this organisation.

There should be a delay to enable an impartial inquiry to be carried out—the time is probably too short for a Royal Commission—by an independent body so that we may have an independent assessment of what is going on, bearing in mind the greedy self-interest of those who stand to benefit from what is happening.

Without all those things — without Government intervention and without a stay of execution until there is an independent inquiry so that we may know the facts and possibilities and what ways there are of safeguarding the independence of, and maintaining, the trust—a greedy and irresponsible grab will be made for the gold that has developed in Reuters. It will be seen as a sordid, self-interested and, in my view, immoral attempt by those financial interests that now dominate Fleet street to enrich themselves and, in so doing, to threaten, in their clumsy, inept fashion, the independence and integrity of an agency which is vital not only for the public interest in this country but throughout the free world. An independent news organisation is vital to truth and understanding. It is now threatened by the greedy self-interest of the Fleet street barons.

10.42 am

Sir Bernard Braine (Castle Point)

The House is grateful to the hon. Member for Great Grimsby (Mr. Mitchell) for raising this important subject and for doing so in a non-partisan way, for this clearly is a matter which concerns us all, whatever our party affiliations. It is a matter above the clash of party opinion. We may differ on details, and it was clear from the spirited interruptions that the hon. Gentleman received that many hon. Members will wish to contribute to the debate.

This issue concerns an institution which, in a world that is still only half free, and in which violence and the lie, as Solzhenitsyn reminded us, always need one another, is crucial to truth, freedom and good government. It is as important as that.

The name of Reuters is familiar to millions of people throughout the world and for all of them it is synonymous with integrity. We in this House in the past have played no small role in ensuring the continuance of that reputation. The present pre-eminence of Reuters as a purveyor to the world of fast, accurate and independent reports of men and events, and as a supplier of unbiased, factual information to financial and commercial organisations, owes a great deal to the foresight of our predecessors in this House who, in the darkest days of the second world war, willingly accepted that Reuters should be preserved as an independent news organisation rather than become an organ of propaganda.

We have every right—even more, a duty—to ensure that the unique nature of Reuters is preserved and that the achievements of the past, and the considerable potential for the future, are not traded for the transient advantage of the few.

Reuters is a world-wide organisation, but its headquarters are here in London. Here it began more than 130 years ago. Here it has flourished and here, when its future was under threat in 1941, Parliament intervened to ensure the continuance of its independence and impartiality.

This is no mere commercial matter. This is something which once before, and now again, is a responsibility that Parliament cannot shrug off. We have every right—we have a duty—to voice our concern and to expect that it will be noted and acted upon by all those connected with the present plan for the flotation of Reuters as a public company.

The present management may deprecate our interest. Indeed, they say both publicly and privately that the affairs of Reuters are no affair of ours. But our interest and concern is both justified and essential. Of course, we in Parliament are not, and should not be, concerned with whether the flotation of Reuters will raise £1 billion, or with what the newspaper proprietors will do with this windfall when they get it. I, for one, am not concerned with personalities; I am not concerned with the gain that particular companies may make out of this. We live in the real world and we know what goes on.

What we should be concerned with, and what cannot be ignored, is the preservation of Reuters as an organisation with a worldwide reputation for independence and integrity, that cannot be manipulated for private or sectional interest, and which stands, above all, for accuracy, honesty and truth.

Reuters at present enjoys such a reputation. Indeed, its continued success and rising profits stem more than anything from that, and its future must also lie in the preservation of a regard for truth and impartiality that is exemplified in a news service that is supplied to, and accepted by, both the Arab countries and Israel, by the Republic of South Africa and by the emergent black countries of South Africa, by the Communist authorities of the Soviet bloc and by the Munich-based radio station which serves to oppose it.

I was told by a good friend of mine, who some years ago was behind the Iron Curtain meeting prominent Eastern bloc writers, that he had been told by a Czech writer, "When Radio Prague says, 'According to Reuters' we know that for once it is telling the truth."

Employees of Reuters—we must remember that the success of the organisation owes a great deal not to financial manipulation but to the quality, skill and integrity of the journalists who have been employed by it over the years — have told me that they have never anywhere in the world had to apologise for the fact that they work for Reuters or have had to try to compromise their standards to do their job. What a splendid testimony that is to Reuters and to the men and women who serve it. It is that reputation that is at risk.

Reuters' management has sought to reassure its staff and the public by saying that the principles embodied in the trust deed of 1941—a copy of which I have with me and to which I shall refer—will be perpetuated in any flotation. That assurance is regarded with the utmost scepticism by the majority of people who work for Reuters. Indeed, the management's very actions in seeking public flotation and the way in which it has gone about it gives the lie to such reassurance.

The management has said, first, that the flotation is necessary to secure funds for the future expansion of Reuters. That is manifestly something less than the truth. Reuters' profits have surged in successive years from about £4 million to £15 million to £35 million and, in the current year, I am told, to approaching £60 million. These figures have been arrived at after repaying all outstanding loans and capital costs, so the company is free of debt and the entire profit is available either for distribution or to finance future investment and expansion.

More important, however, is the cavalier attitude that the management has displayed towards the Reuters trust deed, which was designed to ensure in perpetuity the independence and integrity of the company. This, the management now says, is not a trust deed as such but merely a shareholders' agreement that can be set aside at will by a subsequent decision of the shareholders. It says that it has taken legal opinion that supports that view. That was not the intention of the shareholders when the trust was established more than 40 years ago, nor is it what the trust deed states.

Even if the management's view of the original trust is valid, what does that mean for the safeguards as yet unspecified? It is said that these "safeguards" will be enshrined in any revamping of the existing company for a flotation. That means that these, too, will be merely shareholders' agreements, to be upheld or disregarded at will by the newly enlarged body of shareholders at any time in the future.

The terms of the trust that was announced on 29 October 1941 were: Reuters shall at no time pass into the hands of any one interest, group or faction … its integrity, independence and freedom from bias shall at all times be fully preserved. The announcement also stated: Provision has been made that the trust shall be irrevocable for a minimum period of 21 years and that thereafter it shall not be amended or dissolved unless the matter has been submitted to the Lord Chief Justice, and shall not be dissolved unless he is satisfied that by reason of the circumstances then existing it is impracticable to secure the objects of the trust as set out above by continuing its operation in its present or any amended form.That is an uncluttered statement and it is clear what the intention was. It is there in black and white. That obligation has not been met and the present management feels that it does not need to be met. What guarantees of Reuters' independence and integrity can be stronger than those embodied in that 40-year-old document? What more reassuring safeguard could there be than a reference to the Lord Chief Justice of England?

Mr. Gorst

May I put it to my hon. Friend, with the utmost and deepest respect, that he seems to be following the line that the hon. Member for Grimsby (Mr. Mitchell) was at pains to make, which I would summarise as follows: that the pursuit of financial reward is corrupting and that capitalism is absolutely corrupt? Surely that line suggests that the industry cannot be trusted to regulate itself and to bring up to date a trust that was formed in 1941. May I put it to my hon. Friend that he slightly misled himself when he said that we have an obligation because we intervened as a Parliament in 1941? The intervention that then took place was a discussion and not a requirement in any legalistic sense. I hope that my hon. Friend will not lead us into the suggestion that we should now start interfering in the management of the agency.

Sir Bernard Braine

I do wish to be unkind to my hon. Friend, but his intervention has not taken us forward one inch. I forbear to comment on his snide remarks at the beginning of what was an unusually long intervention in debate. I accept that we have had a number of lengthy interventions this morning. It seems that my hon. Friend does not understant that what I am driving at is principle. I am not concerned with detail. I am concerned with the principles that are at stake. If he cannot see that, he may have difficulty in convincing the House, if he seeks to catch the eye of the Chair at a later stage, of the validity of his argument. As I have said, I am concerned with principle. Short, sharp and snappy interventions very often help debate along, but some of this morning's interventions merely led the hon. Member for Great Grimsby to detain the House for much longer than I am sure he wished. I do not wish to follow that example. I have only a few more things to say before I resume my place.

I was saying that the obligation in the trust deed has not been met and that the present management feels that it does not need to be met. I repeat that, in case some of my hon. Friends have forgotten it as a result of the intervention of my hon. Friend the Member for Hendon, North (Mr. Gorst). What guarantee of Reuters' independence and integrity can be stronger than those laid down in the tust? What reliance can the House, Reuters' staff—someone has to speak up for that admirable band of journalists, which has built up the reputation of Reuters over many years—or the world at large place on any guarantees about the future direction of the agency when such seemingly unshakeable assurances are now so cynically disregarded?

I am tempted to pursue that line further. I might not have done so, but I am encouraged to do so by my hon. Friend the Member for Hendon, North. The management has asserted consistently that it is determined to preserve the principles of the existing trust but it has refused to indicate how it intends to do so. That is not good enough. It is essential that the safeguards and the principles of the trust are published and exposed to public scrutiny before there is an irrevocable decision on a new flotation. It is impertinent of the management to claim, as it has done on several occasions, that the interest of Parliament, and any consideration by it of the proposed changes at Reuters, is of itself a threat to the independence and integrity of a world news organisation. That is palpable nonsense as well as impertinence. It was only the public airing of the proposed changes in 1941 that took place in the House that ensured the continued independence of Reuters. That would have gone at that time if it had not been for Parliament. It is no exaggeration to say that the safeguards written into the 1941 trust agreement, especially the need to refer any changes to the Lord Chief Justice for approval, were included because of the action of the House.

The need to refer changes to the Lord Chief Justice was continued when the trust deed was amended in 1947, and again when the trust was further amended in 1953. The latter document, of which I have a copy, is still in force. It is quite clear in section 12 of the trust deed that any changes in the structure of Reuters can be introduced only after submission to and approval by the Lord Chief Justice. I should like to know whether any approach has been made to obtain that approval. That seems unlikely in view of the public remarks of the Lord Chief Justice. If no attempt has been made to obtain his approval, why not? If we have any spokesmen for this who wish to bring about the proposed changes, let them explain why it has not been thought necessary to approach the Lord Chief Justice. The House has a right to know, and a right to insist on knowing exactly what is planned for an institution which Parliament has done so much to preserve.

It is all very well for the present management to claim that Reuters is now a large international organisation with business interests in almost every country, but it cannot claim that that puts it, and it alone, among the many large international organisations operating in Britain, beyond the natural interests of Parliament or above the standards of conduct that we demand of any other company in the land. Before the announcement was made last month that the management had decided to call a public flotation, the proposals were sent to the trustees for comment. I ask the House to note the word "comment". They were sent to the trustees for comment and not approval. That appears to bear out the fears expressed by independent commentators and Reuters' staff that any safeguards for the independence and integrity of the company and the continuation of its renowned news service will be valueless.

For the past 40 years Reuters has made a trading point of the trust in its dealings with customers and members of the staff. Both customers and staff have felt that they were dealing with a body whose probity was ensured by adherence to the principles embodied in that trust. How will customers feel in the future if the management has its way? How will they regard a body that can be seen to disregard what were presented to them as inalienable principles? The truth is that there can be no safeguards under the scheme advanced by the board.

I understand that the highly reputable merchant bankers, Warburg's, which is advising the management on the possible flotation, has pointed out the difficulty of floating a company that would not be subject to the control of those called upon to invest in it. I am told that the recommended plan, which would enable the existing owners to control more than 50 per cent. of the votes in the company while holding fewer than 30 per cent. of the shares, has had a sour reception.

There has certainly been a strong reaction in the City, and it is not surprising. The big institutional investors simply will not accept such an arrangement. The National Association of Pension Funds and the British Insurance Association were quoted in The Guardian yesterday as saying that they cannot make any exception in the case of Reuters to their rule that shareholders in a company must be able to control the whole of that company They object to paying the piper without having any choice of tune. The NAPF and the BIA are right, of course. Companies must be accountable to those who put up the funds that enable them to function. But that is the nub of the question. Any move to change the proposals to meet those investors' objections must necessarily weaken whatever safeguards may be proposed against the possibility of Reuters being taken over by sectional interests or becoming the tool of one faction. That is the dilemma.

It seems all too apparent that the impetus for flotation and the eagerness for the profits that will accrue come not from a band of long-standing shareholders who have sustained and encouraged Reuters over many difficult years, but from their successors, who see substantial profits as the solution to difficulties of their own which have nothing to do with Reuters. Such an attitude can only damage Reuters' reputation. That is a far cry from those who promised in the trust deed that they would regard their involvement in Reuters as being in the nature of a trust rather than an investment.

The entire business of the Reuters flotation has been shrouded in secrecy. Only now are we pulling out the facts. The secrecy may have been necessary for commercial reasons. I have been involved in business and I know how the system works; there has to be secrecy when one is making certain proposals. However, some of the actions taken under that shroud of secrecy do not appear to be likely to bear close scrutiny when they are dragged into the open.

I cite the example of the issue of shares in the existing private company to the staff. Three years ago, the only shareholders in Reuters were the newspapers in this country, Australia and New Zealand. The managing director, the general manager and the company secretary were employees. They sat on the board as executive directors, but they were not shareholders.

The board decided to make some shares available to those three employees and they were each enabled to buy about 300 shares, valued by the Inland Revenue at about £147 each. The three lucky directors put down about 10 per cent. of that valuation.

Since then, the offer of shares has been extended to other Reuters staff, giving a shareholding, at the last count, among some 120 employees. However, the House should be told that the shares have not been allocated on any basis other than the management's decision. Of two people in the company, doing the same job or working in the same department, one may have been offered a share option and the other, just as hard-working and able and possibly even senior, may not.

The most recent share options are for between 10 and 30 shares. The crux of the matter is that the Inland Revenue now values the shares at more than£6,200 each. The share purchase scheme allows staff to sell back to Reuters at the current valuation a 25 per cent. of their holding after one year and a further 50 per cent. after five years.

Thus, the original three employee shareholders are in the enviable position of being able to sell back to the company that employs them shares that they bought for less than £150 for something over £6,200. No wonder those three employees felt aggrieved when Alexander Chancellor, editor of the Spectator, said that they sought to make themselves rich through the Reuters flotation. No wonder either, that Mr. Chancellor apologised when they pointed out the full facts to him. He wrote that he was sorry that he had said that they aimed to make themselves rich by floating off the company. That was not true; they had made themselves rich already.

Before it is too late—and time is of the essence—the House must demand that, whatever financial arrangements may be reached about the future of Reuters — the negotiations are no business of mine and the future is, in any case, assured by the present arrangements of the company and does not depend on the flotation — the absolute integrity of Reuters and the continuation of its irreplaceable news service must be the subject of enforceable guarantees. It is not enough to rely on vague generalisations and statements of intent.

The unfettered flow of truthful, accurate news reports is something that hon. Members, irrespective of party, must always cherish. It is vital to the operation of our democratic way of life and something that we have come to expect from Reuters for more than a century. We cannot contemplate discarding it.

11.6 am

Mr. James Callaghan (Cardiff, South and Penarth)

I join the hon. Member for Castle Point (Sir B. Braine) in congratulating my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on securing this timely debate. As my hon. Friend's recent parliamentary performances have shown, he has an eye for an opening that is as keen as that of any our legendary Welsh scrum halves—though he took longer this morning to reach the try line than they would have done.

This is a timely debate and I do not take the despairing view that it is too late for action to be taken. There is time. What worries me about the 10 interventions in the debate so far is that some of those who have intervened clearly do not understand, and therefore we cannot have made clear, the basis of our concern. It is for the future of Reuters—that its name should not be damaged and that its reputation should be upheld. Unless hon. Members who have been intervening regard the matter with a little less levity than some appear to view it, they will damage Reuters by their attitude. A matter of public interest and public concern is involved and it should be explored on the Floor of the House.

The purpose of the debate is not to examine the morality of newspaper proprietors. We seemed to be drifting into a debate about whether the old generation was better than the new. That is not our purpose. Discussing the morality of newspaper proprietors would be as fruitful as discussing the innocence of the train robbers.

Our interest is in the future of Reuters and whether the proposed course accords with the undertakings given to Parliament and are in the best interests of Reuters. My concern is not with the journalists, though, as my hon. Friend the Member for Great Grimsby said, they have a strong case, or with the financial institutions. My concern is with Reuters, its future and Parliament's interest in the matter.

It has been said that Reuters is a world leader in providing unbiased and accurate information. It is the only truly international non-American news agency entirely free of Government influence or control. It is an important institution. My interest arises only because one of the former managing directors, Sir Christopher Chancellor, wrote to me, solely on the ground that he was now so old that I am the only senior politician he still knows. That is my only interest in the matter. He and the Spectator—I understand that Sir Christopher Chancellor is not unknown to the editor of the Spectator—have between them done a public service in bringing the matter into the open, no doubt to the irritation of many people.

The fact that Reuters apparently is the second largest communications network in the world, second only to that of the American defence establishment, the Pentagon, and that it has such close relationships with Parliament—I shall return to that point because it is essential to what I am saying—makes this a matter of national concern and public interest.

Reuters has achieved its pinnacle in the world under the beneficial interest of what has always been accepted as a trust. That is set out clearly in the original agreement, where the title is in large type—"This Agreement of Trust". That is how it was put to Parliament, and Parliament was concerned with it. The answer to Conservative Members who interrupted the hon. Member for Castle Point is that the trust provided not that Reuters should be a purely capitalist organisation but that the shareholders hereby record their agreement that they will regard their respective holdings of shares in Reuters as in the nature of a trust rather than as an investment".

Admittedly, the prospects of profit did not look as great then as they do now and as, indeed, they are now, but the shareholders were committing themselves, for better or for worse, to regarding their investment as in the nature of a trust rather than for maximising profits. Naturally, I want to see Reuters prosper but I do not believe that, in order to prosper, it is necessary that it should maximise its profits to the last possible penny, if that would damage Reuters or the undertakings given to Parliament.

As has been mentioned in the debate, the agreement provided that the trust shall not be terminated or amended…unless the proposals for such termination or amendment have been submitted to and approved by the Lord Chief Justice of England".

Words could not be clearer than that, and it is an affront to our common sense to say that the agreement can be set aside as though it is of no concern of Parliament, or that the Lord Chief Justice can be brushed aside.

Mr. Gorst

I take the point that the right hon. Gentleman makes but surely he would concede that if funds can be found by the new value which is available, it might well be to the benefit of Reuters to utilise the newly acquired right.

Mr. Robin Corbett (Birmingham, Erdington)

The money does not go to Reuters.

Mr. Callaghan

I would concede the hon. Gentleman's point if it were true, but I shall come back to it when I deal with the financial aspects.

The solemn undertakings that were entered into by the shareholders were not entered into freely or without nudging; the shareholders did not embark upon them voluntarily. This is where the parliamentary interest arises, and I urge those who are sceptical to consider the past. There was a rather scathing interjection referring to capitalism and to whether the House has an interest. I remind hon. Members of what Brendan Bracken told the House of Commons at the time in question. He said that he was not discussing these matters with the Newspaper Proprietors Association and the Press Association; he was entering into negotiations with them.

Mr. Corbett

That is right.

Mr. Callaghan

That is where the parliamentary interest arises, and the Reuters board of management is offensive when it says that there is no parliamentary interest or concern in the matter. As Mr. Brendan Bracken said of the negotiations: Whether these gentlemen run their business at a loss or at a profit does not matter to us. What we are doing is saying to them in the national interest, 'It is desirable on the whole that you should have some form of trusteeship.'"—[0fficial Report, 22 October 1941; Vol 374, c. 1873.] The initiative came from here, from Parliament. It came because Clement Davies, as the leader of the Liberal party, seized his opportunity—as my hon. Friend has done this morning — to raise the matter. On that occasion there was a cross-Bench view that these matters should not be left to Reuters, and it was in those circumstances that Brendan Bracken began negotiations and told Reuters that Parliament's view was that Reuters should set up a trust.

Brendan Bracken was as good a Conservative as any of the Conservative Members present in the House today. There are some of us who remember his robust approach to the problems of capitalism. Let Conservative Members remember their history before they seek to discard something as being old-fashioned and out of date. Let them consider the circumstances in which the trust was called into being. It was carefully planned as a result of parliamentary intervention.

Reuters has expanded its other services very considerably—apart from its news service—since those days. The financial services have been expanded, the business news has been expanded, and the shipping services have been or are being expanded. There are plans to go into other fields. It is because Reuters has integrated those activities with the news service that its advantage over its competitors has been gained. It has followed from the integration of the two main services.

The raw material that Reuters provides in the way of financial and business statistics, supported by a flow of unbiased information and news, has enabled its services to be rated above those, for example, of Telerate and other competitors in the United States. I am not an expert in these matters but I understand that to be true. I understand that it is the view of the management that that has enabled the network to be much bigger than that of Reuters' competitors.

I agree, of course, that it is necessary that Reuters' technology should be kept up to date. I understand that Reuters is being challenged in that respect, and that a substantial sum will be required to bring the technology up to date. The fact that a by-product is that it will bring a substantial uncovenanted potential benefit to certain newspapers and to senior staff came as a surprise, perhaps not to the staff but certainly to some of the newspapers, which were too sleepy to be aware of the potential goldmine on which they were sitting. But Reuters proposes now—this is important—to meet the need for cash for the new technology by a large issue of shares, and that involves rewriting the terms of the trust that was negotiated by Brendan Bracken on behalf of the Government and the House. That is our interest in the matter.

I intend to ask the Minister a number of questions to which he will not be able to reply. There is no point in the right hon. Gentleman taking a pen out of his pocket, because he does not know the answers. That is the gravamen of my point. The Minister has not stirred his stumps. He has sat, as somnolent as he looks now, in the face of this developing situation in which it is clear that Parliament has an interest. I shall be grateful if he takes note of my questions. He will not be able to answer them today, but I suggest that it is his job and his responsibility to the House to get the answers before any conclusions are reached.

The directors' first step of disavowing the trust and saying that it is only a shareholders' agreement is in contradiction to the undertakings given to the House. I ask the Minister why the trust has been disavowed. I remind right hon. and hon. Members that the trust was entered into with the full agreement of the proprietors and of Brendan Bracken. Why have the directors disavowed it?

It has been said that disavowing the trust will weaken the reputation of Reuters. I do not know whether that is true. However, I know that Sir Christopher Chancellor used to say that when he was selling Reuters around the world he always carried a copy of the trust agreement in his pocket to assure people that it was a genuine news-gathering and disseminating body totally independent of the Government. Whether his successors will be able to do that when it becomes a purely commercial undertaking, I do not know. But at least it is a matter for doubt and a matter about which the Minister should satisfy himself. The disavowel of the trust casts doubts on whether the existing shareholders still adhere to the purpose of the trust—that it is in the nature of a trust rather than … an investment.

I do not cast doubts on the trustees when they propose these substantial new arrangements, although I have much more confidence in some of them than in others of them, especially some of the Johnnie-come-latelies of the newspaper world, who do not have the concern for newspapers that Lord Beaverbrook shared in the past, as I know from my own experience. Whatever may be said about Lord Beaverbrook's attributes, I say that he was a most engaging dinner companion. But that is for another day.

I come to my next question to the Minister. The board has submitted this proposed new scheme, the details of which we do not know, to a very reputable firm of solicitors asking whether this is in accordance with the original undertakings. Why has the approach been made to a reputable firm of solicitors and not to the Lord Chief Justice? It is not a reputable firm of solicitors that is named in the trust agreement as being the body which is to adjudicate on this matter. It was specifically written in to satisfy Parliament that it should be the Lord Chief Justice.

Why does not the board go to the Lord Chief Justice? Is it concerned that it might not get the decision that it wants? It could test the legality of the trust in law if it wanted to. It has chosen not to do so. In view of the fact that the undertakings given to Parliament at the time are now being disregarded and set aside, I ask the Minister why they are being set aside. Will he please account to Parliament and tell us the reason? If he cannot tell us today, will he please find out and let us know later?

I know nothing of the details, although I have tried to inquire. I have not seen the Warburg statement, which some people seem to have. But I understand that changes have been made in the original intentions because of the latent criticism being expressed by the Spectator and other newspapers. Here I add my word to what my hon. Friend the Member for Great Grimsby said. The Daily Telegraph, which stands to make some financial gain, has reported as freely and as independently on the matter as anyone else. I cannot say that of all the newspapers.

We believe that the trustees are making some changes. They tell us behind their hands that these are improvements to the original scheme. Parliament is in the realm of rumours and half leaks. Is there to be a master share held by the holding company? Is there to be a holding company which will protect the original interests of the trust? I do not know. The Minister does not know. He has not inquired, and he cannot tell us today. Are there to be shares with extra voting rights, as was suggested today by the hon. Member for Castle Point, to which, as we saw inThe Guardian yesterday, the pension funds take exception? I understand why they take exception to that approach.

Are there to be independent trustees? Is a majority of the shares to be sold off, or would that cause indigestion in the city? Therefore, will a large number of shares be kept in the existing hands? if the directors are to do that and if they advance that as a reason for saying, "Look how we are protecting the original purposes and intentions of the trust," how can we be sure that they will not abandon that with the same disregard that they have tried to abandon the trust which they set up with the consent of Parliament in 1941?

What are the answers to these questions? My interest is the parliamentary interest. Parliament was originally concerned about these matters. The Minister at the time negotiated with the trustees. What action are the Government taking today? It is time that they took action.

I come to the specific question asked by the hon. Member for Hendon, North (Mr. Gorst) just now. Is a public issue necessary? Is it necessary to change the trust agreement to raise the funds required to modernise the technology of Reuters? I do not know the answer, but it has been pointed out that Reuters is entirely debt-free. It has made substantial profits. I suppose that at present-day costs it is probable that those profits would not be able to supply the necessary cash, but they give Reuters a wonderfully good base on which to raise money.

The hon. Member for Hendon, North may argue, although I hope to dissuade him from his attitude because this is a serious non-party issue, that it would be cheaper for Reuters to raise money by an equity issue with a high price-earnings ratio. That would cost less than issuing bonds, which would cost more than a general flotation, But given the past undertakings to Parliament, given the reputation of Reuters, given its undertakings to regard the shareholdings as in the nature of a trust rather than as an investment, would not it be at least worth considering that, instead of a general flotation, bonds should be issued even though it cost more? The consequence may be that the shareholders would gain a little less than they would otherwise. They will make substantial profits, anyway.

I hope that the hon. Member for Hendon, North will not take the line that the last penny has to be got out of these proposals to ensure that capitalist profits are maximised. The hon. Gentleman raised the matter to score a point off his hon. Friend the Member for Castle Point. But, given the history and background of Reuters, it should be prepared not to maximise its profits but to take a little less, having done very well, to ensure that the trust is maintained in its present form.

I repeat my question to the Minister. Is the change in status necessary to secure the future development of the trust? Could the same ends not be achieved by different financial arrangements, which would enable necessary modernisation without infringing the trust as it stands? There is no need to over-emphasise the difference between disseminating news and giving financial services. Running them together has perhaps brought advantage to Reuters. There is no reason to disturb them and I do not wish to emphasise one rather than the other.

What guarantees will the new arrangements provide for the continued independence of Reuters as a trust? Some Conservative Members have said that there will be a trust. That might be so but I do not know that there will be. Parliament has not been thus informed. Moreover, unless he has made some private inquiries which he will disclose, the Minister does not know whether a new trust, if there will be one, will meet the opinion of Parliament as it was expressed earlier. Why has the Lord Chief Justice not been asked for his opinion on whether the new arrangements are in keeping with the original intentions of the trust?

I am told that the arrangements for the flotation are far advanced. There is to be a meeting of the trustees on 21 February. The Government still have time to stir themselves and to satisfy Parliament on these matters. Some time ago I asked the Attorney-General to intervene. He replied: If the 'Reuters Trust' is a private trust, the trustees will be bound by it unless or until the trust has been modified or extinguished. That did not tell me much and the Government relapsed once again into somnolence. I strongly urge the Minister to call in the trustees between now and their meeting on 21 February. He might not find them reluctant to come. Indeed, following conversations with one or two of them, I think that they will be ready to meet the Minister to discuss these matters.

There are three reasons why the Minister should call the trustees in. The first is the special relationship—which I have demonstrated—between the origins of the trust, Parliament's interest and the present circumstances of Reuters. The second is Reuter's failure to consult the Lord Chief Justice. The new arrangements must be a matter of public concern. The third is that, although Reuters wants to emphasise that it is an international organisation—I would not want to quarrel with that—it is an institution that has the closest links with the United Kingdom and with Parliament.

The issue is straightforward enough. Reuters is not a normal company for which the maximising of profits is the only or overriding consideration. It is for Reuters to demonstrate that it needs to adjust its financial arrangements in the proposed way to secure its development. It might be possible for Reuters to achieve development by other financial means that would not involve the destruction or substantial modification of the trust.

The best way forward is for the Minister to call the trustees in and for the Lord Chief Justice to be asked to carry out the examination that the trustees undertook would be carried out and which the Minister's predecessor accepted. The Lord Chief Justice should be invited by Ministers, if not by the trustees, to examine the proposals. He should be assisted in this complicated issue by financial experts on matters such as tax, which affects the trust in the event of a flotation or distribution, and the raising of capital, so that he is not approaching the matter from a purely legalistic point of view. He should determine whether there should be a new trust and, if so, whether the proposed safeguards, which I understand that the trustees are now considering, are adequate to meet the original intentions of the trust.

My objectives in this matter are clear. I want to ensure that Reuters maintains and develops its leading role worldwide as a source of accurate and unbiased information, linked to its financial services. No one wants to stand in the way of that. I also want to maintain Reuters status as a trust to prevent any improper pressure being applied to undermine its independence.

We all know how news can be bought. We all know people, institutions and Governments which attempt to do that. I do not maintain that these public issues cannot be resolved. However they must be resolved to the satisfaction of Parliament, which was concerned with the origin of this matter. These issues have not been resolved so far and the Minister has not undertaken action that he should have undertaken. I beg him to do so and to come back to the House with his conclusions so that they can be exposed to the full light of day, as was the original trust.

11.36 am

Mr. Jonathan Aitken (Thanet, South)

The House always listens with great respect to the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) and has done so today. I hope that he will forgive me for saying that I thought his main argument suffered from being a somewhat old-fashioned approach. It might even be said that it was a Rip van Winkle approach. It did not appear to acknowledge that the world and Reuters have changed profoundly in the 24 years since the parliamentary events of which the right hon. Gentleman spoke.

The right hon. Gentleman's main thesis was that there is a parliamentary interest in this matter. The basis for that argument seemed to be the words of Mr. Brendan Bracken in 1941. I cannot possibly accept that what Mr. Bracken said in 1941 is the basis of a parliamentary interest today. If there is such parliamentary interest—I do not believe that there is—it must be defined by today's Parliament looking at today's conditions.

The right hon. Gentleman made great play of the view that the arrangements for Reuters are defined by a trust. He again went back to the words of Brendan Bracken for support. It is not the words of Mr. Brendan Bracken in 1941 or the words of the right hon. Gentleman in 1984 which define whether there is a trust or a shareholders' agreement. This is a legal matter which must ultimately be decided by the courts. We should not make too much play of the political or parliamentary arguments, which are largely a matter of semantics as to whether this is a shareholders' agreement or a trust. Surely we must all be anxious to uphold the high standards, impartiality, independence and integrity that have characterised Reuters for the past century and a quarter.

Having dealt briefly with the views of the old statesman I shall now deal with the speech of the "new statesman"—it was almost a parody of the magazine of that name—which emanated from the lips of the hon. Member for Great Grimsby (Mr. Mitchell).

Mr. Austin Mitchell

The hon. Gentleman's speech is influenced by the Spectator.

Mr. Aitken

I shall have something to say about the Spectator in due course.

I congratulate the hon. Gentleman on his good fortune in once again winning the ballot for private Member's motions, but that is about the only thing that I can congratulate him on, because his speech was exotic, confusing and full of material with which I profoundly disagree.

I must begin, as did the hon. Gentleman, by declaring an interest as a member of the National Union of Journalists and as a director of at least one company that is a satisfied customer of Reuters' excellent service. I do not speak in this debate as a former journalist, although I have strong views on the need to maintain the journalistic independence and excellence of Reuters; still less do I speak as a Reuters customer. I speak simply as a parliamentarian who hopes that the Government will not make a fool of themselves by going down the misguided road proposed by the motion.

I have three strong criticisms of the motion. First, it reveals an alarming ignorance about the true nature and role of Reuters, and about the limits of ministerial and Governmental responsibility for Reuters. Secondly, the motion was inspired, at least to some degree, by the politics of envy towards those individuals or organisations that are likely to become rich or even richer as a result of the flotation. Thirdly, in its call for Government action, the motion displays an astonishing mixture of parliamentary imperialism and journalistic insularity, which is a negation of the independent, impartial and international standards that have been the hallmark of Reuters' excellence.

Today Reuters is the epitome of the independent international company successfully operating, using the most modern technology, in more than 150 countries. For a proud century and a quarter it has maintained its supremacy as the world's leading news agency. It serves no governmental, national or racial interest, and it is undoubtedly the best and most impartial of the big four news agencies. The hon. Member for Great Grimsby was right to remind us that some of its competitors, such as Agence France Presse, are heavily subsidised by Governments. Its American competitors, United Press International and Associated Press, are inevitably heavily influenced by their large home base of American customers. Associated Press draws 83 per cent, of its revenue from American sources, whereas Reuters earns only 17 per cent, of its revenue in the United Kingdom, and less than 0.5 per cent, of its revenue from the Government. Although it is registered in London and has its headquarters here, its operations, staff and customers are international.

Why does Reuters want a flotation? Its shareholders say that they wish to restructure the company for sound, sensible and honourable commercial reasons. First, Reuters is faced with intense competition from American information and news agencies, and it wishes to finance its expansion to remain as world leader in this area. It is all very well for Back-Bench Members to say that there is enough money to finance that expansion out of profits, but my right hon. Friend the Minister will confirm that in today's world of information technology and news systems, expansion can be an extremely expensive business, in terms of providing cable systems and other new technology. It is a prudent and wise financial belief that a flotation will help the agency to be in a stronger position to finance expansion so that it can beat its competitors.

Secondly, the shareholders of Reuters wish to show the real worth of their asset in the balance sheets, and they would be commercially negligent if they did not wish to do that. They cannot be criticised on commercial grounds for taking the action that they now propose.

However, it is fair to ask whether there are dangers to the public interest in this flotation. The hon. Member for Great Grimsby conjured up all manner of demons, hobgoblins and spirits from the vasty deep to suggest that Reuters will promptly enter an age of darkness, with all integrity thrown to the wind, on the day of the flotation. In his scenario, the pot of Reuters gold, to which he referred many times, was almost as complex and doom-laden as the plot of Rheingold. That is pure fantasy, dreamed up in a spirit of political envy and financial jealousy that has no basis in reality.

Here I must draw attention to the hon. Gentleman's acknowledged chief guru, whose teachings so clearly influenced his speech. His guru is not Marx, Lenin, Marshall McLuhan or even Wedgwood Benn. His speech was composed in an unholy alliance with the editor of the Spectator, Mr. Chancellor, who has been conducting a maverick crusade in the columns of that journal, in which no theory has been too far-fetched for his fervid imagination in search of ammunition for the belief that the flotation should not take place. Mr. Chancellor's thesis is that the integrity of Reuters will be "denigrated and circumscribed" if its shareholders are seen to include ugly-faced capitalists. I do not know how Mr. Chancellor squares that fear with his duty of maintaining the integrity of the Spectator under the proprietorship of Mr. Cluff. Perhaps that is because Mr. Cluff is a beautiful-faced capitalist, but I shall let that pass.

Mr. Chancellor's theories, which have been developed at great length in many columns, consist of several so far wholly unfounded fears. He suggested, for example, that Arabs, Israelis and other political interest groups may be large buyers of blocks of shares. He has upbraided senior executives of Reuters because they will be substantial shareholders in the company. Almost everyone, from Sir Zelman Cowan of the Press Council to the Fleet street trade unions, has been castigated for demanding a share in the carve up as he calls it. Mr. Chancellor seems to see himself as the sole standard bearer of journalistic integrity at Reuters, apparently largely on the basis that he was a former employee there — a fact that he curiously omitted to mention until attacked by a reader for failing to declare his interests in his early series of articles.

The belief shared by Mr. Chancellor and the hon. Member for Great Grimsby that Reuters will immediately jettison its independence, impartiality and integrity is moonshine. I say that for several reasons. First, the interest of the shareholders must be to maintain Reuters" supremacy by keeping up its high standards of integrity and impartiality. Secondly, the board of Reuters has already declared that it is adamant that the principles of the existing shareholders' agreement, known as the Reuters trust agreement, must be maintained. Thirdly, it is almost inevitable that a stronger trust will emerge with a legally binding structure, as is the consequence of any public flotation, bound as it will be by company law.

Whatever the new structure, it is bound to be much more effective in preserving independence and journalistic integrity—as the Reuters board wishes to do—than is the present Ruritarian, Gilbert and Sullivan procedure by which the Lord Chief Justice is mysteriously consulted, but apparently without real power.

Reuters' board proposes that there should be three trustees in future, any one of whom can exercise a veto if there is an unwelcome slide away from journalistic integrity and impartiality. It has also proposed a structure of voting by which control will remain in the hands of the large shareholders who own Reuters today. I accept the point made by the right hon. Member for Cardiff, South and Penarth that some institutions are restless about those proposals because they move away from the sound commercial principle of one share, one vote. I can understand the City institutions' well-known views on the matter and sympathise with them, because the multiple voting of shares is no friend to sensible company administration as a matter of principle. However, there is a perfectly sensible alternative structure that will preserve the vital elements of independence and integrity, and that is what is known as a golden share or a master share structure, which in effect gives one share certain key powers to impose protections against takeovers or such undesirable intrusions.

One way and another, when the public offer document is produced—it is a public document and is therefore available to the press — Parliament and anybody else who wishes to can comment on it, as well as the City institutions and financial organisations. Then we shall be able to see what the Reuters board is proposing.

Mr. James Callaghan

It might be too late.

Mr. Aitken

With respect to the right hon. Gentleman, he probably does not realise that there is almost always a delay of several weeks between the issue of a flotation and its final financial confirmation. An offer document is circulated for several weeks before people take up the shares and they have plenty of opportunity to pass judgment on such matters as the price or content of the document.

I have some confidence, as apparently has the distinguished chairman of Reuters trustees, Mr. Angus McLachlan, that there will not be a sell-out to foreign dominant interest or any other kind of dominant interest and there will not be a shift away from the high standards that have characterised Reuters in the past. I see no good reason for fearing that this will happen.

I have been surprised during the debate by what I described, in the case of the right hon. Member for Cardiff, South and Penarth, as a curiously old-fashioned approach, which one might call parliamentary imperialism, by which we suddenly seem to believe that in 1984 London is still the centre of world news and we have a great national institution. The hon. Member for Great Grimsby said that the matter concerned national security. He seemed to want to keep Reuters under British control. As I said earlier, that would be a complete negation of Reuters international independence.

We cannot approach this matter on the principle that Britannia rules the news. We have to acknowledge that Reuters is a completely different animal from the days of the 1940s and the true position is that neither the British Parliament nor the British Government have any real standing in this matter. It is not for us to tell Reuters how to run its business. It has run it successfully and with the latest technology, and in doing so has managed to adhere to the high standards set out in the original shareholders' agreement.

It is useful to ventilate our concern in this matter, but beyond ventilating them, there is nothing more Parliament can do other than to trust the wise decision of the shareholders to maintain the excellent standards that have always been maintained.

11.53 am

Mr. Robin Corbett (Birmingham, Erdington)

I hope that the hon. Member for Thanet, South (Mr. Aitken) will have the grace to blush when he reads the Official Report tomorrow. I firmly believe that neither the House nor the Government should respond to the invitation that he and others of his hon. Friends have made to cast aside or tear up a solemn agreement of trust that, for more than 40 years, has been the basis on which Reuters has won and preserved its outstanding reputation.

It is not without irony that we come to this matter in the Orwellian year of 1984 because, despite the words of the hon. Member for Thanet, South, the issues at stake in what is proposed for Reuters touch upon our views of an independent press in a free society and the integrity of a worldwide international news service. The Opposition are concerned about an international news agency of international repute, based here in London as a source for world news. Reuters has won and sustained a byline accepted in newspapers, radio and television news rooms around the world. In our view, its reputation is now in jeopardy because of this proposed rip-off.

I hope that the Minister for Information Technology will not take the line that was taken by his hon. Friend the Member for Thanet, South, who seemed to say that the Government cannot do anything but wash their hands of any interest in this matter, and here I echo a point made by my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan). My right hon. Friend has already given a quote, and I shall now do so again to make the point that it is legitimate not just for the House but for the Government to take an interest because that path has already been trodden. In the Official Report of 22 October 1941 the then Minister of Information, Mr. Brendan Bracken, said: The Chancellor of the Exchequer and I"— that is an unlikely pair; he does not refer to the Attorney-General— are actually negotiating with the parties concerned. He did not say, "We are speaking to the parties concerned," or, "We are asking them to come in and have a cup of tea and a cosy chat." he used the words negotiating with the parties concerned.

I take the greatest exception to the suggestion by the hon. Member for Thanet, South that, because something was done 40 or 50 years ago when an agreement was solemnly entered into, and to that extent is dusty, we have the right to disregard it or help to tear it up. If we proceed on that basis, we shall undermine one of the foundations that has helped this place to survive.

If that ministerial statement was good enough then, it is good enough now. If the point has not gone home, I shall quote again from Mr. Bracken, who continued: The Government have been keeping a fatherly eye on the matter. There can be no doubt about the proper interest that should be exercised on behalf of the public by the House and this Government, like that Government, in the matter of Reuters.

My right hon. Friend has already referred to what Mr. Bracken later went on to call the national interest—and it is a national interest. We are dealing here not with a company that makes baked beans, pins, soup or furniture but with an agency of international repute dealing with one of the most delicate of products—the collection and dissemination of news which, when it is received in newspaper offices around the world, is trusted and respected because it carries on it the single word that has come to stand for integrity, "Reuters".

In the same debate, it was said by the then chairman of Reuters, the then hon. Member for Sunderland, Mr. Storey: It is true that the proposed sale is coupled with a proposal for the creation of a Reuters Trust, but this Trust will have no real power."—[Official Report, 22 October 1941; Vol. 374, c. 1863–73.] In the light of recent events, those words are undoubtedly all too prophetic. The management of Reuters has completely failed to treat properly with the present trustees who are charged with upholding this agreement, whatever its legal status.

When the agreement was made—and we know that the Government played a part in the negotiations—we are entitled to assume that those whose signatures went over the 6d stamp on the back of the agreement meant what they were setting their hand to not just for the day on which they did so but for as long as Reuters did so. Otherwise it would have been a dishonourable act. It could rightly be said that they were doing no more than trying to buy time and to get the House and the then Government off their backs. I do not believe that.

My right hon. Friend and the hon. Member for Castle Point (Sir B. Braine)—this is the nub of the issue—have already quoted from the first provision of the agreement of trust, which said: that they will regard their respective holdings of shares in Reuters as in the nature of a trust rather than as an investment". I do not care how many times Conservative Members try to wriggle and twist their way out of those words. That is what is set down. The meaning of the words is crystal clear, and legions of lawyers cannot, in common sense, persuade anyone other than that the bid for maximum profit in that sense was a secondary and not a primary consideration. Those who signed this document laid other duties on them.

Mr. Aitken

Does the hon. Gentleman accept that that may be his view of the meaning of the words, but that there may be a Reuters' view and other views? What is the ultimate test of the meaning? Is it a trust set up in the fully legally constituted form? Is it a shareholders' agreement giving certain guidelines, pointers and guarantees? Surely the ultimate test must be the test of the law, and that must mean the test of the courts. No other test, including the hon. Gentleman's own interpretation, is valid.

Mr. Corbett

Frankly, I am indifferent to the legal standing of the document. In this flash bang, whizz kid, modern world, of which I do not claim membership, I side in this respect with my right hon. Friend. I am old fashioned enough to believe that when people give their word in a document they mean what they say. Otherwise we cannot proceed. There will be no trust. It is not something transient, as I have already tried to point out, merely to escape the opprobrium that was building up on their backs. I am astonished by the hon. Gentleman's indifference. The meaning of the words is crystal clear, inside and outside any court. I have said, and I mean it, that I am not concerned with the courts; I am concerned with honourable men giving their word and honouring that word, and their successors accepting it as an obligation when they take over the management of Reuters and similar businesses, accepting as an obligation the inheritance of the word that was given on the day that the document was signed.

There is another aspect of the flotation. It has already been said this morning that none of the proposals for Reuters will in any way change the way in which that agency has been operating, and that this flotation holds no dangers to the integrity and reputation of Reuters. That cannot be so. I am no expert in these matters, but I understand that, under the Companies Acts, there is a general obligation on company directors to run the company for which they are responsible so as to make the best and maximum return to the shareholders. That will clash and collide with the undertakings given in this agreement of trust. The hon. Gentleman cannot lightly dismiss the matter. He spoke with certainty when he cannot be certain. None of us can.

At the least, the flotation implies a threat to Reuters' editorial integrity, to the independence of its service, and—equally worrying—to the scale of the news service that it at present provides, in wrenching the lid off that crock of gold. There are parts of this news service, particularly involving the Third world, that will never make money. They will never pay for themselves. The new breed of buccaneer, currently poised to come in on the back of this flotation, regarding this in commercial terms as just another business, will look at the loss leaders and say, "Botswana? We can't afford that. Pull the plug out. Zimbabwe? We can't afford that. Pull the plug out." That is a commercial judgment. We object to that, because the business in which Reuters is involved, and in which it has established its reputation, has not been built on that basis. The business has always been regarded as one, and the former directors of Reuters accepted their obligations, particularly towards smaller countries in the developing world.

There is one other repellent and obnoxious factor. Those who are now poised, as trustees, to take the decision to float are those who stand to benefit most, financially and individually. Lord Rothermere of the Daily Mail has his hand out for £120 million. So does Lord Matthews of the Daily Express and Daily Star. Mr. Murdoch of The Sun, the News of the World, The Times and The Sunday Times can collect an estimated £90 million. Reed International, the present owners of the Mirror group of newspapers, stands to collect £80 million. Those people, in a position of trust, are the main and immediate beneficiaries of the decisions that they are now taking.

My much missed friend, Phillip Whitehead, the former Member for Derby, North, said in an article in The Times of 21 December last year: You cannot put forward a scheme, and be a beneficiary front it, when it fundamentally alters the agreement for which you stand trustee. That, in my view, sums up in one sentence what this is all about.

Doubtless it will be argued that, because of all this parliamentary interest and the agonies aroused elsewhere, the management or trustees will offer the most watertight guarantees—assurances that would stretch down both sides of Fleet street. We have had recent experience of the worth of assurances given by at least one of the present managers of Reuters. I refer to Mr. Murdoch. Anyone who has read Harold Evans' book, "Good Times, Bad Times" on the guarantees—oh! so willingly given then by Mr. Murdoch so as to get his hands on those properties—knows that those guarantees were snapped, broken and bent in order to elbow Mr. Harold Evans out of the editorship of The Sunday Times because, he alleges—and I accept what he says — there had been conversations between Mr. Murdoch and the Prime Minister about why the paper was not doing more to support the Government.

That is the reality of the value of guarantees. To give them the benefit of the doubt, even if those guarantees are meant, there is no guarantee that they will be kept in perpetuity. The only way to ensure that is to make use of the provision in the agreement of trust for a role for the Lord Chief Justice. The hon. Member for Thanet, South (Mr. Aitken) made light of that, but the Lord Chief Justice's office is acknowledged to be the highest and most independent in the land. That is one of the reasons for its existence. We did not write the words into the agreement, but there is a role for the Lord Chief Justice, and it is astonishing that neither the trustees nor those who manage Reuters have invited the Lord Chief Justice to help. The Government should now move in that direction.

It cannot be right for us to be invited to rely on the so-called guarantees and undertakings of a newspaper proprietor who has not shown himself to be a man to be reliable in respect of the guarantees given for The Sunday Times and The Times. As an American journalist recently observed, no self-respecting fish would volunteer to be wrapped in one of Mr. Murdoch's papers.

We all value, and perhaps take too much for granted, the role of our journalists and press. We are proud of the freedoms that they have, although some of us are sometimes critical of the way in which those freedoms are exercised. We could help to protect that press and those who work in it by putting a freedom of information Act on to the statute book, making it possible for journalists to have access to information—on behalf of the public, and in the public interest — that there is no earthly reason for withholding.

We are one of the most secretive societies in the world. We have a passion for keeping things secret just for the sake of it. The electorate is denied access to whole areas of information by our newspapers, television and other media. Before this Parliament ends, I hope that we shall at least take that step of passing an Act on these matters and also ensure, as quickly as possible, that the independence and integrity of the great Reuters agency is maintained and sustained.

12.12 pm

Mr. Nicholas Lyell (Mid-Bedfordshire)

In following the hon. Member for Birmingham, Erdington (Mr. Corbett) I should like to throw some light on the legal background to this affair. This is not because it in any way weakens the obligation in honour to fulfil what is required by the declaration of trust, as it is described and as it describes itself, which was made in 1941 and repeated through to 1953, and has been honoured ever since; but because it may help a little if diffidently I say why I, as a Back Bencher, think that the so-called trust is probably not legally binding as such. I can then explain why it should be seen as something that should be fulfilled in its full spirit but as a moral obligation.

I speak as a lawyer when I say that the document is unusual. There is no doubt that if the makers of the document, the Press Association, whose integrity has not been impugned, and the NPA, whose integrity has been rather unfairly impugned, had been desirous in 1941 of entering into a legally binding trust there would not have been the slightest difficulty in doing so. There is no doubt either that the document was drawn up by lawyers after careful consideration.

However, if a trust had been intended, it is most odd that the document should have stated of the shareowners that they will regard their respective holdings of shares in Reuters as in the nature of a trust". Those words immediately begin to throw doubt on whether there was an intention to make a legally binding trust as opposed to an admirable and noble obligation between themselves to shareholders.

On reading the document, one discovers that no property was vested in the trustees. The trustees do not own the shares at all. However admirable are objects A to E set out in clause 1 of the document—which has been much read—they are not of a nature that makes them wholly or exclusively charitable. Therefore, there is certainly not a charitable trust. When one applies the essential test of an ordinary trust—the requirements of administrative workability, certainty of objects and ascertainable beneficiaries—the document fails on all counts.

Therefore, it is helpful to realise that from a lawyer's viewpoint it is very unlikely that there was ever intended to be a legally binding trust in that sense. I am fortified in saying that by referring to 1941 and to column 1873 of Hansard. Mr. Brendan Bracken said: What we are doing is saying to them"— the newspaper proprietors and the PA— in the national interest, 'It is desirable on the whole that you should have some form of trusteeship.' "—[Official Report, 22 October 1941; Vol. 374, c. 1873.] The vagueness and generality of those words show that those involved were seeking to calm the world and to enter into solemn obligations between the shareholders, but not to set up a legally binding trust. We know that it had the support of the Lord Chief Justice of the time. However, looking ahead 40 years, one can see that a Lord Chief Justice might be put into a difficult position if today he were to be asked to intervene and to make practical suggestions as to how to proceed in a wholly different set of circumstances.

I shall briefly go into the history of Reuters and then formulate quickly what Parliament is entitled to require, as a matter of public interest, of the owners of the company and of any future owners who may buy an interest in it under any flotation or other capital reconstruction. Reuters started as the baby of Julius Reuter, who made a lot of money out of purveying financial information. Thereby, he was apparently able to subsidise and certainly to create the remarkable international press agency for ordinary news. The money that he made from his financial information made him rich and famous, and it kept a news information service of utter integrity going throughout his lifetime.

There was a hiccup in 1915. The temporary circumstances that arose then caused the company to be made into a private company with no less a person than the Government's Director of Propaganda as its managing director. After a time that was seen not to be the ideal solution, and in 1924 the company was brought by the PA, which kept it going and maintained those high standards out of its own pocket.

Throughout that period it was private profit that funded that admirable institution. That shows that for 90 years, right up to the war, private profit was capable of doing it. When, in 1941, there was the reconstruction and the NPA came in to take a share because it had money and the PA was under pressure, it continued to be private profit that maintained the institution. That was solemnised in a public way, albeit not in a legally binding way in so far as it was described as a trust, through the public declaration and document. We are now entitled to turn to the public document to see what it says not in legal form but in substance. Paragraphs (a), (b), (c) and (d) of clause 1 of the agreement of trust include the following: (a) That its integrity, independence and freedom from bias shall at all times be fully preserved". It states at (b): Its business shall be so administered that it shall supply an unbiased and reliable news service to British, Dominons, Colonial, Foreign and other newspapers and agencies with which it has or may hereafter provide contracts". The agreement states in effect that Reuters should provide an independent and unbiased news service throughout the

We are entitled to look to the present owners to produce the same for the future. I accept that changes have been made, particularly in technology. I do not pretend to understand in detail why a flotation, the raising of extra capital and the bringing in of extra shareholders may be necessary this year or next to fund further developments in technology, but I can understand that they may be necessary.

Provided that we can be satisfied that any new owners will bind themselves solemnly to the above principles and in a way which is likely to work as effectively as the solemn declaration made in 1941 has worked for the past 43 years, I believe that they will have done their duty and we can he satisfied. I hope that the outcome will develop in that way.

12.22 pm

Mr. Bryan Gould (Dagenham)

I declare an interest as a member of the NUJ. I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) not only on his amazing good fortune in yet again being successful in the ballot, but on his judgment in selecting such a subject for debate. It is of considerable parliamentary and public interest.

I shall not rehearse the powerful arguments effectively deployed by the hon. Member for Castle Point (Sir B. Braine) and my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) to establish the unique position which Reuters holds in our public life and in the role of the media. We are considering not simply Reuters' reputation but large and important parts of the British media, including the BBC. Those reputations derive from the high standards established over many years by the Reuters agency.

Precisely that importance prompted our predecessors in 1941 to look carefully at the future and the reconstruction of Reuters. As my right hon. Friend the Member for Cardiff, South and Penarth and others of my hon. Friends have made clear, the Government of the day, through the Minister of Information and the Chancellor of the Exchequer, were not prepared simply to sit back and say, "This is nothing to do with us," as some hon. Members have said today. They were not prepared simply to issue good advice or to make pleas to Reuters' owners. They negotiated. We do not know from Hansard precisely what form that negotiation took, but we know the outcome. As many hon. Members have said, the outcome was an agreement.

The agreement uses portentous language, and describes itself as an "Agreement of Trust". The signatories undertook to hold their shareholdings in the nature of a trust rather than as an investment. They undertook: That Reuters shall at no time pass into the hands of any one interest group or faction and That its integrity; independence and freedom from bias shall be at all times fully preserved. Parliament had insisted upon those objects and the shareholders did their best to meet them.

I am astonished that some hon. Members argue that it is old-fashioned to expect people who put their signatures to such statements to adhere to them. That is not old-fashioned. Technology may have changed, and the nature of the world may have changed in many ways, but a signature to a clear undertaking does not change and is not a matter for fashion. In asking whether the signatories really meant what they said when they signed the document, the hon. Member for Thanet, South (Mr. Aitken) imputed to them baser motives than any of us would dare to do. I cannot believe that they will thank him for it.

Reuters has traded on the basis of that agreement for 43 years. The whole world believed that Reuters was owned by a trust and operated under a co-operative arrangement which somehow insulated that vital news agency against crude, commercial considerations. That was the whole point of the exercise. Now we are told that it is not a trust, but that it operates under an ordinary agreement.

The obligation to refer any change to the Lord Chief Justice depends on the continuing legal validity of the provisions of the agreement. If it can be argued that the agreement is no longer binding and can be extinguished, the obligation to refer to the Lord Chief Justice also falls.

I am a lawyer and I agree with the argument advanced by the hon. and learned Member for Mid-Bedfordshire (Mr. Lyell). Accepting that the matter has yet to be tested in the courts, if it ever is, I should have thought that within five minutes of casting an eye on the agreement it would be apparent that it was simply a contract. It is binding on each member in the sense that if one wanted to depart from it he would be bound by it and told to stick to it. The courts would enforce that. However, if all the signatories agree to put an end to the agreement, including the obligation to refer the matter to the Lord Chief Justice, in my view, for what it is worth, they can do so.

I am content to accept that that settles the legal arguments, but, unlike the hon. and learned Member for Mid-Bedfordshire, I do not accept that that settles the issue. The agreement was designed to meet certain concerns about the public interest, expressed in this House and elsewhere. It was designed so that an undertaking was given, whether or not it was legally binding. It was designed to satisfy those who expressed concern.

Mr. James Callaghan

If my hon. Friend and the hon. and learned Member for Mid-Bedfordshire (Mr. Lyell) are right in saying that this is not a trust—I am inclined to think that they are right—there can be no trustees. If that is so, what is the standing of those gentlemen who purport to make statements in the names of the trustees?

Mr. Gould

That is a good point. The gentlemen can call themselves whatever they wish. By calling themselves trustees they have added to the general air of assurance that Reuters has given to the rest of the world that it is not simply a straightforward commercial undertaking but a trust, and that the people involved are exercising some fiduciary duty.

Sir Bernard Braine

If that line were to be pursued, would it not be highly damaging to the very reputation to which we attach such great importance? Is there not a case, before we go any further, for a clear legal ruling on whether the trust is a trust?

Mr. Gould

I am sorry that the hon. Gentleman was not in the Chamber to hear the tribute that I paid to him when I began my speech. I am pleased to agree with both of his points. If we are now being told that what everyone assumed was a trust is no longer a trust—we need not go so far as the hon. Member for Thanet, South and say that it was never intended to be a trust and was nothing but a trick—we are entitled to say that the basis on which we all assumed that the independence, integrity and freedom from bias was enshrined in the agreement and on which so much reliance has been placed was rather shakily founded.

I accept that it would be in everybody's interests to have a clear legal ruling. For the purpose of this debate, and exercising my poor judgment as far as I am able, I am simply saying that the argument that it is not a trust agreement does not surprise me. The main point is that that does not and should not settle the matter.

It would be a gross dereliction of duty for us simply to say that the protection that our predecessors, ourselves and the whole world has assumed for 43 years did not exist. It is wrong to say, as some Conservative Members have said, that we can simply forget it. Surely it would be far more rational to say that if the assurances given 43 years ago are worthless, and that the document that parades as a trust agreement is not a trust agreement, we must take a fresh look at the matter and successfully, satisfactorily and comprehensively do what our predecessors were apparently misled into failing to do.

Mr. Lyell

We should not embarrass the trustees. Does not the hon. Gentleman agree that a contractual agreement, especially one made so publicly, has its own integrity, and that it is the spirit of that integrity that we want to see maintained? We trust that it will be maintained.

Mr. Gould

Of course that is right. As I said earlier, the agreement is binding between its members. If someone wished to depart from it, he would quickly be told that he could not do so because it was a contract. But we are entitled to say that if what was put forward as a safeguard against some of the obvious difficulties into which a news agency could run if it was treated purely and simply as a commercial company was not actually put in place, we should look again at how we can provide that.

The problem is that the trustees, far from saying that they are not concerned with these matters, have been brought to a realisation — many did not need any prompting—that these matters are of some consequence and that they must address themselves to the problem of providing safeguards.

We constantly read press reports of the sort of agreements that the trustees are considering, and which would go some way towards meeting the objectives. The problem is that, if an agreement in such solemn terms as the current agreement cannot provide the necessary safeguards, it is difficult to understand how any of the parties agreeing to anything at all can provide those safeguards. Once it is accepted that Reuters is a commercial operation with the obligation to maximise profits, it will be possible for them to say, yet again, "I am sorry, this is something that we can extinguish at will."

The trustees will find themselves under great pressure because every time they take a step towards safeguards—however effective or ineffective in the long term—they must necessarily reduce the commercial value of whatever they are trying to sell. We can already see signs of that in the reaction of the City financial institutions and in the advice that Warburg's has given to the trustees. Therefore, we cannot say to the trustees that, one way or another, we have all been let down because we misinterpreted the true effect of the agreement, but we shall now accept that a lesser agreement may be satisfactory. The trustees will be told, "Hang on a minute, that lesser agreement will conflict with the overwhelming commercial interests that are clearly responsible for producing the belated change in the interpretation of the agreement."

I urge the trustees, whatever else they do, for goodness sake not to be pushed away from at least a continued public declaration, in one shape or form, that the principles of the trust should be maintained. Once Reuters became simply any old company—just another piece of commercial property—the possibilities of maintaining the safeguards which everybody agreed were necessary would be much diminished.

The dangers that Reuters would then face I need not expand on length because they have been mentioned in the debate. They are the dangers in the end of unpredictability; we simply would not know, once Reuters' shares could be bought and sold in the ordinary way, into whose hands they would fall. That opens up the possibilities of control by sectional interests, directly contrary to the terms of the supposed agreement.

It also opens up the possibility, as my hon. Friend the Member for Great Grimsby explained, of a substantial shift in emphasis in the concern and care that is taken by Reuters, a shift from the role as a news agency, which is less profitable, towards the different considerations which would apply to Reuters as a financial news service.

As my hon. Friend the Member for Great Grimsby rightly pointed out, the whole point of news is to disseminate it as widely as possible. In many senses, however, the whole point of financial intelligence is to make it as exclusive as possible. That is how one maximises one's profits. I agree with my hon. Friend the Member for Birmingham, Erdington (Mr. Corbett) that it seems unlikely, if commercial considerations alone are to rule, that Reuters' correspondents in the remoter parts of the world who do not pay their way will be maintained. If the drive for profit is on, there will be many casualties.

Already we see that the prospect of this sale—which in a sense has nothing to do with Reuters; the sale is designed to release funds not for Reuters but for other interests, particularly in Fleet street—is producing its consequences in Fleet street. It is adding, in my view unfortunately, to the general concentration of ownership of the press because it is entrenching the present unrepresentative ownership behind such mountains of money that no one else will ever be able to break in, and we in the Labour party regard that with great suspicion.

While we all accept that a free press is one of the great bastions of liberty and must be defended, we must be careful to ensure that we have the substance as well as the form of a free press. If the press is so narrowly owned, and the price of breaking into press ownership is too high, that access to it is so limited—and, almost naturally, the very small number of people wealthy and powerful enough to own the press will support one political view rather than another—then, while we may have a free press in form, we may have the dangerous development of having a press which would not necessarily see it as its role to stand up independently against the Government of the day, and that would be a very sad development indeed.

What is to be done in this situation? It is right that the House should express a view, should debate the issue and bring the facts into the open, but we are also entitled to turn to the Government, as our predecessors did in 1941, and ask what they intend to do about it. I confess—I hope that the Minister will prove me to have been too cynical—that I have no great hopes of the Government in this matter. It would take a very brave man indeed to stand between Lord Matthews and £100 million, and I do not see the present Government having that sort of courage, particularly given the close relations and mutual benefits that arise between Government and press in the context of that relationship.

It is true that what has happened to Reuters is a form of privatisation. Here we have an institution which we had thought was set up in the public interest to serve that interest, and we are now told, "No, none of that matters. All that matters is to maximise profit." That is very much the Government's own approach when they in turn own and control institutions that are run and owned in the public interest.

I have no great hope that the Government will do anything very effective to fulfil their responsibilities. However, it is sad that Ministers and Conservative Back Benchers, or some of them, should be afflicted by what I can only call a form of moral blindness. I fear that that is all too characteristic of the present state of the Conservative party, which seems to think that everything has to be reduced to a cash value and that the cash must be obtained whatever else is sacrificed. The interventions of some Conservative Members suggest that they cannot understand the principle which has animated so many others on both sides of the House who have expressed concern that the drive for profit may destroy the independence, integrity and all the other values which have made Reuters successful and which are still important today. The Government have the opportunity to say, "No, that is not today's Conservative party. We recognise, as our predecessors did in 1941, that there is a public interest which it is our responsibility to fulfil."

One of the major factors in the rearrangement will be taxation. If the Inland Revenue gives its blessing to some changed arrangement, that will smooth the way for that rearrangement to take effect. I am not suggesting that the Government should use that power deliberately to obstruct the rearrangement, but I suggest that they should not necessarily go too far out of their way to accommodate it.

It is not for the Opposition to present the outline of a solution but it is for the Government to explore with the Reuters' trustees how such a solution could be achieved. No one who has contributed to the debate would wish to say that it is wrong in principle for what has become a valuable commercial property to be given its correct commercial value. That is rot the point of the argument. We wish to ensure that the objectives that everyone wants to achieve can be achieved without necessarily running counter to the commercial interests that are involved. That is where the Government have a role to play.

The Minister can do just as his predecessor did. He can ask, as my right hon. Friend the Member for Cardiff, South and Penarth suggested, for conversations and discussions to take place with the board and the trustees to ascertain whether there is a way of securing their commercial objectives and the wider public interest. I believe that that can be done and I could suggest some solutions, but that, in a sense, is not my role. We cannot stand easily in the way of commercial considerations, but my hon. Friend the Member for Great Grimsby, with the support of many of those who have contributed to the debate, has reminded the Government of their responsibilities and the trustees of theirs. Between them, we expect the public interest to be safeguarded.

12.44 pm

Mr. John Gorst (Hendon, North)

The hon. Member for Great Grimsby (Mr. Mitchell) has given us an important opportunity to debate this subject. I do not agree with everything that he said, but a discussion in the House on any aspect of our national life that underpins democracy, as does the free press, is important.

The differences between the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), my hon. Friend the Member for Castle Point (Sir B. Braille) and myself are perhaps more apparent than real. I found it difficult to disagree with anything that the right hon. Gentleman said and the motives of my hon. Friend, who took exception to my intervention, are shared by us all.

However, I challenge the right hon. Member for Cardiff, South and Penarth about the motives of Mr. Brendan Bracken in 1941. He was Minister of Information during the war and my right hon. Friend who is to reply to the debate is the Minister for Information Technology. The distinction is important. The negotiations in which Brendan Bracken was engaged were motivated more by a desire to negotiate the Government out of involvement than by a wish for a greater involvement. Mr. Bracken said: We had better face up to the fact that whoever manage Reuters must be people who also have the financial responsibility for the concern … We are approaching a problem by way of getting all parties concerned into some form of agreement, but the thing that worries me, and must worry the Chancellor of the Exchequer far more is, Who is to finance this business?"—[Official Report, 22 October 1941; Vol. 374, c. 1869–70.]

The question who is to finance the business is relevant. If some of the large newspaper interests are expected to benefit, we must bear in mind that those who use Reuters' service are those who are able to remain in business. Therefore, their profitability goes hand in hand with Reuters' existence. I join other hon. Members in paying tribute to the almost sublime reputation enjoyed and deserved by the Reuters news service throughout the world.

Some basic questions and assumptions underlie the motion and the speeches so far. An impartial, accurate, objective, prompt and independent news service certainly matters a great deal. Up to now, Reuters has met those criteria. The question whether the proposed changes will put the service and its integrity at risk is a legitimate one for us to ask.

However, I part company with the hon. member Member for Great Grimsby and some of the phraseology of his motion on the assumptions that money is the root of evil, that a drive for viability does not necessarily involve a drive for profitability and that, if it does, it will somehow contaminate the new agency's integrity.

The presumptions with regard to the reputation and performance of Reuters are correct, but the presumptions of the hon. Member for Great Grimsby about the role that can be played by the pursuit of profit are unjustified. I ask the rhetorical question, "Why should newspapers connive at or consent to a move that would erode the integrity of their very reason for existence and which would be hostile to their fundamental interests?"

What is being alleged—at least, it was alleged by the hon. Member for Great Grimsby when he moved the motion — is that a financial service going to about 15,000 individual subscribers on 37,900 terminals in 119 cities spread over 74 countries will take precedence over supplying the news requirements of local, provincial and national newspapers and the radio and television media. I do not believe that that is likely to follow in any logical sense.

Reuters was born in the climate of free enterprise. It has continued to flourish in that way—not out of a marriage or political or Government partnership—and has had an enlightened existence. Therefore, I do not understand why a free press should commit suicide by undermining the reputation of the Reuters news agency simply for the short-term—it must inevitably be short-term—financial gain that might be the result of a flotation. If a free press requires parliamentary intervention, if it cannot regulate itself, it cannot justify the description of free press, and cannot remain free for long.

The most important point is that Ministers, whatever they may wish to do by way of suggestion and even cajoling—as Brendan Bracken did in 1941—should be very careful to avoid any further participation in the matter. In that respect I found myself completely in agreement with the hon. Member for Dagenham (Mr. Gould), who spoke from the Opposition Front Bench.

The questions that the right hon. Member for Cardiff, South and Penarth asked the Minister are the pertinent questions to which we want answers. Whether it is necessarily the Minister who should be answering them, rather than having the corporate opinion of Parliament as a whole, may be another matter.

I am particularly sceptical of the attitude of Ministers towards news. Indeed, only last night, in talking to a Secretary of State who shall remain nameless, I found that his perception of news value, with regard to some of the more dramatic matters of the past seven days was that they were of such little importance that it would be much better not to discuss them for many weeks to come.

One understands that Ministers do not want awkward matters raised, but we may well be forgiven for taking a different view. That is why, from a political aspect, the less we have Ministers involved in discussions that should be left to a self-regulating press, the better and more healthy it will be. That does not mean that I believe that the undertakings that were given, in either a legalistic or moral sense, in the trust deed are unimportant. Indeed, I believe that they are the right way ahead and that, whatever adjustments or modifications may be deemed to be appropriate or necessary as a result of the new climate that exists in the press, as compared with 1941, it is highly appropriate that they should be made. But I do not believe that they should be made as a result of "negotiation"—started or implemented by Ministers; they should be started and implemented by the press as a whole, acting as a free press.

I am sorry if my next comment contradicts what I believe the right hon. Member for Cardiff, South and Penarth was right to say. This is not a party political issue. It is a matter of national importance. But I say in passing that I regret that the hon. Member for Great Grimsby used in his motion such words as "unrepresentative and monopolistic" when discussing the ownership of the press. It is a matter of party disagreement whether it would be any better if collective leadership, management and administration of the press were brought about. We disagree about whether it would lead to greater integrity and objectivity. We can leave that matter on one side. I regret that the hon. Gentleman felt it necessary to introduce it into this debate.

The hon. Member for Great Grimsbsy also referred to a greedy and short-sighted attempt to make a quick profit. In moving his motion he spoke of "the millionare's club" upon whose members honours "had been showered." His hon. Friend the Member for Dagenham referred to "a great rip-off." This is an unworthy red herring in a discussion which otherwise is of the greatest importance.

The House should express the requirements of a free democratic system, and one of them is that we should have a free press to find the means of fulfilling the need for objective news and unimpeded comment. Here we should express views on the proposed new structures. For us to dictate the final solution would be regrettable and a weakening of our system of free parliamentary institutions.

12.57 pm

Mr. Nicholas Soames (Crawley)

From not nearly so erudite a position as that of many of my right hon. and hon. Friends, I acknowledge that this is a very serious matter, and I treat with respect the words of the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), but I cannot accept the philosophy of the motion. As my hon. Friend the Member for Hendon, North (Mr. Gorst) pointed out, the hon. Member for Great Grimsby (Mr. Mitchell) littered his speech with references to the moguls of Fleet street. greedy press barons, and plots and counter-plots. It was truly the stuff of the politics of greed.

If we talk about greed, it may be felt that the Fleet street unions have no parallel for venality and disgraceful working practices. The picture that the hon. Member for Great Grimsby portrayed of Reuters' journalists crying into their soda water because of their deep concern about their future, while touching, is unreal. Fundamentally, it is the prospect of financial gain that is so deeply distressing to right hon. and hon. Members on the Labour Benches.

In Reuters we have a splendid British institution whose fortunes have risen and fallen over the years and which has now galvanised itself, through force of circumstances, and grasped the opportunities open to it. It has transformed itself into a highly successful corporation. It is a company whose hour has come and whose shareholders are now able to reap a profit and the benefits of a long and previously entirely unsatisfactory investment. History furnishes many impeccable and respectable precedents for such action.

Reuters is a hugely successful corporation employing 566 journalists in 110 offices. It has 31,000 computer terminals selling news to 158 different countries. It is in the forefront of the world of information technology, and it will need to be bold and inventive if it is to stay ahead of the field.

Reuters is known to the public principally as a news agency, but it gets the bulk of its business and all of its profits from its electronic financial intelligence services. Shareholders in the company have received no dividend for 40 years. The great improvement in Reuters' performance has now prompted its shareholders to attempt to realise their profits, probably by a flotation of at least part of their various shareholdings. However, the form of the sale has not yet been finalised. Reuters' principal market is in financial intelligence. The company will require huge investments if it is to keep apace of developments.

On 14 November 1983, the chairman of the Reuters trustees said: On becoming Trustees we, all of us, accepted an obligation to conserve the objects of the Trust which are, in brief, to maintain the integrity and independence of Reuters and to ensure that its control does not fall into the hands of any one interest, group or faction. When any scheme is presented to us we shall seek independent legal advice as to whether that scheme is one to which we, as Trustees, should concur".

I acknowledge the desirability of safeguarding the integrity and independence of Reuters' news service. However, as what the board is proposing is neither a merger nor a takeover, we have no powers to intervene, and it would not be in the interests of press freedom for us to seek them. I welcome statements by the board and by the trustees about their anxiety to safeguard the integrity and independence of Reuters and hope that they will succeed in working out arrangements which achieve that. However, Reuters is firmly in the private sector, and it is not for the Government to dictate what those arrangements should be.

It would be wrong to adopt the view that the owners of shares should lack the right to their proceeds. It is also simplistic to say that a flotation will merely result in enriching a handful of press barons. Proceeds from investments will have to go to substantial reinvestment in the company. It is utterly wrong to say that the proceeds of any flotation will end up in only a few pockets. It is stretching a point way past its limits to suggest that a gain to a public company is in some way the unfettered property of those who are running the day-to-day affairs of the company.

Reuters' interests will be served only by retaining its complete integrity. The management would be extremely foolish if it tried to denigrate that. However, that has nothing to do with the flotation. I believe that the hon. Member for Great Grimsby wants to interfere with the press. Although his argument was expressed in terms such as freedom and diversity, it springs from a deep-seated and illiberal hostility in the Labour party towards the press. When the Opposition talk about a more diverse press, they really mean a more Socialist press.

The Labour party's 1983 manifesto, among other things, proposed Setting up a launch fund to assist new publications. Presumably Government money would be used to set up such newspapers. It also proposed Replacing the Press Council with a stronger, more representative body. and making both broadcasting itself, and the organisations responsible, more accountable and representative". In other words, the Opposition stand for a major increase in the Government's and the judiciary's powers over the press. For that reason, and because the debate is motivated essentially by hatred of success and profit, I utterly reject the motion.

1.4 pm

Mr. Gerald Howarth (Cannock and Burntwood)

It is a tribute to the hon. Member for Great Grimsby (Mr. Mitchell) that he has been able to secure yet another top slot in the ballot, and can advance another cause. Last lime I was pleased to join him in the Lobby on his House Buyers Bill, but unfortunately today I cannot take the same sympathetic view towards his arguments.

Dissemination of information is of great importance to the House, because hon. Members rely upon it, but a is also important to commercial interests. As my hon. Friend the Member for Crawley (Mr. Soames) and my hon. Friend the Member for Hendon, North (Mr. Gorst) said, in many respects the motion has not helped us to consider the matter objectively. The attack on the greedy press barons is a thinly-clothed disguise for an attack on the press generally. The hon. Gentlemen's speech contained a series of paradoxes, the first of which—repeated in the speeches of his hon. Friends—was anxiety about the independence of Reuters, coupled with a desire for Government intervention. My right hon. Friend the Minister has been called upon to intervene in the matter. I am not sure how the Opposition can square those views.

The hon. Member for Great Grimsby and his colleagues have an ambivalent attitude towards the press. When they do not like what it says about them, they want it controlled or they want the Government to intervene. However, when the hon. Gentleman attacks the limited, unrepresentative and monopolistic ownership of the British national press", he spoils his case. If that is his view, the remedy open to him is to set up his own newspaper. [Interruption.] Hon. Members laugh at that suggestion, but it has been done in the past. During the recent NGA dispute, we saw how much money the unions could use, including pension funds, for those purposes rather than investing the money in works of art, much as those who have an interest in art must be delighted by those investments. The TUC is examining the possibility of setting up its own newspaper, so there is clearly an acceptance by the Opposition that there is an alternative.

In his speech the hon. Member for Great Grimsby said that Reuters should not be subject to commercial pressures. However, on the radio this morning he said that it is controlled by the greedy national, provincial and Australasian press. There is a paradox in his argument.

This great organisation, which is revered in the House and in Britain, and allegedly worldwide, is under some pressure. No hon. Member has yet mentioned the fact that there is a move in Third world countries to set up their own press agency, because they are not happy with the agencies that they believe are controlled by the OECD countries.

As in many other areas, the national interest will be best served by a diversity of ownership. A good example of that is UPI, with 1,400 shareholders. The hon. Member for Great Grimsby sought to give the consumer more choice and to protect the public from monopolistic interests in his Bill to end the monopoly that solicitors have on conveyancing. I share the desire of all hon. Members that Reuters should remain impartial, and be known throughout the world for its impartiality. As I said, we are at the forefront of those who require to be briefed on the facts, and if we cannot trust the organisations that give us the information we shall not be able to carry out our function in this place. Commerce will not be able to fulfil its function if it cannot rely on impartial material.

I see no reason why the new Reuters should not be as much concerned with impartiality as hon. Members or as those who are now the trustees of the organisation. Reuters has to sell its services to the world's press and if it were not impartial and if it did not continue to be impartial the world's press might not take these services. That might precipitate the creation of another institution with centres away from London, New York, or even the western world.

The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) said that the success of Reuters in the provision of financial information lies as much in the integrity of its news-gathering activity as anything else, and I endorse that. The information technology that it provides is being bought on the basis that it is a reputable organisation with integrity. As one who has worked for 12 years in the City of London in international banking, I can vouch for the importance of these services.

This is a twin-track business. There has been much emphasis on news-gathering being a second-role function, but that is misguided because the information that comes across on the tape about political events in far corners of the world is just as important as the screen showing the spot dollar-sterling exchange rate or any of the other commodity, currency or interest rates. It is essential for the proper fuctioning of the business in which I have been employed that we should have the twin tracks of information—up-to-date information on prices, which is what Reuters was founded on, and up-to-date, reliable and trustworthy political information.

It is rather amusing to see the hon. Member for Great Grimsby attacking flotation, because in this he is adopting a somewhat conservative view. In essence, he is saying that today's shareholders, because they are there, have to be locked into the situation for time immemorial.

Mr. Austin Mitchell

That is what a trust is.

Mr. Howarth

I shall leave the lawyers to argue about that.

We have already heard about the history of the organisation and how the Newspaper Publishers Association came into it to provide financial stability. It was not only out of a sense of national obligation, but because the organisation required financial support. I do not condemn the shareholders for seeking to realise an asset. Perhaps they will acquire those funds to pay even larger salaries to their employees. I am sure that the hon. Member for Birmingham, Erdington (Mr. Corbett) will not disagree with that, and neither will other hon. Members who are card-carrying members of the National Union of Journalists, who see that that benefit may come from this.

The point was well summed up in The Guardian, which said this morning: For simple reasons of business prudence, it would not be sensible for the newspaper owners to retain complete ownership of Reuters. The value of the interest in the newsagency is so large in relation to the value of the businesses concerned that no business manager could reasonably argue that such a large proportion of the group's assets should be held in a single investment. I use the word "investment" because it is in the article.

The funds flowing back from the flotation — and funds will flow back—will help to provide Reuters with the financial support which an embattled Fleet street cannot give. Few national newspapers are making money, and if they are it is often from interests outside Fleet street. They cannot give Reuters the financial support that it needs if it is to meet the challenges of the future, and expand the financial services that have greatly contributed to its success in the recent past and which, in many respects, have been a flag carrier for British technology.

A free press is an essential ingredient of a free society. The trustees have a problem to resolve; it is not a problem for this House to resolve. We heard the lawyers arguing across the Floor of the House on this aspect. They know what their responsibilities are, and it is unworthy of us to suggest that they are incapable of considering what those moral obligations are—if such there be. They are as much aware as the rest of us of the importance of retaining the integrity of Reuters. The best guarantee for a continuation of an impartial news-gathering agency is a financially sound company, without Government interference. Reuters itself can best determine how best to carry the company forward into the 21st century.

1.15 pm

The Minister for Information Technology (Mr. Kenneth Baker)

First, I should like to congratulate warmly the hon. Member for Great Grimsby (Mr. Mitchell) on initiating this debate. I congratulate him also on his great good fortune in recent months. On three separate occasions he has initiated in the House debates on matters that are of public concern and interest — the televising of Parliament, the ending of the monopoly of conveyancing by solicitors, and now Reuters. For him, the law of averages seems to have been suspended. He has a running lucky streak, and if he believes that luck runs, I recommend him to deploy it on all possible fronts, because it cannot last.

Our debate today has been most interesting, because it relates to a matter of public concern. It is interesting also in that few debates in this Chamber have an attendance in the Press Gallery that is greater than that on the Floor of the House. The hon. Gentleman has given the House a useful opportunity to express some strongly held views on this important matter. Naturally enough, there has been comment in the media of late on the proposed flotation, some of it perhaps rather speculative and premature because the company has yet to unveil the details of the proposals that it is considering.

The hon. Member for Great Grimsby said that there had been an element of secrecy surrounding the debate on Reuters and that the press had not really dealt with it. I do not agree with him. There was a long article in the Spectator by Alexander Chancellor, and there were other press reports, to which I shall refer later in my speech, in the Financial Times, The Guardian, and in other newspapers. So it is not right to say that this subject is being smuggled through in the dead of night in secrecy, because it has been debated in the press.

The hon. Gentleman could not resist the opportunity of having a go at the press barons. I made a note of his flow of adjectives — undesirable, immoral, greedy, rip-off, shabby, irresponsible, sordid, clumsy and inept, repellent and obnoxious. I do not know whether he gave lessons to his leader, or whether his leader gave lessons to him, but the flow of adjectives to describe the attitude of the press barons was quite impressive. As my hon. Friend the Member for Lancashire, West (Mr. Hind) pointed out in an intervention, the hon. Gentleman should not just associate those adjectives with one side of Fleet street, because, as several hon. Members pointed out, the unions there can be accused of being just as greedy. It is a tragedy that today, as a result of the exercise of monopoly power, one of our leading newspapers has not appeared.

May I say a brief word about the history of Reuters. Some hon. Members have referred to it, and it is a matter of some interest. Reuters began not in London but in Germany. Reuter operated a pigeon post service for his customers in Aachen. He invested in pigeons because they could cover the distance between the Brussels bourse and Aachen about six or seven hours faster than the train. Therefore, he was able to provide his customers in Aachen with information before it arrived by the more traditional means. However, he could do that only for a short time in 1850, because wireless telegraphy quickly outdistanced the speed of the pigeons. It was then that he came to Britain.

The organisation started in 1851 with Mr. Reuter—as he then was—setting up a telegraphic office near to the stock exchange to provide stock exchange information to clients in Paris and London using the then new technology of telegraphic cables. His supply of general news soon followed on from this and the basis of the now world-renowned news agency was formed. But over its life Reuters has had to be more than a news agency, for that activity has not generally been a profitable one. To keep this side of the business going Baron Reuter, as he became, operated a private telegram service over his wires. Even during its founder's lifetime Reuters became a publicly quoted company, yet, when the baron himself died in 1899, its reputation for independence and impartiality remained firmly established.

The people who have served Reuters over the years have maintained that reputation for impartiality and there have been many distinguished servants. One of the most distinguished, Sir Christopher Chancellor, was mentioned by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan). Sir Christopher was a general manager of Reuters at the end of the second world war and afterwards.

It was during the first world war that a crisis arose following the suicide of Reuter's son. It was then realised that in Reuters the country had an asset which should not be allowed to fall into the wrong hands and so it was reconstituted as a private company with a patriotic role. As far as one can see, it virtually became a part of the Government's propaganda machine. The young man who came back from South Africa to run it, Roderick Jones, became within two years Sir Roderick Jones. He was the chief shareholder and managing director, but also the Government's director of propaganda, reporting to the then Minister of Information, Lord Beaverbrook, the great uncle of my hon. Friend the Member for Thanet, South (Mr. Aitken). That obviously could not be the best of associations for Reuters, and in 1925 the company was sold to the PA, itself owned in the main by the country's provincial newspaper proprietors.

The next change occurred in 1941. I shall touch on it several times, because it represents an important episode. In those difficult days, Reuters wanted to continue to exist as a news agency and not to be dependent upon Government facilities. It was very conscious that it did not want to have the role that had fallen to it in the last three years of the first world war. But wartime had put great demands on the resources of Reuters and, indeed, on the PA. Many of Reuters' markets in Europe, for example, had been lost. The PA did not have the necessary resources, and therefore the NPA, representing the national newspapers, was invited to buy 50 per cent. of the shares to ensure the continued operation and viability of Reuters.

The anxieties that were expressed then were, first, that Reuters would be dominated by the London press and, secondly, that its independence and integrity would be impaired—the very anxieties that have been expressed during today's debate. Anxiety, for example. was expressed by Mr. Storey, a Member of Parliament who happened to be the chairman of Reuters that, with the NPA holding 50 per cent. of the shares, Reuters will be run primarily to serve the special interests of the London newspapers". Likewise, Sir Stanley Reid, speaking on behalf of the great overseas press, said: I have the greatest doubts indeed as to whether those bias-free conditions will be maintained". Interestingly, there was no demand for nationalisation or direct state involvement even though Nye Bevan was in the Chamber; he intervened twice in Brendan Bracken's speech. Brendan Bracken, speaking for the Government, said: If a news agency were regarded throughout the world as being the property of the British Government, its news value would be very small."—[Official Report, 22 October 1941; Vol. 374, c. 1864–69.] That was the point made by my hon. Friend the Member for Castle Point (Sir B. Braine) in his moving speech.

Many of the points made then have been repeated in the current debate, but it is ironic that in 1941 the anxiety was that the newspaper proprietors were moving into Reuters, whereas today the anxiety is that they are leaving Reuters.

There is no dispute now, any more than there was then, that Reuters is our only international news agency and that it still enjoys a reputation for truth, independence and impartiality of which everyone associated with the company can be proud. I fully accept that it would be a very great pity if Reuters were ever to lose that reputation.

We know that after the debate in 1941, no doubt in part due to it, a document was concluded between the parties which set down in black and white the principles by which Reuters was to operate. It is clear that the 1941 arrangements were made to ensure that in the national interest Reuters' independence and integrity continued. There was a desire that it should not fall into unsuitable hands, so it was spelt out that its integrity, independence and freedom from bias shall at all times be fully preserved".

Anxiety was expressed due to the fact that the large newspaper interests, the press barons, were taking an interest in Reuters and there was a fear that they would distort its impartiality. The 43 years of integrity since then show that those anxieties have proved to be completely misfounded.

We can all acknowledge that the directors and trustees of Reuters have done a good job in running the company in accordance with those 1941 principles. In 1953 ownership of the company was widened to incorporate Commonwealth press interests, but the principles remained virtually intact.

As I said earlier, Reuters has always been more than a news agency alone. In the 1950s the company started to think about marketing its intelligence services electronically. In the 1970s the company began to reap the rewards for its initiatives. Its accounts are a testimony to its success.

Reuters' turnover increased from £53 million in 1977 to £197 million in 1982. In 1982 it felt able to pay its first dividend—a dividend of £1.9 million. As has been said, 40 years is a long time to wait for a dividend and hardly supports the suggestion that the owners, the so-called greedy press barons, were in it for the money.

The company now employes 3,200 people, nearly 40 per cent. of them in the United Kingdom. Its employment has increased by 70 per cent. in 10 years. Last year it paid a dividend of £5.8 million. Would that we had more such successful companies in Britain.

Reuters is a national asset, not just as a news agency but as a highly sophisticated network for financial news. That is part of its national importance. Any business that has expanded in this way and has such prospects for further expansion must give thought to its finance because the sums involved in setting up sophisticated networks are very substantial. It may be naive to suppose that the entire proceeds of flotation currently under consideration are for reinvestment in the company, but the board has said that a proportion will be.

It is worth recalling the board's statement of July 1983 which referred to A study of the future financial structure of the company and methods of financing further growth. The study followed a management proposal that Reuters should consider issuing stock to raise cash for future investment in the company's business and to strengthen its strategic position.

As my hon. Friend the Member for Hendon, North (Mr. Gorst) pointed out, the people who are most involved in the future of Reuters are, after all, those in the company itself and the shareholders and its trustees. The shareholders are principally the Press Association which represents local newspapers, the Newspaper Publishers Association, which represents national newspapers, and the New Zealand and Australian press associations. The board of Reuters has made its position absolutely clear. It has issued a number of press statements, and in one of them states: The Board affirmed that in any change in the structure of Reuters it would ensure that the role of the trustees and the principles of the present Trust Agreement would be maintained. This Agreement states that control of Reuters shall at no time pass into the hands of any one interest, group or faction and that its integrity, independence and freedom from bias shall at all times be fully preserved. That was said on 9 November. On 14 November the chairman of the Reuter trustees, Mr. Angus McLachlan—the hon. Member for Great Grimsby referred to him — said: On becoming Trustees we, all of us, accepted an obligation to conserve the objects of the Trust which are, in brief, to maintain the integrity and independence of Reuters and to ensure that its control does not fall into the hands of any one interest, group or faction. When any scheme is presented to us we shall seek independent legal advice as to whether that scheme is one with which we, as Trustees, should concur".

As regards the Press Association and the NPA, both know that the news agency side of Reuters is a very valuable service. My hon. Friend the Member for Thanet, South made that point. It is certainly important to its members. It has a high reputation around the world for integrity and independence and it is in its hands to ensure that the service can be continued and carried on in an independent way. The Financial Times, which is admittedly a shareholder through its involvement in the association, in a leader on 29 December said: A trust of some sort would have to remain in existence and then went on to say: There seems no reason however why the institutions should not be able to devise a satisfactory formula which would ensure diverse ownership and the maintenance of proper standards. Those are the words of a shareholder—someone who will benefit by flotation.

The responsibility clearly lies with the owners of our newspapers. From the reports that we have read of what has been said, they are clearly not intending to shrug off that responsibility. As several of my hon. Friends have said, the shareholders are also Reuters' major customers. In the earlier phase of the development of Fleet street it was common for the popular press to maintain a large number of foreign correspondents, whereas now they maintain few. They send people to certain places when a crisis blows up. Therefore, they derive a great deal of their information on what is happening around the world from such news agencies as Reuters. It is certainly in their interests to ensure that Reuters continues to exist as an independent source of news.

The Government have no locus in these matters. They are not shareholders. We have made it clear that we do not interfere in the affairs of Fleet street other than to discharge the statutory obligations that the Secretary of State for Trade and Industry has laid down in competition legislation. However, I accept that there is public concern, which has been expressed by hon. Members on both sides of the House. What is the public concern? Why is Reuters so special? After all, it is one of many news-gathering sources. Since 1941 the variety and number of sources of news have increased enormously, including the news-gathering capabilities of television—for example, ITN and Visnews, a London-based company. That is a significant contributory factor in the flow of news internationally throughout the world.

Therefore, it cannot be said that Reuters has precisely the position that it held in the earlier part of the century. However, it is the only British and Commonwealth international news agency. It probably has the highest reputation in the world for integrity and independence. The Government can secure none of that because Reuters depends upon its own professionalism, and that depends upon its staff, its reputation and its reliability. That is something that no Government can guarantee. The speciality of Reuters over the years has been that professionalism and the sturdy independence of successive managers who, even in time of war, were not prepared to become, as it were, part of the propaganda machine of Government.

The sale of Reuters is not the sale of a hotel or just some other property. A hotel must be managed efficiently, establish a reputation for itself and attract customers. A news agency is a different sort of animal, and I was asked by the hon. Member for Dagenham (Mr. Gould) not to be too realistic. Oscar Wilde said that a realist was someone who knew the price of everything and the value of nothing while a romantic knew the value of everything and the price of nothing. In the spectrum that ranges from romanticism to realism, I think that I am a little closer to the romantic end, as I suspect are most hon. Members who have spoken today.

A news agency is a different sort of animal, for an important reason that was given by the right hon. Member for Cardiff, South and Penarth and by my hon. Friend the Member for Castle Point. It is different because it could fall into the hands of a particular interest, commercial or political, and probably the greatest concern is the political influence that might be operated. This could be said to be of real concern, particularly in view of the caperings that UNESCO has got up to in he past few years in trying to persuade the world that news, particularly from the Third world, has been doctored by various news agencies—allegations that I look upon as sheer fantasy.

The key concern would be any loss of independence. There is, therefore, a concern, but that concern is most acute in Reuters itself and among its customers and shareholders. As I said, many of its shareholders are its customers. Reuters operates all over the world in a variety of political regimes and economic climates and it is important for its reputation of independence that it is not seen to be the preacher or mouthpiece of any one of those interests or countries.

Its independence is its strength, and that goes for its independence from the British Government. It is important that Reuters is independent of the British Government, because its position in other parts of the world could be weakened if it were seen to be yielding to pressure from the Government of the United Kingdom. Reuters, after all, is an international company that draws 83 per cent. of its revenues from outside the United Kingdom. It is a truly international operation.

Mr. Gould

Perhaps the Minister has yet to come to the nub of his argument, but I am anxious not to let him escape without answering a basic question. He appears to be accepting the obvious public interest that there is in the continued independence of Reuters, and I think that he would concede that that independence has apparently rested for 43 years not only on the professionalism of Reuters, important though that has been, but on the intervention of the Government in 1941.

It may be that the protection that we were then offered was not quite what it seemed. However, would the Minister accept that at a moment of great danger, with the intervention of overtly commercial pressures, some such collaboration between Reuters and the Government is again necessary to ensure the continued independence of the news agency?

Mr. Baker

I shall come to that point; in no way will I not answer it. First, I shall answer some of the points addressed to me by the right hon. Member for Cardiff, South and Penarth, some of them pertaining to the hon. Gentleman's intervention. The right hon. Gentleman, when saying that he intended to ask me certain questions, said as I took my pen from my pocket that I should not waste my time because he did not expect me to answer any of them. He said that in a charitable way; he did not mean that I would not know the answers but wondered whether a Minister should be answering such questions at all. He recognised that to be the position. He was right, because many of the questions that he asked — for example, whether different financial arrangements could be made to finance expansion, whether it was or was not a trust, whether the trust had been disavowed — should be addressed to the board of Reuters because the Government have no direct standing and were not party to the agreement.

The right hon. Gentleman argued that in the debates of 1941 the words spoken by Brendan Bracken were extended indefinitely into history. I thought that my hon. Friend the Member for Castle Point dealt with that rather well. The powers that the Government had in 1941, during a period of great crisis and war, were different from those that now prevail. The company has been transformed. Technological changes have been constant throughout the history of Reuters and so things have moved on. It is the views of Parliament today that are important.

The right hon. Gentleman asked me, as did the hon. Member for Birmingham, Erdington (Mr. Corbett). about the position of the Lord Chief Justice and said that we should invite him to intervene. As a former Prime Minister, the right hon. Gentleman will have great understanding of the constitutional proprieties of these matters, but I am advised that that is an extraordinary request for any Minister to make. I have taken advice from the Lord Chancellor on the position of the Lord Chief Justice and asked my noble Friend to address himself to the question whether the Lord Chief Justice has any functions. This is not, and has never been, a matter for the Government of the day. The present incumbent of the office of Lord Chief Justice has no function in this matter in terms of the duties of that office. As a completely separate matter, I am advised that the arrangements in the agreements of 1941 and 1953 appear to be between private individuals contained in a private deed, and such agreements could not ordinarily impose any obligation in law on any third party, whether holding public office or otherwise. They certainly appear to impose no obligation on the Lord Chief Justice. That is the advice that I have received.

There has been discussion about the nature of the trust deed. It is interesting—

Mr. James Callaghan

The Minister misses the essential point of my argument. I am not suggesting that the Government should act over the heads of, and without recourse to, the existing board of management and trustees. As we know, the original trust, if that is the proper term, was devised between the Government of the day and the Newspaper Proprietors Association. In those cirmcumstances, I am saying that the Government should call in the trustees as a first step, along with the board of management, and discuss with them — the Minister acknowledges, as we all do, that this is a matter of public concern — whether it would not be appropriate by agreement between the Government and the trustees to call in the Lord Chief Justice, who was specifically written into the agreement. I believe that it was written in with the firm knowledge of Brendan Bracken as part of the exercise at that time. I am not suggesting that the Minister acts over the head of the board. I am suggesting that he call in the trustees so that public concern can be satisfied.

Mr. Baker

As regards the Lord Chief Justice, the position is that which I have explained. Should the Government intervene in the manner suggested by the right hon. Gentleman? The Secretary of State has no powers to intervene in matters of this sort, and that has been the position over the years.

As for the status of the trust deed, I was interested to hear the views expressed by the hon. Member for Erdington and my hon. and learned Friend the Member for Mid-Befordshire (Mr. Lyell). The views expressed by another lawyer, the hon. Member for Dagenham, were also interesting. The hon. Member for Erdington said that he is indifferent to the legal status of the document. I know that he was speaking from his heart and referring more to the spirit of the document than legalities. That is the hon. Gentleman's view, but that is not the way in which Governments, companies or societies conduct their affairs. One has to have some regard to the legal status of the document, and that is crucial. I was interested to hear the views of my hon. and learned Friend the Member for Mid-Bedfordshire about the nature of the document. He said that he thought that it was probably not a legally binding document. That view was reflected by the hon. Member for Dagenham.

To answer partly the question whether the Government should have a view on the matter, I refer the right hon. Member for Cardiff, South and Penarth and the hon. Member for Dagenham to the comments made in the House by my right hon. and learned Friend the Attorney-General on 14 November last year. He said that he had looked with care at the documents, that he could see no evidence that there was a charitable trust and that it was only for charitable trusts that he had any responsibility.

The arrangement is a private one, in a private deed, and it is a matter for the parties whether the arrangements give rise to a trust.

Sir Bernard Braine

My right hon. Friend said that no obligation rests on the Lord Chief Justice. His subsequent remarks seem to suggest that the document is not a valid legal document. Does my right hon. Friend realise the tremendous import of those statements? The employees and customers of Reuters have believed for a long time that the document was valid, and that the mention of the Lord Chief Justice and what he was required to do gave it special strength. Apparently, that is not so. Therefore, the House has every right to be concerned. I hope that my right hon. Friend will tell us more, because we seem to be in a new situation and the full implications must be grasped by the House and others.

Mr. Baker

I was not expressing a view on the status of the document. My right hon. and learned Friend the Attorney-General has made it clear that it is not for the Government to take a view. We were not parties to it. I have also made clear the advice from the Lord Chancellor about the position of the Lord Chief Justice.

The spirit that has prevailed in the operations of Reuters over the past 40 years derives from the spirit of the agency and the professionalism of the staff. That is what has made it what it is. The history of Reuters shows that that spirit imbues the agency. I do not believe that that will change on the news-gathering side.

Anxiety has been expressed about the risks of a flotation to the independence or integrity of the Reuters' news-gathering service. I have no reason to doubt that the present owners of Reuters are as anxious as anyone to preserve the reputation of that service. On the other hand, shares are bought and sold in a free market between willing buyers and sellers. Prospective buyers will buy only if they feel that they will obtain value for money in any subscription or acquisition. The article in The Guardian today states: It is easiest to answer this by saying what has not gone wrong. There is no real dispute about the logic of the sale either for the owners or for the institutions. For simple reasons of business prudence, it would not be sensible for the newspaper owners to retain complete ownership of Reuters. That has been said on many occasions. Reuters has become a much larger operation and the article says: The value of the interest in the newsagency is so large in relation to the value of the businesses concerned that no business manager could reasonably argue that such a large proportion of the group's assets should be held in a single investment. The article goes on to say that, in the City's view, the dispute is not about the principle of the sale but rather about the details of the scheme itself.

It would be a total misrepresentation of the feeling of the House if it were to be thought that Conservative Members are concerned purely about the flotation, the monetary gains and the free working of the market. They have all expressed concern—just as strong and heartfelt as that of Labour Members — about the integrity and independence of Reuters.

It is certainly the case that a commercial sale does not have to be a completely unrestricted sale. As the House knows, the Government have some experience of mechanisms to provide safeguards against undesirable changes of control. Special arrangements have been made in several instances where the Government have sold their own shares in the various privatisations undertaken in the past four years.

The Government hold a special share in Britoil, where the consent of the holder is required to changes in certain of the articles, which can have enhanced voting rights on a temporary basis in certain cases. A similar special share is held by the Government in Cable and Wireless. British Aerospace's articles contain special provisions to deal with a situation where more than a certain proportion of the company's shares are foreign-held.

I refer also to the example of British Telecom when it becomes a public limited company. The Government will be a minority shareholder, but they will none the less retain certain rights through a special share issued to the Secretary of State. Those are essentially requirements for the Secretary of State's agreement to any changes in those parts of the company's articles of association covering matters such as the appointment of the chairman and chief executives and the blocking of any shareholding exceeding 15 per cent. of the equity stock.

Mr. Gould

I see the point of the Minister's example, but does he accept that, in the cases he has mentioned, where the Government are the instigator and holder of the precise mechanism, it is unlikely that the Government's constancy of political purpose would be overridden by the commercial considerations in the sale of such a shareholding, whereas one cannot have that assurance with a private ownership of shares, because it is precisely the commercial considerations that have provoked the current situation?

Mr. Baker

In the stories which have appeared in The Guardian in the past two days, various mechanisms have been discussed. It is possible to have the mechanisms to which I have referred to protect the position of the company in certain circumstances.

Mr. Gorst

May I remind my right hon. Friend, in this context, that as early as the 1950s or 1960s—certainly the 1960s—the Government had a special shareholding in the British Lion film company, the specific purpose of which was to avoid the company being run into the ground by monopolistic interests?

Mr. Baker

I am grateful to my hon. Friend for reminding me of that case, which had temporarily slipped my mind.

My point is that mechanisms have been devised for companies in which the Government have been a shareholder. The Government are not, of course, a shareholder in Reuters. I referred to the examples at some length not to suggest that Reuters has necessarily the same character as those companies or that those models would suit the particular circumstances of Reuters. I believe that is the point that the hon. Member for Dagenham wanted to make. I referred to them to show that the kind of problem that arises in Reuters is not unique, and that practical solutions which appear to meet the general needs of the situation have been devised in other cases. What, if any, special arrangements are appropriate or acceptable to sellers and buyers in this case must be a matter, in the last resort, for the judgment of those concerned.

Mr. Corbett

I understand what the Minister is arguing about the Government's role and responsibility, but he is being awfully coy about it. Is he saying that there is no possibility of the Secretary of State inviting the trustees to a meeting so that he may put to them across the table the worries of the House?

Mr. Baker

The best way to convey the fears expressed in the House is for the trustees and the board of Reuters to read the report of this debate, as I have no doubt they will. I emphasise that in this matter the Government are not a shareholder. I should have thought that it was highly unlikely that the board and the trustees of Reuters, especially after this debate, would act in a way that did not take into account the views expressed by right hon. and hon. Members on both sides of the House about the future of Reuters.

I appreciate that I have been pressed by the right hon. Member for Cardiff, South and Penarth and the hon. Members for Great Grimsby, for Erdington and for Dagenham to urge the Government to intervene. That, again, is an irony. We have also said that Reuters must be free of Government control and intervention.

The motion urges the Government to intervene. I ask those who make the request to recognise the paradox and the illogical inconsistency pointed out by my hon. Friend the Member for Cannock and Burntwood (Mr. Howarth).

Mr. Corbett

The Government did it in 1941.

Mr. Baker

The motion urges the Government to intervene, and not only in an overt way, because they are also urged to intervene by pressures on the Inland Revenue and by inviting the Lord Chief Justice to give his opinion.

The history of Reuters supports the view that the company does best when its independence from the Government is not compromised. The best solution is for the board and the trustees, as they have said they will, to make arrangements to safeguard the continued integrity and independence of the company. They are responsible people. After the record of the past 43 years of Reuters' integrity, they are entitled to be believed when they say that their purpose is to conserve and to preserve the objectives set down in 1941. That is the way to preserve Reuters' integrity.

For a moment, I go back to 1941. The House clearly reflected the public mood in drawing attention to the importance of Reuters. Reuters was able to go about its business of gathering news around the world because it was perceived as a body independent of the Government, operating from the best of motives and with a meticulous regard for the truth. That would be the best message for the listeners to our debate to report back today.

1.58 pm

Mr. Edward Leigh (Gainsborough and Horncastle)

My right hon. Friend the Minister for Information Technology said that Government supporters should not be seen to be concerned only about commercial profit and that the real heart of the debate was how we were to avoid censorship in this vital news agency.

It happens that I represent the neighbouring constituency to that of the hon. Member for Great Grimsby (Mr. Mitchell). We share one of Grimbsy's popular daily newspapers, which is owned by a press baron and which gives wide prominence to all the hon. Gentleman's speeches. I hope that he does not take the view that the ownership of this well-known daily paper in Grimsby in any way affects its impartiality in reporting his excellent speeches.

Before coming to the House, I remember reading a book by the hon. Member for Great Grimsby entitled "Westminster Man". In that excellent book the hon. Gentleman described himself as the last Gaitskellite. In view of that, I was surprised to read yesterday the vituperative and intemperate language of his motion, in which he talks about a greedy and short-sighted attempt to make a quick profit. I am sure that the last Gaitskellite in the Labour party does not really believe that. I am certain that he does not really accept the Labour manifesto on which he fought the general election in 1983. He may in public express his belief that the words Our aims in the media are to safeguard freedom of expression, encourage diversity and establish greater accountability make sense, but as a student of history he will know that those words are similar to those found in the constitutions of many Eastern European countries. I draw his attention to an article by Dŭsan Hauliček about censorship in Czechoslovakia. It makes interesting reading as, if I understand the hon. Gentleman's argument correctly, he is talking of curbing free enterprise and of Government intervention in news agencies. Mr. Hauliček wrote: The purpose of the 1950 press law was to abolish the existing norms of the pre-Munich Republic in the sphere of the press, and to legalise the new situation, i.e. especially to prohibit all private enterprise in the press. The declaration system was replaced by a licensing system and the principle of publishing errata was abolished; but the law contained no provisions on censorship. The fact that the legal provisions make no mention of censorship and that no specific censorship office was established does not imply the absence of censorship. On the contrary, it was practised with the utmost thoroughness and consistency.

It is the free enterprise aspect of the agency which was founded more than 100 years ago by Mr. Reuter that has ensured its impartiality. It is Government interference such as that in Czechoslovakia which puts impartiality at risk. So much so that a young Czechoslovak writer, Václav Havel, replied to the statement Czechoslovak officials claim that in their country people do not go to jail for their views by saying: No, not for their views, only for expressing them. But what kind of a view is it that does not get expressed? Surely it only becomes a view when it finds expression. I hope that the hon. Member for Great Grimsby will reject such action by the Czechoslovak authorities. I am sure that he will reject the principle behind the letter which was recently sent to a young Polish journalist. His identity has been kept anonymous, but the letter said: Dear Mr. C., we wish to inform you that your newspaper has been liquidated as from 1 March 1982. Your services as secretary to the editorial board are no longer required. Thank you for your former services to this newspaper. That is the type of freedom that is to be found in Socialist countries where news agencies and free enterprises are separated.

My final quotation is of a man who is not generally noted for his Conservative views — Mr. Stephen Spender. He wrote: Today the existence of censorship in the communist half of the world, together with the lack of it in the Western democracies produces an imbalance which prevents the growth and expression of a world public opinion where, without this, the whole world may be condemned to nuclear war. Movements against nuclear armament in the West are subject to doubt and confusion because censorship does not permit of there being corresponding movements in communist countries. Thus they are thrown open to the doubt that they only serve to weaken those countries where there is freedom for such movements to exist. As one can see very clearly today in Russia and China, censorship traps whole countries in the methods and ideologies of an ageing generation of leaders who are in political control of them. The victims of censorship are in fact fighting for ends of far greater consequence for the future of mankind than what we ordinarily mean by the phrase 'individual freedom of expression'. Two hundred years ago Mr. Wilkes was summoned to the House by the Serjeant at Arms for expressing free opinions in a commercial newspaper. I hope that we can continue to ensure, by a commitment to the market-place, that freedom of expression—that most essential and precious commodity—is retained in Britain.

2.3 pm

Mr. George Walden (Buckingham)

The whole House agrees that the hon. Member for Great Grimsby (Mr. Mitchell) has done the House a service by making it possible for us to discuss this subject. I have listened to the weighty speeches of the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), my hon. Friend the Member for Castle Point (Sir B. Braine) and, of course, my right hon. Friend the Minister, and learnt from what they said.

My first reaction to the proposed flotation was one of instinctive apprehension. During the years that I spent abroad, I had the opportunity to contrast the solid reliability of Reuters with other, dare I say lesser, non-British news agencies, and I learnt to have great respect for the former's work. It is a shame that some of the newspaper headlines on this issue have not displayed the same reliability and sobriety as has Reuters.

Reuters is not a company like any other. It is an organisation with a tradition and a reputation analogous in general terms to that of the BBC. Its impartiality is a specifically British quality, of which one sees only too litle in the rest of the world, I am sorry to say, and we should nourish it. But the fact remains that Reuters is not a Government organisation. We are debating today whether the Government should intervene in this matter, using powers which they do not possess. If they did, they would be interfering in the dissemination of news, albeit with the highest of motives.

The best guarantee for the future of Reuters will lie in the continuity of its best traditions. Looking back at the history of the organisation, I was struck by how its reputation for integrity had survived the vicissitudes in its development. In its early life it was a public company, then a private one. At one time the Government's director of propaganda was its chief shareholder, and it has been owned indirectly by owners of the provincial press and by other press interests. We should not forget that at one time concern was expressed about the implications for its impartiality of the mere fact of its being owned by press interests.

In that connection, I should like to quote from Mr. Brendan Bracken's speech in the House in October 1941, when he was Minister of Information. He said that the debate had been to a certain extent one-sided, because nobody has spoken for the bold bad barons of Fleet Street". — [Official Report, 22 October 1941; Vol. 374, c. 1869.] Today, although I did not hear the entire debate, we have had a more objective airing of the issues.

A key aspect of the present position is the prospect that the board of Reuters will ensure that the principles of integrity are carried forward to the future, thereby ensuring that safeguards are evolved to provide continuity. We do not know what the details of the prospectus will be on that score. Here, again, the apprehension that has been voiced on both sides of the House should be noted, but it does not help to caricature the financial position. The proceeds of a sale will be more widely dispersed than has been suggested. I hope that some of the proceeds will help to invigorate the press in Fleet street, the provinces and abroad. I hope that they are not used to perpetuate antiquated practices in Fleet street. I would rather see them put into developing modern technology in Reuters, where it already exists, and, more specifically, in some of the newspapers of which we are all aware.

I do not take a dogmatic view on non-intervention by the Government. If I thought, having considered the evidence and listened to right hon. and hon. Members today, that there was a serious and imminent danger to the Reuters tradition, I should be taking a rather different view. On the other hand, we must be a little chary of the argument that anything that can be described, however generally, as a national institution cannot function without some Government interference and control.

My right hon. Friend the Minister mentioned the Telecommunications Bill in another context. When that Bill was being debated, we heard much argument about British Telecom being a public service. That is true, but it is also true of Marks and Spencer, which functions without Government interference or regulations. On the contrary, it is Marks and Spencer that has gone into the business of advising the Government on efficiency. If the reputation of Reuters has survived a somewhat chequered career of ownership and occupation, the strength of its traditions will carry it through into the future.

This has been a useful debate, in which the House has had a chance to register its interest in the matter. The case for Government intervention has not been proven, but there is no case for complacency either. If at any time in future Reuters news service should appear to be about to depart radically from the established traditions of integrity and independence, I hope that the Government would not be dogmatic when considering what they might do to prevent it.

There is a simple, and perhaps to some people sordid, commercial point. Much of the value of Reuters' service lies in its reputation for reliability and independence. Its customers, both at home and abroad, are not simple-minded people. If Reuters did anything to undermine that value, it would be cutting off its commercial nose. That is an unlikely prospect.

2.12 pm

Mr. Kenneth Hind (Lancashire, West)

All right hon. and hon. Members who have spoken have been keen to preserve the integrity and independence of Reuters. However, one thing that has disappointed me is the failure to understand that the private sector is capable of monitoring and enforcing the high standards of Reuters. My hon. Friend the Member for Buckingham (Mr. Walden) pointed out that the main commercial asset of Reuters, and that on which its reputation is based, is its strong integrity, honesty and infallability in the eyes of the world. To destroy that by biased reporting would destroy the commercial entity that Reuters has become.

We must look carefully at what the private sector has attempted to do with Reuters. The hon. Member for Dagenham (Mr. Gould) likened this flotation to privatisation. It must not be forgotten that, although the Reuters organisation was subject to a trust deed, it has always been a private company and as such commercial. That trust deed was the product of the political situation that arose in 1941 when it was necessary to reassure the world of the integrity of the news supplied by Reuters. That situation no longer exists and that trust deed should be looked at as a product of its time. As a consequence, it is right that it should be reviewed and assessed in the light of the needs of 1984.

The vast majority of organisations that will benefit from the flotation of Reuters are public companies. All the national newspaper organisations, except the Daily Telegraph, are public companies. So the pot of gold will not find its way directly into the pockets of individual newspaper owners, as was suggested today. We should see the argument that we should continue the trust deed as an act of faith from the point of view that it is not an enforceable legal document. As a lawyer, I looked at it carefully and formed the view, in agreement with counsel who advise Reuters, that it is not a legally enforceable trust and that, as such, it would not satisfy the courts in that regard.

There is a second failing in the document. If the Lord Chief Justice of England, as the leading judge in the country, apart from the Lord Chancellor, is called upon to adjudicate privately on the veracity and legal enforcement of this deed, and advise the parties, he can hardly, in his capacity as a judge in the Court of Appeal, give an independent and sensible judgment on it. That again, I suggest, is a product of the 1940s and is no longer important when we view the matter anew today.

Telecommunications and newspaper reporting have changed radically. As an organisation, Reuters has changed with them. A new organisation must spring from it and develop accordingly. I advise those who criticise the trustees and those who are involved in floating Reuters on the Stock Exchange to realise that they have bent over backwards, knowing that the trust was not enforceable, to reassure the public that the integrity and unbiased news reporting of Reuters' news service will be preserved, to such an extent that the way they did so clearly undermined the value of their own shares, thus damaging their own financial interests. It cannot be said that they are only out for their own interests. So I ask all hon. Members to consider that aspect very carefully.

In the light of new developments, Reuters must be able to raise money so that it can maintain its independence. As my hon. Friend the Member for Thanet, South (Mr. Aitken) explained, the preferential shares, with the three trustees maintaining the integrity of the news reporting services, must surely satisfy the requirements of the general public. I join those in the City who have criticised the system used when the Government denationalised Cable and Wireless and other public companies, in that it might perhaps be better to have a golden share, or a master share, as has been suggested.

The arguments for parliamentary intervention are not well-founded. The trust in the 1940s resulted purely and simply from pressure in this House. It was not dictated by emotion or an Act of Parliament. It was a product of the times. Those times have changed. We must come to terms with those changes and recognise that ultimately it is best for Reuters to be floated privately, thus becoming a public company. We must recognise that the private sector is capable, in its own interests, of maintaining the standards that have been the hallmark of the company since its inception.

2.19 pm

Mr. Peter Bottomley (Eltham)

We have just heard a very sensible speech. I agree with the part of the motion that calls attention to the flotation of Reuters. However, I am not sure that attention needs to be drawn to it after all the excitement about the descendants of those who originally held shares and then forgot about them. Nevertheless, it is important to decide when the Government should step in to control, or have influence over, the control of information.

Generally, Parliament should see its duty as ensuring that there are no hindrances in the way of the free and uncensored flow of information. The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) referred to what happened in 1941. That date reminds me of the time when I stood in for my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) at his regimental reunion. I had to say that the only thing that brought those ex-soldiers together was the invasion of France in 1944, six weeks before I was born. The shareholders' agreement to form what may or may not be a trust in 1941 thus occurred quite a while before I was born.

As many hon. Members have pointed out, whether the agreement between the shareholders was a trust or just an agreement is not a matter for the House. That must be determined by the courts. I suspect that if there is a lot of fuss about it, the view of the shareholders that it is an agreement that can be altered can be tested. If the trustees believe that the shareholders are trying to break a legally enforceable trust that would stand up in court they can take action.

There is a slight problem about trying to get the Government to intervene in everything that catches somebody's attention. As I have said before, I believe that such debates are valuable and that we should not spend all our time on legislation and on requiring the Government to do this, that or the other. We should take the opportunity to air issues of general concern, or those that are of sufficient concern for one hon. Member to raise them in the House. I welcome the fact that the hon. Member for Great Grimsby (Mr. Mitchell) raises issues that are of interest not only to him but to many other hon. Members. However, there are times when he launches into a speech in favour of some cause that I support, yet by the time that he has finished I am wondering whether I was right in the first place.

The hon. Member for Great Grimsby might have said two things today. First, he might have said that the future of Reuters, as was the case with its success in the past, depends on how its customers see it. If it continues to provide impartial, independent and comprehensive news, people will use its services and pay for them. However, if it does not do so, they will not use them. Its success is not determined by the form of ownership, whether or not ownership lies in a few hands or by whether there is a market for the shares. Secondly, the hon. Gentleman might have said that he did not see why windfall profits should go to those who happen to be shareholders now.

Mr. Austin Mitchell

I am grateful to the hon. Gentleman for giving way, because it allows me to comment on my disappointment with the Minister's reply. The Minister effectively said that the Government would not intervene where a previous Conservative Minister had intervened to protect the public interest in this matter. I believe that the debate has been successful and that the lesson to emerge from it is that the whole House has expressed its concern that the principles of integrity and independence upon which Reuters was based and which have served it so well should be maintained, whatever the new flotation produces. The most important lesson to emerge from the debate is the attachment to those principles, and that will be brought home to those who take the crucial decisions in Reuters without Government interference or even without the Government's view being known.

Mr. Bottomley

I am prepared to give way again to the hon. Member for Great Grimsby if he wishes to make further remarks such as that. He has just summarised what should have been his original speech. He was generous in giving way during the hour in which he entertained and informed the House.

The quality of the service and the way that it is seen will matter far more than whether Reuters pays dividends, the level of those dividends or who owns the shares.

I could develop at length the argument that, for most of its history, Reuters has been owned by the newspapers that have used its services. The development of Reuters and the creation of profits have come through developing more modern business, using the new information technology and meeting the needs of the financial institutions. One could argue that the spread of ownership that will follow from flotation will mean that the shares in Reuters will be held in exactly parallel ways by the institutions using its services.

The great expansion of Reuters' business — the financial services — means the provision of valuable services to banks, insurance companies, pension funds and people involved in international trade. Those are the people who will buy the shares, on behalf of us, the depositors, investors and life insurance companies. They will not be bought by radio stations and television networks, but mainly by financial institutions and individuals.

Such institutions and individuals have as keen an interest in the quality, accuracy and impartiality of the information provided as the newspapers have had over the last 100 years, and certainly over the last 40 or 50 years, when newspapers have directly controlled Reuters. They have regarded it as being directly in their interests to obtain the impartial information for themselves and they have seen Reuters spread its customer base. As a result, as more people take its services, it is possible to improve the quality and spread of the news service and to lower the cost to individual customers. The interests of the customers and the shareholders in the past have been pretty well matched. I believe that in the future they will also be well matched.

The question whether, and in what circumstances, Government would be right to intervene is difficult. If we were having this debate in the middle of a war, there would perhaps be a greater need to step in, especially if the service was not making money. At present, Reuters is about to be floated at a price-earnings ratio which was probably unjustifiable in the past and may well be now. Those who are hyping the shares may find that they were right and that the shares double or treble in value.

Because of the nature of the market-place, it is equally likely that the promoters of the sale have picked exactly the right time, because our debate spreads interest and everyone piles in. As competition develops, and other things happen, it may not turn out to be such a good deal for the present shareholders. There will probably be no problem about the impartiality of the service, but people might be persuaded to pay too much to obtain the benefit of what they see as increasing dividends in the years ahead.

The hon. Member for Great Grimsby, when dealing with windfall profits, got the House off on the wrong line when he said that the profits from the sale should be used for some different purpose. Surely one of the excitements of share ownership is that one is never sure whether the shares will go up or down in price or whether new developments will be a massive drain on an enterprise. It is the shareholders' good fortune that Reuters has been sufficiently desirable to customers and they have thought of a way of transforming a well-respected, but stodgy business into one that can generate large capital gains for them. If we are all to depend on investment by insurance companies and pension funds to guarantee our old age, the sooner more organisations like Reuters discover diversified services that they can sell to those using our pension contributions—

It being half past Two o'clock, the debate stood adjourned.