B.B.C.: ADVERTISING AND FINANCE

HL Deb 16 July 1968 vol 295 cc263-300

6.38 p.m.

LORD FRASER OF LONSDALE rose to ask Her Majesty's Government whether they will take steps to encourage or facilitate consideration by the British Broadcasting Corporation of the introduction of an element of advertising in their programmes, so that, without raising the present licence fees, the Corporation may have enough money for all its developments and for the improvement of its programmes. The noble Lord said: My Lords, I had the honour to be a Governor of the B.B.C. for two periods, immediately before and during and for a year after the second of the Great Wars. The first of those periods coincided with the time when the noble Lord, Lord Reith, to whom the B.B.C. and this nation, and perhaps the world, owe a great debt for his ethical and moral attitude towards this new invention, was Director-General. It might be thought that, sitting at his feet as I did as a young Governor, I would have absorbed the whole of his doctrine and would have maintained it for a long time, because he was a most powerful man.

I felt with him at that time that the introduction of advertisements into any B.B.C. programme would have been almost sacrilege, certainly inadvisable, and I took that view. But I have changed my mind. As early as 1949, when the Beveridge Committee met to consider the whole process of the B.B.C. and to recommend whether they should have a further licence, I gave evidence to the Beveridge Committee in which I said that I did not see how, over the next decades, the B.B.C. could provide Britain with an adequate television service on the money which would be forthcoming from licence fees.

I would remind noble Lords that in those days the licence fee was 10s.; it then became £1; and now it is £5 for a joint licence for television and sound. The result of this is that with its present number of listeners the B.B.C., according to their own figures, have some £70 million. Nevertheless, it is my case that they have not enough money to do properly the things that we should like them to do. Indeed, at this very moment local stations are coming into existence in various towns and cities. Some towns are welcoming them and then finding they are very expensive; other towns are refusing them because they are too expensive, and I think it is common knowledge that the B.B.C. is at its wit's end where to find enough money to run its services at a very high standard, to maintain them, improve them and to help towards the running of these local stations which a great many people are urging should be increased.

Where can they get some more money? By asking the Government of the day to raise the licence fee from £5 to £6 or £7, a very unpopular tax falling upon 12½ to 15 million people. Or, as I suggest, by taking advertisements. Here I want to ask noble Lords to bear with me for a very few minutes while I examine the merits of advertisements. First of all, since I first changed my mind and advocated to the Committee of 1949 that advertisements should be admitted in a proper form, the I.T.V. has come into existence and the I.T.V., as is known, takes advertisements. The consequence is that Britain has an infinitely better service than it had before because it has the B.B.C. and the I.T.V.—double as much perhaps. Moreover, the competition of the I.T.V. inevitably improved the B.B.C. which must have seemed to be complacent when it had a complete monopoly.

There may be some who say that the standards of the B.B.C. have fallen as a result of I.T.V. and its advertising and all the rest of it. I do not take that view. The B.B.C. has approached more nearly towards realistic attitudes towards the life that we live in the 1960s. If the standard of life in Britain has fallen in the 1960s by comparison with, say, the 1940s, well perhaps there is a valid argument there. But I think we cannot blame the B.B.C. for having approached more realistically the attitude of mind of the public whom it serves. I do not say, or agree, that its standards have fallen as a result of I.T.V. I would say, on the contrary, and as may be expected, the competition of I.T.V. has improved the service as a whole to the public in general, and in particular from the B.B.C. itself.

May I now deal very briefly with what I will call the "ethics and economics" of advertising. It is ethical, it seems to me, to hold out to someone reasons why he should buy something, provided you hold it out fairly and clearly and without over-claiming and without exaggeration. May I here comment that I have no interest in advertising, no interest in radio, no interest whatever in this matter, but the public interest which I have studied for forty years.

Advertising has two public interests, renders two public services; one is to tell the people what is being made, what is available for them to buy to ease their labour in their factories, in their homes, in their daily lives, to encourage and enrich their lives and to give them better things to enjoy, and if there is to be more leisure in this world, better things to have during their leisure, so that it renders this first service by informing people what is being invented and what is being made. Secondly, it enables manufacturers to manufacture in larger quantities than would otherwise be the case and therefore to charge lower prices than would otherwise be the case were it not for this increased manufacture.

I am not saying that all prices always go down the more you advertise, because inflation sees to it that a great many prices always rise, but advertising, in so far as it enables more things to be made, circulated, distributed and sold, does lead to lower prices than would be the case if fewer things were made. It therefore has an ethical background which ought to be acceptable to the nation, and an economic justification which must be acceptable to a nation that must be effective and efficient. Incidentally, the health of the home market, based upon advertising and multiple manufacture, has a very important effect upon the export market, for without large manufacture at home a great many things cannot be sold in the world market at competitive prices, but with a good home market sustained by advertising, good quality, and the right price, there is the basis and the background for an export market.

This leads to the first, but by no means most important, of the suggestions which I want to make. I only make it now because it fits in with my mention of the word "export". The B.B.C. as agent, not as principal, for the Government, and at the taxpayers' expense, runs the Overseas Service, and very well indeed it does as I am able to judge because I am a great traveller. I have listened to it in South Africa, and seaboard and elsewhere, and I know how extremely good and interesting it is. All praise to the B.B.C. and the trim and women who do it. It hardly ever mentions a British firm by name. It may talk of great shipbuilding contracts that have been obtained on the Clyde, Northern Ireland, or elsewhere; it may talk of great contracts for new inventions; it may laud and praise new inventions, but it does not mention the firm which has made them. The Japanese, the Germans, the Dutch, and the American overseas services all use them, not to the detriment of art and ethics, but use them wisely and sensibly to advertise their products.

It seems a pity that British endeavour, British invention, British skill a id art should go unheard and unsung because we do not allow advertisement in overseas service. This is the direct responsibility of Government, not of the Governors of the B.B.C., because it is the Government who order what goes into the Overseas Service the B.B.C. is only the manager. I ask that in the Overseas Service of the B.B.C. we should permit judicious advertising of our motor cars, our engineering accomplishments, our new inventions, our aircraft and all the products on which we rely in the export trade. Not only would it be of interest to those who listen in the making of comparisons, but it would be advantageous to this country.

May I now turn from the general arguments in favour of advertising, both ethical and economic, to its effect on the listener. It is said that the listener cannot tolerate the interruption of his programmes for advertising. Many people used to think this twenty or thirty years ago. Fewer must think it now in view of the success of I.T.V. I have never believed it. Northcliffe said that if you want to sell newspapers you must be sure that in every edition you mention birth, deaths, marriages and food. I would say that if you want to attract listeners to the B.B.C. you must be sure to mention the things that will interest the man in the street or the woman in her home—the things which a woman will buy with her spare money or with her home-spending money. The programmes which she sees on television, or the broadcasts to which she listens on B.B.C. sound programmes bring daily into her home information as to the world outside. It is a regular and genuine service which is of great value to a woman, for example, to tell her what is in the shops. This is especially the case for the old and the lonely who cannot get out so easily to see what is in the shops. Therefore, it is a positive contribution to their happiness and is something which they like. It is part of the programmes which, in my opinion, is among the most valuable to the listener and viewer.

Long ago, in 1925, I was a member of the Crawford Committee which considered whether the B.B.C. should continue to be a private company or become a public corporation. We recommended to Parliament that it should be a public corporation, and that recommendation resulted in the B.B.C. as we know it. It is worthy of note that although the Crawford Committee suggested that advertisements should be avoided where possible, its Report contained among its recommendations a clause which, by implication, recognised that sponsored programmes might be necessary in order to find the money. I am not suggesting that there should be interruptions of Radio 4, which is the old Home Service, or Radio 3, which is the music service, or the cricket service during a Test Match. I am sure that noble Lords will know all this, unless they have all gone over to television and have forgotten the old sound service. Some few millions listen to those services, and I am not suggesting that they should be interrupted with advertisements. But in regard to the old Light Programme, which is now called Radio 2 and Radio 1, which is mostly "pop", I cannot really believe that "pop" is more acceptable than advertisements—but perhaps it is. I even think that five minutes of advertisements in half an hour of "pop" would be a splendid change.

The Crawford Committee, which founded the B.B.C., not only permitted of the possibility that advertisements might be used, but the B.B.C. itself, shy as it is of recognising advertisements for other people, does not hesitate to use them for itself. It tells us every week to buy the Radio Times or the Listener. It tells us that we have just been listening to Madam somebody or other "by permission of Covent Garden", or to somebody else by permission of an impressario or a theatre. It freely advertises when it suits itself, and yet in principle it is opposed to taking advertisements.

I ask my Question in the hope that some of your Lordships may feel, not that I have made out a case for a change, but that I have suggested that there is a case for an unprejudiced inquiry so that the Government, the nation and Parliament ought to make sure that we do not accept that the pattern of the last forty years is necessarily the right pattern for the next forty years. My own personal regard is so high for the B.B.C., its Board, its Chairman (who is a personal friend of mine), its managers and its traditions that I am quite sure that if they were to undertake the judicious use of advertisements, as I am suggesting, they would do it with great efficiency, and I know that they would do it with grace.

6.57 p.m.

BARONESS STOCKS

My Lords. I should like to offer qualified support for the noble Lord, Lord Fraser of Lonsdale, though it may be that with my qualification he will regard my support as not worth having. He has referred to the Beveridge Committee of 1949 which had to consider the renewal of the B.B.C's. Charter and make recommendations as to the terms on which it should be renewed. Your Lordships will remember that with one dissension that Committee came down strongly in favour of public service broadcasting and television dependent on receipts from licence fees. There were three members of the Commission who at the time took the view which has just been expressed by the noble Lord, Lord Fraser. They were Lord Beveridge, the chairman, Lady Megan Lloyd George, and I. The three of us put in a minority Report in favour of allowing the B.B.C. to secure advertisement revenue for television.

I shall not try to delve into the motives of my two colleagues, who unfortunately are not here to tell the tale. My own motive for signing that minority Report was the hope that it might appease a very large section of the powerful anti-Beveridge lobby which was building up in the House of Commons and which was efficiently led by representatives of the advertising industries and the electrical industries. I felt that if the B.B.C. were allowed to admit the first of those great interests to its programmes their desire to break its monopoly might be diminished. So far as I remember, nobody thought very seriously about the question. It was rejected by the majority of the Committee and it was in fact never carried out. As your Lordships well know, we had a subsequent Act which introduced commercial television, financed by and entirely dependent upon advertising revenue. It was not quite on the American model, which allowed the sponsoring of programmes by the advertisers and it was under the statutory control of the Independent Television Authority, but it produced a system of television which was financially dependent on mass audiences attracted by advertisements.

The noble Lord has expressed an opinion about the results of that dichotomy of broadcasting policy. He has said that the B.B.C. television service has greatly benefited from it owing to the stimulus which results from competition. I think that in some respects the B.B.C. may have benefited. The independent programme companies, especially that run by Granada, have put out some extremely good programmes, though they generally came on late at night because they are less likely to attract mass listeners. Granada has also on some occasions taken the lead in being rather bolder in its discussions of prickly subjects such as birth control; but, on the other hand, it his produced an effect on the B.B.C. which I, personally, consider deleterious.

The B.B.C. is always looking over its shoulder at the results of the TAM ratings and opinion polls. It is always on the alert to make sure that its listening public, or its viewing public in this case, is not being sucked away into the competing Independent Television companies. That, I think, has had a bad effect on the B.B.C., and has prevented it, in some respects, from expressing the kind of policy with which Lord Reith agreed and which he implanted in the B.B.C. He was perhaps over-austere in some ways, but he was never vulgar. It is this constant looking over its shoulder that I think, on balance, has been the drawback, and has not benefited the B.B.C. It is always bad for any responsible body to be looking over its shoulder at the immediate result of its actions. It is a very bad thing for politicians to be constantly considering the results of recent opinion polls on them. We know that it is very bad indeed for Prime Ministers, and it is also bad for the B.B.C.

As regards the financial question, the search for funds in order to improve B.B.C. programmes, the Corporation has to consider that the public is under the mistaken impression that it gets its commercial television programmes for nothing. Of course it does not. It pays for them through the prices of the advertised commodities. An immense amount of money goes into the advertising industries, an immense amount of talent, an immense amount of office accommodation—in fact, in my opinion, quite enough. There is another possible result in this so-called financial benefit to television by advertising, or for that matter radio; that is, that if the public grows accustomed to thinking it can finance its entertainment in this roundabout way it will be less ready to accept the necessity of paying a licence fee. After all, my Lords, when you come to think of it, £4, £5 or £6 provides an immense amount of extremely cheap entertainment for the public. It gets very, very good service for the licence fee.

Supposing advertisements were extended to the foreign service, I think it might have a most disastrous result. The great success of the B.B.C. Overseas Service is that it is recognised throughout the world as wholly impersonal aid disinterested. That is the great service which it renders to humanity, and I cannot but think that that service would be somewhat adulterated if the foreign listener were able to listen, for instance, to the praise of some British motor manufacturing firm, or even a small arms firm, whatever it might be. It would at once lead to the feeling among listeners that "They are getting at us." That feeling, I think, is not shared by any listeners to the foreign service of the B.B.C.

Therefore, I wholly reject the suggestion that B.B.C. television should become dependent on advertising, and I wholly reject the suggestion that the foreign service should become dependent, or partially dependent, on advertising. I wholly reject the suggestion that competition on commercial television has been wholly beneficial to the B.B.C.

Now to the points on which I would agree with the noble Lord, Lord Fraser of Lonsdale. In recent years we have had to face the problem of the pirate radio stations, and the growth of the enormous rather youthful public which has become dependent on a perpetual diet of "pop" music. The pirate companies made good money out of advertising spots. They, of course, were in a more favourable financial position than the B.B.C. because many of them did not have to face the fact of paying copyright fees: they were pirates.

The B.B.C. on Radio 1 is now appeasing that audience which formerly relied on pirates by producing a programme as like the programmes of the pirate stations as possible. It cannot be quite like their programmes, owing to the rather restrictive practices of the Musicians' Union in regard to the allocation of "needle-time". If you listen to Radio 1 you will find that it is very much like the material that used to come from Radio Caroline; and the patrons of the pirate stations, as the noble Lord pointed out, were quite happy with their advertisement spots. I am sure the patrons of Radio 1 would be similarly happy with their advertising spots, so I see no reason why Radio 1 should not make a little money by advertising spots. But I should very much regret it if Radio 2, Radio 3 or Radio 4 were to do any such thing. I think it would be disturbing to one's enjoyment of, let us say, the St. Matthew Passion, or an interview by Malcolm Muggeridge, if it had to be interrupted, preceded or followed by an exhortation to "wash white" or make cakes in a certain way.

I agree with the noble Lord, Lord Fraser, in suggesting that the B.B.C. may make a little money by allowing advertisements on Radio 1. Some time ago I wrote a letter to The Times to that effect—since I became a Member of the House of Lords my letters to The Times have been accepted. That suggestion was not, I think, followed up with any enthusiasm by anybody, and it positively shocked the noble Lord, Lord Taylor, who read it before he departed overseas, and who was one of my colleagues on the Beveridge Committee. He thought it terrible to think that the pure milk of the B.B.C. public service broadcasting should be adulterated by this awful thing —advertising spots. I should not be in favour of adulterating pure milk, even by a non-deleterious ingredient, but I do not see why one should not allow a little harmless adulteration of substandard food, because that I think is what Radio 1 is.

7.8 p.m.

LORD DENHAM

My Lords, I should like to support my noble friend Lord Fraser of Lonsdale. I found myself, if I may say so, in very great agreement with everything said by the noble Baroness, Lady Stocks. I agree very much that if an experiment in advertising on the B.B.C. is to be carried out it should be limited to Radio 1. There are two reasons—which have been mentioned —why people oppose advertising on radio. The first is the fear that there might be undue influence on the content of the programmes by those responsible for watching the popularity ratings; and the second is the fear that advertisements would interfere with the tone of the programmes.

So far as the first is concerned, I think that as Radio 1 is a "pop" programme, and is meant to produce the type of music that the greatest number of people want to hear most of the time, the more outside influence there is the more likely it is to be a true "pop" programme. I agree with the noble Baroness that advertisements would not interfere with the tone of Radio 1; in fact they fit in very well, as was found on the pirate radios, with the patter,of so-called "disc jockeys". Indeed they can be extremely amusing.

There would be the other advantages in having advertising on Radio 1. In the first place, I think it would produce the biggest listening audience of the four programmes of the B.B.C., and therefore would bring in the biggest advertising revenue. It would enable the B.B.C. to run Radio 1 all the time. As your Lordships may know, Radio 1 and Radio 2 run very much in double harness for part of the day. For about two hours in the morning and about three hours in the evening Radio 1 and Radio 2 are together, and they diverge to their separate programmes at other times. The disadvantage of this is that those who like listening regularly to the old Light Programme, Radio 2, want to hear what the "pop" pirates used to call "sweet" music, whereas those who listen to Radio 1 want to hear "pop" music. I have heard very many complaints from people who, having turned on Radio 1 to get their evening's ration of "pop", have got light music instead. With advertising, these two programmes would be able to run separately throughout the day.

Another point is that advertising would give the B.B.C. more money, and with the advantage of extra money to pay for record-playing rights they might well be able to negotiate some better agreement with the Musicians' Union over needle time. This was done in America very successfully. The broadcasting companies there pay into some fund which is used for the betterment of the lot of musicians generally, and they can have virtually unlimited needle time. With advertising revenue the B.B.C. might well be able to come to some agreement with the Musicians' Union which would enable them to play records all the time on Radio 1—because Radio 1 achieves its purpose much better with records—and still have its quota of records on the other three programmes. Making Radio 1 self-supporting in this way would leave all the licence money to the other three programmes, which could therefore afford very much more; and the commercial profit on. Radio land I think there must be a commercial profit on it—might even enable the B.B.C. to reduce the cost of the sound licence, or at any rate to refrain from putting it up when, as inevitably they will, they feel they have to.

I suggest that advertising might be much more important still in connection with local radio stations. As your Lordships know, there are some eight local radio stations as a pilot experiment—six working, two about to come—and from what one can gather they do not make money, or at the moment they do not manage to raise locally the money they need. Indeed, in answering a Question on June 13 in another place, the Postmaster General said: In some instances the revenue is forthcoming locally and, after we have had time to assess them fully, it may be that two or three of them will be able to raise sufficient finance and make local broadcasting a viable proposition for the future".—[OFFICIAL REPORT Commons, 13/6/68, col. 421.] My Lords, two or three out of eight becoming viable propositions in the future does not seem to be a very optimistic thought. It is really not very surprising. At present, money for these local radio stations comes, I believe, partly from the local authority and partly from the B B.C. licence revenue. The local authority have been willing to pay money for the first year or two as an experiment, but will they be prepared to go on paying this money? Their ratepayers may well protest in due time, particularly if they do not care for the local programmes. In the long-term, I also feel that it would be wrong for the B.B.C. to go on paying money out of the general licence revenue for programmes which benefit only very small minority of listeners.

Surely here, in local radio, there is an ideal case for advertising revenue. Local stations can be made to pay. Radio Manx, I believe, has an audience of 50,000 people, and yet that has been made into a commercial proposition. If you can make a commercial proposition out of an audience of 50,000 in the Isle of Man, that means that there are many towns which could support two or three local radio stations. London could probably support about twelve. My noble friends and I would like to see a wide system of local commercial radio stations; and I cannot help feeling that it would be very much better to take local radio out of the hands of the B.B.C. Possibly the control of these stations could be put into the hands of the Independent Television Authority. They have had a great deal of experience in commercial broadcasting. It would mean slightly renaming them into the Independent Broadcasting Authority. If that were done I can foresee that the freehold of the local station would be owned by the local authority; they would let this to a programme contractor whom they would select with the help of the new Independent Broadcasting Authority, and part of the terms of the lease could be that they would keep for the local authority perhaps 50 per cent. of the profits which could then be used for local amenities, such as swimming pools, concert halls and things of that kind.

My Lords, the advantages of local radio stations run in this way would be that they would be run at no cost to the ratepayers—the ratepayers would even get an advantage out of it in the form of their share of the profits—and at no cost to the B.B.C., and they would be able to produce a really alternative programme to those of the B.B.C. The difficulty about the present local broadcasting programmes, I believe, is that when items of local interest are not on they fill in with parts of programmes from B.B.C. 1 and B.B.C. 2. These programmes are only on V.H.F., and a large number of people do not have V.H.F. sets. There is not a very great incentive to buy V.H.F. sets so that they can hear local programmes if the only programme different from what they can hear on their other sets is the odd half-hour of local interest. But if this number of local radio stations under the auspices of the Independent Broadcasting Authority were to be working and taking advertisements, they could have very well prepared programmes on tape which would produce a really different programme from the B.B.C. In that way a local broadcasting station could produce all day long an alternative programme of local interest which would really pay. My Lords, I hope that Her Majesty's Government will give very serious consideration to the possibilities of advertising.

7.19 p.m.

LORD BETHELL

My Lords, clearly this question is one of degree. Those noble Lords who have spoken so far have agreed that there should be an element of advertising in the B.B.C.'s repertoire. The question is: what element? No one who has spoken wants uncontrolled advertising. No one wants the situation which now exists in America, where programmes are interrupted every ten minutes by advertisements which are often infuriating and disruptive to the listener or the viewer. No one wants the B.B.C. to run on the same system as Independent Television. No one wants the situation where there is a danger that television will appeal only to the mass audiences—which, of course, may well happen if there is only commercial television and radio in this country.

It seems generally to be realised that, while the coming of I.T.V. has improved B.B.C. programmes, has made the B.B.C. more conscious that it has to take notice of the will of its viewers and listeners and cannot impose its own tastes, its own views on the public, it must also be realised that there can be no general tendency towards the independent system which runs a danger of appealing only to the mass audiences.

I wonder how many of us really appreciate what a valuable thing we have in the B.B.C. The B.B.C. is, to an extent, a prophet in its own country. It is only when one talks to foreigners that one really understands what a high regard people in the world have for the B.B.C. It is one of the very few broadcasting systems that is almost entirely independent either of the Government or of advertising. Surely, there can be no worse disaster than having the B.B.C. run the risk of losing this independence and of reaching the stage that is reached, say, in France, where the Government have quite a lot to say in the political views expressed on French radio and television, or in America.

Of course, it is all very well for the B.B.C. to have these high moral standards and high cultural standards, but it has to pay its way and the question is: Where is it going to get its money? This question has become more acute in recent years because several times it has had to ask the Government to put up its licence fee. In 1963, the B.B.C. received an extra £1, which was then an excise duty, and it was then on a £4 licence. From 1963 to 1965, it operated on a £4 licence. From 1965 to the present day it has operated on a £5 licence. Three times in the last five years the B.B.C. has had to ask for an extra £1. There have been two very unusual reasons for this. I do not think that one should assume, as some noble Lords may, that the B.B.C. will now be asking for an extra £1 every two or three years. Clearly, some noble Lords are frightened by the regular increases there have been in the cost of the licence.

Until about five years ago, the B.B.C. was getting regular increases in its revenue—enough to cope with inflation—from the extra number of people who bought licences and from the increase in the viewing public. Also, in the last couple of years, the B.B.C. has had abnormal expenditure. It introduced B.B.C. 2; it brought about a colour service which many people think is the best in the world. Clearly B.B.C. 2 and the colour service cost the B.B.C. a fortune. These two services must be the main reasons why the B.B.C. has had to ask for extra money.

The question where the money is to come from can be answered in several ways. I go less of the way with the noble Lord, Lord Fraser, who moved this Motion, than with other noble Lords who have spoken. I think there may be a case for having a very small element of advertising in Radio 1 and, perhaps, in B.B.C. 1; but I should hate to see programmes interrupted by advertisements. If there are to be advertisements I should prefer a quarter of an hour of advertisements once or twice a day. This happens in Germany and in one or two other countries in Europe. It is partly an information service and partly a public service. To this extent it is in the tradition of the B.B.C. that it should inform the public of what there is on the market and of what people ought to buy. But the B.B.C., in accepting advertisements, should keep strict control over the way they are worded and presented. The only way it can do this is for there to be no material between advertisements. It also would have the beneficial effect, from the listeners' point of view, that those who do not like to listen to advertising, who are irritated by having their viewing or listening interrupted by advertisements, could turn off their sets while those who want to be informed would know when the advertisements were going to be presented and could switch on.

Another possibility, which exists, for example, in Canada, and one which I am surprised has not been pressed by the B.B.C. more strongly, is that part of the purchase tax on radio and T.V. sets should be made available to the B.B.C. Clearly, if there were no programmes there would be very few sets sold; to this extent the Treasury reaps the benefit of the efforts of the B.B.C. since it gets the tax which is paid for receiving sets. The third way of raising money is by Government grant. This many people will think is the most dangerous of all for it means that the Government finance the B.B.C. out of general taxation. If the Government were displeased with the way the B.B.C. was running its affairs they could find an excuse to reduce its revenue or even to cut it off altogether and take the B.B.C. off the air.

The fourth, and, to my mind, the only real basis for financing the Corporation is by the present means of licence fees. The B.B.C. provides what is perhaps the best bargain in the world in entertainment. Even the proposed £6 licence—which the Government in the December 1966 White Paper gave a clear undertaking to bring into effect this year—represents only 4d. a day—the cost of a newspaper. And for this 4d. one gets three radio programmes and two television programmes. This is extraordinarily cheap.

There are two sources of increased revenue already under way. Evasion has been cut down and I am told that this has brought in to the B.B.C. much more extra revenue than they expected. There will also be an annual increase in the number of colour licence-holders, and this will to an extent bring the B.B.C. back to the situation which existed in the 1950s when there was an ever-increasing number of licence holders providing the B.B.C. with extra revenue every year without the price of the licence being increased. But I think that the Government whichever Party may be in Office should face the fact that if there was advertising it could provide only a small part of the B.B.C.'s revenue. The sort of advertising I have suggested, and which other noble Lords have suggested, is not ideal from the point of view of the advertiser who would prefer to advertise on commercial television rather than under conditions which Parliament would find permissible. Therefore, the advertisements will not provide the basis for the B.B.C.'s finance. I suggest that this is quite as it should be.

My Lords, the cost of running the B.B.C. will increase with inflation and with the price of keeping pace with technical progress. The B.B.C. will always need more money. I think the only way in which this may be provided is by the licence fee being reviewed regularly and put up if necessary. Almost everyone can afford this licence fee. Those who cannot should not be deprived of the public service which broadcasting can give them, and they should be helped. But I ask your Lordships to agree that the licence fee shall in future be the basis for the B.B.C.'s finance. That is the only way that the standard of programmes will be improved, or even preserved.

7.32 p.m.

LORD RITCHIE-CALDER

My Lords, I am very glad to follow the noble Lord, Lord Bethell, because I agree with practically everything he said. I believe that the noble Lord, Lord Fraser of Lonsdale, has put up a reasonable and typically House of Lords argument on this matter which is, of course, the sublimation of reason. In fact what we are looking at is one of Britain's greatest national assets—of that there is no question. Anyone who travels the world as the noble Lord, Lord Fraser of Lonsdale, said he did, will realise that the B.B.C. as it is to-day (even with our criticism, which they respect) is the envy of the entire world. No system has been created which gives to the public, and not just the buyers of entertainment, the quality and in many cases an experimental adventure (we do not always respect that, and sometimes suspect it) that the B.B.C. gives. It has been a great innovator of ideas, and it gives an example to the world to which others have tried to aspire but have lost on the way.

Judged by British viewing standards I cannot imagine anything worse than the kind of thing to which people are subjected by, for example, a completely commercialised system like the American system. I was in the United States when Gemini was meeting in space. They interrupted that meeting to put on a commercial. The public service programmes, which are the high quality programmes in the United States, are put on at times and subjected to conditions which are not acceptable to the commercial advertisers, and therefore they get the worst show.

My Lords, we are struggling all the time between two things. First, I would declare my position. I was against Independent Television and believed that it would lower the standards. Indeed, for a long period of time it did, although it may be better now in many ways, as was said by the noble Baroness, Lady Stocks. But in point of fact what happened was that the B.B.C. had a monopoly at that time, a monopoly which was training highly-qualified people to put on very responsible programmes from the cultural and technical point of view. Then we had Independent Television, and what we are seeing to-day is the "robbing of the hen-roost", the spreading of talent too thinly and the dropping of programmes, at least temporarily, because of a lack of technical skills. Independent Television derived what talent it has from the B.B.C.

My Lords, I would put up a very fervent argument that we do not corrupt in any way. I do not give a damn—I beg your Lordships' pardon—I have no concern or interest whatever about what is done with "pop". You can put any advertisements you like in those programmes. I find plausible the argument of the noble Lord, Lord Denham, on the question of VHF and, indeed, of local radios, which could in local terms carry advertising and subsidise themselves to create for the local market the kind of local interest which might have to be provided by the ratepayers. But beyond that I would not go. If we had to pay up to £10 for a B.B.C. licence it would be cheap at the price. I am not advocating that it should go up to £10 but, by golly! the sooner we give the B.B.C. its £6 licence, the happier I shall be.

We must reinforce the quality of the B.B.C. programmes. It is true, as was said by my noble friend Lady Stocks, that the B.B.C. has been subject to the tremendous pressure of the TAM ratings—that awful, insidious business of comparing the listening figures of such-and-such a programme and then looking over your shoulder and degrading your own programme to try to approximate to what in fact is the lower standard that you would not accept unless challenged by the TAM ratings. I believe it is the duty of the B.B.C. to give the highest quality programmes that this country can take, and some high quality programmes take a lot of "taking".

The point is that we in this country are in a position to give a cultural sustenance which it is not possible to give under the dictates of a system which is governed by sponsorship. In many cases, sponsors are very noble in the way they support the Metropolitan Opera House, and so on, but nevertheless they dictate the quality and, indeed, the content of programmes in the countries where they have been able to take over. I want to see the B.B.C. go on as it is, reinforced by talent for which it can afford to pay and to buttress itself against the competitive inroads of Independent Television by the buying-up of its best people and so on.

I want, in particular—and I am sure that the noble Lord, Lord Bethell, would agree with me—to see it go more adventurously into what was at one time its great triumph, experimental sound radio. With our obsession with television we are in grave danger of forgetting sound radio which in many cases is far more provocative than vision, and which demands a great deal of imagination and presentation in order to make it as viable as the competing visual programmes. In the great days, this was the great experimental field in radio documentaries. Therefore, we have to reinforce and buttress sound radio.

We have to encourage what is the best quality colour television in the world. If your Lordships have seen the green eggs on American television, you would agree with me that the quality of our colour television is extremely high. We want everyone to have colour television. I was struck by what has happened in Canada, where it is recognised that the transmission companies, whether the C.B.C. or the B.B.C., are in fact providing the means for manufacturers to sell sets. Why should not the B.B.C. have a "rake-off" from the price of sets which are sold? I would remind your Lordships that we hear a great deal about Independent Television and how it is beating the need et cetera, but in point of fact the foundation of all viewing on television are the sets provided originally under the licensing system of the B.B.C. I am not underestimating what I.T.A. pay back. Nevertheless, they are beneficiaries of sets which originally were provided because of the quality of and demand for the B.B.C. Let us be clear about this. Over my dead body shall we put advertising into foreign broadcasts.

The quality of the B.B.C. Overseas Services is respected because it is not "plugging" brand products. Many noble Lords are experts on advertising, and they know the difference between "plugging" a brand product and prestige advertising. The detachment and objectivity of the B.B.C. Overseas Services make them listened to everywhere. I have been abroad and listened to the presentations of British advertisers and prepared programmes describing what companies are doing. We are not "plugging" these products but creating an atmosphere on the B.B.C. which people abroad can accept with safety. We are building prestige for British industry. Therefore we must not pollute—I was going to say dilute—this by introducing advertising.

There are many ways in which we can raise money for the improvement of the B.B.C., but I ask your Lordships to rely basically and absolutely on the licensing system. For it is this which gives the B.B.C. its independence from Government grants and removes it from any sort of pressure to lower standards at the demand of people who do not appreciate the standards which the B.B.C. has set.

7.42 p.m.

EARL FERRERS

My Lords, I am tempted to join in this debate because I have been extremely intrested by all the speeches that have gone before. Until the last words of the noble Lord, Lord Ritchie-Calder, I thought that it was going to be the case that every noble Lord who has spoken up to now is in favour of some measure of advertising on the B.B.C., and that it would go out from your Lordships' House after a debate of this nature that the consensus of opinion among your Lordships was in favour of B.B.C. advertising in some form or shape.

LORD RITCHIE-CALDER

I would give my qualified consent, if it were put into the "pop" side.

EARL FERRERS

All I can say, my Lords, is that the noble Lord disappoints me. I, for one, should hate to see the B.B.C. indulge in any advertising whatsoever. My noble friend Lord Fraser of Lonsdale made a fascinating plea, and made it even more fascinating at the end by saying that of course he was not advocating that the B.B.C. should carry advertising, but merely that the Government should institute an Inquiry. I know that the Government like instituting Inquiries, but my Lords, I believe that government by Inquiry is a bad thing. Nevertheless, I hope that the noble Lord, Lord Bowles, will give us an assurance that on this occasion the Government do not agree with the proposal that the B.B.C. should carry advertising and do not consider that an inquiry is worth while. I think it would be a very great pity if the B.B.C. entered into the sphere of advertising. My noble friend's speech was a remarkable advocacy for commercial radio, but that is a different thing from advertising on the B.B.C.

It has been said that I.T.V. has stimulated and improved general television programmes. I think that this may be so. If one watches I.T.V., one tolerates the advertisements. That does not mean that one necessarily enjoys looking at them—at any rate, not all of them. If one were to make a diagnosis of the advertisements, one would find a preponderance of advertisements about soap, washing machines, how to scrub the sink and other such mundane matters.

LORD FRASER OF LONSDALE

My Lords, may I remind my noble friend that if he is not interested in washing, women are?

EARL FERRERS

My Lords, I am sure that if there were a little more moderation in advertisements, they would still get the point through quite well. If the B.B.C. were allowed to advertise, then the pundits would fix what is the best time for advertising—presumably when people are not watching television; namely, when they get up in the morning, or when they are in bed, and switch on the radio. Then the psychologists would go a step further and say that advertising should be done early in the morning when a chap first gets up and before he has got his wits to react against the message, which then would seep through.

I find it bad enough, when I switch on the Light Programme, which is the normal thing in the morning, to hear a disc jockey yattering at me at a rate of knots. For some extraordinary reason they seem to think that one switches on the wireless to listen to them and not to the music. When I want to listen to music, I find it perfectly distasteful to listen to a disc jockey saying how a girl has brought him a cup of lemon tea and how nice it is. I find this unacceptable first thing in the morning. How awful it would be if we were told that it was lemon tea of such-and-such a brand! I believe that the B.B.C. made a great mistake when they tried to emulate the "pop" programmes. This was a huge pity. Certainly the "pop" programmes had a following, but if one tries to copy anything, on the whole one loses one's character and individuality, as well as a certain degree of respect. It is a great pity that the B.B.C. have gone the length they have in trying to copy "pop" radio.

I have always been an upholder of the B.B.C., if not often in public, then in private, because I think they have done a remarkable job. People complain because the programmes they listen to are not those they like; but since the B.B.C. have to cater for a wide variety of tastes, obviously at some juncture one is going to be irked by what one hears. Yet on the whole the B.B.C. have done extremely well.

I would underline what the noble Lord, Lord Ritchie-Calder, has said. If the B.B.C. are short of money, the first thing to do is to economise on disc jockeys, and the second to put up the licence fee. The fee of £5 is not excessive. It works out at 4d. a day for the right to switch on your wireless and television, all three channels, for as long as you like. Any couple going out for the evening to a cinema are likely to spend £1 or more, yet the B.B.C. have a £5 fee for the whole year. If they really are pressed for money, that is the right answer. And for goodness' sake! let us keep the B.B.C. clear of advertising.

7.50 p.m.

LORD STRABOLGI

My Lords, a great many hard things have been said about advertising this evening, and some of the speeches remind me of those that were made during the long debates when legislation on Independant Television was first introduced into your Lordships' House. I must say straight away that I enjoy a great deal of advertising on television—far more than some of the programmes. I find the advertising more creative, more amusing and more stimulating. But perhaps I am biased, because for many years I have worked in advertising, and possibly I have a professional interest in watching them.

My only excuse for venturing to intervene in this debate for a short while is to mention one matter that has not yet been touched upon, and that is the important question of the fourth channel. We know that the Government are to decide within the next few years what will be the whole future of the B.B.C., when the Charter comes up for renewal, and also of the I.T.A.; and obviously the fourth channel is one of the matters which will receive their urgent consideration. It could be given to the B.B.C. for the University of the Air, or it could be given to Independent Television under a separate authority. But whatever happens, the question of advertising will have to be considered.

I do not know whether this is any comfort to my noble friend Lady Stocks, but there has been some recession in the advertising industry in the last year or two, and I am not at all certain whether there would be enough advertising forthcoming to support a fourth channel, or even to support the B.B.C. if the Corporation were run entirely on advertising. These are factors which must be taken into account. However, I agree with the noble Lord, Lord Denham, and indeed with all other noble Lords who have spoken, except possibly the noble Earl, Lord Ferrers, that there is a case for advertising on sound radio, and particularly, as was said by the noble Lord, Lord Denham, on local sound radio.

I should like to ask my noble friend Lord Bowles whether the Government yet know the results of the local radio experiment which was outlined in the White Paper of 1966 and to which the noble Lord, Lord Denham, alluded. I spoke on this when the House had a debate a short time ago on this White Paper, and I then gave my view that the financial support would not be forthcoming. The idea was that these local radio stations should not receive proper commercial advertising, but should be financed by what the White Paper calls subventions by local authorities, but with no charge on the rates. And local bodies were also expected to give some support. I never thought that this support could be forthcoming in sufficient volume to support these radio stations as a viable proposition, and from what one hears about them, although they have barely been started, they are already running into considerable difficulties. It was therefore an ill-fated and ill-starred galère, practically from the moment it was launched. The experiment having been conducted, it is already proving a failure, and. I hope that the Government will now consider some proper commercial support for radio.

I agree basically with my noble friend Lady Stocks that there is a case for running Radio 1 on advertising. I cannot, however, agree with her when she says that she thinks it is as good as Radio Caroline. I do not think it is nearly so good as Radio Caroline. However, if it were run on advertising, and one could also sort out the question of the "needle-time", I think one could probably bring it to the kind of popular appeal which Radio Caroline had. I agree with other noble Lords who have spoken that there is a case for laving advertising on Radio 1, and also for running local sound radio stations on this basis, in the way in which it is so successfully conducted by Radio Manx in the Isle of Man—and I am glad to see the noble Lord, Lord Strange, in his place.

I am sure we are all grateful -do the noble Lord, Lord Fraser of Lonsdale, for initiating this debate and for giving the House an opporutnity to ventilate the many sides of the subject, because it is one that will be much in the mind of the Government, and indeed of the public, during the next few years.

7.55 p.m.

LORD SOMERS

My Lords, I expect I shall be in the last of this rather unexpectedly long list of speakers, but before the debate ends I should like to say a few words. I think my noble friend Lord Fraser of Lonsdale was quite right in saying that the development and improvement of programmes is extremely important. There is no doubt that sound radio and television are taking an ever increasing part in the life of the nation. But I wonder whether the introduction of advertising is the way to ensure a high standard of programme. While there can be no doubt that the B.B.C. are in constant need of money for expansion, the quality of programme comes more from good taste and high moral standards, which I must confess I have considered regrettably lacking in those who are responsible for B.B.C. policy.

I am not one of those who wants every programme to be deadly serious. I realise that good sound entertainment value is absolutely necessary, and that the other more serious programmes must always be in the minority. But what has rather shocked me is the gradually deteriorating sense of what I might call moral standards; the constant glamorising of violence and the rather ungoverned sexual feelings, the rather pooh-poohing of what one might call ethical standards.

No doubt many noble Lords will have seen the report in the Press that Sir Hugh Greene, the Director-General, is about to retire. The noble Lord, Lord Hill of Luton, ha said that during the time of Sir Hugh Greene the B.B.C. has improved enormously in scope, quantity and relationship to the public mood. I cannot agree with this. I think that the tone of the B.B.C. during the past few years has deteriorated very greatly. When one looks back to what it was under Lord Reith and compares it with what it is now, one cannot help feeling that it has sunk a very long way.

So far as advertising is concerned, I tend to agree with my noble friend Lord Ferrers, although I feel that advertising on Radio 1 might be permissible, because the mentality of those who want to listen to "pop" music all day will not be harassed by a few advertisements. But it is not the fact of introducing advertising that is so important; it is the nature of the advertisements. They are so inexpressibly vulgar. I look at the I.T.V. quite often and really, my Lords, to have a serious play interrupted by some stupid song about a new brand of lipstick, or something like that, is really more than one can bear. I sincerely hope that the B.B.C. will not indulge in that type of advertising, at any rate during their serious programmes.

My noble friend spoke of advertising without exaggeration. Has anyone ever seen advertising without exaggeration? I certainly have not. To be told that some new form of breakfast food is the way to a higher life, to greater enjoyment and success, and everything that man could possibly desire, seems to me to be a little beyond the confines of "no exaggeration". I feel that advertising it would be a backward step. One is constantly being told that one must not blind one's eyes to the facts of life and that one must not try to live in an ivory tower. I agree, my Lords, but on the other hand there is all the difference between seeing facts as they are and seeing the facts and then glamorising the bad and denigrating the good. That is what I feel is the great evil in broadcasting to-day.

I do not think I shall find many people who will agree with me. Apparently, most noble Lords who have spoken have been firm supporters of the B.B.C., and I really do not think it is any good my wasting your Lordships' time in saying any more. But I sincerely hope that the Government will think very seriously before introducing advertising into the programmes transmitted by the B.B.C., other than in Radio 1 or during very light programmes.

8.2 p.m.

LORD STRANGE

My Lords, I apologise for rising in my place for the third time to-day, but Manx Radio has been mentioned by your Lordships and I should just like to make one comment on it. It is true that the Manx Radio is extremely well run and manages, for a population of 47,000 to make itself pay on torch-battery power. I cannot say any more because discussions are going on now about whether the power could be increased, but I think I may say that if the power was increased we could bring back to England the "pop" radio that children love. And I would tell the noble Baroness, Lady Stocks, that if one asks any young person, it is the old "pop" radio that they want, with the joie de vivre of the free radio.

I apologise for speaking so much today, but I am glad to see that the noble Lord, Lord Fraser of Lonsdale, is in his place because there is one point which I should like to make for his guidance, or interest. I am not sure that there is not a certain amount of "pirate" radio advertising going on. I will try to explain what I mean to your Lordships, and to give you one instance. There is a game of lawn tennis played at a place called Wimbledon. I believe that a great number of people look at that programme, and when they look at it they see shots of the players changing courts, and on the ladder there is painted, in titanium white paint, which is so clear that one can see it a mile off, the name of the people who can supply the racquets, the balls and the nets. To my mind, that is a form of unpaid, "pirate" advertising.

8.5 p.m.

LORD GRANVILLE OF EYE

My Lords, very briefly, I have listened to the speeches in this interesting debate on the future of the B.B.C., and having listened to all the speeches I am one of those who are not convinced that a case has been made out. We have the commercial medium, we have the public service, and they are, I suppose, to a certain extent in competition. The public has a wide range of choice and I hope very much that when my noble friend Lord Bowles comes to reply on behalf of the Government he will tell us that the Government intend to leave well alone.

BARONESS STOCKS

Hear, hear!

LORD GRANVILLE OF EYE

Nevertheless, I think we are indebted to the noble Lord, Lord. Fraser of Lonsdale, for introducing this subject. In my view, he made out a persuasive case, and he has a long and wide experience of this subject. His Motion seems to place the main emphasis upon revenue, but when he was speaking I thought he placed the main emphasis upon asking the Government for an inquiry into this matter. I doubt very much whether at the present time the public are of the opinion that they want to see a change made. As I understand it, the public has been against a change being made in favour of the B.B.C.'s using advertising, on its local stations or nationally. In my view, it is the responsibility of any Government who propose to make this change to have a complete and thorough inquiry, or otherwise a much criticised referendum, before the change is made.

As I have said, the noble Lord, Lord Fraser of Lonsdale, seems to place the main emphasis upon revenue, and other noble Lords who have spoken have said much the same thing, suggesting; that we should try one radio channel for advertising. If the main emphasis is placed on radio, can my noble friend Lord Bowles tell us whether anyone has made any calculation of the amount of revenue we are likely to get, even on an experimental basis? I have no idea what the revenue is from commercial television, but from what one reads in the newspapers it would seem that large sums of money are being made at the present time by all kinds of people. It would be interesting if my noble friend Lord Bowles could give us some indication of the amount of revenue which would be likely to be derived, either on radio or on television, if any change of this kind were made.

I agree with my noble friend Lord Ritchie-Calder that, wherever one goes in the world, everyone speaks of the B.B.C. as a great institution. One of the problems of democracy in the world to-day is the problem of communication. Ever since the radio came into villages and hamlets all over the world it has been held in the highest regard as a public service, and I hope very much that the Government will think carefully before they make a change from a public service to what some people call the "detergent democracy".

Of course, we all have our criticisms of the programmes of the B.B.C., but that is not what the debate is about. We may not like Till Death Us Do Part, or the old films which are shown on Sunday evenings. But this change in the revenue set-up would not change the programmes, and therefore I hope very much that my noble friend Lord Bowles will tell us that we shall continue to have the two media, with the commercial and the public service, and that we shall leave well alone.

8.10 p.m.

LORD BOWLES

My Lords, I think we have had an excellent debate, ranging all over the subject, and perhaps I might start by dealing with one or two of the more recent speakers. In answer to my noble friend Lord Granville of Eye, we have no idea at all what the revenue could possibly be. I certainly think it would be silly to make any guess. The noble Lord, Lord Somers, was obviously against the advertising, but he went on to criticise the programmes. I want to point out, in answer to any general criticism of the whole line of the B.B.C. programmes, that the responsibility for programmes rests on the noble Lord, Lord Hill of Luton, and his distinguished colleagues on the Board of Governors. It is not for the Government to criticise or to defend the programmes. It is fundamental to the whole concept of broadcasting in this country that the public authorities responsible for broadcasting should be independent of the Government. But I am sure that the Corporation will study the noble Lord's criticisms with great care.

As almost every other noble Lord has said, we are very grateful to the noble Lord, Lord Fraser of Lonsdale, for raising the subject of this debate to-day. We have all listened, I have particularly, with great interest to the views that he and other noble Lords have expressed. His qualifications are of course exceptional. As he reminded your Lordships, he was interested in revenue in the broadcasting services, and in various committees. The whole question of whether broadcasting services should be paid for out of revenue and by advertising included in the services has been studied over and over again during the past 45 years. In the years before the Second World War it was looked at by successive Committees of Inquiry, by successive Governments—they were Conservative Governments—and no doubt by successive Boards of Governors of the B.B.C. In the result, there was no commercial radio or television in this country until after the war.

Since then there have been two independent Committees of Inquiry. The first of them, the Beveridge Committee, which was appointed in 1949, of which my noble friend Lady Stocks was a very honoured member, advised by a majority of seven to four against broadcasting by advertising interests. The Beveridge Report led to wide-ranging argument, and to that argument the noble Lord, Lord Fraser of Lonsdale, as I think he said in his speech, had much to contribute. I cannot of course go over the whole ground again this evening. But your Lordships will perhaps permit me to recall that the Conservative Government in their White Paper on the Report (Cmd. 8550, of May, 1952), stated unequivocably that: The Government would be most unwilling to see any change in the policy of the B.B.C. themselves towards sponsoring or accepting advertisements". This policy was that the Corporation should not admit sponsored programmes or accept advertisements. Noble Lords will recall that from its inception Independent Television has been expressly forbidden to carry sponsored programmes. It is, I think, common ground that sponsoring should never be allowed in any broadcasting service in this country.

The next independent review was that of the Pilkington Committee, which reported in 1962. That Committee warmly reaffirmed the view that the B.B.C. should not be financed out of advertising revenue. The Committee noted that the method of paying for broadcasting affects the character of the service of broadcasting, and concluded that only the licence fee system implies no commitment to any objective other than the provision of the best possible service of broadcasting. The Committee also rejected the view that the B.B.C. might safely accept some advertising revenue, on the ground that in time the Corporation would be driven to a greater and greater dependence on advertising revenue.

This is where I want to say to all noble Lords—and, I think even to the noble Baroness and the noble Lord, Lord Ritchie-Calder—that I personally feel that these Committees have advised against even the thinnest end of the wedge. If your Lordships work it out for a moment, suppose a great number of people agree that Radio 1 could be used for a certain amount of advertising. All right. Suppose it does raise a little money. The time comes when the B.B.C. might want an increase in the licence fee. The Government would then very likely say, "But you have already started advertising; you must extend it"; and those noble Lords who want to preserve Radio 4 will find their case has gone because they let the door open a little; and really there is no stopping advertising once it has started. The Committee also observed that if the B.B.C. were to sell advertising time a fundmental change would take place in the character of the competition between the two broadcasting organisations. It would become competition for the most desirable advertising time and in consequence, broadcasting would suffer. The Conservative Government of the day accepted the Committee's recommendation that the B.B.C. should continue to be financed by the licence fee system. There was little, if any, dissent from that decision.

The debate focused rather on the Committee's recommendation that there should be a fundamental change in the structure of Independent Television. This recommendation was rejected by the Government of the day, and in rejecting it they had the support of the noble Lord, Lord Fraser of Lonsdale, who told your Lordships in this House on July 18, 1962, that the Report's main recommendation was not practicable. That was only six years ago. His experience of the B.B.C. had, he said, taught him the aversion of a public corporation to the selling of advertisements. The noble Lord is of course perfectly free to come to another view, but I am sure he will not mind my noting that he has done so.

LORD FRASER OF LONSDALE

My Lords, I have held the view since 1949 that some advertisements should be taken. I have not changed my mind in the last five years particularly.

LORD BOWLES

My Lords, I have quoted what the noble Lord said, and I remember the noble Lord saying that he changed his mind in 1949 with the Beveridge Report. I will quote again what he said. The Government of the day rejected the recommendation—

LORD FRASER OF LONSDALE

What recommendation?

LORD BOWLES

That a fundamental change should be made in the structure of Independent Television. This recommendation was rejected by the Government of the day, and in rejecting it they had the support of the noble Lord, Lord Fraser of Lonsdale, who told your Lordships' House in July, 1962, that the Reports' main recommendation was not practicable. His experience of the B.B.C. had, he said, taught him the aversion of a public corporation to the selling of advertisements. That was only six years ago.

Your Lordships will be aware of the outcome of the Government's review of broadcasting contained in the White Paper (Cmnd. 3169), of December, 1966. It announced the Government's intention that there should be no change for the present in the arrangement whereby the B.B.C. are financed through the licence fee system, and that an increase in the fee would be required in due course, though not before 1968. There seems to be a certain amount of readiness on the part of noble Lords in this House this evening to accept an increase in the fee. I have no information about that, but I am sure the Government will take notice of some kind of consensus in this House. The B.B.C. are on public record as having applied to my right honourable friend the Postmaster General (then Mr. Short) for an increase. Mr. Short made it perfectly clear that he was considering their application. As he said in another place, the Government would give Parliament ample notice of any proposed increase in the licence fee.

So much, my Lords, for what one might call the historic and constitutional background against which to set the noble Lord's Question. Before turning to some of the considerations it raises, we should. I think, recall what remarkable value listeners get for their licence money—and this has been brought out, I am glad to say, over and over again in this debate. We know that the figure is £5 for a combined set to-day. On the Continent licence fees range from nearly £6 a year to nearly £14. So the amount of licence fee in this country compares most favourably with the cost in other countries. For this amount, the B.B.C. presents hundreds of hours of radio programmes and well over a hundred hours of television every week.

EARL FERRERS

My Lords, may I ask the noble Lord one question? He said that it is on record that the B.B.C. have made an application for an increase in the fee. Have they ever in fact asked the Government if they may go into advertising?

LORD BOWLES

Not that I know of. The noble Earl, Lord Ferrers, is quite right. The initiative must come from the B.B.C. and not from the Government. Lord Fraser of Lonsdale's Question rather suggested that perhaps they might have dropped a hint and the B.B.C. might have made an approach. It is rather difficult to understand exactly what was behind part of his Question, and therefore I put that in as a possible explanation of his thinking on this matter. However, the noble Lord asks, in effect, whether Her Majesty's Government should let it be quietly known to the B.B.C. that if they took it into their minds to seek permission to broadcast commercial advertisements their plea would not fall on deaf ears. The B.B.C.'s Licence and agreement, granted in 1963, provides that the B.B.C. shall not broadcast commercial advertisements without first getting the permission of the Postmaster General. This provision leaves the initiative with the B.B.C. It is for the Corporation, if they think fit, to seek permission to broadcast advertisements.

The facts are the same as they were in December, 1966: that neither before December, 1966, nor, I can reveal since, have the B.B.C. taken this initiative. I cannot speak for the B.B.C., though we have heard this evening from several noble Lords who are connected in one way or another with the Corporation, but I think we can assume that before deciding to seek permission they would take it as their duty to weigh carefully the effect on the quality of their services if they were to broadcast advertisements.

The noble Lord, Lord Fraser, has argued that the performance of the B.B.C. has improved as a result of competition. Here again, I would look back to the last independent inquiry into broadcasting and draw the noble Lord's attention especially to one of its observations. It is sometimes said that the standards maintained by Independent Television show that television financed by advertising can be a very acceptable public service; and that being so, the B.B.C. could, without detriment, be financed by advertising. This argument seems to me to overlook an important consideration. As the Pilkington Committee observed, the effect would be to alter the nature of the competition between the two broadcasting organisations. The competition would increasingly become competition for the sale of advertising time. In consequence—this is how the argu- ment runs—competition would come to be conducted only in terms of audience ratings. Both broadcasting organisations would come to concentrate on those programmes which were known to command the biggest audience. I understand from my noble friend Lord Ritchie-Calder that in America they have seven different channels and the Westerns are always running at the same time. Westerns are all equally popular and so there is no competition at all. They all put on Westerns at the same time.

In the result, the choice available to viewers would become more restricted. Rather than diversity in programming there would be sameness. This is the argument. This is what I was saying about advertisements. As I say, it is laid out in the Pilkington Report. To those who see the argument as more theoretical than real, the Committee's reply is that this is precisely what has happened in countries where competing broadcasting organisations are financed from advertising. Altogether, the Committee's conclusion is that, whatever the effect of the present kind of competition between the B.B.C. and Independent Television, competition of the kind advocated by the noble Lord and supported by other noble Lords this evening, would operate against the public interest in broadcasting.

Of course, many B.B.C. programmes aim to reach the maximum audience and indeed succeed in their aim. For instance, Radio 1 and Radio 2 have been referred to many times—the popular music programme and the Light Programme attract huge audiences. I expect that is why the noble Lord and his noble friend Lord Denham have suggested that they could carry advertisements without detriment to the B.B.C.'s programme generally. The opposing argument is, of course, that this is not a door that one can open only a little and no more. The Pilkington Committee and the majority of the Beveridge Committee concluded that once the B.B.C. admitted some advertising they would gradually be driven to increasing dependence on it.

There are, of course, wider considerations which would have to be weighed in considering the implications of introducing advertising into the B.B.C.'s services. Would competition by the B.B.C. for advertising revenue threaten the continued viability of national or local newspapers? Would it threaten the continued existence of at least some of the independent television companies? On the other hand, would it be right to continue in effect to bar advertising from part of the broadcasting medium—a bar which certainly many in the world of advertising think should be removed? Is it better that the public should pay indirectly for all broadcasting—that is, through the price of the advertised goods they buy, rather than directly through licence fees?

I was very glad to hear my noble friend Lady Stocks point out that people who patronise Independent Television pay the licence as well as anybody else, as well as paying perhaps millions of pounds in the added cost of the goods that are advertised on television. Would it be in the country's best economic interest to stimulate consumer demand by opening up at the present time a more effective vehicle for advertising mass consumer goods? Whatever assessment one might make of the implications for broadcasting of the introduction of advertising into B.B.C. programmes, should we even so take a step which must tend to channel productive effort away from production for export into creating or increasing, and then satisfying, demands for consumer goods at home? This is a point emphasised by my right honourable friend the Chancellor of the Exchequer in his weekend speech. He does not want improvement based on home consumption, but improvement based on increased exports.

My Lords, I do not claim to have the answers to these difficult questions. I observe only that they are posed by the noble Lord's suggestion. The noble Lord suggests an unprejudiced inquiry. He may have in mind an inquiry such as those conducted since the war by Lord Beveridge and Lord Pilkington. The franchises granted to the B.B.C. and to the I.T.A. run until 1976. However, if precedent were followed, there would be set up in good time another such Committee as the noble Lord, Lord Fraser, has mentioned.

The noble Lord complained that the B.B.C.'s external services do not, when referring to our export achievements, mention the names of the firms who have secured them. The B.B.C. are responsible for their programme policy, but my understanding is that their overseas programmes achieve a considerable success in promoting exports by British firms. The B.B.C. reported that of 780 letters recently sent out by them to firms whose products the Corporation had advertised abroad, 131 replies said that they had had direct evidence of sales resulting, while another 222 said they thought the broad-casts had helped. I want to make a distinction between "plugging" and broadcasts about whether there has been a big order, for example, for engines in the United States which would help Rolls-Royce a little further.

The noble Lord, Lord Denham, has referred to local radio. We have all heard of the plans of the G.L.C. and the Manchester Corporation to set up their own commercial local radio stations. There are several difficulties in this suggestion, but I cannot go into them all in a debate on the B.B.C. I am bound to recall that it is the Government's view that the duty to the public of genuinely local radio would prove incompatible with the policy of commercial companies. For the rest, the Government's policy, pronounced in December, 1966, is that there should be a limited experiment conducted by the B.B.C., to be financed so far as is possible from local sources. We shall wait and see how the experiment goes. Meanwhile, let us give the experiment a fair chance.

The noble Lord, Lord Bethell, talked about the evasion of licence fees, and asked whether enough had been done to defeat television licence evasion. I think, the facts are interesting. They are these. Last year the Wireless Telegraphy Act was passed. It made it possible for my right honourable friend the Postmaster General to enlist the help of television dealers, and provided for a sharp increase in the fines which the courts may impose on convicted offenders. The fine for a first offence has gone up from £10 to £50. I think I can say that the measures were welcomed in your Lordships' House, as in the country generally. Also, the measures already in use by the Post Office were intensified. I am glad to be able to say that evasion has been considerably reduced over the last 18 months. One thing I should make quite clear is that this success will not lead the Post Office to relax its efforts. On the contrary, no one should be in any doubt about the determination of my right honourable friend to see that offenders no longer get their television on the backs of the overwhelming majority of honest viewers and listeners.

My noble friend Lord Strabolgi raised two questions. He asked first about the local radio experiment. I think the noble Lord, Lord Denham, had the same idea. The answer is that of the eight stations two have only just started, too soon really to assess results. Support has been overall, positively and substantially forthcoming. My noble friend also asked a question about the fourth channel. The Government said in the December, 1966, White Paper that it will not be allocated for three years at least, first, in the light of the economic situation, and secondly, in view of possible claims of the open university. The noble Lord, Lord Fraser of Lonsdale, and other noble Lords who have contributed so valuably to our discussion this evening, have done a useful service in our debate to-day. It can do nothing but good to have free and open discussion of these things. Meanwhile, the facts remain as the White Paper of December, 1966, recorded them.

Perhaps by way of conclusion I may say two things. First—and here I am sure that there can be no dissent—neither the noble Lord, Lord Hill of Luton, nor his colleagues on the Board of Governors of the B.B.C., need any prompting towards considering where their duty lies. My second observation will, I believe, also command general agreement. The noble Lords, Lord Hill and Lord Aylestone, may well reflect as they think over what has been said here this afternoon, that our broadcasting services, con- sidered as a whole, are regarded by informed opinion abroad as unrivalled anywhere in the world. This has been brought out by many noble Lords here to-day. If I may speak from my own experience, visitors from abroad regularly tell me that they find the standard of radio and television services in this country higher, and often much higher, than that prevailing elsewhere. And they find it an enjoyable feature of our broadcasting that the B.B.C.'s services do not contain advertisements. I understand this to be a typical reaction, and it is something that I should like to place on record.

EARL FERRERS

My Lords, before the noble Lord sits down, would he be kind enough to clarify one point which he made? Did he say that if the B.B.C. wished to make an application to use advertisements it is up to the Postmaster General alone to decide whether or not such advertisements are made? Does Parliament have no say in this? Does the Postmaster General have sufficient powers to give the "green light"?

LORD BOWLES

My Lords, I am not perfectly certain. First of all, the B.B.C. would make the application to the Postmaster General—in this respect that is the Government. I feel quite certain that, without having at my disposal the necessary legal knowledge, possibly some legislation would be necessary to change the Charter, and even to change the Agreement which comes up for renewal in 1976. If I am wrong, I will write to the noble Earl.

House adjourned at twenty-four minutes before nine o'clock.