HC Deb 08 May 1990 vol 172 cc95-115

`.—( ) The ITC shall only allow a takeover of a Channel 3 licensee by another person or body when it is satisfied that the full licence obligations can be met by the prospective licence-holder.

( ) No such takeovers will be allowed within the three years following the licence award except where the incumbent is unable to fulfil the licence obligations.'.—[Mr. Bill Walker.]

Brought up, and read the First time.

Mr. Bill Walker (Tayside, North)

I beg to move, That the clause be read a Second time.

Madam Deputy Speaker

With this it will be convenient to take the following: New clause 34—Revocation of Channel 3 licence on takeover during limited period. '3—'(1) Where—

  1. (a) a licence to provide Channel 3 service is awarded before 1993 to a body corporate, and
  2. (b) it appears to the Commission that, within the period of two years beginning with that award, a person who at the time of the award did not control the body has acquired control of it.
the Commission shall revoke the licence by notice given to the holder of the licence and taking effect forthwith or on a date specified in the notice not being more than six months after the giving of that notice. (2) Upon such revocation any security given by the holder under section 18 shall be forfeited to the Commission. (3) Every licence which is awarded before 1993 to a corporate body to provide a Channel 3 service shall include such conditions as the Commission consider necessary or expedient to secure that they are given— (a) such advance notice of any proposal of which that body becomes aware and which if carried into effect would—
  1. (i) affect shareholdings in the body.
  2. (ii) affect its directors, or
  3. (iii) be in any other way relevant to the control of it.
as is necessary or expedient to enable the Commission to ascertain that such an acquisition of control as is mentioned in subsection (1) is likely to occur, and (b) immediate notice of any such acquisition of control. (4) In this section "control" has the same meaning as in Schedule 2.'. Amendment No. 42, in clause 3, page 3, line 30, leave out from '36(1)(b);' to end of line 33.

Amendment No. 577, in page 3, line 35, after 'person', insert— 'for two years after the grant of a licence and subsequently not'. Amendment No. 3, in page 3, line 36, at end insert— 'and such consent shall not be given before 31st December 1995'. Amendment No. 14, in page 3, line 36, at end insert— 'and such consent shall not be granted before 1st January 1994 unless it is agreed to by the person holding the licence'. Government amendment No. 229.

Amendment No. 484, in clause 5 page 5, line 34, leave out subsection (5) and insert— '(b) In subsections (3) and (5A) "control" has the same meaning as in Schedule 2.'. Amendment No. 483, in page 5, line 34, at end insert— '(5A) Every licence shall include conditions such as the Commission consider necessary to ensure that where—

  1. (a) the holder of the licence is a body corporate, and
  2. (b) for a period of three years from the award of the licence
the Commission shall have the authority to take whatever steps they consider necessary and expedient to prevent changes in the persons having control over or interests in the body where they think appropriate.'. Government amendment No. 418.

Mr. Walker

My right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith) and I tabled new clause 17 because we were concerned with the changes that are taking place and the effect that they could have—I make no apology for saying this—on regional broadcasting. Being Scots, we have taken a somewhat parochial view of what is happening in our area.

The increased emphasis in the Bill on quality and regional service will be wasted if any company seeking to take over a licence-holder is not obliged to fulfil the licence obligations. It will be expensive in time, effort and money to prepare a licence application. If predators can launch a take over bid immediately after the award, there will be a strong incentive not to bid but to wait and see who is the successful applicant, and then attempt a takeover.

After each franchise round in the past it has taken a considerable time for new companies to become properly established and fully to contribute to the service. The dislocation would be greatly exacerbated if companies were fighting off takeovers or being taken over in the early years of their lives.

Unless there is a moratorium on takeovers—three years appears to be about right—there could be chaos in Channel 3 and a consequent loss of service to viewers and advertisers. So we in the north of Scotland, who are serviced by Grampian Television as our local ITV station —my constituency is serviced substantially by Grampian, although Scottish Television is also concerned—are worried lest we suffer a loss of service. We are anxious to avoid the uncertainty that could result from an early takeover attempt following the award of a licence.

Mr. Maclennan

The new clause follows closely the debates we had in Committee in which we drew attention to the predicament that would flow from a speedy takeover by incoming companies and the difficulty that would face the regulatory authority if that were to happen. Indeed, the IBA and its chairman have drawn attention to the problem from the beginning. They recently said that they would regard a moratorium of a year as the absolute minimum necessary to enable them to do their job properly. The hon. Member for Tayside, North (Mr. Walker), whose involvement in these matters everyone in the north of Scotland will no doubt welcome, is right to say that it should be longer than one year.

8.15 pm
Mr. Mellor

I met the chairman of the IBA this morning to clarify the position of the IBA on certain points. He regards 12 months as a desirable moratorium limit, not as a period for which he is asking as a second or third best. I understand that, in his view, 12 months is long enough. In other words, it is not his view of a minimum period —he would prefer longer—but his view of the right period.

Mr. Maclennan

I am happy to rephrase my remarks to take account of what Mr. Russell told the Minister about one year being sufficient. I believe that it is not enough and although I defer to Mr. Russell in many matters—I have no doubt that he has given the issue much thought, not only in terms of what is right but what is achievable from the Government; perhaps he regards one year as a prudent period for which to ask now—the hon. Member for Tayside, North is nearer the reality, which is that the matter will not be settled satisfactorily after only one year.

The selection process which will begin when the bids are invited is complex. It involves difficult valuations by the regulatory authority, and the bidding companies will be put to enormous expenditure of time, effort and money for the preparation of their bids. To have all of that set at naught by a predatory takeover within a year of being awarded the franchise would seem to make nonsense not only of the regulatory process but of the prospects of achieving an orderly approach to regional television and of sustaining quality beyond the initial bid.

Not only is Grampian Television interested in this matter—Grampian has played a notable part in seeking to amend the Bill—but all companies in the 15 regions have an interest in achieving initial stabiity, and I hope that that will be recognised in the Government's response to the new clause. It is imperative that a period longer than a year is acknowledged. I proposed two years, but it is reasonable for Conservative Members to wish to extend the effectiveness of regulation beyond two years, and I shall he happy to support them.

Mr. George Walden (Buckingham)

The new clause goes wider than my hon. Friend the Member for Tayside, North (Mr. Walker) believes. Although I sympathise with his regional concerns, his proposal deals also with the general issue of quality.

When I last spoke on these issues, the Minister of State accused me of being rather free in my use of adjectives. I have a few more adjectives to use tonight. He has done a superlative job with some unpromising material. By that I refer not to his colleagues in the Government but to the original White Paper with which he was lumbered. I do not know how that came about. Perhaps he had a Pauline conversion in the Committee Room, induced by the heat of the television lights. He may have had some internal illumination. Or he may all the time have been a secret, closet Reithian.

The most important thing is that the Bill is much better now than it was originally. I was glad to note that my hon. and learned Friend the Minister encouraged the setting up of a classical music radio station which is an example of interventionism, elitism, is ideologically indefensible and is, of course, absolutely right. I take that as an example of my hon. and learned Friend the Minister's flexibility and realism. By making the changes that he has made, he has set a Bill which was originally standing on its head on its feet. He has done that with enormous cleverness and without losing his balance. That makes it all the more regrettable that on this important point the Government should give the appearance of holding out.

Let us consider the practical circumstances of someone who has just won a franchise on the basis of a guaranteed level of quality. The next task would be to elaborate a programme schedule to set up the service. If on the day after the company won the franchise it received a telephone call saying that there was to be a bid for the franchise that has just been won, its attention would immediately be transferred from the task in hand to fighting off that bid. What is more, in the commercial world as it is, I expect that that company would cast a quick eye over its programme schedules to see where it might cut corners on quality, thereby pleasing the shareholders, in order to ensure its position in the coming takeover battle. That is one reason why I say that takeover bids always end up having implications for quality.

On the two grounds that the company would have its attention diverted from the task of setting up a quality service by a predatory takeover bid and that it might be tempted to dilute its quality to appeal to a bigger mass audience, I appeal to my hon. and learned Friend the Minister to allow a moratorium of, not one year—perhaps three years is too long—but at least two years. We are in new territory and we must do everything possible to give sufficient time for new companies that win franchises to prove themselves.

The ITC will also be in new territory. With all due deference to Mr. George Russell, it will take it more than a year to establish with any confidence whether a newly franchised company is living up to the quality mark. Only after that length of time could the ITC judge whether the predatory takeover company was in a position to continue the established level of broadcasting of the franchised holder.

For all the reasons that I have given, I believe that we need a two-year moratorium on takeovers. I read carefully the speech of my hon. and learned Friend the Minister to the forum organised by the Campaign for Quality Television. I noted that in defence of his decision not to go for a moratorium he talked about the need to get rid of mustiness, to introduce a little competition and, to use his phrase, to stir the pot a little. There is a difference between stirring the pot a little and holding out a pot of jam in front of a wasp's nest. That is one of the dangers that will confront new franchise holders and yet another reason for imposing a moratorium.

I commend my hon. and learned Friend the Minister for his praise of the Campaign for Quality Television, about which he said some kind words at the forum to which I referred. It is not often in the House that we have reason to commend pressure groups. Often their tactics are more and more questionable and arouse more revulsion than attention. In this case, as my hon. and learned Friend graciously said in his speech, the Campaign for Quality Television has been a quality campaign. My hon. and learned Friend has listened carefully to its arguments and accepted some of them. He is to be congratulated on that. On this matter, too, he should take the views of that pressure group seriously.

Yet again, I come back to the question of quality in a broader framework. We are in new territory. We need time for the new arrangements to settle down. My hon. and learned Friend the Minister said tonight that Channel 3 will be a notch down. I notice that a few months ago he was talking about it being a few notches down from public service broadcasting. Evidently there is some uncertainty about how many notches down the new arrangements will be. Since the beginning, the Government have been wrong, but are less wrong now, in failing to recognise the implications of their proposals for Channel 3 for the BBC. We do not know whether Channel 3 is to be one notch down or a few notches down. How many will depend to some extent on the future of the franchise companies. That in turn will depend on whether they have time to stabilise. That in turn will depend on how quickly takeover bids come in.

All the matters that I have raised tie up. What was the point of the Committee laboriously and commendably establishing a delicate structure of checks and balances if with one telephone call and a pile of money someone could come in from the side and knock down the whole house of cards? That could happen.

I appeal to the Government to take a broad and cautious view. They should consider the matter in the round. I finish with one thought. However well the Government and the Minister do their jobs and however well the Committee has done its job, we are in new territory and there is a grave danger of a dilution of standards, whatever we do. We all know the reasons for that. I doubt whether the Minister of State goes along with some of the brassy talk about a new era in television. He is too intelligent a man to believe all that. Therefore, he must keep an eye all the time on every means of shoring up standards. That is why I agree with the new spirit of the Bill.

I hope that the Government will also have a moratorium on their more adventurous plans for the BBC. We need a moratorium for the BBC too. If the Government start talking about doing away with the licence system or changing the regime at the BBC in other fancy ways, they could set off that drift downwards of which we are already in danger because of the implications of modern technology. The Government should view the new clause in that broader way and take into account the implications for quality, remembering that quality has a great deal to do with stability, whether it is a moratorium on takeovers or the stability of the BBC.

Mr. Alick Buchanan-Smith (Kincardine and Deeside)

I strongly support the remarks of my hon. Friend the Member for Buckingham (Mr. Walden). We are dealing with something which is fundamental and which, if it goes wrong, will affect quality. In all my speeches in earlier debates on the White Paper I said that this is a matter of quality and that quality must be sustained and shored up at all stages. The new clause is fundamental in the sense that if a company that had won a franchise could be taken over by another company the whole process of granting that franchise would be negatived. All the standards that had been set could be put at naught. That is why this is such a fundamental matter. As my hon. Friend the Member for Tayside, North (Mr. Walker) rightly said, it is one that has particular regional implications because smaller companies are more likely to be subject to predators. Therefore, it is not just stability and maintenance of quality that matters, but the continuity of regional elements after the franchise has been granted.

8.30 pm

Whether the moratorium is one year or three years is a matter for debate. I would favour nearer three years because one year does not give time, after a new licence has been won, to achieve stability and continuity and, therefore, at least two years, preferably three, would be right. Let us never forget that not only quality would suffer, but so would the service given to a locality and the people who lived in it if there were uncertainty and the ownership of the station and the company were in doubt.

I speak for those who live in some of the regions of this country where the population is more scattered. We want continuity, quality and stability. I do not believe that the Bill gives that, so I strongly support the new clause.

Mr. Tony Banks

In his usual authoritative and perceptive way, the hon. Member for Buckingham (Mr. Walden) put his finger straight on it—because it is quality which is what a moratorium is there to protect. He was right in saying that in Committee the Minister of State did a good job. We said that ad nauseam. The number of times we were forced to compliment the Minister on his proposals became embarrassing. The Bill was eminently improvable and, unlike some of his harder, less cerebral, colleagues on the Front Bench—excluding the present Minister, of course—he showed himself to be both imaginative and understanding of what broadcasting was about and what was needed.

Although we have said that the Bill is still not the one that we would choose, it is certainly much better than the one that started out in Committee. I still feel that if the Tory Whips had allowed the hon. Member for Buckingham to sit on the Committee rather than deliberately excluding him, it might have been even better than it is now. The hon. Member was absolutely correct in what he said about the moratorium.

The Minister of State did a good job and we had the clear impression that his idea of heaven would be rushing from a Chelsea victory at Stamford Bridge to a Pavarotti concert. Certainly both subjects came up in Committee on a regular basis and perhaps his absence from the Dispatch Box at present means that Pavarotti is singing somewhere outside.

I find myself in the odd position of supporting the new clause moved by the hon. Member for Tayside, North (Mr. Walker). It is not an experience that I have had before and I doubt that I shall ever have it again. I know that the hon. Member spent more time talking about regional aspects, but the quality argument is essential. Although we have established a quality threshold, which was very much welcomed because there is not going to be a Dutch auction for new franchises, it is possible that the large players will stand back while the lesser bidders go in for much lower quality than the large bidders would have done if they had gone in during the original round. The franchise may be awarded on quality but, in relative terms, it will be of a lower standard than if the larger bidders had gone in. Once the franchise has been awarded, the big boys will come in immediately afterwards and snap up the new franchise holders. However, they would be coming in at a much lower quality level than they would have been forced to offer if they had entered into the original bidding. That is why the moratorium is absolutely essential.

The moratorium will protect the Government's own guarantee about the quality threshold. Therefore, the Government must accept the amendment or, if not this one, one of the others—because there is a range from which they can choose. There must be some sort of moratorium in the Bill or their arguments about a quality threshold will be set at naught, or at least seriously undermined.

The hon. Member for Caithness and Sutherland (Mr. Maclennan) said that George Russell—or St. George, as he began to be known in Committee—said that one year would do. I think that he is right, and that it could be that George Russell was exercising a degree of self-censorship and decided to opt for the lowest figure that he thought the Government were likely to accept.

If George Russell were given the chance to look at the matter objectively, he would be more likely to agree with the hon. Member for Tayside, North, as I would, than go for something less than three years. That would at least give the new franchise holder the chance to meet adequately the quality standards set in the original bid. If there are predators or potential predators they will have to come into the first process. There would not be much point in their standing back for three years because if the new franchise holders are successful it will be that much more difficult to take them over and, if the predators try to do so, the asking price will be that much higher.

Therefore, for all those reasons, but particularly because I want to protect the Government's acceptance that there should be a quality threshold, I shall support the proposal of the hon. Member for Tayside, North.

Sir Hector Monro (Dumfries)

There is a fair degree of unanimity in the House that the principle of the new clause is what hon. Members wish to see in the Bill. I dare say that, in his reply, my hon. and learned Friend the Minister will say that if he cannot accept one of the new clauses tonight the Bill may be changed in another place.

In declaring a small interest in a television company, I wish to say that this is a matter of standards, takeovers and uncertainty. As my right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith) said, why should we bother about the initial auction if a takeover would be almost inevitable a matter of months afterwards?

I am particularly interested in regional television and live in the Border Television area. While it is not afraid because it would not anticipate any takeover from Grampian Television or Scottish Television, it would certainly he worried about large companies in the south. The balance of programmes is important in regional stations, particularly in areas such as Border, which has to balance the Scottish and English content because it serves both sides of the border and the Isle of Man. Its experience of programme content is very valuable and cannot be lightly thrown away or overtaken by events such as a takeover by a major company in the south.

Therefore, it is important, and reflects the tenor of the debate, that we should work towards a moratorium of at least three years. As my hon. Friend the Member for Buckingham (Mr. Walden) said, in the first year everyone will be settling down and nobody will be clear about the way forward. I should have thought that three years was the very least period in which a company could prepare and run its programmes effectively. It should do it for that period without the worry of a predator breathing down its neck. It should not have to spend more time fighting off a takeover than providing the programmes everybody wants.

We should support the new clause of my hon. Friend the Member for Tayside, North and ask the Minister to consider it carefully. We are all speaking with a degree of experience. I should have thought that the House would accept that the period of two or perhaps three years—which I support—should be the period after which a takeover was permitted.

Mr. Bob Cryer (Bradford, South)

I support the new clause moved by the hon. Member for Tayside, North (Mr. Walker). May I point out that there is a range of options? I support a three-year moratorium after the bid has been decided, so as to give some certainty and to encourage television companies to invest in quality production. It costs much money to make television programmes and films. If there is any hesitation, investment will be delayed.

The cost of bidding will be expensive. Much paperwork will be involved. People will have to prepare the bid and provide the documentation set out in clause 17. They may want to take advantage of clause 17(3), which refers to exceptional circumstances, and concentrate on the quality threshold which they feel that they can surmount better than other companies. It may be expensive to set out for the ITC, and subsequently for the Minister, the documentation, including perhaps examples of programes, to show that clause 17(3) can be used. Expenditure of several thousand pounds may be incurred.

I raised the question in Committee because trade union negotiators have been told bluntly that various television companies have been building up war chests so that, when the Bill becomes law, they can make a bid to capture the franchise. The Minister said that he would relax the provisions on the performance bond so that large amounts were not tied up in bidding and in the effective enforcement of the bid thereafter.

If there is no moratorium, a company, having built up money in the war chest to succeed in the bid, and having succeeded, is likely to retain funds to fend off any predatory bid which may be in the offing. Without a moratorium, funds will be put into defending the company rather than into the production of television. Without a moratorium, viewers will be denied decent quality programmes while a board room battle is fought. We know that board room battles over prominent, so-called prestige companies are often extremely expensive, with both sides inserting newspaper advertisements and employing public relations firms. Sometimes there are investigations into the circumstances in which bids and counter bids are made.

Having won the franchise, a company will want to fight off any predatory bid and will campaign accordingly. That means that it will need much money. It is absurd for the House to pass legislation setting out a fairly complicated and expensive procedure, and then for the Minister to be embroiled in an argument, best summarised by the hon. Member for Buckingham (Mr. Walden) when he spoke on Second Reading, about maintaining the quality of programming. We should relish what he said about the Bill meaning that the Government like trash, that they believe the people like trash and that they would give them trash. We must give all credit to the Minister; in Committee he gave the impression of complete disdain for trash. In exchanges, he was sympathetic to the need for quality to be taken into account as a factor in the "exceptional circumstances" clause 17(3).

Having gone through the battle and having won recognition from the Government that quality is an important component and that there are grave dangers in legislating sloppily—with money counting and quality being pushed to one side—it would be absurd to allow the removal of a moratorium. If there is no moratorium, there will be a drain of funds from the picture on the television screen. That is where we want the money to be spent. That is the basic purpose of a television franchise. That is what a television company is dedicated to and what it will be telling the ITC and the Minister that it can do best.

8.45 pm

We are not ruling out the possibility of competition, but the marketplace will not provide the quality that is necessary. A company cannot invest millions of pounds in quality television programmes if it is apprehensive about whether it will get any transmission at the end of the production period. A company has to invest over 12, or even 18, months to plan, produce and make ready for transmission serious programmes of reasonable quality. A successful bidder must be given a guarantee that he can carry out his commitment free from the worry and anxiety of predatory bids for a period of three years.

In Committee, everyone agreed that a range of talents goes into the production of a television programme. The HTV studios in Cardiff and Bristol are making 112 employees of all grades redundant next Monday because of the war chest syndrome of building up funds. All those people want to make television programmes, but they will be denied the opportunity because of the circumstances being imposed on them by HTV management. It will be a grim development if talented and able people, with skills in writing, acting, editing, photography, set building and so forth, are denied the opportunity to use their skills because bidding is placed in jeopardy by the possibility of predatory bidding.

I hope, therefore, that the Minister will take notice of the representations from both sides of the Chamber which would ensure continuity, commitment and decent television programmes.

Mr. Anthony Steen (South Hams)

I associate myself with the splendid new clause proposed by my hon. Friend the Member for Tayside, North (Mr. Walker) and also with the remarks of my hon. Friends and of Opposition Members. I wish to speak particularly to amendments Nos 484 and 483.

I presume that the whole idea of the Bill is to get some money into the Treasury and at the same time to get high quality programmes for the consumer. Let us assume, for the sake of argument, that a low bid of £50 million was accepted because no other bidders came forward. Let us assume that a group of people got together as a consortium in the Channel Islands, and that, as the successful licensee was about to buy a bottle of champagne at the bar, the consortium made a hostile bid of £150 million. I cannot believe that the Treasury would be pleased if it had to forgo about £100 million because the Bill allowed that sort of thing to happen—and it would happen if there was no moratium on hostile bids. I have an interest in Television South West, which has a fine reputation for quality programmes. It is worried that there will be only one bid and that a consortium, rather like the ring in the antique market, will get together and bid it out of business, and that the shareholders will feel obliged to accept.

Mr. Tony Banks

That is precisely my fear, but I suppose that there is another scenario. It is that the franchise holder who is doing the bidding might be not the nominee but the front man for someone who comes in a little later. In other words, the company that gets the franchise would quickly pass it on to the company that it knows is waiting. It would be not a predatory but a collusive hid, and it would enable the original franchise holder to get the licence slightly cheaper than he would otherwise have done.

Mr. Steen

There are endless combinations of what could happen. That shows that, without a moratorium, many nasty things could happen that would not be good for the Government or for the principle behind the Bill which has been accepted by most of us. The Minister of State has persuaded even those who have doubts that it is the best thing since sliced bread. He would have persuaded us even more if he had got the moratorium matter right.

I shall now deal with the logistics; I am sure that the Minister will correct me if I get them wrong. As I understand the timetable, the new franchises will be awarded in the summer of 1991, although we do not have the exact date. The old franchise will not end until December 1992. There is an 18-month overlap and, as things stand, if the existing television company does not win the licence, it will have to continue for 18 months while the new television company is waiting in the wings doing its bit to undermine confidence. How will that system work, with the old television company winding down over 18 months and the new one waiting in the wings?

If the Minister accepted a moratorium of three years, he would have 18 months from the summer of 1991 until December 1992, and once the licence had been granted, at least the successful television company would have another 18 months to do the job without fearing that it would be at risk from any hostile bid. That would give shareholders a chance to evaluate the effectiveness of the company and whether it was putting into practice the quality programmes that it told the ITC it would produce.

The Minister has given much to the Bill, and has made it a great deal better than when it started in Committee. His acceptance of the modest amendment tabled by me and my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) or some of the other amendments could make it even better. That is what is required. Our amendment is a modest alteration, aimed not at crippling market forces but at giving a little leeway, so that those forces can work in the most effective way for the benefit of the consumer rather than just for the benefit of financiers.

I am sure that the Government would not wish the Treasury to lose money if there was some sort of argy-bargy. I join my hon. Friends and Opposition Members in urging the Government to make some friendly noise which would show us that they feel that something needs to be done. The points made are neither frivolous nor vexatious. They touch on serious matters and were raised by people who are anxious about the future of the franchises.

Mr. John Greenway

This is one of the most important new clauses that we shall debate. I am sad that my hon. Friend the Member for Buckingham (Mr. Walden) was not with us in Committee because his speech demonstrated eloquence and a workmanlike approach. I shall not try to copy that eloquence because I could not.

We considered many amendments in Committee and have still to deal with some important new clauses and amendments. They try to address two issues which are related but quite distinct. First, there is the question of continuity of licence applications. It has not been said so far in this brief debate that clause 3 as drafted requires the ITC to give consent to a transfer. Amendment No. 229 relates to television and amendment No. 418 relates to radio, and we must not forget the importance of the bidding process for radio. Those two Government amendments are welcome because they strengthen the Bill's provisions about licence obligations being put into any new arrangement about transfer or takeover.

Secondly, there is the added issue of the threat to the allocation process for licences. The debate has sought to address that issue, especially in relation to Channel 3 licences. There was much debate in Committee on a key issue that has gained most attention outside the House —the allocation process, especially in relation to the need to strengthen quality. Quality has been strengthened and as the House debates other amendments hon. Members will see the extent to which that has been done. That is to the credit of my hon. and learned Friend the Minister of State because he has responded to representations about quality. That has created an incentive for bidders to drive up quality through the bidding process. It is crucial that that quality is not undermined by prospective broadcasters sitting out the first round—the bidding process—and then getting their sums right through an immediate takeover.

There has been much debate about whether the moratorium on takeovers should be for a year, two years, three years or some other time. It is crucial that a prospective broadcaster should understand that the only immediate means of obtaining a licence is through the bidding process. That is the issue that we must agree, and that is why there is a strong case for a limited moratorium. My hon. Friend the Member for South Hams (Mr. Steen) pointed out that the allocation process was likely to be completed at least a year or 18 months before the operation of the new licences. New clause 34, which is in the name of my hon. Friend the Member for South Hams and which I support, was proposed by the Independent Television Companies Association Ltd. It proposes a moratorium for the period up to the operation of the new licences, and then for 12 months. I was encouraged by my hon. and learned Friend the Minister's comment, in an earlier intervention, that that is also the view of George Russell and of the Independent Broadcasting Authority.

It is crucial that potential broadcasters who wish to obtain a television franchise can only obtain a licence immediately—the same would apply to the new independent radio stations—by winning the franchise allocation. Otherwise, there is a threat that all the good work done in Committee to strengthen the bidding process and to drive up quality will be undermined. A moratorium and takeovers of a limited nature could be the way to resolve that problem.

9 pm

Sir Giles Shaw

My hon. and learned Friend the Minister of State must regard himself as being in a difficult position. He has seen so many changes to the Bill in Committee as he has gradually moved from the first flamboyant gesture of an open-ended option for franchise. However, he should not be too discouraged if the idea of a moratorium is raised now, as it is consistent with the Government's present position.

A new television structure would be fragile. There can be no doubt that the market in 1991–94 will be intensely more competitive for media operations. Channel 4 is already coming on hot and strong, and Channel 5 is due shortly. There will be easy money to be made by companies that succeed in the auctioning process.

There will be real difficulties in the competition for the quality that every hon. Member wishes to see. The competition between those that provide the money for the programme makers will be severe. The scale of commitment of a successful bidder will be greater than that of previous franchise holders, who were in a cosy, semi-monopolistic world—although they had severe difficulties in establishing their regional networks.

The Bill contains various ways to protect the system, with references to small stations, large stations and the cross-ownership of media investments. I dislike media investment in television companies; I think that they should attempt to restrict themselves to obtaining new capital, and not second-guess other media owners. There will be a great deal of cross-fertilisation between companies.

The auction system will provide a series of under-bidders, who believe that they have as much right as anyone else to acquire a franchise. There will be a natural interest in attempting to make an abortive bid more successful. That is endemic to the auction process, and legitimately gives rise to the moratorium procedure.

I remind the House that it is not the under-bidder from the United Kingdom about whom we should be concerned; it will be various EEC bids that can be easily funded to provide a broader interest in how United Kingdom franchises will be awarded. Those EEC organisations have a great deal of experience, and have been acquiring United Kingdom companies for some time —not excluding the water companies—and they will be searching for ways to get in on the act.

My hon. and learned Friend the Minister should accept the principle of a moratorium. The scale of it is, I suspect, a matter of fine judgment. After all, it will be rough if the new company produces but one year's profit and then becomes vulnerable. It is the product—whether it is a good piece of television or a prize-winning exhibit—that those organisations will be looking to buy. The asset of a television company is not just the franchise on the region; it is the selling capacity of the creative minds in that company that provide programmes to be sold abroad that provide profitable investments. That too will have to be considered.

The one year suggested by the chairman of the ITC may not be long enough to protect the fragility of the system but, when all is said and done, I am sure that the moratorium will be consistent with what has gone before. But it must be interpreted with great care because it must protect a system which ultimately has to gain enough strength to stand on its own feet.

Mr. Corbett

There was such a moment as this, as the Minister and other members of the Committee will recall, on 25 January, the night of the great storm. The thunderbolts were clattering against the roof when we had a debate on religious broadcasting and the wisdom of requiring Channel 3 licensees to carry some religious programmes—in other words, to retain the "must carry" rule on religious programmes. The Minister listened to all of us, as he has tonight, and not only did he say that he accepted the sense of the Committee on religious programmes but, almost without being asked, children's programmes as well.

There was another such night when, after a long and enjoyable debate on the exceptional circumstances clause, after unanimity on both sides, the Minister left us with the thought that he would act as the Committee's messenger and talk to others with fingers in that particular pie to see whether changes should be made. We shall come to those changes later.

Not one hon. Member who has spoken in the debate on the moratorium has spoken against it. The principle is agreed on both sides. Even that nice Mr. Russell wants it, let alone others. The only arguement between us is from when it should date. The amendment in the name of my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and others pins that down to 31 December 1995 to allow two years from when the first programmes were shown. We thought that there was some sense in allowing the programmes to be seen. Nobody will argue about whether that period should date from when the licences are awarded by the ITC or from when the programmes begin. An interesting point was made about the 18 months' spill-over period.

I always find it uncomfortable to get tangled up with market forces, but I shall allow it to this extent. It is difficult to say what the balance sheet of a company which is awarded the licence, hopefully by the summer of next year, will show before it has a single programme on the air. It will have earned no revenue from its programmes. It may be that, as part of the process of getting its programmes together, it will be offering to make programmes for Channel 4, BSB or whoever wants to buy them, but I cannot think that that would be a serious proposition.

I do not want to labour the point, but, as the IBA has argued, it makes no sense, having gone through all the paraphernalia of the so-called quality test to check on the safety of the money and the suitability of the people behind it, when the amount of money, the sealed envelope stuff, can be counted at the same time as the quality yardsticks are being assessed—a laborious process and expensive for those who bid—if within 24 hours of all that happening and that nice Mr. Russell and his friends saying, "Okay, you have got it" it is possible for someone to make a bid for that company.

However, I believe that such a thing is unlikely to happen. My own guess is that those who aspire to take a share in an expanded British broadcasting system are as likely as not to be trying to buy their way in to the present set-up. We know that one of the big television contractors has two rather large blocks of shares for sale. I believe, as someone who does not deal with such matters every day of the week, that it is more likely that those who aspire to a share would consider it more sensible to buy in to a company which they are advised—and there are many people in the City willing to give such advice—is likely to stand a good chance of bidding successfully for the new Channel 3 licence.

To concede the principle of a one-year moratorium from the date the licence is awarded will not cost the Government anything. I agree with Conservative Members who made the point that to do so would not be tampering with the doctrine of market forces. The Minister made it clear in Committee that this is the only time that the ITC will observe such an elaborate procedure, and that once the initial round of awarding licences is over thenceforth everything will be done via the stock exchange, by takeover. It is true that in those circumstances, whether the takeover is friendly or hostile, at the end of the day the ITC will have to approve those who seek to acquire the licence and, in the hon. and learned Gentleman's words, stand in the shoes of those to whom it was originally awarded.

Given the one-off nature of the ITC's initial task, how much more important it is that the applicants who are required to observe that process are given a degree of initial protection so that they can show how well they can live up to the programme and financing promises that persuaded the Commission to award the licence. The logic of that argument stands supreme. No one can lose from such an arrangement. The Government cannot lose in terms of their aspirations, and nor can the ITC. The companies which make successful bids neither gain nor lose, but in the critical early period between the award of the licences and the programmes going on screen there will be a measure of protection.

That is important not only for the companies, but, more significantly, for the viewer. The Minister and his colleagues have spoken of the need for stability in the system, arguing that no one wants to see violent changes in what is shown on our television screens. If there is no moratorium, there is at least a risk of the transition being more difficult to achieve.

I hope that the Minister will say that, on the back of the unanimous view expressed in this debate, he will at least reconsider. I suggest that he must go further, for there is a real wish for a moratorium. The bottom line is a one-year moratorium, though I have made it perfectly clear that I would like it to be for a much longer period. Nevertheless, we could all settle on a one-year moratorium.

Unless the hon. Member for Tayside, North (Mr. Walker) can secure a commitment with a period tied to it, I urge him to press his new clause to a Division. To do so would not be for the purpose of humiliating the Minister, who knows that neither I nor my right hon. and hon. Friends seek to do that, any more than do his own right hon. and hon. Friends. Instead, such an expression of the views of the House will give him an added argument when he consults the Home Secretary and other ministerial colleagues. I understand that in the Government today it is all a matter of listening and responding, at least in respect of other matters, so why should the same not apply to the issue now before us? It would be right to indicate before the proceedings are over that such was the eloquence of Conservative Back Benchers and the Opposition on the issue that the Minister felt it would be right to table the proposed amendment in another place. He will know, without my saying it, that if he does not say that, it will happen anyway when another place considers the Bill.

9.15 pm
Mr. Mellor

The hon. Gentleman has laid an appealing prospect before me. I am glad that we have a cameo appearance from the right hon. Member for Manchester, Gorton (Mr. Kaufman), who, as a brief relaxation from foreign affairs, has resumed his interest in the Home Office —and I do not say that churlishly, as he is most welcome here.

I commend the two Government amendments in the group. Amendment 229 deals with an issue raised in Committee—it will require the ITC to satisfy itself that the requirements of the licence would be upheld throughout the reporting period before giving consent to a transfer of the licence. Strictly speaking, the amendments are necessary because ITC consent is already required, but I gave an undertaking that we would etch that more deeply into the Bill, and that is what we have done. Amendment No. 418 makes the same arrangements for the Radio Authority.

Turning to the substance of this matter, obviously I listened with care to large parts of the debate, and my hon. Friend the Member for Fareham (Mr. Lloyd) reported to me on those speeches that, sadly, I missed while taking a short break. I am aware that all hon. Members who have spoken favour a moratorium; that point is not lost on me. However, the other side of the case should not go by default, and I shall briefly outline it.

The ITV network has in the past been protected from takeovers. It is not clear whether that has been of benefit to ITV or whether some of the complacent and inward-looking characteristics of the system—for in—stance, its inability until recent times to come to terms with some of the changes in industrial relations, and some practices that are common outside—owe a great deal to the protectionist environment within which it has been able to operate.

It is interesting that the IBA has announced its intention to permit takeovers of existing companies. We know that leading shareholders of one of the biggest companies are looking for an opportunity to sell. It is likely that takeovers of existing franchise holders will be permitted from the time that the Bill gets Royal Assent. The issue we must consider is whether we should have a stop-go cycle and whether, having allowed takeovers, we should enter a period of moratorium and, if so, whether it should be for one, two or three years.

If—it is quite a large if—my colleagues felt there were any attractions in a moratorium, with respect to the House, I do not imagine that they would want to go further than the period suggested by the IBA, which was 12 months. To be frank, it is higly questionable whether they would want to go that far. The whole issue turns on an evalution of some of the key points.

Hon. Members have expressed the fear that the consequence of allowing takeovers would be that new owners of companies could get around obligations entered into by their predecessors. That will not be possible under the terms of the Bill—first, because the ITC will have to give its consent to a transfer of the franchise. If it deems that the new owners are not fit and proper persons, or are otherwise unsuitable, it will be able to rule them out of court. Nothing could be more pointless than a successful takeover of a franchise which was then whipped away by the regulatory body.

Mr. Walden

I understand the logic of my right hon. and learned Friend's point and it looks fairly convincing on paper. He made the same case at the forum that discussed the matter. However, the ITC will also be a new body exploring uncharted territory. It will have to make an essentially subjective judgment in awarding the franchise. It will then have to make a second subjective judgment about how well the franchise holder is carrying out the franchise and a third subjective judgment about how likely those who take over are to implement that franchise at second hand. So we are dealing with three levels of subjectivity. My fear is that in quality terms they will lead inevitably in one direction and it will not be upwards.

Mr. Mellor

I expect that the ITC will have already sharpened its skills by failing a number of applicants on the quality threshold. It will simply be asked to bring to bear the same thinking.

The hon. Member for Birmingham, Erdington (Mr. Corbett) reminded us that the new purchaser of the franchise stands in the shoes of his predecessor and will be held to all the obligations that his predecessor entered into, with all the new array of powers which the ITC has, and which the IBA does not have, to enforce those franchise arrangements. Those are real safeguards.

Some are concerned that the effect of a takeover bid would be to weaken the ability of a company to carry out its programming commitments, because time and energy would be devoted to resisting the takeover. I am not saying that there are any absolute truths in the matter; I respect many of those who made that point, and I do not reject that argument out of hand, but in most sophisticated, well-structured companies there are those who are charged with the responsibility of programme making and planning and there are those who are responsible for the overall management issues. That is a separate function.

We have to be careful not to exaggerate and over-emphasise the problems of takeovers, which, after all, are part and parcel of every other part of the free enterprise system in Britain. We should be careful not to engage in too much special pleading on behalf of the broadcasting industry which is just one part of what we hope will be an increasingly competitive sector.

Several Hon. Members


Mr. Mellor

I did not expect that argument to find much appeal among Opposition Members, and I have not been disappointed. I give way to my fellow Chelsea supporter.

Mr. Tony Banks

It is not a question of that argument not finding much favour among the Opposition; it does not find very much favour among Conservative Members either. Surely the Minister must be impressed by the fact that some hard-nosed free marketeers are sitting behind him—the hon. Member for Tayside, North (Mr. Walker) being the classic example, and the man who moved the new clause seeking the longest moratorium—and not one single voice save his own has been raised against the idea of a moratorium. Surely, if the will of the House means anything to him, he must give us some moratorium.

Mr. Mellor

I am not honour-bound to provide a balance by having a little squeak on the other side of the case. I certainly understand that some of those who have spoken would give relatively short shrift to the argument that I advance, but I must bear that with fortitude.

Mr. Cryer

It is precisely because we know about the free market system that hon. Members on both sides of the House have presented that argument. The Minister has not addressed a matter which has been raised repeatedly: what will be the position if a successful television bidder decides —as they will be perfectly entitled to do—to resist a predatory takeover, when to do so would necessitate spending a great deal of money? Would that not be perforce at the expense of the quality of television, and should not the moratorium be given to enable franchise holders to demonstrate the promises that they made in their original submissions?

Mr. Mellor

The hon. Gentleman seemed to recognise that the arguments are tending to be against takeovers generally. If they were accepted, they would be valid whether there were to be a moratorium period or not. They go to the root of the question whether there should be takeovers. The present ITV set-up does not make a very compelling test-bed for the proposition that a competitive, free enterprise community operates better when freed from the rigours of takeovers.

As I said in Committee, a number of observers of the broadcasting scene who are certainly not active supporters of my side of the political debate have long asserted that what has been needed to pep up the system is the ability for there to be takeovers and that many of the rest of our proposals would not be needed if we permitted that to happen. Obviously, the question of takeovers is part and parcel of the way in which a new dynamic is introduced into companies and into industries. Many sectors of the economy have greatly benefited from that.

Mr. Chris Mullin (Sunderland, South)


Mr. Mellor

I am glad to know that the hon. Gentleman has views on issues other than the one on which he and I usually talk, so I shall give way to him.

Mr. Mullin

Is the Minister aware that no hon. Member from any party has spoken against the principle of takeovers this evening? We are talking merely about a moratorium. Will the hon. and learned Gentleman address that issue and not get carried away down side alleys about the principle of takeovers?

Mr. Mellor

I have to dismiss that as a somewhat churlish intervention. If some of the arguments allegedly in support of a temporary cessation appear to go to the question whether there should be takeovers as such, I am perfectly entitled to point that out. The point has been registered, and it will be there for all to read that the wide range of hon. Members who chose to participate in the debate—some have great experience in these matters—all spoke in favour of the moratorium.

Mr. Maclennan


Mr. Mellor

I am just drawing towards a happy—well, perhaps not a terribly happy—conclusion. However, I shall give way to the hon. Gentleman who will, no doubt, drive me back to where I was before.

Mr. Maclennan

That has sometimes done the Minister good. However, I wanted to remind him of an earlier Home Office experience. There was a debate in the Chamber on another Bill about a proposal to curtail the rights of juries in serious fraud cases. On that occasion, the Home Office Minister heard, as the hon. and learned Gentleman has heard tonight, 11 voices speaking against the Government's proposal. The Minister gave the undertaking that he would consider the fact that there was unanimity of view, and very properly accepted the view of Parliament. When there has been unanimity of view from such an enormously wide spectrum of opinion, the least the Minister can do is not to set his face against what has been proposed. Perhaps that does bring him back to where he was.

Mr. Mellor

The hon. Gentleman has said in his own words what I was about to say in mine. I will not be deflected from doing so just because of his intervention. I have no remit to change this part of the Government's thinking tonight, and I do not say that this part of the Government's thinking will be changed. I will certainly ensure——

Mr. Tony Banks

Ask the gaffer.

Mr. Mellor

The hon. Gentleman is not in the Shed now; he should contain himself.

Mr. Banks

The directors' box.

Mr. Mellor

I keep an eye on him from the directors' box. Several hon. Members, many of them of considerable experience, have spoken this evening and all have spoken in one direction. I shall certainly acquaint my colleagues with that fact, and if they wish to use it to stimulate some further thinking, so be it. I am not guaranteeing that that will be the outcome, but I was invited to convey a further message and I am probably duty-bound to do so in this instance.

9.30 pm
Mr. Bill Walker

I do not think that in all my years in the House I have ever been described as a protectionist of any kind; no one can suggest that my free market credentials have ever been in doubt. I did not table the new clause frivolously. I believe that television, the most potent communicating force known to man, is not something for which we should legislate lightly. Instead, we should consider the matter in great depth.

The remarks of my hon. and learned Friend the Minister were constructive. Although he did not go as far as my hon. Friends and I would have liked, if he and the Government say that they are prepared to consider the matter again, I accept that assurance.

I beg to ask leave to withdraw the motion.

Hon. Members


Question put, That the clause be read a Second time:—

The House divided: Ayes 170, Noes 262.

Division No. 194] [9.30 pm
Abbott, Ms Diane Barnes, Harry (Derbyshire NE)
Allen, Graham Barnes, Mrs Rosie (Greenwich)
Anderson, Donald Barron, Kevin
Archer, Rt Hon Peter Battle, John
Armstrong, Hilary Beckett, Margaret
Ashton, Joe Beith, A. J.
Banks, Tony (Newham NW) Benn, Rt Hon Tony
Bennett, A. F. (D'nt'n & R'dish) Lofthouse, Geoffrey
Bermingham, Gerald McAllion, John
Bidwell, Sydney McAvoy, Thomas
Blunkett, David Macdonald, Calum A.
Boateng, Paul McFall, John
Boyes, Roland McKay, Allen (Barnsley West)
Brown, Gordon (D'mline E) McKelvey, William
Brown, Nicholas (Newcastle E) McLeish, Henry
Bruce, Malcolm (Gordon) Maclennan, Robert
Buchan, Norman McWilliam, John
Buckley, George J. Madden, Max
Caborn, Richard Mahon, Mrs Alice
Callaghan, Jim Marek, Dr John
Campbell, Menzies (Fife NE) Marshall, David (Shettleston)
Campbell-Savours, D. N. Martlew, Eric
Canavan, Dennis Maxton, John
Carlile, Alex (Mont'g) Meale, Alan
Clarke, Tom (Monklands W) Michael, Alun
Clelland, David Michie, Bill (Sheffield Heeley)
Clwyd, Mrs Ann Michie, Mrs Ray (Arg'I & Bute)
Corbett, Robin Mitchell, Austin (G't Grimsby)
Corbyn, Jeremy Molyneaux, Rt Hon James
Critchley, Julian Moonie, Dr Lewis
Crowther, Stan Morgan, Rhodri
Cryer, Bob Morley, Elliot
Cunliffe, Lawrence Morris, Rt Hon A. (W'shawe)
Dalyell, Tam Morris, Rt Hon J. (Aberavon)
Darling, Alistair Mowlam, Marjorie
Davis, Terry (B'ham Hodge H'I) Mullin, Chris
Dewar, Donald Murphy, Paul
Dixon, Don Nellist, Dave
Doran, Frank Oakes, Rt Hon Gordon
Duffy, A. E. P. O'Brien, William
Dunnachie, Jimmy Orme, Rt Hon Stanley
Dunwoody, Hon Mrs Gwyneth Paisley, Rev Ian
Eadie, Alexander Patchett, Terry
Eastham, Ken Pendry, Tom
Ewing, Mrs Margaret (Moray) Pike, Peter L.
Fearn, Ronald Powell, Ray (Ogmore)
Fisher, Mark Prescott, John
Flannery, Martin Primarolo, Dawn
Flynn, Paul Rees, Rt Hon Merlyn
Forsythe, Clifford (Antrim S) Reid, Dr John
Foster, Derek Richardson, Jo
Foulkes, George Robertson, George
Fraser, John Rogers, Allan
Fyfe, Maria Rooker, Jeff
Galloway, George Ross, Ernie (Dundee W)
George, Bruce Rowlands, Ted
Gilbert, Rt Hon Dr John Sedgemore, Brian
Golding, Mrs Llin Sheerman, Barry
Gordon, Mildred Sheldon, Rt Hon Robert
Grant, Bernie (Tottenham) Skinner, Dennis
Griffiths, Nigel (Edinburgh S) Smith, C. (Isl'ton & F'bury)
Griffiths, Win (Bridgend) Smyth, Rev Martin (Belfast S)
Grocott, Bruce Soley, Clive
Heal, Mrs Sylvia Spearing, Nigel
Hinchliffe, David Steinberg, Gerry
Hogg, N. (C'nauld & Kilsyth) Strang, Gavin
Home Robertson, John Taylor, Mrs Ann (Dewsbury)
Hood, Jimmy Turner, Dennis
Howells, Geraint Vaz, Keith
Howells, Dr. Kim (Pontypridd) Walden, George
Hoyle, Doug Walker, A. Cecil (Belfast N)
Hughes, John (Coventry NE) Wallace, James
Hughes, Roy (Newport E) Walley, Joan
Hughes, Simon (Southwark) Wardell, Gareth (Gower)
Illsley, Eric Watson, Mike (Glasgow, C)
Ingram, Adam Welsh, Michael (Doncaster N)
Janner, Greville Williams, Rt Hon Alan
Kaufman, Rt Hon Gerald Williams, Alan W. (Carm'then)
Kennedy, Charles Winnick, David
Kilfedder, James Wise, Mrs Audrey
Kinnock, Rt Hon Neil Worthington, Tony
Kirkwood, Archy Wray, Jimmy
Leadbitter, Ted Young, David (Bolton SE)
Leighton, Ron
Lestor, Joan (Eccles) Tellers for the Ayes:
Lewis, Terry Mr. Frank Haynes and
Lloyd, Tony (Stretford) Mr. Martyn Jones.
Aitken, Jonathan French, Douglas
Alexander, Richard Fry, Peter
Alison, Rt Hon Michael Gale, Roger
Allason, Rupert Gardiner, George
Amess, David Garel-Jones, Tristan
Amos, Alan Gill, Christopher
Arbuthnot, James Glyn, Dr Sir Alan
Ashby, David Goodhart, Sir Philip
Aspinwall, Jack Goodson-Wickes, Dr Charles
Atkins, Robert Gorman, Mrs Teresa
Baker, Rt Hon K. (Mole Valley) Gorst, John
Baldry, Tony Gow, Ian
Banks, Robert (Harrogate) Grant, Sir Anthony (CambsSW)
Batiste, Spencer Greenway, Harry (Ealing N)
Beaumont-Dark, Anthony Gregory, Conal
Bendall, Vivian Griffiths, Peter (Portsmouth N)
Bennett, Nicholas (Pembroke) Grist, Ian
Benyon, W. Ground, Patrick
Bevan, David Gilroy Hague, William
Blaker, Rt Hon Sir Peter Hamilton, Hon Archie (Epsom)
Bonsor, Sir Nicholas Hamilton, Neil (Tatton)
Boswell, Tim Hampson, Dr Keith
Bottomley, Peter Hanley, Jeremy
Bowden, Gerald (Dulwich) Hannam, John
Bowis, John Hargreaves, A. (B'ham H'Il Gr')
Boyson, Rt Hon Dr Sir Rhodes Hargreaves, Ken (Hyndburn)
Braine, Rt Hon Sir Bernard Harris, David
Brandon-Bravo, Martin Haselhurst, Alan
Brazier, Julian Hawkins, Christopher
Bright, Graham Hayes, Jerry
Brown, Michael (Brigg & Cl't's) Hayhoe, Rt Hon Sir Barney
Browne, John (Winchester) Hayward, Robert
Bruce, Ian (Dorset South) Heathcoat-Amory, David
Buck, Sir Antony Hicks, Mrs Maureen (Wolv' NE)
Budgen, Nicholas Hicks, Robert (Cornwall SE)
Burt, Alistair Higgins, Rt Hon Terence L.
Butler, Chris Hind, Kenneth
Butterfill, John Hogg, Hon Douglas (Gr'th'm)
Carlisle, John, (Luton N) Holt, Richard
Carlisle, Kenneth (Lincoln) Howard, Rt Hon Michael
Carrington, Matthew Howarth, Alan (Strat'd-on-A)
Carttiss, Michael Howarth, G. (Cannock & B 'wd)
Cash, William Hughes, Robert G. (Harrow W)
Chalker, Rt Hon Mrs Lynda Hunt, David (Wirral W)
Channon, Rt Hon Paul Hunter, Andrew
Chapman, Sydney Hurd, Rt Hon Douglas
Chope, Christopher Irvine, Michael
Churchill, Mr Irving, Sir Charles
Clark, Dr Michael (Flochford) Jack, Michael
Clark, Sir W. (Croydon S) Jackson, Robert
Clarke, Rt Hon K. (Rushcliffe) Janman, Tim
Colvin, Michael Johnson Smith, Sir Geoffrey
Conway, Derek Jones, Gwilym (Cardiff N)
Coombs, Anthony (Wyre F'rest) Jones, Robert B (Herts W)
Coombs, Simon (Swindon) Jopling, Rt Hon Michael
Couchman, James Key, Robert
Cran, James King, Roger (B'ham N'thfield)
Currie, Mrs Edwina Kirkhope, Timothy
Davies, Q. (Stamf'd & Spald'g) Knapman, Roger
Davis, David (Boothferry) Knight, Greg (Derby North)
Day, Stephen Knight, Dame Jill (Edgbaston)
Devlin, Tim Knowles, Michael
Dorrell, Stephen Lamond, James
Douglas-Hamilton, Lord James Latham, Michael
Dover, Den Lawrence, Ivan
Dunn, Bob Lee, John (Pendle)
Eggar, Tim Leigh, Edward (Gainsbor'gh)
Evans, David (Welwyn Hatf'd) Lester, Jim (Broxtowe)
Evennett, David Lightbown, David
Favell, Tony Lilley, Peter
Field, Barry (Isle of Wight) Lloyd, Sir Ian (Havant)
Fishburn, John Dudley Lloyd, Peter (Fareham)
Fookes, Dame Janet Luce, Rt Hon Richard
Forman, Nigel Lyell, Rt Hon Sir Nicholas
Forth, Eric McCrindle, Robert
Fowler, Rt Hon Sir Norman Macfarlane, Sir Neil
Fox, Sir Marcus MacGregor, Rt Hon John
Franks, Cecil MacKay, Andrew (E Berkshire)
Freeman, Roger Maclean, David
McNair-Wilson, Sir Michael Shepherd, Richard (Aldridge)
McNair-Wilson, Sir Patrick Shersby, Michael
Madel, David Sims, Roger
Malins, Humfrey Skeet, Sir Trevor
Mans, Keith Smith, Tim (Beaconsfield)
Maples, John Spicer, Sir Jim (Dorset W)
Marlow, Tony Spicer, Michael (S Worcs)
Marshall, John (Hendon S) Squire, Robin
Marshall, Michael (Arundel) Stanbrook, Ivor
Martin, David (Portsmouth S) Stern, Michael
Mellor, David Stevens, Lewis
Meyer, Sir Anthony Stewart, Allan (Eastwood)
Miller, Sir Hal Stewart, Andy (Sherwood)
Mills, Iain Stewart, Rt Hon Ian (Herts N)
Miscampbell, Norman Stradling Thomas, Sir John
Mitchell, Andrew (Gedling) Sumberg, David
Mitchell, Sir David Tapsell, Sir Peter
Moate, Roger Taylor, Ian (Esher)
Montgomery, Sir Fergus Taylor, John M (Solihull)
Morrison, Sir Charles Tebbit, Rt Hon Norman
Moss, Malcolm Temple-Morris, Peter
Mudd, David Thompson, D. (Calder Valley)
Neale, Gerrard Thompson, Patrick (Norwich N)
Nelson, Anthony Thorne, Neil
Neubert, Michael Thurnham, Peter
Newton, Rt Hon Tony Townend, John (Bridlington)
Nicholls, Patrick Townsend, Cyril D. (B'heath)
Nicholson, David (Taunton) Tracey, Richard
Oppenheim, Phillip Tredinnick, David
Page, Richard Trippier, David
Paice, James Trotter, Neville
Patnick, Irvine Twinn, Dr Ian
Pattie, Rt Hon Sir Geoffrey Vaughan, Sir Gerard
Pawsey, James Viggers, Peter
Porter, Barry (Wirral S) Waddington, Rt Hon David
Porter, David (Waveney) Waller, Gary
Price, Sir David Wardle, Charles (Bexhill)
Raison, Rt Hon Timothy Warren, Kenneth
Redwood, John Watts, John
Renton, Rt Hon Tim Wells, Bowen
Rhodes James, Robert Wheeler, Sir John
Riddick, Graham Whitney, Ray
Ridsdale, Sir Julian Widdecombe, Ann
Roberts, Wyn (Conwy) Wiggin, Jerry
Rossi, Sir Hugh Wilshire, David
Rost, Peter Winterton, Mrs Ann
Rowe, Andrew Winterton, Nicholas
Rumbold, Mrs Angela Woodcock, Dr. Mike
Ryder, Richard Yeo, Tim
Sackville, Hon Tom Young, Sir George (Acton)
Sayeed, Jonathan
Shaw, David (Dover) Tellers for the Noes:
Shephard, Mrs G. (Norfolk SW) Mr. Tony Durant and
Shepherd, Colin (Hereford) Mr. Nicholas Baker.

Question accordingly negatived.

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