HL Deb 09 February 1961 vol 228 cc510-9

3.55 p.m.

THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM)

My Lords, with the permission of the House, it might be convenient if I chose this moment to repeat in your Lordships' House a statement which has been made in another place by my right honourable friend the Prime Minister in answer to a number of Questions relating to the proposal that there should be an inquiry into the Press. The statement is as follows:

"Recent developments have given rise to public concern about the state of the newspaper and magazine industry, and in particular the tendency towards concentration of ownership in the industry. This concern was expressed in the House at Question Time last week, and I then said that I was considering whether some form of Governmental inquiry would be useful. I also referred to one or two specific matters on which action might be taken by the Government.

" I can now tell the House that my right honourable friend the President of the Board of Trade has been in touch with Lord Jenkins, the Chairman of the Committee on Company Law, about the suggestion that in takeover bids a minimum proportion of the consideration should be in cash. They have agreed that this suggestion comes within the terms of reference of the Committee and Lord Jenkins has said that the Committee intend to deal with it in their Report. I am circulating in the OFFICIAL REPORT a copy of the letter which my right honourable friend has written to Lord Jenkins.

" In addition, my right honourable friend the Postmaster General is writing to Sir Harry Pilkington, Chairman of the Committee on Broadcasting. about two questions which were mentioned in the House last week, namely, the general question of the relationship of the Press to television, and the more specific question of changes in the effective control of television programme companies as a result of mergers or take-overs. Again, I am circulating a copy of the letter in the OFFICIAL REPORT.

" I now come to suggestions for the setting up of some new Committee or Commission of Inquiry. I have already made it clear to the House that the Government have no power to intervene in an individual transaction which is in itself legal. Nor do I believe that any useful purpose would be served by an Inquiry into the facts of the proposed transactions which have brought the matter to the atten- tion of the House on this occasion. It has 'been suggested that I should invite the parties to these negotiations to call a halt, pending the institution of an Inquiry. I cannot believe that it would be proper for the Government to interfere even to this extent. To do so would be to affect the interests and legal rights of the employees and shareholders of the companies concerned in a matter in which Her Majesty's Government have no authority to act. Whether it may seem desirable to the parties concerned to call a halt to the negotiations in the light of what I have to say to-day is a matter for them, and them alone, to decide.

" At the same time there is a general feeling that these specific negotiations are symptomatic of some general unease in the industry as a whole. The recent closure, through inability to pay its way, of a national daily newspaper with a circulation exceeding a million, clearly came as a shock to the public. And the more recent developments are widely taken to suggest that conditions in the industry are such as to lead inevitably towards concentration of ownership and a reduction in (to quote from the Royal Commission of 1949) 'the number and variety of the voices speaking to the public through the Press '.

" After consideration of the views that have been expressed, I have decided that an Inquiry into such questions as these should be undertaken. I think that such an Inquiry should have the status of a Royal Commission. I therefore propose to recommend to The Queen the establishment of a Royal Commission with the following terms of reference: ' To examine the economic and financial 'factors affecting the production and sale of newspapers, magazines and other periodicals in the United Kingdom including (a) manufacturing, printing, distribution and other costs; (b) efficiency of production; and (c) advertising and other revenue, including any revenue derived from interests in television; to consider whether these factors tend to diminish diversity of ownership and control or the number or variety of such publications having regard to the importance, in the public interest, of the accurate presentation of news and the free expression of opinion; and to report.'

"I propose to keep the membership of the Royal Commission small. I hope to be able to announce the names of the Chairman and the other members in the near future.

" I trust that this approach will commend itself to all sides of the House; and I hope that all those who work in the industry will do all in their power to assist the Royal Commission in its work."

My Lords, that concludes the statement.

Following is the text of the letter from the President of the Board of Trade to Lord Jenkins, dated February 6, 1961: During the discussion in the House of Commons on January 31, following the Prime Minister's statement about the newspaper and magazine industry, reference was made to the suggestion that in take-over bids a minimum proportion of the consideration offered should be in cash. We have since been in touch about this and agreed that this suggestion comes within the term; of reference of your Committee on Company Law. I am, further, glad to know that your Committee intend to consider this suggestion and deal with it in their Report.

Following is the text of the letter from the Postmaster-General to Sir Harry Pilkington, dated February 9. 1961: You will have noticed the exchanges in the House of Commons on January 31 about the concentration of ownership of newspapers and other media of communication, and the special attention which the I.T.A. contracts have attracted in this context. The question of the television contracts has two main aspects. First, there is the possibility that mergers or take-overs may result in significant changes in the effective control of programme companies which are inconsistent with the intention of the I.T.A. in granting the contracts. Secondly, there is the general question of the relationship of the Press to television, including the question whether control over newspapers and television stations should be vested in the same hands. Similar questions might arise with certain patterns of local sound broadcasting. I am sure that these are matters which your Committee have already noted, and indeed the Prime Minister drew the attention of the House on January 31 to the fact that they would fall within the scope of your Committee. He also said that your Committee might well make an interim report on these aspects. The Prime Minister has now decided to recommend to The Queen that there should be a Royal Commission, which will he small in size, with the following terms of reference: ' To examine the economic and financial factors affecting the production and sale of newspapers, magazines and other periodicals in the United Kingdom, including (a) manufacturing, printing, distribution and other costs; (b) efficiency of production; and (c) advertising and other revenue, including any revenue derived from interests in television; to consider whether these factors tend to diminish diversity of ownership and control or the number or variety of such publications, having regard to the importance, in the public interest, of the accurate presentation of news and the free expression of opinion; and to report.' It would obviously be a great advantage to the Government if they could have the views of your Committee on the two points I have mentioned above when the Government consider the Report of the Royal Commission. I should be grateful if you would bear this in mind as the work of the two enquiries proceeds. If it would help I should be happy to discuss the matter with you."

4.1 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I am much obliged to the noble Viscount. The statement made by the Prime Minister in another place sets out the definite decision of the Government on what they intend to do. On the other hand, I am exceedingly sorry that that decision has come down in favour of a Royal Commission. It is a rare thing for a Royal Commission to be of short duration in its deliberations, and I should have thought there was far more urgency about this question than seems to be displayed in this statement. I agree that the Prime Minister is faced with a difficult situation in regard to contracts and the like, but I should have thought that some other body could be appointed to act with much more speed and decision.

I am disappointed that in a country like ours, where the view of a democratically elected Government expressed in a proper manner can be of such influence with great interests, there was no request to the particular parties concerned in the recent take-over bid which might have persuaded them to halt the thing altogether until further decisions had been come to after inquiry. From my point of view at any rate, all these things are to be deprecated. In regard to speed, I would urge specially, if this decision is irrevocable, that there should be some kind of time limit set. One has seen recently in the Press that there are some urgent questions outstanding in regard to members of the staff of the recently defunct paper News Chronicle. Some of them are having to go to law about it and are being kept waiting. If anything like that is going to arise again, then while I think that perhaps the terms of reference are going to be fair, they should be fairly broad and should include inquiry into some of these matters. I am afraid that some of the points in relation to the take-over bid are likely to be lost in the time taken by a Royal Commission to meet and consider the position.

4.4 p.m.

LORD REA

My Lords, I cannot go all the way with the noble Viscount, the Leader of the Opposition. This matter needs a little time to consider. I should have thought that the first part of the statement was most commendable, and that the Prime Minister has taken statesmanlike action in not interfering when he was rather doubtful whether he should or should not. I think he is to be congratulated on that. With regard to the Royal Commission, the matter is one of such importance that I think it does need an inquiry of real authority. I agree that Royal Commissions are apt to be lengthy in their procedure, but perhaps the fact that it is set up may give a general atmosphere to the matter's being, in a sense, sub judice, and will affect the trend of the subject in an acceptable way.

4.5 p.m.

LORD BOOTHBY

My Lords, I cannot go all the way with the noble Viscount, Lord Alexander of Hillsborough, in his disappointment. This question affects the whole future of the British Press. I think it will take time, and should take considerable time, for the matter to be considered by an authoritative body. For the present, at any rate, one can see that there is pretty fierce competition in regard to the national Press. I do not think any great damage will be done by the setting up of an authoritative body like a Royal Commission to examine this subject, and I think it ought to take time to do it.

There is, however, one question I should like to ask the noble Viscount, if he would be good enough to answer it recent days we have seen a television station used as a pawn, if I may put it in that way, in the take-over campaign—used in order to purchase a large Press empire. That, in fact, is what has happened. I think the question of television is a matter of some urgency, and I should like to ask my noble friend Lord Hailsham whether it would be possible for the Government to ask the Pilkington Committee if necessary to make an Interim Report on the specific matters that have been referred to them.

4.6 p.m.

THE EARL OF SWINTON

My Lords, before the Leader of the House replies, may I say, in supplement to that—I agree with what Lord Boothby has said in regard to this being a subject for a Royal Commission—that I should have thought that the matter which is being referred, quite properly, to the Jenkins Committee is one of great urgency and affects a great many take-over bids which may come in the near future. Can we have an assurance—this should not require much evidence—that the Jenkins Committee will be asked to treat as a matter of urgency the question of whether there should be special cash provisions in take-over bids?

4.7 p.m.

VISCOUNT HAILSHAM

My Lords, I am afraid I had the final text of this statement at rather short notice, but I am under the impression that the noble Lord, Lord Boothby, when he reads the letter to Sir Harry Pilkington, will find some satisfaction from its terms. Unfortunately, I have not seen the final text and I should not like to bind myself, but I hope he will find some satisfaction in its terms.

As regards the last point, I do not know with what degree of urgency the Jenkins Committee will necessarily regard the particular aspect of the matter which has been referred to them. The question of the issue of shares for a consideration other than cash, which is bound up with the question, is one which my noble friend knows has been a long-standing issue for discussion in Company Law and, of course, arising in connection with Press mergers and take-overs it would cover the whole field of industrial undertakings. I should think that although it may be important to get the right answer soon, it must, of course, be necessary to get the right answer rather than a wrong answer. I know that there are strong arguments on bath sides, and I should not like to prejudge at all the issue, which will be one for the Committee. But I feel certain that the noble and learned Lord, Lord Jenkins, will have noted the degree of importance and urgency which my noble friend attaches to this matter.

Reverting to the two other comments which have been made, I was a little disappointed that the noble Viscount should have such a low opinion of Royal Commissions. They take varied degrees of time in carrying out their work. I think I can remember a Royal Commission which reported within six months. There is no doubt that the use of the prerogative of a Royal Commission gives added authority and stature to an inquiry such as is not always possessed either by a departmental or by an interdepartmental committee. Obviously, an inquiry of this kind requires the power to summon witnesses and to call for documents. Whether it he a legal or effective practical body, I am not at all sure that an inter-departmental committee would have the same power or command the same general support if it sought outside help in this way. I should have thought that a Royal Commission was the right answer here. There are various other types of tribunal, but I do not think one could have thought of one which was apt for the present need without legislation. So I should think that that criticism was not a valid one.

I do not feel that we, as a Government, ought to have requested the parties to halt. We do not want to prejudge the results of the findings of the Commission; and, as the Prime Minister said in the course of his statement, we have to consider that individual people's rights are concerned and that an intervention by Government without any previously established principle of public policy in a matter of this kind might affect those private interests in a quite unwarrantable way. I should think, on the whole, that we have done right to point out the terms of reference and, as the right honourable gentleman the Prime Minister has expressed it in his statement, to say that it would, of course, be for the parties themselves to consider whether, in the light of that, they wished to continue with any project they might have in mind.

LORD CITRINE

My Lords, might I ask the noble and learned Viscount in what sense the interests of the employees would be adversely affected if the Government had declared a view that it might be better to halt these proceedings? Is not all the evidence just the opposite way? Is not all the evidence that where mergers have taken place the inevitable result has been the closing of newspapers and the reduction of staff as a consequence, and can it be expected that this merger, if no view is announced by Her Majesty's Government about the matter, will be held up pending the result of a Royal Commission?

If the thing is done and a merger takes place, the damage will be done to the employees' interests, irrespective of what gain the shareholders may get. If the right honourable gentleman the Prime Minister believes that the interests of the employees are going to be adversely affected, he should at least have indicated to your Lordships, through the noble and learned Viscount, on what ground that view is taken. I was for many years associated with the Daily Herald and I know the deep interest and concern that is being felt by employees of that newspaper and members of the Trades Union Congress.

VISCOUNT HAILSHAM

My Lords, I should have thought that the answer to the question of the noble Lord. Lord Citrine, which I must confess surprised me a little, is rather obvious. The employees are precisely the people who could be adversely affected by a halt in these proceedings.

LORD CITRINE

By a halt?

VISCOUNT HAILSHAM

Certainly. Her Majesty's Government, although they might request a standstill of negotiations between two public companies—although even then they have no power to impose it—even if that request was acceded to, could not keep going a newspaper which was losing money, or secure for employees compensation from employers who were bankrupt as a result of the halt. In point of fact, as the noble Lord has mentioned the recent case of the News Chronicle, while I do not wish to prejudge the merits of that case or express any opinion about it, it was at least stated that one of the motives which led to the merger was thereby to ensure that there should be compensation for employees who otherwise would have lost it.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I am much obliged for the answer which the noble and learned Viscount has given. I do not at all agree with the last answer, and at some time or other we shall have a chance of stating our view in more detail. I think it would be unfair to continue this discussion during the present business before the House, but we will come back to it.