The Newspaper Industry's Future

HL Deb 29 April 1981 vol 419 cc1209-37

5.19 p.m.

Lord Birdwood rose to call attention to the future of the newspaper industry; and to move for Papers.

The noble Lord said: My Lords, the subject of this Motion is the future of the newspaper industry, and to the extent that I can I am going to concentrate on the future rather than the past and rather than the present. A summary of the press today exists in ample form in the McGregor Report, the most recent of Parliament-initiated examinations of the world's newspapers. Nobody can dispute the thoroughness of that report or the quality of its investigation. It is a benchmark for the industry, and we are lucky that one of the speakers this evening is the chairman of the Royal Commission which produced it. The recommendations in the report were many; they were credible and they were justified. The changes that it predicted in the industry were prescient. The will to implement the recommendations is undimmed, and the industry's debt to the noble Lord, Lord McGregor, will not be repaid until these sensible counsels have been absorbed into its ideas and actions.

I said that I wanted to look to the future, and the starting point has to be the technical possibilities. In my discussions with people inside and outside the industry in order to gather opinion and fact, I found that a real understanding of the technology changes which were possible was missing outside the industry itself. As things stand, the physical printing side of the industry has to be in the future what it is today: big, fast machines impregnating huge rolls of newsprint with inked images; cutting, folding and making the newspaper that I read each morning. Where the hidden changes must happen is in the stages which the contents—the words and pictures—go through between someone writing them and their appearance in cast plates.

What is truly extraordinary is that the production of a newspaper, using conventional methods—and most do—would be completely recognisable to a journalist from an era which predated the telephone. But the technology exists which could take these processes and these jobs forward by 100 years. The key, of course, is the creation, storage and manipulation of electronic material which bypasses the mechanical processes which the industry has inherited. If I may, I should like to describe what is possible.

A reporter on the scene of an event types his story directly onto a keyboard clipped to a telephone. That automatically delivers an image of the copy content to a visual display waiting at the publishing control centre. Then a sub-editor trims it where appropriate, using the keyboard on his machine; he decides on priority and position and introduces it into the page layout using the machine to take the detailed print and column decisions, which were the decisions of the compositor in the print-room. In minutes a page of the newspaper is complete and available to be read off a visual display by the newspaper's editor. Approval follows and the page—indeed, all the pages of that edition—can be transmitted directly to plate-making.

It will not escape your Lordships that this process can take place over any distance. Let us imagine a situation in which newspapers were publishing houses only; with titles, consumer loyalties, and individual styles—all the qualities which make us buy one paper rather than another. These would not even need their own presses. Instead they would print with contract print companies all over the country and beyond, geared to respond to electronic data. Such print centres could run each night, printing to precise demand forecasts, the daily nationals and distribute to local catchment areas. It could happen, but it will not.

The truth is that the new technology is a fact of life as real as the spinning jenny, the combine harvester, the television set or the home computer. The burdens of our newspaper industry, of any newspaper industry in the developed world—high fixed costs, strong unions, climbing prices for newsprint and in many cases falling circulations and at best wavering advertising revenues—need no exaggeration. The trouble is that everyone—readers, advertisers, the Government and, to some extent, Fleet Street itself—falls into the trap of believing that the newspaper industry is graveyard bound. We tend to forget that the mixture of professional pride, cynicism and sometimes cussedness, which so often seem to be tearing the newspaper industry apart, also gets a fresh, brand-new product to millions of consumers every day. I challenge: beat that, Unilever!

We are right when we think that Fleet Street is the print media capital of the world, and the quality of what it produces is second to none. Its casualties are that much more public; we have an example just two days old. But to be fair the net sums involved hardly compare with major industrial failures. The strengths of the newspaper industry are so often overlaid by a sort of death wish, and the apparent eagerness to pronounce that the patient is suffering from a terminal disease. I believe that the prospects are by no means as bleak as they are made out to be.

Earlier this month a reputable survey of business ratios published hard facts about newspaper profitability, which totally demolish pet ideas of an industry dying on its feet. The Investors Chronicle went very bullish on the regional press a few weeks ago; product advertising, as opposed to recruitment advertising, has been held at pretty much the same cash levels and looks set to climb.

But the future financial help of the newspaper industry depends so much on getting the new technology in, and working. There are two aspects to this problem. The first is the effects on the industry of the development of alternative electronic media. The teletext systems of Prestel, Ceefax and Oracle are already with us, to be followed soon by new developments in television—fourth channel and breakfast TV. This will surely be followed by video discs, satellite and cable TV. People are playing with the thought that the house owner will simply sit in front of his machine and access information on to his own reusable newspaper. A lot of these new media will carry advertising.

The second consequence of new technology directly concerns the production of newspapers themselves. It involves the application of photo-composition, computer typesetting and dispersed printing. Unless this industry can substantially raise its efficiency by applying new technology, it will find cruel competition in the next generation of electronic media.

Of course, it is easy to exaggerate the speed with which new media could pose a serious threat to the newspaper industry, but it is hard to over-estimate its ultimate importance. For example, it was once assumed that the only commercial application of the wireless would be for groups of people to listen to sermons. But then again, the advent of television and radio has not brought about the death of the printed word. I believe that the threat posed by the new media has been over-stated. My reasons for optimism are varied.

Past experience suggests that the growth in television has tended to increase the demand for printed information, particularly commentary which is shut out of TV as a consequence of the very nature of the medium. In the entertainment business, the book-of-the-film is an example. But there are other areas where a viewer's curiosity is aroused by morsels of information, and he or she follows up by reading about it in, quite often, a newspaper.

Newspapers by their very nature have an in-built capacity to carry more information, news, and comment, on a wider range of subjects than either radio or TV, and this information can be retained for future reference. And a newspaper can campaign in a way denied to other sources, except possibly local radio.

In terms of volume and variety of programming teletext is even more restricted in what it can do than television and radio. Teletext is suited for carrying factual information such as train timetables and exchange rates, and much else, but can offer little or nothing in terms of editorial content. What I cannot stress enough is that newspapers are sources of information which are paced to the real behaviour of real people—casual, human things—whereas their electronic would-be counterparts need a rigid, disciplined interaction, completely alien to ordinary life. The industry has nothing to fear from that direction, although in 10 years' time I may have to think again.

The position of Fleet Street and the regional press as sources of stories is accepted by programmers in the other media. Without the newsgathering skills of our nationals, some TV and radio programmes would look very thin, not to mention Ceefax and Oracle, which use a lot of newspaper-carried information. But surely the overwhelming comparative advantage of newspapers is that the reader can decide what he wants to read and can browse among the information that is available.

In the next few years I suppose that we shall all be subjected to a mass of electronic information which is likely to have precious little entertainment or educational value. The possibility that a householder may one day be able to produce his own paper by pushing buttons is a very long way off. But, if it did happen, it would still be more convenient to walk to the local newsagent and buy a paper, rather than to sit in front of a screen and punch out all the information one wants to read.

If the competition is to pose no real threat then the onus is on the industry itself to improve its efficiency, reduce advertising rates and cover prices, and increase circulation. At the moment, as we all know, there is an endless repetition of futile skirmishing between the unions who doggedly resist new technology and the managers who see it as a means of achieving all their objectives. Fleet Street is something in the same position as New York publishers were 30 years ago. It faces rocketing costs, and the inheritance of conflict. We will just have to see whether the new owners in the Street will fare better than their predecessors. Newsweek is a good example of what can be achieved using the technology I have described. Printing, like many other forms of communication in America, has moved into space. The Wall Street Journal beams editorial by satellite to seven of its regional printing plants. The Herald Tribune has already started satellite transmissions to Hong Kong, and the Columbus Dispatch claims a breakthrough as the world's first electronic newspaper by making its entire editorial content available to some 3,000 terminals across the States.

In the UK we have a long way to go. The Economist has introduced photocomposition, but there are no VDUs. The Wolverhampton Express and Star has done well to instal visual display units for its journalists, but as yet the material is not transmitted directly to the printers. The fact is that Fleet Street is still using hot-metal setting, and journalists tap typewriters. No one doubts that the new technology will speed up production and permit the separation of editorial and print functions and get more rapid local, national and international distribution. Particularly higher productivity newspapers will be able to contain increases in their newsprint costs.

Recent developments in the newsprint industry such as the speeding up of machines, the mechanisation of wrapping and finishing, and the use of computers to monitor quality have reduced unit costs. But newsprint still accounts for a substantial proportion—it varies between 20 and 40 per cent.—of the total cost of producing a paper. An equally pressing problem is the catastrophic drop in production capacity of the UK newsprint industry. The great proportion of our newsprint is now imported from Canada and Scandinavia, but it must be strategically as well as economically important that the UK newsprint industry is maintained. For the industry to be 100 per cent. dependent on supplies of foreign newsprint is as undesirable in my view as for manufacturing to be dependent on 100 per cent. imported steel.

At the present time, due pretty much to the recession, UK newsprint consumption is down to 1.3 million tonnes. This country, incidentally is the third largest consumer of newsprint in the world behind America and Japan, and is trailed by West Germany and Russia. The market is a mature one which has not varied much over the years, but, if the economy improves, consumption should increase slightly over the next 10 years to, I think, 1½ million tonnes.

The price of newsprint depends on the cost of raw materials and energy as well as on the dollar sterling rate of exchange. It is bought in dollars, so a strong pound means cheaper products. The important consideration must be, from the point of view of the industry, that the price of newsprint has gone up nearly four times in the last 10 years. Ecological measures have also more than doubled the cost of new plant, and this has inevitably been passed on to newsprint customers.

One cannot touch on newsprint without a prod to the Government to be vigilant on the subject of EEC quotas of newsprint and the question of tariffs. I urgently draw the attention of my noble friend Lord Trefgarne to the terms of Protocol 13 and its interpretation within the GATT quota timetable on newsprint. He will be aware that from 1984 Canadian newsprint will be punitively penalised on quota. Reassuring sounds came from another place on these subjects in a debate at the end of last year, but they hardly constituted guarantees. Obviously no one would be more watchful than the newspapers themselves on the topic of possible tariffs, as the effect of a sudden extra jump in costs on this front would be absolutely intolerable.

The problems associated with human or mechanical failure have cost the newspaper industry millions in lost production. And these problems associated with the implementation of new technology and escalating costs have been exacerbated by a marked recession in recruitment advertising. There are two related problems. Total demand for advertising space has been adversely affected by the recession which is affecting all media outlets. In the case of press advertising there are brighter prospects for next year, particularly in the case of display advertising, but newspapers are going to have to market themselves even more aggressively to maintain their share of the market. But this might not be a bad time for the press to sell itself hard. With a slump in Independent Television's audience ratings in the final quarter of 1980, coupled with the alarming increase in the cost of commercials, many of Britain's biggest advertisers are less than avid to spend money there, and I believe would welcome an excuse to divert more to the press.

Provincial newspapers are in a slightly different position. They traditionally take a hefty slice of total media advertising, but are, more than the nationals, vulnerable to the threat from regional TV, local radio, and teletext, and in particular the recent development in free newspapers. Fleet Street's flair for drama has viewed give-aways as debasing journalism and cutting into press freedom, and perhaps these fears are not entirely groundless.

The threat, though, seems less now than 10 years ago. In the form we think of them, free sheets started in Birmingham, I believe, some 16 years ago, and now number around 300 titles. Provincial newspapers have absorbed this development and now own half the titles—a pragmatic but commercially justified development. Furthermore, free sheets, despite the sector's reputation for being a sort of journalistic kindergarten, have reached a degree of respectability. Even so, the pressure on standards remains, and in the interests of local communities it is important that provincial newspaper proprietors and the independent owners of these free sheets strike some sort of responsible balance between journalism and advertising. As in the rhyme, "when they are bad they are horrid".

But the economics are compelling. To take just one random example, in the last six months, the New Observer at Kingswood and Keynsham, in the West Country, have changed from a paid-for weekly, printing 9,500 copies and losing money, to a free weekly, printing 42,500, which is now profitable. The improved revenue of course comes from higher advertising rates, and more advertisers, by giving guaranteed penetration. Opinion varies whether the position of free sheets has stabilised after peaking, but at least one major newsprint supplier has predicted to me that free sheets will represent a quarter of his tonnage sales in the next 10 years.

Despite the self-evident commercial pressures, the editorial content of the majority of our national and regional newspapers is extremely high. Perhaps it is a tribute to the prestige of the industry that there seems to be a never-ending supply of corporate sugar-daddies attracted to the idea of owning a newspaper. By checking the abuse of power, and crusading on behalf of those without rank or influence, newspapers in this country perform a vital role in our democratic process. Editorial freedom is widely respected and the interaction that takes place in London between overseas representatives and our own journalists plays a significant part in promoting Britain's image as a free society abroad.

The editorial integrity and diversity of opinion which is expressed in newsprint cannot be taken for granted. There are already pressures at work which are clouding this freedom of choice, and the price of keeping standards high is incessant vigilance. With newspapers vying with each other to maintain their share of the market in difficult trading conditions, there must be some danger that newspaper owners from outside the traditions of newspaper publishing could allow—certainly not aim for, but allow—lower standards.

Ownership itself is not necessarily benign, and it is not impossible to picture ownership of newspapers with substantial interests outside the publishing world using this privilege to further those outside interests. Finally, there is a very real threat arising from the concentration of ownership of newspapers in the hands of one man or one company. The restriction of competition has, goodness knows, detrimental effects on other industries—not least the elimination of choice for the consumer. But no free society can allow a monopoly of the printed word, and in this area the Government has a delicate task in ensuring that those in the industry observe not only the letter but also the spirit of the law relating to monopolies and mergers. Despite the threat of closure, the principles of editorial integrity and freedom of choice must be upheld. The problem of the newspaper industry are not just the problems of yet another sector of British economy in decline. There is more at risk and there is more to lose, and it would be a tragedy for this country if the journalistic clichés of honesty and the search for truth declined.

It was not my purpose in opening this debate to air my own views. Other participants this evening are more expert, and I am grateful that we have been given the chance to hear them. As an outsider to the world of newspapers, I am tired of the repetition of criticisms about the way in which newspapers run their own affairs. While I have been looking at the subject, I have felt like an outsider in a big brawling family. All the relatives know each other's faults and have learned, almost, to live with them. But the family blood ties come first when a threat from outside the family is perceived. All that one might say about management and labour has been aired—intelligently, passionately, sorrowfully—in countless editorials and articles. No one should underestimate how brutally aware the newspaper industry is of its own problems—and of its own future.

Nor was it my purpose to list figures about the profits and losses of the various titles. These figures exist abundantly and up to date. But I have been interested in the relative lack of continuous financial information available to managers; the kind of working information which would be standard practice in other manufacturing industries.

I did not feel the need today to stress the differences between the nationals and provincials, or quote the percentages of employment in these terms. But I was disturbed to get evidence that industrial relations in, for instance, Manchester, are beginning to echo some of the less appealing practices of Fleet Street. In passing, one individual commented to me that television has no reason to be complacent in this area. Because of the crisis and the immediacy which prevails in both media, his words were, "Television is in danger of becoming the Fleet Street of tomorrow".

Several people have made the point to me that not enough management time has been deployed in the past in "product planning" in its commercial sense. Also, I have been made aware of the vicious circle of colour supplements forcing up cover prices at the expense of circulation rather than attracting new readers. A relatively new phenomenon is the historically loyal reader making a conscious decision not to buy because of price. High general unemployment is hurting the mass market titles with loss of factory gate sales. Some people have regretted to me what they see as newspapers turning into daily magazines, with features at the expense of hard news stories. Speaking for myself I do not agree, as I enjoy the personal style of regular feature writers. I cannot let this pass without the most sincere regret—shared by all in this house, I think—at the loss to our day of Bernard Levin and the noble Lord, Lord Chalfont. Mr. Levin's lobsters and bumble bees, the gas board, his passionate, meticulous condemnation of tyranny—these will not easily be forgotten. To go on in the same vein about the noble Lord in his presence would be impertinent of me, but I feel sure that your Lordships will echo my feelings.

Lastly, I have heard fears expressed that the changing patterns of ownership are causing concern among those countries which send their journalists here to be trained. I feel sure the Government has grasped this point and is in a position to give positive assurances today. We cannot over-estimate the value to the nation in being the favoured training ground for so many would-be journalists from overseas. I look forward, my Lords, to hearing—unlike my own papers for contribution—the views of experts. I beg to move for Papers.

5.45 p.m.

Baroness Birk

My Lords, newspapers have a wide fascination which acts like a magnet picking up diverse opinions—often uncomplimentary to the press and expressed with a reckless confidence and an awesome authority which have little relation to reality. This does not apply, of course, to the moderate speech made by the noble Lord, Lord Birdwood, and indeed we are indebted to him for keeping this important subject under current review. We are also indebted to my noble friend Lord McGregor of Durris—who I am delighted to learn will be speaking later in this debate—whose Royal Commission on the Press produced an excellent analysis of its current state. Many of the report's recommendations still need to be implemented.

Suggestions that the newspaper industry is in dire straits are not true, and I am very glad that Lord Birdwood also took an optimistic view. The industry is alive, thriving and thrustful. The printed word, which is one of the most important facets of our civilisation, is holding its own. It is not being eroded by television or by radio but is being complemented by them. I will not go into the electronic forms because the noble Lord, Lord Birdwood, dealt with them at some length. Printed words have a permanency and they do not rapidly disappear from the eye or the ear as do television and radio. Today, we in this country have 10 national daily newspapers with a total circulation of 15 million; a drop from the 20 million of a decade ago. We have seven national Sunday newspapers whose circulations have also dropped, but they have still maintained around 18 million sales. We also have a provincial press which is usually in a a very healthy state. The drop in circulations is a result, I believe, of the increase in cover prices which have now been pushed to the limit. The coldest draught has been felt by quality newspapers because half their advertising revenue comes from classified advertisements; so that when a recession hits hard, it hits these newspapers very hard as well. Yet the Sunday Express now has a colour supplement, the News of the World plans to introduce a colour supplement in September, as does the Sunday Mirror, and the publishers of the Daily Mail are talking about launching a new Sunday newspaper.

I share the doubts which were expressed by the noble Lord, Lord Birdwood, about the proliferation of colour supplements because of the investment which goes into them and the competition they pose as giveaways to some magazines. I say this with feeling having once been the associate begetter and editor of Nova, where we felt that the colour supplements copied from our magazine and got off the ground free, which made them very difficult to compete with.

Returning to newspapers, we have seen the launch of a new Sunday newspaper in Scotland, the Sunday Standard aiming at a circulation of 170,000, and which will also be giving employment in that heavily depressed area, which is very important. The noble Lord, Lord Birdwood, referred to the question of giveaway newspapers. I believe there are two sides to this question. Many of them are owned by provincial newspapers, and a number of good provincial newspapers which are flourishing today started life as giveaway newspapers at the end of the last century.

The question of changing patterns of ownership is currently posing some problems, and the noble Lord, Lord Birdwood, touched on this point. I believe without any doubt that the sale of Times Newspapers should have been referred to the Monopolies Commission before it was agreed to. The result might have been the same; I accept that Rupert Murdoch is a professional newspaper man. But when one has a structure and a procedure, then it should be followed. I believe that the Government were quite wrong not to insist that this matter be referred to the Monopolies Commission. Meanwhile, Mr. Murdoch having given certain undertakings, I wish The Times well and will say at this point that it has had a very good rebirth. However, there should be an emergency procedure, because one of the reasons why this matter did not go to the Monopolies Commission was that Mr. Murdoch was unwilling to wait the three months required for this procedure; and when there is the likelihood of a newspaper closing down, or where there is a hiatus, it is impossible to expect that people will wait that length of time while the newspaper loses its advertising and goes down the drain. Perhaps the Minister would say whether the Government are seriously considering this; I understand that by the use of an emergency procedure it could be sorted out within two or three weeks.

Coming to the Observer, we have a different proposition. The problem here is not really one of monopoly but whether the particular ownership is for the public benefit. Owning great slabs of industry in Africa and the Lonrho style of management raises serious doubts as to whether it should own a newspaper whose reputation is now largely based on its coverage of African affairs. Now!, which since Monday has affectionately been known as "Then", had no chance from the beginning. There is little prospect in this country of an expensive news magazine with no passionate views, no soul and no campaigning spirit, standing up against competition from the national dailies and Sundays. Sir James Goldsmith made the mistake of thinking in the French context, where his l'Express is extremely successful, and that the same result would be achieved in this country, where we have a tremendous number of national dailies and Sundays.

One of the most important points to consider is the quality of newspapers. As a reader and journalist, I believe that the most important factor is that of content. This is what newspapers are all about, and in my view the tabloids, with a circulation of 12 million, cause the most concern. Many years ago the Daily Mirror, under the editorial leadership of my noble friend Lord Cudlipp, proved that a paper could be serious, campaigning and entertaining. Then we got the Sun—the rebirth so to speak—which started at the lowest common denominator yet still managed to descend editorially.

Unfortunately, the Daily Mirror went down market as well, debasing its own editorial currency in defence of circulation. That was a great mistake. The Daily Mirror is now pulling up; its content is more serious, it is crisp and very readable, and its circulation has increased. The lesson to be learned here is that you must not under-estimate people; once a market has been set and you know your product is acceptable and is being well read, you should try to hang on. Although I do not subscribe to its political views, the Daily Mail is a good tabloid. In recent days we have heard Lloyd Turner, the new editor of the Daily Star, say; I am not a tits and bum man", and he has said he wants to turn it into a more serious Left-wing paper.

There is today a certain amount of cross-comment which is interesting, remembering the cultural and political gap there is in the pattern of our newspapers, a subject to which I shall come shortly. For instance, The Times, which has been considered all along as the defender and supporter of a Conservative Government, contained a leader on the Nationality Bill which was a sensible and constructive critique on what is being done on the subject. Yesterday it ran a slashing attack on the Contempt of Court Bill, which has left your Lordships' House for another place. That was not surprising in view of the thalidomide campaign which the paper undertook some years ago.

When speaking of quality, it should be pointed out that journalists themselves have a great responsibility. I speak from experience when I say that there are frontiers beyond which one cannot go. Nevertheless, most journalists take a pride in producing well-written work, material which they would like to read themselves. That is not to say that when one re-reads what one has written one could not make improvements in it. But journalists must heed their editors. There is a political and cultural gap and it is clear that we need in our pattern of newspapers a left of centre non-tabloid. A feasibility study is being carried out now by the TUC into whether it would be possible to finance a new paper of the Left. I agree with those who do not want newspapers subsidised by the state; that would be a dangerous and slippery path for newspapers to take in a free democracy. I also doubt whether the national printing corporation as suggested in the minority report to the Royal Commission report is necessary; there is ample printing capacity among the newspapers now in operation.

One cannot run too far ahead of one's readers. One has to reach the point where they are not underestimated. One can push an experiment, but if the point is reached when people do not want to read the paper, then one is undertaking a self-destructive exercise. I see the long-term improvement in quality as resting in the educational sphere. In my view, newspapers should be read and criticised as part of the school curriculum. I accept that certainly the better schools, in the sixth and even lower forms, have societies where this activity is undertaken. I am sure that, like me, noble Lords have been invited to speak to them and answer questions. That newspapers are discussed in schools today must be a necessary part of the curriculum if the readers of the future are to demand something better. Knowing something of what the various newspapers stand for must be of great help in that connection, and I am not thinking only of the political slant of newspapers. I am thinking of the differences between news and comment, what is missed and how some newspapers specialise in particular features and so on. Such informed demand would also be good for newspapers because it could only result in a greater demand overall for newspapers in the future.

A certain amount of monitoring of newspapers is done by the Press Council, which was established 27 years ago. However, it is concerned mainly with complaints. The Press Council got off to a flying start with the noble and learned Lord, Lord Devlin, as chairman, followed by the noble and learned Lord, Lord Shawcross; but latterly it has taken quite a bashing, some of it justified in my view. Eight editors have refused to publish the adjudication. I accept that the council has put it out again and had it republished in other papers, but unless the newspaper industry supports the Press Council—for the benefit of the industry as well—I fear we shall see a dangerous situation arising. For the Press Council to be effective, it must be strong and be seen to be strong, it must be authoritative and show its authority, and it must make itself well-known as a protector of the public and not just as a tool of the industry. It should advertise itself and not have to go about begging bowl in hand; in my view, £200,000 is chickenfeed if the Press Council is to do an effective and well-recognised job. After all, unless it puts its own house in order, a statutory body with legal sanctions will replace it, and that would be an unfortunate development.

My union, the NUJ, had its representatives withdraw from the Press Council. My personal view is that that was a great pity, and if there had been a ballot, which there was not, I would certainly have voted against that decision. I say that because while they may disapprove of what the council is or is not doing, the representatives—there were four of them, the largest representation of any group on the Press Council—should have stayed and fought front within, even though a separate Commission of Inquiry has been set up by the Campaign for Press Freedom. The Royal Commission made a number of recommendations about the Press Council, some of which have been implemented. For example, 50 per cent. of the members should be lay members. But, as the Press Council stresses, it is important that these members should be chosen from a very wide spectrum.

The noble Lord, Lord Birdwood, spoke at some length and interestingly on the new technology. As he said, the new technology has made some strides, in particular outside London, and in this area it is fair to say that IPC has led the field. But progress is understandably slow. New technology means cuts in manpower, whichever way one looks at it, and it can be brought about only by union and managerial co-operation. The unions' move towards amalgamation of the number of print unions should be encouraged. This has been on the board for some time and I hope that something will come of it.

I think that there is a great deal wrong with what is happening in regard to restrictive practices and other matters. I do not make excuses here. But management has an abysmal record, and I believe that it is even more to blame than the unions for the industrial relations snarl-ups that we are suffering and which have been building up over a number of decades. Today management is trying its best to disentangle the situation and to create a climate of co-operation, but we are suffering from what has happened in the past. The Times management, when The Times was closed down, tried to get through the new technology without having enough consideration for the professional and social consequences.

Of course, restrictive practices and very high wage demands are millstones around the industry's neck. But the unions have a heritage in the industry going back 500 years. The human factor is of tremendous importance. In the 'thirties, 'forties, 'fifties, and 'sixties the proprietors were very weak. They never stood together; they certainly do not always stand together today. In those years restrictive practices and wage demands were encouraged in order to win the circulation wars against competitors.

It has been said that there is a mutual conspiracy in the industry between management and workers. Well, as Bernard Shaw said, Every profession is a conspiracy against the laity"; and so probably is every industry. But mutual conspiracy is really a basis on which one can sometimes get things to work. I think that a marriage probably has to be a mutual conspiracy if it is to be successful. But we must find a basis of mutual understanding as an infrastructure for the mutual conspiracy. That understanding seems to be slowly coming about, but if we are to look to a successful future, it needs to be improved.

The noble Lord, Lord Birdwood, referred to the newsprint industry and said that in the United Kingdom it must be maintained. I believe that we must be clear that we cannot have a vast home newsprint industry. The main exporters of newsprint to this country are Scandinavia and Canada. But here there should be more recycling. As I saw when I was a Minister in the Department of the Environment, the waste problem in this country is very grave. Whenever people were asked to save newspaper and other material—in particular newspaper—the complaint was that it was never wanted if they delivered it somewhere themselves, or it was never collected from them when they offered it. I would press the Government for help on this matter, though I must add that I think all Governments have been very remiss in this field. Help here would certainly not endanger press freedom, but would aid the industry.

Finally, despite the faults, the shortcomings, and the gaps in the political spectrum, we have throughout the country a wider variety of newspapers than there is anywhere else in the world. Although the quality is not always as good as many of us would like it to be, it is still a free, volatile, and fairly high quality press. The future is far from black. Let us improve it, but let us make sure that in doing so we do not erode its basic freedom.

6.5. p.m.

Lord Winstanley

My Lords, it is a great pleasure to follow the noble Baroness, Lady Birk, in the debate. It was once observed, somewhat cynically, by a noble Lord opposite that perhaps the two simplest routes to your Lordships' House, apart from birth, were, first, being a Liberal Member of Parliament and, secondly, working for the Mirror group of newspapers. Well, here we both are. But my answer to that charge would be as follows. First, it is not very easy to become a Liberal Member of Parliament, and, secondly, I am quite sure that it is not easy to achieve in the press the degree of expertise that has been achieved by the noble Baroness. I listened with very great interest to every word that she said, and I am quite sure that her speech has been of immense help to us.

We should all be very grateful to the noble Lord, Lord Birdwood, for giving us an opportunity today to bring a little light into a rather dark place. Recently a great deal of hysterical nonsense has been spoken, in another place and elsewhere, about the press and its various problems. I believe that your Lordships' House can be counted on to talk informed good sense on the subject, as indeed it so often does on many other subjects; and certainly we shall have informed good sense from the noble Lord, Lord McGregor of Durris, who is to speak later. I am quite sure that what has been said, and what has yet to be said, in the debate will be of very great importance, but whether those concerned will actually take any notice is perhaps another matter.

At the outset I must make absolutely clear two points regarding the views of my noble friends on these Benches on this important question. First, we believe passionately that a vigorous, free and unfettered press is a vital ingredient in any democratic society. We also believe that the press discharging its vital functions effectively depends basically on the maximum number of journalists, editors, and others operating with the maximum degree of freedom and autonomy. Only in that way shall we achieve a proper and effective balance of opinion and outlook. The freedom and the autonomy of the individuals who are actually writing in the papers is much more important than the matter that has already been referred to—that of ownership, though I admit that that is of some importance.

In other words, on these Benches we do not believe that fairness, political balance, and adequate ventilation of minority points of view can, or indeed should, be imposed on the press by Parliament. What Parliament can do, and perhaps should do, is to pass a Freedom of Information Bill, so that the press can always find out exactly what is happening, instead of discovering it when it is too late to do anything about it. We also happen to believe that we should pass, too, a protection of privacy Bill and give some effect to the recommendations of the Younger Committee. We see no inconsistency in those two matters. Indeed, noble Lords on these Benches have a long history and tradition of treading delicate paths of this kind without falling over on either side.

Basically, I am saying that essentially this is a matter of communication between the press and Government, between Parliament and the press, between the people and Government; and it must be a two-way business. The Government must keep the press fully informed, and not push the press into a position where it constantly has to find out things. The Government must open up the books to clear scrutiny, perhaps a little more than is done in this country. I believe that in Britain we are still obsessed with secrecy. It must be a two-way affair. The press must be free to comment freely.

Of course, the Government are entirely free to read the comments with which they happen to agree; and I know that that is what Governments tend to do. I think it was Sir Harold Wilson who, as Prime Minister, was once described by someone with perhaps a clinical turn of mind as suffering from what was called the "Cleopatra syndrome". Noble Lords might recollect that Cleopatra, in her less amiable moments, was apt to execute messengers who brought bad news. If one does that, it is remarkable how soon the good news starts flowing in. Of course that is the kind of press that the Soviet Union has—a press with which the Government always agree. I hope that we shall always have a press with which no one always agrees and which always expresses different points of view.

Secondly, on behalf of my noble friends I want to make it absolutely clear that we believe that it is not Parliament's business to bail out an industry which two Commissions have shown to be suffering from bad management, deplorable industrial relations, thriftlessness and waste and outrageous and extravagant overmanning. We all know what is wrong with the press. It is in all these volumes—nearly 1,000 pages produced by the noble Lord, Lord McGregor of Durris, and his colleagues, in their admirable report. We all know what is wrong; but, surely, the press must themselves sort these matters out, and if they want to stay in business they must put their own houses in order. Otherwise, they must just go to the wall, like other inefficient concerns.

That really means that the press has to come to terms with new conditions and has to adapt to new conditions and to new demands. We have seen that happening so often in the media as a whole. When films first appeared it was generally said that that was the end of the theatre. It was not the end of the theatre. It meant certain changes in the theatre, so that the theatre changed its techniques, perhaps, and developed in different ways. When gramophone records and recorded music were first produced we were told that that was the end of orchestral music. It was not; it was in many ways the beginnings of orchestral music. Live music had to adapt to recorded music.

We now have a situation in which the main purveyor of news to our people is not the press any more but is television and radio, and that means that the press itself has to come to terms with new demands and has to fill a new place. I think many papers have already done that admirably, and have realised that they are not the primary source of news for our people; they are the primary source of comment and perhaps further explanation, in-depth discussion and matters of that kind.

Further, I want to say that the suggestion that the loss of one or two so-called national newspapers would mean the end of a free press totally ignores the very important role played by scores of vigorous, healthy, thriving, regional and local papers all over our country which genuinely keep the flag of freedom flying high. If we look back at the record we shall soon see that time and time again a regional or a local paper, such as the Sheffield Morning Telegraph, for example, to quote just one—and it is one with which I have no personal connection—has unearthed a national scandal and been in the forefront of the civil liberties movement. If we look further back we see how much the so-called "national" papers have in fact damaged what were once powerful and influential opinion-formers.

Noble Lords may know that when Thomas De Quincey decided to edit a paper he did not edit The Times; he edited the Westmorland Gazette. When Matthew Arnold wanted to write to the papers to ventilate his very important and interesting views he did not write to the Guardian; he wrote to the Sheffield Independent. There are still excellent small papers all over Britain carrying first-class, informed and balanced leading articles—and well written, too, which cannot be said of all the quality dailies today. I think there are times, perhaps, when the old art of sub-editing appears to have departed, and when one could cover The Times, the Guardian and the Telegraph with grammatical corrections. I think that from time to time one will find a higher quality of writing in some of the regional and local press. But I am bound to say that the influence of regional and local papers has in fact been reduced and diminished by the excessive concentration and metropolitanisation of our press in Fleet Street.

I said "so-called" national papers because I think that some of them are not really national papers at all; they are London papers, local papers—and this time I am really using the term "London" in its correct, strict, geographical sense, and not in the normal Manchester sense. When we say "London", of course, we mean Cornwall, Devon and all points south of the Wash. But I really do believe that many of these papers are not "national" in any meaningful sense of that word. In fact, I think the national press does much to support and to maintain and preserve our excessive concentration of power and influence in London.

Noble Lords on these Benches have campaigned against over-centralisation in many fields, and we do not share this national hysteria about the London papers. It would be ludicrous to give financial help to the industry which pays the highest wages in London and wastes money in innumerable other ways. Of course, it is regrettable that the Scottish Sunday Express, I think, now has to be printed in Manchester, but perhaps that makes up a little bit for the Manchester Guardian now being edited and controlled and run in London. As a Manchester man, I could face the world provided I had an umbrella and the Guardian—but that leads me to my final point.

This excessive preoccupation with Fleet Street, this undue metropolitanisation of the press, I think has done much to diminish the value of the press. I do not say for a moment that the provinces, or what is done in Manchester, in Sheffield or on Merseyside is better than what is done in London. What I do say is that it is different. I think that what the regional journalist and the regional press can do is to look at national and international events through regional eyes and give a regional flavour to international and national themes.

Even in the field of television, because programmes are produced by Granada in Manchester—and I see the noble Lord, Lord Bernstein, here—does not necessarily mean that they are better, but it does tend to mean that they are different. I think that one thing that happened with the movement of the Manchester Guardian to London was that it immediately affected recruitment. Once the seat of power was in London its recruitment was in London, along with that of The Times, the Telegraph and the other quality papers. So the difference has tended to be diminished, and I wonder whether distinguished journalists like Francis Boyd and Neville Cardus would ever have come to the fore had the Guardian been situated in London in earlier days; and I think that that question applies to many of our affairs.

I would close by saying that I think a great deal of the strength of our whole society in Britain depends upon its diversity. I now think that there is a danger that the weakness of our press lies in its lack of diversity, and I hope that sooner or later we will see our press thriving and flourishing, with a vast variety of control and operation, not just in London but throughout the United Kingdom as a whole.

6.18 p.m.

Lord Chorley

My Lords, I am sure that we are all grateful to the noble Lord, Lord Birdwood, for giving us this opportunity to discuss the future of the newspaper industry, and I shall want to pick up a number of the points that he made in his admirable and extremely wide-ranging speech. The newspaper industry must be, I suppose, just about the most researched and investigated industry in the country. There have been three Royal Commissions since the war, the last reporting four years ago, and numerous other reports, books and articles of varying degrees of usefulness. One might well think that there was little new that could be said about it, but an old concern can take on a new emphasis in the changing environment in which our press has to operate. The speeches we have already heard show that, I think.

My own interest in the press stems, in the main, from an intensive three years as a member of the last Royal Commission, under the distinguished and wholly agreeable chairmanship of—and I am sure that on this occasion he will allow me to refer to him in this way—my noble friend Lord McGregor of Durris. I should also record that I have a number of professional connections with the newspaper industry.

Inevitably—and I think the speeches so far have already shown it—one tends to concentrate on the national newspaper industry, and I shall be no exception. Notwithstanding that, I should like, as a north countryman, to echo the thoughts of the noble Lord, Lord Winstanley, on the importance of the provincial newspaper industry. Incidentally, he referred to De Quincey as being the editor of the Westmorland Gazette—the newspaper of my home town. I think that in fact he had to be removed from office because he was far too highbrow for the Kendalians of the time—but, still, it was an interesting event. The provincial newspaper industry is larger than Fleet Street in industrial terms. It is larger in terms of output and employment. Nor should we forget that the provincial newspapers are in general (excluding, perhaps, the present recession) reasonably profitable. I did not know that United Newspapers were being tipped, but, on the whole, they are reasonably profitable. They have been proceeding quietly and steadily with the introduction of the new technology, and, even if their manning levels are high by international good practice, they do not exhibit the same horrors as Fleet Street. They provide an essential service as a source of local news and opinion and an equally essential service which is sometimes forgotten, by creating a market place through their classified advertisements for the sale of goods and services. I doubt whether they will suffer seriously from local radio, something which some people think might happen. I think that local radio is partly complementary but partly a useful competitive spur in a situation where all the main towns now have only a single evening newspaper. I think that the relationship with radio will be a healthy one.

There is one feature of the development of the provincial newspaper industry over the last 15 years which is not satisfactory, and that is the growth of regional concentration in ownership. There are understandable reasons to do with production economics which in part explain this tendency. Nevertheless, it tends to reduce local competition and, perhaps more important, it carries the danger of lessening the variety of opinion and voices at local level. The last Royal Commission drew attention to this and I believe that the Monopolies Commission has taken note of our views. It would be helpful to hear the Government's views this evening.

We should remember that there are some half dozen journals of opinion—when I prepared these notes, I wrote, "not all flourishing financially", and that was at the weekend, before we learned of the demise of Now!—but we should remember also that there are large numbers of periodicals often referred to as "the alternative press" all of which contribute to a diversity of social and political comment. We would all agree, I am sure, that we should be much poorer without Private Eye.

But it is our Fleet Street newspapers that matter most and that is where the trouble lies. We have seen in the last 12 months the demise of the Evening News and the transfer of ownership of The Times and the Sunday Times which followed the failure of the Thomson Organisation's efforts to get them on to a proper footing. Now there is the prospective change of ownership of the Observer. Both these changes of ownership stem from poor, if not appalling, financial performance. Just before Easter it was announced that the Guardian had had a poor year which was not even covered by the profits of the Manchester Evening News and the other papers in that group. To set against this, we have only Lord Matthew's courageous enterprise in starting a new popular daily. One cannot help feeling that it is a case of plus ca change, plus c'est la même chose.

I do not want to comment on the specific issue of why the Government did not refer The Times's change of ownership to the Monopolies Commission while they referred the Observer change. I am fairly familiar with the circumstances in each case and I shall listen to what the Government have to say with great attention. There are involved here important issues both of policy and of its application in particular circumstances.

I want to concentrate on the general problems of Fleet Street which lie behind these recent events. Some would say that everything is due to the inexorable economic law that the economies of scale derived from larger-scale circulations tend to be self-reinforcing and that these economic forces will be so strong that the market leader in any one class of newspaper will drive out its competitors. I do not subscribe to that thesis. All the evidence I have seen suggests that Fleet Street is such an irrational place that it is wise to be agnostic and unsafe to make predictions. The failure of the News Chronicle was not the result of this law but had more to do with its management and editorial performance. The resurgence of the Sun in the 1970s—whatever one thinks about it in terms of quality, which is a value judgment—after it was acquired by Mr. Murdoch, should not have been possible according to this law. Its unit costs resulting from its derisory initial circulation should have been far greater than those of its larger circulation rival, the Daily Mirror. But, in fact, its unit costs were lower.

Like so many so-called economic laws, the reality of the market place is often very different. As I have already noted, it ignores the abilities of different managements adequately to control costs—manning levels and pay rates—in production, administration and editorial departments. This is such a truism as to seem scarcely worth stating. But all the evidence that I have seen suggests that once a newspaper becomes successful it becomes appallingly difficult to retain control. And one might add that it is not just successful newspapers that have difficulty—witness The Times. One might add: the richer the parent, the more difficult it is. Nor does the law take account of that simple but elusive factor, editorial flair. The mere spending of money on the editorial department is not a substitute for editorial flair and it does not ensure that you get the right readers in the right quantities. Finally, the categorisation of newspapers into simple classes fails to recognise—and I am speaking now principally about the quality press—that there is no such thing as a single quality advertising market. There is a whole host of different markets and sub-markets. The secret of success, in my view, lies in finding your market niche. A paper which strays outside its niche does so at its peril. Yet so often one finds Fleet Street managements chasing ever-larger circulations and ever-larger advertising volume. Large circulations in the quality press are not necessarily profitable; nor, necessarily, are large advertising volumes. The most notable example is the Financial Times, which has the lowest circulation of any of our national newspapers but which is much the most successful on the whole.

When the late Lord Thomson acquired The Times in the 1960s, he proceeded to push up its circulation from 300,000 to over 500,000. But he ran into larger and larger losses because the new readership did not have the pulling power and, therefore, the advertising profitability of his old readership. He had to retreat; and by 1973 he had just about got The Times to at least a break-even position. In the course of last winter, I was involved in the preparation of a business plan for The Times. This was for the purpose of a long-stop bid to preserve The Times should all else fail. At that stage, as people generally know, The Times losses were approaching 50 per cent. of its turnover an the manning levels were absolutely unbelievable. Yet the projections made by our extremely experienced technical consultant showed that it was perfectly possible to publish The Times profitably. Indeed, the manning levels that he postulated were somewhat above provincial levels. The composition at The Times would have been carried out based on an existing organisation which uses female typists and computer typesetting. The current rate of output of these girls, I am told, is over twice that of Fleet Street compositors and the girls earn about £6,000 a year. By contrast, some top compositors in Fleet Street now earn up to £30,000 a year. If it had been possible to break out of the Fleet Street straitjacket, with its customs and practices, not into some hypothetical world but into a world of relatively modest technical performance, the finance for this venture could have been found on strict business criteria.

Contrast the position of The Times with an example from one of the best-run United States newspapers, to which the noble Lord, Lord Birdwood, referred, the Wall Street Journal. He gave some graphic descriptions of what the new technology can do. As a further illustration I may say that the Wall Street Journal—and this was five years ago—has a printing plant in Florida. Facsimile pages are beamed in from New England by satellite and the whole print for the southeastern States is run off by just 14 people. We were told that one of these 14 is a janitor and another a gardener. I do not think you would find that anywhere in the United Kingdom. It does not surprise me that discussion among Fleet Street executives is not so much whether in an ideal world one could increase productivity by, say, 25 per cent. but rather whether it could be four times as high rather than, say, twice as high. That is the measure of the situation.

I therefore have no doubt at all that every newspaper in Fleet Street could be profitable, and some of them extremely so. I have no doubt at all that the TUC paper, which has been mooted now to my knowledge for at least six years, could also be profitable if it were properly manned and if it had the right editorial flair. But how do we achieve this, my Lords?

Five years ago during the last Fleet Street crisis, a joint standing committee of trades union general secretaries and newspaper managements, under the chairmanship of Mr. Bill Keys, negotiated a comprehensive package dealing with procedures for introducing new technology, voluntary redundancy, pensions, disputes procedures, and so forth. It was wide-ranging, imaginative and generous and it was put to the trade union members by ballot. It was overwhelmingly rejected by the production workers. It would be nice to think that another attempt would fare better. But there is not the slightest reason to suppose that it would. All the events of the past five years—and The Times stoppage in 1979 is a good example—suggest that while general secretaries may propose, the chapels dispose. I therefore see no reason to suppose that, for example, the proposed merger between SOGAT and NATSOPA will have any effect on the situation. I see no solutions, I am afraid, other than the chipping away by managements.

Every so often, as we have seen twice this winter, a parent company will get fed up and pull out; and every so often a new organisation will step in to try its luck. But it is a chancey business, and one of these days a major title will disappear, a title which in even a modestly rational world could have been profitable. If the British disease is a reluctance to accept change, the Fleet Street variety—Fleet Street 'flu if you will—must surely have few peers in virulence. Such is our fourth estate.

6.33 p.m.

Lord McGregor of Durris

My Lords, I echo what every speaker has already said in expressing my gratitude to the noble Lord, Lord Birdwood, for initiating this debate. There have been authoritative contributions concerning the performance, the economics and the general distribution of the press. I do not propose to attempt to traverse ground which has already been covered so admirably. I intend to spend a few minutes discussing what seem to me to be two major threats to the freedom of the press at the moment.

A free society is easier to recognise than to define; but liberty of expression is a distinctive element in every definition. That liberty rests upon the opportunity to speak, write and publish whatever we wish without fear of punishment or penalty, save that the rights of other citizens must not be infringed. Newspapers are central to the exercise of this freedom. I do not mean only the national newspapers or the regional newspapers to which the noble Lord, Lord Winstanley, referred. I include also the periodicals—some 4,000 to 5,000 of them—as well as hundreds of community newspapers and the so-called "alternative" newspapers; that is, alternative to the established press.

These latter alternative publications range from the more extreme forms of politics and the more esoteric schools of philosphy to the more liberated forms of sexual expression. This branch of the press demonstrates that there are no ideas, however seemingly grotesque, absurd or offensive to ordinary folk, which cannot and do not find their way easily and cheaply into print. The right of minorities to publish and to circulate their views is at the heart of the freedom of the press, and the alternative press testifies to the maintenance of that right in Britain today.

Not all publications have to incur heavy costs of production. But we think mostly of newspapers in terms of their contribution to democratic politics. The great English editor of the Pall Mall Gazette, Frederick Greenwood, wrote in 1890: to suppose that in any country the influence of the press was ever a delight to the Government would be a complete mistake. It is a rival influence, often a conflicting influence and sometimes…a commanding and destroying influence … The press is sometimes a nuisance to Ministers because it preaches triumphantly from imperfect information; at other times because it discovers too much of the truth, and makes inconvenient exposures of neglect, error, fraudulent pretence and false principle. How should it be loved by those who suffer from the operation? Indeed, it is not loved. Relations between the press and politicians in democracies are, all over the world, always uneasy, suspicious and fretful. Another editor of great experience and repute, my noble friend Lord Jacobson, once observed in this context: relations between politicians and the press have deteriorated, are deteriorating and should on no account be allowed to improve". That we may think is the proper circumstance in a democracy.

When I was chairman of the Royal Commission on the Press I quickly learned that many politicians were dedicated in principle to a free press but regarded existing newspapers as a conspiracy against them and their party. Indeed, I was astonished and much influenced by the intensity of dislike that I found among politicians for the press when revealed in private conversations. Of course, I recognise that this dislike sometimes stems from genuine grievances. James Margach, sometime political correspondent of the Sunday Times, has analysed the relations between 12 Prime Ministers and the press during the past 50 years. In his view, nearly all of them subscribe to Lloyd George's maxim that, What you can't square you squash, and what you can't squash you square". He cited only two exceptions to this generalisation: Mr. Attlee and the noble Lord, Lord Home of the Hirsel. But he also described parts of the press as indulging during the past 30 years in "screaming irresponsibility".

Citizens in a democracy must reckon with two facts of public life. First, some politicians, though paying lip service to the indispensability of a free press, would shackle and control it if they could. Secondly, a free society which expects responsible conduct from a free press must go on tolerating some, often shocking, irresponsibility as the price of liberty. Independent newspapers must be as free to behave irresponsibly within the law as to behave responsibly.

The secret of a free press must always remain the courage to resist encroachments in a conflict which can never issue in a final victory. New threats to freedom arise constantly, and I shall mention two which I see as sinister omens today. Over much of the world denial of freedom of expression is the ordinary condition, news and information are suppressed and distorted, and deviant journalists are harassed, imprisoned, tortured and killed. There is nothing new in this. What is new is the role which UNESCO has played for 10 years, during which the politics of communication have become one of its chief concerns. Angry debates have resulted from resolutions put down by the Soviet bloc, urging the extension of state and international control over the means of communication. At the same time the resentments of third world countries over the control by advanced countries of communications and much of the packaged entertainment of the world have burst out as denunciations of a new colonialism manifesting itself in the form of cultural imperialism.

Many developing countries regard governmental control over the press as an indispensable means of promoting their national identity, cultural integrity, economic growth and political cohesiveness. They see these supreme aims as being undermined by the open criticism of Governments which exist in democracies. Such countries seek to redress what the Director-General of UNESCO described to the General Assembly of the International Press Institute two years ago as: the first and most fundamental imbalance which exists today in communication of separating the small number of over-developed and over-informed countries from the vast majority of the others". It is a remarkable indication of the outlook of senior officials in UNESCO that they add the sin of "over-information" to the catalogue of wickednesses for which they hold accountable the countries who contribute the bulk of their budgets.

However, with the approval and support of UNESCO, the third world now demands a "New World Information Order". Five years ago some 80 Governments of the Non-Aligned Movement stated that the object of the new order was the emancipation of development of national communications media, which is an integral part of the overall struggle for political, economic and social independence. In their view, emancipation and development should provide a more equal distribution of the means to communicate which is in itself highly desirable and would recognise the sovereign rights of Governments to control the flow of information about themselves and their countries to the outside world, and would harness the media to the cause of national development by ensuring their loyal support for Government policies—a prospect, my Lords, which I find terrifying.

These aims explain why many developing countries, though by no means all of them, link a worldwide reform of the media with the North-South dialogue on economic co-operation to find ways of reducing inequalities of wealth between poor and rich countries. They hold that a new international order in matters of information and the mass media is as important as a new international economic order. These developments in UNESCO have received the full support of the Director-General, Mr. M'Bow, and it is therefore most encouraging that Britain has taken the lead in opposing his policy of imposing by ukase what has come to be known in UNESCO double-speak as: a free and balanced flow of information throughout the world". This is no party matter. The responsible Ministers in this Government and in the previous one have made their voices most effectively and eloquently heard in the last two UNESCO general conferences in support of the virtues of a free press in all parts of the world. I understand that the Government have pressed the need for a co-ordinated Western policy upon our partners in the Community, who are now more fully aware than they have been in the past of the political aspects and political implications of this question. I understand also that similar steps have been taken within the Commonwealth, both at governmental level and by such bodies as the Commonwealth Press Union. Nevertheless, it would be heartening if the noble Lord, Lord Trefgarne, could reassure the House about the Government's future intentions concerning this question.

Unhappily, I discern similar authoritarian tendencies of thought at home, although their sources and settings are different. I began by stressing the inevitable conflict in a democracy between politicans and the press, and the great importance that this situation attaches to the maintenance of the press entirely ndependent of Government. Broadcasting and the press are the two chief sources from which the public obtain news, information and comment. The Royal Commission was strongly influenced by a comparison between the press and broadcasting. In the case of the press, no legal restriction is placed on the right to buy or launch a newspaper. Consequently, there is no specific obligation on editors or proprietors to have regard in what they publish to the need to meet either the public or the individual interest.

The case of radio and television is very different. The notion that people should be free to set up their own television services would be fanciful because, under present technology, broadcasting frequencies are scarce national resources. Consequently, the law places specific duties on a television authority, which has to be appointed and controlled by the Government and is accountable to Parliament. Moreover, the broadcasting authorities observe strict conventions governing the way they handle political and controversial topics. Such authorities do not exist in the free-market world of newspapers. However, the press and broadcasting overlap greatly in their functions and especially in their sources of information.

The Royal Commission throught that the necessity for governmental regulation of broadcasting greatly strengthened the case for a press which owes nothing to the policies or favours of Governments. However, pressure for governmental intervention in the press has been growing steadily in recent years. Four years ago, for example, Mr. Moss Evans, at a conference on the press organised by the TUC, outlined an unpleasing programme which Mr. Wedgwood Benn and many of his friends have since been advancing. Mr. Evans said—and I am largely quoting from him: The problem of the mocha from the trade union point of view consists of establishing a means of monitoring the output of the media to establish balance, or lack of balance, devising a practicable code of objectivity, fairness and accuracy to govern the presentation of news and opinion and a means of policing"— observe, my Lords, Mr. Evans' choice of words— and enforcing any such agreed criterion". These and other tasks, such as issuing the operator's licence which Mr. Evans would require all publishers to obtain, and setting up a National Press Finance Corporation to enable, among other duties, trade unions to launch a national newspaper, would be discharged by a Standing Commission for the Media, which would be responsible to a Minister.

I am sure that everyone will welcome what my noble friend Lady Birk said about the feasibility study which is now being conducted, at the end of what the noble Lord, Lord Chorley, said was a six-year programme, for filling the gap created by the death of the News Chronicle, and the long absence among the variety of the national press of a left-of-centre quality newspaper. But I am glad to see that the Trades Union Congress has, at last, decided that it may be possible for it to find the finance for such a newspaper from its own resources, rather than from public funds. Such thinking as I talked about earlier is dangerously prevalent among democrats who wish to liberate the press from the thraldom of capitalist ownership. In reality, they would hand it over to a Ministry of Truth and tell us that we had been granted a new freedom.

Schemes for Government intervention in the press, by way of subsidies from public funds or by reallocating advertising revenues from successful to unsuccessful newspapers, were rejected by the Royal Commission, because, among many other reasons, they were satisfied that such schemes would inevitably be a threat to the independence of the press, as a Government appointed body or agency would have to exercise what would, in effect, be the functions of a censor when choosing between applicants for assistance. And, again, in reaching this decision on such schemes, the Royal Commission attached the highest importance to avoiding any type of protection or assistance to the press, which would give Governments access to the possibility of manipulating the press by withholding, threatening to withhold or offering to continue such subsidies.

As the noble Lord, Lord Birdwood, made clear in his lucid and wide-ranging speech, there is great promise in the future of the press, and I certainly agree with the noble Lord, Lord Winstanley, that there is no cause for deep pessimism. But there is also a great peril in the future. The procedures of UNESCO, which are resulting in the legitimation of state control of the press in a number of areas of the world, are echoed here in proposals for similar types of control for similar purposes. I have spent time in discussing them because I think our best defence against such developments is exposure and discussion.

6.54 p.m.

The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne)

My Lords, today's debate has, once again, been both timely and useful. As it has shown, any discussion on the newspaper industry raises issues and principles which lie at the very heart of our society. It is therefore most appropriate that your Lordships should debate the industry from time to time, and we are indeed indebted to my noble friend Lord Birdwood, as every noble Lord has said, for giving us the opportunity to do so today. The debate provides a fitting opportunity for me to express my great regret at the recent untimely death of Lord Barnetson. A lifetime's experience in the newspaper world enabled him to speak with authority on many aspects of the press. He will be greatly missed by his colleagues in the industry and, doubtless, he would have taken part in this debate today had he still been alive.

When one talks of newspapers, the majority of people automatically assume that one is referring to the national press. But we should not, however, forget or neglect our flourishing regional and local newspapers, to which so many noble Lords have referred this evening. While the provincial press may not be as glamorous as the national press, it is nevertheless equally important and indispensable.

Today's debate has, however—inevitably, I suppose—concentrated on the national press and some mention has been made, both here and, indeed, outside the House, of its financial problems. The national press cannot blame its current difficulties exclusively on the recession. The industry's problems are deep-rooted, long-standing and, indeed, well-known. In the final analysis they will not be solved without major improvements in its industrial relations.

Industrial relations in the national press have long been the subject of much criticism. The most exhaustive recent study was conducted by the Royal Commission on the Press—chaired, of course, with such distinction by the noble Lord, Lord McGregor— which commissioned two reports, published in 1976 and 1977, from the Advisory, Conciliation and Arbitration Service. While ACAS found industrial relations in the provincial press to be reasonably good, they saw urgent need for reform in the national press. Traditional problems—demarcation disputes, overmanning, the progressive collapse of management authority, the extreme fragmentation of the bargaining structure—had been further complicated by the challenge of new technology. Little appears to have happened since 1977 to modify those conclusions.

Unfortunately, the Programme for Action, agreed by management and unions in the industry in 1976, which contained many badly needed reforms, was rejected in ballots by the union members in 1977; and I think that the noble Lord, Lord Chorley, referred to that. All too often, worthwhile changes agreed at national level proved impossible to implement in individual newspaper plants.

None the less there remain some hopeful signs. There are discussions under way for union mergers which should do something to improve industrial relations. There have recently been some encouraging increases in realism among those primarily involved—reflected, for example, in agreements to reduce manning levels. The provincial press is showing that the challenge of new methods of production can be successfully met, without the catastrophic results predicted as inevitable by many critics of the introduction of new technology. On the contrary, disastrous consequences will occur if the challenge is not taken up. The future of the newspaper industry holds out much promise. It is, however, one in which outmoded and antiquated production processes have no place.

Several noble Lords have raised questions about the Government's response to the recommendations of the 1974–77 Royal Commission on the Press, which was set up by the previous Government to consider the state of the newspaper industry. There has been no Government response to the final report as a whole.

The Royal Commission's final report contained 70 recommendations, the majority of which were addressed to the industry itself. Of the 25 addressed to Government, these cover a wide range of issues and each must be considered separately and in the light of any opposing views from other interested bodies. For example, the Government are considering the Royal Commission's recommendation on the law of innocent dissemination in conjunction with an opposing recommendation from the Faulks Committee on Defamation which reported in 1975. I can however assure the House that the Royal Commission's recommendations are taken fully into account wherever action is contemplated on any issue to which they have given their attention.

For example, the recommendations relating to the involvement of the press in broadcasting were studied in drawing up last year's Broadcasting Bill. Section 36 of what is now the Broadcasting Act removed the right of a local newspaper to be offered a shareholding in a local radio contractor as recommended by the Royal Commission.

Noble Lords have referred to the freedom of the press and some have expressed concern that commercial requirements for success or survival have not been necessarily conducive to the true diversity of editorial opinion. Successive Governments have regarded an independent press as a fundamental feature of a democratic society and have recognised that restrictions on its freedom are undesirable. The editor of a newspaper, like any individual, is free to publish what he wishes, provided that he does not breach the law on such matters as defamation, official secrets, obscenity or contempt of court. The restrictions imposed by such laws apply no differently to the press than to all other citizens.

The Government support the view of the 1977 Royal Commission that questions of press conduct must be left to the influence of the Press Council, the industry's own self-regulatory body, and should not be subject to Government regulation. The Press Council lists among its objects preservation of the established freedom of the British press and the maintenance of its character in accordance with the highest professional and commercial standards. Some have suggested that to ensure the presentation of as wide a spectrum of opinion as possible the Government should actively encourage new publications. The Royal Commission rejected proposals to introduce special schemes of financial assistance for new newspapers, principally on the grounds of risk to the freedom of the Press, and the Government endorsed that view.

Noble Lords have indicated their concern at the growing concentration of ownership, particularly in the national press. Views have been expressed on the inadequate nature of the newspaper mergers provisions of the Fair Trading Act and on the recommendations of the Royal Commission with respect to monopolies and mergers in the newspaper industry. This was particularly a matter which was worrying the noble Baroness, Lady Birk. Perhaps in a moment I can develop that theme a little more. The Government are continuing their review of competition legislation in general, including of course the special provisions which relate to newspaper mergers.

Many would consider the future of the newspaper industry a rather gloomy one. However, there are even now encouraging signs that its future will confound present pessimism. A new Scottish Sunday newspaper, the Sunday Standard, was launched last Sunday, and I wish it well. Associated Newspapers is planning the launch of a new national Sunday newspaper. The Sunday Express Magazine which was launched on 12th April has made other Sunday newspapers seriously consider following suit. I gather—and the noble Baroness, Lady Birk, confirmed this—that the noble Lord, Lord McCarthy, is currently heading a feasibility study on the prospects of a new national daily newspaper which, as I understand it, would "reflect the interests of the Labour movement". This is hardly a picture of a dying industry. The increasing number of so-called "free sheets" to which my noble friend Lord Birdwood referred, now being distributed locally, is an interesting development, although I have to agree that it is not one which is universally welcomed by the existing provincial press.

May I turn now to some of the points which have been made this afternoon. First I should like to refer to the question of the Times Newspapers acquisition to which the noble Baroness, Lady Birk, specifically referred. In a debate in another place my right honourable friend the Secretary of State for Trade fully explained his decision to give consent to the acquisition of Times Newspapers by News International without referring the matter to the Monopolies and Mergers Commission. He explained that he had an established preference for newspaper mergers to be referred to the Commission so that there should be a full and independent investigation of the implications for public interest, but in this instance he decided that there was a real risk that a reference would lead to closure and that it would therefore be appropriate to give his consent forthwith, but subject to conditions designed to safeguard the editorial integrity traditional in Times Newspapers.

I have noted the suggestion made by the noble Baroness that in cases of urgency a report by the Monopolies and Mergers Commission on a proposed merger could be completed in just a few weeks. However, as I have said, the Government's review of competition legislation includes the newspaper mergers provisions. We shall certainly bear in mind what the noble Baroness has suggested. May I be allowed to point out that if such a procedure were devised there would inevitably have to be some trade-off between the speed of the inquiry and the rigour with which it is conducted, bearing in mind that the final report would need to command general confidence.

Lord Taylor of Gryfe

My Lords, before the noble Lord leaves that point, I wonder whether he would comment on the fact that the Times Newspapers acquisition was not referred to the Monopolies and Mergers Commission. The London evening dailies merger, of which there is a complete monopoly in the London area, was not referred to the Monopolies and Mergers Commission and there was an immediate increase of 20 per cent. on the price of that article, while the Lonrho acquisition of the Observer, which by no standard represents a monopoly situation, was in fact referred to the commission. I wonder what is the logic of references to the commission.

Lord Trefgarne

My Lords, we have to consider each and every case on its merits. As the noble Lord knows, under the existing legislation there are procedures for these mergers to be allowed to proceed where the Secretary of State decides in a particular case that it is appropriate for this to happen. That is what happened in the cases to which the noble Lord has referred. As I have said, this is a matter which we wish to keep under review and we are doing so. I would not wish to prejudge the outcome of the consideration that is being given to that particular matter.

Several noble Lords referred to the proposed purchase of the Observer by Lonrho, as did the noble Lord, Lord Taylor of Gryfe, just now, which has now been referred to the Monopolies and Mergers Commission who are conducting their inquiry. On that particular matter I can say that the Monopolies and Mergers Commission have undertaken to report as quickly as possible. I hope that your Lordships will forgive me if in the meanwhile I do not comment in further detail.

The noble Lord, Lord McGregor of Durris, in his most informed and interesting speech raised the threat to press freedom posed by developments, largely in the UNESCO forum, towards a so-called "New World Information Order". This is a subject of great importance. As the noble Lord pointed out, the Government are concerned about it. My honourable friend the Minister of State at the Foreign Office, Mr. Blaker, set out the Government's position on these issues in his reply to the Adjournment Debate in another place on 8th December last. As my honourable friend indicated, the Government are actively pursuing with Western partners the question of coordinating a more effective Western response to these developments. We are already, and will remain, in close touch with the United Kingdom press interests concerned. Certainly the Government's serious reservations about some of the proposals that have been made in this context remain as valid now as they were when they were made by my honourable friend in another place, and indeed I have referred to the reservations that we have on this matter, in this House and from this Box from time to time in the past.

My noble friend Lord Birdwood expressed concern about the problems of the supply of newsprint and perhaps I may deal with that matter in a little detail. Indeed, some have criticised the lack of Government assistance to prevent the substantial reductions in the United Kingdom's newsprint industry. I regret that Bowater has closed its mill at Ellesmere Port with consequential redundancies in an area already suffering heavily from unemployment and that Reed has found it necessary to reduce its capacity and declare redundancies at Aylesford and Gravesend.

There has been no lack of Government concern about the problem of newsprint. The Government had full discussions with Bowater and indicated that substantial financial assistance could be available for new investment at Ellesmere Port, for which the company had been making outline plans, to improve their performance as a genuine alternative to closure, but it was for Bowater to consider whether to invest against the cost to them of closing the mill. As the House knows, the company decided not to take up the investment alternative but the Government did all they could to help.

Concern has also been expressed at the uncertainty surrounding the operation of the EEC newsprint quota from 1984 onwards, when EFTA countries will enjoy full free trade with the Community. The Government are aware of the newspaper industry's reliance on imported newsprint and the need to maintain the present diversity of supply. The future operation of this quota system is under consideration by the European Commission which in due course will make a formal proposal to the Council of Ministers. Therefore, the Government's decision on this issue must await action by the European Commission. In arriving at our decision we shall take fully into account the views expressed by my noble friend and others.

The noble Baroness, Lady Birk, also referred to the problem of recycling newsprint. It is true that some Government support has been provided for this in the past. The present problems are rather those of supply and demand. The fact is that the demand for old newsprint for recycling purposes has dropped very sharply recently and I believe that is at the heart of the present difficulties.

The noble Lord, Lord Chorley, mentioned the closure of Now! magazine. I must confess that I personally rather enjoyed reading Now! every week and the closure is a disappointing end to a brave attempt to establish a new national publication, but the fact that the attempt was made is further evidence of the continued vitality of Fleet Street.

My Lords, today's debate has once again shown the great importance which your Lordships attach to the newspaper as a means of communication, notwithstanding competition from other information media. I sincerely hope that the newspaper industry, too, will take note of the issues raised and the recommendations made to it.

7.14 p.m.

Lord Birdwood

My Lords, it only remains for me to say a personal thank-you to the speakers today and to reiterate what I said in my opening words, that I was in the presence of experts.

The noble Baroness, Lady Birk, mentioned the TUC newspaper study, as indeed did the noble Lords, Lord Chorley and Lord McGregor of Durris. It was interesting to me that in a recent article in the New Statesman the writer of that article came down firmly against this concept and in a piece of self-mockery, relatively rare in that particular periodical the accompanying cartoon showed a newspaper vendor with his box of TUC papers and behind him five others, all saying, "Paper, paper".

The point raised by the noble Lord, Lord Winstanley, about the excessive preoccupation of Fleet Street and that Fleet Street is basically a London local writ large is very well taken and I would commend individual Fleet Street editors to have that part of the noble Lord's speech hung above their desks.

The noble Lord, Lord Chorley, also mentioned the regional concentration of ownership. When he spoke about his recent experience with the management study on The Times, I felt that he had a lot more stories up his sleeve about over-manning and I should love to hear some of them sometime.

Coming now to the contribution made by the noble Lord, Lord McGregor, I could not be more grateful to him for bringing up the appalling UNESCO—I should like to say fiasco, but it is not. It is serious, indeed unbelievable, in its implications and thoroughly unpleasant, and anything that this Government can do to block it I think will be approved of by any freethinking person.

In this country we love our newspapers: they are rumbustious, raucous, irreverent—sometimes just silly. Alternatively, they are grave, articulate, earnest, or merely dull. They are financially healthier than people are led to believe and, as to their future, we wish them well. It only remains for me to beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.