HC Deb 07 January 2004 vol 416 cc374-82

Motion made, and Question proposed, That this House do now adjourn.—[Jim Fitzpatrick.]

7.15 pm
Mr. John Denham (Southampton, Itchen)(Lab)

I am extremely grateful for the opportunity to raise concerns about the decision by Granada-Carlton, the new single ITV, to run down Meridian television, which is based in Northam in my constituency. With your permission, Madam Deputy Speaker, I shall try to allow other hon. Members to contribute to the debate.

Before Christmas, Meridian announced 175 job losses. Its plans include the closure of the Northam studios and relocation to Fareham, the closure of the Maidstone studio, the winding up of the successful teams, which covered, for example, the recent rugby World cup and ocean racing, and a major restructuring of the most successful of the regional ITV news services.

In part, I want to express local but important constituency concerns, but I also want to raise the implications of what Meridian is doing for the entire new ITV. The managing director of Meridian said that its plans are a blueprint for the rest of the new single ITV. If so, my right hon. Friend the Minister needs to recognise that there are major implications for regional independent television and serious challenges from the outset for Ofcom and the new regulatory regime.

The contrast between the promises made to Meridian staff at the time of its take over by Granada and what is happening now should make everyone who is concerned about ITV cautious about relying on promises or assurances that its management might give. I hope that the Minister will note that, too. Of course some change is inevitable, especially in a highly technology-dependent and sensitive business. I understand that there is probably no real business case for large outdated studios of the sort at Northam in Southampton, but, although change is inevitable, that does not mean that we should not consider what is proposed carefully.

I pay tribute to all the people who have worked at Northam over the years, not just under Meridian, but under TVS and Southern Television too, and who created programmes that will be familiar to hon. Members, such as "How?", "Worzel Gummidge", "Out of Town", the "Ruth Rendell Mysteries", "Village Voices", "Spotlight", "That's Life" and many other programmes, both regional and national, including sport, most recently the World cup.

Southampton as a city has gained enormously in profile and prestige from being the main home for both BBC South and ITV for a long time. In the 1980s, the then Labour council fought a hard battle to keep BBC Television in Southampton, for which we have been well rewarded. It is a shame that the new Liberal Democrat council, despite its efforts, has not been more successful in keeping Meridian in the city.

The south-east does not have a simple, clear regional identity, such as the south-west or the north-east, but neither are we a glorified suburb of London. The southeast has the most successful regional economy. We have distinct counties, sub-regions and communities. We have our own sporting, cultural and artistic traditions. We have unique cities, towns, villages, countryside and coastal areas.

The south-east should be reflected to its residents, to the country as a whole and to the wider world through good regional broadcasting.

Bob Spink (Castle Point)(Con)

Is the right hon. Gentleman aware that the region also includes people in my constituency in south Essex and in the constituency of the hon. Member for Thurrock (Andrew Mackinlay), who is in the Chamber nodding in agreement that our constituents would be impoverished by the proposals and that we should do everything we can to retain those facilities in Southampton?

Mr. Denham

I am grateful to the hon. Gentleman for that intervention. People watching these proceedings on television may realise that there are far more hon. Members on both sides of the House than is normally the case for the end-of-sitting Adjournment debate. I hope that my right hon. Friend the Minister will recognise the concern that is being expressed in the Chamber.

In the south-east, we also want our fair share—or, to be frank, a larger share if possible—of television production and its related creative industries in our region. The past two years and the current proposals suggest that responsibility for regional broadcasting is about to pass almost entirely to the BBC. First, there was the national deal with the Independent Television Commission, which cut regional programme slots from 15 to eight and a half hours a week—much of that can hardly be described as regional programming. Not long ago, budgets at Meridian were cut from between £20,000 and £25,000 for a half-hour slot to between £5,000 and £12,000 and I understand that the figure may fall further. Now, we learn that half the staff at Meridian are to go.

What a contrast to the promises made by Charles Allen, then chairman of Granada, and Steve Morrison, its managing director, when they took over the company. I have been given what I believe are genuine and reliable transcripts of their presentation to staff. Mr. Allen, currently head of the new ITV, said: The first thing is that we are absolutely passionate about regionalism. Regionalism is absolutely the heart of everything we do…we didn't spend £1.75 billion not to grow this business. You don't buy a company of this scale with this level of talent not to listen to them"— the staff—

you are now part of a much bigger operation…where particularly production plays a key part". Mr. Morrison told staff:

And to echo what Charles said, we are not in the business of contraction, we are in the business of expansion. What we want to see is more production more play coming from this studio site and indeed, you know, your other satellites than you already do… You've developed over the years a capability in certain types of programmes. And, you know, nationally important programmes, like your Dispatches are well recognised. And the issue for us is how do you build that up. "Absolutely passionate about regionalism", "the business of expansion", "more production coming from this and our other sites": what a contrast with the closure and contraction currently facing Meridian. It is not surprising that many people working for Meridian feel badly let down.

I know that Ministers cannot be responsible for what business executives tell their staff during company takeovers. However, the issue is not just the development of any old private business; it relates directly to the future of Channel 3, to the public service broadcasting obligations of ITV and to the development of one of the UK's major industries—television production. Those should be of concern to my right hon. Friend the Minister and I hope that she will take note that it would be dangerous to rely too much on the promises and assurances that might be given to her and others by the people now running ITV. Meridian staff did just that, and look what is happening to them.

The truth is that the drive for a narrow interpretation of shareholder value in ITV is leading to the same short-term drive to maximise profit at the expense of the long-term investment in and development of the business as has been seen in other major companies in the US and the UK over the past few years. Even the much-vaunted new investment in the new studio looks likely to cost less than the money that will be made by selling the Northam site. I believe that one of the consequences will be a sharp decline in Meridian's ability to make regional programmes—whether we are talking about programmes about the region for the region, programmes about the region for the network, or the ability to make a wide range of programmes designed specifically for the network.

Indeed, I fear that the impact may well be wider than Meridian itself. Of course, national or international sports coverage, a particular area of expertise in the Meridian company in Southampton, need not be based in Southampton or any other specific UK location; but the concentration of media skills in regional centres sustains the whole industry in that area. It is the pool of talent that supports independent programme-makers and the BBC, works with academic institutions and assists new local broadcasters.

Let me say in fairness that I know Meridian does not intend—or says it does not intend—to turn its back on all those links, and wants to develop new links. Nevertheless, I believe that a sharp reduction in television employment such as the one that is proposed, and the loss of skills that that will involve, is bound to have a wider impact on the health of the television industry in the south. We have been told that Meridian is the model for the rest of the new ITV. If that is so, it means stripping out serious regional programme-making in ITV and also encouraging a decline in the strength of the regional television industry as a whole.

I am also concerned about news coverage. It may well be possible, with new technology, to organise and deliver news coverage more efficiently and effectively than is the case at present, but it is pretty clear that the current proposals are driven primarily by a wish to cut costs rather than by an analysis of the best ways—including the most efficient ways—of delivering a news service in the future.

Meridian is unusually successful as an independent television news service. Maidstone has regularly achieved ratings as high as 50 per cent., while Granada usually achieves about 12 per cent. The outlets in Southampton and Newbury regularly secure about 30 per cent.—much more than many other ITV regional news programmes. I would say at the very least that altering the current arrangements, which are so successful, without really good justification based on an analysis of the best way of serving the public rather than an analysis of the best way of saving money, is a strange way of going about things.

I have not been able to confirm this, but I have been told that the original announcement of job losses was not covered by Meridian's regional news. That is surely unusual; would it have happened if any other company was to lose 175 jobs?

Moreover, is the regional political coverage that Members of Parliament enjoy safe? It is easy to understand that a single ITV company might want to save money on its political coverage, but I suggest that that would be at the expense of the local knowledge that makes regional news and regional political coverage worth having.

These changes are happening just as the new regulator, Ofcom, comes into existence. I shall end by raising some issues that should be of direct concern to the Minister: that constitutes an invitation to Members who may wish to intervene. Let me say that, as the Government move towards statutory consultation rights for UK employees, I hope the Minister shares my distaste for the way in which Granada apparently went off to the ITC to secure support for its proposals before informing any of its staff.

Mr. Mike Hancock (Portsmouth, South)(LD)

I agree that Ministers cannot be responsible for what Meridian told its staff, but surely they are responsible for what Meridian told its viewers about the retention and building up of a regional dimension in its programming. That is manifestly lacking in the proposals as we see them.

Mr. Denham

The hon. Gentleman raises an important issue relating to, in particular, the new role of the new regulator. It brings me to my second point: the changes are taking place before Ofcom has decided how to interpret its requirements for regional production quotas and expenditure outside the M25. Ofcom recently wrote to me We will be considering how this requirement will be interpreted and are establishing arrangements to gather the necessary data for ITV to demonstrate that there is a reasonable geographic spread in the sourcing of network programmes. That requirement was a key element of the Communications Act 2003. It seems that, by presenting a fait accompli at Meridian, the new ITV will effectively set its own baseline for Ofcom and reduce Ofcom's scope to set a challenging interpretation of those regulations.

I should be grateful if my right hon. Friend the Minister would respond directly on whether the reduction in Meridian's programme-making capacity can be held back until Ofcom has decided how to approach the issue. If that can be done, will she use every power that she has, either legally or by persuasion, to ask for that to be done? At the very least, it would be much better if the issue were looked at when those at Ofcom have got their feet under the table and have worked out how to approach the issue, which would ensure that it is considered properly.

Norman Baker (Lewes)(LD)

The right hon. Gentleman is making a very good case. Does he agree that the transmission of local news for Sussex and Kent from a base in Hampshire, following the closure of any Maidstone outlet, will be detrimental to people in Sussex and Kent and that such news cannot possibly be of the same quality? More importantly, is this not the thin end of the wedge? If Granada gets away with that closure strategy without intervention from Ofcom or the Government, it will be repeated throughout the country.

Mr. Denham

We have already been promised that what is being done in Meridian is the model for the whole of the rest of the ITV network. That is what we seem to have been told, and those are the risks. As I said earlier, I can accept that there may be different, better and less expensive ways to organise the way in which news is delivered, but I am pretty clear that these proposals have been driven by a desire not to improve, but to cut the cost of the news service, so my hon. Friend is right, as I hope that other hon. Members and I are, to express those concerns about the risks that are involved.

A couple of colleagues wish to speak briefly in their own right, so I will conclude my remarks. I hope that everyone will recognise how many hon. Members have attended the debate. This is a matter of great concern. Unusually, while it is a big issue for my constituency, this Adjournment debate is of national significance. What happens in the south-east will have repercussions throughout the United Kingdom, and the fact that hon. Members from Northern Ireland and Scotland are present reflects that interest.

7.32 pm
Mr. Derek Wyatt (Sittingbourne and Sheppey)(Lab)

I congratulate my right hon. Friend the Member for Southampton, Itchen (Mr. Denham) on putting such a strong case, and I associate myself with all that he has said.

I raised this issue first with the Select Committee on Culture, Media and Sport, and our report will be out shortly. Although I cannot say whether this will definitely be in the report, there is one thing that we will ask: will Ofcom please handle the issue in the open? In other words, when it takes evidence from Meridian, the National Union of Journalists chapels and other people, will it do so in the public domain, not behind closed doors? That is something about which the Minister might have a view.

In the 1960s, a famous chairman of Anglia Television—once a very great company—said that ITV was a licence to print money, and it wants to get back to exactly that. The Carlton merger will benefit senior management, not the viewers. I am told that two things were on the agenda at a recent senior management away day—one was something about communicating the changes and the other was to ramp up the share price.

Let me deal with the communications bit. The first thing is that there was a leak, which shows how good that management is. There was no communication with the staff, the workers, the producers or anyone. The proposal came out of the blue, from left field. Those involved are running to catch up, which is what happens. Secondly, I ought to congratulate not just my constituents who raised the issue with me, but the NUJ chapel at Maidstone, which has been absolutely fantastic. I congratulate the chapel on its efforts.

Why would anyone want to reduce the service to ramp up the share price? People would only want to do that for two reasons: first, to reward senior management and, secondly, to make the company attractive to a buyer. They are the only two reasons, and they do not serve the population and the viewers. I am a moderniser and I understand modernisation issues, but once Maidstone has been stripped out, the local journalists will be stripped out, even those with cars, laptops and digital cameras. Within three years, if the company has not been sold already, the political correspondents will be stripped out. Look at what has happened with the political correspondents in Parliament. In fact, there will be no local service, no local knowledge—no local anything—and certainly nothing regional. That is what the company wants to happen.

ITV2 could have been the regional option for ITV, but it is not. ITV2 has a budget of just £1 million for original programming. The situation is crazy and a disaster because there was a chance to use the channel for regional programmes. I hope that the Minister will be persuaded that the BBC charter review could give a regional channel, as part of the public sector service review, to take the place of ITV. The situation is appalling, so I am grateful for the few minutes that I have had to make my case.

7.34 pm
Jonathan Shaw (Chatham and Aylesford)(Lab)

I, too, congratulate my right hon. Friend the Member for Southampton, Itchen (Mr. Denham) on securing this important debate. The Meridian studios in Maidstone are located in my constituency and "Meridian Tonight", which covers both Kent and Sussex, has the highest ratings of any regional news programme in the country. My right hon. Friend cited a ratings figure of 50 per cent. Meridian has reached that figure and is talking about improving on that record, which I hope it does. However, for the reasons set out by my right hon. Friend, many of us have a jaundiced view about whether the figure will be breached. Many ITV companies throughout the country would look enviously on the successful regional news programme's record and we should not forget the advertising revenue that it brings to the company. The BBC recently moved its south-east operation from London to set up a dedicated news programme covering Kent and Sussex in response to Meridian's lion's share of the audience viewing figures.

Although Meridian's studios are in my constituency, we are not wedded to buildings and there is not necessarily a question of whether the building will remain. However, the location and quality of the staff who produce such an excellent programme cannot be dismissed because that infrastructure has been built up over many years.

We are greatly concerned about the mixed messages that have come from Meridian. Mr. Clive Jones, its managing director, recently told the Select Committee on Culture. Media and Sport: We are not proposing to diminish the number of journalists at all. All we are talking about is moving a presenter and maybe a technical director. The journalists will stay…the reporters will stay". Tim Suter of Ofcom said a similar thing in response to a representative of the National Union of Journalists. He said:

Colleagues here and in the south region have been given detailed information that the reporting staff in the South-East will remain at its present strength, as will the camera teams. In reality, however, both presenters will be based in Hampshire. The sports presenters will be based in Hampshire, so there will be no one in Kent or Sussex to cover sport, and the sports job in Maidstone is being axed. Only two out of seven production journalists will remain in Kent, the size of the news desk will be reduced from three people to one and one reporter's job will be lost. Perhaps it is not surprising that today's edition of The Guardian says that the head of ITV news is considering quitting. Ofcom must take a robust line, as the Prime Minister said to me a couple of months ago when the proposals came out. We want a robust response from the Minister.

7.38 pm
The Minister for the Arts (Estelle Morris)

I apologise for the fact that I have only eight minutes in which to reply, but I wanted to give hon. Members as much time as possible to speak on what I know is an important regional issue. Every Member of Parliament understands the importance of regional media coverage. Indeed, I understood that importance better as an MP than as someone who was not especially actively involved in politics. I know that many issues that we raise on behalf of our constituents would never get back to them if it were not for regional broadcasting and journalism. Our constituents, as citizens, have the right to have their concerns raised here, so we need a channel of communication between this place and their homes to ensure that they know that we are acting on their behalf. I understand the anger that I sense and—without prejudging the issue—the feeling among hon. Members that they have been let down. It is for Meridian and hon. Members to talk about that, but I understand the strength of feeling and know what an important local issue we are debating. The irony, as my right hon. Friend the Member for Southampton, Itchen (Mr. Denham) said, is that, having set up a framework and given the regulators the power to act, there is very little that the Government can do at this time. I therefore want to make a robust response, as hon. Members asked me to do, and make a few observations.

It does not matter whether it is Meridian or any other employer, it makes good sense and is good management to let people know that their jobs are at risk before telling the outside world. It is only humane to treat individuals in that way, and if that did not happen in this case, that is regrettable.

Mr. John Redwood (Wokingham)(Con)rose—

Estelle Morris

I will give way on this occasion, but shall not do so again, as I have very little time.

Mr. Redwood

I am grateful to the Minister, as I did not get the chance to make a speech. Is she happy with the autopilot system set up by the Competition Commission and Ofcom, given the tragedy that is unfolding?

Estelle Morris

Yes, I am. However, this may be a test case, and I expect Ofcom to act strongly, as I shall explain.

The Communications Act 2003 has given extra protection to regional broadcasters. There is a framework of licences for regional programming and production, and the test will be whether Ofcom, the regulatory body, acts firmly if the terms of those licences are not adhered to. Having listened to right hon. and hon. Members, I believe that there are two particularly important issues. It is not appropriate for me to comment on one of them because the time to do so has passed. As my right hon. Friend the Member for Southampton, Itchen said, the target or quota for programming used to be higher. There is now a quota of eight and a half hours for regional programming, and there is also a quota for sub-regional news coverage. Ofcom must ensure that those targets are adhered to, but it cannot intervene in respect of a quota that has been changed by agreement with the Independent Television Commission from 15 hours to eight hours. We have set a lot of store by Ofcom's regulations, but the time to comment on them has passed. Whether they are right or wrong, good or bad, and whether the ITC could have come to a different agreement, the time for comment has passed. However, the licence clearly says that Meridian has undertaken to produce eight and half hours of regional programmes, five and a half hours of which must be sub-regional news and three hours non-news. Ninety per cent. of those programmes must be made in the region, because that is one of the quotas in the framework.

Ofcom is considering representations that it has received. If it is thought necessary, it could act to make sure that Meridian keeps to the terms of its licence. The bottom line is that those quotas or targets are in Meridian's licence, and I expect Ofcom to act to make sure that they are preserved. Members from all political parties must surely agree about that. The Government are trying to pull off the trick of giving companies flexibility and freedom to meet the competitive challenges that they face, to make changes to adapt to new technology and digital broadcasting, and to reorganise personnel as times change. Nobody wants things to stand still. My right hon. Friend generously said that Meridian, like any other company needs, from time to time, to make changes. As a media business, it needs to act quickly. No one wants to go back to the days when, to make change to, for example, patterns of employment, companies had to seek permission and jump a series of hurdles imposed by the ITC, Ofcom and the Government. Nobody wants to let that happen again.

There is clearly a deal to be struck. If companies are to have the freedom that they need and want, we must make sure that Ofcom is empowered to act ferociously if they break the terms of their licence. This is a test case. The time to discuss whether the terms of the licence are sufficient to protect regional broadcasting has passed, but my robust message to the House is that I expect Ofcom to monitor the terms of licences and to take action if they are broken. I apologise for not answering all the questions asked by hon. Members, but I accept the importance of this debate. I can assure them that the Government will monitor what happens as far as possible. If things do not go as expected, we will have reason to comment in future.

Question put and agreed to.

Adjourned accordingly at fifteen minutes to Eight o'clock.