HL Deb 22 July 1963 vol 252 cc460-596

3.14 p.m.

Order of the Day for the House to be again in Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Chesham.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD MERTHYR in the Chair.]

Clause 5 [Advertisements]:

LORD SHEPHERD moved to add to the clause: (6) In exercising its powers under this section it shall be the duty of the Authority to keep under constant review the amount of time given to advertising, and to ensure it is reduced to a minimum that is consistent with the proper performance by the programme contractors of their duties under this Act and the principal Act.

The noble Lord said: I beg to move the Amendment which stands in my name and the names of my noble friends. I would ask the Committee to cast their minds back to the Government case when the Television Act, 1954, was passed. I think it is right to say that their declared policy was, in the first instance, to provide an alternative television programme for the whole of the country; secondly, to break the monopoly of the B.B.C. and to place the service in the hands of private enterprise, with an element of competition; and, thirdly, that this should be done at no cost to the viewer, the revenue to come from advertising.

I do not believe that Parliament at that stage contemplated a private monopoly as now exists. Equally, I do not believe that this House contemplated that a television contractor who issued a 5s. share in 1957 would find that share, two years later, standing at 70s. 9d. That is the result of the decisions taken by Parliament and by the Authority. Nor do I believe that this House or Parliament ever contemplated that the very large profits that might arise should be siphoned off and used by the programme contractors for investment in projects quite different from television, such as bowling alleys, or even for providing the investment in television in such countries as Kenya and Canada. The revenue from advertising, as given by the Government, for the year 1963–64, will be in the region of £80 million. This is a cost borne by industry for advertising consumer articles on our commercial television. But, obviously, that amount is borne not by the viewers directly, as in the case of the B.B.C., but by the general consumer. I would suggest to the Committee that the present rate of spending on advertising has resulted in a very expensive service. I would hazard a guess that the cost of operating commercial television is in the region of £50 million a year. If one compares the commercial service and the B.B.C. one wonders why commercial television should cost £50 million a year when the B.B.C. cost is in the region of £18½ million.

I would suggest that when Parliament passed the 1954 Act it had in mind, as I said earlier, the provision of an alternative entertainment and educational television service. They had not contemplated it in the sense of a straight commercial operation. We believe that it would be possible to provide this service with a good deal less advertising than is at present shown on our commercial television. In a struggling area at this stage it may well be possible—I would go so far as to say that it would be possible—for these companies to reduce their advertising time. What they require is a more remunerative type of advertising. In the main areas of London, the Midlands, South Wales and the North-East the profits that contractors are making are quite sufficient, even when the levy is taken into account, for a marked reduction in the amount of advertising. If that were done, it might well make it possible for the bigger advertising groups, like Hedley's, to be able to spend more of the money available for advertising with the smaller companies who really need this extra assistance. On the first day of our Committee stage I quoted the statement by Hedley's that, after paying for advertising with the "Big Four" and the main regional stations, there is little left over for the smaller contractors.

I should like to show that in certain areas it is not unreasonable to state that these companies could well reduce the amount of advertising time. First of all, I would draw the Committee's attention to T.W.W., Limited, which is a contractor for South Wales and West of England. This company was founded in 1957, with a capital of £62,401. Up to 1962, it accumulated in the profit and loss account £833,000. During that time, it has been able to pay out in dividends, on an average, 110 per cent. every year. In 1957, during its first year of operation, it had a loss of £70,000, but during the years 1959 to 1962 it has been making profits in the region of £1,200,000, on the original capital of £62,000. I would suggest that on those figures alone there is sufficient grounds for a marked reduction of advertising time.

I would also refer to a company in the North-East, Tyne and Tees Television, Limited. Like T.W.W., this company is a relative newcomer. It was formed in 1960, with a capital of £58,400. In 1960, its first year of operation, it was able to make £996,000 profit—working profit, it is fair to stress. In 1962 it made a profit of £1,179,000 on the capital of £58,400, and during that period it was able to capitalise £223,000 of undistributed profits. In 1960 it was able to declare a dividend of 450 per cent. In 1961 it did not do quite so well; it paid a dividend of 110 per cent. In 1962, it paid a further 110 per cent. Considering the area, the capital involved and the profits, I think it is not unreasonable to suggest that within that area there could be a reduction in advertising time.

I would now refer to Associated Television, a company in which the noble Earl, Lord Bessborough, is interested. It was formed in 1956, with a capital of £750,000. It has increased its capital, in some cases through capitalising its profits, until it now stands at £4,650,000. As the noble Earl said on the Second Reading, this company sustained some loss in its first years of operation—£362,000; but in 1959 its working profits had risen to £4 million; in 1961 to £6¾ million; in 1962 to £5,524,000. The average dividend which this company has paid has been 60 per cent., although during 1963 it has been reduced to 41¼ per cent.

All these three companies have been able to invest considerable sums of money in activities well outside the sphere of television. I would suggest that from these figures alone there is good reason to believe that these companies could voluntarily reduce the amount of time given to advertising. All the television contractors last year made a profit of approximately £23 million. But I think that it is fair to say that the bulk is made in the heavily populated areas—London, the Midlands, the North-East and South Wales. The main burden (shall I say?) of giving up advertising time would have to be borne by the major companies.

The position of the small struggling companies, about which we shall no doubt hear later this afternoon, could be much improved if the advertisers were able and willing to spread their advertising over the country instead of concentrating it, as they do, perhaps are forced to do, in the heavily populated areas. It is true that the Government propose a levy. Taking the suggestion of the Minister in another place, I would say that the three companies I have mentioned will all still be in a position from their heavy profits to effect the reduction which I am suggesting. Taking the levy into account, T.W.W. will still be making a profit of £900,000 on a new capital of £624,000; Tyne and Tees will be making a profit of £702,000 on a capital of £292,000; and Associated Television a profit of about £3,300,000 on a capital of £4,650,000.

LORD LLOYD

My Lords, is the noble Lord talking about issued capital or about the capital employed in the business, because they are different things?

LORD SHEPHERD

I am talking about the issued capital.

LORD LLOYD

With great respect, I think that the noble Lord ought to discuss this in relation to the capital employed in the business, because that is really the standard by which these things should be judged.

LORD SHEPHERD

My Lords, that is quite true if you argue that profits arise and dividends are made, not on the capital employed but on the capital that has been issued and subscribed. But the whole object of private business enterprise is the profit that can be made on the capital employed. I base my suggestion on my own figures. I am sure that the noble Lord, Lord Lloyd, will produce his own later.

From the facts and figures I have been able to ascertain, I believe there is a clear case that these companies could well reduce the amount of advertising. The Government and the Authority, in consultation with the contractors, have themselves in recent years reduced the amount of time given to advertising. I think it is clear that there would be great advantages to the industry as a whole—and I suggest to the Committee that that is what we should be looking at to-day; the industry and the viewers as a whole throughout the country—and if we were able to effect a reduction in advertising time in the main areas, then much could be done to assist the smaller companies.

There is one other point in this matter. The Authority, with the agreement of the contractors, have progressively reduced advertising time. But for the first time the Government now become an interested party, because they will receive considerable revenue from the levy. It may well be that the Government will not be so anxious to persuade the Authority to reduce the amount of advertising time, because it might well result in a loss of revenue to the Exchequer. The Authority have had some difficulty in reducing the amount of advertising time in the past few years. I think we should lay a duty upon the Authority, as was suggested in the Pilkington Committee's Report on page 228, where it recommends: That the Authority should, in particular, keep the maximum under constant review to see if it cannot be further reduced. I think it is generally agreed throughout the country that something could, and should, be done about the reduction of advertising time. It may well be possible to get away from this disputed time—what is called the "natural break". I hope I have made out a case, and that the Government will be willing to accept the spirit and principle of this Amendment. I beg to move.

Amendment moved— Page 5, line 35, at end insert the said subsection.—(Lord Shepherd.)

THE EARL OF SWINTON

I ought first of all to say, as I said when I spoke originally on the Pilkington Report, that, though I am not a shareholder in any of these companies, I am a director of a company which owns shares in a television company. However, I do not think that has prevented me from giving, certainly on the occasion when I made my main speech, some advice, with which even the noble Lord, Lord Morrison of Lambeth, was in a large measure of agreement—and not for the first time, because we have done rather a lot together in cinemas and that sort of thing, not by making a profit, but by way of administration.

The noble Lord, Lord Shepherd, as he always does, has argued his case in a persuasive manner, which, unless one looked at little below the surface, might seem rather more conclusive than I think it is. I should like to ask your Lordships to consider one or two of the results of the proposal put forward by the noble Lord. He has really based it almost entirely on the fact that some of the companies have made excessive profits. I certainly agree that, having initially made pretty large losses on a somewhat doubtful venture, they have made very large profits indeed. I do not know that I have always regarded it as a sin to make a profit. I have generally found that unprofitable bu3inesses were unsuccessful businesses and were not always the best to be connected with, either as a shareholder or as a worker. But I agree that the profits should not be so large, and the Government have already taken steps in the Bill to deal with that. It may be argued—I am not going to argue it now—whether the best way of taking off an excess profit from a company is by putting a special levy upon its profit or by putting a levy upon its gross income, quite irrespective of the profit that may arise. But what the Committee have accepted is that there shall be this levy, and that is the way in which excess profits of the companies will be siphoned off.

But let it be observed what will happen if the Amendment is carried. In the first place, it would, I think, put an invidious and difficult task upon the Independent Television Authority. It would quite certainly, I agree, greatly reduce the profits of the companies; but in doing that, it would also greatly reduce the levy which the Government are hoping and intending to collect out of this, and which is going to be returned to the viewers in meal or malt. The net result, so far from benefiting the viewer, even in this matter, would probably be to make it more certain that the licence fee would have to go up.

But the matter does not stop there. Surely this idea that at any moment the I.T.A. might, and indeed would, be obliged to say to a programme contractor: "Well, I think you could do with a little less advertising time", would create a chronic uncertainty for every company. Do not forget that these companies must plan, not days or weeks but months ahead in their programmes, and still more in their developments. I have no doubt whatever that if this Amendment were carried it would make the companies a prey to uncertainty; they would go for uniformity; go for buying films which they knew they could get at a fixed price, and which they would put on and the viewer would have to "eat". It would discourage new ventures and reduce new opportunities of employment, both for actors and for authors; and I have no doubt at all that it would tend to reduce the quality of programmes.

I hope your Lordships will believe that I am sincere when I say this. I think it is necessary to have this Bill. But I am a little disappointed in it, and in so many of the speeches made in this matter, perhaps not entirely on one side. I say this looking back on what I tried to do, and what the noble Lord, Lord Morrison of Lambeth is carrying on now, for the cinema industry in this country, when I tried to re-create it—and, indeed, succeeded—when it was absolutely "down the drain". All the time one's idea was: how can we improve it? What worries me so much about what is being done to-day is that it is all restrictive. How ought we to cabin this company in this way? How many codes can we produce, in order to make quite sure that we do not have any sex or any violence; that we ban Treasure Island and we ban Macbeth? I do not know. But this does not seem to me to be the way to get not only more popular television but better television; to get experiments which, though they may lose quite a lot of money to start with, will eventually succeed—because I have a tremendous belief in the British public and in the taste of the British public. In time they will come to appreciate better television just as they came to appreciate good music.

I know the noble Lord's intentions are strictly honourable, but still they all seem to me to be tainted with this desire to crib and cabin, and not a desire to encourage novelty and development and to make television more exciting and worthwhile. I hope that, with that in mind, the Committee will consider very carefully before accepting an Amendment of this kind.

3.40 p.m.

LORD SHACKLETON

The noble Earl has really misunderstood the purpose of this Amendment. Indeed, I do not think he knows what is in the Bill already. This is nothing to do with codes. This is a small extension in a particular direction of a responsibility that is already laid on the I.T.A. It is a fact that the I.T.A. already have to fix the amount of advertisement. They already vary it, and in certain respects they have already reduced it without any visible signs of disaster to most of the programme contractors. I do not think the noble Earl need be so mournful about this. There are some people who like television advertising, and I think there are times when I like it better than some of the programmes. But generally I should have thought that we are agreed it is something we put up with in order to have commercial television, which I should have preferred not to have. However, we have it now.

The I.T.A. have already done something to cut down the amount of advertising. There was criticism of the I.T.A. in the past for being too lax. When we look at the last Report of the Independent Television Authority we see they go into great detail as to how they set about organising advertising. There are a number of things they have done which are wholly good, such as cutting out advertisements in certain areas, and gradually reducing the total. But we are nervous about one aspect of the advertising levy, and the speech we have just heard makes it clear that it will be assumed that the Government now have a vested interest because of the revenue they will expect to receive from the advertising levy. We do not want the I.T.A. to be tempted or, indeed, pressed by the Government in order to provide revenue.

The Pilkington Report, about which on this matter I do not think anyone can complain, was fairly moderate. The Committee said merely that they hoped advertising would be controlled, and they hoped it would even be possible for it to be reduced. It is not possible to say what the right amount is. The I.T.A., in fixing the amount of time given to advertising in the programmes, have to decide whether it shall not be so great as to distract from the value of the programmes as a medium of information, education and entertainment. They already have the job of forming that much more difficult judgment.

We are suggesting to them—and this again is a very moderately worded Amendment—that in arriving at the figure they should put it as low as possible; that it should be the minimum that is consistent with allowing the contractors to do the job. It may be that in the short term there is not much further reduction that can be made. In the future, when the second channel is started, it may even be necessary to increase it—I do not know. But, on the whole, we should like to keep it as little as possible consistent with carrying out the provisions of this legislation. This gives the I.T.A. a clear lead, and it will give them a power to resist any pressure from any Government of the day to step up advertising as a means of revenue. I do not know that the Government would do it, but the speech we have just heard suggests that the Government will have a vested interest.

I think this is quite a modest Amendment. It is not designed to hurt people in the industry; it is designed merely to lay down a little more clearly what the responsibilities of the Authority are in this matter. I hope that the Government, even if they cannot accept this particular form of words, might consider another form. It may be that it should be dealt with in the Schedule, but on the principle that there should be a minimum, I am quite sure that this is something which should be written into the Bill.

THE EARL OF DUNDEE

We all take some interest in the amount of Tv advertising. As the noble Lord, Lord Shackleton, has said, some people like it, perhaps occasionally even better than the programme into which it is inserted. The noble Lord is right in saying that nobody wants too much of it, but I do not think he is right in desiring that legislative provision should be made for reducing it to the barest possible minimum. I will try to remind your Lordships briefly of the attitude of the Government towards I.T.V. advertising. While I appreciate the noble Lord's purposes in moving this Amendment—and I also share with him the desire to prevent programmes from being adversely affected by too much advertising—I do not think this is a very good Amendment.

The noble Lord, Lord Shackleton, has reminded your Lordships of the principle laid down which is copied from the Act of 1954. In this Bill it is in Schedule 1, paragraph 3: The amount of time given to advertising in the programmes shall not be so great as to detract from the value of the programmes as a medium of information, education and entertainment. In spite of what the noble Lord has said, I still feel that this is an admirable definition, and I do not think it can be improved upon. I think it is much better than the change proposed by the Amendment. I agree with the first part of the Amendment, which says that the Authority ought to keep under constant review the amount of time given to advertising …". The Authority must do it in any event. I do not agree that we should have an Act of Parliament to try to ensure that advertising is reduced to a minimum consistent with the proper performance of the duties of the programme contractors under this Act and the Principal Act. The programme contractors, of course, have not any duties under the Act. It is not spelled out that their duties consist of the contracts which they make with I.T.A., and it is I.T.A. who must judge whether they are fulfilling those duties or not. When I looked at this Amendment I thought at first its most obvious meaning was much the same as what is laid down in paragraph 3: the amount of time given to advertising … shall not be so great as to detract from the value of the programmes … That, I should have thought, is not very different (except that it is rather clearer) from saying that it ought to be reduced to a minimum consistent with the proper performance of what I take it to be the duties—it is not very well worded in the Amendment—of the programme contractors as arranged, not defined in the Act, with I.T.A. to produce the best possible type of programme. Of course, we do not want more advertisement than is necessary to ensure the best possible type of programme. But if we are going to put in the Bill, in addition to saying—because Lord Shepherd will agree with this definition in the Schedule—that advertising … shall not be so great as to detract from the value of the programme", that it is reduced to a minimum … I think the I.T.A. might take it to mean that Parliament was requiring them to reduce the amount of advertising to a level below that which was necessary to enable programme contractors to produce the best type of programme for the benefit of the public. If it means that, it is bad; if it does not, I think it is unnecessary because it does not mean any more than is in the Bill already.

The noble Lord, Lord Shepherd, concentrated mainly on the financial provision of the companies, arguing that because some of them were making, admittedly, large profits, they should therefore reduce their profits by cutting down their advertising. But I cannot see the effects which he thought would follow from it. I think it is quite likely that if we were to cut down times allotted to advertising the rates would go up on account of scarcity value. The effect would be that the smaller advertisers might be squeezed out and the larger ones would have to pay more.

The noble Lord, Lord Shackleton, has already explained, and I think we are all agreed with him, that the I.T.A. ought to have concerned themselves with controlling advertising before. Up to now, as the noble Lord, Lord Shackleton, pointed out, they have done a good deal by voluntary agreement with the programme contractors to reduce the amount of time given to advertising, and I think I am right in saying they have practically eliminated advertising altogether from more serious drama, from art, documentary films, news features and so on. But the Government accept the recommendation in paragraph 228 from which the noble Lord, Lord Shepherd, quoted: We do not … think it desirable that the present or any other maximum or average should be prescribed in future legislation. We think the Committee were quite right in saying that the average at present of six minutes is reasonable, and we accept the present rule of six minutes as a general average with a maximum of seven for any one hour. We think that the Authority should not hesitate to exercise the power to alter these figures if they think it is desirable, but we do not think it is right to enjoin on them as a desirable objective that the actual advertising time should be reduced.

I would remind your Lordships that the reductions which have taken place so far are voluntary, as a result of arrangements with the I.T.A. Now, in Clause 5 of this Bill, we are giving the Authority very great powers which they did not possess before to control the amount and the character of advertising and to impose requirements as to advertisements and methods of advertising, and they may give directions to a programme contractor in respect of times for advertisements which are to be allowed. Also, they may make different provision for different parts of the day, different days of the week, different types of programme or for other differing circumstances. And we entirely agree that they should keep the question of advertising time constantly under review. I do not think there is very much difference between what our objectives are and the objectives of the movers of this Amendment. The noble Lord, Lord Shackleton, said in his speech that it is not possible to say what is the right amount of time, and I think, having given these very wide powers to the Independent Television Authority, we must allow them reasonable latitude for deciding how they are going to be used.

I should like to refer to one more point arising out of the remarks of the noble Lord, Lord Shackleton, and to comment on what he thought was possible: that, since the levy was now being imposed, the Government might bring pressure to bear upon the I.T.A. and its programme contractors to increase the amount of advertising so that the Treasury would get more money. I do not think there is the slightest possibility of that. We are introducing this levy simply because we think it is the best and most convenient way of ensuring that the programme contractors pay a proper rental for the privileges which they are given under the law, and I can imagine nothing less likely than the I.T.A., which is carrying out these duties under the Act, seeking to increase the amount of advertising time in order to please the Government by raising more money. I think that the provision which I read to your Lordships in the Schedule is the right principle. I do not think it wants any addition. I think the Amendment, although it may be moved with the best of intentions, would detract from it and not improve it.

LORD SHEPHERD

We have a long way to go this afternoon to deal with the Amendments on the Order Paper and therefore I do not propose to argue with the noble Earl, because obviously he has his mind and we have ours. I sought to show that it would be possible for these companies themselves to reduce the advertising time. It is a fact that advertising time is continually being reduced—perhaps with objections from the contractors, but it is being reduced. We should like to see that reduction speeded up, and that is the purpose of this Amendment. Therefore, we will have to support this Amendment in the Lobby.

3.57 p.m.

On Question, Whether the said Amendment (No. 10) shall be agreed to?

Resolved in the negative and Amendment disagreed to accordingly.

Clause 5 agreed to.

Clause 6 [Committee and panel to advise on advertisements]:

LORD FRANCIS-WILLIAMS

This is a very small Amendment, but I think a useful one. Its object, as your Lordships will see, is simply to widen slightly the composition of the Committee which is set up and which at present is stated to be representative of the public as consumers. The only purpose of this Amendment is to make it representative of the public mainly as consumers. The idea behind it is that such a Committee could be made in some cases more effective if it included perhaps, for example, representatives of some of the big distributive firms or retail organisations who have an expert knowledge which they could bring to bear on seeing whether advertising claims made were excessive or not, and therefore they would be able to help in the effectiveness of the Committee. That is the only purpose of the Amendment, and I hope it is one which the Government feel they can accept. I beg to move.

Their Lordships divided: Contents, 27; Not-Contents, 48.

CONTENTS
Addison, V. Henderson, L. Rusholme, L.
Airedale, L. Latham, L. Samuel, V.
Airlie, E. Lawson, L. Shackleton, L.
Archibald, L. Lindgren, L. Shepherd, L. [Teller.]
Champion, L. Listowel, E. Silkin, L.
Crook, L. Lucan, E. [Teller.] Sinha, L.
Faringdon, L. Meston, L. Summerskill, B.
Francis-Williams, L. Morrison of Lambeth, L. Walston, L.
Gainsborough, E. Ogmore, L. Wise, L.
NOT-CONTENTS
Ampthill, L. Glentanar, L. Milverton, L.
Bessborough, E. Goschen, V. [Teller.] Monsell, V.
Bossom, L. Grenfell, L. Mountevans, L.
Carrington, L. Hanworth, V. Mountgarret, V.
Chelmer, L. Harris, L. Newton, L.
Chesham, L. Hastings, L. Robertson of Oakridge, L.
Conesford, L. Horsbrugh, B. St. Aldwyn, E. [Teller.]
Denham, L. Iddesleigh, E. Sandwich, E.
Derwent, L. Lambert, V. Simonds, V.
Dilhorne, L. (L. Chancellor.) Lloyd, L. Soulbury, V.
Dudley, L. Long, V. Spens, L.
Dundee, E. Lothian, M. Stuart of Findhorn, V.
Eccles, L. Lyle of Westbourne, L. Swinton, E.
Ferrers, E. McCorquodale of Newton, L. Twining, L.
Forster of Harraby, L. Mancroft, L. Waleran, L.
Fraser of North Cape, L. Mills, V. Windlesham, L.

Amendment moved— Page 6, line 1, after second ("be") insert ("mainly").—(Lord Francis-Williams.)

THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM)

I quite understand why the noble Lord has moved this Amendment and what he is driving at, and it is certainly something in principle with which we agree. However, apart altogether from principle, it raises a point of real difficulty; so much so that it does not seem to me entirely wise that we should incorporate what he has said in legislation. The point is this. Although it is a small Amendment in effect, and rather desirable, what is embodied in a Statute has to be carried out in the way that is written in the Statute. The difficulty arises out of this. In the past, the Advertising Advisory Committee was composed of about half of what we might loosely term advertising interests, but it is not now. It is now composed of twelve people, apart from the independent chairman, in the shape of four consumer representatives, four representatives concerned with medical advertising, who may be said to be representative of a limited section of consumers, and four people who are, again loosely, advertising interests.

It is a point of interpretation. If you consider the second section, who are representative of the British Medical Association, the British Dental Association, the Pharmaceutical Society and the Ministry of Health, should they be classed as consumer representation or not? If not, it would mean that to carry out the noble Lord's Amendment five further consumer representatives would have to be appointed. If, however, they are to be considered consumer representatives, there is nothing to worry about at the present time. My right honourable friend the Postmaster General has been in touch with the Authority on the question of strengthening the committee in this respect, and, as I said on Second Reading, Mr. D. T. Jack has now been appointed, and he is, of course, quite independent.

I would draw your Lordships' attention in this context to the assurance given in another place that it was the intention of the Authority that the chairman should always be independent, and I have put down an Amendment, which is the next one, to ensure that shall be so. While I agree that this is a matter that obviously ought to be kept under' review and watched, I think the Authority can be relied upon, in view of the present situation and the point the noble Lord has put forward, to watch it. After all, it is possible for my right honourable friend to have discussions with them on this matter if it seems to be getting out of hand. I think, on balance, while not rejecting the principle, we ought not to accept the Amendment.

LORD SHACKLETON

I rather share the views of my noble friend Lord Francis-Williams, that in principle this is a desirable Amendment. I do not expect he will feel so strongly at the moment that he would wish to take it to a Division, but it is useful to have a discussion on this particular clause. I am quite sure that there is no disagreement between the two sides of the Committee as to the objectives, and certainly this particular clause in the Bill is an improvement. It may sound a little ungenerous, when the Government have put in something which goes a little further than before, that we should ask them to go even further. We accept that there are difficulties, as we found over the British Museum Bill, in arriving at the exact mathematical membership of particular bodies.

Although it is not wholly on the point of the Amendment, I should like to suggest—I echo the point of the noble Lord, Lord Francis-Williams—that this committee should be widely based and that professional interests of one kind or another may not feel quite so free as somebody who is completely independent. I should like to make a plea for some representation of the distributive trades. Perhaps I should declare an interest at this point as I am in the distributive trades myself. I think it would be agreed by all those who are familiar with retail trade that those who are leading the retail trade, and indeed most retail traders, whether they be private enterprise or co-operative, are heavily concerned with the maintenance of standards, and particularly with avoiding the embarrassment of false claims. It was pointed out in another place that one of the most effective members of the committee was Mr. Roger Diplock who was representing the Merchandise Marks Association or Committee.

I should like to think that there was always at least one representative, or possibly two, of those who are going to sell the goods that are advertised. Their interests will not necessarily be the same as those of the advertisers. We want to ensure that there is a really effective watch-dog committee. We think that in the setting up of a panel this clause improves things, but I hope that the Government will bear in mind some of the points that have been made on this matter to-day, and perhaps convey them to the Independent Television Authority.

LORD FRANCIS-WILLIAMS

I thank the noble Lord opposite for his expression of interest in this matter. I should certainly not wish to press it to a Division. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD CHESHAM

This is the Amendment that I have just mentioned, put down to fulfil an undertaking given by my right honourable friend the Postmaster General in another place, that he would try to find a form of words to secure the independence from advertising of the Chairman of the Advertising Advisory Committee. He said that if he could, he would table an Amendment later. He did; he could; he has, and this is it. I beg to move.

Amendment moved—

Page 6, line 5, at end insert— ("(4) Before appointing a person to be the chairman of the said committee, the Authority shall satisfy themselves that that person—

  1. (a) will have no financial or other interest in any advertising agency, and
  2. (b) will have no such other financial or other interest in advertising as is in the opinion of the Authority likely to prejudice his independence as chairman;
and the Authority shall also satisfy themselves from time to time that the chairman of the said committee has no such interest as is described in paragraph (a) or (b) of this subsection.")—(Lord Chesham.)

LORD SHACKLETON

We welcome the Amendment.

On Question, Amendment agreed to.

LORD SHACKLETON moved, after subsection (6) to insert: (7) The Authority shall sufficiently set out the action taken under this section during the year in the Annual Report prepared in accordance with section 15 of the principal Act.

The noble Lord said: I rise to move Amendment No. 12 standing in the name of my noble friend Lord Francis-Williams and other noble Lords. This, too, is a small, though not unimportant, Amendment. It is to require the Authority to set out the precise action they take under Clause 6.

One of the difficulties that we have found in the past, in regard to discussing and keeping a watch on the operations of the I.T.A., has been that certain information has not always readily been available. Let me say straight away that the I.T.A. give a good deal of information, and in their most recent Report there is an interesting section on the control of advertising. But there have been times when not enough information has been given. Even if it could be argued that there has been, it is so important that the public and Parliament should know exactly what the Authority do under this clause, that we should like to make this a statutory obligation. I am quite sure that there is no difference between us on the desirability that they should report on their actions in this respect: the only possible argument is whether it should be laid upon them as a specific duty, in the same way as are certain other matters that one might wish to be particularly dealt with in their Report. I beg to move.

Amendment moved— Page 6, line 27, at end insert the said subsection.—(Lord Shackleton.)

LORD CHESHAM

I certainly do not propose to try to argue with the noble Lord that he is wrong in what he has put forward as the principle of this Amendment, other than querying the view that this should be made a statutory requirement. I do not so much query that as a question of principle as merely to say that it is not strictly necessary. The reason I say that is that under Section 15(4) of the 1954 Act my right honourable friend the Postmaster General already has the power to require the insertion in the Annual Reports of the Authority, if it is thought desirable or necessary, of the kind of material to which the Amendment refers. Since that power already exists, I do not think it is necessary to put more into the Statute than is there at present.

The noble Lord will probably wish to know that the Authority told my right honourable friend that they would regard it as a natural development to include in their Annual Reports from 1964 onwards, in view of their new powers, the more interesting aspects of their operations in regard to advertising. That, of course, will include medical advertising. The Reports would probably be in rather more general terms, because I do not think the Authority would regard it as part of their function to publish highly detailed and complicated information about their dealings with a great number of individual advertisers. I should have thought that, in view of the powers which my right honourable friend already has, by Statute, to require them to publish this kind of information in their Reports, we could perhaps leave it at that.

LORD SHACKLETON

I do not want to press this Amendment. I did not expect that the Government would accept it, and I am grateful for the Government's assurance. Perhaps I might ask that in the exercise of the powers under the Act details about the people concerned should be published. It would be helpful to know who are the members of these committees. It may well be that they do publish this in their Reports—I apologise; and gather that they do. It would be interesting, at any rate, that they should describe again the sort of interests that are involved. There is no disagreement between us on the principle. I only repeat my feeling that we need to know as much as possible about this; and it is in the interests of the I.T.A., who have in the past complained that they have sometimes been rather harshly judged, that they should publish as much as possible. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 6, as amended, agreed to.

Clause 7:

Rental payments by programme contractors.

7.—

(4) If the accounting period is a period of 12 months, the amount of the additional payments for the accounting period shall be that given by the following Table.

TABLE
RATES FOR A 12-MONTH PERIOD
Appropriate rate for determining amount of additional payment
For the first one-and-a-half million pounds of the advertising receipts of the programme contractor for the 12-month accounting period Nil
For the next six million pounds of those advertising receipts 25 per cent.
For the amount by which those advertising receipts exceed the aggregate of the said sums of one-and-a-half million and six million pounds 45 per cent.

(7) The contracts between the Authority and the programme contractors— (c) shall provide that where for any insertion of an advertisement a programme contractor receives or is entitled to an entire consideration not solely referable to that insertion the advertising receipts shall be calculated by reference to so much only of the consideration as is referable to that insertion according to an apportionment made in such manner as any such contract may provide, and it shall be the duty of the Authority in framing the contracts with the various programme contractors to include such terms as are in their opinion necessary or expedient to ensure that the amount of the additional payments required under this section are paid promptly and in full.

4.21 p.m.

THE EARL OF DUNDEE

With the permission of the Committee, perhaps before we discuss the Amendments on this Clause it might be helpful if I were to make a short observation on all of them. It is not the business of either House of Parliament to defend the privileges of the other, and the last thing I should ever seek to do would be to spoil the fun which I am sure we shall have in discussing these Amendments. But I thought that it might be helpful to your Lordships if I made some inquiries about them, because although Amendments which infringe the financial privileges of another place have on occasion been accepted in another place, privilege being waived, but that has never been done in respect of Amendments which actually deal with the imposition or remission of taxation. The principle is set out in Erskine May, at page 813: The Commons, when they so wish, 'waive privilege' in individual cases, and accept amendments by the Lords, so long as they do not materially infringe the privileges of the Commons. I thought that it would be helpful to your Lordships if I were to make such inquiries as are open to me to make about these Amendments on the Paper. It is my duty to advise your Lordships that all these twelve Amendments on this clause do materially infringe the financial privileges of another place and that, with the possible exception of No. 19, in no circumstances could privilege be waived in regard to any of them. I might have put it more emphatically, but I thought that it might be unseemly to anticipate what might happen in another place. I therefore thought it my duty to try to help your Lordships by indicating what might be expected. I hope that a good time will now be had by all in discussing these Amendments. I thought that it might perhaps save a good deal of disappointment later on if I were to give your Lordships this information before we proceed to deal with them.

THE EARL OF SWINTON

Is the noble Earl who is leading the House really right in this matter? Of course, I should not dissent for a moment from the statement that we could not impose taxation, or interfere with taxation which had been imposed, but I understood that this was considered not to be taxation. If the imposition had been an excess profits levy, then (and this has been well known in the past) without doubt that would have been a tax. But is the noble Earl quite sure (I am not discussing the merits at all, but this is a very important point) that a levy of this kind is a tax? I should have thought that it was extremely arguable. I have not looked up the point, because I did not know that it was going to be taken, but there have been a number of cases where levies have been imposed on this or that industry. Are those taxes?

There are levies which have come before us in relation to the cotton industry in regard to research. Both the noble Lord, Lord Morrison of Lambeth, and I have been responsible for legislation which has involved levies of that kind. I have never heard it suggested that that was a tax which could not be discussed or amended here. In a number of cases an Affirmative Resolution is required to approve this kind of levy within industry. Such a Resolution must be brought before both Houses of Parliament. This levy upon these companies is not a general tax at all: It selects half a dozen people, and says: "These people are to pay this levy." I should have thought that it was stretching the terms of the Parliament Act, and the convention about these matters, very far to say that this was a matter of taxation with which this House could not interfere, and that the other place would be entitled to insist on its privilege and reject any Amendments which were made here. I should have thought that that was a very strong thing to say.

THE EARL OF DUNDEE

I do not want to take up much time, I am only doing my best to help your Lordships in this.

THE EARL OF SWINTON

I agree. If that is the position there is no need to discuss this, but I should have thought it was very doubtful that that was the position.

THE EARL OF DUNDEE

Under this Bill it is provided that the levy shall not belong to the I.T.A. but shall go into the Exchequer—which, I suppose, is not quite the same thing as in the Potato Marketing Board or the cotton industry when levies are used for the purpose of helping the industry. My reason for not wishing to be dogmatic about this matter is that it might sound as if I was trying to say what ought to happen in the other place, which is the very last thing I want to do. All I want to do is not to mislead your Lordships' House.

If your Lordships like to take the risk of passing a whole lot of Amendments and having them all ignored on the grounds of privilege, then your Lordships are entitled to do so. All I am trying to do is to aid your Lordships in discussion and possibly preventing future disappointment.

LORD DOUGLAS OF BARLOCH

Is not the decisive provision in this Bill Clause 7(2) which says: The additional payments shall not form part of the revenue of the Authority and, when received by the Authority, shall be paid into the Exchequer of the United Kingdom or the Exchequer of Northern Ireland as provided by this section."? If the money is never any part of the revenue of the Authority, and if it is paid into the Exchequer, by whatever name it is called it does appear to be a tax.

LORD MORRISON OF LAMBETH

If I may respectfully say so, from the point of view of common sense I think my noble friend Lord Douglas of Bar-loch has put a point which is worthy of consideration. In the end the judgment of this question, as to whether or not the Amendments involve privilege, will be the judgment of another place, and not of this House. My impression is that, unless the other place goes clean off the rails, the judgment of the House of Commons as the custodian of the national purse is final on these matters. As to what the noble Earl, Lord Swinton, said, I should have thought, especially in the light of the point raised by my noble friend Lord Douglas of Barloch behind me, that this might be called a levy but in principle, in practical effect, it is not much different from taxation. It has the result that the advertising revenues of the company will be diminished by the amount of the levy which will be paid into the Exchequer. To that extent I should have thought that it was a matter of language, rather than of substance, as to whether or not it was taxation, and that the House of Commons would take the view that it was taxation.

I should like to be clear on the points that have been raised by the noble Earl, Lord Dundee. I think he stated the case fairly, though perhaps I would state it with slightly more emphasis on the rights of this House than he has done. I have made inquiries and, as I understand it, this House can pass, if it is so minded, such Amendments as it wishes, even Amendments which pretty clearly involve privilege. I do not think there is anything in Standing Orders to stop it; and, of course, we have the advantage or disadvantage that we have no effective presiding officer. I must say that in my short experience here I have found it an advantage, and not a disadvantage. It is most useful now and again not to have an effective presiding officer, and one of the great things about this House is that it can behave itself notwithstanding that fact. But, while saying that, I think the House can pass such Amendments as it wishes. Nevertheless, especially on a Bill that came from the Commons, when it returns to another place it would be not merely the prerogative but the duty of Mr. Speaker to draw the attention of the Commons to Amendments which involved prima facie Commons privileges. Then it would be for the Commons to decide whether or not to insist upon their privilege, and there have been some few occasions when they have not so insisted.

On the other hand, I must say that it would not be wise for this House repeatedly and without a sense of responsibility to pass Amendments which clearly involved the privileges of the Commons, as I think a number of these Amendments do, because if we did that persistently and customarily we might not improve the relations between the two Houses. We might begin to get a bad name in another place, which would be unfortunate. I should not wish to deny any noble Lord the right of ventilating what he conceives to be an injustice or grievance—in fact, I ventilated one myself at any earlier stage—and I think it might be useful if we could have an opportunity to ventilate grievances. The Government could then reply and indicate whether or not in their judgment they had administrative powers under the Bill wholly or partly to meet some of these criticisms, rather than that the House should pass Amendments in favour of particular commercial undertakings. It would be a pity if the House—I do not want to use the word "irresponsibly", but without due thought passed Amendments which clearly involved Commons privileges. Because, just as I am jealous of the rights of the House of Commons, I have now become jealous of the reputation of this House, and I should not like it to be such that the Commons began to think that we were being rather foolish and irresponsible.

LORD GLADWYN

My Lords, as a comparatively "new boy", and certainly as no constitutional lawyer, I hesitate to plunge into this—I will not call it controversy, but rather a discussion, except to say that if we accept the full thesis of the noble Earl, Lord Dundee, I think we shall be getting into rather an extraordinary position. He said that it was absolutely useless for us, though we could discuss it, to pass any Amendment on this matter, because, as I understood him, it would inevitably be turned down in another place on the grounds of privilege. Therefore, the suggestion was really that we might just as well shut up shop on these twelve Amendments and go home. Is that really the case?

I quite accept—and I was deeply impressed by what the noble Lord, Lord Morrison of Lambeth, said—that nobody wants to go against the privileges of another place. Of course we do not. We know what the privileges are. But take my own Amendment, for instance. It was never voted on in the House of Commons. They never expressed a view on the Amendment I am putting forward here. It comes up here; there is perhaps a torrent of oratory; and a number of noble Lords say that they think it is a very good Amendment. It might even be that the Government agree—as I think some members of it do now—that it is a good Amendment and they would like to pass it. I gather from the noble Earl, Lord Dundee, however, that the Government are powerless. They may think that it is a very good Amendment, but they can do nothing at all. It goes back to another place and automatically the Speaker takes his pen and says, "This is privilege. It is out." But why should that be? Why should the Government not communicate to the Speaker that they now think it is a good Amendment? Why should he not consult the House? It may be that most Members of another place would think it a good thing if the Government gave a lead. Why should not the Speaker say, "This is an exception"?

In my case the noble Earl, Lord Dundee, read out something about "anything which materially affects the privileges of another place". My Amendment would affect it to the extent of £10,000, out of a total of £18 million which the Government are going to get from this levy. Nobody can say that that materially affects the privileges of another place. In reasonable language they could not say that. Therefore, though the Constitution at the present moment may be so arbitrary as to be almost, on the face of it, unreasonable, why can we not change this by passing, if we like, some unexceptionable Amendment, which the Government may find it in their hearts to support, and then hope that the other place, in their wisdom, will not insist on their privilege? I cannot see why we should not do that. It seems to me the path of wisdom and I hope that the Government will agree.

THE EARL OF SWINTON

I think this is an important point and perhaps I might add a little more on it. I agree with a good deal that the noble Lord, Lord Morrison of Lambeth, has said. I must, I think, accept from the acting Leader of the House the position that this would be treated as a taxing Amendment. I ventured tentatively to express the same opinion and was frowned upon by a number of distinguished lawyers, who told me that I was talking great nonsense. I then withdrew my view, which has now been expressed so authoritatively by the Minister of State. I think the position is really this. It is true that there is nothing to prevent us from passing the Amendment. I have known, and have certainly accepted in leading the House, Amendments which are privileged Amendments. They then go to another place and the Speaker, if it be his view that an Amendment is privileged, draws the attention of that House to the fact that the Amendment passed by this House is privileged. But with that he leaves it to the House to decide, and the House on some occasions, if it has rejected an Amendment, has insisted on its privilege.

I do not myself recall any case where this House has differed and sent the Amendment back. There is a slight delicacy about the business, because I think some form of words is used. It is rather like talking about sex, and the indelicate word "privilege" is not actually used in the reason for dissenting. But they can, on the other hand, accept it and pass it. I think that the noble Lord, Lord Morrison of Lambeth, if I might respectfully say so, is right that, if we passed a great many Amendments to this Bill on which the Speaker would almost certainly say to the House they were privileged, we should really get into the position of having tried to recast a taxing measure. On the other hand, there might be one particular matter on which it was felt that injustice had been done and perhaps that another place had not even fully considered the matter. Because, remember, it is not like a Finance Bill. It was not considered in Committee by the whole House; it went upstairs to a Committee, and then it had a day, I suppose, or half a day, in the House on Report; but only certain Amendments were selected for consideration. If one Amendment were made here which the House felt was reasonable and which, perhaps, appealed to the other place, then I do not think that the strictures of the noble Lord, Lord Morrison of Lambeth, would apply. But if we made a great many Amendments, then I think they would. I do not know whether I am in order in saying that, but it seems to me to be perhaps something which a pretty old Member of both Houses might be allowed to say.

4.41 p.m.

LORD MORRISON OF LAMBETH

Might I make a suggestion, in all humility? I think we have now fairly fully discussed, and quite properly discussed, in an exploratory way, the procedure and the question of rights and privileges. I do not think there is much else to be said. Nevertheless, I feel that it would be just and equitable that noble Lords—even if I do not agree with them—should be able to say what they want to say about these problems. As a matter of fact, I raised a problem earlier, though I have not put down an Amendment, partly because of my own regard for privilege and partly because there was not complete unanimity about it between my noble friends and myself; but I should like to raise the matter again with the object of getting a view from the Government.

Might I suggest this course? This series of Amendments on the Paper do, in my judgment, involve the question of Commons privilege. May I suggest that noble Lords forgo the right to move these Amendments but that, on the other hand, when we come to the Question, "Whether Clause 7 shall stand part?", then we should have a general discussion, in which the substance of these Amendments could be raised in speeches, and in which the Government, either by one Minister or by two Ministers, could reply, indicating their view of these problems, and whether or not, under the Bill, the Government or the Authority have any means of administration by words—not that the words are going necessarily to be inserted, but in order that they can be considered and solutions reached, if they wish to reach a solution. I feel that, instead of our involving ourselves in a discussion on these Amendments separately, it would be better if noble Lords would agree that they should not be moved but that we should have a general discussion on the Question, "Whether Clause 7 shall stand part?" I do not know whether the noble Earl, Lord Dundee, would find that course agreeable to Ministers or not.

LORD LLOYD

Before the noble Earl replies, I must say that I do not feel that that is an acceptable suggestion. I do not think most noble Lords who have put their names to these Amendments would agree to that for a moment. Nor, indeed, having been twenty years in this House, should I consider it in any way necessary. We frequently discuss Amendments which are privileged. We have not necessarily passed a great many, but we frequently discuss them; because, in point of fact, putting down individual Amendments on a very complicated financial clause of this kind provides a much easier peg on which to hang an argument than to have another Second Reading debate on the whole clause. My own feeling—and I say that as a very humble Back Bencher—is that it is perfectly proper to discuss these Amendments. It is the easiest way of discussing the problems. We need not necessarily pass the Amendments, if the feeling of the Committee is that that would be a mistake. After all, this clause is the most important clause in the whole Bill: it is the guts of the whole thing. I do not think we can go through the Committee stage without discussing this clause; and I hope, therefore, that the noble Lord will not insist on our having another Second Reading debate.

THE EARL OF DUNDEE

I am grateful to your Lordships for the help you have given to me. In reply to the noble Lord, Lord Douglas of Barloch, who quoted subsection (2) of Clause 7, that, in fact, was the subsection to which I had just referred. In reply to the noble Lord, Lord Morrison of Lambeth, I am most grateful for his suggestions, and I will certainly do my best, not only to listen to your Lordships but to make any statements on Government policy which may be helpful. To my noble friend Lord Lloyd, I would say that it so happens that, in dividing up this Bill between my noble friend Lord Chesham and myself, all the Amendments on this clause fell to me, so I am entirely at your Lordships' service, and will do whatever your Lordships indicate you would like me to do. I think, in view of what my noble friend Lord Lloyd has said, it would be better, obviously, if your Lordships were to speak to the Amendments one by one, and I will do my best—I will not say to give a satisfactory reply, but to make whatever statement on behalf of the Government that I can.

In reply to the noble Lord, Lord Gladwyn, who talked about my thesis, it really is not my thesis; it was all done by a thing called the Parliament Act, 1911, which was passed when we were all very young, and which most of us cannot remember. In reply to my noble friend Lord Swinton, we are always most grateful to hear his advice on these questions. The advice I have been given is that it is not a distinction between one or two Amendments on which privilege might be waived: it is a distinction between a material breach and an immaterial breach, which is not quite the same thing. Although, of course, it is not for me, or for any of us, to anticipate what might happen, the advice I have received is that, even if the other place were to be unanimously convinced by the excellence of your Lordships' speeches that all these Amendments ought to be accepted, the only method by which they can give effect to this wonderful harmony would be by withdrawing this Bill and introducing a new Bill with a new financial Resolution. However, that is not a matter with which we need concern ourselves. I am trying only to help your Lordships in proceeding with our discussion.

LORD SHACKLETON

Before we leave that aspect, may I ask whether the noble Earl reckons that, when introducing new legislation, it would be possible to take action under the Finance Bill? I know it is too late this year, but presumably this is the sort of thing that might find its way into a Finance Bill. The second point which I might suggest to noble Lords is that there are parts of this clause which, I take it, are not privileged. I cannot see how Clause 7(1)(a) could possibly be privileged; and it may well be that noble Lords may find that, if they cannot get what they want to-day, they might be able to adjust certainly their Amendments to that paragraph, because this seems to me to have nothing to do with the Treasury, and ties in rather with the point which the noble Earl, Lord Swinton, was making—the analogy of a levy on a particular industry for that industry's purpose.

THE EARL OF DUNDEE

I think it would be better if we did not anticipate these points, but took them as they came.

4.48 p.m.

LORD ARCHIBALD

I am sure we are all very grateful to the noble Earl for the guidance he has given us on this matter, and particularly for an earlier remark, that he did not want "to spoil the fun", and that we should go ahead with our discussions. I am afraid that his guidance has rather spoilt the fun. It has, in effect, taken the sting out of the discussion. But, not being a constitutional lawyer, I did not attempt to intervene in the discussion as to what we might discuss or pass, but I am pretty certain we have a right to discuss these Amendments just as we discuss a Finance Bill—which, of course, we would never seek to amend.

THE EARL OF DUNDEE

We shall be doing that to-morrow.

LORD ARCHIBALD

I am also flattered by the suggestion that there is a likelihood of these Amendments being passed by your Lordships' Committee, which I am bound to say is something which I had not anticipated. If they are not passed, then I take it that no trouble arises with another place.

Amendment No. 12A, which stands in my name and in that of my noble friend Lord Francis-Williams, is undoubtedly an extremely far-reaching Amendment. I think my noble friend Lord Morrison of Lambeth suggested that this was an Amendment for the benefit of certain big commercial enterprises. I should like to start by assuring him that that is not the purpose of the Amendment in any way.

LORD MORRISON OF LAMBETH

I did not say that—not here, anyway. I may have said it somewhere else, but not here.

LORD ARCHIBALD

Yes; this afternoon. I think so, anyway; but we will look to-morrow. Whether the Amendment would have the effect of benefiting the programme contractors is not the point with which I am concerned. The purpose of this Amendment is to benefit three classes of people; the main class being the millions of television viewers; the second class being the people who are the producers of programmes, whether they be filmed or live or of any other types; and the third class, the makers of these programmes, the directors, writers, artistes, technicians, craftsmen—all the creative people who combine to make the programmes for the benefit of the viewers.

Earlier this afternoon, on the first Amendment, the noble Earl, Lord Swinton, made the suggestion that if there was any restriction in the amount of advertising, that would be bound to have harmful effects on the programmes because it would tend to make the programme contractors economise on the programmes to offset the loss of advertising. If that argument holds with regard to the type of restriction of advertising envisaged in the first Amendment, then I think it must apply with greater force to the levy proposals contained in Clause 7 and to which my Amendment relates. Obviously, the first effect of this levy, if advertising revenue remains constant or even if it increases a little, will be that the programme contractors will first of all look at the most expensive programmes they put on to see to what extent that type of programme may be reduced in quality or quantity. I think that the most expensive programmes are probably the British films made specially for television. I do not mean the old films made for cinemas and resurrected to fill in time on television, but those made specifically for television exhibition. These would probably be the first category that would come under the economy axe. I am certain there will be an economy axe in the programme contractors' hands if the Bill goes through in its present form.

It may be argued that the quality of the programme is not determined by its cost. We have heard that argument before and it has a certain superficial truth about it. But, taking it by and large over the whole field of programming, I do not think that anyone would argue that if there is a substantial reduction in the amount that is spent on programmes there will not inevitably be also a falling-off in the quality of the programmes. It is entirely with a view to maintaining the quality of the programmes for the benefit of the viewers, the producers and the workers in the industry that this Amendment proposes that the amount certified by the Authority to have been spent on programmes should be a deduction before the application of the levy.

It has been suggested that if the whole of the cost of programmes is to be excluded, that leaves room for what I believe is called "a fiddle"; but I believe that as the Amendment is drawn it puts it in the hands of the Authority to certify that the programme costs have in fact been incurred. This, I think, reduces the possibility of "a fiddle" to something infinitesimal, if not ruling it out altogether. If this Amendment were acceptable I should have thought it would have been possible for the Postmaster General, under the provisions of subsection (6), to raise the percentage amounts of the levy so that a greater amount would be received by the Treasury than if the Amendment was operated without that increase in the levy on the smaller amount to which it would apply. In view of the fact that this is perhaps purely an exercise with no practical outcome, I do not propose greatly to elaborate the arguments at this stage, but I will at least at this point beg to move.

Amendment moved—

Page 7, leave out lines 18 to 21 and insert—

("For such part of the advertising receipts of the programme contractor for the 12-month accounting period as amounts to a sum equal to the aggregate of all sums certified by the Authority as having been expended by the programme contractor in that period on revenue account in the provision of programmes (other than advertisements) Nil
For the next one-and-a-half million pounds of those advertising receipts Nil").
—(Lord Archibald.)

LORD FRANCIS-WILLIAMS

I rise to support my noble friend Lord Archibald, although we now know that we speak without the possibility of anything actually concrete flowing from what we say. Having taken part in a good many television discussions, the position is not a strange one to me. One does not expect anything very concrete to come from such discussion; but one hopes to sow a seed. My remarks in the circumstances are made in the hope that with the noble Lord, Lord Archibald, I may sow a seed which will perhaps flower at some future date. I am particularly concerned in this matter—as the noble Lord, Lord Archibald, said that he is—with trying to ensure that the level of programmes on television shall stand high and shall not deteriorate in any way because of the pressures that may be brought to bear to save money after the levy by not spending as much as formerly. I want to urge that more shall, if possible, be spent on programmes.

It is, of course, quite clearly the case that the value and attractiveness of a television programme cannot always be related to its cost. There are a number of extremely interesting and attractive television programmes which are very cheap to make. Indeed, I saw one the other night after we had finished and gone home from the first day's discussion of this Bill in Committee. When I switched on my television set—as I hope other noble Lords did—I had the great pleasure of seeing my noble friend Lord Morrison of Lambeth acting as a television reporter in a programme discussing the changes that have taken place in London in his lifetime. I thought he did a very good job indeed. In fact, if my noble friend wishes to start a new career as a television reporter, I should like to make him an offer right away. I do not imagine that that was a very expensive programme to make; although I hope my noble friend received an adequate fee for it. But, in a great many instances, if there are going to be good programmes, a very substantial amount of money has to be spent.

I should like to deal with the type of programme about which I know most, programmes of public affairs and information, in which it is frequently necessary to send camera teams and commentators across the world and to spend a great deal of money in order to get an adequate interpretation of what is going on in the world. Other programmes, made either at home or abroad, in which a great deal of new shooting has to be done are bound to be expensive. I think I ought to say here that, although it is sometimes said that Amendments such as this one are in some way an attempt to bolster up the unions who are somewhat restrictive, I believe it is worth pointing out that only in the last few weeks one of the strongest and most powerful unions in the television industry, the Association of Cinematograph, Television and Allied Technicians quite voluntarily substantially reduced the crewing and therefore the cost required for a number of these films in the past. Therefore, I do not think that it can be said that the unions, though they hope that something of this kind could be done, are seeking to look after only their own interests, any more than I believe that Equity, the actors' union, is thinking in those terms when it supports this new proposal.

One of the greatest assets of this country is the high quality of the acting ability which we have and which has shown itself on stages all over the world as well as on television and cinema screen. But that acting quality cannot be nurtured unless there are programmes in which it can have a chance to try itself. Even more important than all these is the necessity that the British point of view, the British interpretation of events, should get some adequate showing on overseas screens, particularly on the screens which are more and more coming into existence in many underdeveloped countries. These countries cannot afford to pay any substantial amount for the television films they get.

The producing company with which I am associated, about which your Lordships will know because I have declared this interest before, are particularly anxious to get films dealing with public affairs, international affairs and current issues, on to the screens of underdeveloped countries because we believe that this is part of the important educational business which those interested in television ought to do. We are ready, as I know many television contractors are ready, to make films available to these small television companies in the underdeveloped countries at no more than a mere handling charge, the mere cost of making a copy of a film and getting it there. It is important that these screens should not be left open to nothing but American Westerns or, what is increasingly becoming the case, offerings from the Communist part of the world, which would give a very biased interpretation of how the world goes and of the motives of the West. Films should be offered to television centres of this kind, and I think it is in the national interest that they should be offered, but this cannot be done unless there is a domestic market which enables such films to be made.

The purpose of this Amendment is to ensure that television companies would have adequate resources to spend money on making good television films. I recognise that we have to accept the privileges of another place, but I hope that the point of view which my noble friend Lord Archibald and I have put on this suggestion will have a little weight and perhaps at some time produce some results.

THE EARL OF DUNDEE

I seem to have mislaid my OFFICIAL REPORT, from which I had intended to quote, but I think that on Second Reading both noble Lords advocated that an allowance for costs should be made before the levy was imposed: if I remember rightly, they suggested a procedure similar to that under Form C in the case of films. The Amendment which they have on the Order Paper would allow all expenses to be deducted, including the cost of buying other films. As I work it out, the effect of this would be to reduce the total levy from £17 million to something like £3 million, and the profits of the contractors before tax would go up from £15 million to £29 million. If we were to restore the position by having the levy on the remaining profit, it would have to be at the rate of 150 per cent.

LORD FRANCIS-WILLIAMS

I do not want to interrupt habitually in what is inevitably a rather theoretical debate, but I should have thought, since the Amendment requires that the costs should be certified by the Authority, that the Authority, with all the experience they have, will be capable of seeing that nothing in the way of swollen programmes would be allowed and would keep them down to the actual bare costs. If they were kept down to the bare costs, they would not have anything like such an effect as the noble Earl suggests.

THE EARL OF DUNDEE

I have not suggested that the total costs which the Amendment proposes shall be exempt are exorbitant. They include not only the contractors' own costs, but also the cost of other programmes purchased from other sources. I think, from the noble Lord's speech, that what he intended the Amendment to do would be to deduct only the costs incurred by the contractors in producing the features themselves. In that case, it would not be quite such a heavy deduction: he would reduce the levy from £17 million to about £10.3 million, and the profits of contractors would go up from £15 million to £22 million.

I do not think the noble Lord will wish me to take up time to say more than that I appreciate his point and fully understand it. Perhaps there is one comment that I ought to make. We all want the programme contractors to have enough money to spend on the production of the best films, features and television, but it does not necessarily follow that the more money that is spent on a production, the better it is. The effect of encouraging people to spend more may make them more extravagant rather than more efficient. I appreciate what the noble Lord has in mind, but I think that the Government are right in believing that the scale of the levy which we have written into the Bill will ensure that rentals paid by contractors after 1964—we hope they will be adequate and fair—should leave them with sufficient resources to provide first-class programmes and allow for reasonable profits. If that is not so, Clause 7 contains provision for altering the scale, should that prove to be desirable or necessary.

LORD SHACKLETON

I think that I ought to say that I am not in full agreement with my noble friends. We all appreciate the purpose behind their Amendment, and I have had anxiety expressed to me by some individual producers and others that the effect of this levy will be to make less money available for programmes. After reading most of the 270 columns of the Report of the Committee stage in another place on Clause 7, I feel that the Government have produced the best plan that they can at the moment. I have talked to others in the industry who are not too concerned about this.

Clearly, if the effect of this levy were such as my noble friends feared, it would defeat the purposes of the Government in regard to independent television, because we are seeking to get good independent television and to take away such surplus as seems right to get the profits obtained in the public domain, as we regard it, down to a reasonable level. I agree that, from a tax purist point of view, there are objectionable aspects of this type of tax, but it seems to me that we are likely to see new types of tax, anyway, especially if the National Economic Development Council continue their researches and recommendations in the way they are doing. After the Government have given this matter exhaustive consideration, and a number of my honourable and noble friends have also considered it, I feel that we should do better not to change the basis that exists, and I would recommend my noble friends not to press the Amendment.

LORD ARCHIBALD

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.11 p.m.

LORD LLOYD moved, in the Table in subsection (4), to leave out "25" and insert "20" [per cent.]. The noble Lord said: Like noble Lords opposite, I feel equally somewhat frustrated, and like them, also, I feel it is right that these matters should be discussed in this Committee. I think there are great injustices in this clause and, like the noble Lord, Lord Francis-Williams, I hope that sooner or later the penny may drop with the Government and something may happen. Therefore, I make no apology for saying a word or two on the clause; and there is a series of Amendments, stillborn, but nevertheless on the Marshalled List, in the names of myself and my noble friend Lord Gladwyn. Since these Amendments are to some extent interconnected, perhaps it will save time if I say a word on the clause as a whole.

As I said on Second Reading, I do not think that discriminatory taxation of individual industries is a good thing; I think it is objectionable, in principle. While we all agree that these concessions have been much too valuable and that the companies must pay more in the future, it is a pity that the Government should have resorted to this particular method of getting the money. It could probably have been done in a better and more healthy way by competition. Failing that, I think a straight increase in the rental, based on past profits, would have been better; or, if you insist on having discriminatory taxation, I am convinced that the fair way to do it would be to have a tax on profits. I say that because of the widely differing circumstances of the companies in this industry.

I gather that the Postmaster General in another place rejected the tax on profits on the ground that it was open to evasion. I must confess that I could not follow his reasoning in this regard. I cannot see why this tax, if it were based on profits, would be any more open to evasion than the ordinary company tax on profits paid out already by the contractors and by every other company in the country—unless he thinks that contractors on television companies are more prone to tax evasion than other gentlemen in a similar position, in which case it would seem unfortunate that so many are Members of your Lordships' House. Looking around me, I cannot believe that he was justified in that view: your Lordships look extremely honest this afternoon. On that particular ground, I find it difficult to follow his mental processes.

But if I could not follow the mental processes of the Postmaster General, I can follow the demerits of this particular levy, which I think is a bad tax for three reasons. First, it works very unfairly between the companies. That was pointed out—not the financial implications of it, but the great difference between the working conditions and areas of the companies—quite admirably by the noble Lord, Lord Shackleton, the other day; and I was sorry the Government did not accept his Amendment, because I am convinced that something must be done sooner or later about these areas and about the conditions in which the companies operate. Therefore I think it works unfairly in that way. Secondly, a levy of this kind, based as it is on turnover, in a state of affairs when revenue, on the whole, looks fairly static and where overheads are undoubtedly going up, is very dangerous and might easily have the effect of putting this industry into a declining spiral of revenue to profits, which might be a bad thing. Finally, I think the levy is far too onerous.

I put down various Amendments, and other noble Lords have, too, to try to correct the anomalies created by this tax which arise owing to the different working conditions of the companies. Those I hope to advert to a little later. But the first two Amendments on the Marshalled List in my name and that of my noble friend Lord Gladwyn deal purely with the burden of the levy. In order to get an idea of this, one has to take a case, and I happened to take the case of Associated Television. I went to that company and asked them to supply me with certain facts, which they were good enough to do. I thought they were the best example for this reason: that they happen to be a company of a size comparable with the two biggest companies—namely, Granada and Associated Rediffusion—and they happen to be the only one of those three companies who operate in two different areas and, therefore, have a double lot of overheads. I think they are a particularly significant case, and I thought it would be interesting to see the effect that the levy would have had on this company if it had been applied in the year 1962–63.

These figures, which I may say have been supported by a firm of accountants who are a household word in the City and completely reputable, are as follows. If the levy at the rates laid down in the Bill had been applied to the profits of Associated Television in the year 1962–63 those profits would have been reduced by 90 per cent., and the return on the capital employed in the company would have been 4 per cent. Here I should like to take up a point with the noble Lord, Lord Shepherd. It is the capital employed in the company which is the yardstick in all financial matters, not the issued capital, which really, with respect to the noble Lord, I do not think is very relevant. I think that 4 per cent. for any company, and above all a growth company, is a figure so ludicrously low that it is a very serious matter.

Again, in order to try to get a comparison over to your Lordships, I went into the figures vis-à-vis return on the capital employed in the business after depreciation, but before tax. I took the returns for other well-known companies in various industries at random. They are, in the motor industry, Jaguar Cars, 29 per cent.—against 4 per cent. for A.T.V.; in the rubber industry, Dunlop Rubber, 10.9 per cent.; in the oil industry, British Petroleum, 28.2 per cent.; in the electrical industry, Plessey, 23 per cent.; in stores, Marks and Spencer, 28.8 per cent. I have plenty more, but I think that gives your Lordships a fair idea. Where I work in the City I think it is generally regarded that for a normal, healthy company you would expect the earnings on the capital employed, before tax, to be around 20 per cent.

All I am saying to your Lordships is that I think the Government have really misjudged this position. They started off by letting these companies make far too much money. I believe they have now swung to the other extreme and are putting these companies into a serious financial position, with exactly the results about which the noble Lord, Lord Archibald, was speaking. I am quite sure that he is right. The first thing to go will be film making, which is very expensive in capital, and which is a very good export. I know of one company which, since it started operations, has brought in no less than 12 million dollars in foreign exchange, and £1½ million from the Eastern Hemisphere.

Is this really necessary? The Postmaster General seems to have a fixation about this figure of £18 million. I must confess I do not understand the £18 million. This seems to be a figure which is quite arbitrary, which has been picked out as what has to be extracted from the industry by hook or by crook. It does not seem to have any relation to the future development of the industry, or to what the industry can stand. In another place, the Postmaster General has throughout stuck to this figure. If he gave away in one direction, he took it back in another, so that he got his £18 million. I would be grateful if my noble friend who is to reply could give us some explanation as to the crucial importance of this figure of £18 million. Why not £14 million, £24 million, £30 million or £5 million? I do not know. Perhaps the noble Earl could tell us.

This is very serious for the industry. I am not suggesting that there should not be additional taxes, but I do not think it is right at this stage to tax these companies at this rate. This is the effect on one company as it will be on other companies, though possibly not quite so bad, because it so happens that the overheads of Associated Television are a great deal more expensive than the others. They have to work seven days a week instead of five to get the same revenue, and they have to pay ten days' wages because you cannot employ people for the week-end without paying double wages. I think that is all I need to say. I am sorry if I have delayed your Lordships. These two Amendments go together, and I imagine that the noble Earl will deal with them together. I beg to move.

Amendment moved— Page 7, line 23, leave out ("25") and insert ("20").—(Lord Lloyd.)

VISCOUNT BRIDGEMAN

I had not intended to say anything on this Amendment, and I would not have done so but for one remark which fell from my noble friend Lord Lloyd; that is, the possibility that by the levy the Independent Television Company's power to earn foreign exchange through exports might be that much reduced. I am bound to say that I had not realised that angle of the problem at all. I rise only to say that (this point will probably come out to-morrow in the debate on the Finance Bill, or I hope it will) this is the last moment when we should do anything to jeopardise the earning of foreign exchange by any industry in this country which can possibly earn it.

THE EARL OF DUNDEE

I am delighted that my noble friend Lord Lloyd should seek to use me as a slot machine, although I am afraid I cannot hold out much hope that this particular penny is likely to drop in the near future. The present scale proposed in the Bill is a result of long and careful thought which the Government believe would ensure payment of rentals by companies after 1964 which will be adequate and fair. Some of your Lordships may think we have over-estimated the amount which should be charged, and others of your Lordships have suggested that the profits are much too high so that advertisement could be reduced without affecting them.

I do not think I could give any scientific justification, for which my noble friend asked, for the figure of £18 million, and I would remind him and all your Lordships, that there is provision in this clause for adjustments to be made. We quite appreciate that increasing costs in future might alter the basis on which these calculations have been made. I think I should point out to your Lordships that if these proposals which my noble friend has made were to be accepted on the basis of estimates of advertising expenditure which have been furnished to us by the advertising profession, the effect would be to reduce the yield of the levy for the year 1964–65 by about £4½ million, with a corresponding increase in the total profits of the programme companies, before tax, to some £19½ million. Moreover, the great bulk of this benefit would accrue to the four major companies.

As I said in reply to previous Amendments, and on Second Reading, we cannot accept that this state of affairs would provide adequate rentals for the valuable public concessions which the contractors will enjoy. For that reason I cannot at present say anything about the possibility of accepting the proposals which my noble friend has made. But I assure him that the Government will keep a close eye on this point, particularly in view of the possibility of increasing costs, and that my right honourable friend is ready, if he thinks it necessary and desirable, to use the powers which are given him under subsection (6).

May I conclude by reminding my noble friend that the television advertising duty is being remitted, which makes the return of the capital employed distinctly larger than it would otherwise have been? This duty is, of course, small compared with the new levy, but it is in some ways a less justifiable impost. I thank my noble friend for his interesting figures which, in spite of the academic discussion we are having, I assure him will be seriously considered by my right honourable friend.

LORD LLOYD

I am grateful to the noble Earl for his reply. I confess that I wish he could have told me whether he thought a 4 per cent. return on capital before tax was the sort of thing he would contemplate in any company with which he was associated. I wish he could have told me the significance of the £18 million, about which I am still completely at sea. He mentioned the question of the television advertising duty. I have no doubt he will be aware that this is a matter on which varying opinions are held as to how much of that will come back to the companies. In any case, if it did come back, it would be taxed at the top rate, so that the amount of extra money the companies would get out of it would not be very great.

Before withdrawing the Amendment I should like to draw the noble Earl's attention to a document which has just been put in my hand. It is the OFFICIAL REPORT of Standing Committee B in another place. In column 703 at the bottom of the page the Postmaster General said: I make perfectly clear at the outset that the proposed levy is not a tax. I do not know whether that would alter our earlier discussion in any way, but I will hand the noble Earl a copy of the Report. I do not know what he will feel about that. Either the noble Earl is right and the Postmaster General is wrong, or vice versa. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.30 p.m.

LORD GLADWYN moved, after subsection (4) to insert: () If the advertising receipts for the 12-month accounting period do not exceed two-and-a-half million pounds no payments shall be due from the programme contractor for the accounting period: Provided that the amount payable under the levy shall not exceed the amount by which advertising revenue exceeds two and a half million pounds.

The noble Lord said: In moving the Amendment which stands in my name alone, I have to declare no interest except that I am an inhabitant of East Anglia and a fervent admirer of Anglia Television. In respect of the other Amenments which stand in my name and in the name of the noble Lord, Lord Lloyd, I have to declare a certain indirect interest since I am a director of the merchant banking house of S. G. Warburg & Company, who are one of the financial advisers to A.T.V. Since that Amendment has been withdrawn, that fact is perhaps not particularly relevant, but I thought I ought to declare it. May I say at this point that while I am entirely conscious of some of the failures of Independent Television and I am, of course, wholeheartedly in favour of curbing the admittedly excessive profits which have been made, there were many things in the Pilkington Report with which I profoundly, and perhaps temperamentally, disagreed. In principle, I am still firmly on the side of Independent Television, and I think, by and large, it has done a good job in improving the general liveliness of our programmes. I am sure of that.

The Amendment of which I now urge the adoption is designed to cover what undoubtedly this Bill has, in fact, created as a special case, namely, that of Anglia Television, and, of course, the case of other companies who may come into the same category if there is any redistribution of areas made by the Independent Television Authority next year. As your Lordships are aware, the Independent Television companies are divided into three groups. There are, so to speak, three divisions: in the first division are the four major companies; in the second division are the large regional companies; and in the third division are the small regional companies. The proposed levy now exempts the third division altogether. It hits the major companies pretty hard; but if certain, as I think, manifest injustices which were referred to by the noble Lord, Lord Lloyd, were corrected I think that they would be, by and large, in a position to take it. But it discriminates atrociously between the large regional companies in the so-called "second division". There is no doubt about that.

Anglia's installation and expenditure—that is to say, its general overheads—are similar to those of such companies as Tyne Tees or Scottish Television, but, unfortunately, and it is not its fault but it is a fact, owing to its scattered population and the absence of what are called large conurbations, its revenue is barely half that of those companies, both of which, as we all know and as we have heard from the noble Lord, Lord Morrison of Lambeth, are still likely, if this Bill comes into effect and the levy is applied, to make profits in the neighbourhood of £800,000 to £900,000.

Nevertheless, Anglia has a record which is second to none (this is not disputed) in the quality of production. It has produced a large number of admirable and socially-desirable plays which have been taken by the network, and its nature programmes, as noble Lords probably know, have had enormous success and have been sold all over the world, notably in Europe, the Commonwealth and America. It has contributed largely and handsomely to the University of East Anglia in Norwich. Its directors are prominent and respected local figures. It is extremely popular regionally and it would be a real tragedy to our community in East Anglia if it had to cut down on the excellence of its productions.

These facts have been recognised by the Postmaster General who, on June 24 last, in another place said [OFFICIAL REPORT, Commons, Vol. 679 (No. 132), col. 992]: To that extent, therefore, it is true that Anglia falls between two stools. It is also true that Anglia's performance in the production of things like serious drama has been extremely good and has been better than most of the regional companies. The company deserves good marks for this. It is indeed an extremely good television contractor. In column 956 he said: Naturally, the increase in the amount of the free slice will work to the advantage of all the companies whatever their circumstances and whatever their size, but, in proportion, it is bound to confer the greatest benefit on the smaller companies not already exempted by the original free slice, and"— the P.M.G. added— the middle group of companies will be assisted to a greater extent than the larger companies", which is true with the sole exception of Anglia.

Why is Anglia so much more unfavourably affected by the present levy than, for instance, Tyne Tees Television? Here I must, I fear, give a few figures. I hope I will not bore your Lordships and I shall try to make them as clear as possible for your Lordships' benefit. The net advertising receipts for 1964–65 are, in Anglia's careful estimation, likely to be in the neighbourhood of £2,140,900. That is, if we assume that the entire television advertising duty—which, as your Lordships are aware, is now applicable but which will be abolished when the present Bill becomes law—is "recovered". That is to say, the advertisers will pay for more advertising to cover what they now pay in the way of tax; which is of course, on the face of it, most highly unlikely. If, however, we assume that only half this duty will be "recovered", as the phrase goes—and it is a fact that the Postmaster General has worked on a 50 per cent. recovery basis for the rest of the industry—then receipts of Anglia in 1964–65 are likely to be in the neighbourhood of only £2,041,450.

The expenditure of Anglia during this period is, of course, conjectural, but its own estimate of £1,859,000 seems on the face of it to be a reasonable one. It has been proved by all kinds of experts, accountants and everybody, and up to now it really was not, I think, seriously questioned. But it now seems that the Postmaster General is insisting that expenditure on only £1,780,000 will be incurred during 1964–65, apparently on the quite uncertain assumption that the I.T.A. would make a substantial reduction in its present rental. He seems to assume that, but he does not know whether it will or not. Therefore, if we assume that only 50 per cent. of the advertising duty will be recovered we are left with a profit on Anglia's showing of only £182,450, of which, unless something is done, the levy will account for £135,362, leaving only £47,088 as profit, which, together with income from other sources of about £54,000, will make a grand total of just over £101,088, of which about half, as your Lordships are well aware, goes in taxes.

In fact, we reach the lamentable result that, in all probability, Anglia during the first year of operation under the new Act will be earning before tax only 5 per cent. of its total revenue, which compares with the Postmaster General's figure given in another place of 21.5 per cent. for the rest of the industry. He said that he considered that was a reasonable rate to work on for the rest of the industry. Moreover, it is not at all unlikely that even this may prove optimistic. Even if one accepts 100 per cent. recovery of the television duty it only requires the revenue to fall marginally by 5 per cent. and expenditure to rise by 5 per cent. for Anglia to be actually in the red. Let us see what the Postmaster General said on this point in another place on April 25. He said: It is not part of our intention to take an unreasonable amount away from the companies. Obviously, they must be left with adequate funds to enable them to produce high-class programmes and to earn reasonable profits. We have included in the new clause a provision which will enable Parliament to ensure that they make satisfactory margins. A little later on, on May 7, he said: Secondly, I am quite certain that both sides also agree that the rentals should not be pitched so high that any of the companies are left with insufficient revenue to enable them to provide good programmes of the quality that the public is entitled Ito expect and, at the same time, to leave them with a reasonable margin of profit. It is also common-ground, I think, that Independent Television should have a secure and permanent place in our society and that canot be ensured if companies are starved of funds". That is what he said. I suggest, with the greatest respect, that this admirable declaration of principle would in no way apply to what is perhaps the most deserving of all Independent Television companies if the Bill goes through in an unamended state.

I know that no absolutely conclusive argument can be based on figures which are, after all, only estimates. I believe, for instance, that the Postmaster General not only maintains that the advertising tax will be fully recovered, which as I said really seems to be out of the question, but also seems to want to add a growth factor, as he calls it, which may apply in industrial districts but certainly not in East Anglia; and if he applies that the revenue will be, according to him, £60,000 more than Anglia agrees. The important point is that, even if advertising receipts unexpectedly expand, even if expenditure does not increase, as the Postmaster General thinks it may not, to the entire extent foreseen, and the whole of the advertising tax is recovered, all of which are unlikely, even then Anglia would make a profit of only £302,000 in 1964–65 (this is the Postmaster General's own optimistic estimate), which is only 14 per cent. of turnover, as opposed to 21.5 per cent., which the Postmaster General maintains is desirable for the rest of the industry.

As against this, the Anglia estimates, which are neither too cautious, I think, nor too optimistic, but simply objective—they were considered carefully by accountants, financial advisers and heads of departments and the Board—clearly indicate a lower limit of profits representing only 5 per cent. before tax on revenue, and a maximum, if things go extremely well, of 8.2 per cent. Anybody can, of course, be wrong in making forecasts and assumptions like that, but if the Postmaster General proves to be wrong East Anglia will have to bear the responsibility.

Therefore, the Amendment has two purposes. The first is to provide a sort of safety net for progressive companies who exceed the free slice by a small margin. That is the case with Anglia. The second, as your Lordships will see, is to smooth the passage of an expanding company from a revenue of £1.5 million to £3 million a year without it being severely penalised at the lower level. This is the effect of the second paragraph of my Amendment, which, if your Lordships will put a wet towel round your heads for a second, you will see avoids the horrible situation which would arise if only the first paragraph were approved. If Anglia's revenue, in fact, came to £2.5 million and £1 it would be stung for 25 per cent. levy on just over £1 million, which is not the intended effect of the Amendment! The effect of the second paragraph is that there will be a sliding scale which will involve payment of no duty up to £2½ million and thereafter at a rate starting with £100,000 on £2,600,000 and ending with £350,000 on £2.9 million, after which the levy would apply as suggested in the Bill.

The Postmaster General has implied that Anglia's position, which he agrees is unique at the present time, may be alleviated by various measures which could perhaps be taken at a later date. The Independent Television Authority, for instance, might reduce the rental or it could in theory increase the area, a solution made by various members of the Opposition, or there could be some other special treatment, either by the Postmaster General or the Authority. Unfortunately, when it becomes pretty clear that Anglia's position is such that some reduction of rental is absolutely essential the damage will really have been done. Programme planning in terms of staffs and organisation and equipment is a long-term thing, and you cannot deal with that in retrospect; you have to take a decision now whether to employ next year all those characters, have special programmes and so on, or whether to sack them on a balance of probabilities. You cannot just hope something will turn up and keep them on.

Nor can reduction of rental make any very great difference really, since it obviously on The best hypothesis could not be more than £50,000; they pay £200,000 now. The Authority could not really reduce it more than that unless it was going to get in terrible trouble with other companies. No responsible company can enter into long-term arrangements with the staff unless it has a reasonable prospect of employing them and satisfying the shareholders. As for increased area, this would still need long negotiations in which many other interests would be involved. Anglia's area is now quite large, almost as large as any other; and it seems unlikely to result in solution of any real difficulty, even if it could be arranged in time.

There is a further solution which has been suggested, and that is application of Clause 7(6), which reads: The Postmaster General may with the approval of the Treasury, and after consultation with the Authority, by order amend subsection (4)"— that is to say, the rate of levy— … by increasing or reducing any rate, or the number of different rates, or the amount to which any rate applies". Therefore, under this clause the Postmaster General obviously has a right, after consultation with the Authority and with the approval of the Treasury, to say "All right, Anglia, we agree you are in a special position and we think there should be a free slice of £ ½ million for you". The Postmaster General could do that if he wanted to do it.

If we could get some slight assurance from the Government that this was the sort of thing that might happen, that the Government would, in view of the facts I have given, which I think are indisputable, really seriously consider increasing the free slice to £2½ million, shall we say next spring when Anglia's revenues can be ascertained for the last financial year; if there is some assurance that would be done in the name of obvious justice, I would not suggest that yin the present clearly unfavourable climate my Amendment would be pressed. But I think that unless something like that is done, then the treatment of Anglia is extremely unjust.

I would therefore earnestly beg the Government to reconsider their attitude as regards Anglia and to accent the Amendment, or to give the kind of assurance which is needed. I would resume my arguments for this course as follows. There is no basic change under this Amendment in the operation of Clause 7. There would be virtually no loss at all to the Treasury. Out of the £18 million required by the Government from the levy only about 150,000 would be lost—absolutely "chicken feed""—if that. Moreover excessive profits could never be made by Anglia because, if a company's turnover rose to £2½ million it would, as I have tried to explain to your Lordships, under this Amendment, become eligible for the levy on a sliding scale basis.

But the chief point of my argument—and this is the burden of my song—is that the acceptance of this Amendment, or the provision of some kind of assurance by the Government, will ensure that Anglia, and indeed I think any other small company or smallish company in the future, could continue to pursue a quality programme policy. In East Anglia we are deeply apprehensive lest our admirable local effort should have to be cut down on these quality productions, or lest they should even perhaps cease their admirable contributions to the network and stop their native programmes, which are so popular and which do cost quite a lot of money, as we all know; lest we should, in other words, suffer a marked deterioration of the programmes to which many people in East Anglia look forward every evening. I confess I cannot see why a sort of slavish adherence to what appears to be an arbitrary rule—this blunt instrument which is now being applied, regardless of anything else, in the form of a levy—should be thought to be essential, when for a really trifling sum the excellent service of Anglia can be assured, to the benefit of the community as a whole, to the detriment of no other company, and with no suggestion that anything resembling excess profits would ever be made.

The only conceivable reason I have been able to discover for resisting this Amendment is that if it were passed some kind of exception would be made. I do not quite know what sort of exception could possibly be made. If the principle of a sliding levy in the initial stages were conceded, this would be only a right and just means of tempering the Government's blunt instrument. It would not necessarily be for Anglia only. Any company which might emerge from the redistribution of contracts made by the I.T.A. might come into this category, too. In any case, because a law establishes what is patently an injustice it is really a dreadful thing to assert that this injustice cannot be rectified because if it were rectified a precedent would be created. Therefore, I earnestly beg the Government to give us the assurance for which I ask, or else I would ask your Lordships to vote on the Amendment which I now move.

Amendment moved— Page 7, line 27, at end insert the said subsection and proviso.—(Lord Gladwyn.)

5.52 p.m.

LORD WALERAN

If I may just add a little to what my noble friend Lord Gladwyn has said, I should like to support him in every way on this Amendment. I have no interest to declare, but as the noble Lord, Lord Francis-Williams, has said, Anglia has done a wonderful job with its programmes; and for that reason it should be supported. Everyone in this House wants better programmes. I would ask the noble Earl, Lord Dundee, who is to reply for Her Majesty's Government, whether he would answer the question put to him by the noble Lord, Lord Lloyd: that if the Postmaster General has categorically said that it is not a tax, then surely we are entirely in order in presenting the Amendment.

If by any chance it should be a tax—and perhaps the noble Lord, Lord Gladwyn, could help us in this—surely it is a matter of tacking a financial provision to a Bill sent to your Lordships' House; and that is a matter of privilege for us. Perhaps this point should be considered, because I seem to remember that on at least two occasions we have raised this matter of tacking a financial provision on to a Bill sent from another place, which is a matter of privilege for us. I hope your Lordships will take the view that, as a matter of justice, we should support Anglia in this matter. I think they are being unfairly treated, and as the noble Earl the Leader of the Opposition said in his remarks during the Peerage Bill this afternoon, how right it is for your Lordships' House to take a broad-minded view when it is a matter of justice!

LORD EVERSHED

May I add my warm support to the Amendment proposed by my noble friend Lord Gladwyn? My reason for supporting him is because, like him, I am a resident in East Anglia, and I hope your Lordships will agree with me that this part of the country has a superiority in certain respects, at least over other parts of the country even North of the Tweed. For one thing the figures for criminal prosecutions are very much lower in East Anglia than in other parts of the country—but perhaps that is by the way.

The real point is that East Anglia is, and remains, substantially country. That has two effects. First, because there are no dense centres of population the Anglia Television Company has not the same resources in income as other companies which are comparable in other respects. Second, as has been said, it provides exceptional programmes. It won the only major award ever won by Britain at an international television festival for a programme on Anglia wild life. I submit to your Lordships that it would be a tragic thing in these days if an organisation providing that kind of viewing were to be put at risk. As the noble Lord has said, as things stand it will be put at risk: there cannot be any doubt of that. Therefore, I am saying nothing controversial because, as the Postmaster General has said in another place, Anglia Television falls between two stools. He also was good enough to fix an appropriate stamp to the company by saying that its performances deserved the greatest credit. Therefore, I submit that it would not be right, simply in order to have a tidy rule, to commit a real injustice which would be harmful to the nation.

LORD LLOYD

I should like briefly to support my noble friend. Quite enough has been said, and I do not wish to detain your Lordships, except to point out once again that had we had a tax on profit none of this discussion would have been necessary.

LORD STRABOLGI

I should like to support what the noble Lord, Lord Gladwyn, said in so ably moving the Amendment. I feel that a word of support should come from this side of the House, because I think he has put forward a very strong case indeed. Like other noble Lords who have spoken, I have no financial interest in this matter, although I have a great affection for East Anglia. I was at school there and I have ever since taken a great interest in that part of England. It would be tragic, in my view, if this television company were either so crippled that it had to go out of business, or had to go out of business because of the particular levy.

As the noble Lord, Lord Lloyd, has said, this levy is a most extraordinary form of taxation. It should, of course, be a tax on profit, in the same way as every other form of business is taxed, and not a tax on income receipts. But it is in the Bill, and we have to make the best of it. The other point on which I would comment is the rigid attitude adopted by the Government. If I may say so with respect, surely there are exceptions to every rule. One must not be too rigid. I think it is one of our drawbacks in financial thinking that we are often too rigid; in order to be fair all round, we often hurt and ruin businesses where quite justifiable exceptions could be made.

As noble Lords have said, Anglia Television is a marginal case: it falls between the two stools. I understand that the levy figures are based on the kind of receipts coming in to the large television companies, and take no account of the rather knife-edged balance sheet on which Anglia could be working. Indeed, I understand that if receipts fell by only 5 per cent.—which would be quite possible with a trade recession, if there was not so much money spent on advertising (I worked in advertising and I know something about these matters)—and their expenditure also rose (which again is perfectly possible, as all of us in this House know, with rising inflation every month), it would be quite possible for Anglia to be in the red. We should then arrive at the extraordinary situation that their profits before the levy might be £136,000, whereas the levy itself would amount to £139,000. That, I submit, is an absolutely intolerable situation. I realise, as the noble Lord, Lord Gladwyn, has pointed out, that there are certain provisions in the Bill; but if the Committee do not receive adequate assurances from the noble Earl, Lord Dundee. I greatly hope that the noble Lord, Lord Gladwyn, will press this matter to a Division.

LORD MANCROFT

I think that the noble Lord, Lord Gladwyn, has made a strong case. I have no interest to declare in this matter, like the noble and learned Lord, Lord Evershed, and the noble Lord, Lord Strabolgi, except that I happen to be an East Anglian; and since on Anglia Television recently it was announced that the Church of St. Peter Mancroft was, in their opinion, the handsomest Parish Church in England, I thought perhaps I might take this opportunity to return the compliment. I have listened carefully to the noble Lord, Lord Gladwyn, and to the case that he has deployed, and I know that that case has been widely supported throughout the whole of East Anglia. There may be some other points that have not been mentioned in the debate and which the Government will now deploy. If that is so I hope they will be strong points, because at the moment, so far as I can see, the case in favour of Lord Gladwyn is very strong indeed.

LORD SHACKLETON

May I intervene to support the Government? I think we ought to get one thing out of the way—namely, the question as to whether this is outside the Commons' privilege. Whatever the Postmaster General said in Committee in another place, it is quite clear, from the context of this matter, that it is a form of revenue raising for the Exchequer. If the noble Lord who quoted so aptly, and was kind enough to give the reference to that unfortunate statement by the Postmaster General, had quoted further, he would have seen that this particular levy was agreed to only after he had consulted the Chancellor of the Exchequer and after the Chancellor had satisfied himself that it was going to be a reliable alternative source of income to take the place of the original television advertising duty. I do not think we can possibly argue on this particular matter (I know that the noble Lord, Lord Waleran made this point) that this is not a form of revenue and not within the privilege of another place. However, it is fairly obvious that your Lordships' blood is up on this occasion, and I should like to make a plea for taking a rather more moderate view.

There is a wave of emotion in support of Anglia Television—I admit that I have shared in it myself. I have been impressed—I say this without any malice—by the case which they have made to many people and to the devoted supporters, particularly those with local loyalty. It is quite clear that Anglia Television have, in fact, won the good will of many intelligent and willing people. But at what point are the Government to guarantee a company against loss? It seems to me that at some point the line must be drawn, and that at some point a company must contrive to pay its way. There are certain powers, to which the noble Lord, Lord Gladwyn, referred, under which the Authority can, in some degree, temper the wind. I do not think he ought to dismiss as of no consequence the power of the Authority in Section 7(1)(a) to fix the rentals. It was made quite clear in the debate in another place that they could vary those rentals to meet particular circumstances. It may even be that, in order to tide a company over a particular period, the Authority would have power to remit those rentals; but I am quite certain that if we play around further with the agreed scale we might as well abandon this entirely, and I hope that the Government will stand firm on it.

This is an extremely technical matter. It is extremely difficult for this Committee to judge the merits of the various figures that have been put forward. There have been figures which I understand have been exhaustively considered by the Postmaster General and his advisers, and they are standing on these figures. If they can be convinced that they are wrong, then clearly they ought to think again; but I understand that they have not yet so far been convinced. In those circumstances, I hope that the noble Lord will not press this Amendment to a Division. If he does, reluctantly and without any criticism of the performance of Anglia, I should certainly have to ask my noble friends to vote against the Amendment.

6.7 p.m.

THE EARL OF DUNDEE

The East Anglians in your Lordships' House seem to be almost as numerous as the Scotsmen; and hardly less persistent. I think it is always a good thing to stick together, and I admire loyalty and coherence in these matters. This Amendment was moved and discussed in another place on Report, but it was not pressed. Now my noble friend Lord Gladwyn, with varied support from many quarters, has put the case again—and, I think, much better. I believe that we all admire the record of this programme company, Anglia, and I am glad to hear more evidence of how well it has done. I am glad to hear from Lord Gladwyn that it is selling so many programmes abroad, from which it will earn larger profits without having to pay any levy on advertisement revenue.

I think that the Postmaster General, who has been quoted, appreciates the special position of this company and the way in which it may fall between two stools. But, as the noble Lord, Lord Shackleton, has said, and as I think the noble Lord also said in our Second Reading debate, we must bear in mind the possibility that hard cases may make bad law. My noble friend Lord Gladwyn has based his argument largely on figures which he gave in great detail, and he also, I am thankful to say, gave the figures which the Post Office has compiled, thereby relieving me of the necessity of doing so. In any case, I know that the noble Lord is familiar with the Postmaster General's figures, and, as he has told us, he regards them as highly optimistic; and he thinks that even if they are right they would still be unfair. So I will not pursue the question of figures any further, but will come straight to the point which the noble Lord, Lord Gladwyn, made; that, whether we think his case is likely to be justified by the event or not, under subsection (6) of this clause The Postmaster General may with the approval of the Treasury, and after consultation with the Authority, by order amend subsection (4) of this section in all or any of the following respects, that is, by increasing or reducing any rate, or the number of different rates, or the amount to which any rate applies; and the references in this subsection to a rate include the case where the rate is nil. I am not going to ask your Lordships to make either too much of that, or to prejudge this question in any final way. But since Lord Gladwyn asked me if I could give an assurance upon the manner in which this subsection will be interpreted, I will make it quite clear that the Government can alter the scale shown in subsection (4).

For example, not only can the rates of levy be changed, but the "free slices" can be increased, and there can be smaller slices after that, with smaller or even nominal rates of levy. The arrangements the Government can make could effectively help the situation visualised in the case of Anglia, though not in the precise method by which the Amendment would seek to do it. I can give your Lordships an assurance that the Government will indeed keep the position under review and will suggest any alterations that appear to be necessary at any time, even before the scale starts to operate, if it is clear from the data becoming available that the assumptions on which the Government have based their calculations are not in fact being achieved in practice.

In any case, I should perhaps add that as soon as a second I.T.A. programme is authorised (this applies to other contractors, of course, besides Anglia), and in connection with such authorisation, the Government will have to review the whole scope of this levy. That is one of the reasons for the insertion of subsection (6) in this clause. I have gone as far as I can to meet what my noble friend has submitted to your Lordships, and I hope that he will be satisfied with what I have said.

LORD GLADWYN

Could the noble Lord just repeat the assurance? I am afraid that I did not take it down.

THE EARL OF DUNDEE

Which part?

LORD GLADWYN

The part in which you said that in certain circumstances you would take account of the possibility of applying subsection (6).

THE EARL OF DUNDEE

Certainly; I want to make it quite clear. The Government can alter the scale shown in subsection (4). For example, not only can the rates of levy be changed, but the "free slices" can be increased; and then there can be smaller slices after that, with smaller or even nominal, rates of levy. The arrangements the Government can make can effectively help the situation visualised in the case of Anglia, though not in the precise method by which this Amendment seeks to do it. I can give your Lordships an assurance that the Government will indeed keep the position under review and suggest alterations as appear to be necessary at any time, even before the scale starts to operate, if it is clear from the data becoming available that the assumptions on which the Government have based their calculations are not being achieved in practice.

LORD GLADWYN

In view of this particular form of assurance, which seems to indicate that, if the figures adduced by the Postmaster General should not be accurate and it should be clearly established next year that this is not so, in those circumstances if the Government would—

LORD MORRISON OF LAMBETH

"Can". Do not run him too hard.

LORD GLADWYN

I understood they can; and I understood the noble Earl to say that if the figures were not accurate they probably would. That was the inference I had from his words. If it is correct then I will ask leave to withdraw my Amendment. If it is not correct, I should like to press it.

LORD MORRISON OF LAMBETH

As I understood the noble Earl, Lord Dundee, he was throughout using the language "could" or "was able to". I think that it is important that we should know whether or not he has given a clear pledge to make financial concessions.

THE EARL OF SWINTON

We must get this point quite clear. I understood that the whole object of the speech of the Minister of State was to show that the Amendment is unnecessary. The argument has arisen because the Postmaster General and the company have produced figures which are in conflict. Nobody is going to be able to tell until next year which of them is right. The whole point is that if the Postmaster General is wrong then he has full power to vary the levy.

LORD MORRISON OF LAMBETH

Yes.

THE EARL OF SWINTON

That is a statement of fact, which appears in the Bill and which we can all read for ourselves. The assurance which the Government are being asked to give—and it is not an unreasonable assurance—is that if the Postmaster General is wrong and Anglia is right, the Postmaster General will exercise the powers which he is taking in this Bill to give Anglia fair treatment. Is that the assurance, or is it not?

LORD SHACKLETON

It is quite unreasonable to expect anybody to take a hypothetical judgment of that kind. He might see the figures; Anglia might be able to prove they were getting deeply in the red. It might be that the Minister might think they could save themselves by more efficient means of operation. It would be rash for the Government to pledge themselves in quite the terms suggested by the noble Earl, Lord Swinton. I should have thought that the undertaking given by the Minister was good enough. It was an expression of good will and of intention, so far as the circumstances justified the application of that power.

LORD CONESFORD

I agree that nobody wants to be unfair to the Minister at the Box, but, as he read the undertaking, I thought the effect was this: that, should it prove that the Postmaster General's assumption as to figures was incorrect, Her Majesty's Government would not hesitate to use the powers under subsection (6) in order to see that justice was done.

LORD MORRISON OF LAMBETH

What does the noble Lord mean by that? That is a lawyer's point of view.

THE EARL OF DUNDEE

I am all in favour of clarity, but I suggest to your Lordships that, when a perfectly clear and reasonable undertaking has been given, it may be a little unnecessary to waste so much time in these rather meticulous verbal niceties. I cannot see any contradiction whatever between what has been said by the noble Lord, Lord Shackleton, and what has been said by Lord Conesford. I do not want to read out a third time what I have already said twice, and I should have thought that to a reasonable intelligence what I have said should be intelligible.

LORD GLADWYN

It is important for Anglia Television to get the actual form of words right and for them to understand what it means. I wanted to be sure of the facts before taking a decision whether or not to press this Amendment. But in view of what the noble Earl, Lord Dundee, has now said, and in view of what seems to be the intention of the Government, not to allow Anglia to be victimised if its figures are right, in those circumstances—

LORD MORRISON OF LAMBETH

That is really naughty.

SEVERAL NOBLE LORDS

Order, Order!

LORD GLADWYN

It is not at all naughty. That was the impression I got from the Minister; that is in any case the impression I derived. In view of that, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

6.19 p.m.

LORD LLOYD moved, in subsection (6), after the first paragraph to insert: As from the date of the introduction of the second television service in any area as provided in section 13 hereof the Table in subsection (4) of this section shall thereupon cease to apply to any additional payments thereafter to be made by any programme contractor providing programmes for broadcasting by the Authority in that or a substantial part of that area, but those additional payments shall, notwithstanding anything contained in the foregoing provisions of this section, be calculated in relation to the not profits of such programme contractor at such rate or rates as may be fixed by order made by the Postmaster General with the approval of the Treasury and after consultation with the Authority.

The noble Lord said: I can deal with this Amendment quite briefly. Its purpose is to ensure that as soon as a second television channel has been introduced the present system of a levy, as opposed to a tax on profits, shall be abolished by the Government and that we get down to a rather more sensible system of taxing these companies. I was encouraged, up to a point, by my noble friend Lord Dundee when he went so far as to say that when a second television channel was introduced the whole question of the levy would have to be reconsidered. But I was not sure whether he meant that they were going to have the same old levy, with slightly different rate, or whether they were going to reconsider the whole question of having a levy at all. I do not think that we ought ever to have had a levy. We ought to have had a tax on profits—and I have said that before.

The point is that, hard as the levy will bear on the companies now, as soon as they have to finance a second television channel—which like all these things, will probably run at a loss for two or three years, or maybe more—their costs are bound to rise very greatly, and the levy will then become an intolerable burden. When we get to that stage I believe that we must go for the normal system of a tax on profits, which is the system by which every company in this country is normally taxed. I do not think there is anything more I need say. I beg to move.

Amendment moved— Page 7, line 41, at end insert the said words.—(Lord Lloyd.)

LORD SHACKLETON

I hope that the Government will resist this Amendment. It may well be that the introduction of a second television service, if and when it comes, will reduce the profits, but it seems to me that the principle is just the same. We are taking a decision in this Bill to tax excessive profits in a field which is regarded as the public domain. If the rates are wrong, or, equally, if the profits are cut heavily down to size, it is perfectly open to the Government by Affirmative Order, to amend those rates and, presumably, even to abolish them entirely in practice. I imagine they would even be able to fix a nil rate, or a rate which in fact never operated. I should have thought it better at this stage not to legislate against a hypothetical proposition; all the more so since I am still very uncertain (for reasons I shall not go into now) whether there will be a second television service in the commercial field.

THE EARL OF DUNDEE

I think the noble Lord, Lord Shackleton, who has just spoken, is substantially right about this. The question of whether it is better to have a levy or a tax on profits has been debated at enormous length elsewhere, and in public, for a long time before this Bill reached your Lordships' House. The reason why the Government rejected the idea of basing the levy on profits is that it would have bristled with difficulties for everybody concerned. We think that the present proposal—that is, the levy on advertising receipts—is much more simple to operate, and we still believe that it is right in principle. But the Government are aware that the scale of the levy will have to be reviewed when we are nearer to a second I.T.A. service. What will have to be done depends very greatly, I think, on the way in which the new contracts are allocated. When a second service is introduced, the matter can probably be dealt with simply by changing the scale of levy, for which there is provision in the Bill; but if necessary the Government will consider amending legislation. Meanwhile, this Amendment would bring with it all the various complications which have already been discussed in another place, and for that reason I would not advise your Lordships to accept it.

LORD LLOYD

I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD SHACKLETON

I believe this Amendment is the only one that is, perhaps, not covered by privilege. I put it down for the perfectly innocent reason that, in a very long clause which I found difficult to understand, I found this particular paragraph more difficult than most. With my noble friends I therefore put down a Motion to leave out paragraph (c), in the hope that the Government can explain to me why it is necessary to have it in the Bill. I beg to move.

Amendment moved— Page 8, line 26, leave out paragraph (c).—(Lord Shackleton.)

THE EARL OF DUNDEE

I am glad to have the opportunity of making this subsection a little clearer. It may be that the noble Lord feared that the programme company might try to reduce the total of advertising receipts on which the levy is calculated, by trying to pass on the burden to the advertiser in the form of some special surcharge. That possibility is provided against by subsection (11)(b)(i) of this clause, under which any such special payments would count towards the cost of advertising receipts. But the purpose of this paragraph is to cover cases where a contractor receives one single payment, which covers not only the cost of the advertising on a time and rate basis, but also the cost of services rendered; such as, for example, the use of studios or technical facilities belonging to the contractor for the production of the advertisement itself. In cases like that we feel it is only right that the contractor's (b) payments—that is, the payments referred to in Clause 7(1)(b)—should be charged only on the cost of the advertisement, and not on the cost of the services rendered as well. I hope the noble Lord will agree that that is right.

LORD SHACKLETON

I am grateful. It did look for one moment as if it were a back-handed way of introducing sponsoring, although I could not believe that to be so. With that explanation, for which I am most grateful, and which for at least for another minute will enable me to understand the subsection, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

6.27 p.m

LORD GLADWYN

The noble Lord, Lord Lloyd, seems to be temporarily out of the Chamber, but he is being sent for. In fact here he is, so I will not go on with my prolonged argument but will leave it to my colleague. I beg to move.

Amendment moved—

Page 10, line 47, at the end insert: ("(c) any programme contractor who is required under the terms of his contract with the Authority to provide programmes which shall contain a suitable proportion of matter calculated to appeal specially to the tastes and oulook of persons in each of two or more areas (as defined by the Authority and approved by the Postmaster General) and, to comply with this requirement, has accordingly to maintain studios, offices or premises in more than one area, shall for the purposes of this section, make a separate return of his advertising receipts for each area, and the additional payments due from that programme contractor shall be separately computed and charged accordingly, to the intent that the Table in subsection (4) of this section shall apply by reference to each area taken separately.")—(Lord Gladwyn.)

LORD LLOYD

I must apologise to your Lordships for that aberration, which was entirely necessary. Your Lordships have heard of one injustice—namely, the way in which this Bill was born in anger. This particular Amendment deals with what I think is another very considerable injustice, and that is the effect of this levy on companies which have dual operation. I think this applies mainly to two of the large companies; that is to say, A.B.C. and A.T.V. As your Lordships are probably aware, two of the four major companies, Associated Re-diffusion and Granada, have unified operation in a single area.

Associated Rediffusion have five days in London, and Granada have five days in the North, whereas the other two have to operate in two different areas; that is to say, A.B.C. have two days in the Midlands and two days in the North, and Associated Television have five days in the Midlands and two days in London. I think that probably the worst hit of the lot is Associated Television, for the simple reason that they have to work seven days in the week in order to achieve roughly the same revenue as the other two large companies. So they have to pay a wage bill of ten days, because people will not work at the ordinary rates for two days over the weekend, and they therefore have to pay two full lots of wages. There is no question about it, their overheads are therefore about double those of the other two companies, who are fortunate enough to have one area of operation.

Again, I say that if there had been a tax on profits this question would not have arisen because that inequality would have been ironed out as a result of the tax on profits. But, owing to the levy, a company with heavy overheads is obviously going to suffer much more severely than a company with much lighter overheads, although the fact that the company has heavier overheads is not necessarily due to any inefficiency but is due merely to the fact that, by the will of the Authority, the company has been forced to operate in two areas, with two lots of studios, two lots of offices and double overheads. I feel (I am sure that your Lordships will agree on this, but I speak for myself) that this is manifestly unjust, and I believe that even the Government themselves think so, because my noble friend Lord Chesham admitted on Second Reading that the areas and the operating conditions were extremely unequal. He said that he thought that this was something that ought to be dealt with under Clause 7; and that is why I am dealing with it under Clause 7. He said they were very unequal, that it was something the Government themselves wanted to see done, and that they wanted to see that there were fair conditions between the companies.

I know that I shall be told by the Government that the way to deal with this is to charge differential rentals under Clause 7(1)(a.) I cannot feel that this is a very satisfactory solution; and I am rather surprised at the noble Lord, Lord Shackleton, because I understood him to say this afternoon that he thought it was a good idea, whereas earlier on this Committee stage, in column 343 of the OFFICIAL REPORT (Vol. 252 (No. 117)) he said: I am not myself in favour, nor are a number of my noble friends, of varying rentals. So I am not quite sure where the noble Lord stands. Since he was speaking for the other side, it may be helpful to know where they stand on this issue. I am quite sure in my own mind that differential rentals are a bad thing, and I am sad to have lost the noble Lord's support, and also his presence.

LORD MORRISON OF LAMBETH

If the noble Lord will forgive my interrupting, I thought that, in municipal housing, it was one of the firm planks of the Conservative Party's platform that there should be differential rents. Now the noble Lord says that differential rents are wholly bad.

LORD LLOYD

The noble Lord cannot resist it. Party politics come in when we have hardly started. I am not the Conservative Party; I am just myself, and I am speaking for what I think is right. If the noble Lord wishes to address the Conservative Party, he should address the Government Front Bench. I am not a great expert on municipal politics, either, but I am at the moment trying to develop my reasons for thinking that differential rentals are bad.

I think they are bad because, from the start, you get away from any clearly defined system of taxation. You get away from a system where companies know where they are; and I think that it is bound to lead to unsatisfactory relations between the Authority and the companies. Because, to get any equality between the companies, the differentials would have to be enormous. I understand that if you were to try to get rough equality between the three big companies Associated Rediffusion and Granada would have to pay an extra £2 million, against A.T.V.'s and A.B.C.'s £600,000. That is the scale of the differential. It is the only way you will get equality, and I think differentials on that scale will lead to a great deal of heartburning between the companies.

I do not think you would ever get agreement on the basis of assessment between the companies and the Authority; and, ultimately, you would have a situation where the Authority would have to decide. In fact the situation would be reached where, basically, the profitability of any individual company would be decided, not by the efficiency of the company, the standard of their programmes or anything else, but by the Authority, as an entirely arbitrary power. I do not think that would be a good thing. I do not think it was ever the intention of the original Act which the Government introduced; and I do not understand why that should be their intention to-day, if indeed it is. But that is what I understand the Government's answer to this is likely to be.

Now this Amendment of mine is not very complicated. It is designed simply to provide that where a company has to operate in two different areas it may maintain separate accounts in each area and may be allowed the free slice of Ell million in each area. Curiously enough, from the figures I have seen that would not quite produce equality even then, and those in the dual areas (although the larger of them has, I think, almost exactly the same advertisement revenue as the two companies in the single operating areas) would still be a little worse off. But it would reduce the problem enormously, and it would be a very great deal fairer.

There is one other point which I think I ought to mention. The noble Lord may tell me that this is not possible because it would lead possibly to other companies in other areas having two transmitters and then claiming that they ought to have a free slice for each transmitter. I should like to make it perfectly clear that I do not think that that is what the Amendment says, and it certainly is not the purpose of the Amendment. The purpose of the Amendment is to provide that where, by the act of the Authority—not by the volition of the company, but by the act of the Authority—a company is forced to operate in two areas, this concession should be made.

LORD SHEPHERD

Would the noble Lord not agree that the companies were not forced to operate in two areas? They applied to operate, perhaps some in the case of London and some in Manchester. They were free when they made their application, and they were free in their choice of operation.

LORD LLOYD

With great respect to the noble Lord, I do not think that is true. The areas were laid down by the Authority. The companies were perfectly free to put in for any area they could get, but it was probably a case of "First come, first served". The noble Lord himself has been saying how bad the areas are. Therefore, this is unfair: they are unequal. Either the noble Lord must eat his own words or he must agree with me. Therefore I say that these conditions are not fair, they are not equal, and that these, companies are, in effect, put by the Authority in these areas. Obviously they would much rather have unified working—who would not?—but they cannot help it. Therefore I think this is just as good a case as the Anglia case. The Government have said they think something ought to be done about these inequalities, and I suggest that here is their opportunity.

LORD MORRISON OF LAMBETH

I think this raises a point which I raised at an earlier stage. It may not be quite the same, but I think it pretty well is; and I will put it rather more shortly than the noble Lord has done, because the case has been stated at some length. The point is—and I should not like to be cross-examined about it, because I do not quite understand the technicalities of how it can come about—that apparently it is the case that, under the Bill as it stands, the company that has two transmission centres (that is to say, real areas of operation; I am not talking about offices or studios: and there are two such companies, A.B.C. and A.T.V.) is financially materially worse off, it is alleged, than a company like Granada or any other company with only one transmission centre. I cannot make it out. I should have thought that the fact that they had to maintain two television centres would, if anything, entitle them to somewhat better treatment, and I cannot quite make out why it works out this way.

This is not an Amendment which I would be involved in pressing to a Division, but I think there is a question, not of the principle of the levy at all, which I am not challenging, but of equity as between two companies and other companies. That seems to me eminently a fair point with which Parliament should concern itself—because if ever Parliament gives up the idea of not considering equity between one person and another, or between one firm and another, then Parliament will appear in a less favourable light in the public mind than otherwise it might.

What I want to ask the Minister—and I am not trying to tie him down to a promise to do any particular thing as was done on a previous Amendment, to which I rather objected—is whether the Government will have the power under the Bill to make modifications or adjustments either in the levy or in the rental and later, perhaps, as regards areas, whereby such things as prove to be unjust can be put right. That is the only point I am concerned with. I would be much obliged if the noble Earl would deal with this point as well as with the others which were raised by noble Lords opposite.

I must apologise if I mixed up my geography. But I thought the Conservatives sat opposite. I am getting rather confused about the political geography of this House. There is one noble Lord, a very firm and rigid Conservative, who sits on the Cross Benches. Now there is an ex-Conservative Minister who is going to sit on the Cross Benches, and two noble Lords opposite have denied that they are Conservatives. If we could have a little map from the Government Chief Whip showing which are Conservative Benches and which are not it would prevent my making slanderous statements accusing a noble Lord opposite of being a Conservative, when it later appears that he is either Liberal or Socialist.

LORD LLOYD

I must try to help the noble Lord, Lord Morrison of Lambeth. I dislike seeing him in this confusion and worry. Of course I am a Conservative. What I said was that I was not responsible for Conservative policy on municipal housing. I do not think that housing has anything to do with this Bill.

LORD FRANCIS-WILLIAMS

I would support what has been said by my noble friend Lord Morrison of Lambeth because, in fact, I made the same point on Second Reading. But I believe there is inequity between these companies in this matter. I do not feel quite so dissatisfied as the noble Lord, Lord Lloyd, that it cannot be met in some part by a differential rent; but I think it would be very good to get an assurance from the Government that this inequity will be considered, and that measures will be taken to try to even it out.

THE EARL OF DUNDEE

I am sure that the longer the noble Lord, Lord Morrison of Lambeth, is in this House—which I hope may be for many years to come—the more impressed he will be by our superiority to the more uninteresting conventionalities of Party divisions. The Amendment is designed to alleviate particularly the position of A.T.V. and A.B.C. under the levy arrangements by trying to establish separate chargeability in separate areas; and I think the noble Lord, Lord Morrison of Lambeth, has correctly understood the position and the difficulties—or, at least, he has understood it as well as I.

Under Clause 7 the levy payments are made on the advertising receipts of the programme contractors. Even if a contractor has two separate contracts the advertising receipts would be aggregated for the purpose of the levy. The argument is that the expenses of contractors who operate in two areas are particularly heavy because they provide programmes on certain days in two different areas, increasing their costs by having two lots of offices and two lots of studios et cetera in the two areas. It can further be pointed out that in future the Authority might appoint more companies on this divided working basis, and the levy will bite inequitably as between the various programme contractors.

The position in regard to two particular companies, A.T.V. and A.B.C., who have a dual franchise, is that A.T.V., I understand, have a seven-day operation, with five days in the Midlands and two in London; A.B.C. operate two days, Saturdays and Sundays, in the Midlands and the North. A.T.V. have a definite obligation under their contract to provide a proportion of their programme material to appeal specially to the people catered for; and the I.T.A. could also, we understand, oblige A.B.C. to do this under their contract. But in fact they do not do so because the situation of purely weekend operation does not require the same line to be taken.

My noble friend, Lord Lloyd, said that he anticipated that the Government reply would be that we should use the "A" payment, which my noble friend did not agree with. The reason why we think it is right to do that is that the inequalities arise from the pattern of contracts which have been allocated by the Independent Television Authority. Therefore, we think it right that their own rentals should be differentiated accordingly and I.T.A. are, in fact, examining this; and they propose, as I told the House on Second Reading, with the Postmaster General's agreement, to alter them. There is a substantial amount that can be varied here. At present, the total of rentals of the "Big Four" is £3½ million, and in 1964–65 this might very easily be £5½ million; so there would be plenty of room for a proportionate division of these amounts to ensure that the most valuable contracts in the way of returns have to pay the largest sums in rent. But there is also the separate question that will be raised again about a division of areas—different days of the week et cetera—which all depends on the contracts. That will come up again when the contract is renewed and that, in our view, is a matter for the I.T.A. to consider.

LORD LLOYD

As I understand it, the noble Earl says that the Authority may vary the rentals in order to adjust inequalities, and that the Authority is going to look into the whole question of areas and working hours when the contracts are revised. Is that correct?

THE EARL OF DUNDEE

Yes, that is correct.

LORD LLOYD

Can he give me any assurance that the Authority have this particular problem in mind—it is a very great injustice—and that some remedial steps are likely to be taken before these companies so affected are to be too hardly hit by the operation of the levy? If something is to be done, it ought to be done fairly early. Obviously, if a number of years elapse before anything is done, it will be very unfair on them.

THE EARL OF DUNDEE

I can certainly assure my noble friend that the Authority have it very much in mind. As to the timing and the remedial steps, I do not think I can anticipate that with any detailed correctness.

LORD LLOYD

I am grateful to my noble friend, and I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 7 shall stand part of the Bill?

LORD ARCHIBALD

I do not propose to oppose the Motion that Clause 7 should stand part of the Bill, but before the Motion is put I should like to raise a point with the noble Earl who is dealing with the clause. At an earlier stage the noble Lord, Lord Lloyd, quoted the statement of the Postmaster General in another place that the levy is not a tax. I have not heard reference to that yet. I am also informed that when the original Bill was in its early stages in another place Clause 7 was printed in italics, which those who have served in another place tell me has a special significance. But I am told that after that statement by the Postmaster General, the italic print disappeared when the Bill was reprinted for the next stage. I wonder whether the noble Earl could tell me whether there is any significance in that.

LORD CONESFORD

May I rise on a similar point? I did not intervene before because unfortunately I missed the discussion on privilege that took place at the beginning of the discussion of this clause. I wonder whether in the course of that discussion reference was made to the specific reference to this House in subsection (6) of the clause. If it were suggested that this was a clause with which this House was not entitled to deal, I think that it would be worth calling the attention of the Committee to subsection (6) of the clause, which has been mentioned a good deal by the Minister in the course of this debate. For subsection (6) to be used at all, an Affirmative Resolution by this House is necessary. Perhaps this is germane to the question that has just been put by the noble Lord, Lord Archibald.

THE EARL OF DUNDEE

Statutory instruments are always laid in both Houses, whether they apply to finance or not. With regard to the question of the noble Lord, Lord Archibald, probably he was not here when the noble Lord, Lord Shackleton, referred to this, elaborated it considerably and proceeded to give some more quotations. The only one I want to give is the one I have given already and which was repeated by the noble Lord, Lord Douglas of Barloch. Subsection (2) of Clause 7 says: The additional payments shall not form part of the revenue of the Authority and, when received by the Authority, shall be paid into the Exchequer of the United Kingdom or the Exchequer of Northern Ireland as provided by this section. I make these observations for purely factual reasons. As I have already told your Lordships, all I want to do is to help your Lordships about the facts of the situation. The last thing I want to do—it would be quite improper—is to try to anticipate in any way what may, or may not, happen in another place on certain eventualities.

Clause 7 agreed to.

Clause 8 [Newspaper shareholdings]:

6.52 p.m.

LORD MORRISON OF LAMBETH moved, in subsection (1), to leave out all words from "contractor", where that word first appears, down to and including "interest". The noble Lord said: This is the first of a group of Amendments which stand or fall together. The clause as it is provides that the contracts between the Authority and a programme company shall … contain all such provisions as the Authority think necessary or expedient to ensure that if at any time there are newspaper shareholdings in the programme contractor, and it appears to the Authority that the existence of those shareholdings has led or is leading to results which are contrary to the public interest, the Authority may, with the consent of the Postmaster General, by notice in writing to the programme contractor, taking effect forthwith or on a date specified in the notice, determine or suspend for such period as may be so specified or until a further notice is given, the Authority's obligation to transmit… This leaves open the question of the degree of newspaper interest in a programme company that would imperil the situation with which Clause 8 is designed to deal. That is not satisfactory. It is not even provided that if a newspaper shareholding in a company constitutes a third or a half or 51 per cent. of the shares, then it would be caught. There is no definition whatever. In our view, that is not satisfactory.

I agree that our Amendment goes so far as not to allow newspaper shareholding in programme companies at all. That may be thought to be somewhat extreme, out there is a lot to be said for it. Part of the doctrine of the Government in bringing in Independent Television a few years ago was to stimulate competition between the B.B.C. and I.T.A. I thought that this was wrong at the time and I still think it is wrong. But competition cannot stop there. I.T.A. transmit opinions, on the whole fairly, putting one side and the other, and hard news, on the whole fairly. They transmit drama and plays, and one of their official purposes is to give information and education. The Press is another channel of information and education, and also of entertainment. Therefore, if it is right that there should be competition between the B.B.C. and I.T.A. and that they should be entirely separate concerns, surely, prima facie, it is equally right that there should be competition between Independent Television and the newspapers and that they should be entirely independent of each other.

There is one great newspaper proprietor who firmly takes this view—namely, the noble Lord, Lord Beaver-brook, who thinks that newspapers ought to keep clear of commercial television and who apparently takes pride in the fact that his newspapers have no involvement in commercial television. I do not always agree with the noble Lord or his newspapers—not by any means—but on this point I find myself in agreement with his view.

It may be said that the fact that some newspapers have a monetary interest in commercial television does not upset their judgment of the merits of commercial television. I am not going to assert that it does. But it must be embarrassing to the newspaper, conscious of this financial holding in commercial television, when they feel called upon to express opinions about programmes, or about the merits of this Bill. They must be conscious of the question: do they look independent, if they have a financial interest in commercial television? The Press should not only be independent in fact but should also be independent in form, and appear independent of commercial television, which is a rival form of mass communication.

Your Lordships will remember that when the Pilkington Report came out there was a general attack, some of it of a pretty vicious and, as I thought, wicked character by some newspapers with financial interests in commercial television. Anybody reading it could not but suspect, to put it no higher, that those newspapers were influenced by the fact that they had a commercial interest in television. Your Lordships may remember some of the unbalanced and spiteful things that were said against the Pilkington Report, which, I may say, is a great deal more thought of now than it was by many of these newspapers at the time it was published. Another difficulty with a few newspapers is that they are a little embarrassed about whether to put the B.B.C. or I.T.A. programmes first. Far be it from me to accuse them of improper practice in that respect. They may have a genuine conviction that they should print the programmes in accordance with their view.

It may be that the Bill should have a little more about newspapers. It does not say to what extent they must take into account the amount of newspaper interest in commercial television. To that extent it is a vague legislative provision, which, it appears to us, might have no consequences whatever. So we move to strike out the provision for investment by newspapers in commercial television. We are inclined to think that that is right and the best and straightforward course to take. But if we cannot get that, we should, at any rate, like from the Government a declaration as to how they and the I.T.A. intend to administer this provision in the Bill, so that we may know it is going to be an effective provision to protect the points to which I have referred in my observations. I beg to move.

Amendment moved— Page 11, line 5, leave out from ("contractor") to second ("the") in line 8.—(Lord Morrison of Lambeth.)

LORD STRABOLGI

With respect to my noble friend Lord Morrison of Lambeth, I disagree with his Amendment, and I think the clause in the Bill as it stands is perfectly sound. I should perhaps declare an interest here, as I am professionally employed with an international public corporation which has a certain holding in Associated Television, although I hasten to add that I speak as a private individual and in no way on behalf of my colleagues. The clause as it stands is really perfectly adequate. I think the phrase "contrary to public interest" is something that can cover a great many eventualities, but I am not persuaded, by any means, that the shareholding by newspapers in television companies is in any way contrary to public interest. On the other hand, people have a certain disquiet about newspapers—they think very strange things about newspapers, which are hardly ever justified—and I feel that the Government have quite rightly put this wording in the Bill.

My noble friend Lord Morrison of Lambeth wants to take it out, even if it has the consequences which he has described to your Lordships. In fact, for a perfectly hypothetical reason, he wishes to take out this important clause, so that the company concerned will no doubt have to be suspended from their work and go out of business. If we carried my noble friend's Amendment, I think we should be prejudging the result before it has taken place, and one might describe that (if I may quote the words used by my noble friend Lord Shackleton earlier) as a hypothetical judgment. It is also—and I think this is even really more serious—an intolerable interference with the right of a public company to invest in another public company where and how it wishes.

There are further effects of this Amendment which I would submit should be considered rather more than, if I may say so, my noble friend appeared to consider them. He thought that one could wipe out a company, reinstate it or suspend it just like that. What does it mean? It would mean, if the Amendment were carried, that those programme contractors would be suspended from transmitting programmes and, therefore, that viewers would be deprived of those programmes and advertisers deprived of important advertising time; it would mean that the people working in that company would be thrown out of work, and would also mean a loss to the shareholders in the company. As I said, I think the clause is perfectly adequate as it stands for a very remote eventuality, and I hope the Government will not accept the Amendment.

LORD CHESHAM

I almost began to think that it was going to be unnecessary for me to say any more because of two self-cancelling speeches. But that is not quite the form, and I should like to take the opportunity of which the noble Lord, Lord Morrison of Lambeth, invited me to avail myself of giving a little explanation of the matter. I was delighted that he came out so completely honestly and said that, although he thought perhaps a total abolition of Press holdings went a little too far, on balance he was prepared to put up with that in order to make sure that nothing untoward should happen. This Bill, in respect of Press holdings, has already been strengthened so that drastic action in this direction, should it be desirable, can be taken if any of the kind of things which are feared by the noble Lord in fact take place. Having accepted that, I think we have to stop short of total abolition.

The noble Lord said that there should be some kind of definition of what was or was not in the public interest. I would not envy him the task of trying to define what that was. If it is to be a majority shareholding, is it necessarily wicked and contrary to public interest that there should be a holding of 51 per cent. of the shares as a perfectly straight forward investment? It might be that some effect such as he fears could be created by somebody with a much smaller holding. But I think that to try to produce a definition of what was against the public interest would be difficult and, indeed, unwise, because presumably anything that is not defined as being contrary to the public interest is in the public interest. I do not think it would be well to start on that.

There are the powers in the Bill. The noble Lord, Lord Morrison of Lambeth, doubted that there were sanctions in the Bill for what is to happen if any Press interest should transgress against this clause. He said: "What can be done about it?" The noble Lord has already read out himself what could be done about it, in that the Authority or the Postmaster General can simply stop transmitting their material, which, as the noble Lord will agree, is a most drastic sanction to happen to anybody. But, apart from that, there is a further power which would operate—and that is one of the advantages of the shorter-term contract—in that you could make a change, or suggest that a company should rid itself of some of what I might be allowed to call its Press strings, if it was felt that those Press interests were getting out of proportion.

Just how far are we likely to go in seeing how the interests of Press and television can operate in a way that would be contrary to the public interest? Under Section 3 of the present Act, which remains substantially as it is at present, the Authority have to observe (or see that it is observed) impartiality on matters of political and industrial controversy or relating to current public policy. Therefore, no kind of editorial opinion, the opinion either of the Authority or of the programme contractors, is permitted. That is quite a strong safeguard on what is to be in the programmes themselves. Then there is the other side of the picture mentioned by the noble Lord, and that is how much the Press might be impressed by the fact that they had shareholdings in programme contractors. I should have thought it was a fair claim that, certainly in the main, the newspapers regarded their shareholdings as a normal financial investment, as the noble Lord, Lord Strabolgi, pointed out it was quite legitimate for them to do.

The noble Lord, Lord Morrison of Lambeth, rather fell over backwards in trying to find points that could be considered as criticism, but I doubt whether the placing of I.T.V. or B.B.C. programmes this way or that way round will make much difference on the mind of the newspaper readers and viewing public. This really is the point. We agree with him that it is possible that something like this could happen. That is why these reserve safeguards of quite drastic sanctions have been included; and there is the discretion for the I.T.A. to be able to operate them when such matters as those to which the noble Lord referred seem to be in danger of coming up. The position is covered. I think a total prohibition would be going too far, and I hope that the noble Lord, Lord Morrison of Lambeth, may feel possibly a little happier about it in view of what I have said.

LORD SHACKLETON

I acknowledge that the Government have gone some way, and they did so in another place, to meet the anxieties of those who were worried about the link between the Press and commercial television. But it is our contention that it is so important that these two forms of public communication and expression should be separate from one another that we should like to see legislation which would prevent newspapers from having interests in I.T.V.

Let me say straight away that I am not so much concerned with the newspapers bringing improper influence on I.T.V., which is a highly regulated industry, as with their interests modifying their own attitude and the handling of news and comment. To my noble friend Lord Strabolgi, who made remarks of a classic freedom of investment approach, I can only say that there are already restrictions under this Bill as to who can have an interest in a programme contractor. Advertising agents are prevented from doing so. We are taking this very much further, I admit, in saying that the Press should also be completely debarred from having these interests. I should like to give the reasons why.

If it were possible to stop at a convenient point, I should be inclined to agree to this. But I think it is extraordinarily difficult for the Government to judge what is in the public interest in a matter as tenuous as this. Would the fact that the Press may or may not report certain discussions in the House connected with commercial television—or that only Lord Beaverbrook may do so—be regarded as contrary to the public interest? This was an allegation made in regard to the Committee stage in another place: the fact that the majority of the Press were very hostile to Pilkington when their interests were involved, although there were exceptions, when they said that the two things were completely separate. But I think it is almost impossible to separate editorial policy, and it might, indeed, have an inhibiting effect on the Press in this respect, although noble Lords may be dubious about anything having an inhibiting effect on the Press.

I am not concerned about the future of the programme contractors if the Press interest is removed. I think my noble friend Lord Strabolgi, if he were to read the Bill, would see that the danger of these programme contractors being closed down and of people losing their jobs is virtually nil. It is clear that other people would want to take up the interest. It would be possible to name a date well in the future—there is no need for it to be retrospective—by which time the Press interests would have to be removed. We have some doubts as to whether this is going too far, but we are driven by the logic that anything short of total abolition of interest will fail to achieve the objectives which the Government declare, and which I accept it is their intention to achieve. As there is a further development of television and possibly, in due course, of local sound broadcasting—although it is not strictly relevant to the Bill—I think it is of the highest importance that news channels should be separated, and that in the public interest the Press should keep to the newspaper business. I am saying this in the knowledge that there is considerable convenience in the present arrangement. There is even a certain obvious logic in it. But I think the dangers are there and apparent to many people who are anxious. Therefore, we should like to press this Amendment.

LORD FRASER OF LONSDALE

Would the noble Lord explain how it would be possible to get separation? Supposing an investment company, which is in the habit of investing in a dozen, twenty or 100 different companies, were to hold at the same time Daily Mirror shares and shares of one of the contractors. It may be said that there is only a sisterly or brotherly interest there. But supposing the control of one company passes to the other, then the mutual shareholding might be offensive from his point of view. How can he prevent this?

May I ask one other question? Would the noble Lord, Lord Morrison of Lambeth, or the noble Lord who has just spoken, go so far as to say that all means of public communication must be separate—the cinema for example? Would the noble Lord help us by giving us any observations on that? Supposing a newspaper proprietor, a newspaper company, or an investment company, holding a lot of newspaper shares, also holds shares in films, film making, or film distribution. Would he think that equally offensive? Where are you to draw the line once you start saying what may be held and what must not be held?

LORD SHACKLETON

We draw the line at the point we are now proposing. We are not discussing cinemas. We fully accept that there may be arguments in that field, but it is not our intention to pursue them, and we do not think there is that sort of danger. If there were, Parliament would have to look at that. There are also powers in the Bill to restrict certain people from being contractors. It seems to me that it is perfectly reasonable to apply these provisions in the same way to this particular group. I fully acknowledge that there are certain difficulties of this kind. But I think it would be reasonable enough to establish whether or not there was a direct or consequential

holding on a direct investment of a kind that gave a newspaper a direct beneficial interest.

I do not think the argument, which has a certain technical attraction, in any way weakens the case we are making. It may well be that it would be necessary to strengthen this matter and to define it in greater detail. But we are pressing the Amendment as it stands, and we are disappointed that the Government have not so far shown a greater willingness to meet our points.

LORD CHESHAM

Before the noble Lord starts marching us through the Lobbies, I should like to make only this one point: that I think there is a danger here of confusion of thought between a monopoly (if that is the word) or centralisation of ownership of various means of communication and the influence on people's minds that those means can exert. It is important to differentiate between them, because I still maintain that the safeguards in the Bill are adequate to see that there is not a monopoly or centralisation of the means of influencing people in this way; and that is what I am concerned about. I do not think that means that it is impossible for the I.T.A. to know or to judge when something has been occurring which is contrary to the public interest, because I am perfectly certain that, apart from their own efforts or those that might be made by my right honourable friend, no one in Parliament is going to be slow in coming forward with observations on the subject.

On Question, Whether the said Amendment (No. 21) shall be agreed to?

Their Lordships divided: Contents, 15; Not-Contents, 34.

CONTENTS
Addison, V. Henderson, L. Lucan, E. [Teller.]
Alexander of Hillsborough, E. Latham, L. Morrison of Lambeth, L.
Archibald, L. Lawson, L. Shackleton, L.
Burden, L. [Teller.] Lindgren, L. Shepherd, L.
Champion, L. Longford, E. Summerskill, B.
NOT-CONTENTS
Aberdare, L. Colville of Culross, V. Hastings, L.
Ailwyn, L. Conesford, L. Lloyd, L.
Albemarle, E. Denham, L. [Teller.] Long, V.
Ampthill, L. Dilhorne, L. (L. Chancellor.) Lothian, M.
Auckland, L. Dundee, E. Mansfield, E.
Bridgeman, V. Ferrers, E. Mountevans, L.
Carrington, L. Fraser of Lonsdale, L. Newton, L.
Chelmer, L. Glentanar, L. Strabolgi, L.
Chesham, L. Goschen, V. [Teller.] Strathclyde, L.
Stuart of Findhorn, V. Townshend, M. Waleran, L.
Swinton, E. Vestey, L. Windlesham, L.
Terrington, L.

On Question, Amendment agreed to.

Clause 8 agreed to.

[The Sitting was suspended at twenty-nine minutes past seven and resumed at 8.30.]

Clause 9 [Advertising agents disqualified from being programme contractors]:

On Question, Whether Clause 9 shall stand part of the Bill?

LORD SHACKLETON

May I just ask the Government, on the Question, That the clause stand part, whether they are now really satisfied with the position? The noble Lord will realise that about a year ago we had some activity on this subject of an advertising agent as a disqualified person, and I take it that this clause has been inserted in order to clarify the position. When I first saw it I thought it seemed to be pretty satisfactory. I noticed, however, that in the Committee stage in another place an Amendment was moved which suggested that the net was too wide. The Assistant Postmaster General said on that occasion that he would certainly consider the matter, and if it was possible make some changes, because of the difficulty that it might exclude people—newspapers and others—who might come within the net of this particular Amendment. If this was so, and I imagine this was the reason why the noble Lord, Lord Mountevans put down his Amendment, it would obviously be undesirable. Perhaps the Government could tell us whether they are now satisfied with this clause.

LORD CHESHAM

Since the noble Lord asked me directly whether the Government are entirely satisfied, I am bound to be honest and say, "No, not entirely." As the noble Lord knows only too well, there has been a good deal of discussion on the subject of the definition of an advertising agent, and this was an honest and extremely painstaking attempt to try to meet the situation by providing an adequate definition. Although it has not yet been possible to do so, I should still be prepared, if it would help the noble Lord, to have yet another look at it between now and the next stage of the Bill to see whether any improvement can be made. If I find there is I will see whether I can do something about it. I cannot give any promise, of course, or give any undertaking that we shall find something better; but I am certainly prepared to try.

LORD SHACKLETON

I think it is a little unsatisfactory that we cannot get it straight. I suppose it will not be challenged. On the other hand, one could not guarantee that some awkward Member of the House might not get up and suggest that these people are disqualified under the Bill, as I did under the original definition. I suppose that the courts might interpret it in a way which widened the net. Obviously, we cannot do better than the Government on this point. I can only say that I gratefully accept the noble Lord's offer, and that, in view of the anxieties which have been expressed, and which no doubt caused the noble Lord, Lord Mountevans to put down his Amendment, I think it would be helpful if we could have another look. I am very grateful.

Clause 9 agreed to.

Clause 10 agreed to.

8.35 p.m.

LORD FRANCIS-WILLIAMS moved, after Clause 10 to insert the following new clause:

Authority to ensure the showing of British television films

".—(1) Without prejudice to the duty imposed upon the Authority by section 3(1)(d) of the principal Act, it shall be the duty of the Authority as from 1st April 1965 to ensure that in any financial year at least thirty per cent. of the films to which this section applies are of British origin and of British performance:

Provided that the provisions of this subsection shall not impose any such duty upon the Authority in any financial year in which it is not reasonably practicable to comply with those provisions owing to the number or character of the films available or to the excessive cost of such films.

(2) This section applies to all films which are made specifically for exhibition through the medium of television and form part of the recorded matter included in the programmes broadcast by the Authority, other than films the playing time of which is less than twenty minutes.

(3) For the purposes of this section a film shall not be treated as being of British origin and of British performance unless it is a film which would qualify for registration as a British film under section 17 of the Films Act 1960 if the provisions of that Act relating to the making of applications for registration were complied with.

(4) In computing the percentage referred to in subsection (1) of this section no account shall be taken of any film if more than five years have elapsed since the end of the calendar year in which it was first published."

The noble Lord said: In moving this new clause, I stand rather astounded at my own moderation in that the clause proposes only that of all the television films 30 per cent. shall be British. It would, perhaps, be nearer to what would be just and equitable if one asked for 50 per cent., but at 30 per cent. I hope one will find a good deal of sympathy for this proposal from the Government. Let me make it clear at the beginning that this refers only to television films, not to cinematograph films. It refers to 30 per cent. of the television films—of the films shown on television—and not 30 per cent. of the entire television programmes.

LORD SHEPHERD

May I ask the noble Lord for clarification? Does he include in films that material which is in fact recorded, such as plays, which are not straight film?

LORD FRANCIS-WILLIAMS

No. This is concerned with films which are made as films for television showing, and says that 30 per cent. of those films made for television should be British. I think there are many strong arguments in favour of this. In the first place, it is essential that the television film industry and all the manifold talents which go into that industry should receive support. It has to be acknowledged that they have to compete directly with a large number of television films of transatlantic origin, particularly, which have already not only covered their costs but made a substantial income on the American domestic market and are frequently offered in this market at very low rates. Therefore, through no fault of their own but simply because to some extent the British television market is a dumping market for American television films, the British television film maker, if he wants to do a good job of making films, is bound to find himself at a disadvantage unless some quota of this kind, such as operates in the film industry, is allowed to exist.

There is the other important aspect of this affair to which I referred on the Amendment to Clause 7, which could not be pressed because of the issues which arose. I think it is important that British television films should be available for sale abroad, both because they can earn a significant amount of revenue and also because it is most important that in the under-developed countries films should be available for the new television screens which will give some picture of the British and Western way of life and which will bring to those communities some evidence of what I believe to be the talent and resourcefulness of the British character and the artistic qualities of Britain. This is particularly important, because, as your Lordships will appreciate, in many of those under-developed territories television is a medium of extraordinary educational and informational force.

In many of those areas you have a largely illiterate or semi-illiterate public. Often, there is a communal viewing of the television, which can get across to such populations in the way the printed word cannot do. It is, I think, most essential for British prestige and legitimate British interests, and for showing the British face to the world, that British television films should be available for sale in those markets; and such British television films are not likely to be available unless they can be reasonably certain of a domestic market here. The new clause does not refer (in fact they are specifically excluded under subsection (2)) to films having a playing time of less than 20 minutes. That is so that the clause shall not apply to the kind of news films that appear in many news magazine programmes and so on, and which obviously ought to be governed by the flow of the world news at any one moment, and not to be required, even by so excellent a general provision as this, to fashion their programmes to meet any other consideration than giving a fair and comprehensive picture of what is happening in the world. Therefore, we have, particularly and definitely, excluded this short news type of film from this category.

What remains, of course, is the large number of entertainment films, the longer documentary films and films of that character. There is a further exclusion by this clause, and I think it is most important. Under subsection (4) no film which was made more than five years previously shall be included in this quota. That, of course, is to prevent the use of any provision of this kind simply to pack the television screens with old British films instead of old American films. What this clause is trying to achieve is to give a healthy life and an economic viability to British television films, newly made for the television screens, giving a picture of Britain to the British people, and also enabling that picture to be spread abroad. I beg to move.

Amendment moved— After Clause 10 insert the said new clause.—(Lord Francis-Williams.)

LORD CHESHAM

While I fully appreciate the force of what the noble Lord has said, and the reasons that have prompted him to put forward this Amendment, and while I most certainly should not like him to think that the Government are heedless of the interests of the British television film industry, I think it my duty to point out to your Lordships certain things which we feel apply in the possible application of a rigid quota of this kind, and which in fact led us not to propose any change in Section 3(1)(d) of the 1954 Act. I would also, in passing, remind your Lordships that the Pilkington Committee were against quotas in these matters, and in favour of flexibility.

The noble Lord, Lord Francis-Williams, said quite correctly—and I heartily endorse this—that the flow of television films between countries is a very important thing for more reasons than just the money. He spent more time, quite rightly, in saying how it presents Britain to the world, with which I would agree. A point which usually crops up when considerations of this kind are being thought about—this is not my main point—is whether he does not risk, in his suggestion of the imposition of a quota here, sparking off counter measures elsewhere of the same kind.

LORD FRANCIS-WILLIAMS

I do not wish to interrupt the noble Lord too much, but I should have thought that the British television film industry would be delighted if the Americans would impose a similar quota against us so that we had a possibility of showing a larger proportion of British television films on American screens.

LORD CHESHAM

That is a point of view, and rather an interesting one. I had been given to understand that the amount of films exported was larger, but, naturally, I accept what the noble Lord said. I am sure he will agree with me that he certainly would not want counter measures, as it were, to be imposed against our films so that it would make it more difficult for them to be sold abroad. I make no more of it than that, but I think there is that risk. He would no doubt also agree with me that the I.T.A., and the B.B.C. as well, have already achieved a quite creditably high proportion of British material.

That being so, I feel that the sensible course is probably to leave the Authority free to exercise their responsibility for the content and balance of programmes, and not to put on a specific and selective quota—particularly when there is attached to it, if I may, with respect, say so, a proviso which gives them a "let-out", but which is likely to, or might possibly, give rise to almost endless arguments. I am talking about the proviso in the first subsection of the new clause. That proviso would put the onus of proof on the Authority to show why they have not selected certain films. It would also put on the Authority the onus of proof as to why the programme contractors could not afford them. I think that it would end up in an impossible position of interminable wrangling.

The question of cost comes up as well. As the noble Lord knows, filmed programmes are more expensive than either recorded or "live" ones, and I should have thought that there might be a risk that if one had to buy a certain number of films at a certain cost the film might be a rapidly diminishing feature of television as against other methods of producing programmes. After all, it is only one method of a recording material to be shown on television, and even what the noble Lord called a modest figure of 30 per cent. is bound to be an arbitrary one. After all, a programme can be "live," recorded, or filmed, according to a variety of technical considerations and other things. It would be rather difficult, quite apart from the question of the difficulties and differences which can arise under the proviso, to apply a quota.

One further consideration is that I should not have thought that Section 17 of the Films Act, to which the Amendment refers, and which lays down conditions which have to apply to a film made for showing in cinemas in order for it to qualify as a British film, was necessarily entirely appropriate to films which were intended for the rather different conditions of television.

I must remind the noble Lord—not that he does not know it perfectly well—that there is already an existing system which the I.T.A. have for deciding what counts as a British film within the broadcasting industry. I must also point out—not that he does not know this as well—that that is operated with the agreement of fourteen unions, and in fact it works. I will not try to say how, because it is a rather elaborate and complicated process. But one of the troubles which we are up against in that, as the noble Lord, Lord Shepherd, said, is the question of telerecording, which does not count as a film. While wanting to support the industry I think we might give it as much cause for alarm as otherwise by switching the emphasis on to telerecording rather than the making of actual films specially for television. Naturally I cannot be specific, and say that this thing would happen or that thing would happen, but I can say that the consequences of this Amendment might at least be described as unpredictable.

We think there are certain objections to this arrangement, which I have tried to outline. But I think the noble Lord might wish to know that my right honourable friend has written to the I.T.A., and the B.B.C. as well, asking them to bear in mind, in so far as television films are used in their services, the possibility of assisting the television film industry as best they can. It might be interesting that I should add that at the present moment the British share of television films on Independent Television is nearly 40 per cent., and the corresponding figure for the B.B.C. during the last quarter of 1962 was 34 per cent.

LORD ARCHIBALD

I think that we on this side of the Committee, at least, and probably noble Lords in other parts also are bound to be disappointed by the reply we have just heard. I would remind your Lordships of the history of this matter. I think I should be right in saying—and I hope this is not boring to your Lordships—that the idea of a quota for television films flowed, first of all, from the producers' association of which I have the honour to be Chairman, the Federation of British Film Makers. We put proposals of this nature to the Pilkington Committee and, as the noble Lord, Lord Chesham, has said, the Pilkington Committee did not agree with us on that. But in the debate in your Lordships' House on the Pilkington Report I revived this suggestion of a quota for television films, and I then suggested that it was perhaps not entirely suitable for legislation. I said that I thought the industry here would be satisfied if the Postmaster General would get an agreement—a gentlemen's agreement if you like—with the B.B.C. and the I.T.A. (or, instead of the I.T.A., direct with the programme contractors) that they would, in fact, fulfil a quota so far as British television films were concerned.

While I am very grateful that on subsequent representations the Postmaster General, as the noble Lord has just said, wrote to the I.T.A. drawing their attention to the value in practice of trying to make sure that an adequate proportion of British television films were shown, quite frankly I do not think that that goes far enough. I am quite sure that, if the Postmaster General were to take up this question seriously, and were to make representations (I know that under this Bill the B.B.C. are not concerned, but I should hope that he would make the same representations to the B.B.C. as to the I.T.A. or the programme contractors), that might be a better way of dealing with it than by trying to write it into legislation. The important thing is to get the two authorities to agree that there should be, in effect, a quota of British television films shown on British television.

I agree with the noble Lord who is in charge of this clause on one point: that the question of definition is a rather difficult one. One might say that we all recognise a television film when we see it, but it is a little difficult to define it in relation to new technques, and newer techniques which may develop in the future. But we all know what is a television film—the B.B.C. know, and the I.T.A. and the programme contractors know—and if they would agree with the Postmaster General that they would observe a quota for British television films, there would be no difficulties about interpretation, because all the authorities would know exactly what they were referring to.

If I may reply to one or two other points which the noble Lord has made, I do not think that there is any danger in the alarm he has raised about counter measures in other countries. After all, we have had a quota for cinematograph films operating since 1927 and, so far as I know, that quota has not been responsible for restrictive measures in other countries. That there are restrictive measures in other countries is undeniable, but there is no evidence whatsoever that those restrictive measures in other countries have been a counter measure to the Cinematograph Films Act and its quota for cinematograph films. And, as my noble friend Lord Francis-Williams says, that is a risk that the industry here would be very willing to accept.

A point which has not been made and which is unfortunately not included in the Amendment, though I think it would be included if there were, as I ask, an agreement between the Postmaster General and either the Authority or the programme contractors, is that the agreement should include a reference to the time at which the films are shown, because it would be quite unsatisfactory if the American television films were shown et the peak hours and the British television films were shown at the less important hours of the day. It would be rather important that any agreement should cover that point. I want also to suggest to your Lordships that this has an important bearing on the whole of British film production, and not just British television film production. Any of your Lordships who have recently been in Hollywood, as I believe some have, and who have gone to the studios there, will have found that the studios which are still open are in fact being kept alive by the production of television films. Without these, the overheads, the general cost of operating the studios, would be such that they would have to close, and there would be no place available for the making of cinematograph films.

We are rapidly getting to that stage in this country. Our film studios get a great benefit from the making of such British television film series as there are. They help to carry the overheads of the studios; they help to keep the studios going when the main peak period of production of cinematograph films has passed; and, by taking their share of labour costs, overheads, rentals and so on, they make it possible for the studios to stay open and to be available for the making of cinematograph films. I think that is a point which cannot be stressed too strongly: that if, as a result of the levy, there is a cutting-down on programme costs and consequently a cutting-down in the making of the most expensive item, the television film, it will have a serious effect on the film studios in this country and, as a result, on the making of cinematograph films here.

If I may, I will emphasise a little more the details of the important point made by my noble friend Lord Francis-Williams. Look for a moment at the actual cost involved. To make one episode of a television film series—and when we are talking about television films we are talking mainly about television film series; and I need not remind the Committee about them; they are well known—costs roughly something like £25,000. It is possible for the programme contractors to buy the British rights of an American series which may have cost a great deal more than the British costs I have indicated. They can buy the British rights for from £3,000 to £5,000 per episode. In fact, this is the market for the dumping of those films which have recovered their costs and have made their profit on the other side of the Atlantic. Faced with the native cost of £25,000 per episode there is obviously a very strong temptation, particularly after the levy comes into operation, to avoid that expenditure, to drop the British film series altogether and to be content to use the cheaper American film series. That would be a most undesirable situation, but it is one that seems to me to be implicit in the Bill and in the consequences of the levy.

I hope, therefore, that if the Government are adamant on refusing this Amendment, they will at least come a little further to meet us on this matter; and I would ask again that it should not be just that the Postmaster General writes to them and says he will keep this in mind but that he should actively take it up with them and try to seek a gentleman's agreement with them under which the B.B.C. and the programme contractors shall undertake to show a reasonable proportion—say 30, 40 or 50 per cent.—of British television films, and to show them during peak hours or off-peak hours according to how the American films are shown in these different hours of the day. I hope that we can get some little satisfaction from the Government and not simply a plain negative.

LORD CHESHAM

I will do my best to help the noble Lord in view of what he has said. Of course, he will realise that, as regards the hours of showing, under this Bill the I.T.A. have quite extensive power of control. But I have no doubt that what he has said will not fall upon deaf ears in that respect. So far as the question of making my right honourable friend agree to some kind of voluntary quota with the I.T.A. and, indeed, with the B.B.C., of course, I cannot stand here and commit him in that respect. Still less can I commit him to come to some agreement with them. Obviously the noble Lord realises that. I will, however, certainly convey to my right honourable friend what the noble Lord has said and the underlying sense of what he meant. Naturally it will then be for my right honourable friend to decide how to proceed next.

LORD SHEPHERD

May I make a suggestion to the noble Lord? I presume that if a quota were to be imposed at some time or another it would be done by regulation and order. I believe that that is what is done under the Cinematograph Act when a quota is imposed or a levy raised. I can well see from the remarks made by my noble friends that something has to be done if British television films are to have a proper showing. I wonder whether the Minister would consider whether it would be possible to include in the Bill provision, should the necessity arise in the interests of British television, for the Minister to make a quota by Order.

LORD CHESHAM

I am always ready to take up serious suggestions from the noble Lord and I will look into this, because I can see that it is seriously intended, but I cannot hold out a good deal of hope. The noble Lord realises that my original reply was devoted to the undesirability of having any sort of statutory quota. When I spoke again, I was talking about a voluntary, free-will quota, which was what I thought the noble Lord had in mind.

LORD FRANCIS-WILLIAMS

I thank the noble Lord for going so far as he feels he can. I wish that he could have brought himself to go a little further, but in the circumstances I will not press the Amendment and beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 11:

Contracts for programmes

11.—

(4) Every contract concluded between the Authority and a programme contractor shall contain all such provisions as the Authority for the purposes of the discharge of their functions think necessary or expedient to ensure that the programme contractor—

9.7 p.m.

VISCOUNT COLVILLE OF CULROSS moved, in subsection (4), after "functions" to insert for the purpose of maintaining supervision and control over the programme to be provided under the contract".

The noble Viscount said: This is little more than a drafting point, but I think that it is something which should be right, and I would welcome an assurance from Her Majesty's Government that all is well in this subsection of Clause 11. I am satisfied that it is right that the contracts between the Authority and programme contractors should provide for the supply by programme contractors of various information needed by the Authority for the supervisory and controlling functions under this and the principal Act. But I do not suppose that this clause intends to give the Authority power under the contracts with the programme contractors to get hold of material for them themselves to transmit, if they ever have to do so in default.

What the subsection says is that the contracts … shall contain all such provisions as the Authority for the purposes of the discharge of their functions think necessary …".

One of their functions under this Bill and the principal Act is to put out programmes themselves in default. I am a little afraid that the clause as it is at present drafted will enable them to obtain scripts and other programme material free for that purpose. I hope that my noble friend can say that this is not what is intended and, if that is so, that the point is not open to the Authority under a technicality under this subsection. I beg to move.

Amendment moved— Page 13, line 40, after ("functions") insert the said words.—(Viscount Colville of Culross.)

LORD CHESHAM

I need have no hesitation in assuring my noble friend that that is not the purpose of the clause at all. If there is a legitimate doubt about that aspect of it, I shall be glad to look into the matter and see whether anything needs to be done. Of course, my noble friend realises that I cannot accept the Amendment because of other necessary powers which must remain to the I.T.A.; but I will certainly consider the matter, although I think his fears are groundless.

VISCOUNT COLVILLE OF CULROSS

I am grateful to my noble friend. I would point out to him that subsection (5) does put in the words I am here suggesting and thereby would tend to differentiate the purposes for which they used the powers under subsections (4) and (5). That is really the source from which my doubts came. I shall be grateful if he will look into it, and, in the meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD SHEPHERD moved to add to subsection (4): (f) if so required will incur expenditure on the production of programmes to be broadcast by the Authority amounting over a period defined by the Authority to a sum not less than a sum being such a proportion of the advertising receipts of its programme contractors as the Authority with the consent of the Postmaster General may determine".

The noble Lord said: I will be as brief as I can in regard to this Amendment. We have heard right through the Committee stage, both from the noble Lord, Lord Lloyd, and from my noble friends behind me, about the possible effects of the levy: that it may well induce contractors to reduce their expenditure on programmes. My feeling, frankly, is that this is not likely to be the case, but fear has been expressed in the Committee this afternoon, and was expressed in another place, that this might be so. We therefore feel that we ought to include in the Bill an Amendment that where the contractors are not spending, in the judgment of the Authority, sufficient sums to provide the type of programmes that is required of them by the principal Act, then the Authority shall have power to so direct them to raise their programmes, even if it means further expenditure. That is the purpose of the Amendment. I beg to move.

Amendment moved— Page 14, line 20, at end insert the said paragraph.—(Lord Shepherd.)

LORD CHESHAM

The noble Lord will understand if I gloss over what I regard as a "cock-eyed" piece of drafting in the Amendment and get on, as has happened before, to the substance of it. This is a matter to which, since it was considered in another place, the Government have devoted a good deal of thought. The noble Lord was perfectly right when he said that this Amendment is based on a certain amount of fear and misgiving that the expenditure will be cut to a minimum and thus depress the whole standard of television.

The noble Lord, Lord Shackleton, said on Second Reading that those producers on commercial television to whom he had spoken were not particularly worried about the Bill. I wish that in this connection he had listened to them a little harder. But, needless to say, we understand the feelings and the anxiety of people who work in and for the Independent Television companies and who may be worried about this matter. There are, however, to counteract this anxiety, the safeguards which are in the Bill. The contracts come to an end in July, 1964, anyway. After that the I.T.A. will have responsibility, when they come to select and appoint contractors for the ensuing period, to see that good programme standards are kept up. I do not think I need read out to your Lordships (because you are all familiar with it), the express obligation in Clause 2 of the Bill, which sets out the duty of the I.T.A. in that respect.

There are also the Authority's powers of control over programme arrangements. These are given by Clauses 3 and 4. Then, in view of what has been said this afternoon, in our submission the operation of Clause 7 will leave the companies with sufficient means to produce good programmes; and there is the provision in that clause to enable Parliament to ensure that that is so. I am not sure that I agree with the proposition that the expenditure of a certain sum of money is bound to produce a good programme. Unless I am maligning him, I think it was the noble Lord, Lord Francis-Williams, who mentioned that point this afternoon.

LORD FRANCIS-WILLIAMS

I think I did. What I said was that one could by no means say that a costly programme was necessarily better than a cheap one. But that does not mean you may not have to expend a reasonable amount of money on a programme.

LORD CHESHAM

I remember thinking at the time that I regarded that proposition as rather more dubious than the noble Lord did. He is more knowledgeable about these things than I am, but I should have regarded it as a little more dubious than he appeared to do. Also, in certain circumstances it would possibly lead to some waste. The point I want to emphasise is that I think the anxiety which has been expressed by the noble Lord, Lord Shepherd, about the future is not well based, because it seems to me that Independent Television have a possibility of a healthy future. What we think is necessary is not so much the spending of a particular sum of money on particular programmes, but the production of good programmes which the Bill, with its safeguards and reasonable sums of money, with the spur of competition with the B.B.C. can achieve.

On Question, Amendment negatived.

9.18 p.m.

LORD SHACKLETON moved to add to subsection (4): (f) will provide the Authority with a statement of accounts in such form as the Postmaster General with the approval of the Treasury may require and with a view to the publication of the general report prepared by the Authority.

The noble Lord said: The Amendment is designed to ease the lot of Parliament and others who are concerned with the performance of the contractors, both in regard to the terms of the impact of the new levies that are put upon them, and in regard to their programmes. I think it is commonly agreed between us that these contractors are operating within a field of public interest, and are permitted to have a valuable concession. For this they have to give certain services, and it is our hope that these services will continue to improve. Under this clause it is laid upon the contractors that they will give reasonable facilities to the Authority for inspecting books, accounts, records and other documents. It seems to us that the Authority should have power, not merely to inspect the books, but to demand that the accounts are presented in such form and in such detail as will enable them to judge, with the minimum of effort, various matters, and also to enable the Authority in their report to give some account of this.

I would suggest that this is genuinely in the interests of the contractors. They are operating in a field in which there is great public interest, and there can be no reason why their accounts should not be published. Indeed, it might dispose of accusations that might be going around about their activities. I hope that the Government will see that this is a necessary complement to the Act. It will enable the Postmaster General and, if necessary, Parliament, in so far as these accounts are published in the Report, to judge the conduct of these contractors a good deal more fairly. For this reason I hope the Government will consider this sympathetically, and, even if the form of words is not satisfactory, give us an undertaking that they will provide some sort of provision along these lines in the Bill. I beg to move.

Amendment moved— Page 14, line 20, at end insert the said paragraph.—(Lord Shackleton.)

THE EARL OF DUNDEE

This is an Amendment which was moved in another place and which my right honourable friend the Postmaster General said he would consider. He did consider it and, I would assure the noble Lord, Lord Shackleton, sympathetically. The Amendment was, therefore, withdrawn. My right honourable friend has considered it, although in the course of the discussion he said that it was unnecessary to do so. But I am afraid that he still feels that he is not able to accept this Amendment, for reasons which I must, in courtesy, state to your Lordships in view of what happened in another place and in view also of the case which was put forward by the noble Lord, Lord Shackleton.

The first objection in principle to what the Amendment seeks to do is that it goes much further than the Companies Act, 1948. That Act lays down certain minimum requirements about the accounts of public companies to be attached to their annual report filed with the Registrar of Companies and thus available for public inspection. But since most of the programme contractors engage in activities other than television alone, their accounts available for inspection are usually consolidated ones which do not reveal everything that you might want to know about their television activities separated and abstracted from the rest of the activities which go to make up their accounts. If we were to require the programme companies to provide for publication more than the general law of the land requires companies to do, I think that would be really wrong, unless there were strong reasons for doing so. It would not be reasonable to require a company to publish information in the way that the Amendment seeks to require about revenue and costs, which might be of value to competitors in the same business, and publication of one part only of a company's business might give a very misleading picture of the company's overall affairs and financial position, and might cause embarrassment in the company's dealings with trade unions, performers or programme promoters.

There is one particular reason why it might be thought a good thing that information should be provided about accounts. The noble Lord, Lord Shackleton, has represented that if we were to reconsider the amount of the levy in any way it might be desirable that we should have information—and we have heard a good deal of information this afternoon, sometimes conflicting—about how these companies are doing or likely to do. I do not think it is necessary to have this Amendment in order to do that, because the I.T.A. will have power to obtain all the information they need, all the information that the Government need and all the information that will be needed in order to bring about a decision by a statutory instrument under Clause 7(6) about the company's affairs.

In the final three paragraphs of this subsection (you have to go back a long way in this Bill to get the verb of a sentence; very often you have to go back to the preceding page) it says: Every contract concluded between the Authority and a programme contractor shall contain all such provisions as the Authority for the purposes of the discharge of their functions think necessary or expedient to ensure that the programme contractor"— and then you go down to paragraph (c)— will provide the Authority with such declarations, returns, documents and other information as the Authority may require. (d) in particular, if so required, will provide the Authority with information as to the costs incurred by the programme contractor in providing the programmes or any part thereof (including advertisements) and his receipts from advertisers, (e) if so required, will give reasonable facilities to the Authority for inspecting the books, accounts, records and other documents kept by the programme contractor for the purposes of any business carried on by him, and for taking copies of, or of any part of, any such documents. That, of course, is quite apart from anything the I.T.A. may say in their Annual Report about the effect of the levy on the companies, or anything the companies themselves may say in their own Annual Reports. Therefore, my right honourable friend does not think that it is very necessary in the public interest to impose this additional requirement upon the companies.

LORD SHEPHERD

Frankly, I find the Minister's reply rather bewildering. If the noble Earl would look at the Independent Television Authority's Annual Reports and Accounts, he will see that from time to time statements are made about the progress of the programme contractors. The Report I have here deals with the smaller contractors in Scotland, Grampian and the other one. Therefore, we have this particular aspect appearing in the Report. With regard to the statement of accounts to which my noble friend referred in his Amendment, I am sure the noble Earl, Lord Dundee, will agree that these accounts are available. It is true that they do not give the trading account, but they show the profit and loss; and the balance sheet of each of these companies is available in London on payment of, I think, 1s. Further, you can obtain this information quite readily from the Exchange Telegraph Company, on which I based my information earlier on this afternoon. Here we have detailed information not only on the purposes of the company, but also on its profit margin, the earnings on its capital, the dividend it has paid, the tax it has paid and the like. The information goes even further than that; the chairman describes the progress that has been made. It also gives information as to the subsidiary companies that the contractors have started up. In fact, all this information is available if a person has got the time to go and look for it.

What we are suggesting is that since these contractors, these public companies, are making use of a public medium, all this relevant information should be included in the Report. I appreciate that under the Bill the Authority will be able to call for the information they themselves require to decide upon the performance, good, bad or indifferent, of the contractor. But this is a public Authority which is, in some ways, answerable to Parliament, and I should have thought it was in the interest not only of the Authority but also of the contractors—which, as my noble friend said, have been open to criticism—that the relevant information, which is available if you have the time to find it, should be made readily available in this Report. I cannot think that is an unreasonable requirement.

LORD SHACKLETON

I should like to press the Government on this, especially after hearing the noble Earl's reply. I think the analogy with the Companies Act has nothing at all to do with it. That Act has a completely different purpose. As my noble friend explained, this is a field in which the public are interested, and in the case of the larger companies if they happen to be public companies a good deal of Information is available; so I cannot, for the life of me, see what embarrassment is going to be caused. In my opinion this is typical of an old-fashioned view. I do not believe that the big industrial or commercial company is so nervous about people seeing the details of its trading activities. Indeed most of them not only get their accounts out and sent round to their shareholders, which they have to do anyway, but get them up in a form which is easy for them to understand. How can it cause embarrasssment, as I think the noble Earl said, with the trade unions or with other promoters? The noble Earl knows a great deal about company business and I think he would have done better without his brief on this Amendment.

I should like to make an appeal. I am wondering whether the noble Lords who are concerned with some of these companies might not care to help us—and I mean this in no way to embarrass them, because this seems to me to be desirable. Where there is a feeling of secrecy, then suspicion is aroused. There is no reason why these accounts should not be made available in sufficient detail, as they will be made available to the shareholders in the case of private companies and as they are generally available in the case of public companies. If in fact they are tangled up with other trading accounts, it is almost certain, I should have thought, that the great majority of these companies have their separate trading companies' accounts. I have not checked that against the terms of the Bill, but presumably there are separate corporate bodies in every case, and as such they will have their own balance sheet and profit and loss account. For the life of me, I cannot see why this information should not be delivered. Probably they do deliver their annual accounts. This is probably one of the returns for which the Authority asks. We are suggesting that this should be written into the Bill and also that it should be included in sufficient detail in the Annual Report.

The noble Lord was good enough to say that the Postmaster General had looked at this matter. I suspect that by then he was getting pretty tired of this Bill, and I would appeal to the Government not to give up just yet. It is an exhausing process. They have been doing quite well to-day, and I hope that on this occasion they may do something for the Opposition, who have not been unhelpful. I suggest that this will remove some of the criticisms. It may reveal nothing of great significance, but it will bring things into the open, and I can only say that if the contractors are good employers, and I expect most of them are, it will be in their own interests to provide this information that would be available to the trade unions.

THE EARL OF DUNDEE

I do not think there is much in this Amendment. My difficulty is that it has already been carefully considered by my right honourable friend as a result of discussions in another place, and I think his original contention that it was unnecessary is right, in view of the three paragraphs that I have quoted to your Lordships; I think that the I.T.A. and the Government, and, if necessary, Parliament, will be able to get all the relevant information they want. What the Amendment is asking is that these contractors should be put under more stringent requirements under the ordinary law than they are under the Companies Act. We have all been most patient over this Bill. I will certainly undertake to consult my right honourable friend again on this. The reason I am doing so is because the noble Lord has suggested that he might have been tired of the Bill when he reconsidered it, and I think that, as we are sitting unusual hours, we ought to be sympathetic to that point of view. Therefore, in response to the noble Lord's appeal, but without giving any kind of undertaking, I will ask my right honourable friend whether he is quite sure that he has reconsidered it enough.

LORD SHACKLETON

I am grateful for that little kindness, and ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.37 p.m.

VISCOUNT COLVILLE OF CULROSS moved, after subsection (4), to insert: () Every such contract shall contain such provisions as may be necessary or appropriate for ensuring or facilitating effective consultation at all times between the Authority and the programme contractors in relation to matters up on which, under any of the provisions of the principal Act or of this Act or of such contracts, the Authority are required to consult the programme contractors, or from time to time propose to give directions to the programme contractors, or exercise powers or rights vested in the Authority for securing compliance with any of such provisions or any regulations, rules or codes made thereunder, or for remedying any breaches thereof, or in relation to other matters of common interest to the Authority and the programme contractors, and in particular for the maintenance of a committee representative of the Authority and the programme ccntractors to consider and give advice or make recommendations to the Authority and the programme contractors as to such matters.

The noble Viscount said: I think that all members of the Committee would probably agree that the one main thing that has come out of the present system under the principal Act is the Standing Consultative Committee which was set up between the earliest of the programme contractors and the Independent Television Authority and has been incorporated in the contracts of all the programme contractors who came into existence since that date. This Committee is an ad hoc Committee—it has no statutory origin. But it has met regularly ever since independent television started, and it has done all the things which I have attempted to set out in my Amendment, and I think done them satisfactorily. It has provided a forum where matters of disagreement and dispute can be discussed and worked out before they ever get to any of the serious statutory stages which are in the original Act. If there is one thing that will be more necessary than anything else when this Bill becomes law, it will be an increased amount of consultation between the programme contractors and the Authority. Therefore, I hope that Her Majesty's Government will agree to give their statutory blessing, as it were, to some sort of consultative machinery such as at present exists, and make quite certain that it is written into the contract and that it can continue to do the good work that it has done heretofore. I beg to move.

Amendment moved— Page 14, line 20, at end insert the said subsection.—(Viscount Colville of Culross.)

LORD CHESHAM

I must admit, having a nasty suspicious mind, that when I first saw this Amendment I thought that my noble friend also had a nasty suspicious mind, and had some sort of feeling that the Authority would be likely to pursue their way through their functions and duties without consultation. I am somewhat relieved at the reason the noble Viscount has put forward, and he will forgive me if I say that I think there is perhaps not a great deal in it, except on one point. Obviously, the Authority must be in constant touch with the programme companies all the way through, and I would point out that Clause 3 provides that there shall be consultation in the drawing up of the programme schedules. Certainly, the Authority will consult as a matter of course with the companies on their policy on codes.

The essential point is that all the consultation in the world, whether it is statutory or not, cannot, and must not, detract from the position of the Authority as being in control. I do not quite know what would happen after consultation if there were not agreement, so to speak. The noble Viscount has referred to the Standing Consultative Committee. I have no doubt that after the useful work it has performed and is performing, as he rightly says, it will continue in being. I have no reason to think that it will not. In point of fact, even if for some reason, it should not, the Authority still has power under Section 8(1) of the 1954 Act, to arrange for the provision of such a Committee. I should have thought it highly desirable that there should be such consultation, but stopping short of making it an actual statutory provision. There is nothing between my noble friend and myself, except as to whether or not it is desirable to make the setting up of such a Committee statutory. Personally, I think it is unnecessary. The I.T.A. must obviously, if it is to get efficient working, consult all the way through, whether it is a statutory duty or not. I think that it would work better if it were not done on a statutory basis.

LORD SHACKLETON

Before we finally dispose of this Amendment, I must say that I should have liked to hear from the noble Viscount how far he has anxieties about the continuation of this Standing Consultative Committee. It is conceivable that in years to come the I.T.A. might become perhaps rather more authoritarian. I do not know. Clearly, it is in the Authority's own interests to have excellent relations with the contractors. I am not sure that there is not perhaps an advantage in writing in some such measure—I do not know whether it is desirable that it should cover everything, including the kitchen sink (which this Amendment, on which I congratulate the noble Viscount, does), but it would seem to be obvious common sense. I am wondering whether the noble Viscount feels very strongly that there ought to be a statutory requirement. This gives the programme contractors collectively a position. It may well be that they already have suitable associations for consultation among themselves, and it is not as if we want the relations to be such that a protection association is necessary. Before the noble Viscount decides to withdraw his Amendment, I should like to say that I have a certain sympathy with what he is seeking to achieve, and I am wondering whether he feels that perhaps what has been said is enough, or whether there are grounds for anxieties over this.

VISCOUNT COLVILLE OF CULROSS

What the noble Lord, Lord Shackleton, has said about the kitchen sink is rather a good case in point. It tends to be a very controversial matter at times when it comes into the dramatic side of the programme! I have no serious anxiety about the situation, but I thought it would be useful to draw attention to the particular machinery arrangements which have been made. It has been so successful, and has avoided so much trouble almost before it began, that it seemed to me that, in a clause which was full of what contracts must have in them, of a restrictive or other nature, it would be a good thing to include something that was recognised as good and useful. I thought that Her Majesty's Government would look favourably at it, particularly as my noble friend Lord Chesham has said that he accepts the need for full consultation throughout, which was no more and no less than what my Amendment contained. If the noble Lord thinks it is not necessary, I have no such anxieties as to wish to press the Amendment beyond what has already been said in your Lordships' House. I therefore willingly withdraw it.

Amendment, by leave, withdrawn.

THE CHAIRMAN OF COMMITTEES

The noble Lord, Lord Lloyd, has informed me that he does not wish to move his Amendment, No. 29.

LORD SHACKLETON

I beg to move the Amendment standing in the name of the noble Lord. It may be that the answer is the same one as we had on the earlier Amendment.

A NOBLE LORD: Should the noble Lord be moving this Amendment?

LORD SHACKLETON

It is in order for me to move it. I was more attracted to this Amendment than to some. I think that in the course of the debate quite a powerful case has been made for taking into account the special problems of special programme contractors. Although most of us ion this side were inclined not to make too big concessions, this does seem to me—

THE EARL OF SWINTON

Is the noble Lord moving this Amendment, because otherwise I would say that he is out of order. He is moving it?

LORD SHACKLETON

I am about to do so, yes. I thought I had to say, "I beg to move" at the end. I am in fact giving the Government a chance to explain a little further. The reason why I am attracted to this is because I think it is a more moderate and workable Amendment. It may well be that the Government's answer is that the Authority will in any event do what is contained in the Amendment. If the noble Earl, Lord Swinton, is not familiar with the Amendment, I would say that it requires the Authority to allocate various areas or days of the week in which programme contractors shall operate. When doing so, the Authority shall take into account the achievement of fair conditions between the programme contractors.

We have had quite a good deal of evidence to-day that conditions have not been entirely fair between certain programme contractors. We have argued from this side of the House that the Authority has power, under Clause 7(1)(a), to ease the lot of those who feel they are oppressed. I am inclined to make it a duty of the I.T.A. to do this. In any case, although this is on a theme which we have already discussed, I think this Amendment is in a rather more workable form. I would be interested to hear the reply of the Government, unless they were misled by the fact that the noble Lord, Lord Lloyd, was not going to move the Amendment and have thrown away their reply. I beg to move.

Amendment moved—

Page 14, line 29, at end insert— ("(6) In allocating the various areas in which or the days of the week on which the programme contractors shall operate the Authority shall take into account the achievement of fair conditions between the programme contractors and in addition shall for the same purpose provide for differential payments under section 7(1)(a).").—(Lord Shackleton.)

THE EARL OF DUNDEE

I am sorry to disappoint the noble Lord, Lord Shackleton, about this. But, in the first place, I think that the Amendment is not really necessary and, in the second place, I have nothing more to add to the reply which I think I gave about an hour and three-quarters ago to my noble friend Lord Lloyd, and the noble Lord, Lord Morrison of Lambeth, who took the opportunity of asking a number of questions about A.T.V. and A.B.C., which I had rather expected the noble Lord, Lord Morrison of Lambeth, might raise on this Amendment. But I was very glad that he raised them on the earlier Amendment, which I thought would be an economy of time. Therefore I am a little sorry that the matter has been raised again.

But the point which the noble Lord, Lord Shackleton, mentioned, about (a) rentals in Clause 7, is one which I fully dealt with on the earlier Amendment with regard to inequalities about the nature of the area and the days on which television takes place, and that really is a matter which I think the I.T.A. must decide in renewing contracts when that comes to be done next year. I would only just add the qualification that we want to be fair between companies, as I hope the I.T.A. will be. We must also consider not only fairness between the companies, but also what is going to produce the best type of television in relation to the needs of particular areas.

LORD SHACKLETON

Of course, the noble Earl was in fact on the previous occasion speaking to a different Amendment, which was concerned with a different subsection of a different clause. This is concerned with Clause 7(1)(a). But in the circumstances I should not wish to press the noble Lord's Amendment, and I therefore ask leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 11 agreed to.

Clause 12 [Breach of contract]:

9.50 p.m.

VISCOUNT COLVILLE OF CULROSS moved, in subsection (1), to leave out "has broken the contract on at least three occasions" and insert has on at least three occasions within such period as may be specified in the contract committed breaches of the contract which were not merely formal or technical or otherwise of trivial importance".

The noble Viscount said: In another place a very important addition was made to this clause in that the arbitration provisions in subsection (2) were added. This arbitration provision was inserted in order to determine whether or not there was a breach of contract serious enough, in the end, to lead to a programme contractor's licence being taken away. If the words that I suggest are not put into this clause, then the arbitrator will have nothing worth while to argue about, because it may be that there is a trivial breach of contract as a result of which notice is given by the Authority to the programme contractor, and it will be strictly necessary for the arbitrator to say that this is so. This, however, is thwarting the whole point of arbitration, in which it is for the arbitrator to decide whether what the Authority alleges is a serious breach which should lead to the programme contractor's licence being taken away is or is not such a serious breach. I think that, unless some such words are added to this subsection (1) of Clause 12, this point may never arise at all.

After all, even in the last Road Traffic Act it was enacted that it is only for serious offences, if you commit them three times, that your licence is taken away, as I think my noble friend Lord Chesham knows very well. I do not think there should be any question, under this Bill, of three purely formal, trivial or minor breaches of contract leading to a licence being taken away. I hope, therefore, that my noble friend will be able to look with some favour upon this Amendment; and, if it is not right technically, at any rate will see that something of a similar nature is written into the Bill. I beg to move.

Amendment moved— Page 14, line 40, leave out ("has broken the contract on at least three occasions") and insert the said new words.—(Viscount Colville of Culross.)

LORD CHESHAM

While I see what my noble friend is getting at, I am afraid that if we were to put these words in the Bill we should create rather more difficulties than he is seeking to solve. It would certainly give rise to a good deal of uncertainty—the uncertainty being, of course, who is to be the judge of what is merely formal or technical or otherwise trivial. From what my noble friend says, there are two people who can be the judge. One is to be the arbitrator, in which case, in order that he gets every case to judge what is trivial or what is merely formal or technical, the Authority must give written notice of a breach to a programme contractor—in the case of every single possible breach they make, however formal, however trivial or however technical.

Now I think that that is a complicated way of achieving nothing very much, because I should have thought that at any rate the primary opinion that should be given on this matter would be the opinion of the Authority. They have so far behaved, as I understand it, in a very reasonable way on this matter, and unless the noble Viscount tells me otherwise I see no reason to think that they will not continue to do so. They must have some power to ensure that no company continuously offends against the contract; and, obviously, a breach that the Authority regards as notifiable will be of sufficient seriousness to call for that action. I really cannot see the Authority wanting, or even needing, to deal with every trivial thing by means of written notice, and making it a notifiable breach. I should have thought that they would deal with those kinds of breaches of contract over the telephone, or round the committee table, or whatever they do at the present time. I am sure that we can rely on a sense of proportion coming into play, that no very small errors of judgment, or something of that kind, will be regarded as a matter calling for written notice. I do not think that they should be, and, despite the provisions to which my noble friend refers, I do not think it is necessary for them to go through all this paraphernalia.

THE EARL OF SWINTON

I should rather like the noble Lord the Minister to have another look at this point. There is nothing between us in intention or purpose here, but I recall (as he also ought to, because he was deputy Minister of Transport when we had the Transport Bill before the House) that it was then considered necessary to put into that Bill that a man should not lose his licence—for he lost it after three offences—for a purely technical offence. I cite this merely as a parallel. But it was necessary; not because anybody suspected that the Minister of Transport would do anything unreasonable; but because, unless the position was so stated in the Act of Parliament, even though he would have wished otherwise, it would have been necessary to take action over a technical offence such as leaving a motor-car. Everybody, except a Minister who is privileged, has left his motor car and been told to move it on. For an offence like this a driver might have lost his living. The Minister felt it necessary in that case to put it in the Bill in order to save him from himself. I quite agree.

A great many things have been said about the I.T.A. I think they have done a very good job. I think they have been quite firm when necessary; they have also proceeded by negotiations and talks—which, after all, is not a bad way to proceed. In this connection, there was a lot of comment in this House on a Bill earlier to-day when the Government got themselves into a mess because they had not properly consulted with the Trades Union Congress and the Employers' Confederation. I think that I.T.A. have been admirable in that respect. I should like the Minister to look at this. I am sure that is the way they would want to proceed; but I should like to make quite sure that this Bill is so drafted that they do not have to take action and serve notices for something perfectly trivial. Let them have the right and the duty to intervene where there is a breach of which notice has to be taken; but let them have full power to wash out the trivial mistakes. Would the Minister look at this to make sure that the I.T.A. have the discretion that he wants them to have?

LORD SHACKLETON

I hope the Government will not give way on this matter. The noble Lord has said how good the I.T.A. have been. I would say that a great deal of the grounds of criticism of commercial television has been due to the failure of the I.T.A. to do their job. It may be that in the past they should have taken stricter action than they did. We have taken the financial penalties out of the Bill, and I am not opposed to that: I think the Government were right to do that. The financial penalties are neither here nor there. But it seems to me that the I.T.A. must have the right to judge what is a breach of contract; and there are ample measures to protect the contractors in this matter. It seems to me we cannot help it further by trying to say what is exclusively a trivial offence—because some people might regard some things as trivial when the I.T.A. did not. And I can see the possibility of some quite absurd arguments. I think the Government have it about right. It may please the noble Viscount if they undertake to look at it; but I hope we shall not play around with this particular section.

LORD CHESHAM

Of course, nobody wants any programme contractor to lose his licence for a breach that is trivial or technical. What I am anxious to do is to preserve the position of I.T.A., as I see it. The present position is that the Authority have discretion not to serve a written notice where they think a breach is trivial. What I am afraid of is that, if I accept this Amendment, the I.T.A. will no longer have that discretion and must serve a notice in order that the arbitrator can adjudicate. The noble Earl adduced the analogy of the Road Traffic Act. It rather looks to me as if we should be importing the principle that every constable must prosecute every motorist for every offence, however formal or minor, in order that the court can use its discretion in regard to endorsing his licence. This seems to me a cumbersome way to proceed. Naturally I will look at this again, but at the moment I think that it is better left as it is.

VISCOUNT COLVILLE OF CULROSS

I thank the noble Lords who have taken part in this small debate. It is difficult to put down Amendments to this Bill which do not suggest that one is criticising the way in which the Authority exercise their discretion. I am not proposing to do that at all. Nevertheless, I think that the Bill itself should be sufficiently precise to make perfectly clear what is meant and so that your Lordships should not rely solely on the good sense of the Authority, which may or may not remain as it is to-day. However, I think that my noble friend Lord Chesham has produced a powerful argument against this Amendment. I gladly accept his offer to look at it again to see whether anything can be done to improve the wording and make it more precise. In the meantime, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 12 agreed to.

Clause 13 [Second television service provided by Authority]:

10.3 p.m.

On Question, Whether Clause 13 shall stand part of the Bill?

LORD SHEPHERD

I am a little anxious about the wording of Clause 13. It places a duty on the Authority, when a second commercial television service is created, to ensure that so far as possible the same kind of subject matter is not broadcast at the same time in different programmes. I am satisfied about that provision, but the original Act makes it clear that competition should exist where it is possible. We know that that has not been possible because there is only one service. I should like to have it from the Minister that when a second commercial service is started, there will be competition between the two contractors, at least in the main areas, and it will not be a case of the existing television contractors operating two services in the same place at the same time. I hope that the Minister can give us an assurance, because Clause 13 does not deal with this and this may imply that the Government may have shifted their ground on the question of competition in the principal Act.

THE EARL OF SWINTON

I would have spoken on the previous Amendment if it had been raised, and I am glad that the noble Lord, Lord Shepherd, has spoken to the clause, because I should like to make one or two observations on it. I said when we discussed the Report of the Pilkington Committee that I thought it right that there should be a Third Programme, but that what that Third Programme ought to be was a genuine Third Programme, like the B.B.C. Third Programme, which would cater for minorities. I believe that is really what the demand is. Minorities are not just highbrow people. It is interesting to go into the statistics of what people view. Sport, racing, and even boxing (the noble Baroness, Lady Summerskill, is not here, but she would be delighted to hear this)—is a minority interest. So there is a pretty wide field of minority interest that is not just pure highbrow stuff. I am sure it is right to cater for this.

But what I am absolutely certain is that that is not solved by just setting up another third competing programme, and still less by setting up two more purely competing programmes. After all, a second commercial programme would mean that it was inviting competition from a majority audience, just as I think—and I am sure noble Lords opposite, who are such supporters of the B.B.C., in fairness, will not deny this—there is a great tendency in setting up just a B.B.C. second programme that that will lead to the competition at the particular hours for just the majority audience that are desired. Incidentally, nobody has yet said exactly how the money is going to be found for the B.B.C. Third Programme. I do not quite know. It will cost a great deal of money. I suppose something will come out of the levy. "When is a tax not a tax?"—but I must not go back on that. At any rate, after all the devious stages by which the levy has found its way via the I.T.A.—up to which stage it is not a tax, and after which, when the I.T.A. pays it over to the Exchequer, it becomes a tax, though I should have thought it was then a tax on the I.T.A. and not on the programme contractor—something will come out of that. I doubt very much whether that will be enough. I doubt, too, whether eitherside is anxious to put up the licence fees on a General Election.

I wonder whether it is too late, in the interests of getting greatly improved television and the kind of third programme I believe we all want, to have one third programme, and to divide that programme between the B.B.C. and the I.T.A.? You cannot take away things from the great majority audiences. They are going to see what they want, just as people go year by year to see My Fair Lady. It is not too late to think about having a joint third programme. It might get the Government out of a great many financial problems, and it might also help people like the noble Lord, Lord Francis-Williams, and all those people who are good at having ideas about these things; and it might even get a little more mutual understanding between the B.B.C., who are jolly good (they have become much better since they have had this amount of competition, but they are still a little "holier than thou" and non-cooperative in things) and the I.T.A. I do not expect an undertaking from the Government but I should like to know that the door is not closed. If the Government would have another look at this, I do not think they would regret it.

LORD SHACKLETON

It is delightful that the noble Earl should bring this splendid subject up again. I thought we had advanced a little beyond it, but he is hopeful that it is not too late. I am afraid it is. I do not want to rehearse all the arguments against it, but the main argument at this stage is that a third television programme which would be a highbrow programme would not get off the ground at all. I am afraid that the Government's approach, which is the Pilkington approach, by which the B.B.C. and in due course the I.T.A. have their second programmes—though we have doubts about the second I.T.A. programme on economic and social grounds, but not on broadcasting principle grounds—would be damaging to the sort of purposes the noble Earl had in mind. We fully accept the sincerity of his motives, but it has been canvassed so often and has been rejected by the great majority of people, though one or two programme contractors are peddling this as a compromise idea, some of whom did not want to have another commercial channel. I think there are cogent reasons against it, but in any case it is too late now. We are already committed. The B.B.C. are already embarking on their second programme, and I think the matter has to go forward as at present planned.

LORD CHESHAM

After that exceedingly pleasant small debate on the possibility of third channels or double second channels, or whatever it may be, apart from the observation that, taken by and large, probably the more channels you have the more likely are minorities to be catered for, I will pass back, if my noble friend does not mind to the delights of Clause 13. I cannot say categorically and specifically that the second service could not in any circumstances go to existing contractors. What I would agree is that it would be a bad thing if it went to them in the same place, at the same time.

LORD SHEPHERD

That is what I meant.

LORD CHESHAM

Except in remote places, that is not the intention of this clause. There is no question of going back on the spur of competition, or however the noble Lord put it. The substance of the clause is to try to ensure that it is a matter of balance and programme content, and that whoever is running the channel (and, as I say, I agree that it is undesirable it should be the same people, in the same place at the same time) there should be a balanced programme, because the whole idea of having two programmes is to give a balanced television service so that there is a choice for the viewer. As I said on Second Reading, if there is something light on one, there should be something more substantial on the other, and that is the intention of the clause.

Clause 13 agreed to.

Clause 14 agreed to.

Clause 15 [Audience research]:

LORD SHACKLETON moved, to add to subsection (2): and the Authority shall include a summary of the said facts in their annual report compiled under section 15(3) of the principal Act. The noble Lord said: It is surprising that we should have had to put into the Bill an obligation on the Authority to carry out audience research. It was one of the criticisms of Pilkington that the I.T.A. had not carried out proper audience research. I think the I.T.A. were a little hurt about it, having already carried out some rather expensive research, perhaps rather defensively explaining that anything they produced people would not be likely to believe.

I think we should be prepared to believe the I.T.A. if we could arrive at some common standard of approach to this whole problem of audience research. On the one hand, we have the B.B.C. with years of experience of carrying out the most detailed audience research, and noble Lords will be familiar with some of their reports. They are not generally published, but they are based on an exact inquiry using sampling methods and trying to establish not merely how many people watch a programme but how much satisfaction they get from a programme; and from that they build up an appreciation index.

On the other hand, the I.T.A. and the commercial companies have tended to rely on TAM ratings, which, I understand, are based on a device which is attached to a set which records whether that set is on at a particular time and the programme it is switched on to. This is, of course, no indication of the number of people who watch the programme; it is an indication of the number of households in which a television set is switched on and left switched on; and it may well be that people leave it switched on without looking at the programme at all because we are all taught that it is bad to switch a television set off and on too often. I do not know whether there is any truth in this, but certainly you are told that you should not switch a set on within twenty minutes after it has been switched off. Therefore, it is quite likely that this country is full of television sets switched on to commercial television programmes with nobody looking at them at all. Maybe one could even argue that, if they are switched on to commercial television programmes, it is more likely that people are not looking at them than if they were switched on to B.B.C. But that, of course, would be a rather partisan view.

I think it is unfortunate that there has been this competition war. On the one hand the B.B.C., driven by the competitive spur, some of which we rather deplore, would claim to beat the commercial people at their own game, which they have done quite successfully on a number of occasions, and they claim that they have about 50 per cent. of the audience. On the other hand, the commercial companies, who depend on the size of their audience for their advertising revenue, will quote TAM ratings and their answer would be a very different one. I think that this has been a pretty sterile war, and both sides have been using it.

What I think is clearly intended in this clause is that there shall be proper audience research, and we are now asking that, in addition to there being proper audience research, it shall be properly reported upon. I would suggest this is something which is important for the annual report. The B.B.C. in their annual Handbook give some account of the extent to which audience research reflects interest in particular programmes. I am not suggesting that it should be published in detail. Indeed, I can see that it might well be undesirable to do so, as well as becoming a great bore. But I think some account of it should be included in the report.

I would not necessarily press this into the Bill, but I should be satisfied if I have deployed a case in this matter,—and I hope I have—that the Government should give some undertaking to suggest to the Authority that they should cover this. This is not a matter of no significance at all. It will not only be of value, of course, to people who are directly interested in broadcasting; it will possibly be interesting to those who are concerned with sociological developments, and provided that they need the sort of thing which is being done in sufficient detail, then no doubt they will be able to go to the I.T.A. and obtain access to the actual results. I beg to move.

Amendment moved— Page 16, line 15, at the end insert the said words.—(Lord Shackleton.)

10.20 p.m.

LORD McCORQUODALE OF NEWTON

I should not like this Bill to go out of this House without one voice, at least, raising some doubts upon the accuracy of either B.B.C. or I.T.V. methods of audience research. Having been trained in science in my youth, I do not believe in the accuracy of all these marvellous researches which, from small samples, are supposed to be able to tell us that 8½ million people watch this programme and 6 million watch that programme. I believe there is an enormous amount of inaccurate supposition provided by these samples, not only in this walk of life but in Gallup Polls and all these fancy things the advertising world produces for our delectation. I would express a sceptical view on the whole of this audience research. I think it is a very good thing the B.B.C. and I.T.V. ask some of their viewers what they think about programmes, but to get down to exact figures about the numbers who watch this and that from a scientific point of view is, to a large extent, in my belief, "hooey". The other thing I should like to say on this clause is this. I have no objection to the Amendment the noble Lord, Lord Shackleton, has moved. If they are going to make these researches we might as well know about them. But the words in the clause, "for encouraging the making of useful comments", surely are out of place. Are we suggesting that the public might make useless comments, or do we think that people make comments which they do not think are useful?

LORD FRANCIS - WILLIAMS

I would support my noble friend Lord Shackleton on this matter, I myself being a television performer of sorts. Audience research is very often the curse of all good television. If one is told, often in some mystical and, as the noble Lord opposite said, completely unscientific way, that x millions listen to this programme and only a hundreds of thousands to that, it gives a sort of quantitative view of the programme, and this is then used to suggest quality, which is not at all a perfect method. I think there is a strong case for making a provision of this kind which would ensure a report on the audience research done by the Independent Television and an examination of what its results are, because I think that might turn out to be a very valuable thing for commercial television itself.

It seems to me that commercial television, in its audience research and particularly in its use of TAM rating, is still very much at the stage that popular newspapers were about half a century ago when the Northcliffe revolution began, and when the appeal of advertisements was based entirely on the number of heads that could be counted. Newspapers themselves, with the support and backing of advertising agencies and so on, have refined and gone on refining their analysis of their readers, with the result that it has become possible for quality newspapers appealing to comparatively small sections of the public (which if one were to count heads would not be regarded as important at all) to obtain the necessary advertising revenue, because they can show by greater refinement of reader research that the readers they have are people of substance, people who help to form opinion, and so on.

I think it might be good if commercial television were forced to look beyond the completely arbitrary TAM rating and required, because of a public scrutiny of what they were doing in their tests, to develop more refinements. We might then find it possible to develop within commercial television itself some more of those third television programme qualities that have been spoken of. It might well be found that a programme which did not appeal to a very large number of people on TAM rating but appealed to a sufficient number of people of influence and of the kind who read the serious quality papers could secure advertising revenue for the programme which would make it, even by the most commercial standards, a viable proposition, even if it was appealing only to a million instead of eight million or ten million viewers. Therefore, for that reason if no other, in the hope that that might happen, I am very glad to support this Amendment.

LORD CHESHAM

So far as this Amendment is concerned it would be natural to expect the Authority to include in their Report mention of their various branches of activities, and particularly in something like this, which is a new function in respect of audience research. It would be a curious omission if they did not say something about it. I would agree with the noble Lord, Lord Shackleton that it would be undesirable to go into complete detail, but as on the occasion when we considered Amendment No. 12, it is not necessary to put this into the Bill, because my right honourable friend already has power under Section 15 (4) of the 1954 Act to allow the Authority to put in whatever information appears desirable or necessary.

LORD SHACKLETON

I am grateful, and I hope this will be done. I should like to reply to the noble Lord, Lord McCorquodale of Newton. Without wishing to go too deeply into the value of social surveys and Gallup Polls, and so on, which I think, when they are properly conducted, have considerable value, I believe it is perfectly possible to have a scientifically conducted poll which none the less yeilds unsatisfactory or inaccurate results. I have been trying to get away from precisely this counting of heads, and it is because there has been this slightly unfortunate competition between the B.B.C. and the I.T.A. and all the commercial programmes, which has made the counting of heads seem important, that I should like to see more emphasis on the type of audience research that the B.B.C. does, which does not purport, as a rule, to produce accurate figures of viewing or listening but tries to get a general impression of satisfaction from people of the extent to which they enjoyed programmes, with a view to making judgments. I am sure that if the noble Lord would like to look at some of these reports he will find them interesting. They do not purport to be accurate but they serve a purpose. I am grateful for the Government's acceptance of this principle, and I hope that since the I.T.A. have not done as much in the past they will realise that this is something on which it will be interesting to have a report. I hope in doing so they will heed what the noble Lord, Lord McCorquodale of Newton said. We are not just interested in the counting of heads. I beg leave to withdraw the Amendment.

Amendment by leave, withdrawn.

Clause 15 agreed to:

Clause 16 [Programmes relating to controversial matters]:

THE EARL OF DUNDEE moved to add to the clause: (2) In section 3(1) of the principal Act, paragraph (g) and the proviso (which, with certain exceptions, require matter designed to serve the interests of any political party to be excluded from the programmes broadcast by the Authority) shall cease to have effect.

The noble Earl said: This is an Amendment to clarify Section 3 of the principal Act. I had better just explain briefly what it is about. The operative subsection in the Act of 1954—that is, Section 3(1)(f)—requires the Authority to see: that due impartiality is preserved on the part of the persons providing the programmes as respects matters of political or industrial controversy or relating to current public policy;

In this Bill, Clause 16 provides that in applying what I have just read a series of programmes may be considered as a whole. In the principal Act there is another paragraph (g), followed by a proviso which makes particular reference to the British Broadcasting Corporation's Party political broadcasts. It has been generally agreed by all political Parties, by the B.B.C. and the I.T.A. that the special reference to the B.B.C. should be omitted, which would have made an Amendment necessary anyhow. It has now been agreed by all parties, and by the B.B.C. and I.T.V., that it would make the thing clearer still, and less inhibitable, if paragraph (g) and the proviso were omitted, which is the effect of this Amendment. I beg to move.

Amendment moved— Page 16, line 19, at end insert the said subsection.—(The Earl of Dundee.)

Clause 16, as amended, agreed to.

Remaining clauses agreed to.

Schedule 1 [Rules as to advertisements]:

10.31 p.m.

LORD SHEPHERD moved to add to paragraph 4: ; and for the purposes of this paragraph the Authority shall draw up a code defining `natural breaks', and it shall be the duty of the programme contractors to obey the said code.

The noble Lord said: Paragraph (4) of Schedule 1 states that advertisements shall not be inserted otherwise than at the beginning or end of the programme, or in the natural breaks. If I had my way (and I think the majority of viewers would agree with me) I should like to see the words "natural break" omitted from the Bill. I think most people who watch commercial television are prepared to accept the advertising material at the beginning and the end of programmes. For some, of course, it is a welcome relief, in that they can nip out smartly and make a cup of tea and get a biscuit, or something like that. But I think that the majority of people, particularly in regard to some of the more serious programmes, feel that these so-called "natural breaks" spoil the programmes.

The noble Earl, Lord Dundee, speaking earlier on an Amendment, stated that advertisements should not be inserted where they spoil the particular programme. From time to time there is dispute as to what is a natural break. I believe that there are discussions between the contractors and the Authority on where and when an advertisement should be inserted in the classification of a natural break. The purpose of this Amendment is that the Authority should make absolutely clear what is a natural break, and that it should be defined in such a way that if the contractors obey the code certain types of programme will not be regularly broken up by advertising. I appreciate that a code is in some cases general, but I should have thought in this particular case that it would be possible for the Authority and the contractors to produce a code of such a nature that, by and large, we could eliminate that type of advertisement from the serious programmes, and perhaps from the quiz programmes, in which I should have thought there was not a natural break; and, where there is advertising in a programme, that it must be quite clear that it is a really natural break and not one that has been created artificially merely for the insertion of advertisements. I beg to move.

Amendment moved— Page 19, line 19 at end insert the said words.—{Lord Shepherd.)

LORD CHESHAM

Of course, to an extent I agree with the noble Lord about the irritation caused by a natural break. I can only conceive of its being exceeded by the irritation caused by doing away with the natural break and having an unnatural break. But I do not think we need to go into that at the moment. It is something which has always given rise to a good deal of attention and argument. As the noble Lord says, it has been difficult to define. In fact he admitted that by referring at all to a code.

I suppose one could say that the practice that has grown up over the years has to an extent tended to codify the matter, but I do not think it would be right to put specifically on the Authority a statutory obligation to carry out their duties on matters which, in any case, they have to observe under the Bill. That is rather putting their freedom of administration in a kind of straitjacket. Considerable attention must be paid to this. I do not think there is any argument about that, and I do not think the Authority would argue about it either, but they ought to have a certain flexibility about drawing this up. In regard to any powers they require to draw up a code, they would not require any further powers by way of this Amendment—because they have powers to do just what the noble Lord wants under clause 5, subsections (4) and (5). I should have thought that, having got those powers, there is no need for this Amendment.

LORD SHACKLETON

I want to press further on this because this is a matter in which the I.T.A. have failed. They stated in their last report: There are, of course, many more internal breaks in most television programmes into which advertising could be inserted than are used for the presentation of advertisements. In their evidence quoted in Pilkington they use almost the same words: Almost every programme contains more natural breaks than are needed for the insertion of advertisements, and the problem of placing them is therefore one of selecting the most suitable break. We have all watched commercial television programmes in which we know some of these advertisement breaks have in no way been natural at all. Pilkington said: There is … evidence that many programmes do not contain obviously natural breaks, and that some of the breaks are not only patently contrived but are ill-contrived in timing or frequency. They thus offend the principle that the insertion of advertisements must suit the programme, rather than the reverse. They go on: We note that, after much public criticism, the Authority took steps to tighten the practical interpretation of the term natural break'. It has not been good enough so far. There are still too many unnatural breaks. Although I would agree that it is not necessary to add further powers to the Bill, I would urge the Government to ask the Postmaster General to press on the I.T.A. that they must do better in this matter. I am sure most noble Lords will agree with what I am saying on this. I do not think we need further legislation, but it is something which is very irritating and extremely damaging to Independent Television.

Amendment, by leave, withdrawn.

Schedule 2 [Amendments of principal Act]:

10.40 p.m.

LORD SHACKLETON moved, in paragraph 2, to leave out "by the Postmaster General". The noble Lord said: It is a little late in the evening to start on the subject of the appointment of the noble Lord, Lord Hill of Luton, as Chairman of the I.T.A. The purpose of this Amendment was to do a thing which, on the whole, I think we should prefer not to do in this country: to require that the Government, in making appointments to the Independent Television Authority, should seek the approval of the House by submitting a draft Order in Council. This would be an introduction of something like the Senatorial practice in the United States, of having to approve Government appointments. While I am quite sure that we should not really want this procedure the Amendment is put down because of the crass folly of the Government in appointing a man who no doubt is an admirable and able man, but a highly contentious figure, to a highly sensitive post.

I am not attacking the noble Lord, Lord Hill of Luton, personally in this matter, but he is going to occupy a post in which he is bound to be subject and open to criticism in one way or another. No doubt he is a man of strong character and integrity, and will resist pressures that are brought to bear on him; but there is temptation, in a case like this, to lean over backwards to avoid criticism by the other side. It may well be that there will be a tendency to be unfair in certain matters to the Party of which he was a distinguished member. But of all people to be appointed to this particular post, I can scarcely think of anybody who is more controversial than Lord Hill of Luton. That is the reason for this Amendment, though I do not expect that the Government will accept it and although I should not really like to see a system of Parliamentary control of such appointments. The analogy with the Coal Board has nothing to do with it, because the I.T.A. and the B.B.C. are in a different category. I should have liked to see the sort of arrangement whereby that appointment would be subject to some agreement between the Parties. It would have been perfectly easy to have discussions. There are many matters on which political leaders of different Parties can come together and can agree on acceptable people. It is for this reason that I beg to move the Amendment.

Amendment moved— Page 20, line 13, leave out ("by the Postmaster General").—(Lord Shackleton.)

THE EARL OF DUNDEE

The noble Lord began by very effectively stating the case against his own Amendment, when he said that this is not the sort of thing that we should want to do, or that we ought ever to want to do. But he was proposing that we should do it because the Government have appointed Lord Hill of Luton as the next Chairman of the I.T.A. It is, of course, a fact that the appointment of members of the Authority—and, for that matter, the Governors of the B.B.C.—has always been made without the prior approval of Parliament. That has always been recognised as desirable, and it was recognised as desirable by the noble Lord, Lord Shackleton. in his remarks just now. The reason why Lord Hill of Luton has been appointed is that the Government thought he was the best man for the job. He has divested himself of all Party affiliations and the Government are emphatically confident that he will prove a strong, able and impartial Chairman; and that he will not in any way allow his previous political affiliations, of which, as I say, he has now divested himself, to inhibit him in his conduct of the Authority's service. I think this has been very much overdone.

When Lord Robens of Woldingham was appointed by a Tory Government to be Chairman of the Coal Board, I do not remember hearing a loud outcry of indignation from the Labour Party on the ground that people with previous Party affiliations ought not to be appointed as Chairmen of public Boards, and in spite of what the noble Lord has said. I can see no more reason why we should object to one appointment than to the other. I am sorry that the noble Lords feel so strongly opposed to this particular appointment, but I think it would be quite wrong, as indeed the noble Lord has admitted, to change the method of appointment on that account.

LORD SHACKLETON

If the noble Lord can see no difference between the appointment of Lord Hill of Luton as Chairman of the I.T.A. and Lord Robens of Woldingham to the Coal Board, then all I can say is that the case for this Amendment, regrettably, becomes even stronger. I will make no more of it. I believe that in fact the B.B.C. Governors are appointed by Order in Council, but it may not be subject to Parliamentary approval. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

10.45 p.m.

LORD ECCLES moved, after paragraph 3, to insert:

Provision of Experimental Educational Service Outside Programme Contracts

"4.—(1) In section 2(2), at the end of paragraph (b) there shall be inserted the words 'and (c) with the consent of the Postmaster General, arrange for the provision, otherwise than by programme contractors, of educational broadcasting services of an experimental nature to be broadcast in addition to educational programmes provided for the purpose of the public service referred to in section 2(1)(a) of the Television Act 1963 by programme contractors.

(2) So much of section 4(6) as prohibits the inclusion in programmes (other than advertisements) broadcast by the Authority of anything which could reasonably be supposed to have been included therein in return for payment or other valuable consideration to the Authority shall not apply to any programme so broadcast in an educational service provided under section 2(2)(c).'"

The noble Lord said: I have troubled the Committee with this Amendment simply and solely because I believe that educational television has an enormous future, and that in this country we are behindhand and need every possible chance of promoting experiments. I am fortified in that belief by what my noble friend Lord Dundee said on Second Reading of this Bill.—[OFFICIAL REPORT, Vol. 251 (No. 110) col. 1373]: We shall all agree that we should like more educational services to be performed by television. It is a field in which developments are only just beginning". That is absolutely true; and when I looked at the Bill I saw that, under Section 2(2) of the principal Act, the programmes broadcast by the Authority must clearly be provided by programme contractors in consideration of payments to the Authority. Therefore a body that does not make a payment to the Authority cannot be a programme contractor; nor can the Authority transmit its programmes. This Amendment would enable the Authority to arrange for the provision, otherwise than by programme contractors, of educational services of an experimental nature. I should say at once that the educational programmes provided by the programme companies are of very great value, and what the Authority now wish to do would be additional to and in no sense a replacement of the companies' programmes.

It has always been the view of the Authority that there should be a national service of educational television and that, when it comes, it should be under the direct control of educational bodies, and not under the control of either the Authority or the B.B.C. Therefore, the proposal in the Amendment is for experiments only, and is only for such time as a national education service is not in operation. Why is it so desirable that the Authority should be able to arrange for such experiments? I can perhaps best give the answer by citing an example. The Vice-Chancellor of Queen's University, in Belfast, has a committee sitting to consider an experimental educational service in the Belfast area using the available V.H.F. channel. That is a service which, if it comes off, will, undoubtedly be of the greatest interest to our friends in Northern Ireland, where I can well understand that adult education is something they care about very much.

Suppose that the Postmaster General were prepared to allocate the available channel—and I can hardly think my right honourable friend would make much trouble about that—if this Amendment were accepted, I understand the Authority would be prepared to transmit the programmes of this service and to give it substantial financial support for a period of up to three years. This is a really constructive idea. I am quite certain that the Government do not wish it to be stillborn. I am also certain that many other ideas of this kind will come forward which will come to nothing if the Authority cannot give them support. I need not remind your Lordships how short we are of teachers, particularly in the field of adult education: nor, I think, what a great need there is to supplement, both for schoolchildren and for adults, in any way which will make it more interesting and more lively to them, knowledge and skill. Further, that, of course, some other countries, at any rate, are pushing ahead in this field. We cannot expect the programme companies to provide in the peak hours experimental programmes of educational content. Yet for many specialists who would be deeply interested in programmes that deal with their particular subjects, there are probably no times except peak hours when they will come together and watch in good number. Fortunately, there are a number of spare V.H.F. frequencies not used at present by other V.H.F. services and these make possible the introduction of additional V.H.F. services in three or four areas, including Ulster, of which I have spoken.

The second part of my Amendment is designed to avoid the possibility of difficulties arising from Section 4(6) of the principal Act, which says that programmes must be seen not to have been provided in collusion with advertisers. The lawyers think it possible, that unless this second part of the Amendment is included we may get into difficulties in that respect. I hope therefore that this Amendment will appear suitable to the Government, as my noble friend, Lord Dundee, hoped one would be, and that its acceptance will strike a blow for the better technique of adult education which is very backward at the present time. I beg to move.

Amendment moved— Page 20, line 25, at end insert the said paragraph.—(Lord Eccles.)

THE EARL OF BESSBOROUGH

I rise briefly to support the noble Lord in what he has said. I do so not so much as a director of a programme company but as a long supporter of educational television, and especially in this House, where I moved a Motion on this subject two or three years ago. I hope very much that the Government will consider this Amendment most seriously. The noble Lord has already told us about what has been done in other countries, and I think it is true to say that we are behind. I believe that there are at present spare V.H.F. channels, and I hope that ultimately there will also be spare U.H.F. channels which might be used by unversities or other educational bodies. It seems to me that this experimental provision is one of the best Amendments which has been put down in this Committee during the past two days and, indeed, that it could be one of the best things in the Bill.

LORD SHACKLETON

I understand that the Government are likely to look favourably on this Amendment, and I entirely agree with the noble Earl, Lord Bessborough, that this is an extremely interesting Amendment. I am quite sure that it is one near to his heart, because I know that he has been very interested in educational television. The Amendment, however, raises a number of questions in my mind. It is a pity that this important Amendment, which could be the subject of quite a useful debate, should have come on so late at night. As I understand it, this is a proposal which might operate in certain areas. I gather that in Belfast Professor Grant has his committee; that there will be a spare channel on V.H.F., either Band I or Band III or one of the V.H.F. channels, available; and that the idea is that the I.T.A. should begin to set up certain experimental services.

It was, of course, very strongly argued by the Pilkington Committee that education should be developed within the existing services, both B.B.C. and I.T.A., and I myself am attracted by that principle. But I can see there are severe limits to this, particularly in regard to peak-hour educational broadcasting. I find it difficult to see how it is going to work. I presume that local programme contractors will help to provide certain of the facilities. I do not know whether that is what the noble Lord, Lord Eccles, has in mind. Presumably the studio and I.T.A. will provide the transmitting service. How is it going to be co-ordinated? Is it going to be run separately from the B.B.C. developments? It is arguable, perhaps, that the B.B.C. should be given these separate channels to do this. Obviously, the last thing we want, whatever our particular affiliations, is competition between the two authorities for this purpose. But I can see difficulties. Whereas most of my noble friends to whom I have spoken on this matter are in favour of the Amendment, I think it is a matter to which we shall have to give particular thought in future. Presumably this is experimental. We shall look forward with interest to hear how the Government regard this and how they look at some of the possible snags that may arise.

THE EARL OF DUNDEE

I told your Lordships on Second Reading that in the second of the two White Papers on Broadcasting, paragraphs 43 and 44, the Government had accepted a formula defining educational broadcasting for adults, on the basis of which specific proposals for additional hours of educational broadcasting had been made, and that we attached the greatest importance to these developments. I think this is a subject of great importance. I entirely agree with the noble Lord, Lord Shackleton, that it involves a great many complicated questions, one or two of which he mentioned: whether it is better to sandwich educational material in between other programmes, how much place should be given to the B.B.C. in relation to the I.T.A., and the methods. But we need not consider these complications now, because all that this Amendment does is to provide that, if any experiments are undertaken, I.T.A. shall be entitled to take part in them. It does not necessarily mean that any experiments will be undertaken, though personally I hope that they will, nor does it mean that if they are undertaken I.T.A. will be required to carry them out.

All that it does is to make a permissive provision that, if an experiment is undertaken, I.T.A. shall be entitled to take part in such experiment. I hope that your Lordships will be willing to accept this Amendment, which I think is a good one. The Minister of Education, who has been consulted about it, has agreed with it, and I therefore would ask your Lordships to accept it.

LORD ECCLES

May I thank the Government very much for their reply? I feel sure that, from what may be quite a small beginning, both I.T.A. and B.B.C.—because, of course, I want to see experiments done by the B.B.C. too—will stimulate the interest of and give hope to people who have ideas and have not yet been able to put them into practice.

LORD FRANCIS-WILLIAMS moved to insert the following paragraph: 9. To the definition of 'disqualified person' in section 5(1) there shall be added the following paragraph:— '(d) being a body corporate carries on activities which do not further the purposes of the provision of programmes for broadcasting by the Authority'.

The noble Lord said: I beg to move the Amendment standing in the name of my noble friend Lord Shackleton and other noble friends. This Amendment is an attempt to ensure that programme contractors are in fact programme contractors and do not hive off into all sorts of other activities, like developing bowling alleys, as many of them now are beginning to do. It seems to me wrong and inappropriate that revenue which has been secured by showing television programmes, and advertising revenue acquired by doing so, should be used for investing in all sorts of other activities which are in no way furthering the purposes of the provision of programmes for broadcasting by the Authority. I do not think it is necessary to say much more about the Amendment than that. We want programme contractors to be programme contractors, and we think that in return for the franchise which they get under their contract they should be required to concentrate their activities on producing programmes. I beg to move.

Amendment moved— Page 21, line 17, at end insert the said paragraph.—(Lord Francis-Williams.)

THE EARL OF DUNDEE

This is another Amendment which my right honourable friend in another place undertook to look at. He has carefully considered it, but I do not think that it is either a necessary or a particularly good thing to provide for, or that it is really necessary to achieve the purposes which I know the noble Lord has mainly in mind in moving it. I think it would be unjustifiable to prevent a company which is engaged in one branch of human activity from engaging in another branch of activity, provided that the other branch is not such as to prejudice its performance, which the I.T.A. have the duty of supervising and directing in the interests of good broadcasting. I do not see why a company should not engage, if it so chooses, in farming, or even holiday camps—not that any of them are likely to—so long as it does not so distract the company's attention from television as to detract from the performances it gives.

I would remind the noble Lord that there are existing powers under Clause 11 under which the I.T.A. can act in regard to any change in the nature of the company or any failure on the part of the company to carry out the requirements which are imposed on it by the I.T.A. Clause 11(3) says: (3) Every contract concluded between the Authority and a programme contractor shall, where the programme contractor is a body corporate, contain all such provisions as the Authority think necessary or expedient to ensure that if any change affecting the nature or characterstics of the body corporate, or any change in the persons having control over or interests in the body corporate, takes place after the conclusion of the contract, which, if it had occurred before the conclusion of the contract, would have induced the Authority to refrain from entering into the contract, the Authority may by notice in writing to the programme contractor, taking effect forthwith or on a date specified in the notice, determine the contract. This Bill is full of provisions enabling the Authority to require that proper sums shall be spent on the improvement of the programme companies' performances in the interests of good television. I think, therefore, it is not necessary that we should impose this prohibition on any company from undertaking any other useful kind of activity or combining one thing with another. If the I.T.A. consider that such a combination of interests or activities is prejudicial to good television, then they have a remedy in their hands.

It also has positive powers under the Act to require that programme contractors shall conduct their business in accordance with what the I.T.A. conceive to be the best interests of television and the best purpose of their duties under this Act in the interests of the public. I would therefore suggest to the noble Lord that, in view of the fact that this matter has already been fully gone into in another place, and that my right honourable friend has undertaken to consider it (I have no reason to think he was especially tired when he did so) for good and reasonable causes he has come to the conclusion that it would not be a good thing to accept the Amendment.

LORD FRANCIS-WILLIAMS

The noble Earl seems to brandish before us a steam-hammer when all that is wanted is a tap on the shoulder. We are told that if necessary the Authority can bring a contract to an end because the company is doing things which it ought not to do. All we are asking is that it shall be laid down that the programme contractors should be programme contractors and not go off into other things; that they should have a "Stop" light which says, "This is a 'No entry' road." But as this matter is being gone into, and in view of the lateness of the hour, I will not press the Amendment.

Amendment, by leave, withdrawn.

11.7 p.m.

LORD SHEPHERD moved, after paragraph 13, to insert the following new paragraph

Accounts of programme contractors

"14. In section 15, there shall be added after subsection (4) the following new subsection:— '(4A) The programme contractors shall make available to the authority such financial information concerning their television operations as the Authority may require, and the Authority shall include in its annual report so much of this information as it may, after consultation with the Postmaster General, think proper.'

The noble Lord said: Earlier in the evening the noble Earl agreed to look into the question of Amendment No. 27. I could see some difficulty in that Amendment in regard to a statement of accounts, as perhaps they would be consolidated, although I would agree with my noble friend that before the accounts are consolidated the contractors would have separate accounts for their television operation. But this Amendment is a little more particular. It requires that The programme contractors shall make available to the Authority such financial information concerning their television operations as the Authority may require …"— in other words, such figures as the Authority may themselves require of the contractors—and that the Authority should include such information as, after consultation with the Postmaster General, they think proper.

I would not deploy again the arguments we made. This is a matter of considerable public interest. This is a public medium; it is a public Authority, working in conjunction with private companies. Apart from the reports of operations of the smaller companies, the Report lists the names of the directors and the senior officers of the programme contracting companies. It would seem to me desirable, in the interests of the Authority and the contractors, that such information as to give an indication of the progress of these companies should be included in this Report. I hope the Minister will consider this point when he considers the question of Amendment No. 27. I beg to move.

Amendment moved— Page 22, line 34, at end insert the said paragraph.—(Lord Shepherd.)

THE EARL OF DUNDEE

I undertook to ask my right honourable friend to have another look at Amendment No. 27, and I had rather hoped that this Amendment might be consequential to it. I now understand that the noble Lord wishes to pursue it a little more, particularly because it is not exactly the same point. Nevertheless, I think the Amendment is unnecessary. If your Lordships will look at Clause 7(7) of the Bill, you will see that it makes provision for the I.T.A. to receive the information about advertising receipts for the purpose of computing the additional payments. Then in Clause 7(10) there is a provision that the I.T.A. shall prepare a special account of the additional payments which has to be sent to the Comptroller and Auditor-General and laid before both Houses of Parliament. I do not want to go too much into Statute legislation, but I have the principal Act here. Under Section 15(5) the Postmaster General can ask the Authority for any information or document with respect to the financial transactions of the Authority; and under subsection (4) of the same section he can direct what information shall be included in the annual accounts. Then the Authority can, for their own purposes, obtain from the contractors information as to costs incurred in providing programmes and their receipts from advertising, and can obtain access to the contractors' books, accounts and records.

The noble Lord has argued that publication of a certain amount of financial information in the I.T.A. Annual Reports might help the companies themselves because it would show publicly whether the additional payments were as heavy a burden as they are suggesting they will be, and it would indicate how much they were spending on programmes. Under the previous Amendment, No. 27, I think the intention was to limit the activities of companies, and I suppose that the present Amendment is a further attempt to get at the particular position of a company in its television activities alone. But I have pointed out that under Clause 11 and Clause 7 the Authority can get all the financial information they need. As to what might be published, the noble Lord's Amendment leaves this to the I.T.A. as to what they think proper. It mentions consultation with the Postmaster General, but leaves the decision, I think quite correctly, to the I.T.A. I would, therefore, suggest to the noble Lord that there is no need for a statutory requirement of this kind; that it is a matter which could clearly he left to be considered by the Independent Television Authority.

LORD SHEPHERD

I thank the noble Earl. I will carefully look at his remarks, and perhaps he would also look at the case that I have made. On those terms, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 2, as amended, agreed to.

Schedule 3 [Repeals]:

11.13 p.m.

LORD CHESHAM

This Amendment is consequential on Amendment No. 35. I beg to move.

Amendment moved— Page 23, line 18, column 3, after ("(1)") insert (", in paragraph").—(Lord Chesham.)

LORD CHESHAM

This Amendment, also, is consequential. I beg to move.

Amendment moved— Page 23, line 21, column 3, after ("person'") insert ("and the whole of paragraph (g) and the proviso").—(Lord Chesham.)

Schedule 3, as amended, agreed to.

House resumed: Bill reported with Amendments.

House adjourned at a quarter past eleven o'clock.