HC Deb 09 May 1990 vol 172 cc299-303
Mr. Mellor

I beg to move amendment No. 391, in page 35, line 39, leave out subsection (3) and insert— '(3) In subsection (2) "nominated news provider" means a body corporate for the time being nominated for the purposes of that subsection under section 30.'.

Mr. Speaker

With this we can take Government amendments Nos. 392 to 400, amendment No. 488 and Government amendments Nos. 401 to 404.

Mr. Mellor

The amendments make changes to clauses 29 and 30. First, the ITC must now invite applications for nominations as a news provider and must consult all the regional Channel 3 licensees an any nomination or termination of the nomination of a news provider. That should give some openness and an element of participation in the nomination process.

Secondly, the review procedure on nominated news providers is now to be revoked if an applicant has been refused nomination. Otherwise, it would be a pointless exercise, as no action could result from the review. However, the reviews can take place at any intervals that the ITC decides rather than on two or more occasions. Therefore, the procedure is more practicable and flexible.

Thirdly, there is provision for nomination to be terminated by the ITC if performance is unsatisfactory. All those who would be disqualified from holding an ITC licence by the ownership restrictions imposed by part II of schedule 2 are similarly disqualified from being nominated as a news provider. All the other amendments are minor or consequential.

Mr. Maclennan

I thank the Minister for tabling the amendments, which, so far as they go, are of some value.

Amendment No. 488 stands in my name and in the names of the hon. Members for Torridge and Devon, West (Miss Nicholson) and for South Hams (Mr. Steen). I must make it plain that the arrangements for Independent Television News are not adequate. What is proposed will have far-reaching consequences for the provision of national news.

The Government have a choice—allowing competition and market forces to triumph or continuing the present protected non-profit-making enterprise of ITN. The Government are allowing ITN into the marketplace but ensuring that it is protected from competition, thereby effectively creating a private monopoly that can use the resources and the prestige of television to seek profits in other markets, such as radio news, as is already happening, or in other aspects of television or information work.

The Government's proposals have met with the opposition of almost all the companies that provide regional coverage. The case for the change has not been well made. Amendment No. 488 proposes to delete subsection (7)(b) of clause 30, which would prevent Channel 3 licensees from owning more than 49 per cent. of the shareholding of ITN.

Some within ITN may feel that their management style has been cramped, but they owe their present position to investment by television companies. There is no guarantee that new owners, interested above all in profit rather than the end product, will be keen to invest more in programmes. It also remains wrong in principle that companies required to show a programme are debarred from holding an owning stake.

Quality will suffer, because the new ITN will not necessarily be primarily interested in its television output. The emphasis could increasingly be on mass audiences and on cheaper production. There is further concern that a commercial management would be less understanding of the principles and requirements of broadcasting and more open to outside commercial or political pressure. It is more likely than professional broadcasters to have its own commercial or political views which it would wish, however obliquely, to be reflected in the editorial line.

I foresee that the Minister may argue that there is a statutory quality requirement, and that there would be a threat hanging over the main nominated news provider of other companies being nominated if quality slips, but the IBA—the ITC-elect—has made it clear that it expects only one news provider to be nominated, and it is obvious that it will be ITN. While it certainly has a power and does not rule out using it to nominate other companies, it is clear that it believes that the revenues do not exist to fund more than one news provider. In other words, the market will not work.

That is the most compelling reason for not putting Independent Television News into the marketplace. However, if the Government have confidence in the market and genuinely believe that there is a role for the market, they should have the courage of their convictions and let the marketplace operate.

Several companies, including Visnews, believe that they are effectively equipped and financed to offer a higher quality service for less money. If it was a requirement that there should be at least one nominated rival to ITN. that would be a provision for a proper market. It would ensure some competition and the efficiency that the Government have been advocating throughout our debates. It would also give the television companies power to ensure that news programmes are perhaps less London-centred and reflect national and international news from a national and not a regional standpoint.

The provision for Independent Television News seems to satisfy no one. It does not satisfy the companies and it is not wholly satisfactory to those in ITN, who, I believe, want to continue broadly as they are at present. The provision certainly does not satisfy others who believe themselves to be capable of providing an alternative to ITN. Because the provision reduces the stake of Channel 3 companies in the provision of news, the news customers will not necessarily be in the minds of the news providers.

I do not know of any other country where arrangements like those in the Government's proposal operate. The Government's proposal is an unacceptable compromise which the House would do well to reject. I therefore commend amendment No. 488.

Mr. Steen

I will not delay the House with amendment No. 488. However, I want to tease from my hon. and learned Friend the Minister, even at this late hour, the reason why he is so keen to give third parties the majority stake in ITN. Why cannot that be a minority stake?

The ITN network is probably the envy of the civilised world. It is one of the most successful news programmes of its kind. Why does my hon. and learned Friend believe that it should be changed? Why does he believe that it will be better for that change—because that is the only reason why it should be changed?

My amendment is intended to persuade the Government that they should look again at the formula and realise that there has never been a shortage of money in the ITN network. The television companies have always put in what was needed. Even at this late stage, will my hon. and learned Friend the Minister realise that it is a pity to change something that is successful on the basis that it might be better? Perhaps my hon. and learned Friend will explain why he has brought forward this proposal in this way.

Mr. Corbett

I suspect that the Minister will tell us in some perverse manner that his proposal is yet another shining example of the righteousness and beauty of market forces. However, before the hon. Member for Thanet, North (Mr. Gale) gets too excited, I hope to demonstrate that the Government have misread the situation.

In Committee, I referred to the Romanian question. Within almost minutes of President Ceausescu calling a rally in the main square of Bucharest to decree that glasnost and perestroika were not needed in Romania because they had arrived already, unnoticed by the population, the revolution exploded. A decision had to be taken immediately by those responsible for the management of ITN, not about whether to cover events in Romania but about how to cover them. They had to ask themselves whether the events were important enough to send at least one crew out there as fast as possible, or whether to rely on someone else doing so and try to buy the coverage from CNN, NBC or another channel.

The House will remember that those events took place just before Christmas. There was no time for board meetings and so on. A decision was taken that, although the budget did not provide for it, ITN had to cover the story. That makes my point and shows why the Government are so profoundly wrong on the matter. Those responsible for taking spending decisions are those who put the money into the kitty. Moreover, when they knowingly exceed a budget, as they presumably had to, even if only a monthly or quarterly budget, for the instant coverage of Romania, they know that it is likely that they will have to go to the companies that chip into the pot of ITN and say, "We did this and we need some extra money from you."

10.30 pm

I can think of no better example of accountability. The direct users of the ITV licence, the holders, are those who pay for it. Under the Government's proposals, a new factor will be introduced. If more than 51 per cent. of the company is owned by people who are not Channel 3 licence holders, those people will expect a profit. One of two things will happen: either the cost, and therefore the price, of providing the ITN news service will increase to provide that profit, or some or all of the profit will come out of what is now spent on gathering news. That must be so. It may be a combination of both. Extra money will be required which is not needed now because ITN is a non-profit-making company, as the hon. Member for South Hams (Mr. Steen) said. I hope that no one reads into that that ITN is careless about money. It is not.

The new ingredient and the prime effect of what the Government propose is that the profit has to be found from somewhere.

Mr. Gale

Taking up the hon. Gentleman's Romanian example, I hope that ITN will send a crew out to that country immediately to demonstrate to the free world how unfair and unfree the present electoral processes are. I also hope that it will scrutinise the results and the six days between the closing of the poll and the opening of the ballot boxes. I hope that it will make a further success of that by selling the coverage around the free world.

Mr. Corbett

The hon. Gentleman will forgive me if I say that for a moment I wondered which country he was referring to. No one setting budgets for international news coverage could possibly have imagined what was about to explode in eastern Europe and the Soviet Union, to which there had to be a response simply to satisfy the viewers, let alone from the point of view of selling the coverage. I have no doubt that ITN will take the points that the hon. Gentleman mentioned seriously.

ITN will face extra competition for the viewers to whom it appeals—it is used to competition from the BBC already—from the thematic dedicated satellite channels, whether programmes on those channels are better or worse. Either the cost of the service that ITN delivers will go up or there will be pressure on it to spend less on news collection. I cannot for the life of me understand how that is supposed to add to the performance of ITN.

Earlier, the Minister told us how rotten we were to expect Sky Television to divest itself almost instantly, as people would know that it was an unwilling seller. That argument may apply to ITN. If the clause remains as it is, what arrangements will be made and over what period to ensure that ITN is not ripped off for a valuable property?

Mr. Mellor

The arrangements for ITN do not spring fully armed from the brow of some poor benighted Minister, either myself or my predecessor. They reflect sustained discussions, including sustained lobbying from leading figures within ITN. It would be wrong to see the arrangements as something that has been imposed on ITN or the wider industry by the Government.

It is true that a number of people, not least the company, have an advocate in my hon. Friend the Member for South Hams (Mr. Steen) and that they do not like what is happening. I must advocate a fair position for the wider community rather than for the company.

We have two objectives in the provision of news on Channel 3. First, we want to ensure that Channel 3 offers a high-quality national and international news service able to compete effectively with the BBC. Consistent with that objective there should, wherever possible, be competition in the supply of news to Channel 3. We believe, as do a number of people outside Government, that, if Channel 3 licensees are allowed to own all of a nominated news provider, a conflict of interest will arise between a news organisation that may be seeking to expand its interests and those licensees who are solely concerned about their news service. It would therefore be to the benefit of ITN if it was liberated to some degree—leading figures within ITN share that belief. As a result of the proposed measures, a controlling interest will almost certainly still be held by the companies holding the Channel 3 franchise, as we know that 49 per cent. is an effective controlling interest in almost every company.

The ITC will be masterminding divestment pursuant to clause 36. It will be able to do so over a specified period to avoid the problems that would otherwise arise. It will be for the ITC to determine how long a period of grace to allow, and I know that it is bending its mind to that now.

I do not consider that the proposals pose any threat to ITN—rather, they provide ITN with the opportunity to develop. If it is consistent with the maintenance of high-quality news, national and international, that there should be a competing provider, it is right to include that caveat. We know that such high-quality news is an expensive commodity, but if it is consistent with that to have a competing provider, it is important to have a proviso that such competition does not place in jeopardy the provision of that news. Other providers may want to enter the market, and it would be wrong not to allow them to do so.

Within a sensible framework that reflects the realities of the situation, I hope that we have introduced some much-needed competition.

Amendment agreed to.

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