Cross-media Ownership

– in the House of Commons at 3:31 pm on 23rd May 1995.

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Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage 3:31 pm, 23rd May 1995

With permission, Madam Speaker, I should like to make a statement about media ownership.

Because of the extreme market sensitivity of this issue, I arranged for the substance of the Government's decisions to be announced by my Department before the stock exchange opened for business this morning. I am making this statement at the earliest opportunity thereafter. I hope that the House will accept this way of proceeding, for which there are clear precedents and which I discussed last week with the hon. Member for Islington, South and Finsbury (Mr. Smith), as well as the hon. Member for Caithness and Sutherland (Mr. Maclennan) and the right hon. Member for Manchester, Gorton (Mr. Kaufman)

Following the relaxation of some of the restraints on the ownership of ITV companies in December 1993, the Government announced in January 1994 that they were to review the existing rules governing media ownership. Today I have published a policy document which sets out our proposals, copies of which are available in the Vote Office. In developing the proposals, we have taken account of advice, ideas and comments from a wide variety of sources. I am grateful to all those who wrote to us and participated in the constructive debate on the issue.

Media ownership policy must balance two key objectives. First, it must underpin the diversity of viewpoint that is necessary in any healthy democracy. The Government believe that that requires additional safeguards on plurality of ownership beyond those required by competition law alone. Secondly, it must ensure that the media industry is able to respond to the changing demands of the marketplace and, in particular, that it is able to take advantage of the market opportunities which flow from accelerating technological change.

Technological convergence is not only bringing together functions that have traditionally been separated, but creating an enormous variety of new products and markets. It is inevitably difficult to predict the exact nature and pace of that change, but as different media sectors converge, media ownership regulation needs to look at the media market as a whole, if its core objectives are to be delivered.

The importance of developing a new approach will be reinforced by the introduction of digital broadcasting over the next few years. That will lead to more channels, more choice for viewers and listeners and more opportunities for media companies. The Government will follow up my announcement today by publishing their proposals for digital broadcasting later in the summer.

Against the background of those changes, I am putting forward for consultation a long-term proposal for the future regulation of media ownership which has three main features. First, the media market would be treated as a whole. Secondly, market share thresholds would be established, below which media ownership would be regulated only by normal competition law. Thirdly, a regulator would be established, who would be empowered to restrict concentration above the thresholds where he or she deemed such concentration to be contrary to the public interest.

For the purposes of consultation, I propose total media market share thresholds at 10 per cent. of the national media market, 20 per cent. of a regional market and 20 per cent. of the individual press, radio or television sectors.

Such a model would provide a flexible and durable framework, which would better accommodate the dynamic of the media industry, while continuing to safeguard the public interest in diversity and plurality. I also believe, however, that the substitution of the existing structure by an entirely new framework of rules must be based on full consultation and widespread acceptance that the new structure is fair. I shall therefore welcome views from all interested parties on the proposal.

In the meantime, however, action is required now. The Government therefore propose to introduce a package of immediate measures to remove unnecessary restrictions on the growth of media businesses. It will contain two elements.

First, I am today introducing a package of proposals for change through secondary legislation. I am laying before the House an amendment to the Broadcasting (Restrictions on the Holding of Licences) Order 1991, which, subject to the overarching 15 per cent. threshold set by the points system set out in part IV of that order, will raise the number of local radio licences that may be held by a single person from 20 to 35 and relax the subsidiary limits on the holdings of radio licences in urban areas with a population of between 1 and 4.5 million.

I am also consulting the Independent Television Commission and the BBC with a view to amending the Broadcasting (Independent Productions) Order 1991. I propose to raise the equity ceiling between independent producers and broadcasters from 15 per cent. to 25 per cent. and to amend the definition of an independent producer, so that the ownership of any broadcasting interests outside the European Union does not disqualify an EU company from independent status within the United Kingdom.

In addition, my right hon. Friend the President of the Board of Trade has agreed to amend the newspaper merger provisions of the Fair Trading Act 1973 by doubling the threshold for automatic reference to the Monopolies and Mergers Commission from a circulation of 25,000 to a circulation of 50,000.

The changes will allow greater consolidation within the radio industry, encourage greater investment and stability within the independent production sector and reduce the costs of small mergers within the newspaper industry. The remaining short-term changes that I am proposing today will require primary legislation, which will be brought forward at the earliest available opportunity.

Subject to two important safeguards, the Government propose that newspaper companies with under 20 per cent. of national newspaper circulation will be able to control up to 15 per cent. of the television market, including up to two regional ITV licences or one regional ITV licence and the Channel 5 licence. Newspaper companies with more than 20 per cent. of circulation share will be free to expand in satellite and cable up to 15 per cent. of the total television market, but regulation will continue to prevent them from owning more than 20 per cent. of any terrestrial ITV or Channel 5 licence.

The new rules will also apply reciprocally, allowing television companies to acquire interests in newspapers on the same basis.

Proposals for cross-control between television and newspaper companies will be subject to safeguards. First, any such investment will require the consent of the ITC, which will have the power to restrict transactions which it deems to be contrary to the public interest. Secondly, no cross-control will be allowed between newspaper and television companies where the newspaper company's regional titles account for more than 30 per cent. of regional newspaper circulation in the relevant ITV region.

The Government also propose that the arrangements to liberalise cross-investment between newspaper and television companies should be replicated for cross-investment in the radio sector. In addition, the Government will take the opportunity to remove the numerical limits on the holding of local radio licences, but retain the overall 15 per cent. limit on the number of points in the radio ownership system.

The Government will also abolish the rules that limit ownership between terrestrial television, satellite and cable. Terrestrial broadcasters will therefore be allowed to have controlling interests in satellite and cable companies, provided that their total interests do not exceed 15 per cent. of the total television market. Satellite and cable companies will also be able to have outright ownership of ITV or Channel 5 licences, subject to the 15 per cent. market limit and the two-licence limit.

These principles will apply subject to one condition. The current rules for ownership of non-domestic satellite broadcasters and cable operators have already allowed for a much higher level of investment by newspapers in those sectors than in terrestrial television. The Government therefore propose that satellite and cable companies that are more than 20 per cent. owned by a newspaper group with a national circulation share of more than 20 per cent. should continue to be restricted to a 20 per cent. holding in one ITV or Channel 5 licence, and 5 per cent. in any further ITV or Channel 5 licence.

Finally, as part of the review, the Government have looked again at the ownership arrangements for ITN. We have decided that the principles underpinning the Broadcasting Act 1990 remain sound, and that the 20 per cent. limit on individual stakes in ITN should remain. However, in order to give more ITV companies the opportunity to invest in ITN, we shall remove the 50 per cent. limit on total ITV holdings.

Our media industry is on the threshold of a new era. We cannot pretend that the changes in technology, and their impact on the marketplace, are not happening. We have an obligation to create the legislative framework that will allow the industry to respond to those changes. At the same time, we must protect the diversity of our media, which is an essential element of our democracy.

The approach that I have outlined today does two things. First, it suggests a fundamental long-term reform of media ownership in Britain, and allows time for the implications of this proposal to be properly considered. Secondly, it proposes some more immediate changes which balance more liberal ownership regulation with the introduction of a new provision for public interest scrutiny of the growth of media businesses. I commend it to the House.

Photo of Mr Chris Smith Mr Chris Smith Shadow Secretary of State

I welcome the document, which is long overdue. Why has there been such a long delay? In particular, why could we not have heard these announcements before the Channel 5 process was put in hand, rather than after?

Opposition Members welcome the broad, long-term approach of viewing the whole spread of the media, adopting a points system to do so, and insisting that no one company can secure a dominant position. While the principles set out by the Government in the document are broadly right, however, we believe that the practice leaves much to be desired.

Does the Secretary of State understand that he is putting enormous power into the hands of his proposed independent regulator? That regulator will have very wide discretion: he or she will have the power to make or break companies. The regulator will determine what happens to the ownership of national newspapers and television stations. But who appoints the regulator? Who will it be, and to whom will that person be accountable? Those are crucial questions, which the document leaves up in the air.

We believe that the regulator must not be "doubled up" with the Director General of Fair Trading or the ITC. Given the enormous scope and importance of the regulator's role, this must be the only thing that he or she does: he or she must not be moonlighting from other private or public responsibilities.

May we also have an assurance that the normal operation of competition policy through the Monopolies and Mergers Commission will continue alongside the new rules? Surely both must apply: one must not be a substitute for the other.

How has the Secretary of State arrived at his inadequate definition of the public interest, which will be the regulator's crucial remit? I carefully searched paragraph 6.19 of the document for the Government's definition. Diversity, accuracy, economic benefit and efficiency are all rightly included, but I sought in vain for one crucial and overwhelmingly important word—"quality". Surely quality of programme making must be at the top of the list of criteria.

In the more immediate future, is there not also a serious danger of a flurry of takeover and merger activity for hitherto independent ITV stations? If national newspaper companies with a national focus and interests seek to take over regional ITV stations, will there not be a serious danger of harming the regional character of those stations?

A sense of regional identity has been one of the glories of the ITV network since its inception. Is not the Secretary of State putting that at risk? What safeguards will he put in place? Why does the document contain no specific provisions in relation to foreign-owned media companies? Surely precisely the same rules should apply across the board, whether companies are foreign or domestically owned.

What account have the Government taken of the future of community radio stations which may lose out as new radio licences go to bigger commercial companies? There is nothing necessarily wrong with commercial radio expanding, but surely there must be simultaneous provision to protect community radio interests. Why is the document silent on conditional access and the power of media gatekeeping? It states that that issue caused concern during the consultations, but why do the Government proposals not address it at all?

Why does the entire document have about it the sense that it is trying to legislate for an old era rather than a new? It deliberately excludes digital terrestrial television, says little about subscription services, and does not address the vital issue of access by the public to broadcast sports events. Those are the new growth areas of the media world, and they are remarkable by their relative absence from the document.

The principles are surely clear. They are: diversity, plurality, quality and the best possible programmes for the viewer and listener. The rules are to make sure that there is not excessive dominance by any one commercial provider. The Government have set out some of that in their document, but there is a trail of unanswered questions and concerns over much of the detail. Ultimately, the document will not do much to benefit the ordinary viewer and listener.

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

I was not entirely clear whether the hon. Gentleman was welcoming the document or attacking it. As he started by saying that he welcomed it I shall take him at his word. He said that there was a trail of unanswered questions. Some of the questions that he listed are in the document in interrogative form because the document starts a consultation process on precisely the questions that the hon. Gentleman raises. Perhaps I may go through his points one by one.

The hon. Gentleman asked why it has taken so long to produce the document. The issue is important, and it is important to address it in the short and long-term contexts. I make no apology for spending time thinking through the document's short and long-term proposals.

Secondly, the hon. Gentleman asked me—presumably this was one of his trail of unanswered questions—about the shape of the regulator. That question is avowedly unanswered in the document, which sets out the need for a regulator and invites opinions on the precise shape that the regulator should take. One way of approaching that would be to vest the power in the Director General of Fair Trading and the MMC. Another way is the one which the hon. Gentleman suggested—I take that as an early response to the consultation process.

The hon. Gentleman asked me whether normal competition rules will continue to apply alongside any specific regulation of media ownership. The answer is yes.

The hon. Gentleman then asked me about the public interest in quality. He was on to an important point, even though it is not directly germane to the regulation of media ownership. We focus on quality in our television system through the ITC, through the channel allocation system, and through the conditions imposed on allocation. The document examines the whole media sector.

I am sure that the hon. Gentleman would not seriously argue for the introduction of statutory machinery to regulate quality in the newspaper sector, which is just as important a part of the media industry as television. The answer to the hon. Gentleman's question about quality is that all those provisions remain unchanged by these proposals—including the provisions in the ITC to protect the regional character of the ITV licensees.

There are no proposals to change existing arrangements governing foreign-owned companies. The Government do not believe that there is any need to change them, so we have introduced no proposals.

Community radio is an important success story from the last round of liberalisation of the radio industry; I look forward to similar success stories in other parts of the media industry, coming on the back of the deregulation that I have announced today.

The hon. Gentleman suggested that the document is silent on the subject of conditional access. It actually devotes a whole page to the subject, between paragraphs 5.12 and 5.16, where it sets out clearly the Government's position. That is that protecting the fair operation of conditional access is fully and adequately achieved by existing competition law arrangements. The DGFT has already demonstrated his willingness to use his powers in that area this year.

So I disagreed with the hon. Gentleman's concluding comments about the balance between the old and the new. The document consciously sets out to deal with today's problems and to show the direction in which we go tomorrow, and I welcome his support for that approach.

Photo of Peter Bottomley Peter Bottomley , Eltham

Will my right hon. Friend accept my welcome for his response to some of the open lobbying and the results of some of the seminars run by the Department? There will be great pleasure at this announcement on the part of the Pearson group, Associated Newspapers, The Guardian and The Telegraph Group—perhaps not shared by the Mirror Group and News International.

Will the lobbying by Channel 4 lead in time to an end to the subsidy for Channel 3 interest payments and dividends? Does my right hon. Friend expect a future paper to deal with the unnecessary restrictions that prevent British Telecom from putting television signals down telephone lines?

With the absence of scarcity, does my right hon. Friend soon expect to allow usual fair trading and monopolies and mergers conditions to apply to the newspaper business? The predatory pricing of The Times seems to many of us to have increased the losses of that business and to represent an unfair attack on other broadsheets.

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

My hon. Friend describes the document in terms that I do not recognise, and then goes on to demonstrate the importance of what it seeks to do: to concentrate on the policy objectives that we set ourselves.

The document concentrates on two key interests—plurality and diversity in the media market, and the equal and equivalent interest that the public have in strong and healthy media businesses. The proposals in the document are designed to change media ownership regulation in the service of those two objectives.

The important principle behind the funding mechanism for Channel 4 is that the people who signed contracts when the Channel 3 licences were awarded in the belief that they ran the risk of covering deficits in Channel 4, and in return for that participated in Channel 4 profits, should be entitled to the Government's protecting that interest, which formed part of the contract that they signed when the licences were awarded.

As for BT getting into broadcasting, the House will know that the Government's position is that it is important to restrain the growth of BT in that sector in the short to medium term at least, to allow other operators to set up competing distribution systems.

If my hon. Friend wishes to pursue the question of predatory pricing by individual newspapers, he will know that there are clear provisions in competition law within which that can be pursued. I am sure that the Director General of Fair Trading will look forward to hearing my hon. Friend's evidence.

Photo of Gerald Kaufman Gerald Kaufman Chair, National Heritage Committee

I was concerned at the right hon. Gentleman's response to the hon. Member for Eltham (Mr. Bottomley) on the issue of Channel 4 funding, because it appeared to pre-empt his response to the Select Committee report on the British film industry. I very much hope that his mind is still open on that matter.

In support of my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), I may say that the proposals for the immediate future that the right hon. Gentleman puts before the House will arouse little controversy, and, I am sure, will be widely acceptable. On the other hand, I ask the Secretary of State to accept that what the consultation document says about the longer-term regulatory arrangements is almost certainly impracticable and quite certainly unrealistic.

It is simply not possible to regulate the technology of the future in the way that the right hon. Gentleman describes in his document. He said that we were on the threshold of a new era, but one would never have thought it from the way in which he looked at the possibility, or from the omission from his document of a policy to enable the free market to operate in the interests of the consumer.

Is the right hon. Gentleman aware that, while he includes in his document arrangements to allow newspaper groups greater freedom to cross-invest in television, television companies greater freedom to cross-invest in newspapers, and cable companies greater freedom to cross-invest in terrestrial television, he once again excludes British Telecom from the ability to compete in broadcasting television to Britain against American telephone companies, which are involved in cable in this country? While he is obstinate about that, I put it to the right hon. Gentleman that he is being a King Canute on the matter. The change has got to come, and the sooner it comes the better.

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

In what I had to say on the Channel 4 funding formula, I have undertaken to respond to the right hon. Gentleman's Select Committee on the question of the film industry in full within the relevant period, and I shall do that. I shall certainly set out clearly in that document a reconsidered view on the Channel 4 funding formula.

The comments that I made in response to my hon. Friend the Member for Eltham (Mr. Bottomley) reflect the basis on which the Government reached their decision at the end of last year, and that will be reconsidered in the course of the response to the Select Committee. However, I am not certain that there will be widespread expectation of a fundamental review so soon after the decision was originally announced.

I welcome the fact that the right hon. Gentleman regards the short-term changes in both primary and secondary legislation that I propose as relatively uncontroversial. I am grateful for his support on that.

In his concern about the long term, the right hon. Gentleman returns to a theme that has been a familiar subject of discussion between us: the position of British Telecom. My position, and that of the Government, on that has been clear for some time. We believe that there is a strong public interest in the establishment of competing networks alongside BT, and that is the reason why we are constricting the growth of BT into that sector against the published deadline.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

Will my right hon. Friend take congratulations on moving a long way towards dealing with this difficult position? We all welcome the part of the report that does that.

On the matter of ownership, will my right hon. Friend explain whether he has considered—and if so, why he rejected—the lesson that we might learn from France, where newspapers and other aspects of the media have to be owned by Frenchmen or French-dominated companies? Is that not something that we could emulate?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

That is, of course, a subject that is regularly discussed in the context of media ownership. I am bound to say that I find that the comparison between us and the French—and, indeed, between us and many other countries—in respect of foreigners owning aspects of our media tells to our benefit. It is more attractive to have a more liberal regime such as ours, rather than the constricting type prevalent in France and elsewhere. I also observe that it is hardly a new position, but has been fundamental to newspaper economics in this country for the best part of a century.

Photo of Mr Robert Maclennan Mr Robert Maclennan Party Chair, Liberal Democrats

In so far as the policy document will foster diversity and pluralism in broadcasting, it will be wholly welcome. I make no complaint at all about the time that it has taken to come forward with these measures, in a complex and rapidly changing technological environment. May I, however, raise two matters where I doubt that the Secretary of State's proposals will foster diversity and pluralism?

The first concerns the need to regulate the television access systems covering encroaching subscription and cable. The right hon. Gentleman will have noted what Mr. David Glencross, the chief executive of the ITC, said about the need to legislate in this sphere, but the paper speaks only of maintaining a review. Secondly, is it really satisfactory to allow the owner of 30 per cent. of newspaper coverage in a region to acquire a Channel 3 licence? It seems that there is a serious risk of regional dominance by a single owner, which would be unacceptable.

Finally, may I express my satisfaction that the Government have at last agreed to lift the restrictions on ITN ownership above the 50 per cent. level, which always seemed artificial?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

I am grateful to the hon. Gentleman for his last point. As for conditional access, I can only repeat what I said earlier. I have not been persuaded that there is any need to go beyond the existing provisions of normal competition law, which require people operating conditional access systems in Britain to operate in a way that is not anti-competitive, and which satisfies normal competition law requirements. I see no need to go beyond those provisions.

I accept that the degree of regional newspaper concentration that is acceptable in the hands of someone who also controls the relevant Channel 3 licence is a matter of judgment, although I think that the 30 per cent. level that I have proposed strikes a fair balance between the interests of diversity and allowing strong and healthy media businesses to grow.

Several hon. Members:

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Photo of Miss Betty Boothroyd Miss Betty Boothroyd Speaker of the House of Commons

Order. I must remind the House that, in addition to a Second Reading debate, we have another important statement. May I ask for the co-operation of the House and request brief questions and brief answers, so that we can make some progress?

Photo of Mr Toby Jessel Mr Toby Jessel , Twickenham

Far from complaining about the delay, like the hon. Member for Islington, South and Finsbury (Mr. Smith), could I ask my right hon. Friend whether he is willing to enlarge to the House and to the country on why it is necessary to make these changes at all? Why could not things just have been left as they were?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

The short answer is that real pressures are building up in the marketplace, and media businesses quite properly remind us that the existing provisions are preventing them from taking advantage of the commercial opportunities available, but no public interest is served by maintaining that regulation. Those who are in charge of a regulatory system should have to rejustify the regulation rather than have to justify lifting it.

Photo of Mr Tony Worthington Mr Tony Worthington , Clydebank and Milngavie

Will the Secretary of State tell us which of his proposals will stimulate good-quality programme making in Scotland, Northern Ireland, Wales and the regions of England? One of the great problems about this country is its metropolitan bias.

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

The key issue of quality is always served, in my view, by ensuring that those who are responsible for media activity are healthy, strong businesses. I cannot see that the interest of quality is served by unnecessarily and artificially constricting the growth of a business. Having said that, and as I said in answer to the hon. Member for Islington, South and Finsbury (Mr. Smith), the key provisions for regulating the nature of the output of television and radio broadcasters are germane not to the ownership of those companies, but to the conditions on which the licence is granted. That issue is not addressed in the paper.

Photo of Patrick McLoughlin Patrick McLoughlin , West Derbyshire

Will my right hon. Friend confirm that there is nothing to stop British Telecom offering video on demand, and, indeed, owning cable companies? Why has he not brought forward proposals to ensure that the BBC puts Radios 1, 2 and 3 out to open, competitive tender? Looking at the share of the audience attracted by radio shown in the document, one sees that a far greater share of the nation's population listens to Classic FM than Radio 3, whose service could be provided by the commercial sector.

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

My hon. Friend's first point is right. With regard to competition in the BBC, my hon. Friend will know that the Government brought forward a White Paper on the future of the BBC during the previous summer. I would not seek to reopen those issues. The clear conclusion of that paper was that we shall continue with the present structure of the BBC, but we shall seek to reinforce the accountability mechanisms which work within it, through the agreement and the pledge to audiences, which the BBC governors will be responsible for issuing each year. The accountability of the BBC is important. I have no proposals to change its status.

Photo of Chris Mullin Chris Mullin , Sunderland South

Will the Secretary of State confirm that the document leaves unscathed the Murdoch empire's control of 37 per cent. of national newspaper circulation, Mr. Murdoch's considerable interest in television and his monopoly of the encryption system? Will he also confirm that the document does not extend to satellite the restrictions on domestic content which apply to commercial television? How quickly does he anticipate that Carlton and Granada will be asked to disgorge their extra 18 per cent. ownership of ITN?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

In answer to the last point, the enforcement of the now confirmed provisions of the Broadcasting Act 1990 is a matter for the Independent Television Commission. It will clearly proceed with the enforcement of the provision which has existed since that Act. With regard to the effect of my proposals on Mr. Murdoch's business—or, come to that, any other media business—I confirm that I do not anticipate, as a result of the Green Paper, a dramatic change in Mr. Murdoch's business—or, come to that, anybody else's business.

I am concerned to allow businesses to grow in a way which allows them to respond to legitimate market opportunities, but which subjects them to public interest scrutiny when they get above a certain size in the market. That seems to be the legitimate way in which a regulator should go about his business. I am much more concerned with the principles than I am with the specifics of a particular operator.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I congratulate my right hon. Friend on his statement, which to me certainly highlights the importance of plurality, diversity and quality. With such quality clearly comes quality of programmes and regional content of programmes in the development of television.

Does my right hon. Friend accept that one of the main reasons for his statement was to give the United Kingdom media industry the opportunity to compete in the almost unlimited media market internationally, in which we can do so well? Would he answer the question put to him by the hon. Member for Islington, South and Finsbury (Mr. Smith) about the effect of the proposals on community radio, which to many people is of growing importance and which may well be adversely affected by one of the proposals that he has announced this afternoon?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

I do not agree that the community radio success story is threatened by what I have announced this afternoon. I would argue that the further liberalisation I have announced is a further step down the road of liberalisation which was introduced some years ago and which made possible the growth of community radio, which my hon. Friend welcomes and which I welcome. I look for an opportunity for other small-scale operators to develop in the radio and other sectors. The proposals on digital, which I shall introduce later in the year, will also have an effect on that aspect of activity.

My hon. Friend is absolutely right to stress the huge opportunities for British media businesses that have critical mass here to exploit their skills and expertise in overseas markets. That is one of the opportunities that is further opened up by this document. I re-emphasise the point that the regulation of quality, through the Independent Television Commission and the Radio Authority, is unaffected by anything that I have done today.

Photo of Mr John Fraser Mr John Fraser , Norwood

Many people will regard with incredulity the right hon. Gentleman's complacency about gatekeeping, or what he calls conditional access. He must be aware that no coherent set of principles applies to these matters, and that nobody knows from one case to another whether a complaint to the Office of Fair Trading will work. Surely the right thing is to have a coherent set of principles and something more like the arbitration system that works under the Copyright, Designs and Patents Act 1988.

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

One of the first Committees on which I served, with the hon. Gentleman, was the Committee considering the Bill that became the Competition Act 1980. That Act sets out precisely a coherent framework of constraints on anti-competitive practice, and it applies through the normal process of competition law to the conditional access regime that operates in Britain. That is exactly the coherent approach for which the hon. Gentleman asks; it is provided by the competition law approach that I advocate.

Photo of Mr Alan Howarth Mr Alan Howarth , Stratford-on-Avon

Does my right hon. Friend accept that the media, in their role in mediating our democratic debates, are effectively a part of our constitution? If so, is he not right, as he proposes, to establish a policy framework which both encourages technological pluralism and sets particularly stringent safeguards against monopoly and the abuse of monopoly power in the field of the media?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

I am grateful to my hon. Friend, and I agree with his point. In a healthy democracy, it is important that a diversity of voice is available through all the different forms of the media. Plural ownership—that is, ensuring that there is not excessive concentration of ownership—is one of the means of safeguarding that diversity of view.

Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee

Does the Secretary of State agree that this statement is set against the background of the Berlusconi scandal in Italy? When the statement was drawn up, did the Government take into account trying to prevent a similar situation from happening in Britain? Apart from the 40 per cent. that goes to the BBC, could a Berlusconi type be stopped as a result of the statement?

Is it conceivable that somebody with political, television and other media strength could emerge—or could be prevented from emerging—as a result of the statement? The truth is that, taking into account the percentage they have now, six Murdoch types could arise as a result of what the Secretary of State has said. Will the Secretary of State give me a straight answer: could a Berlusconi-type scandal emerge in Britain as a result of the statement?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

The hon. Gentleman asks me two straight questions, to which I shall give two straight answers. Could a Berlusconi figure emerge as a result of the statement? No. Could a Berlusconi be prevented from emerging? Yes.

Photo of Mr Anthony Coombs Mr Anthony Coombs , Wyre Forest

I recognise the importance of diversity, and I welcome the tentative liberalisation that the statement suggests. However, can my right hon. Friend tell me why it seems to be important to set a long-term target of 10 per cent. of the UK market, especially given the fact that, with digital television, satellite television and more and more interactive communication, it will be far more difficult to measure the total market, let alone to regulate it?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

My hon. Friend describes the 10 per cent. envisaged in the long-term scheme as a target. That is not the word that I would use; I would describe it as a threshold. It is fair to say that, if someone owns more than 10 per cent. of the audience share of the media voice in the community, there is the potential for a public interest issue to arise. Once an operator gets beyond the 10 per cent. threshold, he will be subject to public interest regulation. That is not the same as saying that he would be prevented in all circumstances from growing above that level.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Is the Secretary of State aware of the genuine concerns in Scotland? Should not national newspaper sales be taken into account when assessing the eligibility for acquiring regional and local radio and television interests?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

That is exactly what I propose. National newspaper circulation should be the criterion which limits the group of newspaper operators able to invest in Channel 3 and Channel 5 licences. The answer to the hon. Gentleman is that we are going in the same direction.

Photo of Peter Atkinson Peter Atkinson , Hexham

I welcome my right hon. Friend's proposals for liberalisation, but in the long term he must listen carefully to consultation. As he said in his statement, the media market is changing worldwide, and we need strong and significant news groups, such as the Mirror Group and News International, to compete worldwide. Would it not be a pity if those efficient groups were restricted by over-regulation by the Government?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

I entirely agree that we have a clear public and national interest in strong, healthy and growing media businesses. The purpose of the paper is to encourage the growth of such businesses, while balancing the continuing and legitimate public concerns about the over-concentration of media ownership in a single hand or a few hands. My hon. Friend is right to draw attention to the importance of minimum regulation, which is necessary to deliver that important public policy objective.

Photo of Stephen Timms Stephen Timms , Newham North East

The Secretary of State's proposals deal with regulating the media market at a regional level. How important does he regard the retention of regional identities in media terms, and how important was that consideration during the framing of the proposals? Does he accept that, if we are to secure the retention of those identities in the long term, proposals will have to be brought to this House which go further than those he has produced this afternoon?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

I am a strong advocate of the propositions that regional identity is important and that regional media have an important role to play in fostering a sense of regional identity. I suspect that there is no disagreement on that matter in any part of the House.

The proposals do not address that issue directly, because it is not germane to the precise issue which the paper addresses—the regulation of media ownership. Concerns about regional identity in the BBC are handled through the BBC's pledge to audiences, and in the independent sector through the conditions attached to the award of licences by the ITC and the Radio Authority. That issue is not directly germane to the ownership of the companies which ultimately operate those licences.

Photo of Mr Nigel Forman Mr Nigel Forman , Carshalton and Wallington

In an increasingly multi-media age, when the combination of technological convergence and market liberalisation—factors to which my right hon. Friend has referred—are pointing towards a seamless market in this area, should we not look carefully in the medium term at the idea of an overall regulatory system to avoid the regulatory overload and regulatory arbitrage which could follow from having a plethora of organisations minding the business of the parts of the overall sector?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

My hon. Friend makes an interesting and important point which is germane to one of the important points raised by the hon. Member for Islington, South and Finsbury about the shape of the regulator proposed in the long-term scheme. There will no doubt be substantial public discussion about that, and I look forward to pursuing the matter with my hon. Friend.

Photo of Peter Hain Peter Hain , Neath

Given the technological convergence accelerated by digitalisation, and alliances such as that between Rupert Murdoch's News Corp and the American communications operator MCI—20 per cent. of which is owned by BT—are not the Secretary of State's proposals for regulation already obsolete? Should we not be looking for a merger of the telecommunications and broadcasting regulations, to create a new and common regulatory system?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

That is an interesting thought that we might wish to pursue, but it is not necessary at this stage in the process, for precisely the reason that I have given in more than one answer this afternoon—it is important for us not to confuse the telecommunications industry, development of which is an important national interest, with the existing structure of the broadcast mass communications industries. There is certainly convergence between them, but we are not yet in a world where they are the same, and if we seek to leap into that, we are likely to end up with confused policy objectives.

Photo of Mr John Butcher Mr John Butcher , Coventry South West

Does my right hon. Friend feel that the perpetual and contrived hysteria that now obtains on Radio 1 complies with any definition that he might have of public service broadcasting? Should that sort of stuff be paid for by a more or less compulsory levy on the public? As a result of today's announcement, can he reassure those of us who are fugitives from the four terrestrial television channels that the satellite channels will remain a Melvyn Bragg-free zone?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

My hon. Friend asks an important question about satellite television—a matter to which the hon. Member for Islington, South and Finsbury also referred. I am with my hon. Friend rather than the hon. Gentleman. If we are to encourage the development of the new technologies of cable and satellite, it is important that we do not import into each and every cable and satellite station the same sort of objectives that we define for the mainstream terrestrial broadcasters. To do so would be to limit dramatically the growth of those new technologies, in a way that would serve no public interest and would be undesirable from an economic point of view.

Photo of John Whittingdale John Whittingdale , Colchester South and Maldon

Does my hon. Friend accept that the liberalisation that he has announced will allow the necessary investment to come forward, if we are to take full advantage of the opportunities for technological development in the broadcasting industry? Does he also accept that, as technology allows the further proliferation of channels, it may be possible to relax the rules still further, and that, in due course, the media can be governed by the same rules that govern every other industry?

Photo of Stephen Dorrell Stephen Dorrell Secretary of State for National Heritage

My hon. Friend has argued that case for some time, and I am aware of his views. For reasons that I have already given, I do not believe that we are in a world—or likely to be for the foreseeable future—in which monopoly regulation alone is sufficient control on concentration in the media market. Further restriction is necessary, but I also believe strongly that anyone who advocates further regulation, which is what I am advocating, needs to rejustify that and to retest the proposition regularly.