Broadcasting Bill [Lords]

HC Deb 16 April 1996 vol 275 cc537-614

Order for Second Reading read.

Mr. Deputy Speaker (Mr. Michael Morris)

Before I call the Secretary of State for National Heritage, I have two announcements to make. First, Madam Speaker has selected the amendment in the name of the Leader of the Opposition, and secondly, all Back-Bench speeches will have to be restricted to 10 minutes.

5.5 pm

The Secretary of State for National Heritage (Mrs. Virginia Bottomley)

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

We stand on the verge of a new broadcasting revolution even more significant than the change from black and white to colour television. Digital technology has the potential to bring new and different services to viewers. It can bring more income to the broadcasting industry and more jobs across the country. Digital television offers improvements in picture quality, increased potential for wide-screen broadcasts, interactive television, more subscription services and, above all, many more channels and greater choice. The Bill will give British industry the chance to lead the world into the digital age.

We already have a broadcasting industry that is admired and envied by other nations. Our programmes are sold to broadcasters all over the world, and once digital television is up and running the domestic and international market should grow considerably. That will mean more jobs for the UK at every stage in the broadcasting chain—from the manufacture of television sets to the production of programmes. The worldwide move to digital technology means a worldwide demand for programmes and equipment, which the UK is already well placed to supply.

The media is an industry unlike any other. It informs, influences and engenders public opinion and debate. Debate and discussion over the airwaves has become a central feature of our culture and way of life. In an advanced democracy such as ours, it is important that there are as many voices competing for the attentions of the nation's viewers and listeners as possible. By international standards, this country already has one of the most liberal media ownership regimes. The Bill provides substantial further liberalisation to enable media businesses to grow and operate more flexibly in an ever more competitive world. We need, however, to retain essential safeguards on plurality of ownership which go beyond the backstop provided by general competition legislation. The special protection provided to broadcasting reflects its influence and importance over people's lives.

The Bill is based on three key principles. We must safeguard plurality of ownership and diversity of voice—the lifeblood of a successful and vibrant media industry. We want to foster the competitiveness of the UK broadcasting industry. We lead the world in digital technology, we are a net exporter of television sets and we are the largest exporter of television programmes after the United States. The Bill will enable us to remain at the forefront of the global information revolution. We are determined to maintain broadcasting standards in the digital age.

Mr. David Alton (Liverpool, Mossley Hill)

On standards and the culture of violence that has been created as a result of, in particular, Hollywood-style programmes being broadcast so much over our airwaves—400 killings are broadcast each week on British television—does the Secretary of State think that digital technology provides an opportunity to introduce the V-chip, as has already happened in the United States and Canada? Does she agree that harmonisation with those countries, and with the decision taken by the European Parliament on the same subject, should be dealt with under the Bill? Will she take the opportunity of repudiating the article in the Financial Times that suggested that she would be hostile to such an amendment to the Bill?

Mrs. Bottomley

I think that the hon. Gentleman knows that I share his concerns about the effect of television violence, especially on children. I believe that it is right to explore the options offered by the V-chip, albeit that the technology is at an early stage and that there would be all sorts of complications associated with introducing it in practice. I shall certainly not dismiss it as an option until the idea has been explored.

Undoubtedly we should use the opportunity provided by the Bill and all the other mechanisms at our disposal to ensure that as we move towards the great expansion of television—digital, satellite, cable and terrestrial—it does not result in endless violence coming through on our screens, which would damage our young people. I make it clear that we want to uphold our unique tradition of public service broadcasting, and that we shall not relax our controls that prevent the broadcasting of violent or otherwise offensive material.

The Bill will have far-reaching effects on the industry.

Ms Angela Eagle (Wallasey)

If, as I hope, the right hon. Lady is as concerned as I am to maintain our long tradition of public service broadcasting, why has the Bill nothing to say about quality with regard to the multiplex providers?

Mrs. Bottomley

I am sure that the subject will be debated further in Committee and at other times during the passage of the Bill. We are maintaining the same high criteria for public service broadcasters. As we go for a great expansion in the number of channels, it is important that they should satisfy the criteria, such as that of variety, and the other tests set for them, just as standards are set for cable and satellite broadcasting. We seem to be seeing an example of the Labour party being excessively interventionist and attempting to put extra burdens on a growing industry—in contrast to its change of policy in recent days, about which I shall say more later.

The Bill will have far-reaching effects on the industry; our decisions will touch the lives of every viewer and listener. Last year the Government consulted on major regulatory issues in the industry concerning both media ownership and new digital broadcasting services. We have acted swiftly in introducing the Bill in response to market and technological developments. As the House will be aware, when we published the Bill it incorporated improvements resulting from that consultation exercise, which were widely welcomed.

Mr. John Marshall (Hendon, South)

My right hon. Friend referred to comments made last year to her. She will remember my suggestion that Capital Gold AM, London's second most popular radio channel, should be allowed to move to an FM frequency. Will she now say something about that proposal, which is reported in the Financial Times today?

Mrs. Bottomley

I know that my hon. Friend keeps a close watch on that topic. Indeed, it was extensively debated in another place. The Government accept that there is a strong case for change, and we shall announce our conclusions in time for the debates in Committee.

In publishing the Bill I announced that, in response to earlier consultations on those vital issues, in future all existing terrestrial broadcasters would be able to provide extra digital channels, and that companies operating multiplexes—the means by which digital programmes are transmitted—would not be required to bid for their operating licences, nor to pay money to the Exchequer, for the first 12-year licence period.

I also announced that the two-licence limit on the control of ITV licences would be removed, and that the Independent Television Commission would be given new powers to protect regional programming. In addition, local newspapers would have greater freedom to expand into local radio, and the new Channel 4 funding agreement would allow Channel 4 to invest more in making programmes. All those announcements were made in response to earlier consultation.

Mr. Tim Renton (Mid-Sussex)

I realise that the amendments made by the House of Lords substantially changed the original ideas about the Channel 4 funding formula, and I welcome that. However, while the funding formula is, rightly, being maintained, would it not be a good thing if my right hon. Friend announced that she intended to make an order regarding the balance of the funding for Channel 4—for 1998–99, for example—fairly soon after the Bill received Royal Assent? Otherwise there would be continual lobbying from channel 3 and Channel 4 on the issue. A quicker certainty would be a good thing.

Mrs. Bottomley

My right hon. Friend will, however, be aware that we live at a time of great change in that sector; in my view, to anticipate the precise balance of Channel 4 funding at this stage would be premature, but I have noted his comments. We have sought to reduce uncertainty both for Channel 4 and for the channel 3 companies, but we do not believe that at this stage it would be appropriate to go further.

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

The Secretary of State will know that, as a director of Border Television, one of the smaller ITV companies, I have an obvious interest to declare. Will she guarantee that the extra money that Channel 4 will derive from the measures will be allocated to United Kingdom production, and will not be used as a means of buying production in the United States?

Mrs. Bottomley

The right hon. Gentleman makes a strong point. I cannot give him any assurance on that matter at the moment, but I have noted his point, and I expect that Channel 4 will also have noted it.

Mr. Keith Mans (Wyre)

Does my right hon. Friend agree that at least some Conservative Members are worried about the concessions already made to Channel 4, bearing in mind the fact that it has changed in nature since it was founded, and is accountable neither to shareholders nor to licence fee payers?

Mrs. Bottomley

Once again, I think that my hon. Friend is addressing his comments not only to me but to Channel 4 itself. The arguments on that matter are a balance between the different television companies. My experience suggests that normally there are merits in most of their arguments, but that there is usually another side of the case too.

Mr. Gerald Kaufman (Manchester, Gorton)

Is it not a fact that as the right hon. Lady has responded to questions from right hon. and hon. Members on both sides of the House, the situation, far from becoming clearer, has become less clear? When the Select Committee on National Heritage recommended the abandonment of the ludicrous Channel 4 funding formula, whereby hugely rich organisations such as Granada were subsidised by Channel 4, the Government turned our proposition down outright.

Now the Government are edging towards accepting that proposition, but in a way that makes the situation more rather than less unclear. Will the right hon. Lady tidy the situation up, say that she will accept the Select Committee's recommendation, and get the mess out of the way once and for all?

Mrs. Bottomley

I am deeply intimidated by the right hon. Gentleman; the Select Committee has indeed had a great influence on many areas for which I now have responsibility. I hope to say a little more about the Channel 4 funding formula later. However, I do not yet feel able to say that I entirely acquiesce in the Select Committee's recommendation.

Several hon. Members

rose—

Mrs. Bottomley

I shall take an intervention from the hon. Member for Vauxhall (Miss Hoey), and then I hope to get on with my speech.

Miss Kate Hoey (Vauxhall)

Does the Secretary of State agree that substantial concessions have already been given to Channel 4 in another place, and that it would be silly for anything else concerning Channel 4 and its funding to be put into the Bill before we see, for example, the effects of Channel 5, and the real effects of any funding change on regional programming?

Mrs. Bottomley

Yes.

Dr. Keith Hampson (Leeds, North-West)

Will my right hon. Friend give way?

Mrs. Bottomley

I think that I must press on; I hope that my hon. Friend will bear with me. I shall be more than happy to give way again later. All these interventions will make the House aware what it is like to be Secretary of State for National Heritage; the issues are so finely balanced between the different interests.

Debates on the Bill in another place were conducted largely in a thoughtful and constructive spirit. In piloting the Bill so ably through, my noble Friend Lord Inglewood continued to respond to sensible and practical proposals for change, while holding fast to the principles that underpin our proposals.

We have introduced an overarching criterion for granting multiplex licences so that the regulators must, above and beyond the criteria already laid down in the Bill, judge which applicant will do most to promote the development of digital broadcasting. We have removed the ownership controls on cable operators in recognition of the fact that they provide first and foremost a means of programme delivery rather than programme services.

We have introduced a new category of restricted service television licence which will allow specialist and community broadcasters to run services. We have enabled existing independent national radio licensees to roll their licences for one eight-year period if they take up their guaranteed digital broadcasting places. We have listened to and acted on the concern expressed about the availability of sports rights by preventing listed events from being shown exclusively on subscription television.

Although our main proposals have been generally welcomed by the key players in the industry, my preoccupation is to respect and protect the interests of consumers. I hope that participants in debates in this House will approach the issues from the standpoint of the needs and desires of viewers and listeners rather than just the special pleading of vested interests.

Parts I and II of the Bill deal with digital terrestrial broadcasting. Under the terms of existing legislation, it is already possible for the operators of cable and satellite television services to go digital if they wish and to provide viewers with scores of channels. What is currently not possible in law is digital terrestrial broadcasting. The Bill will enable companies to transmit terrestrial television signals in a digital format for the first time. The frequencies that we are allocating to digital terrestrial services will allow for at least 18—and probably more—channels to be received by viewers.

Digital terrestrial services can use existing aerials and will not require the installation of dishes or of underground cabling. The television industry will be able to take advantage of the comprehensive terrestrial broadcasting structure that is already in place, with a network of transmitters well suited to regional broadcasting.

Our proposals for digital television will preserve the United Kingdom's internationally renowned tradition of public service broadcasting. We recognise the immense contribution the existing terrestrial channels make to our national life. They will, therefore, be offered guaranteed capacity on multiplexes. That also makes economic sense because their involvement in digital terrestrial broadcasting will be crucial to attracting viewers. The existing public service broadcasters will still have to meet the quality programming requirements and quality thresholds about which I have already spoken, thus setting a benchmark for broadcasting standards in the digital future.

Mr. Tony Banks (Newham, North-West)

I give way to the Secretary of State—[Laughter.]

Mrs. Bottomley

We all know our place when the hon. Member for Newham, North-West (Mr. Banks) is around.

Mr. Banks

Perhaps, one day, I shall give way to the then ex-Secretary of State for National Heritage. However, I am grateful to her for giving way to me on this occasion.

Where does the word "quality" in respect of digital terrestrial services appear in the Bill? We know that digital will take over from analogue, perhaps in 15 years' time. Where is the word "quality" and will the Independent Television Commission be required to enforce quality standards?

Mrs. Bottomley

In explaining to the House that the existing terrestrial broadcasters will be offered a guaranteed place on the multiplexes, I have made only too clear the importance we attach to quality and the contribution that those broadcasters will make to the development of digital terrestrial broadcasting. That quality element applies not just to channels 1 to 5, but to Teletext, the existing holder of the public service teletext franchise. I can announce today that Teletext too will be guaranteed capacity sufficient to expand its existing service. We intend to allocate to it 3 per cent. of the capacity on the frequency primarily reserved for channels 3 and 4; that represents more than twice what is needed to reproduce the existing service.

Mr. Ian Bruce (South Dorset)

I am most grateful to my right hon. Friend for being so generous to Back Benchers.

I want to make one small point about the guarantee given to the BBC. It seems strange that we insist that the commission gives the BBC space whereas there is nothing to allow the commission to say to the BBC, "Look, you are not using space sensibly." The BBC is hanging on to two different frequencies for Dorset FM and is not providing a local service. That is a dog-in-the-manger attitude. Perhaps we should give extra powers to the commission.

Mrs. Bottomley

My hon. Friend has raised a vital question about Dorset FM, on which I cannot say that I am properly briefed at the moment. However, I promise him that I will thoroughly investigate the circumstances surrounding Dorset FM and see what can be done—immediately on my return to my office. At the moment, I can say only that it is the great quality of the BBC, its ability to provide more services and its huge resources that have been the pressure for us introducing the Bill at an early opportunity. We believe that if we can be in the forefront of the digital revolution, there will be a great advantage for this country. I pay great tribute to the BBC for its work in research and in driving forward these proposals. It would not be fair to associate the BBC generally with the character, whatever it may be, of Dorset FM.

The introduction of digital television will enable many new commercial stations to enter the terrestrial broadcasting market. New entrants should be free to pioneer services and to respond to the standards demanded by the viewing and listening public. We want to give those who invest in digital terrestrial television every chance to succeed. Viewers have benefited and jobs have been created as a consequence of this country attracting new investment, such as that of BSkyB, into the broadcasting industry in recent years. We intend to ensure that many businesses, large and small, domestic and overseas, are able to participate in the new opportunities created by digital terrestrial broadcasting.

The Bill will give the ITC the necessary powers to ensure that a fair and effective market develops. Coupled with our proposals for licensing digital conditional access systems, the Bill frees companies to participate in a flexible, competitive digital television market driven by the demands of consumers.

We want to ensure that, in future, all viewers will still have access to the public service broadcasting on channels I to 5, even if they choose to rely on cable rather than terrestrial transmission. My noble Friend Baroness O'Cathain stressed the importance of that point in debates in the other place. We shall, therefore, introduce a Government amendment to require digital cable services to carry channels 1 to 5. That will be welcomed by the House.

The Bill also introduces a regulatory framework for digital radio. We have again provided a framework that balances the interests of the listener and the industry. The result will be more national and local radio stations that give the listener significantly better quality reception. Digital radio, like digital television, offers the customer more choice and improved technical quality. The existing national stations, such as Classic FM, will, like their television counterparts, be offered a guaranteed place on a digital multiplex.

The proposals on media ownership in clause 66 and schedule 2 will allow British media companies to take advantage of technological progress and to expand into new business. At the same time, our proposals will maintain plurality and diversity.

We want UK companies to succeed in the domestic and international marketplace. The new rules relax existing constraints on cross-media holdings, allowing groups to control a mix of newspapers and television and radio licences. The Bill also allows further concentration within broadcasting. It abolishes the limits on the number of channel 3 television and independent radio licences that one company may control and substitutes overall limits of a 15 per cent. share of the total television audience and a 15 per cent. share of the total radio points.

This is a liberalising Bill. In the past, cross-media ownership has been virtually outlawed. There is no common-sense justification for moving at one bound to wholesale deregulation, but we should not set in place a regulatory system for a fully integrated media market that does not yet exist.

Alliances between newspapers and broadcasters will in future be subject to a public interest test. The Independent Television Commission and the Radio Authority will have the power to prevent newspapers and broadcasting licences from being co-owned if they judge it to be against the public interest.

The regulators will base their judgments on three criteria—promoting media plurality and diversity, maintaining a strong industry for the benefit of the country and ensuring the proper operation of markets. Obviously, the ITC and the Radio Authority will be able to seek advice as necessary from the competition authorities on this issue.

Mr. William O'Brien (Normanton)

The Secretary of State referred to newspaper groups being involved with radio and newspapers. Will she give me some assurances that regional newspapers will be given the same opportunity as national newspapers, and that regional newspapers will be allowed to make representations during the passage of the Bill to express their concerns to the Secretary of State?

Mrs. Bottomley

I have had many discussions with regional newspapers, on the strength of which I have modified the proposals in the Bill a couple of times already. It remains the case, however, that the Bill is concerned about plurality and diversity, and that, in our opinion, dominant broadcasters and dominant newspapers covering the same territory are not conducive to, or appropriate in, a democracy.

The Bill is a liberalising measure. There are many more opportunities for all those involved in the industry, but it is our view that it is still appropriate to have several additional controls. I understand that the Labour party recently ripped up all the principles it previously stood for, but I shall come to that later.

Mrs. Anne Campbell (Cambridge)

rose—

Mr. John Redwood (Wokingham)

rose—

Mrs. Bottomley

I give way to my right hon. Friend the Member for Wokingham (Mr. Redwood)

Mr. Redwood

Does my right hon. Friend recognise that these technologies are coming together rather quickly? How will the market share be calculated for things such as electronic newspapers transmitted through the Internet and through the television and home computer, and what adjustments will be made for the fact that these markets are rapidly becoming global in the English-speaking world?

Mrs. Bottomley

My right hon. Friend is right, but it is not yet possible to regulate the market in its fully developed form, and I believe that this is an appropriate staging post at which we will be significantly liberalising the regime. We will move into allowing far more cross-media ownership, and have put appropriate regulation and controls in place, which were widely welcomed not only by the industry but very much by the Labour party when they were first announced.

Mrs. Anne Campbell

rose—

Mr. Kaufman

rose—

Mrs. Bottomley

I shall move on, if I may, because this is a complex Bill. I have a great deal of material to get through and many others wish to speak.

The Bill also prevents groups having 20 per cent. or more of national newspaper circulation from acquiring channel 3 or Channel 5 licences or radio licences or vice versa. This restriction, however, does not apply to the emerging markets of cable, satellite and digital terrestrial broadcasting. Even the largest newspaper groups therefore have room for expansion under our proposals, but it would not be right for those who dominate the newspaper audience also to control the dominant, established, television or radio broadcasting licences.

The Bill will achieve diversity, plurality, quality and the best possible programmes for the viewer and listener. The rules are to make sure that there is not excessive dominance by any one commercial provider."—[Official Report, 23 May 1995; Vol. 260, c. 713.] Those were not my words; they are the words of the hon. Member for Islington, South and Finsbury (Mr. Smith), spoken when we launched our White Paper in May 1995.

The policy that the hon. Member for Islington, South and Finsbury devised appears to have changed since then. I know that some Opposition Members want to give vested interests a higher priority than the interests of viewers and listeners. In October 1995, the Labour party tried to strike a grubby deal with British Telecom, which might have jeopardised the £10 billion investment programme of the cable companies. Now Labour is at it again, trying to rig the regulations.

In a recent Sunday Times article, the hon. Member for Kirkcaldy (Dr. Moonie) said he favoured removing restrictions on concentration of ownership because

the whole point is to ensure the creation of bigger companies that "can compete abroad". His policy is to allow companies to take more of the market, even if that removes plurality of ownership and undermines people's choice. I am not certain whether he speaks for the whole Labour party, but if he does these proposals are as ill thought through as they are opportunist.

In the words of Mr. Paul Foot—[Laughter.] I quite understand why Labour Members do not want to hear what he had to say. He said that the policy stinks of … back-scratching sleaze.

Opportunism is what new Labour is all about. Only a month ago, the hon. Member for Hartlepool (Mr. Mandelson) went on television to threaten newspaper groups with increased regulation unless they gave Labour an easy ride at the general election.

The right hon. Member for Copeland (Dr. Cunningham) has had plenty of opportunities to explain which policy is official party policy, but we have had only flannel. Do any of the hon. Members whose words I have quoted speak for the Labour party? Or does the right hon. Member for Copeland have yet another view? Like the hon. Member for Newham, North-West (Mr. Banks) on the radio this morning, we shall be very interested to know what is going on. Or perhaps the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) has washed his hands of this issue, just as he has washed his hands, it seems, of the Elgin marbles.

Mr. Robert G. Hughes (Harrow, West)

Or lost his marbles.

Mrs. Bottomley

That must be right. I appreciate that.

Or perhaps the hon. Member for Birmingham, Ladywood (Ms Short) could lift another veil from Labour's plans.

In this place and in Committee, my hon. Friends will be relentless in exposing cosy deals that the Labour party dreams up to please its friends.

The thresholds set out in the Bill provide a clear set of ground rules. At no point have our proposals been devised with any intention to attack or penalise the Daily Mirror, News International or any other specific newspaper group. They are there to protect the public.

Diversity of voice is needed, not only at the national level but in the regions and localities of the United Kingdom—the point the hon. Member for Normanton (Mr. O'Brien) made a moment ago. The Bill therefore retains controls designed to prevent local or regional monopolies.

Mr. Kaufman

rose—

Mrs. Bottomley

If the hon. Gentleman will forgive me, I do not want to give way because I have given way at length.

The Bill prevents dominant local newspapers from dominating local radio or owning a channel 3 licence in the same area. If a national newspaper substantially differentiates its local or regional editions, the regulator will treat these as local papers and they will be brought within the scope of those controls.

As a consequence of our consultation—this is the point I made earlier and have made several times to my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler)—we have already relaxed the local newspaper ownership threshold at which companies would not be allowed to own a radio station in the same area. The threshold has been raised from 20 per cent. to 50 per cent., but we remain concerned not to allow one company to own all the radio, television and newspapers in one town or region. Reciprocal restrictions will prevent local broadcasters from establishing dominant local newspaper interests.

If a channel 3 television licence changes hands, clause 67 would allow the ITC to hold the new owner to the standards, range and regional content in programming that the current licensee was achieving. That directly protects the regional flavour of programming, which is such a valuable feature of ITV—a point that has been made by several hon. Members in the debate in recent weeks.

We shall go further than that. We propose to clarify the definition of various provisions and terms used in clause 67. We want to help the ITC to implement provision and to prevent companies from avoiding the spirit of the legislation, so we propose to require the ITC not to approve amended channel 3 networking arrangements if the regional programming of smaller ITV companies would be threatened.

Part III of the Bill amends the funding arrangements for the Welsh fourth channel—S4C. The current funding formula is based on the vagaries of the television advertising market. Under clause 68, the Government's annual payment to S4C will be the January 1997 payment made under the old formula, uprated annually like the BBC's licence fee—in line with the retail prices index. The new arrangements will make the future public funding streams for S4C more predictable. That should benefit both S4C and the Government. We shall also introduce measures to allow S4C to operate digital commercial services, like the BBC.

Clause 70 amends the funding formula for Channel 4. Under that formula, an income of a certain level for Channel 4 is underwritten by the channel 3 companies, but they in return receive payments from Channel 4 when, as in recent years, Channel 4's income exceeds that level—a number of hon. Members have already referred to that. As I have made clear, the Government want to retain the formula as an insurance policy to guarantee Channel 4's security as a quality public service broadcaster. But we want to operate it flexibly to react to the changing circumstances of the broadcasting marketplace. Accordingly, as I made clear earlier, the Bill provides an order-making power to alter the distribution of Channel 4's excess revenues above the statutory threshold. We have already announced our intention to use that power in Channel 4's favour—first by ending Channel 4's payments into its statutory reserve fund as soon as possible and, secondly, by reducing the payments from Channel 4 to the channel 3 companies. That reduction will take effect in two stages, from 1998 and 1999, but we believe that it is neither necessary nor sensible to decide now the exact changes that we will seek to make to those payments. They will, however, be of a scale to provide Channel 4 with significant additional resources to invest in UK production.

The House will be aware that in another place there were lengthy deliberations on the subject of sports rights. I am pleased that part IV of the Bill guarantees the availability of live coverage of listed sporting events for terrestrial free-to-air television. It allows subscription or pay-per-view channels to broadcast live coverage of listed events only if rights are also made available to a terrestrial service. Equally, a terrestrial service will not be permitted to broadcast live coverage of a listed event unless rights are similarly made available to a subscription or pay-per-view service.

Mr. Bruce Grocott (The Wrekin)

How can the Secretary of State say that she is pleased about that when, as recently as last December, she and her Ministers were insisting that there was no need for any further controls or regulations and that the whole thing could be left to the so-called free market? Is it not plain to everyone that she made a change only because she was forced to do so by a parliamentary vote and that the availability of sport on television to most of our constituents is not safe in the Government's hands?

Mrs. Bottomley

The hon. Gentleman's remarks have little relevance. There has been detailed consultation on the Bill and the options have been examined at each stage. In the same way as we issued a consultation document on ownership and digital broadcasting, it was also appropriate to produce a detailed consultation document before taking permanent decisions. The House will be aware of the complexity of the issue.

Mr. Joseph Ashton (Bassetlaw)

While understanding the morality of what my hon. Friend the Member for The Wrekin (Mr. Grocott) said, and his motives, surely if events are open to everyone an unofficial cartel could be formed to offer a minimum price for events such as the cup final. Where is the referee or regulator to ensure that the teams and clubs playing in the cup final can say, "It is not fair; we are not being given a fair price and therefore do not think that we should go on television"? Where is the referee?

Mrs. Bottomley

The complexity of the issue has become clear to a far wider audience in recent months. A great deal of money is going to sporting organisations as a result of the sale of rights and the rights holders feel strongly about that. [Interruption.] I take issue with the hon. Member for Glasgow, Cathcart (Mr. Maxton)— many of the organisations are now involved in a number of activities, encouraging more and more young people to take up sport. Our stadiums are of a high standard. As we go football crazy in the summer with Euro 96—the biggest sporting event for 30 years—many of us will be aware that the extra income stream has been of benefit.

At the same time, as the hon. Gentleman says, the public are concerned about being able to see more sport, albeit that the amount of sport has dramatically increased. That is why the House will eagerly look forward to the voluntary code of conduct being drawn up by the Sports Council which considers precisely those issues and examines the matters that should be taken into consideration when sports rights holders want to do the right thing for sport in its widest sense.

Mr. Nigel Evans (Ribble Valley)

A number of us had reservations about the pay-per-view £10 that subscribers were asked to pay for the Bruno-Tyson fight. But having said that, Sky has been knocked right, left and centre. Will my right hon. Friend pay tribute to the fact that Sky Sports shows more than 10,000 hours of sport compared with the BBC's 1,500 hours? Credit should be given credit where it is due.

Mrs. Bottomley

I pay that credit where it is due—much more sport is now available on television.

Part V of the Bill merges the existing Broadcasting Standards Council and the Broadcasting Complaints Commission. A new body, the Broadcasting Standards Commission, will combine the remits of the two existing bodies, creating a single focus for public concerns about taste and decency and the portrayal of violence. It will also be involved in questions of unfair treatment and unwarranted infringement of privacy by broadcasters. For the first time, the new body will be given the power to commission research into issues of unfair treatment and the infringement of privacy. That power will be in addition to its power to commission research into standards in broadcasting which has, until now, been commissioned by the existing Broadcasting Standards Council. To reinforce the BSC's authority, the Bill requires broadcasting and regulatory bodies to record any action that they take following a complaint to the commission. That information will be published in the Commission's regular complaints reports.

The new commission is an advisory and adjudicating body. It will build on the influence of its predecessors, but it is the broadcasting regulatory bodies—the Independent Television Commission, the Radio Authority and the Welsh Authority—that are directly responsible for ensuring that programmes meet standards of taste and decency and do not contain material that is offensive to public feeling. The new BBC royal charter and agreement set out similar responsibilities to be met by the corporation, and more clearly identify the governors' specific obligations on those questions.

Sir John Gorst (Hendon, North)

In the past three quarters of an hour that my right hon. Friend has been on her feet she has mentioned plurality, diversity, quality and liberality, but the one word that she has not mentioned—perhaps she is about to come to it in the next section of her speech—is impartiality. Is she satisfied that the licensing arrangements that she is outlining are adequate in terms of impartiality in the BBC? Has she given thought to the appointment of a particular governor with special responsibility for impartiality?

Mrs. Bottomley

My hon. Friend speaks for many when he identifies the profound concern that is felt and the fact that the BBC's reputation rests on its reputation for impartiality. I welcome the statement of the retiring chairman of the BBC, Duke Hussey, that that was a vital element for the BBC, and the comments of the incoming chairman, Sir Christopher Bland, who once again spelt out the importance of that issue. In the statement of pledges—which is required under the royal charter and agreement—the first pledge involves impartiality. The BBC will shortly produce its first document under that heading and I know that my hon. Friend and other hon. Members will want to scrutinise it carefully. The charter and agreement spell out very clearly the governors' duties as regulators—including, above all, ensuring that there is impartiality and confidence in the process. My hon. Friend the Member for Hendon, North (Sir J. Gorst) will be aware of some of the steps that we have taken already to establish a separate line of complaint for those who are not satisfied. I believe that my hon. Friend will be further reassured on that front when he sees the statement of pledges.

I have referred already to the technical prowess and the enviable overall quality of broadcasting in this country. The United Kingdom is notable also for its seriousness in maintaining standards of fairness, taste and decency in broadcasting. I believe that developments in the digital world will reinforce those important principles for which British broadcasting is valued around the world.

Part IV of the Bill contains provisions ancillary to the BBC's privatisation of its transmission network. The Government support the privatisation of BBC transmission services, which will provide the corporation with new funds to invest in digital television. I notice that the amendment standing in the name of the Leader of the Opposition regrets that privatisation. Are we to understand that beneath that amendment there is a policy—or perhaps that is too much to ask—to renationalise the BBC's transmission network?

Without those funds, money would have to be diverted from programme making so that the corporation could make the necessary investment in digital television. Would the Opposition deprive viewers and listeners of programmes rather than support an imaginative use of public assets in the public interest? Substantial investment by the BBC in digital broadcasting will be a catalyst for commercial broadcasters' involvement and an incentive for the more rapid development of digital services. The Bill also provides that BBC commercial broadcasting services—as opposed to those funded by the licence fee—are regulated by the ITC and the Radio Authority, like other commercial broadcasting services.

We intend to propose a number of amendments to the Bill in Committee—many in response to issues raised in the debates in another place. We shall introduce amendments to the public interest test for newspapers acquiring broadcasting interests. They will clarify that the test is not retrospective and does not apply continuously, and they will also permit the application of the test where a national paper starts a local paper in an area where it has acquired broadcasting interests.

In close consultation with the broadcasting regulators, we shall make proposals to strengthen further the definition of control—effectively outlawing arrangements that are designed to circumvent the ownership rules. We shall also announce our proposals for regulating shareholdings in broadcasters which fall short of control.

During the debate in the other place, concern was expressed about news provision on channel 3. We shall introduce an amendment making it clear that the one company selected by the ITV companies from an approved list compiled by the ITC will be the sole provider of channel 3 news. It need not provide it indefinitely—nor does it necessarily have to be ITN, the current provider—but a single source will provide proper competition for the BBC and a nationwide service of national and international news.

We shall fulfil our commitment to allow independent local radio licensees who take a place on a digital radio multiplex to extend their licences for a further eight-year term. We also propose to allow existing independent local radio licences to be renewed without a further bidding process when no other operator expresses an interest. We shall strengthen the ITC's powers to deal with foreign satellite broadcasting applicants, ensuring in particular that licence applicants are not serving the interests of political bodies.

In the light of a great expansion in the number of channels and in opportunities, we shall not allow the United Kingdom to become a base from which terrorist or propagandist organisations can broadcast overseas. We shall propose amendments to the existing licence application process to safeguard Britain's good name as a country with a responsible broadcasting regulation regime.

I shall also mention briefly our plans for reviewing the progress of digital broadcasting, thereby setting a time scale for the transition from analogue to digital reception. That will occur five years after the first multiplex licences are awarded—or earlier if the take-up of digital television merits it. We shall put that on the face of the Bill. However, we shall not bow to pressure exerted by the Opposition to set a date now for switch-off. We are not prepared to coerce viewers into accepting digital television regardless of their personal choices.

In its craven desire to appease the industry, the Labour party would stop those least able to afford a digital television seeing any television. The Conservative principle of customer choice has been a constant feature of our broadcasting policies for all the years that I have been in this place. Customer choice will determine the success or otherwise of digital terrestrial television, in the same way as customer choice determined the format of satellite television soon after the passage of the Broadcasting Act 1990.

By contrast, the apology of an amendment standing in the name of the Leader of the Opposition is a wish list inspired only by Labour's desperation to placate vested interests. On cross-media ownership, the Opposition have lurched from a paranoid terror of large media groups to sycophantic devotion to them. No doubt Opposition Back Benchers are as astonished as their friends in the Campaign for Press and Broadcasting Freedom by the latest U-turn. Perhaps Opposition Front Benchers will answer the questions posed by the hon. Member for Islington, South and Finsbury when speaking for the Opposition only last year. He said: If national newspaper companies with a national focus and interests seek to take over regional ITV stations, will there not be a serious danger of harming the regional character of those stations? … May we also have an assurance that the normal operation of competition policy through the Monopolies and Mergers Commission will continue alongside the new rules? Surely both must apply: one must not be a substitute for the other".—[Official Report, 23 May 1995; Vol. 260, c. 712.] I can certainly provide that assurance to the House. We are the friends of the consumer; we stand for the viewer, the listener and the reader, just as we stand for the patient, the passenger and the pupil. The Labour party does not.

The Bill builds upon and nurtures the best traditions of British broadcasting. It offers the British people unparalleled choice and it will help to bring the technology of tomorrow into the homes of today. Viewers and listeners will choose whether digital succeeds. Through the Bill, the Government are liberating British media companies to serve the British public, to exploit new technology, to create new jobs and new commercial opportunities, and to allow Britain to lead the world into the 21st century. It is a common-sense Bill for the new millennium and I commend it to the House.

5.57 pm

Dr. John Cunningham (Copeland)

I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof: That this House declines to give a Second Reading to the Broadcasting Bill [Lords] because it fails to provide the necessary incentives for rapid development of digital terrestrial television; does not contain a satisfactory framework for ensuring fair access to televised sporting events; treats newspaper groups unfairly in their access to broadcasting markets; fails to give clear commitments to ensuring the proper regulation of open access and of conditional access systems; regrets the privatisation of the BBC transmission system; and deplores the missed opportunity of providing the regulatory framework necessary to embrace the convergence of television and telecommunications technologies at the approach of the Millennium.

I confirm at the outset that the Government were right to introduce a new Broadcasting Bill. I am not convinced that the Secretary of State made the correct type of speech about it, but I shall return to that issue later. Does the Bill meet the challenges that we face? Will it be effective? Does it give sufficient guarantees to viewers and to listeners? We must answer those questions and judge where the public interest lies and how to safeguard it.

When the Bill was debated in another place, widespread concerns were expressed that the Government's proposals fell well short of what was required in a number of important areas. The Secretary of State sounded rather like the hon. Member for Rutland and Melton (Mr. Duncan) when, in the face of an overwhelming and humiliating defeat in the House of Lords, she claimed that she was pleased that the Bill had been changed. It is rather like the Government's claiming some crumb of comfort from their humiliating defeat in the South-East Staffordshire by-election.

If the Secretary of State wanted the sports broadcasting provisions in the Bill, why did she not include them in the first place? If she wanted the amendment to be carried, why did her right hon. and hon. Friends oppose it to the bitter end? It is absurd for the Secretary of State to claim to be pleased about what was, by any test, one of the Government's most humiliating climbdowns on an important facet of broadcasting in recent memory.

The background is one of rapidly advancing technological change, media industry restructuring and global market development. As the right hon. Member for Wokingham (Mr. Redwood) made clear, the Secretary of State does not seem quite to understand the nature and pace of that change. Her answer to the right hon. Gentleman will put in jeopardy any hopes she might have of a place in his first shadow Cabinet.

As the right hon. Lady said, the consumer end of the changes means a wider choice of programmes and services, with the advance of digital broadcasting, satellite broadcasting and cable services bringing more competition and greater choice. Those changes, however, raise public concerns about access, standards and quality. I share all those concerns and in a number of respects, the Bill fails to meet them, particularly those in relation to quality, as several hon. Members have made clear in interventions.

The rigid distinctions between telephony, computing, broadcasting and film are rapidly eroding. The new delivery systems will provide new commercial, industrial and employment prospects. Digitalisation will accelerate the pace of change and create new challenges and opportunities for legislators and broadcasters alike. It is a time of convergence of education, the arts, drama, the cultural industries, film and television. The right hon. Lady was right to say that those changes have the potential to bring considerable wealth and employment opportunities to the countries that make a success of them.

Mrs. Anne Campbell

Does my right hon. Friend agree that it is crucial that some of the new digitalised channels provide educational opportunities as well as the opportunities that he has already mentioned? Should not we legislate to make available some space for that important purpose?

Dr. Cunningham

Yes. I agree with my hon. Friend. We have the most respected and effective distance learning organisation in broadcasting anywhere in the world—the Open university, which was introduced by a Labour Government. We also have an important proposal to develop a university of industry to utilise precisely the opportunities to which my hon. Friend refers.

Technological convergence can bring together work and leisure, the office and the home, education and entertainment. Broadcasting is a key area of activity wherein news, sport, drama, music, cultural activities, education, business and commerce come together. Public policy in broadcasting has always been, and will continue to be, of critical importance. The growth of multi-media industries and their significance in all aspects of our lives means that public policy must address the challenges of technological innovations, ownership issues and matters of content and standards.

The question for us all is whether we can meet those challenges and turn them to our advantage to produce commercial and economic success. The opportunities are enormous—not just to install the technology, but to develop the huge range of new services that technology will facilitate. That is why the Bill is so important. The Government's decision to introduce a Broadcasting Bill can be seen in two ways. It can be seen as a modest measure that tidies up some aspects of the Broadcasting Act 1990, introduces the prospect at some undefined future date of a new form of broadcasting and implements the last vestiges of the Government's privatisation programme. Alternatively, in the words of the Secretary of State, it can be portrayed as the liberation of British broadcasters to be world leaders in the next millennium and a framework to encourage and support the necessary risk investments. I am sorry to say that it seems much more likely that the first scenario will prevail.

Mr. Ian Bruce

I am sure that the House was expecting the hon. Member for Newham, North-West (Mr. Banks) to ask this question, but he is not in his place. In the nine years that I have been in the House, every time any media organisation was taken over, the Labour party was quick to say that it was wrong to concentrate media ownership. Why, therefore, in the reasoned amendment that seeks to deny the Bill a Second Reading, does Labour seem keen to see large newspaper conglomerates taking over terrestrial broadcasting facilities?

Dr. Cunningham

The hon. Gentleman apparently does not understand that the Bill facilitates the purchase of channel 3 licences by newspaper owners. The argument is not about that, as it is already happening. Multi-media companies are developing not only in Britain, but internationally. If the hon. Gentleman does not understand that, he is in the wrong debate. The debate concerns how those developments can be managed and controlled and what legislation or regulation should be put in place to do it. I shall return to that later in my speech.

Mr. David Mellor (Putney)

The right hon. Gentleman was unduly unkind to my hon. Friend the Member for South Dorset (Mr. Bruce). I trust that he will treat me rather more sympathetically. What is puzzling the right hon. Gentleman's many admirers in the Conservative party, including me, is how he can put his name to an amendment that suggests that the newspapers are being treated unfairly when, with the full authority of the Labour party, in another place on 23 May last year, Lord Donoughue said: We particularly welcome the 20 per cent. newspaper circulation ceiling on TV ownership, which appears to prevent the existing giants from expanding further into television."—[0fficial Report, House of Lords, 23 May 1995; Vol. 564, c. 934.] There is no way in which what Lord Donoughue said can sit with the Labour amendment. What is the explanation for that? Our explanation is that the Mirror Group has got at the Labour party.

Dr. Cunningham

I am happy to respond more kindly if the right hon. and learned Gentleman thinks that I should. It was once said that television was a device that allowed us to see in our own living rooms people whom we would not necessarily invite into our homes. I would not necessarily put the right hon. and learned Gentleman into that category, but it certainly applies to some of his hon. Friends.

I said that I would return to the matter of the Mirror Group, but I am happy to respond now. The Secretary of State should explain what was so fundamental about the Government's choice of 20 per cent. That is the question. The arbitrary choice of 20 per cent. of the market happily allows United Newspapers and Associated Newspapers to buy channel 3 licences, but miraculously and coincidentally, prevents the Mirror Group from doing the same. That is the inconsistency in the Government's position and that is why we are raising the question. What made them decide on 20 per cent.? Why was it not 25 per cent., or 30 per cent? What was the logic in choosing that figure? I shall return to the matter later.

If the Conservative party were following its convictions altogether, it would not want any such regulation. It would want the market to decide, as I have no doubt the right hon. Gentleman would agree.

Mr. Redwood

To clear up the point, will the right hon. Gentleman say what contacts he and other members of the shadow Cabinet have had with the Mirror Group in the past three months regarding this important issue?

Dr. Cunningham

The same contacts as I have had with Sir David English, News International representatives, BSkyB representatives, regional newspapers and publishing organisations. Anyone who wanted to see me to express concerns about the provisions of the Bill was welcome in my office, just as the right hon. Gentleman would expect. I saw people on a completely even-handed basis. Incidentally, that remains the position.

Mr. Hugh Dykes (Harrow, East)

Why, then, did the right hon. Gentleman not see Lord Donoughue?

Dr. Cunningham

I see Lord Donoughue every week. He is a valued colleague and member of my team. To make it clear to the hon. Gentleman, I should add that Lord Donoughue and I are not just colleagues; we have been friends since we worked together at 10 Downing street 20 years ago. Perhaps I might take this opportunity to praise the valuable work of my noble Friend and his colleagues and team in the House of Lords for securing so many important amendments to the Bill.

There is no division between the Opposition and the Secretary of State on the desirability of introducing digital broadcasting, especially digital television. It offers the prospect of better quality television pictures and competition and innovation, with a much greater choice of television channels. It also offers far more efficient use of the scarce radio spectrum in our heavily congested airwaves. The introduction of digital technology does not, however, guarantee better quality television programmes or better channels. Few comments on quality can better that of Sam Goldwyn who observed: The wide screen makes a bad film twice as bad.

There is no guarantee that digital television will bring better quality programmes to our television sets, yet the three key criteria for potential multiplex operators are said to be investment in infrastructure, investment in promotion and programme variety. Quality does not feature among the key criteria that the Government have set down for development.

It is clear from discussions with many of the leading figures in British broadcasting since the Bill was published that none would say that digital television will definitely happen under these proposals. That is not just the position of overly cynical or clever-boxing broadcasters, but of many analysts of the broadcasting market.

Mr. Roger Gale (North Thanet)

I fail to understand the hon. Gentleman's concern. If he has genuinely mastered the complexities of the distribution of multiplex licences—it is slightly questionable whether he has—he will surely understand that the quality thresholds are already in place, because most of the multiplex licences will go to existing broadcasters to enable them to expand their services through the digital medium.

Dr. Cunningham

In spite of the hon. Gentleman's patronising intervention, that is not clear to me and it is not clear to many broadcasters either.

The single biggest risk factor for the future of digital television is the requirement for multiplex operators to promote the take-up of digital television. The operators of the multiplexes not already allocated will be expected to make substantial investments to ensure that digital terrestrial television is widely adopted by the consumer. In reality, that must be through the subsidy of set-top boxes because early production models are likely to be far too expensive for many except a small group of enthusiasts or high-income earners. As an analysis of the market risk of digital television prepared by NatWest Markets said: There is little or no scope for subsidy of the digital set top box by the service provider. But the availability of a cheap box, we contend, is a key issue in the selling of what after all may be a less attractive competing product than that offered either by cable and BSkyB. The multiplex operators will not really have a distinctive new product to sell. New broadcasters will wish to see an existing customer base before they invest in programming. They will have to have far higher revenues than conventional broadcasters to pay for programming and to pay the multiplex operators for the right to broadcast. If there is a shortage of income, that will seriously risk driving down the quality of the content. That is the point, and I am sure that the hon. Member for North Thanet (Mr. Gale) understands it perfectly.

We have clearly seen from the development of BSkyB that it is the rights holders who have the valuable product. The top sporting events, films, drama and the soaps bring in the audiences, and BSkyB and others have to pay handsomely for them. The sporting bodies do not have to pay the broadcaster to be seen or heard on air. It is the other way around and that will be a financial challenge for any new broadcasters with digital technology developments. Heavens above, the BBC even has to pay Camelot to be allowed to broadcast the weekly national lottery draw live.

The existing terrestrial broadcasters have little incentive to put their own money into the development of digital broadcasting. While they are automatically entitled either to a place on a multiplex or a multiplex in their own right, they are also free to sit back and wait for the new players to invest. To get on air, any new broadcaster will have to pay for space on a multiplex. The new broadcasters will thus face much higher transmission costs, which in turn will inevitably drive down investment in production. In effect, they will be subsidising the reception of television programmes broadcast by others that almost certainly will be of superior quality to their own.

There are, of course, alternatives to the route that the Government have chosen. One of the many potential advantages to be gained from the introduction of digital terrestrial television is the liberation of the radio frequency spectrum for other purposes. That can be done only by setting a switch-off date for analogue broadcasts at some point in the future. If the Government's steadfast refusal—we heard it again today—to set such a date continues, that will also mitigate against the early fulfilment of their proposals.

If the present proposals for digital broadcasting prove to be unrealistic and potential multiplex operators do not materialise, a future Government will have to consider other options to promote its introduction.

Ms Judith Church (Dagenham)

Does my hon. Friend agree that the Government have wasted an opportunity to give an important British industry a lead in the world in important new technology? Would not it be wonderful if the one decent legacy that the Government were to leave in their tottering last days was a decent Broadcasting Bill?

Dr. Cunningham

My hon. Friend is right. Our objectives in Committee will be to improve the Bill and to improve our chances of being successful in that area.

A system of digital broadcasting that ensures universal access could also embrace cable delivery systems and digital satellite broadcasting. Ultimately, consumers should not have to be concerned about the method of service delivery to their homes. The real choice in broadcasting comes from universal access to a wide range of programme services. The Government's current plans seem to be moving away from that objective. Universal access has always been an objective of public service broadcasting. I fear a loss of service to people in rural communities and some of the fringe areas of the United Kingdom. I also believe that there is a possibility of driving a wedge between the current terrestrial, satellite and cable broadcasters and potential future operators of digital multiplexes.

Many of the criticisms of the Government's proposals for digital television can also be applied to digital audio broadcasting. The same questions about investment arise. In addition, it has been asked whether multiplexes are necessary for the successful development of digital radio. An especial concern has been raised by the Commercial Radio Companies Association, which believes that insufficient spectrum has been set aside for all existing local commercial radio broadcasters to be able to convert to digital transmission in the foreseeable future. That possibility, and the association's complaint that positive advantage has been given to the BBC's local services, raises the question whether a local digital radio market will emerge. We will need to examine that further in Committee.

The Government's failure to understand the principles of providing universal broadcast service has been clearly shown in the debate, which I mentioned earlier, about the televising of sport. We initiated that debate not because we are opposed to BSkyB, but because there are important issues at stake. I am a Sky subscriber, as are, I suspect, many right hon. and hon. Members. Sky has been bold, innovative and successful in its approach to the broadcasting of live sport. We have no intention of excluding it, but there are a small number of events—the original legislation was, after all, introduced by the right hon. and learned Member for Putney (Mr. Mellor)—which, it is worth remembering, do not have to be sporting occasions, which the public rightly believe should be available free to air on the widest possible basis. That was the purpose of our amendment in the other place and we were naturally delighted that it received such wide-ranging all-party support and is now part of the Bill. I sincerely hope that the Secretary of State has no intention of removing it. Judging from her remarks this afternoon, I think that we can conclude that she does not, but we shall watch carefully.

I also accept that the sporting bodies, the rights holders, have a legitimate right to maximise revenue from their product. That is why we support the case for unbundling broadcast rights for sport. The separate sale of live coverage, rebroadcast rights, highlights and radio coverage would allow the growth of a variety of sports coverage suited to particular types of delivery system. There is no evidence that that would substantially diminish the overall value of rights. Some people, in some sports at least, believe that it could increase the value. If we were to proceed in that direction, in time the relevance of the limited list itself might also diminish.

Mr. Ashton

If Parliament passes a law saying that a certain product must be made available and there is no appeal with regard to pitching the price, what is to stop the participants challenging the legislation in the courts or going to the Office of Fair Trading and saying that it is a restraint of trade? If rents are fixed, there is a rents officer. If we have a prices and incomes policy, we have a prices and incomes board. The law says that the product must be made available, but not at what price. If a cartel is formed, or if there is an accusation of a cartel, the Ryder cup people or the Football Association could go to court and say that every fair trading law had been broken. As I understand it, the legal advice is that that would be so.

Dr. Cunningham

The short answer—I understand and know of my hon. Friend's interest in these matters and I respect his concerns—is that the OFT is already considering the position of the Premier League in these matters. Competition law and other provisions will take their place, as they should if questions are raised about such matters, but my hon. Friend says, "If a list should emerge". A list exists. It was introduced by the 1990 Act and has been there for some time. That is what I am addressing.

Mr. Gale

Will the right hon. Gentleman give way?

Dr. Cunningham

No, I shall not give way to the hon. Gentleman again.

We also believe that the list should be reviewed, not necessarily with a view to extending its scope. We have accordingly proposed that an advisory group should consider all the issues in order to inform the Secretary of State's decisions on the televising of sport.

Mr. Peter Ainsworth (East Surrey)

Another quango.

Dr. Cunningham

The hon. Gentleman talks about a quango. The Secretary of State has already referred the matter to a quango. It has already happened. The hon. Gentleman should keep up with events. What concerns me is whether anything effective will emerge from the right hon. Lady's decision.

The Minister of State, Department of National Heritage (Mr. Iain Sproat)

Wait and see.

Dr. Cunningham

The Minister says, "Wait and see," but we have some indications already. I understand that a draft code of practice on the broadcasting of sport was delivered to the Department a few days ago. It has been agreed, apparently, by some of the executives of major sporting bodies, but not by their governing bodies. To date, no formal discussions with any broadcasters have taken place about it, although some informal soundings have been made. My understanding is that the code of practice is on rebroadcast rights and highlights and does not yet deal with the important issues, such as news coverage of sporting events.

The right hon. Lady should publish that proposal as soon as possible, and certainly during our Committee proceedings, so that the House and the Committee can make some better-informed decisions. On the basis of what we understand, it is a long way from being satisfactory. If the right hon. Lady does not publish it, or even if she does and it is unsatisfactory, we will reintroduce amendments to provide a statutory framework for the unbundling of sports broadcasting rights.

I come now to the importance of proper regulation of conditional access systems—the set—top boxes and associated technology of must-carry and must-offer protection to ensure that all broadcasters are treated fairly, and of universal access for viewers and listeners across the United Kingdom.

In January, the Government published their proposals for regulation of conditional access systems and they have given a commitment to table next month the relevant statutory instruments to implement the European Union television standards directive, but we need to be convinced that all the necessary steps are being taken. The new licensing regime needs to be put in place now and Parliament should be debating the issues as part of the Broadcasting Bill. We shall certainly raise them in Committee.

A further matter that should be settled by the Bill is the Channel 4 funding formula. The formula was a well-intended measure in the 1990 Act. I say to the right hon. and learned Member for Putney that it was founded on good intentions. The formula worked to most people's satisfaction for a while, but it has fallen into disrepute. There are, I know—we have all had the correspondence—strong feelings on both sides of the argument, but when the 1990 Act sought to underpin the finances of Channel 4, it did not envisage the outcome, and I cannot blame the right hon. and learned Gentleman for that.

In the event, the funding formula has not been a great success. In the five years to the end of 1997, Channel 4 will have paid more than £300 million to the ITV companies, which is considerably more than its expectations and more than anyone envisaged at the time. A fair means should now be established to redirect the substantial amount of Channel 4's revenue back to programme making. The formula should not just be ended, giving a blank cheque or carte blanche to Channel 4; there must be commitments if the formula is to be ended, and we shall want to explore what the Secretary of State had to say about that in more detail in Committee.

The right hon. Lady tried to have some fun about opposition on strong and diverse companies in the media operating in local, national and international media markets, but she must do a bit better than quote Paul Foot in support of her case. As I understand it, Mr. Paul Foot, in The Guardian, was saying that we on the Labour Benches should accept without question a piece of Conservative Government legislation. I must say that that is a headstand of spectacular proportions, even for him. We have no intention of doing so.

The Government's position is perverse. They want developments in cross-media ownership, but arbitrary figures have been set to judge how much of the market any one company can own. The most arbitrary aspect must be the restrictions on national newspaper groups investing in commercial television—the so-called 20 per cent. rule.

The Mirror Group, as the right hon. Lady knows because she has had discussions and correspondence with it, feels that the legislative proposals are biased against it—and understandably so. It should not be discriminated against, particularly when supposedly smaller newspaper groups own a large number of regional and local newspaper titles. Nationally and internationally, cross-media ownership already exists and is developing. The question is not whether it should exist—it is happening—but what controls should be used to guard against monopoly and to ensure fair competition and diversity. We are happy to debate those issues.

Mr. Mellor

I am grateful to the right hon. Gentleman for giving way a second time. If 20 per cent. is not the right figure, what is?

Dr. Cunningham

I am sure that the right hon. and learned Gentleman knows that, if it was 25 per cent., the Mirror Group would be allowed to participate. The amendment was blocked. United Newspapers and Associated Newspapers can participate. Conservative Members must say why the limit is drawn to block the Mirror Group. [Interruption.] Why not News International, indeed, which has something over 30 per cent. of the newspaper market? That is why my hon. Friend the Member for Bassetlaw (Mr. Ashton) said, apparently to some mirth on Conservative Benches, although Conservative Members pride themselves on pursuing market forces and free enterprise, that perhaps the usual competition laws should be allowed to operate. That is at least as sensible and logical a position as the one adopted by the Secretary of State.

Paragraph 9(1)(b) of the new part IV of schedule 2—to be found on page 108 of the Bill—gives powers to the ITC and provides that a licence does not have to be granted if the relevant authority determine that in all the circumstances the holding of the licence by a body corporate falling within paragraph (a) or (b) above operates, or could be expected to operate, against the public interest. So let us not hear from Conservative Members that there are no safeguards against abuse—they are written into their Bill, but it is apparent from their clacking away during the debate that they have not read it. That has been amply demonstrated by what they have said.

In local newspaper markets, there are other questionable restrictions on cross-media ownership, which are again the subject of much criticism from local newspapers. The thresholds do not seem to be based on any objective assessment of markets. They are clearly derived from the failure of competition policy and the Government's repeated failure to bring such policy up to date. If the Office of Fair Trading and the Monopolies and Mergers Commission were able to do their jobs properly, the thresholds would not need to be set in such an arbitrary manner.

If public interest issues are at stake, let us use public interest criteria. That is what they are there for. The public interest also requires that, where takeovers occur, there is adequate protection for regional interests. I know that at least one right hon. Gentleman on the Conservative Benches shares some of the views that I am expressing in this part of my speech.

Mr. Robert G. Hughes (Harrow, West)

Will the right hon. Gentleman give way?

Dr. Cunningham

Yes, but then I must get on.

Mr. Hughes

I hear what the right hon. Gentleman says, but does he not feel obliged to explain why he so violently disagrees with Lord Donoughue, a personal friend with whom he has worked so closely, who said that we have it absolutely right and warmly welcomed the 20 per cent. rule? Is the House not entitled to expect an explanation?

Dr. Cunningham

That was a poor question. I rather regret giving way to the hon. Gentleman, because he has just repeated a question that I have already answered.

The hon. Gentleman asked why I violently disagree with Lord Donoughue. I do not. If the hon. Gentleman checks the Hansard of the other place, he will see that Lord Donoughue was talking about the White Paper and that his comment was made long before the Bill was published. He will also see that Lord Donoughue moved an amendment on the very issue that I am talking about, so the hon. Gentleman is behind the times and is rather ill informed, as is often the case.

I welcome the proposal to merge the Broadcasting Standards Council and the Broadcasting Complaints Commission, but we believe that a further step could be taken. The Independent Television Commission's main role is to consider issues of quality. We think that very important, but we should consider whether it should also deal with standards and complaints. The public would then know that there was one body to which they could turn when concerned about any aspect of television broadcasting. At the moment, there is a plethora of regulators. Frankly, the public do not know that some of them even exist, but if they do, the public are not sure of their powers or how they can help when they have a complaint.

I share the Secretary of State's understandable concerns about the proposal to use the so-called V-chip. I am happy to have a discussion on that as, indeed, is she, because, like almost every hon. Member, I want to ensure that, so far as practicable, children are protected from violent or disturbing images on television screens. 1 share the public's concerns generally on those points, but the reality is very different from some of the reports that we have read in the newspapers. Even if every new television set were to be fitted from tomorrow with the V-chip, some 36 million television sets in everyday use in Britain would be without one, and many of those sets will survive for many years. We know that many parents will not go out and—by whatever means—have their existing television sets retro-fitted with V-chips.

Mr. Hughes

rose—

Dr. Cunningham

No, I shall not give way again.

Many of those sets will survive for years. The proposal leaves out the need to fit the chip to video recorders, which would also require one as, in time, probably, would personal computers. There is also a legitimate argument that over-reliance on such end-user technology might, for example, lead inevitably to a lowering of standards in the general quality of broadcast material. It might also erode the well-established principle of the 9 o'clock watershed. The overriding principle must be the exercise of parental responsibility, which can only ever be supported—not released—by technology, so let us have the debate. Anyone who believes that that is a quick and easy solution to the problem is deluding him or herself.

The BBC transmitter privatisation, to which the Secretary of State referred, is unnecessary. Nor did the BBC want it. It is taking place as a sop to those on the Tory right who want the whole of the BBC to be privatised. It was forced on the BBC, which probably acquiesced to ease the renewal of its charter. Before the sale takes place, there are some important questions to be asked about how the future of broadcasting transmission services will be regulated. We do not know who will be the likely purchaser of the transmitters, but it could, for example, be National Transmission Ltd. and its new owners, Cabletel. How will a monopoly or, indeed, a rather complex duopoly, be regulated? How will its prices be controlled? Will radio and television transmission operate in the public interest, or will it operate in the interests of a private monopoly just motivated by profits, as we have seen in many other private monopolies created by the Government following privatisation? All these questions have been ducked by the Secretary of State, and we shall pursue them in Committee.

There are other issues—

Mr. Michael Fabricant (Mid-Staffordshire)

Will the right hon. Gentleman give way?

Dr. Cunningham

—such as who owns some of the transmitter sites, particularly those based on embassy properties overseas. Finally, but by no means least important—

Mr. Fabricant

Will the right hon. Gentleman give way?

Dr. Cunningham

Not for the moment.

What provisions will there be for the staff of the BBC transmission department, whose employment and pension rights do not merit a single line in these proposals? The staff of the BBC transmission service must be treated in no less favourable a way than the IBA employees were when its transmission services were privatised. If the House will forgive the pun, bland reassurances about TUPE—the transfer of undertakings protection of employment—regulations are simply not good enough.

The Bill's remit is broad and complex—

Mr. Fabricant

Will the right hon. Gentleman give way?

Dr. Cunningham

—but its vision is narrow. Where are the provisions—

Mr. Fabricant

Is he frit?

Dr. Cunningham

The hon. Gentleman flatters himself.

Where are the provisions to deal with the new types of point-to-point and video-on-demand services? Where are the clauses to regulate the provision of moving images on the Internet? Where are the regulations that will accelerate the process of convergence of the television, telephone and personal computer?

Broadcasting has a great tradition in the United Kingdom, from the early radio broadcasts, through Baird's experiments 70 years ago, right up to the present day. We have, as the Secretary of State rightly said, been at the forefront, the cutting edge, of much of the progress in broadcasting technology. In spite of our criticisms, we have probably the best television industry in the world, even though we must all from time to time reflect on that wonderful comment of Harriet Van Horne, who said: There are days when any electrical appliance in the house, including the vacuum cleaner, seems to offer more entertainment possibilities than the television set.

To their credit, the Government see the commercial and economic opportunities of digital technology—opportunities for British industry across the globe; opportunities that we cannot afford to miss—but they have failed to provide the legislative and regulatory framework to match those challenges. That is why we shall vote for our amendment.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse)

I call Mr. David Mellor.

Mr. Ashton

On a point of order, Mr. Deputy Speaker. It was announced earlier that, after the Front-Bench speeches, speeches would be limited to 10 minutes. When will that arrangement start, and when will it end?

Mr. Deputy Speaker

It will start immediately.

6.39 pm

Mr. David Mellor (Putney)

I am grateful for the opportunity to speak about an area of policy which means a great deal to me, and has done for most of my time in the House.

I welcome the Bill, which represents a full-hearted acceptance of the reality of change that has coloured and motivated all Conservative legislation on broadcasting over the past 50 years. All the major broadcasting changes that are now considered so beneficial were introduced by Conservative Governments, and were generally opposed by Labour. The move towards imposing a statutory framework on the digital revolution will, I think, be as successful as—six years on—the Broadcasting Act 1990 is now seen to be. Whatever was said about that Act. ITV and Channel 4 have flourished and the Trsry has benefited, and there have been none of the malevolent consequences that were predicted.

Given the time limit, I shall concentrate on a few issues that reflect my view that, while of course there is room for enterprise and entrepreneurs in broadcasting, it will never be a suitable medium for a free-for-all. There will never be a completely free market in broadcasting. There is always a role for regulation; the task of successive Parliaments and Governments is to determine what that regulation should be, and with how light a touch it should be applied.

I have been closely involved in the issue of sport since the Bill was introduced. I believe that the right answer has now been arrived at in regard to the limited list and the restriction on Sky. I subscribe to Sky Sports: I believe that in future there will be specialist channels catering for the addict in a way that general channels cannot be expected to. We must recognise, however, that there is considerable resentment among the public, who feel that they may be robbed of what they regard as key national sporting events.

The restricted list—whose legislative history dates from well before the 1990 Act—provides a fair basis for specifying events that should be seen on terrestrial television. I do not consider that a major inhibition to the development of Sky's business, but I do not support any extension of the list. I think that we must simply accept that it exists, arbitrary though it may be. To extend it would be to open a Pandora's box: people would want to include everything from the Five Nations championship and the Ryder cup to the tiddlywinks championships.

It would be wrong for us not to address the issue of "unbundling" in an effective way. There is no reason why those who have paid for exclusive rights to show a sporting event—even if they have paid formidable sums—should not both allow limited highlights to be shown on news channels on other services and, if they are television channels, allow separate radio rights so that those who cannot afford to subscribe can listen to the event on the radio. That is what many people did when the last Ryder cup event was broadcast. We have a public interest in ensuring that monopolists do not damage the public's entitlement to share in great national sporting events. I do not necessarily believe that that should be included in a Bill, but I do believe that it should be achieved effectively. I hope that there will soon be a code of practice, so that we can judge its effectiveness before the Report stage.

The right hon. Member for Copeland (Dr. Cunningham) said something that he may not entirely have meant; it was rather tangential. I may have misunderstood him, but he seemed to be saying that it was a good thing that the Premier League's television rights had been referred to the restrictive practices court. I am sorry if he thinks that—but he is now saying that he does not, so I take back what I said.

Personally, I consider that action to have been a malign and foolish intervention. The equivalent regulator in America is specifically forbidden to interfere in the entitlement of the league to sell its television rights as a unit. It is self-evident that every football team cannot agree its own television rights. If Manchester United has an exclusive deal with one television channel and Liverpool has a deal with another, how on earth can their matches be given television coverage? I believe that the regulator overstepped the mark.

When the 14 per cent. threshold was set, Channel 4 wanted it. It did not know any more than the rest of us whether, once free to sell its own advertising revenue, it would flourish: it took a leap in the dark. I understand why it now wants a change, and I also understand why the Channel 3 companies resist the idea—if some of them did indeed rely on securing an income from Channel 4 when they made their bids. Some were paying formidable sums to the Trsry for the right to broadcast.

I believe that considerable progress has been made in sorting out the issue, but I hope that it will be possible to deal with it once and for all during the passage of the Bill. As my right hon. Friend the Member for Mid-Sussex (Mr. Renton) suggested, there might be some advantage in that; I do not see the point of keeping the pot bubbling.

I am sorry that, having delivered his soundbite, the hon. Member for Liverpool, Mossley Hill (Mr. Alton) has departed. The V-chip strikes me as a simplistic solution to a complex problem, which, like all simplistic solutions, will not work. First, I think that responsibility for the broadcasting of offensive material should continue to lie with broadcasters. No one should be let off the hook because, if they show something unacceptable, a little widget in the television set will stop children seeing it. Secondly, such an arrangement may be all right in America, but, unlike America, we have regulation. Regulation should be effective, and should prevent the showing of programmes that are over-violent or offend the taste and decency of the wider community.

Our attention has already been drawn to the awesome consequences of replacing pieces of equipment to ensure that the V-chip can be inserted. It has been forgotten, however, that if the V-chip is to work on the basis of a one-to-five classification, everything shown on television must be classified. The system can be triggered only if the programme involved identifies itself as level 4, 3 or 2. I think that it is an elephant trap for the unwary, and I hope that the House will resist the proposal of the hon. Member for Mossley Hill.

As for cross-media ownership, we have all experienced our little humiliations when political proposals or pieces of legislation go wrong. The right hon. Member for Copeland teased my right hon. Friend the Secretary of State about her alleged humiliation over sports rights. I suspect that my right hon. Friend was well aware that that would happen at some point in the proceedings, and was entitled to make a judgment about when she wished to reveal her hand.

The right hon. Gentleman did his usual clever stuff, spinning his words effortlessly. He reminded me of what was once said about the boxing promoter Don King: "If bullshit were poetry, he would be Shakespeare." However, the fact that Lord Donoughue had eaten his words before the right hon. Gentleman could eat them for him cannot disguise the truth that the Labour party should feel some embarrassment. When—as is appropriate in the case of a Government of integrity like the present Government—the White Paper actually said what the Government would do, and when the Government then published a Bill to enable them to do it, Labour made one response to the Government's announcement of their intentions and a quite different response to the Bill. Whatever the right hon. Gentleman says, there is no option but to conclude that because Mirror Group Newspapers got at the Labour party it has had a conversion on the road to some city other than Damascus on the issue of 20 per cent. rather than 25 per cent. It sits ill in the mouth of a party that is always proclaiming its high standards on these matters to object to the Government apparently falling in thrall of vested interests when the first time that a vested interest so much as waves a little finger at Labour the public interest flies out of the window. Labour cannot be proud of that.

The Bill is worthy of a Second Reading and I hope that after some details have been smoothed out in Committee it will become law.

6.50 pm

Mr. Gerald Kaufman (Manchester, Gorton)

The Bill would be much better if it took account of the reports by the Select Committee on National Heritage on Channel 4 funding, on which its provisions are unsatisfactory. On listed sports, the Government have been forced to adopt the Select Committee's recommendations. The Government have failed to understand the Committee's recommendations on the future of broadcasting as outlined in our report on the future of the BBC.

The Bill is poor because it has no plans for the future horizons of broadcasting, which is the future of this country. We are not simply debating television entertainment but the future of work, education, medicine and the social organisation of our cities. We shall see the biggest change since the industrial revolution. Countless jobs and billions of pounds worth of exports are at stake. In future, television, computers, newspapers and telephones will merge into one seamless continuum. That is not a fanciful, futuristic prospect: it is happening now.

In the United States NBC and Microsoft are discussing a service by which NBC will broadcast the news. Anyone who wants more will be able to tune in to the Microsoft network and receive everything that is related to that news coverage. That can happen now. Audiences and services are changing. Cable television is providing telephone services and 30 per cent. of the population now have access to satellite and cable television.

The Government have been forced to recognise change through the Bill's historic clauses 26 and 113, which for the first time will give the ITC power over the BBC. But the Bill as a whole is a puny, bureaucratic, petty regulatory measure that cannot see beyond an extremely low horizon. It aims, not very competently, to tidy up the past but fails to prepare for the revolution of the impending future. Its petty, silly and almost certainly unworkable regulations on cross-media ownership are the most vivid illustration of its inadequacy.

I have rarely read such claptrap in any legislation as that contained in clause 5 and schedule 2. They set out batty requirements for an assessment of changes in the percentage of total audience time of television stations, and changes in the national and local market shares of newspapers and the number of 15-year-olds who watch any particular programmes. The percentages are utterly arbitrary. The right hon. and learned Member for Putney (Mr. Mellor) asked my right hon. Friend the Member for Copeland (Dr. Cunningham) what percentages he supported, but the right hon. and learned Gentleman failed to take account of the fact that the Bill gives the Secretary of State power to change the percentages at any time she wishes—so she does not necessarily believe in those percentages either.

I do not know whether to laugh at the sheer fatuity of the legislation or to cry at the expenditure of time by highly paid civil servants, no doubt with first-class degrees. Such demented provisions are aimed at limiting what needs to be expanded. We need more cross-media ownership, not less. In the United States, cross-media alliances are powerful enough to dominate the world, but in Britain the future of communications will be crabbed and stunted. There is no policy for the future of the biggest growth industry for the foreseeable or, indeed, the unforeseeable future. The Department of National Heritage is not a Ministry for fun: it should be a powerful industrial Department rather than a finicky calculator of points and percentages.

I repeat what I have said in the House several times in the past, and I shall continue to say it until someone does something about it. Instead of allowing foreign-owned cable companies to make this country their adventure playground, expanding their wealth from the United States and Canada into this country and dominating more and more the 48 existing channels and the many more that we should and will have, we should build up a United Kingdom conglomerate that is powerful enough to take on the world's biggest conglomerates. The only pre-eminent indigenous company that is capable of providing the software, the programming for that conglomerate, is the BBC.

The BBC ought to be working in partnership with the ITV companies, which are currently able to harvest a short-term bonanza for themselves but which in the long term on their present basis are doomed. The BBC is stumbling into the future. Its world and prime channels, which are now available on the continent, are examples of that. But it needs to be booted into the future. The BBC needs to be set free from the licence to which it clings as an anchor, but which is its shackle. It needs to be propelled into the world market, but it is the playground of puny men who are totally unequal to the challenge of moving into the information super-highway.

As one of his earliest acts as chairman of the BBC, Sir Christopher Bland ought to clear out the puny men. The corporation must enter a partnership involving not only its current worldwide partnership with Pearsons but British Telecom. It must have the incentives and the disciplines of the market. It is cushioned too much by the licence and by being a public corporation. The current issue of The Economist is right that the days of subsidised television are coming to an end and ought to end.

Huge possibilities and prizes are available for this country because it has the asset of the BBC logo and the priceless asset of the English language. The Bill not only does nothing to realise the possibilities of the new age of communications in which those prizes are available but its absurd page after page of pointless, unworkable and unimplementable regulations are a ball and chain. In the last full Session of this Parliament the Bill shows that we can hope for nothing from the Government. My right hon. Friend the Leader of the Opposition has shown that he completely understands the issues and my right hon. Friend the Member for Copeland has added to what the Leader of the Opposition said in October. We must look to a new Government for new ideas which will gain for Britain the industrial rewards that are there to be won.

It is incredible that the Conservatives call themselves the party of the market. The Bill has nothing to do with the market. It is backward looking when what we need is one that looks to the future. I hope that a Labour Government will soon introduce such legislation.

6.59 pm

Mr. Tim Renton (Mid-Sussex)

I have to tell the right hon. Member for Manchester, Gorton (Mr. Kaufman) that although I sit under his chairmanship on the National Heritage Select Committee, I believe that he is totally wrong in his approach to the Bill. The trouble with the Bill is that it is complex—but, as many hon. Members have already said, we are dealing with extremely complex issues.

When I was a Home Office Minister, I played a part in the preparation of the 1990 Broadcasting Bill, before moving to another job at No. 12 Downing street. The House must recognise now, as we had to recognise in 1990, that technological change in broadcasting is proceeding at such a speed that it is rather like a moving reel of 8 mm film—but Parliament stops the film, says that there is to be another broadcasting Bill and we have to take a snapshot of one moment in time in what is essentially a fast-moving picture. That is the difficulty that the House faces with this Bill, as it did with the 1990 Bill.

As I said, I wholly disagree with the right hon. Member for Gorton. My right hon. Friend the Secretary of State, with her officials and with officials at the Department of Trade and Industry, has done an extremely good job in dealing with a very complex task. It is true that such phrases as "multiplex service" and "independent analogue broadcaster" are not on people's lips in the pubs in my constituency—or, I suspect, in Manchester. If I were to talk about digital compression to one of my friends, he would probably think I was referring to someone who had caught his fingers in the car door. If I were to talk about conditional access, people might think it more relevant to family law and the rights of divorced parents to have access to their children. We must accept that those phrases are not on people's lips in this rapidly changing world.

The questions people want to ask are these. Will the BBC stay the same? Will we have to continue to pay a licence fee? Do we have to buy much more equipment, such as computers, modems, satellite dishes, and so on, to get the new channels? Do we—sports fans apart—want the new channels anyway? And what will we do with 200 channels if we get them? The great majority of people in Britain would say, "Stop the broadcasting revolution: stop this particular world turning so fast—I want to get off."

The Bill does not make the average person much wiser. However, we have to accept—those hon. Members who serve on the Select Committee know this—that we cannot disinvent the atomic bomb, digital television, the Astra satellite or fibre-optic cable. The Government must cope with changes according to the best information available at the time and the best prognosis of what will happen in the years ahead.

Hon. Members have already said that the two major new factors—the two great challenges—will be digital television and interactive television. We have not yet said much about interactive television, but there are enormous possibilities for school education, adult learning and home shopping. However, the screen needs to be linked to a telephone line to complete the return loop. That means that the domination of television for the past 30 or 40 years by the terrestrial broadcasters is over. Influence and power will move away from them to satellite and cable broadcasters and to the giant telephone companies. They are very different players indeed.

One of the few detailed questions that I want to explore in the time available to me is whether it is right, in those circumstances, for responsibility within Government to be split between the Department of Trade and Industry and the Department of National Heritage. I suspect that it is not. The whole spectrum of responsibility should fall to one Department, probably the DNH. In turn, the DNH should pass on to the Independent Television Commission as much as possible of the detailed, executive responsibility for daily decisions. It is wrong for a Government Department to have to interfere in highly technical, executive decisions on a day-to-day basis.

From this rapidly changing scenario will emerge three or four very large companies, in multimedia or in telecommunications, or in both. They will have pan-European ambitions. Murdoch, Canal Plus, Bertlesmann and Berlusconi are some of the obvious names. In a sense, with the Bill the Government are like the legendary Dutch boy keeping his finger in the dyke, trying to stop a huge tidal wave of water flowing out, not knowing where it would go. If there is excessive domination by a few companies, I have no doubt that Britain will no longer have the diversity, the variety of ownership and the programmes that we all want and which have served this country so well. The attempt to preserve those is the guiding philosophy behind the Bill.

There is one particular area—I hope that my right hon. Friend will add it to her copious notes—in which the Bill should go further than it does: the control of conditional access or encryption. The providers of the highly technical service of encryption will not be just the gatekeepers; they will not just have their own turnstile in the sky, as BSkyB described its pay-per-view coverage of the Bruno-Tyson fight: they will have the ability to control other people's turnstiles—other people's gates to profit. Surely that makes the licensing of conditional access services essential. That should apply not just to digital broadcasting and satellite, but to terrestrial and analogue. If it is not made clear that the Government intend to introduce a licensing system to cover the whole area of conditional access, the providers could be in a dangerously dominant position in an indispensable component of provision to viewers of subscription television services. I hope that that is one area where the Standing Committee will reinforce the licensing provisions. The ITC should be the watchdog for that, as it is ideally suited for the role.

We have discussed Channel 4 widely. I hope that my right hon. Friend will think again about the need to give some indication of the likely level of the split in funding in 1998–99. I hope that she will bear it in mind that television companies—and Channel 4 is a leading company—plan two years ahead for their series of programmes. It will become increasingly important to Channel 4 to know its likely funding position in 1998. I recognise that quality is the hardest issue of all. We fought for it with the 1990 Bill and I hope that clause 8 of the current Bill will be amended to include some sort of quality formula for digital terrestrial television. I do not think that the argument that quality should be excluded is properly or sufficiently made. There should also be a clear incentive for original production within the United Kingdom. That is, after all, the bedrock of our television industry. It is what has made some of our television companies, such as Granada, famous throughout the world. There are huge exports involved, for example, into the Masterpiece theatre of United States television. The proposals can be modest, but surely some incentive should be provided, even to the new digital television providers, to commit themselves to British-based original production, which will grow as they establish their profits.

Finally, I want to say something which I know that many people feel—which is that we have some of the best television and radio in the world. I hope that in the multiple birth of new channels on digital, satellite and cable, we can ensure that the creative skills of our multimedia industry are not only maintained, but thrive. On that basis, I support the Bill.

7.9 pm

Mr. Robert Maclennan (Caithness and Sutherland)

I very much agree with almost everything said by the right hon. Member for Mid-Sussex (Mr. Renton), which I have not always done on these matters. I think that the demission of office has made him less doctrinaire on broadcasting matters, which I welcome.

The right hon. Gentleman was right to emphasise that the broadcasting industry in this country has been immensely successful in producing programmes of quality and variety that are almost without parallel in the world and have been enjoyed almost universally in this country—with unlimited access until relatively recently. That situation is changing, and it is right to examine the regulatory framework that is needed to take account of technological developments, which are moving so rapidly and have made the Broadcasting Act 1990 an insufficient basis for the future.

The broadcasting industry is important and—notwithstanding what the right hon. Member for Manchester, Gorton (Mr. Kaufman) said about its current performance; I think that he overstated the case—it employs about 42,000 people and is worth about £3.5 billion to the United Kingdom's economy. He overstated the case because he places much greater emphasis on the broadcasting industry as a productive industry rather than one that serves the listeners and viewers. It is because of that service aspect of the industry that it is necessary to have a regulatory regime that is sensitive to such considerations, and not only to the adaptations necessary for operation in a global market.

I believe that we have always recognised in this country that a special competition regime is required for broadcasting, rather than merely placing reliance on the Office of Fair Trading or the Monopolies and Mergers Commission. I have noticed on other occasions that the right hon. Member for Manchester, Gorton and other hon. Members are so fascinated with the new technology that they are at risk of believing that the medium is the message.

Digital broadcasting is of great importance. It allows more economy in the use of the spectrum and, when combined with multiplexing, can greatly increase the possible number of channels. I think that, at least theoretically, it offers the possibility of a welcome expansion of consumer choice. Although that development will not occur overnight, as the opportunities for listening and watching programmes multiplies, so the audience reach of those channels will be fractured and diminished, which must have a considerable impact on programme making.

It is possible—I hope that the right hon. Member for Gorton is right about it—that specialist interests may be better catered for in such a world. I think that that is quite possible, but it is also true that commercial pressures may erode the resources that have been put into public service broadcasting, which could diminish the true diversity and quality of programmes available to the public.

The possibility that those resources will be eroded is why I think that the Government are right to proceed with some caution in altering the regulatory framework of broadcasting, and why—in particular when we consider the detail of the Bill, which is complex—we should seek to ensure that the new rules relaxing controls on media ownership do not undermine plurality and diversity. In particular, we must strengthen provisions that are necessary to secure the distinctiveness of regional media. In the light of what the Secretary of State had to say on that point, I shall return to it later.

Broadly, I think that the Government's proposals for digital multiplexes make fair provision for existing terrestrial channels, and I particularly welcome the allocation of an entire multiplex to the BBC. However, it is not clear what the Government intend to do about the standardisation of technology for receiving such channels. Do the Government intend to ensure that black boxes will be standardised across the industry? It would clearly be too expensive for viewers to have to purchase different black boxes for each channel they wish to watch. If we are to continue with the objective of universality of access, I hope that the Government will find it possible to consider that point.

If subscribers to pay television have to go through one gateway to receive that service, and the controller of that gateway is also the provider of programmes and can exclude other programme providers, there is a clear risk of anti-competitive practice, as the right hon. Member for Mid-Sussex pointed out. I think that the Bill does not seek to protect us against such potential abuse, which is a little odd considering the Bill's purposes. Like the right hon. Gentleman, I should like to see an amendment tabled in Committee to achieve such protection. Although the Government have mentioned this point at earlier stages, they seem not to be treating it as an issue of broadcasting policy.

There is an even bigger black hole in relation to competition, because the Bill does not provide any system of licensing or regulation for conditional access and encryption for existing analogue cable and satellite broadcasting. The Independent Television Commission has argued—I believe that the House should accept its argument—that it is best equipped to regulate conditional access, and should be empowered to do so for both analogue and digital services.

Although currently we seem quite far from the proffered 18 national television channels on six multiplexes, I should be interested to know why the Government are willing to contemplate having half those multiplexes acquired by a single company. Again adverting to a point raised by the right hon. Member for Mid-Sussex, I should like to know whether some quality requirement will have to be met and monitored, either by the multiplex operator or by the programme providers. It is not sufficient to say, as the Secretary of State did, that the BBC and the independent television companies that will have access to multiplex will be regulated and will set a benchmark. It is bound to have a major impact on the pressure for quality on the other half of the industry if more than half the new providers are not to be regulated. That point has not been adequately debated so far in the Bill's passage.

Those are not immediate questions, because we are not faced tomorrow with the arrival of the digital terrestrial revolution, but it is incumbent on us to address the changes that the revolution will bring. I should be interested to hear whether the Minister of State has anything to say to give us a better idea of when and how the revolution will occur, because, although dates have been given—five years has been mentioned—there has not yet been clear commercial interest in moving in that direction.

It would not be satisfactory simply to switch off analogue broadcasting and render the reception arrangements of the bulk of the population out of date at a flick of the Government's finger. I do not think that the right hon. Member for Copeland (Dr. Cunningham) said that that was Labour party policy. We are entitled to hear the Government's best guesses on how this development can be kick-started. So far, it is a very exciting technological development, with obvious benefits, but lacks the commercial catalyst.

I turn from those somewhat futuristic problems and possibilities—as I said, it is right that we should be seeking to legislate for them—to the more immediate impact of the Bill's provisions to liberalise cross-media ownership. I say at once that I accept at least part of the argument that the rapid technological convergence between different media sectors makes some of the existing rules—which weigh against an entry into broadcasting of long-established newspaper companies, for example—artificial and undesirable.

However, we are not talking only about very big business and the demands of the global marketplace—we are concerned with the need to ensure that the media of communication are not unacceptably dominated by too few players. Broadcasting and newspapers have always been recognised as apt subjects for particular rules of competition, since monopoly in the flow of information and ideas is wholly unacceptable.

Subject to substantial strengthening of the Bill's provisions to secure the regional diversity which is one of the most attractive aspects of current British independent television, I would not be unhappy in principle with the relaxation on cross-media holdings to allow groups to control a mix of newspapers, television and radio licences; but—here I take issue with the Government—the market share mechanism, which is the basis of the regulatory proposals for television and radio, is inevitably arbitrary in its effects. A more general requirement—contained in, I think, schedule 2—to satisfy public interest criteria before authorising an acquisition or merger would seem more likely not only to work equitably but to enable the regulatory authority to extract appropriate conditions before authorising mergers or takeovers.

The Government cannot really suggest, as the Secretary of State did, that they are completely lacking in political partiality, whereas the Opposition were politically partial in taking the view that 20 per cent. was the right market share when that would cut out the Daily Mirror but allow the Daily Mail to enter the broadcasting market. These figures are not arrived at accidentally—they are arrived at arbitrarily. They are chosen with a particular purpose which was, no doubt, not to isolate Mr. Rupert Murdoch in his purdah.

On reflection, that is perhaps a rather strange way to put it. I should say that the intention is not to isolate him in being unable to enter the terrestrial market, which I imagine does not trouble him unduly, in view of his domination in other areas. That automatic approach is not sufficiently consumer-oriented to be an acceptable way of regulating the industry. The regulatory authority should examine questions of public interest in the round and be given more detailed guidance than that set out in the Bill.

Above all, it is important that the regulatory body should be dedicated to the media industry, and to the particular interests of viewers and listeners in this country. I do not think that it is appropriate to rely on the MMC to do that work.

I noted reports at the weekend that the MMC has been considering the interests of consumers of electricity and taking into consideration global market arguments to allow the coming together of providers and suppliers in a way that would be highly damaging to the consumer interest if it were to be applied by parity of reasoning in the broadcasting world. I very much hope that that will not come about, but I especially urge that the Independent Television Commission should be the regulatory body for such matters, and that the consumer interest should be dominant in the consideration of regulatory matters.

I was glad to hear what the Secretary of State had to say this afternoon about regional planning. It has been a concern of mine that the greater concentration of ownership, perhaps in the hands of as few as two major companies following the passage of the Bill, could destroy the regional characteristics of the independent television network. Although clause 67 enhances the power of the ITC to extract necessary conditions on the change of ownership of regional companies, the Bill does not deal with the problem of a change in the balance of power among ITV companies, which could result in amendment to the network supply agreement, to the detriment of smaller regional companies.

I understood the Secretary of State to be saying that she has taken note of that point, and would be sympathetic to an amendment to the Bill to give the ITC authority over this matter and allow it to police the sensitive pricing mechanism. If that is indeed her intention, it goes a substantial way towards removing one of my principal anxieties.

I deal now with local radio. This is a rather limited debate and although I understand that I am not subject to a time limit, I think that it would be courteous if I did not cover every point, many of which can be dealt with in Committee. The Bill deals, most importantly, with commercial radio, altering the basis to a limitation of the potential audience share of 15 per cent. for any one company. The strictures about percentages, which I have already outlined, are applicable in this sphere, as they are in television. I am not sure that this is a justifiable approach. It is certainly important to prevent the build-up of local monopoly, and that is something to which we shall return, especially in view of the arguments advanced by the Newspaper Society, seeking to increase the scope for regional and local newspapers to expand into the broadcast media in their own areas. What matters is the principle of diversity. It would not be appropriate for one regional local newspaper group to dominate local broadcast media.

I deal now with just a few matters of detail. First, the Bill contains a rather odd provision. It does not disqualify the BBC from holding commercial radio licences. The Radio Authority was apparently told by officials at the Department of National Heritage that that was a deliberate provision to permit a BBC company to hold a BBC radio licence". The authority considers that that could effect a significant distortion of competition, and I agree. Although it seems doubtful that the BBC would be able to afford such an investment, I should be grateful if the Minister would explain the Government's thinking on this point.

Secondly, I raise a point of detail of rather more local interest. It concerns the strange press release issued by the Department this morning, announcing that the Bill extended the funding for Gaelic radio broadcasting. I am not aware that an additional penny has been made available for Gaelic broadcasting. The press release is, at best, misleading.

As I understand it, clause 76 empowers the Gaelic broadcasting fund to include the financing of Gaelic radio programmes within its remit, but it does not proffer any new money for Gaelic language broadcasting. Nor have the Government done so.

In Committee, we shall want to deal with many matters relating to SC4, but I shall leave them for now.

I have just one question on the broadcasting of sporting events. I am glad that the Secretary of State performed her elegant arabesque—perhaps "tour en l'air" is the more balletic expression—on the listed events. It was admirably accomplished, but let there be no glissade away from the position that she has now adopted.

It is important for the whole nation that such events should be universally available. I understand the thinking that prompted her. It was a perfectly legitimate concern to ensure that sports clubs benefit from developments in technology but not at the cost of these matches. She was right to concede the point. Incidentally, how is the Sports Council's code to be policed? Where is the responsibility to lie?

The Bill also deals with the handling of complaints about standards, and brings together at least a couple of the bodies that have responsibilities in this sphere. I welcome the amalgamation of the two bodies. I was never happy about their separate existence, but I very much take the point expressed by the National Consumer Council, that a large range of bodies is responsible for regulation of the industry.

A one-stop shop approach is at least a desirable objective. The new body could be quite helpful in offering advice and counselling and in carrying out research, but it is important that it is not seen as the body capable of delivering the remedy. That task must lie with the broadcasters themselves. That responsibility should not be taken away from them or be thought to have been locked up in some quango, thus giving an alibi to errors that have been permitted.

The Channel 4 funding formula has been much debated in exchanges across the Floor of the House on earlier occasions. What I thought came out of those exchanges was the Secretary of State's very unsatisfactory unwillingness to make clear the financial consequence to Channel 4 in particular, and independent companies as well, of their acceptance that there have to be changes out of equity. I do not think that the matter can be left indefinitely, and it should not be.

Investment, as the right hon. Member for Mid-Sussex said, has a long lead time. Films in which we would want Channel 4 to invest, of the kind that it has been investing in very successfully, require planning years in advance. If we are to promote British production through the recouping of money that has gone to the independents, it would be helpful if the Government considered such questions.

I do not expect the Secretary of State to make all the moves at once and immediately. I am not asking for something tonight—that would be particularly unreal, in the light of what she said earlier. She ought, however, to consult on the matter, return to the House before the Bill leaves Parliament, and work out an appropriate arrangement that does justice to both sides of the argument. I have no doubt that Channel 4 has made a very impressive case, and it ought to be heard.

Some 40 per cent. of the British people's leisure time is spent listening to or watching broadcasts. Notwithstanding the excitement of the technologies that make that experience and the its diversification possible, and the excitement generated by the prospects of our further projection in a commercial direction through the medium abroad, I hope that the interests of British viewers and listeners will be given priority in the parts of the Bill that deal with the regulation of such an important industry.

7.31 pm

Mr. John MacGregor (South Norfolk)

In the time available I want to deal with one issue only. I congratulate my right hon. Friend the Secretary of State and the Government on the way in which they have responded to debates and representations in another place. My right hon. Friend said that she intends to make a number of further changes as the Bill passes through the House. I add my voice to those who are urging one further change, concerning the issue of regional and local newspapers, in the hope that it can be made in Committee.

We are all agreed on the importance of the 1,400 regional and local newspapers. They help to produce plurality—which is sought through the Bill—diversity and, of course, good coverage of regional and local news, which cannot be obtained as well elsewhere. Local publishers are under immense pressure from their own industry, national newspapers and, above all, from the new means of communication, on which there has been so much focus in this debate, and which are expanding very quickly while communication through the printed word is declining.

The Bill would adversely affect the competitive ability of many regional and local newspaper publishers, their ability to develop their businesses in the only strategic way that makes sense—by diversifying—and their ability to earn additional revenue from which they can continue to provide regional and local services. In other words, the Bill unnecessarily handicaps local and regional publishers, for it allows national and foreign-owned companies to own local and regional television and local radio services, and indeed to back them up with a free local newspaper, which in itself is often a major source of competition for local newspapers, yet does not permit many regional and local newspapers to do the same.

As my right hon. Friend the Secretary of State says, that provision is justified on the grounds that the Government consider that those with a strong voice in an area's local newspaper market should not also be able to dominate local radio services in that area. In response to the proposal of the Newspaper Society, which represents the relevant interests, that national newspapers, together with all other media, should be included in the threshold calculations, my right hon. Friend has said that she believes that there is a clear distinction between the editorial content of national and local newspapers, and that, therefore, the proposal should not be implemented. I believe that that view is mistaken. Of course I accept that at the very time a Bill is preventing cross-media dominance at a national level, we do not want to permit it at regional or local level, but that would not happen if the Newspaper Society's request were met.

First, as my right hon. Friend the Secretary of State has said, the Bill tries in a number of ways to enable some local papers to invest more in local radio. Secondly, and perhaps most important, there is a public interest test. That test is sufficient to deal with the local dominance problem. Thirdly, regional publishers, such as the one affecting my region, Eastern Counties Newspapers, would be hit by the Bill. Such publishers do not have a monopoly of local news; there are a considerable number of local radio services, local television, BBC radio, and so on.

Sir Geoffrey Johnson Smith (Wealden)

Does my right hon. Friend agree that many good newspapers in the south-east would also be seriously affected if there were not the changes that he proposes?

Mr. MacGregor

That is true for many local publishers throughout the country. Local newspapers compete with the national dailies. They compete not only in editorial content but in news coverage. They are competing directly in their own areas for the same readers and advertisers as national newspapers. That is very clear if one looks at the readerships in our constituencies. They very often compete with the national dailies rather than with any other publications. It is not sufficient for local papers to be able to own other media such as local radio stations in other parts of the country. They will of course want to do that sometimes, and it already occurs, but provided that there is not a total local monopoly, there are obvious advantages, cost savings and synergies in being able to own other media in their regions, for which they are so well equipped.

The Newspaper Society is urging a number of changes, but I want to focus on the proposal that, in considering the thresholds, all the media circulating in a geographical area should be taken into account when drawing up the media ownership rules that will determine who can own what media in an area. National newspapers, commercial radio and television and the BBC should be taken into account. Such a change would enable the companies of which I am talking to continue to compete, to diversify as they wish and, in so doing, continue to provide their excellent local service. The public interest test seems to deal with the issue of local monopoly, about which my right hon. Friend the Secretary of State is rightly concerned. A namesake of mine in the other place tabled a number of amendments on this point. They were not taken on board on that occasion, but I hope that some of them will be this evening.

7.47 pm

Mr. Joseph Ashton (Bassetlaw)

I declare an interest as a director of Sheffield Wednesday football club—a premier league team. I want to talk about the listed events. It is rather peculiar that everybody in this country seems to accept that sport should be totally free on television and that people should be able to watch it because they pay their licence fee. If, for instance, Pavarotti were at the opera or the Rolling Stones were playing at Wembley, nobody in his right mind would expect such events to be shown live, totally free. Nobody would expect to see a royal film premiere or the royal variety performance for free, yet their Lordships have decided that sporting events at the highest level should be made available to everybody at a rock bottom price. That is very generous of them, but what about the people who have to stage the events and pay for them?

The top sporting events are now run for genuine fans, who often have to fight to get a ticket. They have to compete with touts, and they pay from £15 to £60 for the once-in-a-lifetime chance of seeing their team play at Wembley. Yet everybody else expects to see those events free.

That is a crazy market situation. Like my hon. Friend the Member for The Wrekin (Mr. Grocott), I believe that the listed events should be shown free on television, simply because people cannot get tickets for them; it would therefore be wrong if they were not on television. But a law that says that all those events should all be shown, on all the television channels if necessary, without having a price fixed or an agreement on what the clubs should be paid, is totally unfair.

As I told the Secretary of State earlier, that position would sooner or later be challenged in the courts, on the ground that clubs are being forced to pay their players fantastically high wages. Players such as Cantona of Manchester United are probably earning £10,000 to £15,000 a week, and Ginola of Newcastle is on £12,000 a week. What would happen if the clubs could not get the money from television? We are already charging high prices to the fans—as high as they can afford to pay. Where would the cash come from? [Interruption.] My hon. Friend the Member for Wigan (Mr. Stott) is asking me a question, and I would give way to him if I had more time. He asks, "Why pay such high wages?"

When the British teams did not pay the high wages in the 1970s, the best British players used to go to Italy, France or Germany. Now it is the other way around. The best foreign players are coming here, because we are paying the high wages. That is why our sport on television is so good; that is why our teams are so good, and why everyone in Europe wants to play here. We can pay such high wages because of the money that we get from television, mainly from Sky. [Interruption.] I apologise to my hon. Friend the Member for Wigan, but I cannot let him intervene because time is so tight. If it were not for the money that we get from Sky we could not afford to pay those high wages. Let us not knock Sky. In 1990 the House said to football clubs, "You must make your stadiums all-seater." They were compelled to do it, and it cost a mint of money. The Government cut the tax on football pools from 45 to 42 per cent.—but they had already put that tax up from 40 to 45 per cent. in the first place, so they were giving the game nothing. The football pools were paying the money out through the Football Trust, and a marvellous job was done in renovating our football grounds.

What happened then? Along came the national lottery, and it has knocked the football pools sideways. The pools are in serious trouble. The lottery has damaged the betting shops and bingo too—and the Government have not taken one extra pound in tax from the lottery, because although they have taken £600 million from it, £600 million has been lost in tax on the football pools, the betting shops and the other parts of the leisure industry; so the Government are no better off.

The game of football has lost a good benefactor in the football pools, which paid through the Football Trust to renovate the grounds, yet at the same time we say that top sporting events have to give their prize product to everybody free.

Mr. Grocott

ITV bid £260 million. That is hardly free.

Mr. Ashton

That is not true. The armchair viewer pays 3p an hour to watch sport. When my team played at Newcastle in the top match of last week, 25 minutes of which was shown on "Match of the Day", we received £7,000—£7,000 for 25 minutes of prime television time. Some Newcastle players get more than that every week. That is all wonderful for the armchair viewer, and it is marvellous for the House of Lords, but it is not so good for the guys like me, who have to find the money from somewhere to put the events on, to pay the wages and to satisfy the demands of the crowd.

A cartel could be formed; ITV, the BBC and Sky could get together and offer peanuts. What would it matter? They would still have the show straight away. The same sort of cartel used to operate before Sky came along. The BBC and ITV used to pay £5 million for 18 games. Then Sky started showing 60 games, and paid about £30 million for them—and Sky put all the teams on.

I know that people will say, "What about the poor? What about the pensioners?" Incidentally, anyone can go and watch a match on Sky on a Monday for the price of a pint of beer in the local pub, because the matches are shown on the big screen. I am sympathetic towards the poor and the pensioners who cannot afford the high admission charges—but I do not see the BBC giving them a cheap television licence, as we do in Bassetlaw where the council gives them the equivalent of the cost of a black and white television licence.

What do the BBC do for the poor? They send them to gaol! Eight hundred people go to gaol for not paying for a television licence. And if we ask in the magistrates court we will be told that those are people who can't pay, not people who won't pay. They are single women with three kids at home, or pensioners. So the BBC does not do much for the poor.

The fact is not that the BBC is hard up but that it does not want to spend its money on sport. The BBC is happy to spend money on "Pride and Prejudice" and other drama. Its representatives admitted as much when our Select Committee investigated the funding of the arts. The BBC paid £1 million an hour for "Pride and Prejudice"—because of the wonderful prestige.

In that case, I cannot imagine how much the cup final is worth. If we consider the number of viewers, and the price for which it is sold all around the world, it must be worth at least £10 million. The BBC would have a fit if someone suggested it pay £10 million for the cup final. But it can find the money for classical music, for opera, for Radio 3, BBC 2 and all the other prestige highlights. It is a fallacy to say that the BBC has no money. It has £1,700 million a year, but it chooses to spend it in a different way.

Let us not malign Sky. The satellite people have put a massive amount of money into sport. Without them, not only football but the whole of British sport, including rugby league, would be in a serious condition now. We would be back where we were in the 1970s, with slum grounds, and unable to pay high prices and high wages. We would not be able to retain our best players and to keep the best sport, as we can now.

We must not forget the other people who work in the industry either. We must remember not only the competitors but those who work behind the scenes, such as the groundsmen, the maintenance men and the ticket sellers. All those people are entitled to say, "You are destroying our industry without giving us anything in its place."

The Government have bowed to the House of Lords, which was trying to be popular. Shortly before it was due to be abolished—or rather, to have its hereditary voting powers taken away—it wanted to do something to make itself popular. The Lords did what they did out of nostalgia, without thinking through the consequences, because they are armchair viewers.

Sooner or later—but not now, while the Bill is going through Parliament—someone will say, "This will not stand up in court. You are rigging a market and saying that those events must be shown without having a proper regulator to fix the price." If there are accusations that a cartel exists and someone goes to the Office of Fair Trading, the arrangement will be kicked out. The organisers of sport at the highest level, with the top legal advice, are saying that the rule will not stand up. I hope that this matter will be probed in great depth in Committee.

7.47 pm

Sir Norman Fowler (Sutton Coldfield)

First, I must declare that I have been a member of the National Union of Journalists since 1961. I am sure that all hon. Members who supplement their income with journalism pay their union dues, too. I also declare an interest as chairman of Midland Independent Newspapers and as a board member of Express Newspapers.

I shall make three short points about the Bill. First, it is about more than broadcasting, radio and television, and broadcasting standards. It is of much more fundamental importance than that, because it represents the Government's policy on media ownership. Critically, it concerns the rules according to which newspapers own television companies and radio stations, and the way in which television and radio interests will be able to own newspapers. The Bill could therefore hardly be more important for the future structure of the media industry in this country.

Of course, media ownership raises controversial questions, about which many people have strong views. When discussing the subject, the first issue that many people raise is foreign ownership. They have noticed that, according to the White Paper, 44 per cent. of newspapers bought today are published either by Mr. Murdoch, who was once an Australian citizen but is now a naturalised American citizen, or by Mr. Conrad Black, who is a Canadian.

Personally, I do not oppose some foreign ownership. I would argue that, in their different ways, both Mr. Murdoch and Mr. Black have made great contributions to British journalism. The question is whether there is any limit to foreign ownership. [Laughter.] My hon. Friend the Member for Harrow, East (Mr. Dykes) laughs. He should understand the revolution that took place at Wapping as a result of Mr. Murdoch's plan. Although I am not an unqualified supporter of Mr. Murdoch, I tell my hon. Friend that if he does not understand that point, he understands nothing about modern journalism.

At the moment, there is no trace of the Government's view on this question. Would the Government be content if all the national newspapers were foreign owned? What is the Government's policy? Do the Government have a policy? The Bill concerns media ownership and we have a right to expect that those questions will be addressed. There is something anomalous—almost grotesque—about the fact that, although the British market is entirely open to all-comers, when the British industry wants to expand overseas, there are all kinds of restrictions in its way.

My second point concerns the regional press. I agree very much with what my right hon. Friend the Member for South Norfolk (Mr. MacGregor) said. At the end of the White Paper presented by the Department of National Heritage, before my right hon. Friend the current Secretary of State took over her post, one finds what the Department regards as the audience data for the "major" media companies in newspapers, television and radio—I use the Department's word. It is altogether typical that the only newspapers shown in the list are national newspapers; the regional press is not mentioned in the tables and gets scant attention in the document generally. Again, we find Whitehall's preoccupation with the national and its lack of comprehension of the regional.

It has to be pointed out to the Government and the Department that there are more than 1,400 regional newspapers in this country, and that their share of United Kingdom advertising is second only to that of television and appreciably ahead of that of national newspapers. The industry employs about 35,000 people, of whom 9,000 are journalists. It certainly deserves the same opportunities to expand as the other media because it faces the same problems of competition.

I will put the argument another way. Far too much of the argument in the White Paper is a provider argument. The Department asks what is best for the provider and not what is best for the user—the customer. I believe that in one respect the interests of the customer and the interests of the provider are exactly the same. I give the following example. If one lives in one of the big regional cities outside London, the only news-based radio stations are those run by the BBC. There are many other radio stations, but they are all music based and staffed very economically. There is no prospect of a local independent radio station based on local news being set up simply because of the journalistic cost of establishing such a station.

Mr. Austin Mitchell (Great Grimsby)

Will the right hon. Gentleman give way?

Sir Norman Fowler

I cannot possibly give way.

The one body that could set up such a station is the local newspaper, because it already has an extensive and expensive news-gathering staff. To expand in that way not only provides a better local service for the public but secures the jobs at regional newspapers. We might well think that the Bill exists to set out such opportunities, but that is not remotely the case.

The argument is that to allow local newspapers to set up stations would create a local monopoly. For the reasons given by the right hon. Member for Manchester, Gorton (Mr. Kaufman), that argument is an anachronism. The Department does not seem to have caught up with the fact that today, there is an incredible amount of choice for anyone, certainly for those who live in big cities, in terms of regional media, national media, cable television and the rest. To add insult to injury, the Bill does allow national newspapers to come into the regions and to set up radio stations.

We can all support the general principle of relaxation and new opportunities. However, I say seriously that those opportunities should not be confined to the big players—the big television companies and the national newspapers—but should be extended to the regional newspapers.

That remark brings me to my third point. My working life has been divided between politics and newspapers; I have set out my media interests. I also spent what Opposition Members would regard as a misspent youth as a Cabinet Minister in three Departments, not to mention being chairman of the Conservative party. That experience has brought me to one undoubted conclusion about media ownership, which is that the Government—any Government—should have the absolute minimum of control over the media.

I make that point because there is clearly a conflict of interest for any political party. Governments are not interested in the independent power of the media to expose—indeed, that is the last thing that Governments want the media to do. Political parties want the media on their side. Perish the thought, but that is precisely why the Opposition have changed their stance on the question and why they have changed their position on the Daily Mirror. They are not unique. As the election approaches, Ministers who have not appeared in the Lobbies since 1992 can be found smiling gaily at the press. That point is not only true of Ministers. The Leader of the Opposition did not go to Wapping, but was prepared to travel halfway round the globe to Australia to put his case to Mr. Murdoch and his executives. As it happens, I think that it was probably a waste of time because it is anything but clear that Mr. Murdoch is a one nation Tory.

In all seriousness, I make the point that over the past few years, major decisions have been taken which have profoundly affected the structure of the media. Important decisions have been taken by Ministers which have not even been referred to the Monopolies and Mergers Commission. In other cases, the MMC has ruled one way and has then been overruled by the Government. I am comparatively neutral on whether the new system should involve an overall regulator or whether there should be another method, but I believe that there should be the very minimum of interference and involvement by Government and Whitehall.

I am a trifle underwhelmed by the Bill. It deserves a Second Reading because of the general relaxation it sets out. However, it merits substantial amendment in Committee and on Report.

7.56 pm

Mr. Roger Stott (Wigan)

I realise that my hon. Friend the Member for Bassetlaw (Mr. Ashton) was not being discourteous in not giving way because he was short of time. I, too, applaud Sky's coverage of all sports, especially my sport of rugby league. My hon. Friend talked about high wage and salary costs. The start of the rugby super-league this year means that next year all clubs participating in it will have to implement a salary cap for players. Perhaps the football authorities could take a lesson from rugby league next year.

Unlike the Secretary of State, I am concerned by the Government's plans to privatise the BBC's transmission network, especially given the recent decision not to secure the licence fee for the tenure of the new charter. Having been a great supporter of the BBC's World Service and its services generally over the many years during which I have watched and listened to them, I am extremely concerned about the provisions in part VI to sell the fundamental asset of the transmission network. I believe that the proposal needs to be examined in far more detail in Committee, as my right hon. Friend the Member for Copeland (Dr. Cunningham) said.

Two major risks are involved. First, who will own the transmission service? The second risk is that the BBC will be vulnerable if the network is sold to a commercially driven transmission operator. Investment in infrastructure could be limited to serving those reached at the lowest cost. It is estimated that only 12 digital transmitters would be needed to reach 60 per cent. of the population, but that a further 68 transmitters would be needed to reach 90 per cent. of the population. The cost differential between those two options reveals the fact that the cost of reaching 90 per cent. of the population will be more than three times that of reaching 60 per cent. of the population. The risk is self-evident.

The second risk of leaving this public service in the hands of a commercially driven organisation is the BBC's subsequent ability to honour what will become an increasingly inflated transmission price. After investing its windfall in digital terrestrial television and digital audio broadcasting, how will it afford the costs of transmission without putting additional pressure on a licence fee that is vulnerable to public opinion and, I emphasise, guaranteed for only five years of the new BBC charter? The corporation argues that it has been given—or it has given us, anyway—important guarantees on the future cost of the transmission service, and what the cost will require. I am sure that the whole House would agree that those guarantees should come under close scrutiny in Committee. If they should prove to be inadequate, as I suspect that they probably will, an alternative must be provided—perhaps by offering the network as an operating franchise while retaining the hardware in the public sector.

I wish to concentrate on two critical issues. The first is that of the controversial Channel 4 funding. To arrive at a sensible and balanced compromise, it is important to assert that the formula is designed not only as a measure of protection, but as a complex revenue equation with implications across the broadcasting scale. Any intention to abolish the formula without careful examination of the facts and figures affecting all parts of the industry might have disastrous results.

The arguments for abolition are manifold. Channel 4 is obviously subsidising a shareholder network; it has paid out more than £100 million since 1994, which might have been invested in original programming and its highly successful promotion of the British film industry. Moreover, the formula is totally unpredictable and although ITV is indemnified against paying more than 2 per cent. of total qualifying revenue, Channel 4 has the unfavourable obligation of paying 50 per cent. of any profit made above 14 per cent. of the TQR threshold. That is manifestly unfair, and makes the channel's revenue forecasts and capital planning very difficult—worrying in an age of technological revolution.

Nevertheless, the arguments against abolition are equally convincing, not least because any change to the formula before 1997 would represent retrospective legislation and would undermine vital confidence in the Bill. We should, and must, wait until 1997, the year delegated for the formula's fundamental review, and not allow the detailed issues informing the debate to be given a premature delivery amidst the complex environment of the Bill.

It is crucial to remember that ITV paid more than £430 million before 1990 to protect and establish Channel 4. Moreover, at least six of the smaller ITV companies depend for their existence on the revenue contributions from the formula—contributions that were forecast and planned for in the confidential business plans that accompanied their licence bids. To restrict that flow before the planned review might have a serious impact not only on the individual television companies, but on the whole regional character of the ITV network. The subsidy is crucial to ITV's programming budget, allowing Granada in my area, for instance, to pay for "Granada Tonight", which airs five days a week, every week of the year, while maintaining the regional news operation in Liverpool, in addition to sustaining its entire regional current affairs output.

When put into perspective against Channel 4's 60 per cent. increase in United States imports and its failure to maintain the ITC's recommended 50 per cent. of original programming, the arguments begin to balance out. The threat to regional programming and regional programme making is significant, and an ill-considered abolition of the revenue stream supporting it would have very serious repercussions, not only on the quality and the quantity of regionally based programmes, but on employment, especially in those regions and especially in the north-west. It would be foolish and irresponsible to tamper with that formula before its intended termination date. Secondly, and finally, I shall discuss the radio industry. I was unclear in my mind about what the Secretary of State said in her opening remarks this afternoon about the issuing of licences to potential bidders for radio licences. I note, however, that a report in Broadcast magazine of 22 March 1996 claims that the Government propose to drop the current bar on one radio company owning more than one FM and one AM licence in the same local market. I feel very strongly that the proposed lifting of ownership restrictions is contrary to the public interest and is not in the interest of smaller independent radio companies. The proposed change would serve further to strengthen the growing monopolies that already exist in the local market and stifle innovation and diversity.

I am aware that the commercial radio companies' trade body, the Association of Independent Radio Companies Ltd., has pronounced in favour of such a change. It may not have made it clear to the Government that a significant minority of radio companies and their management think otherwise.

United Kingdom commercial radio is already dominated by a small number of principal groups, which account for 69 per cent.—463 out of 671—of the total points currently allocated under the Radio Authority's scoring system. The figure will presumably be increased by GWR Group's takeover of East Anglian Radio, which is currently being finalised. Individual companies are allowed to have up to 15 per cent. of the points allocated. Further, I would argue that the way in which the points system is structured—

Mr. Deputy Speaker

Order. Time is up.

8.6 pm

Sir Wyn Roberts (Conwy)

I shall follow the hon. Member for Wigan (Mr. Stott) early in my speech, in that I shall emphasise the immensity of the transition that we are contemplating from analogue to digital broadcasting. It will be a major change, requiring considerable investment, not only on the part of the broadcasters—that we know—but on the part of viewers and listeners. For viewers, not only is the set-top box to be purchased but ideally there should be a wide-screen set.

The transition also means a great deal of investment for television and radio set manufacturers. They will have to adapt to the new system and we have heard very little about their plans to meet the demand which will, one hopes, develop because a higher quality of sound and picture is available. There is no guarantee of success, but there never has been a guarantee in broadcasting. When ITV and Channel 4 were started, there was concern about whether they would succeed; but to date most of our broadcasting ventures in this country have proved successful.

My right hon. Friend the Secretary of State is to be congratulated on introducing the Bill, which allocates multiplexes to terrestrial broadcasters and provides a basic shape for things to come. There is some dissatisfaction among the non-terrestrial competitors about the prior and superior access given to the terrestrials, but I cannot see how my right hon. Friend could have done otherwise in all the circumstances confronting her.

It is only fair to say, without being patronising, that their Lordships have been pretty thorough in their examination of the Bill; they touched on most of the points that I wanted to raise. On the sports issue, I find myself in sympathy with the hon. Member for Bassetlaw (Mr. Ashton): I am not sure that we pay sufficient attention to the fact that broadcasting rights, like rights of entry to sports grounds, belong to the sporting organisations, which must ultimately decide how the rights are to be disposed of. Arguably, the only rights that belong to all of us are news rights, which are different from highlights. News rights are not in dispute, so there is much to be said for unbundling. I am sure that the day will come when sporting organisations will simply use the media as an extra gateway to their events, and charge accordingly.

The argument about cross-media ownership is clearly very much alive. As I have said in earlier debates, I am firmly on the side of those who are likely to promote the richness of our regional life and character—the nurturing ground of so much that is good in this country and an antidote to our somewhat ruthless and arrogant metropolitanism.

Our regional and local newspapers have a case for being allowed to participate in the development of broadcasting, especially at a time when broadcasting needs investment on a significant scale—they must certainly not be disadvantaged by comparison with their national competitors. The Newspaper Society is right to argue that BBC local radio should also be taken into account in any calculations regarding density of coverage, and so on. But my right hon. Friend the Member for Wokingham (Mr. Redwood) is right in saying that other forms of coverage will also have to be taken into account. I also support the points made by my right hon. Friends the Members for South Norfolk (Mr. MacGregor) and for Sutton Coldfield (Sir N. Fowler).

I also support the ITV regional companies, which have given valuable service and provided diversity. HTV has done well in Wales and the west country, despite its heavy licence fee. It receives about £3 million per year from Channel 4 under the perverse formula established under the 1990 Act. So far as I can gather, the formula has few supporters other than those who benefit from it. It should be phased out, but probably at the time suggested—1997—which coincides with the renegotiation of the ITV licences.

Under the digital arrangements, Channel 4 will achieve coverage in Wales independent of the Welsh language channel S4C, which is to share half a multiplex and to be given some additional powers which will enable it to complement its Welsh language output with other, mainly English, programmes, preferably produced in Wales. The Welsh language programmes would be ring fenced financially so that no subsidy could find its way into the English output—just as the BBC's licence-financed programming is ring fenced against sponsored or advertising-financed programming permitted under the 1990 Act. I strongly support that development in the role of S4C, not only because the statutory body will thus be enabled to replace the programmes lost to it by the independence gained by Channel 4, but because there is a strong demand in Wales for English programmes of Welsh origin and such productions will provide a challenging stimulus to achieve high quality all round. I gather that there is some concern in the BBC at the thought that S4C might produce English language programmes, but that matter can be sorted out through co-operation at an all-Wales level.

S4C is not out of the wood yet. It will lose advertising revenue with the loss of Channel 4 programmes and it must be given an opportunity to supplement its new formula funding. My understanding of Lord Inglewood's remarks as reported at column 1198 on 19 March in the other place is that the Government are fully apprised of S4C's needs and will be tabling amendments to meet them. I did not hear my right hon. Friend the Secretary of State mention such amendments earlier, although I did hear her refer to S4C. When my hon. Friend the Minister of State winds up the debate, I should be grateful for confirmation that the Government will table amendments.

There is hardly any need for me to tell my right hon. Friend the Secretary of State that S4C is highly valued in Wales, as is the BBC, HTV and our national newspapers, the Western Mail and the Liverpool Daily Post, which have a role to play when digital television and radio come on stream and there is scope for them to participate. There is much interest in the future of those organisations in Wales and the Bill is highly relevant to that future.

8.15 pm

Mr. Bruce Grocott (The Wrekin)

I thought—in vain—that any new Broadcasting Bill introduced by the Government would begin with an apology to the viewing public and the House for the damage inflicted by the last Broadcasting Bill that the Government introduced in 1990. I was astonished to find that one of the architects of that Bill, who was a Minister at the time, was still trying to defend it. I can only state the obvious: the Bill profoundly destabilised ITV. Among the Bill's many defects was the ludicrous system of bidding for franchises that resulted in, among other things, Yorkshire Television paying £38 million for its franchise and Central Television, a more valuable contract, paying £2,000 for its franchise. If anyone wants to stand and defend that system, I should be interested to hear him do so.

As well as destabilising the industry in that respect, the 1990 Act led to substantial job losses—the number of people employed by ITV was roughly halved—and to the rundown of production facilities and the skills base in the regions. In my region, Birmingham, the result has been spectacular—a large studio complex has been greatly reduced. I would have liked to see some humility from the Government on the subject.

I should also like to see the Government show some humility for the way in which they have treated sport. In the limited time that I have, I wish to concentrate my remarks on an issue that interests not only many hon. Members but millions of people throughout the country: the coverage of sport on television and how it might best be safeguarded to ensure that major events are available live on channels that all of us can see. I also wish to talk about the related issue of ensuring that, at the very least, packages of highlights of other important sporting events can be shown on the major terrestrial channels.

The reasons are self-evident, but I shall rehearse them briefly. First and foremost, only by being on terrestrial channels can such events be seen by most people. Some 98 to 99 per cent. of the population—24 million households—have access to the main channels, while 15 plus per cent. of the population are able to see events on the other delivery systems of satellite and cable. The availability of major sporting events is of interest to a wider variety of people than those who are interested in sport. I hope that it is not overstating the case to say that the grand national is a national event and a unifying event—people talk about it, even if they are not necessarily that interested in horse racing.

The same principle applies to events such as the World cup or the Olympic games. They inspire the sports men and women of the future. If the Coe and Ovett triumphs at the Olympics of the early 1980s had been available only to a small number of the viewing public on satellite television, I wonder whether there would have been a rise in interest in middle distance running in schools and in sports centres around the country. The same may be true of Ian Botham's tremendous exploits on the cricket field in the 1980s. The arguments that major sporting events should be available to most viewers have been proven clearly. That manner of broadcast is the best safeguard for the future of those sports as it inspires young viewers to take them up.

The Government have a sorry record on broadcasting. The Broadcasting Act 1990 failed to provide proper protection—a fact that was recognised from the start. It provided protection only against pay per view and it did not protect against exclusive coverage on subscription channels. We do not always sign early-day motions that we are delighted to read out four, five or six years after the event, but on 18 February 1992, when coverage of the overseas cricket tour by the English test side was sold exclusively to Sky, 38 hon. Members signed an early-day motion which stated: That this House notes that the exclusive rights to the televising of World Cup cricket have been bought by B Sky B, thus ensuring that the vast majority of cricket-lovers will be unable to view the series; acknowledges that this is further clear evidence of the way in which so-called market forces restrict freedom of choice for the viewer; rejects the Conservative philosophy that offers choice only to a minority; and deeply regrets this further illustration of the profound damage being done to British television, once so admired throughout the world, by a Government which puts the interests of advertisers and company profits ahead of viewers and programme-makers. Four years on, I say amen to that. I do not think that anything has happened subsequently to detract from the strength of that argument.

Following the signing of that early-day motion, the National Heritage Select Committee—sof which I was very pleased to be a member under the chairmanship of my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman)—published a report in July 1994 that recommended that the listed events should be protected for subscription as well as pay-per-view coverage and that the list should be reviewed. Like the early-day motion, the report was ignored by the Government. Last year, I introduced a ten-minute Bill that proposed to implement the Select Committee report. The Government ignored it and they advanced the same argument that market forces should be respected at all times.

Now, squeaking and objecting, the Government have finally been forced by a vote in the other place to offer some form of protection. However, I have no confidence in the Government's commitment as they were forced into it. Their arguments against giving some form of protection to the coverage of major sporting events are fallacious. My hon. Friend the Member for Bassetlaw (Mr. Ashton) often uses the same arguments and I disagree with him profoundly. Conservative Members argue that we will pauperise sport if there is a lack of competition within a free market. In fact, ITV bid £260 million for the Premier league rights that Sky obtained with a £300 million bid. The difference between the two sums is admittedly a lot of money, but £260 million is not exactly peanuts. Therefore, it is ridiculous to suggest that we are pauperising sporting clubs by allowing the terrestrial channels to make bids.

The idea that there is a free market force between the satellite channels on the one hand and the terrestrial channels on the other is also quite ridiculous. It is rumoured that Sky will bid £100 million per year for the Premier league when that comes up for renegotiation next year. The total sports budget of ITV—a station that is accessible by all—is about £50 million and its entire programme budget is about £570 million. How can it compete with a subscription channel that is able to pay £100 million per year? Where is the level playing field and the righteousness of market forces? As a result, fewer people will be able to see major sporting events.

In the two minutes remaining to me, I shall make a vain plea to the Government. They have not listened to us in the past four years, but eventually they have been forced to take action. Mercifully, the Conservative Government will not be around in another four years, so we shall not be able to test the theory any further. The Government should adopt the Select Committee report. They should review the list of eight events; it is not sacrosanct. The list does not include rugby, golf and a number of other sports that should be considered. We must "unbundle the events"—to use the famous phrase. We must ensure that events such as the Ryder cup, which disgracefully was not available to most people last year when a very important match was played, are spread between the two channels.

At the heart of the Government's mistaken approach to broadcasting is their apparent obsession with the delivery system and with a managerial structure. They are obsessed with whether programmes are delivered terrestrially, by cable, by satellite or whether it is digital television. It does not matter whether programmes are delivered by carrier pigeon if the programme being sent is rubbish. What is important in television is the quality of the programmes that are delivered to the viewers. That depends on having a home production base; it means having quality regional centres of production; and it means putting the viewer first.

8.25 pm

Mr. Roger Gale (North Thanet)

At the outset, I declare an interest in the debate as a member of the Broadcasting Entertainment Cinematograph and Theatre Union, of the National Union of Journalists and of British Equity.

The Bill is designed to take broadcasting through the digital revolution and into the 21st century. To the considerable extent that it will help to achieve that aim, I welcome it. I share the view of my right hon. Friend the Secretary of State that the entertainment part of the revolution will be programme led, rather than technology led, and that there is a need to stimulate investment not only in digital equipment but in programmes made for digital transmission.

The United Kingdom's programme-making abilities are second to none and there is every reason to believe that we can lead the world in that field. I certainly subscribe to the view that a few good channels will be better than hundreds of bad ones. That is why I am certain that it is also right to seek to promote digital development through incentives for terrestrial television, using the vehicle of existing programme companies. Therefore, I welcome the digital capacity that the Bill will make available for free-to-air public service broadcasters as well as the opportunities that it will create for innovative subscription and pay-per-view services.

The much-vaunted satellite direct-to-home channels may have had their day and satellite may revert, as perhaps it should, to being merely an efficient means of delivery to cable head end. I believe that what we are discussing today is no more than another interim milestone on the road to the fully interactive domestic communications services that will almost certainly have to be delivered by broad band cable.

The danger in another place was that the Bill would become the "TV Sport Bill"—we have heard echoes of those sentiments tonight—to the exclusion of much that is arguably more vital to the development of broadcasting and communications. I hope to serve on the Committee that examines the Bill. In Committee, we shall no doubt return to the provision of sports coverage and the thorny issue of "unbundling" and also examine in fine detail the Channel 4 formula funding. I am sure that we shall consider future "must carry" provisions for public service broadcasters, the minutiae of cross-media ownership regulation, definitions of "control" and the outlawing of warehousing. We shall need to examine the way—I believe that it is the unfair way—in which the Bill is loaded against regional newspapers and local radio stations. We shall have to return to the arguments surrounding the determination of an analogue switch-off date.

In the few minutes still available to me, I shall address what I believe to be some omissions from the Bill: the licensing of conditional access systems, the need to create an environment for the development of a single standard of set-top or set-in decoders and the need to create a communications commission to meet the requirements of a fully integrated industry.

There is a general consensus among the existing regulators—the ITC and the BBC—and the British Radio and Electronic Manufacturers Association, without which there will be no sets on which to watch digital television, that the Bill does not adequately deal with the fact that the viewing public do not want a multitude of decoding boxes to unravel their multiplexed subscription channels. It is also recognised that the proposal that Oftel should license conditional access services under telecommunications legislation does not go far enough. It certainly does not embrace the analogue services that may be with us for several years to come.

I am persuaded of the need for a set-in rather than a set-top decoder that will handle all multiplex terrestrial systems. That being so, I have reached the inevitable conclusion that the Bill must give the ITC the power to take into account proposals for technological co-operation when awarding multiplex licences. I say that on the assumption that demand in the medium term will be for terrestrial receivers rather than satellite dishes, which will become irrelevant. There should also be further proposals to guarantee fair and open access to existing conditional access systems, although we should concentrate on the digital future rather than the outdated analogue history that is BSkyB.

By far the greatest omission from the Bill—and the greatest need—is the creation of an integrated communications commission. We are boldly about to merge the Broadcasting Standards Council and the Broadcasting Complaints Commission.

In a recent press release, National Transcom Ltd.—a company that some will still remember fondly as IBA Engineering—announced its acquisition by the cable operator CableTel. It stated: Together, NTL and CableTel will offer a broad range of entertainment, information telecoms and other transmission/broadcast services. In entertainment, CableTel's local cable television networks and NTL's national broadcast network provide immediate, effective and efficient TV and radio transmission. NTL is world leader in Digital Terrestrial TV and Digital Audio Broadcasting. In information services, the acquisition will further extend the reach and capacity of CableTel's national Internet access service, Cable Online. The broadband capabilities of the companies' combined networks make them particularly well suited to advanced interactive services. CableTel and NTL taken together also currently provide advanced telecoms services for business users, satellite uplinking and downlinking facilities, turnkey studio and transmission systems, telecommunications site facilities and a full range of services for the mobile radio sector. That surely demonstrates the increasing convergence of systems. We need a framework for the development of that environment.

I am not advocating the ministry of truth that lurks beneath the Opposition's proposals, but a light touch regulator and facilitator bringing together the work of the ITC, the BBC board of governors, Oftel, the Independent Committee for the Supervision of Standards of Telephone Information Services, the Radio Authority, the Data Protection Registrar and the Broadcasting Standards Commission.

We have yet to take a long hard look at the year 2020, to decide what the world of communications is likely to look like and to work out a logical, step-by-step approach to get there. However, 20:20 vision will be needed if the United Kingdom and Europe are to have a co-ordinated communications industry that can compete on a global scale. We shall require a director general of communications, presiding over a main board comprising the director of television, the director of radio, the director of news, the director of data and the director of standards, in order to manage what comes out of the all-purpose digital electronic console that each of us will have to bring information to our homes.

The runaway maverick growth of the Internet, with all its power for the dissemination of good and evil, should have taught us that our present structure is creaking at the seams. In the fast-moving development of the awful super-highway, we can be certain only that the pace of change is likely to outstrip rather than lag behind our imagination. We can, however, put in place systems that are sufficiently flexible to manage and accommodate both foreseeable and as yet unforeseen developments. We shall not do that unless we are prepared to embark on a seriously radical overhaul of existing empires.

We shall soon know whether the coming months will deliver at least the footpath towards the gravel track that leads, via the B-road and the trunk road, to the super-highway, or whether we shall turn up a lane and find ourselves in a farmyard of antiquated ideas. The opportunities afforded by the former will deliver for the United Kingdom a place as a brand leader in the European Union communications industry; if we take the latter path, the fast lane will pass us by.

8.34 pm

Mr. John Maxton (Glasgow, Cathcart)

I agree with the hon. Member for North Thanet (Mr. Gale) on one point: that cable is the future rather than satellite, which is essentially outdated technology. However, it will be years before cable is laid throughout the greater part of Britain. It has been said that cable will reach some 52 per cent. of households by the year 2005. Cable will probably never reach rural areas. However, there is already a cabling system that reaches nearly every household in the country. It is organised by BT. Until the Government wake up to that fact and give BT the right to be a broadcaster, there will be slow progress towards customer delivery in terms of cable.

That makes a mockery of the views of the Secretary of State, who said that she represented the needs of viewers and customers. She is denying the vast majority of people in Britain the right to view cable television because she is not prepared to concede that BT should be allowed to be a broadcaster.

Once again, I disagree with my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), the Chairman of the Select Committee. What he said about the BBC does not represent the views of the Select Committee. My right hon. Friend has never understood that the quality of BBC output is closely related to the fact that it is funded by the licence fee. If the BBC were not funded by the licence fee and depended on market forces and selling its programmes in the market place, the quality and standard of its programmes would drop dramatically and it could lose a large part of its market appeal.

I now follow my hon. Friend the Member for The Wrekin (Mr. Grocott), who spoke about sports broadcasting. My right hon. Friend the Member for Copeland (Dr. Cunningham) said that Sky was innovative and imaginative. To what was he referring? I have cable television and I have all the Sky channels. I can watch films made by film makers, BBC programmes that are 10 years old, ITV programmes that are 10 years old and American programmes that are also 10 years old. What on earth has Sky produced? I cannot think of a single programme—[Interruption.] I take that back in respect of my hon. Friend the Member for Great Grimsby (Mr. Mitchell), although it may prove my point. What Dennis Potter plays has Sky produced? What drama has it produced? The answer is practically none.

The channels that Sky uses as a loss leader to make people buy its systems are the sports channels. It is prepared to spend enormous sums of money on its sports channels in order to make people subscribe. In doing that, Sky is denying most of the viewers and customers for whom the Secretary of State expresses such great concern the right to watch many of our great sporting events.

In the other place the Government said that it is all down to market forces and that we cannot deny sporting bodies the right to sell television rights wherever they choose. I dispute that. Last year, the Government, through the sports councils and now through the national lottery, gave £285 million to sport. If we include the money spent by local authorities that have provided swimming pools, sports halls, running tracks, football pitches, rugby pitches, hockey pitches and so on and provided local sports development programmes, it is clear that the public purse gives enormous sums of money to sport and therefore, in my view, the House and the taxpayer should have a say as to where the television rights for those programmes go. They have a right to say that they want to see the major programmes. If we cannot watch Premier league football on BBC, why on earth should we give taxpayers' money to the grass roots of football? I assure my hon. Friend the Member for Bassetlaw (Mr. Ashton) that none of the money that goes to Premier league football from Sky goes to the grass-roots of football to encourage people to play, to maintain pitches or to build pavilions for small clubs. It all goes into the Premier league clubs' pockets to pay higher wages to football stars and to build new stadiums for spectators. It does not encourage one person to go out on to a football pitch and play football. That is the other reason why we put large sums of money into sport from the public purse. We believe that participation in sport is good for the health and welfare of the nation.

If I look around me, I might say that most of the hon. Members present do not look as if they agree that taking part in physical activity is good for our health, but that is increasingly the medical opinion. Running, jogging, playing tennis or squash or taking whatever exercise is good for people. Showing sport on television is one of the ways to encourage participation. We put money into sport to encourage participation and showing sport to the largest possible audience is a way of achieving that. Next Sunday, we will see the London marathon on the BBC and that encourages people to try to get fit. Only a small percentage will continue, but that small percentage is worth getting. If the marathon were shown on Sky, that participation level would drop dramatically.

We have the right to say what happens to the television rights. It has been argued that we might open a Pandora's box if we table amendments on Report to extend the list, but that is exactly what I intend to do. I intend to table amendments in two areas and others will think of other sports that they want to put on the list. I want to include the Five Nations rugby championship as a listed event so that it stays on terrestrial television, because it actively encourages people to take part in sport. Incidentally, we should consider what has happened in rugby. As soon as the television money increased, 24 clubs turned professional and demanded all the money from the television rights. That money will not go down to the grass-roots of rugby: it will pay the players' higher wages and will go into directors' pockets. We must not allow that to happen. I would also put the British Open golf championship on the list. It is absurd that it is not on the list, because it is a major sporting event.

The Government must reconsider the whole issue of sporting events on television. We need to extend the list and to ensure that the money that goes into sport feeds down to the grass roots of the sport and does not stay at the professional level. The money should ensure that people can have good facilities. That does not apply now, so I hope that the Government will think again.

8.42 pm

Mr. Toby Jessel (Twickenham)

I have served on the National Heritage Committee with the hon. Members for Glasgow, Cathcart (Mr. Maxton) and for The Wrekin (Mr. Grocott). They know that I respect them as good parliamentarians, but I do not know what the pair of them have gone on about for the past 20 minutes. They have been tilting at a non-existent windmill.

On the televising of big sporting events, both hon. Members are aware that the great national sporting events will be televised on the popular channels. Many Conservative Members, too, supported that, and if the House of Lords had not bothered with an amendment, there could have been an amendment in this House, which might have been carried, but both hon. Members went on as if we had the situation of three months ago, before the Lords' amendment. The great sporting events will be televised so that everybody can see them, and it is hard to see what those two hon. Gentlemen were complaining about.

The Bill is excellent, and I am glad to be able to support it and the major changes it foreshadows, including not only those on the coverage of sporting events, but those on Channel 4, cross-media ownership, the V-chip and digital broadcasting.

I wish to make a point about music on the BBC. The BBC has traditionally been a great patron of all the arts, but especially plays and music. In the National Heritage Committee's recent report on the funding of the arts, we referred to the important role of the BBC. Too large a proportion of broadcasting on Radio 3 and other programmes is of recordings, and there is not enough patronage of live performances by young British artists.

I remember when Radio 3 broadcast many young pianists, violinists and singers who were starting to make their names. They were not very well paid, but I doubt whether the cost would be any higher than playing a recording of a symphony orchestra and having to pay royalties to the recording company and to the symphony orchestra. Likewise, the BBC does not put on very many young British composers. I want the BBC to reassert its traditional role, because it is a very important part of our national life. Britain is very strong in music and we should build on our strengths. The BBC should always play a leading part in that.

I am concerned about the question of political impartiality in the BBC. When my right hon. Friend the Secretary of State spoke earlier, my hon. Friend the Member for Hendon, North (Sir J. Gorst) made a telling intervention and invited my right hon. Friend to comment on the question of impartiality in the BBC. As I see it, that question interacts with the probability that the BBC charter that is to begin at the end of this month for 10 years will probably be the last.

When the hon. Member for Cathcart mentioned what the right hon. Member for Manchester, Gorton (Mr. Kaufman)—the Chairman of the National Heritage Committee—had said, he did not have enough time to give the whole picture. The right hon. Member's main point about the BBC was the steady decline in the size of its audiences, partly because of the growth of channel 3 and Channel 4 and the growth of cable and satellite television and partly because fewer people wanted to watch the BBC's high standard productions. In the Select Committee report on the future of the BBC, we showed that, in 1989, 49 per cent. of all viewing of television in this country was of the BBC. By 1992, the figure had already declined to 44 per cent. and the decline is a continuing trend. In another 10 years or so, the figure is highly likely to be about 30 per cent. and the growth of cable and satellite has been faster than we predicted two years ago when we produced that report.

The question arises whether the British people will tolerate a compulsory licence fee for a service that only 25 or 30 per cent. of people are likely use by about 2010. Coupled with that, there is a growing evasion rate, from about 7 to 8 per cent., of people who do not pay the licence fee. That is a criminal offence and enforcement and detection are increasingly difficult. Two thirds to three quarters of all those convicted were women and, in many cases, were women pensioners or single or unmarried mothers who could not pay the licence fee. All those tendencies make it likely that the licence fee will, in the end, go and that this charter will be the last one. In that context, anyone who is working for the BBC will feel much more uninhibited about being partial in their broadcasting than they would have done if they thought that that might affect the next charter, which would have run from 2006.

I do not believe that the journalists in the BBC are so impartial as they used to be in the days of Lord Reith or when his tradition, after his period as director-general of the BBC, still tended to prevail. There is a lot of partial reporting on the BBC, as one can hear in the "Today" programme after breakfast. Whichever Government are in office, there will be a tendency for BBC journalists to tilt against that Government because it makes more news to tilt against authority than it does to report impartially.

The impartiality of the BBC is now in decline, and unless some action is taken it will grow. I realise that it is impossible for my right hon. Friend the Secretary of State, in the course of the Second Reading debate, to give any firm commitment, but I am glad to see that she has returned to the Front Bench after having to go out for a short time and I very much hope that she will consider that point most carefully and discuss it with the BBC to see what can be done.

I think that there should be an ombudsman to deal with partiality complaints against the BBC. We already have 18 or 19 ombudsmen in Britain and one more would not be disastrous. Of course the BBC detests that idea, but no one can be impartial when judging his own impartiality. That should be done by someone from outside. An ombudsman is to be preferred here. Otherwise, as a fallback position, I suppose one could consider making one senior governor of the BBC responsible for the investigation of complaints of partiality, but he would have to have his own staff who were not on the books of the BBC. If BBC officials were doing the work for the governor, they would tend to vindicate what had taken place and there would not be the test of impartiality which I, for one, want.

I very much hope that my right hon. Friend the Secretary of State will be good enough to take that on board and consider it carefully, taking it in conjunction with the intervention of my hon. Friend the Member for Hendon, North. I also hope that she will take note of some very sensible views on the matter that have been put in the other place and which I believe have been represented to her. I would also be glad if my hon. Friend the Minister of State would be kind enough to refer to my point when he replies to the debate.

8.52 pm

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

I can tell the hon. Member for Twickenham (Mr. Jessel) that in the nearly 30 years that I have been a Member of the House I have found that Governments of all complexions complain about the BBC. I remember Harold Wilson once calling the 1 o'clock news programme "Lies at One". It may be one of the functions and roles of the BBC to tilt, as the hon. Gentleman described it, at authority and at Governments of the day.

I want to confine my remarks in the time available to essentially Welsh issues and to consider what impact the Bill and the changes that it forecasts will have upon the Welsh broadcasting scene.

First, as a veteran of the previous Broadcasting Act in 1990, and as one who, like others, was horrified at the consequences which led to the incredible nonsense of HTV paying nearly £20 million and Central paying £2,000, the consequences of which we have been living with ever since, I think that we should consider the historic context in which we now come to consider the role of commercial television—regional terrestrial commercial television in the case of HTV in Wales as a national commercial television company.

Secondly, we shall have to consider the issue of S4C. In that context, I have to declare an interest under the new rules in that my wife is a member of the S4C board. Thirdly, we shall have to consider—we have not talked much about it—the role not just of the BBC in the digital age but BBC Wales or the regional and national BBC broadcasts on both radio and television, and the changes that the digital age might bring not just to the national BBC scene but to the regional scene or, in the case of Wales, the Welsh national BBC scene, both radio and television.

The difficulty with a Bill such as this is that it tends to compartmentalise issues. There will be clauses on S4C, on BBC and on the regional commercial terrestrial stations, but in Welsh terms, there should not be such compartmentalisation. Wales is in an interesting but potentially fragile position in that it will have two publicly funded broadcasting stations. Both BBC and S4C will be dependent on funding from the state.

If I have the privilege of being selected to serve on the Committee, I am sure that we shall have the opportunity to debate the funding arrangements and the concerns expressed by S4C in relation to the changes in the funding formula. It was probably not well advised to sneak into the Bill—I think that sneak is probably the right word—a change in the S4C formula without real meaningful consultation. Beyond that, the other major change that digital will have on S4C is that it will at last divorce Channel 4 programmes from S4C.

I come from a constituency which is predominantly non-Welsh speaking and there has been a growing tension there and in parts of other communities in south-east Wales about the non-availability of Channel 4 programmes, at least at the same time as they are broadcast on Channel 4. In that context, S4C should give more and greater consideration to the scheduling of Channel 4, but when the divorce takes place, and when digital television allows Channel 4 to be broadcast separately and therefore accessible to Welsh viewers, there will be a large and significant gap in the S4C schedule. The question is how that gap will be filled. Who will fill it and how it will be filled will be big issues that link seriously with the question of the role of BBC Wales and the terrestrial regional commercial station in the form of the present HTV.

One of our real passions about Welsh national broadcasting, whether it be BBC, HTV or S4C, is that they are the new patrons of the arts. Whereas in the 18th century Handel was financed by the courts and the palatinate, the modern patrons of new writers, new programme makers, and new artistic talent, are the major broadcasters who commission the programmes. S4C has played an important and significant role in developing the Welsh language side. What has not happened to the same extent, inevitably, has been the development of the English-speaking Welsh potential in programme making, in writing, and in the artistic endeavour that is related to the broadcasting scene.

S4C's budget to promote and develop programme making in Wales in the Welsh language is £63 million. BBC Wales and HTV contribute £25 million towards programme making in Welsh terms. We have therefore to think hard about how each compartmentalised piece of the Welsh broadcasting scene will relate to the others in the new age.

I want, fourthly, to raise the issue of the independence of commercial broadcasting in the light of the fact that, frankly, the Bill is a charter for takeovers; it is a liberalising Bill, as the Secretary of State said, and that means takeovers. The Bill will allow a growing concentration of power within the terrestrial television scene, and companies such as HTV are easy victims for the takeover bids that are likely to flow from it. In that context, clause 67 will be extremely important. We have gone over it again and again and shall continue to do so in Committee to see whether it will be able to defend the regional—or, in Welsh terms, the national—commercial position of a company such as HTV, which should maintain editorial and managerial control in Wales.

In that context, I listened hard to the right hon. Lady. In the other place, there was much debate about whether one should add an additional subsection to the proposed new section 21A in clause 67—I think that it was 21A(4)(c)—so that the ITC would have the power to defend editorial and management control in the region. In HTV's case, it would be Wales. I think that it was Lord Inglewood who gave assurances that it was only because of the lack of time that there was no change to that clause. When the Minister replies, will he please confirm that the Government intend to introduce such a change, as foreshadowed in the other place? It will be extremely important to see whether the clause will be able to stand up and whether the controls of the ITC in defending the regional character and nature—in Wales, the national nature—of commercial television will be sufficient to stand against the powerful takeover bids that will take place.

I am a little surprised at the sanguine nature of hon. Members—even my colleagues on the Front Bench—about the concentration of power that the Bill could promote. In theory, it will be possible in the new age after the Bill for a company to own four terrestrial, regional licences and to have 14.9 per cent. of national viewers, but 40 per cent. of advertising revenue. Unless we do something about it, it will also allow the systems of control to be manipulated cynically. I think that the words are "warehousing" and "deadlocking"—ways to avoid and get around the systems of control. I seek an assurance from Ministers that they will support proposals that will be made by the ITC and the Radio Authority to stiffen the definition of control to outlaw the cynical manipulation that we have seen in some major companies in anticipation of the free-for-all that they think will be the consequence of the Bill.

Unlike some hon. Members, after being here all these years, and as I grow older, I have grown more suspicious about concentrations of power. I do not believe that we should support a Bill that will promote budding Citizen Kanes, as it will not be healthy for public broadcasting or for democracy in this country.

9.2 pm

Mr. Hugh Dykes (Harrow, East)

As an hon. Member who must be one of the least expert in this complex subject, I welcome the chance to make a contribution. [Interruption.] I am glad that my hon. Friend the Minister is trying to encourage me to be immodest on this occasion, but it is true. It is sometimes the ones who have the more amateur view on extremely complicated matters who may be able to provide some suggestions, although, having listened to the high quality of the debate tonight, I have doubts about that, as I am surrounded by a considerable number of experts.

There is no need for us always to stick rigidly to the party political stance of either side of the House on these matters. I was extremely impressed with some of the powerful remarks made by the hon. Members for The Wrekin (Mr. Grocott) and for Glasgow, Cathcart (Mr. Maxton), who is not in the Chamber at the moment, and who made an extremely important point that rugby should be generally available.

I declare one modest interest as a shareholder in Carlton Communications plc—the subsidiary of which runs the weekday television services in London—and which also has other television and related interests, but that does not mean that I shall refer to any of its preoccupations tonight.

A misunderstanding can arise because of the way in which the Bill tries to mix a number of very different and complex elements that make me uneasy. I am not uneasy about supporting the Bill on Second Reading—and, incidentally, my right hon. Friend the Secretary of State, who handled an extremely difficult brief with great skill. I hope that she will not mind my saying that I get the impression that she enjoys her new portfolio perhaps more than her previous one, where she also had arduous duties, but she handled the complexities very well, so I am happy to support the Bill.

I am uneasy about the underlying subject matter of the Bill and whether the House of Commons, which is an amateur Parliament in the definitional sense, although plenty of national heritage and media experts are gathered here tonight, is able to cope with and grasp the future of this fast-developing, high-technology matrix of new developments in electronic television communications, and mix it up with the other elements of ownership and concentration, cross-media ownership, conditional access and all the other things. Given the bewilderment that we all feel, I urge those who deal with the Committee stage to try to find a solution that will hold for at least some years to come. Even given such a solution, the ensuing approach is bound to be experimental, complex, uncertain and hesitant: we are reaching out to an entirely new electronic system—a system that is international—while at the same time trying to embrace the old notion of public-sector, high-quality broadcasting combined with competition and commercial opportunities.

My hon. Friend the Member for Twickenham (Mr. Jessel) referred to the BBC. I think that any ombudsman system, presumably built into the combined commission created by the Bill, should not just investigate complaints of bias on the part of the BBC—which I consider grossly exaggerated—but should carry out general investigations, under its existing and future reinforced remits. Any other arrangement would be unfair.

The Bill provides for a merger between the Broadcasting Standards Council and the Broadcasting Complaints Commission. It is essential for the resulting body to be extremely powerful and authoritative. I pay tribute to what the ITC has already achieved: it is an impressive and well-run organisation, built on its predecessor. Nevertheless, it needs more strength and more psychological support from all of us here, and from everyone in the industry.

I fear that the Bill will not do enough to prevent a huge upsurge of violence on television. The code of conduct provides for more such programmes to be shown late at night, but, as we all know, children stay up later now. Sadly, that is the present family syndrome. On the BBC as well as other channels, children—and, indeed, adults who may not be able to handle all of it—see increasing amounts of sickening violence. I believe that, today or yesterday, someone said that 400 people were killed on television every week.

However, I also pay tribute to the BBC for the extremely high quality of television that it has achieved. We are unique in that regard. A great service was done to this country and Parliament by the licensing system, and by my right hon. and learned Friend the Member for City of London and Westminster, South (Mr. Brooke), the previous Secretary of State for National Heritage, before he left the Government: he more or less saved the BBC in its present form—although some changes were made at the margin—for at least five and possibly 10 years. That elevated standards for other programme makers, and increased competition rather than detracting from it. New opportunities have been given to the channel 3 companies, as well as to Channel 4.

We all pay tribute to Channel 4 for its achievements, and the way in which it has changed over the years. It has been a tremendous success. When it was first set up, most of my Conservative colleagues rubbished it, expecting it to be a subversive medium. That turned out not to be the case, for many reasons that I have no time to give.

I like the idea that was presented in the House of Lords—the proposal for a register of the interests of people involved in broadcasting who have other outside interests and are linked to those interests, or to the promotion of a particular case or argument, in the television medium.

I believe that the proposals were tabled by Lord Chalfont and the Earl of Northesk—a gentleman I have not yet met—in an amendment that suggested that the public should be given information about outside consultancies held by broadcasters, their financial interests and their membership of or affiliation to any political parties, all of which could influence the way in which broadcasters provide broadcasting services. As a result of various technical and late-night arrangements in the other place, the amendment was not proceeded with; I imagine that not enough peers were around at that time of night even to consider the subject. None the less, I feel that it is worth our considering the proposal in Committee.

Cable television has received less attention than some other television matters that have been mentioned in this lengthy debate. It is all very well saying that cable television will grow inexorably, and will eventually reach more than 50 per cent. of households—mostly urban, for obvious reasons. I have my doubts about the weaknesses of some of the existing companies—I deliberately mention no names, and there are notably strong exceptions—and I do not think that the future of cable television in Britain looks very good. That poses problems for those who believe that merely widening the choice of services and facilities will automatically have a beneficial effect and will increase competition and consumer choice.

Lest my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) misunderstands my remarks about the quality of journalism in News International, I should tell him that I was not speaking about what he mentioned: we have already discussed that. Is there any evidence that the volume and quantity of Sunday newspapers are the result of what the consumer wants?

People say to me that the Sunday newspapers are a nuisance, and that they are far too bulky to read. They say, "I read only one, or glance at the headlines." We all know that it is just a ramp by newspapers to increase advertising, and that between the advertisements there are a few boring articles, supplements, extra editions, television magazines and rubbish.

If people can get away with it, that is commerce and business, and I pay tribute to their chutzpah in doing it, but the idea that nine or 10 Sunday newspapers is the result of pressure by consumers is utter nonsense. We are kidding ourselves if we heed the exponents of the industry and its highly paid executives who say, "We are just responding to consumer demand and choice." I hope that we can bear that in mind without being paternalistic and patronising to the public. It is the other side of the reality. Competition and choice is good but we must not overdo it. High quality must be our main target, and that will be the BBC's triumph in future.

9.11 pm

Ms Roseanna Cunningham (Perth and Kinross)

In no way is the Bill ideal legislation. It looks like several different pieces of legislation cobbled into one in the vain hope that, by calling it the Broadcasting Bill, the Government will make people think that the Government have done their work in the area. The Government have been poor broadcast legislators, either shutting the stable door after the horse has bolted, or inventing schemes and conditions that do not relate to or even reflect the pace of innovation in the media.

The Secretary of State and some hon. Members spoke about the BBC. In their democratic supervision of the BBC, the Government have over-criticised and under-regulated, and the result is a system of so-called public broadcasting which at network level does not provide anything like the service that it should. At that level, it certainly does not reflect the diversity of these islands.

The review of the BBC charter was an exercise in missed opportunities, with the BBC effectively writing its own licence to broadcast as the voice of London in an inefficient and anti-democratic structure presided over by a centralist and determinedly metropolitan management. There remains little attempt by the BBC to deal with the different realities of Scotland, Wales and Northern Ireland.

The BBC makes only 3 per cent. of its programmes in Scotland, Wales and Northern Ireland, yet those areas are inhabited by some 17 per cent. of the United Kingdom's population. The promise to increase programme making out of London amounts to only an extra six hours a week, because news, parliamentary reporting and sports reporting are excluded from the commitment. But those are the areas where the priorities of the minority nations can be most different. As I said in another debate, 97 per cent. of the BBC news and current affairs programmes seen in Scotland come from London, where there is enormous difficulty, whether out of ignorance or because of wilful disregard, in coming to terms with the four-party system.

In the commercial sector, a decrease in regulation may be a welcome move in future, but only in circumstances where there exists a properly funded, high-quality public service broadcasting system operating through a variety of channels and stations and reflecting the needs of all parts of the United Kingdom. That does not currently exist, so the debate and the Bill are in a vacuum. There is no real attempt to look at the totality of broadcasting; only a piecemeal approach that does no one any service.

Since 1979, broadcasting has been debated in the House 109 times, but only one major piece of legislation has resulted. That was the Broadcasting Act 1990, which led to a shambolic sale of independent television licences, the provisions of which have already had to be amended.

In the period from 1979 to now, broadcasting has undergone not one but several revolutions. In fact, the broadcasting industry has changed out of all recognition. Faced with that change, the Bill is basically a ragbag of provisions that attempt to define the future of broadcasting from a position of little practical knowledge of its present dynamic.

Indeed, there are a number of omissions in the Bill. For example, there is no new provision for community radio and its future, yet community radio stations are a part of broadcasting. What is needed, especially for Scotland and Wales, is a systematic evaluation and review of what is possible, what may be possible and what should be possible. It is obvious that there is little chance of such a review emerging from this Parliament, much less this Government.

We must deal with regulation. Much of the regulatory framework is outmoded in an age of free communication via the Internet—of which I am an enthusiastic supporter—on which multi-sourced, real-time television broadcasting will be possible and practicable within a few years. Real-time audio is already here. We face the prospect of instant communication by computer screens that are also television receivers.

In such changed circumstances, none of which is entirely unpredictable, the Government might be better employed in strengthening and resourcing public service television rather than creating new legislative barriers for the establishment of television and radio services—barriers that will be outmoded and restrictive almost immediately the Bill is passed.

The Government's role should be to provide and nurture high-quality, freely accessible, publicly informative and educational broadcasting outwith direct day-to-day political interference, but within a democratic framework of accountability. With such services at the centre of governmental concern, the alternative commercial services might simply be allowed to find their own levels in the market, within the usual legal bounds of decency and free speech. However, the two should develop together. Without a commitment to public service broadcasting—a commitment which does not appear to exist—an unregulated commercial sector carries with it serious dangers.

National Governments should support and encourage public sector broadcasting. Commercial concerns would select national or international markets and appropriate transmission systems and cyberspace would be inhabited by all those types of broadcasting and many others. The question of cyberspace should be for the widest of international bodies, but with only the lightest of regulation. We might call it the application of subsidiarity to broadcasting.

Speaking of subsidiarity, the maintenance of so-called regional programming is also a matter of public and political concern. Within Scotland—as, presumably, within England—regional programmes are an important part of the programming schedule of the commercial television companies. Grampian Television, which covers my constituency, is a thriving and fiercely independent company, providing important and popular local programmes.

It is essential that both the quality and the quantity of regional programmes increase and do not lessen, regardless of any changes in ownership or control. I hope that editorial control and decision-making will be maintained within the regional areas, and that regional programming is given a wider definition. Equally, I hope that prospective or new licence holders will have their commitments to regional programming investigated even more rigorously than at present, so that there is no question of takeovers proceeding on a false prospectus. That is especially important for the minority nations of these islands. It is even more important for the minority peoples and their languages. It is something often forgotten in this metropolitan centre.

It is worth remembering that cultural, ethnic and linguistic diversity exist even within the constituent nations of these islands—thus, Grampian Television has a responsibility to that dialect of the Scots language known as Doric, just as all Scots broadcasting has a responsibility to Scots and Gaidhlig. That is only one part of the regional programming responsibility—there are clearly many others—and it needs to be safeguarded and encouraged.

Finally, while on the subject of linguistic diversity, I hope that the Government will respond as positively as possible to the representations of S4C on digital capacity and funding.

Mr. Cynog Dafis (Ceredigion and Pembroke, North)

I am glad that my hon. Friend has raised the question of S4C. Perhaps she will elicit from the Government Front Bench a guarantee that S4C will be properly provided for, both in digital space—so that it has half a multiplex, which is what it should have—and in sufficient funding to meet the extra costs and the challenge of the increased competition that will come with digitalisation.

Ms Cunningham

I certainly hope that there will be a response to that intervention, because, had my hon. Friend allowed me to continue, it was the point that I was going to make.

I hope that the Government will respond to S4C's representations on digital capacity and funding. More widely and in the longer term, I hope that they will also respond positively to Comataidh Telebhisean Gaidhlig in its desire for a gaelic equivalent to S4C, and, in the interim, consider granting it powers directly to commission programmes that will widen the choice that is currently available in Scotland.

9.20 pm

Mr. John Greenway (Ryedale)

I begin by reminding the House of my interest as an adviser to Yorkshire Tyne-Tees Television. I make no special pleading in this debate for Yorkshire Tyne-Tees Television, but I should like to place on record three facts that go to the heart of some of the issues that have been discussed in this interesting and high-quality debate.

First, Yorkshire Tyne-Tees Television refused to broadcast a number of pornographic television programmes on the network. In all the talk about the V-chip, it seems to me that broadcasters exercising responsibility is without question the best way of ensuring that that type of material is not beamed into our homes.

Secondly, Yorkshire Television makes and produces "Heartbeat" in North Yorkshire, in my constituency and that of my hon. Friend the Member for Scarborough (Mr. Sykes), which is arguably one of the most successful programmes on British television. I believe that we should encourage that type of family viewing programme rather more. I hope the fact that that programme is produced by a regional ITV company in a region will not be lost on the House.

Thirdly, the merger of the licences of Yorkshire Television and Tyne-Tees Television some years ago has brought considerable benefits, particularly to people living in the overlap area in which a new regional news studio has been created. I think that that merger demonstrates that, if the changes in ITV channel 3 licences that will occur as a result of this Bill are handled correctly, they will bring valuable benefits to viewers.

The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) made an excellent speech. Like him, I was a member of the Standing Committee that considered the Broadcasting Act 1990. I am sure that, like me, he remembers the debate on that Act in Committee. We won many of those arguments, but one or two matters are still unresolved, and we made one or two mistakes. The first mistake was that we failed to specify a reserve for channel 3 licence bids, with the result that licence payments by channel 3 companies are extremely inequitable. Sooner or later, that problem must be addressed.

That problem is connected with the Channel 4 funding problem because, contrary to what is often said, channel 3 licence holders were asked by the Independent Television Commission to take into account the funding formula in putting together their bids. So I ask my hon. Friend the Minister to consider bringing together—either in this Bill or some time during the next 18 months—the need to change the Channel 4 funding formula and the need to revisit the channel 3 licence payments.

Linked to that is the fact that, while everyone has rightly been concerned about the Channel 4 funding issue, it is channel 3—not Channel 4, BSkyB or any other future channel—that pays almost £400 million a year to the Trsry in licence fees and tax on advertising revenue. If we are examining the future of commercial television over the next 10 or 15 years, we must consider not only channel 3 or Channel 4 but satellite and cable. My hon. Friend the Minister knows my views, but it has seemed to me for some considerable time that, sooner or later, we shall have to reconsider a quite separate system for charging commercial television for the valuable access that enables it to realise revenue through advertising.

A second problem that we did not resolve correctly in Committee in 1990 was the ownership of ITN. I vehemently opposed the sell-off by ITV companies of their shares in ITN, which has created the problem we have now. As a result of the changes in ownership, two large independent television licensees own more than half of ITN, with the consequence that the rest of the channel 3 network feels that it is not getting a fair crack of the whip in terms of what it has to pay for ITN.

I agree with my right hon. Friend the Secretary of State that we perhaps need, once and for all, a clear agreement that there should be one independent television news provider. The best way to achieve that at the right price is to nominate the second news provider and then have a proper competitive bid for whatever new service is forthcoming from that provider.

The third problem that we did not resolve correctly in 1990 concerns the vexed issue of conditional access to which other hon. Members have referred. The fact that the Bill provides a legislative framework for the regulation of conditional access through digital programmes in the future is very welcome, but we should, and must, extend that to analogue satellite systems, because we could be some years away from realising the digital opportunities that the Bill seeks to encourage, and that is a problem.

When dealing with that problem, will my hon. Friend the Minister ensure that we differentiate conditional access through satellite, or encryption, from conditional access through cable? My hon. Friend will be aware of the relevant arguments.

I deal now with the sale of sports rights. I do so especially in my capacity as chairman of the all-party racing and bloodstock industries committee. Two of the eight listed events are racing fixtures—the Derby and the Grand National. The British Horseracing Board and the Racecourse Association recognise the importance of those two events being shown nationally on terrestrial television, and have no difficulty with the change in the listed events legislation that has now been agreed.

Those two organisations subscribe strongly, however, to the proposed code of practice drawn up by the Sports Council. In the light of what the right hon. Member for Copeland (Dr. Cunningham) said, I feel highly privileged to have seen a copy of it. I hope that, in Committee or on Report, Parliament will have the opportunity to debate that code and to consider its details to ensure that we get the framework right. As far as I can see, the code makes clear the determination of the sport's governing bodies that they will undertake to make every reasonable effort to strike a balance between the objectives of achieving the widest possible broadcasting exposure and their duty to maximise income for their sport from the sale of broadcasting rights. They also firmly intend to preserve a distinction between television and radio rights such that the acquisition of exclusive television rights shall not preclude simultaneous radio commentary. I am sure that the whole House would agree that that has to be the right approach. It will be difficult to strike the right balance, but on reflection the code represents a better approach than the creation of fresh legislation.

Every time the House debates broadcasting, we are faced with a paradox. Everyone says how wonderful British television is—indeed, it is the best in the world—yet there always seems to be such a reluctance to trust broadcasters. The record of our broadcasters, despite concerns about some elements, speaks for itself—

Madam Deputy Speaker (Dame Janet Fookes)

Order.

9.30 pm

Ms Angela Eagle (Wallasey)

It may seem rather surreal to be debating digital broadcasting when as yet there is no audience, no programmes, no transmission system and no sets, but the extent of the technological advance and its rapidity these days means that such things are highly likely to be with us, and as a Parliament we have a duty to the public to legislate accordingly.

The technological advance with which we are faced implies massive change in all the forms of media that have been referred to in the debate. It could transform those services beyond recognition. Indeed, the advance could be as significant as the invention of the printing press in the effect that it has on our lives, socially, culturally and politically. The Bill should both facilitate that change by ensuring that it happens in an orderly fashion, and regulate it effectively. I am not sure that it does either well enough.

We need to ensure that there is an orderly transformation to the new services, that they are made available to as many people as possible, and that the evolution is fair and equitable. The survival of public service broadcasting and the ethos around it will be an important measure of whether we are successful. We have to ensure high quality in production values and in domestic programme making. As I said in an intervention on the Secretary of State, the process by which the multiplexes will be allocated contains no reference to quality. We must put that right, so that we can ensure that high quality remains an acceptable criterion.

We must also take some time to ensure that control through monopoly does not develop, especially regionally. The Bill makes some attempt to ensure that. We must also, and more crucially, ensure that such monopoly does not develop in the gateway technology—the black box that will enable the multiplex transmissions to be seen on the TV screens in people's homes.

Another crucial principle that we must bear in mind is access for all. That means that access to services is as cheap as possible, that countrywide coverage is provided, and that access does not rely only on having to pay more and more. Opposition Members therefore believe that quality in the awarding of multiplex licences is a key issue.

We welcome the guaranteed space for existing broadcasters—that is one way in which to safeguard quality—but recognise that markets are dynamic. Although quality in our current broadcasters is assured, increasing global competition and pressures mean that we cannot be certain that, without stricter quality control in this country, such quality can be assured in future. We therefore want equality, original production and free-to-air criteria to be part of the ITC licensing application procedure. We want no monopoly. That refers not only to cross-media ownership—I am sure that there will be many interesting debates on that in Committee—but, as I said, to the gateway system.

In the very brief time that has been allocated, I want to speak about listed sporting events. Many people who take an interest in sport welcome the decision in the other place that guaranteed that the coverage of eight major sporting events will remain on terrestrial channels, so that people throughout the country can have access to them. I strongly support that.

I am sympathetic, too, to the possibility of extending the list. I have some difficulty with the idea of a voluntary code of conduct on unbundling. We must see that code in Committee as it has been developed so far, and if we are not happy with it, we should, having the Bill before us, write in a reserve power on unbundling that we can use if the voluntary code either fails to emerge or is not adequate.

As someone who follows cricket, I was especially concerned about the fact that we could see only the limited highlights of the cricket world cup that made their way on to terrestrial broadcasting. I was disappointed that the glorious occasion on which Kenya beat the West Indies was unavailable to us, and that all we had was England's rather drab performances—only just made up for by our being able to watch Sri Lanka's fantastic win.

I look forward to further interesting debates on those important issues.

9.35 pm

Dr. Lewis Moonie (Kirkcaldy)

We have had a fascinating debate, sadly curtailed by an hour and a half of statements, and by the Secretary of State's contribution having been perhaps a wee bit long. [Interruption.] As the right hon. Lady seems to be protesting, I must add that her speech was considerably longer than any by an Opposition Member.

As has been said, we support the principle of the Bill—[Interruption.] As the Secretary of State insists on intervening from a sedentary position, I must add that during her peroration there were times when I felt that I would have been better off at home watching my grass grow.

We support the principle of the Bill, despite the fact that it is deficient in many respects. But we disagree with the Government on key issues, which we hope to debate in full in Committee and on Report, and we shall ask hon. Members to support our reasoned amendment tonight.

I shall pay a brief tribute to the contributions of my colleagues, especially that by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) who, by the strength and quality of his speech, showed us why his Select Committee is such an effective force in national heritage issues.

I must also mention my hon. Friends the Members for Bassetlaw (Mr. Ashton) and for Wigan (Mr. Stott), and my hon. Friend the Member for The Wrekin (Mr. Grocott) who made a trenchant contribution. I also thank my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) and my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who, despite the fact that he confined himself to Welsh issues, showed what a valuable asset he will be in Committee. My hon. Friend the Member for Wallasey (Ms Eagle) also managed to slip in a few remarks at the end.

In the limited time available I shall touch briefly on some of the issues that were raised. I shall also correct a clear misconception in the Secretary of State's mind, because I am sure that the right hon. Lady would not wish people to think that she had deliberately tried to mislead us. She talked about provision for alternative means of switching off analogue signals early, but the whole point is to provide a system that allows people to continue viewing digital signals using their analogue boxes. Under such a proposal, there is no question of people's not being able to use their old sets. I am sure that the Secretary of State would not wish people to get the impression that she was saying that we had suggested such a thing.

The main part of the Bill concerns digital television and radio. We have few fears or qualms about radio, other than those that we have already expressed about multiplexes—we are now talking about digital radio rather than ownership. The demand for high-quality sound reproduction, especially from the many car drivers among us, will ensure that digital radio will get off the ground—and the sooner, the better.

We are a wee bit less sanguine about the prospects for the digital terrestrial proposal. After all, it will have to compete against potentially far more effective delivery mechanisms. Digital satellite, with vastly greater numbers of channels and the possibility of radio links to provide two-way communications, will be a much more effective medium, although again, there are doubts about exactly when it will appear.

Digital cable services, too, will be able to provide a vastly greater number of channels. Even more serious competition will come from the provision of fibre, and the almost limitless band width that that will offer us. But who knows when that may happen? Digital television will have to operate in an uncertain market. That is why so few reliable financial and business commentators have been prepared to say, with their hand on their heart, that they believe that the system will fly. That point should concern all of us. We have no quarrel with the Government inasmuch as we want digital television to get going, as everyone else does.

Mr. Stephen Timms (Newham, North-East)

Does my hon. Friend agree that the quality of the services provided by digital broadcasting will be one of the main determinants of its success? Does he further agree that it is absurd that the Bill does not allow the ITC to take quality into account in determining the licence applications submitted to it?

Dr. Moonie

I could not have put the point better myself; my hon. Friend makes a good point. It is a great disappointment to us that no quality test has been included in the Bill. That is a point that we shall seek to introduce in Committee and on Report. In view of some of the comments made by Conservative Members, I suspect that we may get considerable support for such a proposal from hon. Members on both sides of the House.

I will now touch on some of the other main issues raised tonight and to which we shall return in Committee. The question of cross-media ownership has rightly been brought up. For the record, I will make sure that my views are plain. I favour competition in the provision of services. I favour full competition so I see no reason why any player should be arbitrarily excluded from the market by the introduction of the test proposed in the Bill. Full competition should be fair competition and it is the Government's duty to provide an effective framework for fair competition throughout the industry. The failure to do so is not the fault of the Department of National Heritage but the fault of the Government as a whole. At present, we do not provide a framework for fair competition. If we had such a framework, there would be no need for the specialist provision in the Bill.

Many Conservative Members have made useful contributions on the provision of local services. In general, we agree with them and we shall seek to support amendments on that subject in Committee. However, there is a difference between large metropolitan areas and areas around my constituency and parts of the highlands of Scotland and Wales where there is only one local radio station and only one local paper. To give one group control over 100 per cent. of local advertising in an area would be unwise and we must ensure that that is not allowed to happen. Bearing that point in mind, I agree with many of the points made by Conservative Members.

We welcome the merger of the Broadcasting Standards Council and the Broadcasting Complaints Commission. We also welcome the opportunity to debate the V-chip although, like the Secretary of State, I have some doubts about the practicalities of introducing it. However, that does not alter the fact that we must have a full, fair and frank debate on the issue in Committee and on Report so that every hon. Member's views can be properly taken into account.

We wonder—this is purely speculative—whether we should take things a stage further on standards in broadcasting in view of the key role that the ITC will play. Should we not perhaps look, not too far in the future, at subsuming the role of the new BSC into the ITC and giving it a general extended role in the monitoring and control of standards of broadcasting? I suggest that especially in view of our proposals last year for the extension of the function of Oftel into an ofcom—office of communications—which would take over many of the ITC's current responsibilities for looking at the carriage of signals? To my mind, that would be a far more rational way in which to manage the system.

Enough has been said about sport. I merely reiterate the point that if the voluntary code of conduct fails to come up to expectations, we shall certainly raise the matter in Committee and on Report. The Government had better prepare themselves for losing a vote on an amendment on the code of conduct.

I would like to cover many other issues, but clearly I do not have time. I assure the House that we shall cover those issues exhaustively in Committee. We shall return to the issue of quality again and again. The needs of those with visual and auditory disabilities have not been mentioned, as far as I can remember from the parts of the debate that I heard tonight, but we shall return to them. We expect to cover in full issues such as local diversity and protection of local interest in ITV companies.

After such a full debate, obviously there will be irreconcilable differences between the Government and the Opposition at this stage. The Secretary of State has expressed willingness to offer compromises, and we welcome her flexibility on the matter but, alas, cannot support the Government tonight.

We believe that this is a Bill for the present. Our amendment tries to look to the future. In such a rapidly changing field, our perspective is essential. If we are not successful in doing so in this Session of Parliament, we shall certainly face up to it next year in government.

9.44 pm

The Minister of State, Department of National Heritage (Mr. Iain Sproat)

It is a tribute to the great interest that the House has shown in the Bill that the hon. Member for Kirkcaldy (Dr. Moonie) and I have had such a short time in which to wind up the debate, but it is a very good thing that so many individual hon. Members do take part in a debate such as this. We shall be able to return to many of the details in Committee when, like the hon. Member for Kirkcaldy, I greatly look forward to a lengthy and thorough examination of this excellent Bill.

The right hon. Member for Copeland (Dr. Cunningham) started his speech by talking about television broadcast sports rights, and I follow his example in that, if in nothing else. I shall explain the current position to the House.

The House of Lords said, in my view rightly, that we should retain the listed events. We have eight listed events, and I feel that the House of Lords spoke for the majority of the country when it reached that decision.

Mr. Maxton

You opposed it.

Mr. Sproat

I certainly never opposed it, and the hon. Gentleman will confirm to the House that many is the time I have said to him, "This is an important matter, which must be discussed during the passage of the Broadcasting Bill." That is what I said, that is what has been done and I believe that Parliament has reached the right decision on it. [Laughter.] There is a little too much laughter from Labour Members. I remind them that, in the House of Lords, of those who voted in favour of listed events, the Labour party contributed only 34 per cent., so it was not the Labour party but the House of Lords as a whole, and that Conservatives and independents outvoted Labour on that matter.

Mr. Grocott

rose—

Mr. Sproat

I will not give way.

If hon. Members will keep quiet, I will take us on from that decision about the listed events to what is happening over the unbundling procedures that have been proposed by some.

The Government are wholly opposed to compulsory unbundling. We believe that it would be a gross interference with the rights of sports bodies who owned the rights to the games to take those rights away from them arbitrarily. I thought that the hon. Member for Bassetlaw (Mr. Ashton) put it extremely well, and I thought that the various views that were expressed about the matter showed that it is an extremely difficult subject to get right.

My right hon. Friend and I discussed it with the Sports Council, the governing bodies of sport and the Central Council of Physical Recreation. I discussed the matter with the broadcasters and I said, "We quite understand that it is your right to dispose of your—"

Mr. Maxton

Will the hon. Gentleman give way?

Mr. Sproat

I have no time; I apologise to the hon. Gentleman.

I said, "It is your right to dispose as you wish of the sports that are yours. You nevertheless have a duty to the community to ensure that, when you dispose of those sporting rights, you take into account people's wish to see those sports on television and the wish of those people—especially young people—that the money obtained from the sporting rights be ploughed back into the sport, especially into young people's sport."

We are trying to work out a voluntary code. I have seen the draft—it is only a draft so far—which satisfies many of those aspects. I know that the governing bodies want to look at it again. I know that the CCPR and the Sports Council want to look at it again. If the voluntary code is finished while the Committee is sitting, which I hope and expect it will be, it would be perfectly proper for the Committee to debate that, and I look forward to it. I think it was the hon. Member for Bassetlaw who said that it was a matter of balance. We must balance a number of different interests in relation to sport: those of sporting organisations, those who play sport and those who watch it on television. That is what we are seeking to do; I hope that we shall succeed. I hope that I shall have the Opposition's support when they see what is being introduced.

When we talk about broadcast sports rights we should remember that we are speaking against a different background from that of 15 or 20 years ago. Every day there are seven hours of sport on terrestrial television and every day Eurosport and BSkyB together have 38 hours of sport—there is a tremendous amount of sport on television. I certainly welcome that fact and I hope that we shall return to the subject in Committee.

A number of hon. Members mentioned Channel 4 funding, a subject to which we shall return in detail in Committee. If Channel 4 receives more than 14 per cent. of the total advertising revenue for itself, anything above that 14 per cent. has to be disposed of in specific ways that Parliament has decided—I think that the hon. Member for Wigan (Mr. Stott) rightly raised that issue. At present, of that excess, 25 per cent. has to go into reserve. From the moment that the Bill is enacted, that 25 per cent. can immediately be used by Channel 4 to make British films—the Bill will produce that immediate response and free up cash for Channel 4. On the timing—the reduction of the excess will be done in a couple of stages, the first of which will be in 1998. I give that explanation for the benefit of the hon. Member for Wigan and other hon. Members who raised this important matter. Several hon. Members said that we should look again at conditional access, particularly conditional access and analogue. I think that my right hon. Friend the Member for Mid-Sussex (Mr. Renton) was the first hon. Member to raise the subject. He will know that, earlier this year, my right hon. Friend the Secretary of State for Trade and Industry produced a document called "The Regulation of Conditional Access Services for Digital Television". In that document we made it clear that there would be a licensed system for encryption and the gatekeepers of digital satellite to ensure that nobody could be other than fair, open and non-discriminatory towards anyone who wanted to use the gateway.

A number of hon. Members said, "Yes—that is splendid and that is for the future, but we already have analogue satellites and we should impose similar restrictions on them." I understand why hon. Members say that, but they are wrong. When we were encouraging the satellite business to get off the ground, we set certain regulations, one of which was that there should not be such a licence for analogue satellites. That system succeeded—satellites have taken off in a big way—and having imposed it originally, it would be wrong now to change the regulations under which the analogue satellites operate. They are on their way out and digitalised satellites are on their way in. I hope that hon. Members will accept that the Government want to impose a licence in future, but do not want to change what they have done in the past.

A number of my hon. Friends, as well as the hon. Members for Caithness and Sutherland (Mr. Maclennan) and for Merthyr Tydfil and Rhymney (Mr. Rowlands), talked about the importance of regional television—a subject to which we shall return in Committee. We have found a way to ensure that regional televisions' peculiar regional identities are preserved. If a smaller television station is taken over by a larger one, the larger one will have to fulfil extremely stern regulations imposed by the ITC on quality, amount of hours and the way in which regionality is imposed on the station, and if the regional station that it has taken over has raised the amount of regionality in various ways, the new company will be bound by the ITC to meet those same standards and fulfil the regional criteria.

The hon. Member for Caithness and Sutherland wondered, quite properly, what would happen if, having liberalised the number of stations that any one company can take over, a number of big companies set upon the smaller companies and the contributions that they make to network programming. The ITC will impose a formula that ensures that the smaller regional stations are protected. Regional stations are extremely important—including those in Scotland and in Wales. I am sorry that I do not have time to answer in detail the points raised by the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis), but perhaps we shall deal with them in Committee. I assure him that he will like my answers.

My hon. Friend the Member for Twickenham (Mr. Jessel) raised the issue of impartiality. Hon. Members on both sides of the House are concerned about perceived examples of impartiality on the part of the BBC—I do not seek to make a Tory point. Today's Daily Mail says that the BBC is so conscious of that problem that it has asked two independent parties, Lord Skidelsky and Miss Lambert of the Green party, to examine its actions. They concluded that the BBC has something to learn about impartiality and the Conservative party.

My hon. Friend the Member for Twickenham raised an important point. He advanced some new and interesting ideas about a governor with particular responsibility for impartiality or an ombudsman. Those points concern mainly the BBC, but we shall gladly discuss them in Committee. My right hon. Friend and I have discussed the matter with the new chairman of the BBC, Sir Christopher Bland, and he is strongly seized of the importance of maintaining the BBC's worldwide reputation for impartiality on which so much of its prestige depends.

One of the disappointing aspects of the Opposition's allegedly reasoned amendment was that it accused the Government of not giving enough encouragement to firms to enter the digitalisation business. That is very wrong: I cannot see what more we could have done. We have guaranteed a place on the multiplexes to all existing terrestrial broadcasters so that they may develop their services and we have guaranteed that multiplex operators will be able to operate for free—without making any payments to the Treasury—for the first 12 years. They will be able to roll that over for another 12 years. We have also said that we will review the progress of digitalisation after five years. If the broadcasting technology develops very quickly—as often occurs in that area—we shall re-examine the situation when 50 per cent. of households have digital sets.

I ask the House to remember that we are the first country in the world to introduce digitalisation as part of its legislative broadcasting programme. I do not believe that it is reasonable to ask the Government to do any more: we have done all that we can to encourage digitalisation. If hon. Members have different notions, they may raise them in Committee and we shall be very glad to respond.

I have only one minute in which to respond to the other points raised by hon. Members—as the excellent Whip, my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter), reminds me. We shall return in Committee to the important matters of quality, questions of impartiality, and questions about the funding of S4C and whether it will have proper opportunities to develop other services. I hope that the Committee membership will be balanced and will represent the many views that have been put forward in the House today.

I strongly deprecate the foolish amendment put down by the Opposition. We had hoped to secure their support as we did in the other place, and I am sorry that we did not succeed. I hope that in Committee we shall convince Labour Members of their unfairness and foolishness. I commend the Bill to the House.

Question put, That the amendment be made:—

The House divided: Ayes 267, Noes 297.

Division No. 98]	[10.00 pm
AYES
Abbott, Ms Diane	Banks, Tony (Newham NW)
Adams, Mrs Irene	Barnes, Harry
Ainger, Nick	Battle, John
Allen, Graham	Bayley, Hugh
Alton, David	Beckett, Rt Hon Margaret
Anderson, Donald (Swansea E)	Beith, Rt Hon A J
Anderson, Ms Janet (Ros'dale)	Bell, Stuart
Armstrong, Hilary	Benn, Rt Hon Tony
Ashdown, Rt Hon Paddy	Bennett, Andrew F
Ashton, Joe	Benton, Joe
Austin-Walker, John	Bermingham, Gerald

Berry, Roger	Graham, Thomas
Betts, Clive	Grant, Bernie (Tottenham)
Blunkett, David	Griffiths, Nigel (Edinburgh S)
Boateng, Paul	Griffiths, Win (Bridgend)
Bray, Dr Jeremy	Grocott, Bruce
Brown, N (N'c'tle upon Tyne E)	Gunnell, John
Bruce, Malcolm (Gordon)	Hain, Peter
Burden, Richard	Hall, Mike
Byers, Stephen	Hanson, David
Caborn, Richard	Hardy, Peter
Callaghan, Jim	Harman, Ms Harriet
Campbell, Mrs Anne (C'bridge)	Harvey, Nick
Campbell, Menzies (Fife NE)	Henderson, Doug
Campbell, Ronnie (Blyth V)	Hill, Keith (Streatham)
Campbell-Savours, D N	Hinchliffe, David
Canavan, Dennis	Hoey, Kate
Cann, Jamie	Hogg, Norman (Cumbernauld)
Carlile, Alexander (Montgomery)	Home Robertson, John
Chidgey, David	Hoon, Geoffrey
Church, Judith	Howarth, Alan (Strat'rd-on-A)
Clapham, Michael	Howarth, George (Knowsley North)
Clark, Dr David (South Shields)	Howells, Dr Kim (Pontypridd)
Clarke, Eric (Midlothian)	Hoyle, Doug
Clarke, Tom (Monklands W)	Hughes, Kevin (Doncaster N)
Clelland, David	Hughes, Robert (Aberdeen N)
Clwyd, Mrs Ann	Hughes, Roy (Newport E)
Cohen, Harry	Hughes, Simon (Southwark)
Connarty, Michael	Hutton, John
Cook, Frank (Stockton N)	Illsley, Eric
Corbyn, Jeremy	Ingram, Adam
Corston, Jean	Jackson, Glenda (H'stead)
Cousins, Jim	Jackson, Helen (Shef'ld, H)
Cox, Tom	Jamieson, David
Cummings, John	Janner, Greville
Cunningham, Jim (Covy SE)	Jenkins, Brian
Cunningham, Rt Hon Dr John	Jones, Barry (Alyn and D'side)
Cunningham, Roseanna	Jones, Ieuan Wyn (Ynys Môn)
Dafis, Cynog	Jones, Jon Owen (Cardiff C)
Dalyell, Tam	Jones, Lynne (B'ham S 0)
Darling, Alistair	Jones, Martyn (Clwyd, SW)
Davidson, Ian	Kaufman, Rt Hon Gerald
Davies, Bryan (Oldham C'tral)	Keen, Alan
Davies, Chris (L'Boro & S'worth)	Kennedy, Charles (Ross, C&S)
Davies, Rt Hon Denzil (Llanelli)	Kennedy, Jane (L'pool Br'dg'n)
Davis, Terry (B'ham, H'dge H'l)	Khabra, Piara S
Denham, John	Kirkwood, Archy
Dewar, Donald	Lestor, Joan (Eccles)
Dixon, Don	Lewis, Terry
Dobson, Frank	Liddell, Mrs Helen
Donohoe, Brian H	Litherland, Robert
Dowd, Jim	Livingstone, Ken
Dunwoody, Mrs Gwyneth	Lloyd, Tony (Stretford)
Eagle, Ms Angela	Llwyd, Elfyn
Eastham, Ken	Loyden, Eddie
Etherington, Bill	Lynne, Ms Liz
Evans, John (St Helens N)	McAvoy, Thomas
Ewing, Mrs Margaret	McCartney, Ian
Fatchett, Derek	Macdonald, Calum
Faulds, Andrew	McFall, John
Field, Frank (Birkenhead)	McKelvey, William
Fisher, Mark	McLeish, Henry
Flynn, Paul	Maclennan, Robert
Forsythe, Clifford (S Antrim)	McMaster, Gordon
Foster, Rt Hon Derek	McNamara, Kevin
Foulkes, George	MacShane, Denis
Fraser, John	McWilliam, John
Fyfe, Maria	Madden, Max
Galbraith, Sam	Maddock, Diana
Galloway, George	Mahon, Alice
Gapes, Mike	Mandelson, Peter
George, Bruce	Marek, Dr John
Gerrard, Neil	Marshall, Jim (Leicester, S)
Godman, Dr Norman A	Martin, Michael J (Springburn)
Godsiff, Roger	Martlew, Eric
Golding, Mrs Llin	Maxton, John
Gordon, Mildred	Meacher, Michael

Meale, Alan	Ruddock, Joan
Michael, Alun	Salmond, Alex
Michie, Bill (Sheffield Heeley)	Sedgemore, Brian
Michie, Mrs Ray (Argyll & Bute)	Sheerman, Barry
Milburn, Alan	Sheldon, Rt Hon Robert
Mitchell, Austin (Gt Grimsby)	Shore, Rt Hon Peter
Molyneaux, Rt Hon Sir James	Short, Clare
Moonie, Dr Lewis	Simpson, Alan
Morgan, Rhodri	Skinner, Dennis
Morley, Elliot	Smith, Andrew (Oxford E)
Morris, Estelle (B'ham Yardley)	Smith, Chris (Isl'ton S & F'sbury)
Morris, Rt Hon John (Aberavon)	Smith, Llew (Blaenau Gwent)
Mowlam, Marjorie	Smyth, The Reverend Martin
Mudie, George	Soley, Clive
Mullin, Chris	Spearing, Nigel
Murphy, Paul	Spellar, John
Nicholson, Emma (Devon West)	Squire, Rachel (Dunfermline W)
Oakes, Rt Hon Gordon	Steel, Rt Hon Sir David
O'Brien, Mike (N W'kshire)	Stevenson, George
O'Brien, William (Normanton)	Stott, Roger
O'Hara, Edward	Strang, Dr. Gavin
Olner, Bill	Straw, Jack
O'Neill, Martin	Sutcliffe, Gerry
Orme, Rt Hon Stanley	Taylor, Mrs Ann (Dewsbury)
Parry, Robert	Thompson, Jack (Wansbeck)
Pearson, Ian	Timms, Stephen
Pendry, Tom	Tipping, Paddy
Pickthall, Colin	Touhig, Don
Pike, Peter L	Trickett, Jon
Pope, Greg	Turner, Dennis
Prentice, Bridget (Lew'm E)	Tyler, Paul
Prentice, Gordon (Pendle)	Vaz, Keith
Prescott, Rt Hon John	Walker, Rt Hon Sir Harold
Primarolo, Dawn	Wallace, James
Purchase, Ken	Wardell, Gareth (Gower)
Quin, Ms Joyce	Wareing, Robert N
Radice, Giles	Watson, Mike
Randall, Stuart	Welsh, Andrew
Raynsford, Nick	Wigley, Dafydd
Reid, Dr John	Williams, Alan W (Carmarthen)
Rendel, David	Wise, Audrey
Robertson, George (Hamilton)	Worthington, Tony
Robinson, Geoffrey (Co'try NW)	Wray, Jimmy
Roche, Mrs Barbara	Wright, Dr Tony
Rooker, Jeff	Young, David (Bolton SE)
Rooney, Terry	Tellers for the Ayes:
Ross, Ernie (Dundee w)	Ms Ann Coffey and
Rowlands, Ted	Mr. Malcolm Chisholm
NOES
Ainsworth, Peter (East Surrey)	Bowden, Sir Andrew
Aitken, Rt Hon Jonathan	Bowis, John
Alexander, Richard	Boyson, Rt Hon Sir Rhodes
Alison, Rt Hon Michael (Selby)	Brandreth, Gyles
Allason, Rupert (Torbay)	Brazier, Julian
Amess, David	Bright, Sir Graham
Arbuthnot, James	Brooke, Rt Hon Peter
Arnold, Jacques (Gravesham)	Brown, M (Brigg & Cl'thorpes)
Ashby, David	Browning, Mrs Angela
Atkins, Rt Hon Robert	Bruce, Ian (South Dorset)
Atkinson, David (Bour'mouth E)	Budgen, Nicholas
Atkinson, Peter (Hexham)	Burns, Simon
Baker, Nicholas (North Dorset)	Burt, Alistair
Baldry, Tony	Butcher, John
Banks, Matthew (Southport)	Butler, Peter
Bates, Michael	Butterfill, John
Bellingham, Henry	Carlisle, John (Luton North)
Bendall, Vivian	Carlisle, Sir Kenneth (Lincoln)
Beresford, Sir Paul	Carrington, Matthew
Body, Sir Richard	Cash, William
Bonsor, Sir Nicholas	Channon, Rt Hon Paul
Booth, Hartley	Chapman, Sir Sydney
Boswell, Tim	Churchill, Mr
Bottomley, Peter (Eltham)	Clappison, James
Bottomley, Rt Hon Virginia	Clark, Dr Michael (Rochford)

Clarke, Rt Hon Kenneth (Ru'clif)	Hanley, Rt Hon Jeremy
Clifton-Brown, Geoffrey	Hannam, Sir John
Coe, Sebastian	Hargreaves, Andrew
Colvin, Michael	Harris, David
Congdon, David	Haselhurst, Sir Alan
Coombs, Anthony (Wyre For'st)	Hawkins, Nick
Coombs, Simon (Swindon)	Hawksley, Warren
Cope, Rt Hon Sir John	Hayes, Jerry
Couchman, James	Heald, Oliver
Cran, James	Heath, Rt Hon Sir Edward
Currie, Mrs Edwina (S D'by'ire)	Heathcoat-Amory, Rt Hon David
Curry, David (Skipton & Ripon)	Hendry, Charles
Davies, Quentin (Stamford)	Heseltine, Rt Hon Michael
Davis, David (Boothferry)	Hicks, Robert
Day, Stephen	Hill, James (Southampton Test)
Deva, Nirj Joseph	Hogg, Rt Hon Douglas (G'tham)
Devlin, Tim	Horam, John
Dicks, Terry	Hordern, Rt Hon Sir Peter
Dorrell, Rt Hon Stephen	Howard, Rt Hon Michael
Douglas-Hamilton, Lord James	Howell, Rt Hon David (G'dford)
Dover, Den	Howell, Sir Ralph (N Norfolk)
Duncan, Alan	Hughes, Robert G (Harrow W)
Duncan-Smith, lain	Hunt, Rt Hon David (Wirral W)
Dunn, Bob	Hunt, Sir John (Ravensbourne)
Durant, Sir Anthony	Hunter, Andrew
Dykes, Hugh	Hurd, Rt Hon Douglas
Eggar, Rt Hon Tim	Jack, Michael
Elletson, Harold	Jackson, Robert (Wantage)
Emery, Rt Hon Sir Peter	Jenkin, Bernard
Evans, David (Welwyn Hatfield)	Jessel, Toby
Evans, Jonathan (Brecon)	Johnson Smith, Sir Geoffrey
Evans, Nigel (Ribble Valley)	Jones, Gwilym (Cardiff N)
Evans, Roger (Monmouth)	Jones, Robert B (W Hertfdshr)
Evennett, David	Jopling, Rt Hon Michael
Faber, David	Kellett-Bowman, Dame Elaine
Fabricant, Michael	Key, Robert
Fenner, Dame Peggy	King, Rt Hon Tom
Field, Barry (Isle of Wight)	Kirkhope, Timothy
Fishburn, Dudley	Knapman, Roger
Forman, Nigel	Knight, Mrs Angela (Erewash)
Forth, Eric	Knight, Rt Hon Greg (Derby N)
Fowler, Rt Hon Sir Norman	Knox, Sir David
Fox, Dr Liam (Woodspring)	Kynoch, George (Kincardine)
Fox, Rt Hon Sir Marcus (Shipley)	Lait, Mrs Jacqui
Freeman, Rt Hon Roger	Lamont, Rt Hon Norman
French, Douglas	Lang, Rt Hon Ian
Fry, Sir Peter	Lawrence, Sir Ivan
Gale, Roger	Legg, Barry
Gallie, Phil	Leigh, Edward
Gardiner, Sir George	Lennox-Boyd, Sir Mark
Gamier, Edward	Lester, Sir James (Broxtowe)
Gill, Christopher	Lidington, David
Gillan, Cheryl	Lilley, Rt Hon Peter
Goodlad, Rt Hon Alastair	Lord, Michael
Goodson-Wickes, Dr Charles	Luff, Peter
Gorman, Mrs Teresa	Lyell, Rt Hon Sir Nicholas
Gorst, Sir John	MacGregor, Rt Hon John
Grant, Sir A (SW Cambs)	MacKay, Andrew
Greenway, Harry (Ealing N)	Maclean, Rt Hon David
Greenway, John (Ryedale)	McLounghin, Patrick
Griffiths, Peter (Portsmouth, N)	McNair-Wilson, Sir Patrick
Grylls, Sir Michael	Madel, Sir David
Gummer, Rt Hon John Selwyn	Maitland, Lady Olga
Hague, Rt Hon William	Major, Rt Hon John
Hamilton, Rt Hon Sir Archibald	Malone, Gerald
Hampson, Dr Keith	Mans, Keith
	Marland, Paul
	Marlow, Tony
	Marshall, John (Hendon S)
	Marshall, Sir Michael (Arundel)
	Martin, David (Portsmouth S)
	Mates, Michael
	Mawhinney, Rt Hon Dr Brian
	Mayhew, Rt Hon Sir Patrick

Mellor, Rt Hon David	Spicer, Sir James (W Dorset)
Mills, lain	Spicer, Sir Michael (S Worcs)
Mitchell, Andrew (Gedling)	Spink, Dr Robert
Mitchell, Sir David (NW Hants)	Spring, Richard
Moate, Sir Roger	Sproat, lain
Monro, Rt Hon Sir Hector	Squire, Robin (Hornchurch)
Montgomery, Sir Fergus	Stanley, Rt Hon Sir John
Needham, Rt Hon Richard	Steen, Anthony
Nelson, Anthony	Stephen, Michael
Neubert, Sir Michael	Stern, Michael
Newton, Rt Hon Tony	Stewart, Allan
Nicholls, Patrick	Streeter, Gary
Nicholson, David (Taunton)	Sumberg, David
Norris, Steve	Sweeney, Walter
Onslow, Rt Hon Sir Cranley	Sykes, John
Oppenheim, Phillip	Tapsell, Sir Peter
Ottaway, Richard	Taylor, Ian (Esher)
Page, Richard	Taylor, John M (Solihull)
Paice, James	Taylor, Sir Teddy (Southend, E)
Patnick, Sir Irvine	Temple-Morris, Peter
Patten, Rt Hon John	Thomason, Roy
Pattie, Rt Hon Sir Geoffrey	Thompson, Sir Donald (C'er V)
Pawsey, James	Thornton, Sir Malcolm
Peacock, Mrs Elizabeth	Townsend, Cyril D (Bexl'yh'th)
Pickles, Eric	Tracey, Richard
Porter, Barry (Wirral S)	Tredinnick, David
Porter, David (Waveney)	Trend, Michael
Portillo, Rt Hon Michael	Trotter, Neville
Powell, William (Corby)	Twinn, Dr Ian
Rathbone, Tim	Vaughan, Sir Gerard
Redwood, Rt Hon John	Viggers, Peter
Renton, Rt Hon Tim	Waldegrave, Rt Hon William
Richards, Rod	Walden, George
Riddick, Graham	Walker, Bill (N Tayside)
Robathan, Andrew	Waller, Gary
Roberts, Rt Hon Sir Wyn	Ward, John
Robertson, Raymond (Ab'd'n S)	Wardle, Charles (Bexhill)
Roe, Mrs Marion (Broxbourne)	Waterson, Nigel
Rowe, Andrew (Mid Kent)	Watts, John
Rumbold, Rt Hon Dame Angela	Wells, Bowen
Sackville, Tom	Whitney, Ray
Scott, Rt Hon Sir Nicholas	Whittingdale, John
Shaw, David (Dover)	Widdecombe, Ann
Shaw, Sir Giles (Pudsey)	Wiggin, Sir Jerry
Shephard, Rt Hon Gillian	Wilkinson, John
Shepherd, Sir Colin (Hereford)	Willetts, David
Shepherd, Richard (Aldridge)	Wilshire, David
Shersby, Sir Michael	Winterton, Mrs Ann (Congleton)
Sims, Roger	Winterton, Nicholas (Macc'fld)
Skeet, Sir Trevor	Wolfson, Mark
Smith, Sir Dudley (Warwick)	Yeo, Tim
Smith, Tim (Beaconsfield)	Young, Rt Hon Sir George
Soames, Nicholas	Tellers for the Noes:
Speed, Sir Keith	Mr. Timothy Wood and
Spencer, Sir Derek	Mr. Derek Conway.

Question accordingly negatived.

Main Question put forthwith, pursuant to Standing Order No. 60 (Amendment on Second or Third Reading), and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).