RESTRICTIONS ON THE HOLDING OF LICENCES. (Hansard, 9 July 1984)

§ Mr. Austin Mitchell
I beg to move, amendment No. 17, in page 7, line 34, after 'Community', insert `and had no shareholding of over 10 per cent. controlled from outside it'. The amendment would tighten the provisions that regulate the amount of non-EEC involvement in cable companies. There is a danger that if the cable industry faces financial difficulties—as all the prognostications seem to indicate that it will—American or Canadian production companies that have an interest in getting secure access to outlets in Britain will attempt to buy, take over or increase their stakes in companies here. The enormous development in programming will come from America and Canada. Although, through clause 8, the Government clearly intend to reduce foreign involvement, I am worried whether clause 8 is strict enough. Amendment No. 17 looks as though it has been written by the Welsh language lobby as it reads: no shareholding of over 10 per cent. controlled from outside it". 790 Tightening regulations in that way would prevent shell companies from outside taking a stake in cable companies and prevent overseas companies from building up their shareholding and hence their influence.
I do not intend to push amendment No. 17 to a Division —I merely want the Minister to define how he regards the provisions against overseas involvement, especially overseas control, operating. Does he think that the Bill as it stands is adequate to prevent the type of contingency that might arise if cable companies are in financial difficulties?

§ Mr. Hurd
The hon. Gentleman says that this is a tightening amendment. I agree. It would throttle some interests that will want legitimately to provide a cable service. We have always said that we do not think it right for cable companies to come under foreign control. Clause 8 closely follows section 20 of the Broadcasting Act 1981 in that respect as it precludes cable companies from being controlled by bodies outside the EC. The hon. Gentleman wants to change that by limiting any foreign shareholding to 10 per cent. or less. The Cable Authority will seek companies that are committed to providing the best possible services for the area concerned. It will be under no obligation to welcome every company that comes along with foreign shareholdings of slightly less than 50 per cent. The authority will want to form a view of what is best for the local community. Even after a licence has been issued, it can revoke it in the last resort. It would be able to do so if there were a change in the ownership arrangements which caused the authority to issue the licence.
It would be throttling to impose a rigid 10 per cent. ceiling. If such a ceiling had been imposed on independent local radio, admirable companies might have been prevented from continuing. The answer lies in control, and the hon. Gentleman's definition of 10 per cent. is far too strict.

§ Mr. Austin Mitchell
The Minister has provided an explanation that is not fully satisfactory. We know that a Canadian shareholding has been built up in some of the local radio stations. The authority will have to act in the light of the available applicants. If there is only one applicant and that company has an element of foreign shareholding, the authority will be forced to accept that company. That is not an especially sound defence against overseas interests. However, the amendment was intended to probe rather than to throttle, and I beg to ask leave to withdraw the amendment.