Broadcasting (Hansard, 8 December 1993)

HC Deb 08 December 1993 vol 234 cc434-59 434 11.48 pm

§ The Secretary of State for National Heritage (Mr. Peter Brooke)
I beg to move, That the draft Broadcasting (Restrictions on the Holding of Licences) (Amendment) Order 1993, which was laid before this House on 29th November, be approved.
The order is made under powers in schedule 2 of the Broadcasting Act 1990. The purpose of the draft order is to give effect to the changes in the regulations governing the ownership of the regional ITV companies that I announced on 24 November. I made it clear then that the proposed changes were subject to parliamentary approval.
The draft order amends the present order restricting the holding of licences, which was made in May 1991, in two ways. First, article 2(1) amends article 3 of the 1991 order. Its effect is to remove the distinction between licences for the nine areas with the largest advertising revenue and those for the other six areas. Article 3 of the 1991 order prevents anyone from holding two licences in the nine large areas. The draft order would remove that restriction, except that no one could hold both London licences. The overall limit on holding no more than two licences remains. The other change is technical. Article 2(2) removes from the 1991 order provisions which have now expired and the references to them.
Before I explain the reasons that led me to propose these changes, I should like to reply to criticisms by some Opposition Members that I did not come to the House and make a statement about these proposals. As the House will know, I issued a press notice at 8.30 on the morning of 24 November as the stock market opened, sending a copy at the same time to the Independent Television Commission and the ITV companies. I wrote to a number of right hon. and hon. Members with an interest in broadcasting issues, and I gave a written reply to a parliamentary question later in the day.
As I explained in those letters, these arrangements were made to avoid a period of intense speculation on the stock exchange, which was the likely result if it had become known that an announcement would be made later in the day. This arrangement is usual for Government announcements that are market sensitive. In reaching decisions on the best way of making the announcement, I was influenced by the knowledge that the draft order was subject to debate both here and in another place.
As many hon. Members will be aware, considerable changes are taking place in broadcasting, not just in the United Kingdom but throughout the world. The most obvious change is the increase in the number of channels and services available. In the United Kingdom, we have had an increasing number of cable and satellite channels, as well as new radio services. Even more services are likely in a few years wiith the introduction of digital transmission technology. The technologies of broadcasting, telecommunications and computers are already beginning to converge, and this process can be expected to continue at an accelerating pace.
Similarly, although it is likely that some traditional broadcasting services will remain, many other services of entertainment, information and education will become available. In the foreseeable future, people will be able to pick and choose from a wide range of sources of news, information and entertainment, including films, videos, 435 music, and computer games. Some services will be interactive. People will be able to pay for individual items, as well as whole services. The choice and variety available to the public will be greater than we have ever seen.
Another significant change is the way in which broadcasting is becoming an international activity. A global market for broadcasting is opening up. The United Kingdom should be well placed to take advantage of these opportunities. Broadcasting has been one of the success stories in the United Kingdom in the past 50 years. The high quality of the programmes in our broadcasting services is widely recognised, both here and abroad. ITV companies have, for many years, sold programmes successfully to foreign broadcasting organisations. But the new markets will go well beyond the export of individual programmes, into the provision of whole channels, and a range of services.
The Government want to ensure that United Kingdom broadcasters can build on the success achieved so far and take advantage of the new opportunities that are opening up. We have been holding meetings with senior broadcasting executives to discuss these issues with them. We shall want to consider how these markets are likely to develop and to make sure that there are no unnecessary obstacles that prevent the United Kingdom broadcasters from taking up these opportunities. In saying that, we have to recognise that broadcasters in other countries will be looking for opportunities in the United Kingdom.

§ Rev. Ian Paisley (Antrim, North)
Does that mean that someone from the Irish Republic could buy, say, Ulster Television? Enough republican propaganda pours through at the moment—we do not want an overdose of it.

§ Mr. Brooke
As the hon. Gentleman knows, I always welcome his interventions. The answer to his question is yes, and it would be the case even without the order.
Broadcasting is entering a period of rapid development that is likely to create a revolution in the way we distribute and receive information and education and entertainment services. We are, however, only at the early stages of those changes. It is difficult to foresee the precise nature of the changes or the speed at which they take place.
The hon. Member for Redcar (Ms. Mowlam) and some other Opposition Members understand that major changes are taking place and agree that in the coming months we should look again at the present restrictions on cross-media ownership, as we intend to do.
We are in a period of transition and we need to consider how best to advance. Some people, including the hon. Lady, believe that the best way forward is to stand still. She advocates extending the so-called moratorium. That is the provision in the Broadcasting Act 1990 due to expire at the end of this year. The provision does not prevent takeovers from occurring, but requires the Independent Television Commission to approve them before they take place.
I considered that option carefully, not least because some ITV companies advocated it, but concluded that extending that regulatory requirement was not the best approach to expanding markets. It is, in any case, an illusion to think that we can achieve a continuing breathing space for ITV by legislative means when the rest of the broadcasting world is developing so rapidly.

Several hon. Members
rose—

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§ Mr. Brooke
I shall give way, but, as the whole House is aware, we are anxious to make progress.

§ Mr. Robert Maclennan (Caithness and Sutherland)
I am grateful to the Minister for giving way, but the whole House is also anxious to have information from the Government. The Minister said that he has had discussions with various senior television company directors. What discussions did he have and what representations did he receive from his own regulator, the ITC, on the matter?

§ Mr. Brooke
I shall gladly respond to the hon. Gentleman. He is correct in saying that the House would always want to have the information.
We have had a number of discussions with the ITC. There may have been a degree of misunderstanding in the press in recent days in so far as there was a debate between the ITC and ourselves about my announcement or the particular timing of the ITC receiving it, but we have had discussions in the past about the changes we might make.
As the House will know, the ITV companies had different views about the best way forward. I called a meeting at which all the companies were represented by their chairmen or chief executives so that I could hear their views. I wanted to make sure that all the companies, large and small, had an opportunity to explain their position to me directly. I also consulted the Independent Television Commission, as I said in my answer to the hon. Gentleman.

§ Mr. Robert Hughes (Aberdeen, North)
I am grateful to the Minister. He had discussions with the ITC. What conclusions did the ITC reach and what did it say to him?

§ Mr. Brooke
The hon. Gentleman knows that, even when the Broadcasting Act was going through the House and in the immediate aftermath of it, the ITC believed that the moratorium should last longer than had been built into the Act. Of course I would acknowledge that, but it was a subject that we discussed with the ITC. A number of other interested organisations, including the advertising industry, discussed their views with me or with officials in my Department. I found all those discussions helpful, not least because they gave me an insight into the way in which television is developing.
In reaching a decision, I tried to look beyond the immediate issue to the medium term. I have two clear objectives. First, I want to ensure that the British public keep the television services that they value and that the diversity of choice that they have is maintained and extended.

§ Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)
As a veteran of the Broadcasting Bill and as someone who also went to most meetings in the consultation period on the HTV licence area, I recall that all the other competitors said that they wanted not only to have regional television but for it to be regionally owned. As a result, HTV was driven to pay a large premium to acquire the franchise. Now the right hon. Gentleman is changing all the rules. He is saying that the ownership argument is irrelevant. That is unfair. The basis on which we argued that case drove HTV to pay a higher price than Central Television and others. Now the right hon. Gentleman is changing the rules. Surely he ought to think about it again in the light of the evidence.

§ Mr. Brooke
I am grateful for that point, and for the benefit of the hon. Gentleman's experience. However, it is possible to ensure that the regional commitment is met in 437 the provision of regional television through the exercise of the licence, administered and monitored by the ITC. In that respect, ownership is a different matter.
ITV services are watched by well over 90 per cent. of the population each week. My answer to those who have criticised the proposed changes as being too limited and rather timid is that the millions of people who take pleasure from ITV programmes would not thank us if we moved suddenly from a position of close regulation to one of complete deregulation of ownership, and in so doing undermined the foundations of the present services. I have to take account of the services to the public as well as the opportunities for investment.
My other main objective is to sustain the production base for broadcast programmes in the United Kingdom. That is the key to high quality services here and to the potential increase in exports. As the number of channels increases here and throughout the world, the production of programmes and programme rights will become an increasingly valuable asset.

§ Mr. Chris Mullin (Sunderland, South)
Will the Secretary of State confirm that BSkyB is exempt from the requirement on commercial television to broadcast a percentage of domestically made products? If that is still the case, how can it be justified?

§ Mr. Brooke
It is not exempt—it is subject to the European Commission directive. As recently as October, I submitted statistics to the Commission in Brussels showing the European content—European in the context of this country meaning mainly British—of all the channels for which we have responsibility as regulators.
Some 73 per cent. of the programmes broadcast by ITV are made in Europe, most of them within the UK. A large proportion of the programming is original material, made for ITV's audiences. Those programmes reflect the UK's traditions and culture, and that of its regions. We want that to continue.
We also want to sustain the production base throughout the UK, as well as in London and the south-east. The ITC's licence conditions require that 80 per cent. of regional programming is produced in the area. The ITV companies have told me that they regard the regional nature of the ITV system as of crucial importance. They know that it is valued by their audiences, so it will be in the interest of the companies to maintain regional programming and production.

§ Mr. Peter Snape (West Bromwich, East)
Will the right hon. Gentleman give way?

§ Mr. Brooke
Yes, I will, but at this hour the House wishes me not to slow down.

§ Mr. Snape
I am grateful to the right hon. Gentleman. Under the licence held by Central Television, not 80 per cent. but 95 per cent. of the programmes have to be made in the regions. What assurances can he give those of us concerned about the future that such a restriction will continue to apply now that Central has been handed over, lock, stock and barrel, to Carlton?

§ Mr. Brooke
The ITC will continue to monitor the conduct of the licence, which was issued to Central, and it will continue to be Central that ITV is monitoring.

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§ Mr. Peter Mandelson (Hartlepool)
The House would like the opportunity to question the Secretary of State, rather than listen to him gabble through his brief. Those of us who might be persuaded that there is a case for relaxing the ownership rule and allowing mergers to take place, which would lead to the strengthening of the ownership of ITV companies, would be more persuaded of the case if, by the same token, the powers of the regulatory body were also strengthened so that there was a balance between the two. The strengthening of ownership but also an increase of power to the regulator—would that not be a more balanced and sensible approach?

§ Mr. Brooke
I take the hon. Gentleman's point, but the discussions that I have had with the ITC have included whether it is confident that it would be able to monitor the conduct of the licences if there were a change of ownerships, and it has declared itself satisfied and confident.
I should not have proposed these changes if I thought that they would put at risk the regional programming and regional production which are such valued features of the ITV system. The Broadcasting Act 1990 places requirements on ITV licence holders about regional programming and production. They are reinforced by the conditions of the ITC's licences, which include the promises about programmes made by the companies when they applied for licences. I know that the ITC takes its licence conditions very seriously. Each year it will assess how far the ITV companies have complied with the licence conditions. If any licence holders fail to comply with their licence conditions, the commission is obliged by law to include information about the failures in its annual report, which is presented to Parliament.
However, the ITV companies have to operate effectively in the changing world of broadcasting. Partnerships are already being formed throughout the world to take advantage of the new opportunities. Major media organisations are combining groups of linked enterprises, bringing together programme production, music recordings, publishing interests and broadcasting outlets, including terrestrial broadcasting as well as cable and satellite. In other words, they are linking the material to be distributed and the means of distribution.
In this world of giant conglomerates, with turnovers of billions of pounds, most of the ITV companies are comparatively small. We think that they should be able to take a more active role in forming new partnerships in the global market than would have been possible under the present regulations.
As they explained to me, the ITV companies themselves agree that it is unlikely that it will be possible for the ITV system to continue for much longer with 15 regional companies plus the national breakfast-time company. They believed that a measure of consolidation was desirable, and they told me of the various ways in which companies were already co-operating. However, they had different views about the degree of consolidation that should take place and the speed at which it should happen. Therefore, although there were different opinions about the best way of reaching the objective and the speed of travel, there was agreement about the general direction in which the television industry needed to go.

§ Mr. Cynog Dafis (Ceredigion and Pembroke, North)
What opinion did the right hon. Gentleman receive from 439 HTV? Did not HTV believe that it should remain independent, centred on Wales and largely owned by Welsh Wales so that it would be able to continue to deliver a thoroughly Welsh service with a strong emphasis on the Welsh language? What view did HTV express to him?

§ Mr. Brooke
I am slightly diffident about giving the detailed opinions of each company as the conversations were confidential. I think that the hon. Gentleman knows what the general thrust of HTV's view was, and I would not suggest that it was a million miles from what he said.

§ Mrs. Gwyneth Dunwoody (Crewe and Nantwich)
Is the Secretary of State not aware that for many years—indeed, since the creation of the film industry—television and film productions have been made by powerful companies, usually in the United States or with money originating in the United States? There has never been a lack of programme making outside the United Kingdom. Companies in the United Kingdom were protected by the understandable desire of Parliament to keep a British involvement in British cultural material. Is the Secretary of State aware that the proposed rules will radically change that position and that it will not be possible to continue regional production as it was in the past?

§ Mr. Brooke
I know from previous exchanges with the hon. Lady that this is a subject in which she takes a keen interest, not least with regard to film production. The manner in which Governments of different colours have dealt with the film industry in the past 25 years does not encourage one to think that we do not need to pay close attention to preventing broadcasting from going the same way.
Having reflected carefully on the views expressed to me, I concluded that it would be right to propose changes that would allow two larger companies to join together, except in London. That is the purpose of the order. I do not think that it would be sensible at this stage to go further without a thorough examination of the likely effect of greater deregulation in the ownership of media enterprises. There are, as we know, disadvantages in such concentrations. They can be anti-competitive and prevent newcomers from gaining access to the market; they can restrict choice for audiences and advertisers, nationally or locally. At worst, they can restrict freedom of speech and expression. Broadcasting is more than an economic activity.

§ Mr. John Gorst (Hendon, North)
Can my right hon. Friend assure us that there will be no further changes in the position of commercial television until the BBC's charter has been dealt with—either renewed or subjected to another Government proposal?

§ Mr. Brooke
I do not want to give that precise assurance. We shall want to examine the cross-media ownership factors in the way that I described earlier—a method, incidentally, to which Opposition Front Benchers urge us to return. The speed at which change is occurring means that we cannot freeze time at particular moments to enable things to "catch up". I recognise, of course, that the debate on the BBC charter renewal is going on at the same time. We shall need to take account of all those factors in reviewing arrangements for cross-media ownership and vertical integration.
440 Organisations that cannot adapt to changing circumstances do not survive. Those who wish to preserve the ITV system as it existed in the 1980s, or even in the 1970s, are more likely to hasten its decline than to promote its healthy survival. That is why the Government decided not to extend the so-called moratorium. That has achieved what it was intended to achieve—a short period of stability during the transition from the old ITV system to the system introduced in January this year. Let me say in passing that, on the basis of the figures for the first nine months, the amount of regional programming that has been produced under the new arrangements is substantially up on the previous year.

§ Mr. Michael Bates (Langbaurgh)
Is my right hon. Friend aware that the merger of the Yorkshire and Tyne Tees franchises and companies has brought significant benefits to my constituents by providing a new local news service? The service, which has cost £1.5 million, is broadcast from Belasis technology park in Stockton. Can my right hon. Friend assure me that if another company bids for Yorkshire it will not be able to dump the Tyne Tees franchise to comply with the two-franchise limit?

§ Mr. Brooke
I am delighted to hear about the new local news service. Any bidder for Yorkshire-Tyne Tees would be confronted with the fact that Yorkshire already has a second station.

§ Mr. Brian Sedgemore (Hackney, South and Shoreditch)
What is the answer then?

§ Mr. Brooke
The bidder could not effect a change unless it had divested itself.
It makes no sense to try to protect the ITV companies indefinitely from the disciplines of the market, nor should it be necessary.

§ Mr. Derek Fatchett (Leeds, Central)
The Secretary of State is right in saying that if a third party bids for Yorkshire and Tyne Tees, under the existing arrangements the bid will not proceed. Will he give an assurance, however, that he will examine possible ways in which Tyne Tees could be hived off from Yorkshire, and that any hiving-off process will not simply enable one company to gain control of three companies by the back door? We want a real separation, rather than a false separation that could damage the interests of either company.

§ Mr. Brooke
Having not been wholly solicitous to those who intervened earlier, I thank the hon. Gentleman profoundly. His intervention enables me to correct an answer that I gave my hon. Friend the Member for Langbaurgh (Mr. Bates) and the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore), who intervened from a sedentary position. Of course divestment would not be required if the bid came from an organisation not currently holding a television station licence. It is for the ITC to do all that it can to ensure that licensees comply with the ownership rules. It would monitor the process described by the hon. Member for Leeds, Central (Mr. Fatchett).
The need for adjustments to the ownership regulations was always foreseen, which is why we made provision for the main provisions to be extended and altered by order, subject to the approval of Parliament, rather than by primary legislation. I do not rule out further changes in the 441 future, but the change that we are debating today is a first step in the direction in which the Government believe that we need to go. I commend the order to the House.

12.14 am

§ Ms Marjorie Mowlam (Redcar)
The Secretary of State has glibly presented a gross simplification of a complex issue. There is general agreement about its complexity and that the Secretary of State has failed to grasp it completely. One of the many City analysts who commented on the matter stated that the Government's action was only the latest and silliest turn in this textbook example of how not to regulate an industry. At this wee hour of the morning, it would be unnecessarily cruel to go further, but that accusation of silliness is a compliment compared with many other comments. The most flattering was "a botched job".
We appreciate the Secretary of State's apology to the House this evening for the two-week gap between announcing his proposals to the market and giving Parliament its democratic right to debate and to vote on them. We understand the legislation's market-sensitive nature, but it would have helped if the Secretary of State had understood that it is contempt of Parliament to delay a debate to such an extent that two takeover bids are already launched.

§ Mr. Nigel Evans (Ribble Valley)
Does the hon. Lady not agree with the concept of a television company in my constituency joining another to continue producing splendid drama such as "Brideshead Revisited", investigative documentaries such as "World in Action" and blockbusters such as "Coronation Street"? At the same time, they could compete with the growth of satellite channels such as TNT and CNN from Murdoch and Turner, cable and the telecommunications industry—which will soon provide viewers with videos on demand at the touch of a button. Is it not right that companies such as Granada should be able to join with others for growth and to produce the programmes that we want to see?

§ Ms Mowlam
We called for a continuing moratorium, to allow a review of the kind that is necessary, given the complexity of the market that the hon. Gentleman mentions. Of course there is satellite and cable, and it is illogical and unfair that Murdoch can own 100 per cent. of a non-domestic satellite service when other newspapers can own only 20 per cent. of an ITV company. We do not want the half-cock proposals that are before the House this evening. We asked one year ago for a review and for rational and sensible proposals.
As to the hon. Gentleman's first point, of course we want genuine regional productions and programmes of the quality of "Brideshead Revisited"—but the Secretary of State body-swerved and ducked the question of the ITC having the power not just to regulate and monitor standards but to enforce them. We want quality television, and it worries us that the ITC's ability to regulate and monitor may be lost as television companies grow, become more powerful and centralise. The ITC has done a good job in many areas, but can it continue to do so?

§ Mr. Michael Fabricant (Mid-Staffordshire)
Is the hon. Lady aware that the ITC has the power to impose a 442 fine for a first offence of 3 per cent. of qualifying annual revenue each month, and of 5 per cent. for subsequent offences? Is that not enough of a sanction?

§ Ms Mowlam
There is not enough sanction in the sense that the ITC rightly has those powers post facto. As a result of what the Secretary of State has introduced we will experience some takeovers. Potentially two large whales could develop and a number of small companies—minnows at best—will desperately try to survive in a competitive market—they will compete over advertising and industrial muscle.
What concerns Labour Members and, I think, Tory Members is that as that power is centralised, regional companies may not be able to continue to make the quality productions that we want. That is what is important.

§ Ms Diane Abbott (Hackney, North and Stoke Newington)
The hon. Member for Ribble Valley (Mr. Evans) says that companies such as Granada need to merge to continue to produce programmes of the quality of "World in Action" and "Brideshead Revisited" His argument is back to front. Under the previous regionally-based regulated system, programmes of that quality were produced. The problem is that with the post Broadcasting Act system, the possibility of producing such quality programmes recedes further into the distance.

§ Ms Mowlam
I thank my hon. Friend for that intervention. Her final point should be emphasised. Part of the difficulty that we face this evening is that the problems in the industry have resulted from the Broadcasting Act 1990 and its flaws. Labour Members pointed out those flaws day in and day out. My hon. Friend the Member for Cynon Valley (Mrs. Clwyd) did a courageous job and provided a lot of valuable policy information. She sought to show how damaging the 1990 Act was to so many regional television companies when she said that it has seriously imperilled some of the world's leading producers of television programmes.
We need only look at the mess, the farce and the tragedy that that Act created. Central Television pays the Treasury £2,000 a year. Now that there is a takeover bid for Central Television, it is worth £750 million plus. That tells us that the Broadcasting Act is ludicrous.

§ Mr. Tim Renton (Mid-Sussex)
Does the hon. Lady recognise that the chairman of the Independent Television Commission, Sir George Russell, said that there has been much more stability in the independent television industry following the 1990 Act than there was following other franchise changes, for example, the change 10 years ago? [Laughter.] It is all very well for Labour Members to laugh. It is the judgment of the chairman of the Independent Television Commission.
The hon. Member for Redcar (Ms Mowlam) said that the Labour party had been campaigning for the moratorium to continue. That is not my impression. Is it not correct to say that the hon. Lady is widely known in the television industry for saying that the moratorium should not be continued and that takeovers must be allowed, otherwise from January onwards Bertlesmann or Berlusconi could bid for Central Television? She realised that, under such circumstances, it would be impossible for a British bid for Central Television not to be accepted. Surely, what has 443 happened is that, when faced with two takeovers and the change in share prices, the Labour party typically panics and changes its view, which has been sensible until now.

§ Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)
Several hon. Members are hoping to catch my eye in this short debate. If we have interventions of that length, not many hon. Members will be able to do so.

§ Ms Mowlam
I shall answer the points made by the right hon. Member for Mid-Sussex (Mr. Renton). First, the ITC has clearly said that it would like a continuation of the moratorium.

§ Mr. Renton
indicated dissent.

§ Ms Mowlam
The right hon. Gentleman can shake his head. I quote from paragraph 39 on page 457 of the ITC's submission to the Select Committee on National Heritage: The Government's intention on extending the moratorium beyond the end of this year is not yet clear. The ITC continues to favour an extension and from the same standpoint has considered whether that would be a benefit in changing the rules. So the position of the ITC is clear.
The Independent Television Commission has argued, as many have, that stability in the market is necessary. However, the announcement in the past two weeks has created a degree of instability in the market for some of the bigger companies as well as some of the smaller ones.
Let me now answer the second point that the right hon. Gentleman made. The Opposition have supported a moratorium and want to continue a moratorium to review cross-ownership. The honest difference between myself and my predecessor, if he wants it on record, is that she wanted it for three years and I favoured 18 months—I have said at least 12 months—because the changes that are taking place in the market, partly as a result of the instability that the Secretary of State has created by the half-hearted move that is now being made, are making the problem worse.
The difficulty that will confront us from 1 January, partly as a result of what the Secretary of State has done, is that any company in Europe will be able to come and take 100 per cent. of a British television company. One cannot do that in France because one would be prevented from doing so; a foreign company can take only 25 per cent. of a French television company. One cannot do it in Germany because one would be prevented from doing so; a foreign company can take only 50 per cent. One cannot do it in Spain because one would be prevented from doing so; a foreign company can take only 25 per cent. I could go on. That is the difficulty.
As a result of the short-termism of the institutional fund managers of this country and the short-termism of the British Government, we are leaving our small regional television companies totally exposed to European companies which, as the hon. Gentleman knows, are built into consortia with cross-media ownership, which is difficult to break into. That is what we mean by a moratorium. We want that moratorium to continue because the Government have exposed our regional companies in an outrageous way.

Hon. Members
Hear, hear.

§ Mr. Rowlands
May I just draw to my hon. Friend's attention a simple fact? As she pointed out, Central paid a meaningless sum of money; HTV paid a large sum of money for one reason only—that other competitors were 444 not only showing that they were competing for a regional station, they were actually arguing the case on ownership grounds and now the Government are changing the rules. In our view, we are left with the HTV company saddled with a huge bill because of the Broadcasting Act and the consequence is that a company such as HTV cannot produce programmes because it has to spend the money paying fees.

§ Ms. Mowlam
That is exactly the problem that the Opposition have emphasised. Smaller companies are being put in a position in which it is impossible for them to produce the quality programmes that we would like. I challenge the hon. Members opposite who represent regions throughout the country that have that type of regional television that they want to be protected and preserved. If those hon. Members walk into the Lobbies with the Government tonight they will be calling into question the future of those regional television stations.
So that the hon. Gentleman realises that it is not just Labour hon. Members who agree with me, let me quote from a letter from one of the Conservative Peers in the other place, Lord Buxton. He said in a letter on 7 December: what is being done by the Broadcasting Amendment Order, is a tentative half-measure which produces the worst of all worlds, it will totally unbalance the system, and could lead before long to the eroding of the regional structure. That is the type of worry that other hon. Members share.
Let me return to the final point that the hon. Gentleman made. He says that some of the smaller television companies believe that as a result of this change they will be so exposed after 1 January—exactly the point that my hon. Friend made in relation to HTV—that the Minister has to do something. Otherwise British broadcasting will not be British any more. The same will happen as it did to our film industry and to our insurance industry in the 1980s—it will be destroyed. The Secretary of State can end up by saying that it is important in terms of democratic values and as part of British industry, but what he is doing is potentially destroying both. That is what the Opposition find so disconcerting.
It is not that we were not saying what we have said clearly; let me just reinforce the argument and give other hon. Members a chance to speak. The Opposition have set out the criteria clearly and we believe that they should be reinforced. We want, above all, for regional television to be retained. By that I mean regional production, quality regional production, with a local management team. Some of the Opposition contributions earlier were about companies being regionally owned. As a result of the Broadcasting Act 1990, most of the companies are no longer regionally owned unless one considers Schroders or Barclays De Zoet, Mercury Asset Management or Warburgs as being regionally owned. That is the problem that confronts us as a result of the Act. Now we want an Act that defends that regional production strongly and continues the regional identity that is there and that independent home-grown broadcasting industry. That is why we have argued for a moratorium. We believe that if that were done, the continuation of the present irrational situation would make things worse for the other options—cable, satellite and the other choices for people in this country.

§ Mr. Nicholas Winterton (Macclesfield)
I am sure that the hon. Lady is aware of my interest in the matter. [HON. 445 MEMBERS: "What is it?] I chair the all-party media group of which the hon. Member for Great Grimsby (Mr. Mitchell) is vice-chairman, and in which my hon. Friend the Member for City of Chester (Mr. Brandreth) is also involved. Does the hon. Lady believe that the order will give the regional television companies more strength to resist overseas predators? I share her view that we want British broadcasting to remain British, so if she can say that the order will not have that effect, I shall have more sympathy with her argument.

§ Ms Mowlam
I do think that the order will have that effect for the smaller television companies. There is no doubt that they will be deeply exposed after 1 January, and their future will be in question. That is a serious problem. My honest answer is that, although if the Carlton-Central deal goes ahead the company will be bigger, we still have no broadcasting company big enough to be one of the top 20 in Europe in terms of commercial revenue. As we go into Europe we have a problem with British broadcasting as a growth industry. But there is no doubt that it will help those companies. There is no doubt that that help will not be offered to them. Our problem is that technology is moving at great speed, but our legislation is that of five years ago. We need a vision of where British broadcasting—

§ Mr. David Lidington (Aylesbury)
But the hon. Lady wants a moratorium.

§ Ms Mowlam
Yes, I want a moratorium, because I do not want developments at the present speed that expose half the companies while giving an unfair benefit to the others, and that brings about no recognition of the changes in satellite and cable. For example, in August two North American consortia put £650 million into cabling the populated areas of south and west Yorkshire. Where are the British companies? They are not there, because of the irrationality of the present legislation. That is why we need a moratorium, so that we can take the British broadcasting industry forward together. Such vision goes with the need that we have always emphasised for quality regional television. We want those two developments to move forward together.
If the order goes through, the Secretary of State will place a question mark over the future of regional production and make it harder for our companies to compete in Europe. With one small amendment of the law he will achieve the worst of both worlds.

12.32 am

§ Mr. Roger Gale (Thanet, North)
I congratulate my right hon. Friend the Secretary of State on having the foresight and courage to take the shackles off the British television industry and to allow it the opportunity—no more than that—to move forward, to merge and to compete in the communications industry of the next century.
The hon. Member for Redcar (Ms Mowlam), who spoke for the Opposition, made a plea for vision, but it was backed up by nothing of substance. She made a plea for an outdated broadcasting and television industry. The communications industry of the next century will be about more than simply television or broadcasting; it will allow every household to have a wide flat screen and will bring into that household not only digitally transmitted pictures 446 and entertainment, but data, education, home shopping and home banking. There will be video-telephony. In every home there will be a communications centre the like of which most Opposition Members have not even begun to imagine.
If the United Kingdom is to have the remotest chance of playing a part in the communications industry of the next century, we shall have to create economies of scale. Not one company in this country now—not Carlton, not Central, not Granada, nor any other organisation—has the size and capacity single-handedly to play a major part on that world stage. There is a stark choice before us. My right hon. Friend has recognised that. Thank God that he has done so in time. We must allow major players in this country to merge if they are to attain the size and scale and the financial clout to compete and to create the industry of the next century. If we do not do that, we will be left sitting on the sidelines. I have said for a long time that this country has more creative power and skill than most other countries in the world, but we will need to take it forward from tonight.
I will be brief in what I have to say. I do not think that we have gone anything like far enough, but tonight is the first step. Opposition Members talk about regional broadcasting. There is one national broadcaster in this country with a number of regional outlets. Those outlets provide good regional broadcasting, including news programmes, and they have regional production centres. The broadcaster is called the BBC. If the BBC can do it, one commercial and terrestrial company can do it if it is necessary.
Those companies will be competing not with each other, but with cable and satellite which will bring in, in the case of the Hughes corporation, 104 channels when digital transmission comes. Are we seriously saying that, at the moment, there is one company in this country that has the commercial and the artistic power to compete with any of those competitors? The answer is no.

§ Mr. Nigel Evans
Does my hon. Friend agree with me that what he has just said is absolutely right? The BBC acts as a national and a regional company and it will have to compete in the future with the likes of Turner, which has brought in CNN and TNT, and is looking to introduce other stations via satellite to compete with the BBC. Murdoch also has introduced main channels already via satellite, and that company will be looking to expand its market also. If the BBC is to be up against it in future, and if the independent television companies, which are split, are not allowed to join together and to compete rationally—

§ Mr. Deputy Speaker
Order. I have already informed the House that many hon. Members want to catch my eye during a short debate. It is unfair on people wanting to speak for hon. Members to make long interventions.

§ Mr. Gale
I will always agree with my hon. Friend if he agrees that he is agreeing with me. He is, of course, absolutely right. The crux of the argument is simple. We must have a communications industry—not an entertainment, television or broadcasting industry—which plays a part within, not just the United Kingdom and Europe, but hopefully in overseas markets.
If we are to do that—here I will make a mild criticism of my right hon. Friend—then the step which has been taken tonight has not gone far enough. One has only to look 447 at graphs of advertising sales. Due to the nature of competition from satellite and from an increasing number of channels, the advertising sales graphs are falling. If the sales are falling and production costs are rising, as they are, it is absolutely certain that, without economies of scale, a number of the regional companies to which the hon. Lady referred will not survive franchise—takeover or not. They will go to the wall within three years. I will put money, or a bottle of champagne, on that with the hon. Lady.
If there are no takeovers and the regional companies are left marginalised, they will in three years' time simply not exist because they have no economy of scale or the financial power to compete.

§ Mr. Rhodri Morgan (Cardiff, West)
The hon. Gentleman voted for the Broadcasting Act 1990.

§ Mr. Gale
The hon. Gentleman should know that I served on the Committee which dealt with the Broadcasting Bill. I said then, and I will say now, that that was a Bill for the 1990s. What we are talking about tonight—I hope—is the communications industry of the United Kingdom for the year 2000 and beyond.
The hon. Lady talked about a sense of vision, but if we are to have that sense of vision, let us not have a moratorium that would put the brakes on.

§ Mr. Morgan
Did the hon. Gentleman say that some of the companies for whose franchises, I take it, he voted in 1990 would not survive the next three years? Did I hear the hon. Gentleman correctly?

§ Mr. Gale
I did not vote for those franchises. Indeed, I am on record as saying that the lucky people were those who did not win the franchises, because only a mug would have made a successful bid. Anyone with any sense could see the way the entertainment and communications industries were going. The companies will not survive.
If there is to be a sense of vision, we must look beyond the regions to what is going to happen in the United Kingdom, Europe and the world in the year 2000 and beyond. What we need is certainly not a moratorium of any kind; we do not want the brakes put on. We want them taken off, just as my right hon. Friend has done this evening. But we must go further. We shall have to get used to the idea that we do not need a review. By the time a review had been carried out, the technology would have overtaken it.

§ Ms Glenda Jackson
rose—

§ Mr. Gale
No, I am sorry. I have already given way several times. I hope that the hon. Lady will catch the Chair's eye later.
We need to realise that by the end of the century we are likely to end up with no more than three independent terrestrial television companies in the United Kingdom. We must also understand that there will be mergers—not only between television companies but between television and data and telephony companies; and between all of them and newspapers, too.
In the year 2000 and beyond there will be an electronic, digitally transmitted communications industry. The only way to bring that about is by economies of scale. We should see this process through with courage. Some Opposition Members, I know, agree with me. If we seize this chance with both hands, we will be left not with the 448 rump of a United Kingdom television industry but with an industry at the forefront of a worldwide and powerful communications industry. That is my vision of the future.

12.41 am

§ Mr. Bruce Grocott (The Wrekin)
I had entertained the vain hope that before any Conservative Member embarked on his speech he would begin by apologising to the House and the country for passing the Broadcasting Act three years ago. No doubt my contribution tonight will be a hopeless quest, as I am sure the order will be agreed to.
I should declare an interest. I am a member of the National Union of Journalists and belong to the broadcasting union. I worked for a number of years for Central Television. I have no financial interest in this matter—but I do wish that the Secretary of State had listened to one or two people who did not have a massive financial interest before he introduced the order. I should like to tell the right hon. Gentleman the simple truth about what has happened to independent television in the past six short years.
These events did not come about because of acts of God or the inevitable progress of satellite and cable. The right hon. Gentleman, like his predecessor, seems to think that this is all beyond his control. It pains me to have to remind him that he is part of the Government. Governments exist to control and to regulate in the best interests of the people.
Six years ago, commercial television had some faults but also one or two great strengths; one was that throughout the country there were powerful regional centres of production. More than 2,000 people were working at Central, in Birmingham, which I know best. There were four busy studios and a range of expert technicians—vision mixers, sound editors and so on, all of whom possessed an expertise that could be drawn on to make good programmes. Most of the company owners and managers lived and worked in the region and watched the output as and when it was broadcast.
As Conservative Members are phenomenally interested in accounts, I should add that commercial television, with the rest of the broadcasting industry, managed to contribute to a surplus on our balance of trade payments. We were net exporters of television programmes, and all the signs were that the viewers were quite pleased with what was going on, too.
What has happened to commercial television since then? No one denies that cable and satellite may have created instability, although the problems that they caused are not as great as the Government have suggested. It was the Broadcasting Act 1990 which caused massive destabilisation—no one who has studied the industry would challenge that assertion.
I do not know whether the Secretary of State has read "Under the Hammer", subtitled "The ITV Franchise Battle—Greed and Glory Inside the Television Business", which was written by an industrial correspondent. It should be required reading. The dust-cover explains that the book tells the story of an extraordinary business circus that became, in the words of one television mogul, 'pure poker'". That person was right.
As a result of the Act, Central—good luck to it—got the franchise for £2,000, while another, Yorkshire, paid £38 million for a franchise. No wonder that company has been destabilised. Will those free marketeers on the Conservative Benches please tell me where the logic and sense are in that system? The consequences of the Act have 449 been utterly predictable. I do not know whether Conservative Members are too concerned about such issues, but employment in commercial television has dropped from 16,000 before the Act to about 8,000. Central has reduced its work force from more than 2,000 to about 800. Instead of running four busy studios in Birmingham, it now only regularly uses one of them.
Television programme production used to appear as a surplus in the balance of trade, but it now appears as a deficit. I do not even pray in aid the experiences of Opposition Members, because even the Baroness herself was disenchanted with the Act when she saw what happened to TV-am. I do not shed any tears over that, but Lady Thatcher described herself as bitterly unhappy about what had happened to that company. I believe that the Prime Minister also commented that the decision was not an optimum success, or used some other similar ringing phrase.
What are we being asked to approve tonight?

§ Mr. Michael Stephen (Shoreham)
The hon. Gentleman suggested that Central had reduced its production facilities. Can he explain why? It cannot surely be because it paid too much for its franchise. My hon. Friend the Member for Thanet, North (Mr. Gale) has already said that a large national organisation called the BBC makes some very good regional programmes.

§ Mr. Grocott
Regional centres of production have been run down as a consequence of the Government's requirement to pass work out to independent producers. Another inevitable consequence of the Act has been a drift of television production to the south, because those independnet producers tend to be based in London, although they may have a shop-front somewhere else.
It is ironic that the only part of the network that has been protected by the Government is the merger between London Weekend Television and Carlton. The Government have made sure that London has been looked after.
The terms of the Act have operated for three years, but Conservative Members argue that they are now hopelessly out of date, despite the fact that they passed the Act. In that time, the Secretary of State has further destabilised the system. He has thrown good money after bad. He is now trying to tinker with an Act that is already bad. We already know two inevitable consequences of his actions: the industry will suffer further job losses, and decisions will be made in London and not in the regions.
The right hon. Gentleman has started to talk about regional programming in almost patronising terms. It is suggested that one can dismiss all the franchise requirements as long as companies make their regional half-hour news programmes, cover regional sport or whatever. That is supposed to be equivalent to providing for regional television. That is not what it is about. What we want in the regions are companies that make not only regional programmes but national programmes for the network. Companies have the facilities, the range of skills and the expertise to achieve that, but that will not be the result of the Government's proposals.
Central will be taken over by Carlton and managed and run from London. I belatedly ask the Secretary of State why no reference was made, in anything that he said or in 450 press releases from the managers of the various companies that are now making Monopoly money, to the service that is to be delivered to the viewer? The order is all about the needs of the City and the need for companies to amalgamate to compete. There are no measures on how to deliver to the public the service which they have come to expect over the years and which once made British broadcasting admired and recognised throughout the world.
I ask the Secretary of State, although I fear that I ask in vain, to call a moratorium on broadcasting and to say, "We fiddled about too much and it has had a disastrous effect on the industry." Let us take an overall view of broadcasting and not pick off ITV, the BBC and other parts of the service. Above all, let us recognise broadcasting for what it can be—an outstanding, miraculous medium, which, at its best, television is, rather than something that is there for the delights of advertisers and financiers in the City. The purpose of broadcasting is to enrich our nation and to provide excellent programmes for viewers.
In vain, I appeal to the Secretary of State and to Conservative Members to consider television in that light. That is what they should be doing, but it will not be achieved by the order, which is why we should vote against it.

12.51 am

§ Mr. Tim Renton (Mid-Sussex)
I agree with the hon. Member for The Wrekin (Mr. Grocott) on one matter—the importance of programming. Labour Members, including the hon. Member for Redcar (Ms Mowlam), fail to recognise that it is all very well to talk about programming, but what about the cost? There is much difference between original production, which costs £50,000 an hour, and good original production, which now costs £500,000 an hour. One of the purposes of the order is to ensure that the production base of the ITV companies is maintained. That will be achieved by ensuring that enough good, strong companies have the financial strength to produce good, original programmes.
It is all very well to say that we must keep 15 companies, which will all make regional productions and which are important—let no one regard them as otherwise—but if they are too small, regional production simply will not be very good. My right hon. Friend the Secretary of State is trying to ensure that our independent television companies are big enough for the quality of programming to be good.
I wholly agree with the hon. Member for The Wrekin that not all the attention of boards, chairmen and managing directors must be on share prices and huge capital gains. If that were so, I should worry about it, too. What I want to see, however, is an independent television industry big enough to continue to produce extremely good new programming not only for the regions but for export around the world.
Before continuing—I promise that I shall not speak for long—I must declare an interest. I am a chairman of a new company called Interactive Telephone Services, which is trying to persuade all the television companies to do more interactive programming. That, of course, is declared in the Register of Members' Interests. None the less, I should say that to the House tonight.
One of the mistakes of the Broadcasting Act 1990—and I was one of its architects at the Home Office—was that we 451 listened too much to the argument about the need for regional companies to continue. We were under tremendous pressure to ensure that there was not just one Scottish independent television company, but STV and Grampian, and that Border television continued rather than being merged with Granada or Tyne Tees. We bought that argument, but now, as others including my hon. Friend the Member for Thanet, North (Mr. Gale) have said, the world has moved on. Those companies are not big enough and will not survive as they are presently constituted.

§ Ms Glenda Jackson
Will the right hon. Gentleman give way?

§ Mr. Renton
I know that the hon. Lady is an expert on the subject, but if she will forgive me I would rather she made her own contribution than force me to give way to her as I wish to complete my speech reasonably soon.

§ Ms Jackson
In the time that the right hon. Gentleman has taken to say no I could have said what I wished to say.

§ Mr. Renton
Very well—I give way to the hon. Lady.

§ Ms Jackson
I am most grateful. The right hon. Gentleman referred to the contribution of his hon. Friend the Member for Thanet, North (Mr. Gale), who spoke with passion about the communications industry and the vision for the future. The communications that the hon. Gentleman mentioned are advertising communications—there is no future for programmes of quality. We have only to look at America, where there are three major companies which service nothing more than the advertising industry. They produce programmes of pap and the advertisements that surround them offend no one. Apparently that is the sort of future that Conservative Members wish to see for the British broadcasting industry—that is a disgrace.

§ Mr. Renton
With the greatest respect to the hon. Lady, she has totally misunderstood the point. The scenario that she has described is precisely what I do not wish to see and do not intend to see.
The hon. Member for Redcar did not answer my question about the Berlusconi and Bertlesmann takeover. I agree that we obey the EC rules about bids and acquisitions more openly than the Spaniards or the Italians, but as it stands, as from 1 January Berlusconi could make a bid for Central television. If the provisions are not changed, no big British company such as Carlton will be able to bid a higher price. I do not think that that solution would be acceptable to the House.
The hon. Member for Redcar quoted Lord Buxton. She might have mentioned that he is a founder of Anglia television and has for years fought for the independent survival of Anglia. If anyone is frightened about the takeover of Anglia by continental interests, it is Lord Buxton, because he knows very well that it would be hard for the company to resist it unless a large British company was prepared to take it over. My right hon. Friend the Secretary of State is paving the way for that to happen, for the survival here of fewer viable units within an independent television sector that will make good programming and also live up to the regional obligations which are written into the licences that the ITC will monitor.
I hope that the review that my right hon. Friend says that he is to conduct will investigate not only the relationship between broadcasting and the press but the relationship 452 between the terrestrial channels and the satellite channels, and between broadcasting and radio. For reasons that we all know—due to the substantial growth of channels, particularly from the Astra satellites—it seems that the position needs to be investigated. I hope that it will come under close scrutiny in the investigation that my right hon. Friend is to conduct. I congratulate my right hon. Friend on the difficult steps that he has announced this evening. They are only first steps and they are not easy steps, but it is important to take them.

12.58 am

§ Mr. Robert Maclennan (Caithness and Sutherland)
The right hon. Member for Mid-Sussex (Mr. Renton) prayed in aid of what the Government have done tonight the possible intervention into British television of Bertlesmann and Berlusconi. I strongly question whether anything that the Secretary of State has done tonight has erected an effective barrier against Berlusconi or Bertlesmann if they choose to intervene. The right hon. Gentleman's actions have little to do with protecting British television and have done little to strengthen the capacity of independent television to compete more effectively in other markets. There is already some successful media activity, and Britain has become a European centre for transnational broadcasting. It has become a home for such pan-European channels as MTV Europe, Super Channel, Japansat and Kindernet broadcasting to the Netherlands, and Middle East Broadcasting Centre, TV3 Scandinavia and Kanal 6 broadcasting to the Turks in Europe.
Substantial activities that did not require the permission of the Secretary of State or the alteration in the ITV map that he is countenancing are going on in this country. Many matters that were left unresolved by the 1990 Act are ripe for consideration. The issue of cross-media ownership is highly anomalous. It is particularly unsatisfactory that foreign companies can acquire British companies although British companies cannot enter the market. There is an imbalance between the position of a company such as Berlusconi looking at acquisitions here and the obstacles in the European Union countries to reverse bids.
The order does nothing to tackle the problems that face our television industry. What is being done is for financial reasons within Britain, and the consequence is a predictable narrowing of the regional base of broadcasting. During the passage of the 1990 legislation, that was regarded by the Government as the only real justification for maintaining the independent system as we knew it.
It is strange that the Government should pay so little regard to the views of their own appointed commission on independent television. They have cast to one side and have been somewhat coy about admitting the reasoning of Sir George Russell and his colleagues for seeking an extension of the moratorium. It is strange that the Secretary of State was in such a hurry to allow moves to be made when Sir George Russell and his colleagues made it abundantly clear that the change would be inevitable but should be made in the context of changes that are planned for the BBC in its charter review.
The commission said that changes should be made in the context of some proper assessment of the decline in advertising revenue for the network as a whole that would result from the increased use of cable and satellite. It also referred to changes that are bound to occur as a result of the 453 settling down of the scheme that was put in place only a year ago and those that will arise because of the lack of parity of treatment. Companies had to pay vastly different sums to acquire franchises.
We are in the middle of seeing how the 1990 Act will work, and to change the ground rules in the way that the Government propose is at best irrelevant to the industry's pressing needs and at worst a further unnecessary destabilisation. We do not have a great deal to go on in looking at the effect of consolidation of the 15 regions, but we have seen what has happened to Yorkshire and Tyne Tees television. In an intervention, a Conservative Member spoke about the effect on Stockton.
My general impression from speaking to people in the north-east, and Newcastle in particular, is that that consolidation has not been to the benefit of regional broadcasting. It is not simply a matter of a decline in employment in Newcastle: I expect a further decline in broadcasting employment generally. Production activity is being reduced in that greaat and important conurbation of the north-east.
I cannot see any justification for the proposed takeovers at Carlton and Central other than the avoidance of production by Carlton and the probable stripping out of further capabilities from the two companies. They call that cost cutting and burden sharing and it probably means a reduction in their capability.
I had hoped that the Secretary of State would adhere to at least the objectives of the 1990 Act in seeking to maintain regional diversity and programme quality and to ensure a degree of stability in the industry while he conducted his review. He has not made the review any easier by the steps he has taken, and I hope that the House will not consider it appropriate to approve the order.

§ 1.6 am

§ Mr. Michael Fabricant (Mid-Staffordshire)
It seems incredible that we can be sitting here tonight with the Opposition saying that the moratorium should be continued when the wolves of Berlusconi and Bertlesmann are at ITV's door.
The order proposed tonight for the ownership of ITV licences is necessary because it will permit ITV to survive in a very hostile world—a world of international media giants and changes in technology which will permit about 104 possible channels. I have seen a demonstration in Winchester which suggested that we could be talking about 208 channels from an ordinary Astra satellite.
If ITV were confined by an ownership structure which was devised nearly 40 years ago when there was no BBC 2 and no Channel 4, it would have no future. Only the technologically and economically blind could possibly envisage that.
The core of ITV success has been its capacity to make United Kingdom programmes for United Kingdom viewers, as hon. Members on both sides of the House have said this evening. In 1993, far from independent television becoming weaker, the ITV companies spent more than £500 million on original domestic productions for their network. It is, and will continue to be, a major industry.
While many of us continue to believe that Britain produces some of the best television in the world, we are starting to fall behind our foreign competitors.
454 The United Kingdom trade balance for the import and export of television programmes tells a depressing story. In 1985 we enjoyed a £25 million surplus. By 1991 it had fallen and by the year 2000 it is forecast to reach £640 million as new broadcasters turn to cheaper imported programmes. That makes it doubly important for ITV companies to combine their strengths.
ITV companies must be able to discard the inefficiencies of their current fragmentation if they are to sustain their commitment to the United Kingdom broadcasting network and industry.

§ Mr. Peter Bottomley (Eltham)
I am sure that my hon. Friend is right in large parts, but if the two takeovers in the newspapers at the moment mean that £2.5 million a week has to come out of programming costs to fund the loans for the bankers, how does that add to programming and production in this country?

§ Mr. Fabricant
I do not accept my hon. Friend's assumption First, there has been considerable talk by Opposition Members of Central Television being locally owned. That is not the case, as we know. Central Television is owned mainly by investors from London and its biggest single investor is in Dundee, which certainly is not the midlands. The acquisition of Central Television by Carlton would strengthen the two broadcasting organisations.
I am not going to speculate on where savings might be made, but there cannot be savings from programming. Although, as the hon. Member for Redcar (Ms Mowlam) said, the imposition of fines of 3 and 5 per cent. comes after the fact, like any fine, it is a deterrent. The threat of the licence being withdrawn is the ultimate deterrent. That would happen if the detailed requirements of the ITC licence awarded to both Central and Carlton were not met.
The world has not stood still since ITV was designed in 1955. It has not even stood still since the Broadcasting Act 1990. ITV needs a strong domestic base, and the confidence to meet new players from the United States of America, Europe and Japan. A number of objections have been raised to the new rules. Almost all of them are based on fundamental misconceptions of the way in which ITV is organised.
In the short time that I have left, I have three points to make. First, there is no threat to the regional nature of ITV in the new rules. Television stations and their owners are two different things, and they always have been. Nothing in the current rules requires any regional licence to be owned within its region. We have already heard that Central Television is not midlands-owned. It would be better served being owned by Carlton than being owned by Berlusconi or Bertlesmann. If regional ownership, with the essential guarantee of regional programmes, were such a vital necessity, why did the existing ITV companies reduce such regional programming, when it is not regionally owned? The real guarantees of regionality are in the ITC agreement.
The second guarantee is the powers available to the ITC, and I outlined that in my intervention to the hon. Member for Redcar, and earlier in my talk—[Laughter.]—my speech, my lecture. The ITC has an important role to play in the years ahead, and it is absurd to pretend that commercial restrictive ownership rules are a more 455 workable way to protect the public interest. Regional programming is a valuable commodity, and it will be maintained.

§ Mr. John Greenway (Ryedale)
Will my hon. Friend give way?

§ Mr. Fabricant
No, I will not, as I have only one minute left.
Thirdly and lastly, what are the practical options available to the Government? Some have called for a moratorium on takeovers. We cannot stop the clock, sit back and carefully consider ITV ownership. There is no option available to us, because of the change in European rules.
I live in the midlands, and I would rather have Central Television putting out regional programmes controlled by Carlton than any programmes controlled by the Bertlesmanns and Berlusconis of this world. I commend the order to the House.

1.13 am

§ Mr. Brooke
With the leave of the House, I shall reply to the debate.
I shall leave until the end my response to the hon. Member for Redcar (Ms Mowlam)—I intend that as a compliment to her representation of the Opposition. I thank my hon. Friend the Member for Thanet, North (Mr. Gale) for his robustness and clarity, and for his continuing attention and vigilance on the subject that we have been debating.
The hon. Member for The Wrekin (Mr. Grocott) was in favour of regulation of everything. This country is widely regarded as the best-placed market in the world for cable and telecommunications and the interaction between them, because of the Government's insistence on making sure that we avoid becoming over-regulated. The hon. Gentleman said in conclusion that there was nothing in my speech about sustaining the domestic production base. I can only refer him to the text of the speech that I delivered, where he will see that I made it clear that it was the second main objective of the Government's actions. With admirable appositeness, my right hon. Friend the Member for Mid-Sussex (Mr. Renton) made exactly the same point—that the maintenance of the domestic production base lies at the heart of our policy. In the cross-media review, we shall not only consider the relations of broadcasting and the press but go much wider.

§ Mr. John Greenway
Does my right hon. Friend agree that it is a case not just of the ITC enforcing the provisions of the Broadcasting Act 1990 but of enforcing the terms of the licence based on the applications made by the franchisees, which include regional production of major network television?

§ Mr. Brooke
I am most grateful to my hon. Friend. He is entirely right. On at least one major occasion this year, the ITC has returned to that very issue.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) also referred to cross-media ownership, but the foreign companies that might bid in this market will be subject to exactly the same rules as British companies. The rules apply to bidders from any direction. In response to what the hon. Gentleman said about regional output, I merely quantify what I said earlier. On the basis of the first 456 nine months, there will be 11,000 hours of regional output in the current year, whereas there were 8,250 in the previous ones.
My hon. Friend the Member for Mid-Staffordshire (Mr. Fabricant) impressed everyone on the Select Committee on National Heritage by his knowledge of this subject, and he added to his reputation tonight.
In my remaining two minutes, I deal with the remarks of the hon. Member for Redcar. I thought that there was in her speech a touch of "Stop the world, I want to get off." From what she said, one would not have thought that the Labour party opposed the introduction of commercial television in the first place or that it opposed the introduction of Channel 4. The hon. Member for Cynon Valley (Mrs. Clwyd) said that regional television was dying, despite the increase in regional programming hours that I have described, and in particular animadverted on Granada. One would not think that Granada has just been nominated for 12 BAFTA awards, eight more than any other ITV company. The hon. Lady's position on the moratorium was essentially protectionist. The hon. Member for Redcar is said to be much more open minded.
The hon. Member for Birmingham, Erdington (Mr. Corbett), the Opposition's spokesman on broadcasting, said a couple of weeks ago that the Opposition were contemplating a "mid-course correction"—not before time, I should say, but so much for the intellectual continuity of the Opposition's case. I give the hon. Member for Redcar credit for having maintained the Opposition's enthusiasm for a moratorium, although her grounds have subtly shifted. The Independent on Sunday reported that the hon. Lady had surprised observers by coming out in favour of complete deregulation of ITV". I detect in her the characteristic of the Liberal Democrat—of running with the hare and apologising to the hounds when they catch up.
Bruce Gyngell, the former chief executive of TV-am, called the proposed changes the best news I've heard for British broadcasting in the last 10 or 15 years. I have never been much given to hyperbole—

§ It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted business):—

§ The House divided: Ayes 144, Noes 109.

458

Division No. 22]	[1.18 am
AYES
Ainsworth, Peter (East Surrey)	Brown, M. (Brigg & Cl'thorpes)
Aitken, Jonathan	Browning, Mrs. Angela
Alexander, Richard	Bruce, Ian (S Dorset)
Allason, Rupert (Torbay)	Budgen, Nicholas
Amess, David	Burns, Simon
Arbuthnot, James	Burt, Alistair
Arnold, Jacques (Gravesham)	Carlisle, Kenneth (Lincoln)
Arnold, Sir Thomas (Hazel Grv)	Carrington, Matthew
Atkinson, Peter (Hexham)	Carttiss, Michael
Baker, Nicholas (Dorset North)	Chapman, Sydney
Baldry, Tony	Clark, Dr Michael (Rochford)
Bates, Michael	Clifton-Brown, Geoffrey
Blackburn, Dr John G.	Congdon, David
Bonsor, Sir Nicholas	Conway, Derek
Booth, Hartley	Coombs, Anthony (Wyre For'st)
Boswell, Tim	Coombs, Simon (Swindon)
Brandreth, Gyles	Cope, Rt Hon Sir John
Brazier, Julian	Couchman, James
Bright, Graham	Currie, Mrs Edwina (S D'by'ire)
Brooke, Rt Hon Peter	Davis, David (Boothferry)

457

Deva, Nirj Joseph	Mawhinney, Dr Brian
Devlin, Tim	Merchant, Piers
Dicks, Terry	Mitchell, Andrew (Gedling)
Douglas-Hamilton, Lord James	Monro, Sir Hector
Duncan, Alan	Neubert, Sir Michael
Dykes, Hugh	Nicholls, Patrick
Eggar, Tim	Norris, Steve
Evans, Jonathan (Brecon)	Openheim, Philip
Evans, Nigel (Ribble Valley)	Porter, David (Waveney)
Fabricant, Michael	Powell, William (Corby)
Fairbairn, Sir Nicholas	Renton, Rt Hon Tim
Fishburn, Dudley	Richards, Rod
Forman, Nigel	Riddick, Graham
Forsyth, Michael (Stirling)	Robertson, Raymond (Ab'd'n S)
Forth, Eric	Robinson, Mark (Somerton)
Fowler, Rt Hon Sir Norman	Ryder, Rt Hon Richard
Fox, Dr Liam (Woodspring)	Sackville, Tom
Freeman, Rt Hon Roger	Shaw, David (Dover)
Gale, Roger	Shepherd, Colin (Hereford)
Gallie, Phil	Skeet, Sir Trevor
Gardiner, Sir George	Smith, Tim (Beaconsfield)
Gillan, Cheryl	Speed, Sir Keith
Gorst, John	Spencer, Sir Derek
Greenway, John (Ryedale)	Spink, Dr Robert
Hague, William	Sproat, Iain
Hamilton, Rt Hon Archie (Epsom)	Squire, Robin (Hornchurch)
Harris, David	Stanley, Rt Hon Sir John
Haselhurst, Alan	Steen, Anthony
Heald, Oliver	Stephen, Michael
Hendry, Charles	Stern, Michael
Horam, John	Sykes, John
Hughes Robert G. (Harrow W)	Taylor, Ian (Esher)
Hunt, Sir John (Ravensbourne)	Taylor, Sir Teddy (Southend, E)
Jones, Gwilym (Cardiff N)	Thomason, Roy
Jones, Robert B. (W Hertfdshr)	Thompson, Patrick (Norwich N)
Kirkhope, Timothy	Thurnham, Peter
Knapman, Roger	Townsend, Cyril D. (Bexl'yh'th)
Knight, Mrs Angela (Erewash)	Trend, Michael
Knight, Greg (Derby N)	Twinn, Dr Ian
Kynoch, George (Kincardine)	Viggers, Peter
Lait, Mrs Jacqui	Waller, Gary
Lang, Rt Hon Ian	Wardle, Charles (Bexhill)
Lawrence, Sir Ivan	Watts, John
Legg, Barry	Wells, Bowen
Leigh, Edward	Whitney, Ray
Lidington, David	Whittingdale, John
Lightbown, David	Whittingdale, Ann
MacKay, Andrew	Willetts, David
Maclean, David	Winterton, Nicholas (Macc'f'ld)
Madel, David	Young, Rt Hon Sir George
Maitland, Lady Olga
Malone, Gerald	Tellers for the Ayes:
Mans, Keith	Mr. Irvine Patnick and
Marlow, Tony	Mr. Timothy Wood.

NOES
Abbott, Ms Diane	Dobson, Frank
Barnes, Harry	Dowd, Jim
Beith, Rt Hon A. J.	Dunwoody, Mrs Gwyneth
Benn, Rt Hon Tony	Eastham, Ken
Bradley, Keith	Etherington, Bill
Brown, N. (N'c'tle upon Tyne E)	Fatchett, Derek
Callaghan, Jim	Fisher, Mark
Campbell, Menzies (Fife NE)	Foster, Rt Hon Derek
Campbell-Savours, D. N.	Fyfe, Maria
Cann, Jamie	Gilbert, Rt Hon Dr John
Chisholm, Malcolm	Golding, Mrs Llin
Clarke, Eric (Midlothian)	Graham, Thomas
Clelland, David	Grant, Bernie (Tottenham)
Coffey, Ann	Griffiths, Win (Bridgend)
Corbett, Robin	Grocott, Bruce
Corbyn, Jeremy	Gunnell, John
Cousins, Jim	Hall, Mike
Cryer, Bob	Hanson, David
Cunliffe, Lawrence	Hill, Keith (Streatham)
Dafis, Cynog	Hinchliffe, David
Darling, Alistair	Hood, Jimmy
Davidson, Ian	Howarth, George (Knowsley N)
Davis, Terry (B'ham, H'dge H'l)	Hughes, Kevin (Doncaster N)
Dixon, Don	Hughes, Robert (Aberdeen N)

458

Hughes, Simon (Southwark)	Patchett, Terry
Illsley, Eric	Pendry, Tom
Ingram, Adam	Pickthall, Colin
Jackson, Glenda (H'stead)	Pike, peter L.
Jones, Ieuan Wyn (Ynys Môn)	Powell, Ray (Ogmore)
Kennedy, Jane (Lpool Brdgn)	Purchase, Ken
Kilfoyle, Peter	Raynsford, Nick
Kirkwood, Archy	Rendel, David
Lewis, Terry	Robertson, George (Hamilton)
Lloyd, Tony (Stretford)	Robinson, peter (Belfast E)
Llwyd, Elfyn	Rowlands, Ted
Loyden, Eddie	Sedgemore, Brian
McAllion, John	Short, Clare
McAvoy, Thomas	Skinner, Dennis
McCrea, Rev William	Smith, Andrew (Oxford E)
McFall, John	Smith, C. (Isl'ton S & F'sbury)
Maclennan, Robert	Snape, Peter
McMaster, Gordon	Soley, Clive
McWilliam, John	Spearing, Nigel
Mandelson, Peter	Spellar, John
Marshall, David (Shettleston)	Steinberg, Gerry
Martlew, Eric	Stevenson, George
Maxton, John	Wicks, Malcolm
Meale, Alan	Wigley, Dafydd
Michael, Alun	Williams, Alan W (Carmarthen)
Michie, Bill (Sheffield Heeley)	Wilson, Brian
Miller, Andrew	Wise, Audrey
Mitchell, Austin (Gt Grimsby)	Worthington, Tony
Morgan, Rhodri
Morley, Elliot	Tellers for the Noes:
Mowlam, Marjorie	Mr. Jack Thompson and
Mullin, Chris	Mr. Dennis Turner.
Paisley, Rev Ian

§ Question accordingly agreed to.

§ Resolved, That the draft Broadcasting (Restrictions on the Holding of Licences) (Amendment) Order 1993, which was laid before this House on 29th November, be approved.

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