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Lord Wyatt of Weeford: Why would it enable the Mirror Group to make a legal challenge under the European convention but not Sky and News International?

Lord Donoughue: I sympathise with what the noble Lord says. I suspect that News International might have grounds for challenge but at present it would not benefit from the extra thrust in the convention dealing with Opposition media since News International has for some time not come into that category. It had an excellent newspaper in that category--Today--but chose to close it. In what I am saying I am certainly not opposing News International. I am sure that it will wish to look at the matter and if it succeeds I wish it all luck.

Specifically, Amendment No. 156C, which seeks to leave out the word "national", would remove the artificial distinction between the prices of national and local newspapers. It would require the national market share to be judged against the total circulation of all national and local newspapers sold or distributed free of charge. That is the practical market definition which would be best and which would leave the Mirror Group within the ceilings to expand into Channel 3.

Amendments Nos. 156E and 156G, which I wish to take with this amendment, lift the ceiling from 20 per cent. to 25 per cent., thus removing the

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discrimination. Taken with the national change, that would leave the Mirror Group comfortably within the ceiling and might conceivably bring in News International too. That is quite acceptable to me, as it is to the noble Lord, Lord Wyatt. I beg to move.

6.15 p.m.

Baroness Jay of Paddington: I support my noble friend on the Front Bench. These measures would be arbitrary and unfair, as he described. As my noble friend mentioned in referring to learned counsel's briefing, they are susceptible to legal challenge under the proportionality and non-discriminatory effect of the human rights provisions of the European convention.

My noble friend mentioned the problems of Opposition newspapers. It is interesting that learned counsel says that it is likely that the Department of National Heritage has not given consideration to those anxieties. If there is a very powerful case to be made in support of the Bill and against my noble friend's amendment, the Government need to answer the points made by my noble friend concerning the opinion of learned counsel on these matters. What the Bill proposes is susceptible to legal challenge under the European convention rules. If the amendment is not agreed, it seems important that the Government should justify in precise terms their rejection of my noble friend's amendment.

Lord Desai: I return to a point I made earlier to which the noble Lord did not give a reply. I wish to continue to question him. It is obvious now that a 20 per cent. limit is arbitrary, as was mentioned by the noble Lord, Lord Colwyn. If the ceiling is raised to 25 per cent., it helps one organisation but not another. Clearly, the Government believe that the media are so special that their competition policy needs extra help and an extra belt and braces arrangement which is not needed elsewhere. The Government may be happy for one to eat dangerous food which harms one's health but the media require special attention.

I would like to know why the figure of 20 per cent. has been chosen. Why do the Government feel that above 20 per cent. there is scope for arbitrary power and great domination while that is not the case below 20 per cent.? Without any particular bias to anybody, I suggest that the Government should think of a combined measure of all-media ownership--newspaper and television--either in terms of readership or the amount of time spent by people watching television or whatever.

We need some sort of overall measure which would cover not just newspapers, television and radio but also whatever other media one can think of. We should look at market power in that way. We could then say that competition policy requires us not to have too much concentration from that point of view. If we take 20 per cent. from one medium and use it to restrict ownership in another, I believe that we will run into rather arbitrary thresholds which have no economic logic whatever.

The Earl of Stockton: Following on from what the noble Lord said, can my noble friend the Minister say

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why 25 per cent. should apply? It is another arbitrary figure which may have been chosen for reasons of mathematical ingenuity or, indeed, for personal taste in popular literature, and so on. I am pleased to see that my noble friend Lord Stevens is in his place, but unhappy to see that the noble Lord, Lord Hollick, is not present in the Chamber. However, there is a possibility that their great new media empire will grow to that larger size. Indeed, there are other newspaper proprietors who have proved in the past that they can be successful and there are other television proprietors who, equally, might wish to buy newspapers. What is the magic of any of these numbers, other than pulling something out of the air? Are we in the business of legislating by pulling numbers out of the air? I trust not.

Lord Thomson of Monifieth: Perhaps I may point out that the Minister admitted that we are discussing an absolutely one-off percentage. The noble Lords, Lord Stevens and Lord Hollick, may be immensely successful in their merger and the percentage of the Express Group rise to 22 per cent. or 23 per cent. If it has managed to get into the television business in the meantime, it will be there; it will not be debarred. This is an extraordinarily arbitrarily method of dealing with such problems.

Lord Inglewood: We are now dealing with a technical matter, and I should like to respond to the noble Lord's point. I should make it clear that the one-off application of the test relates to the public interest test as we have defined it, not to the thresholds. If groups are below the threshold and are potentially capable of coming together in terms of mergers which involve newspapers, it is necessary to satisfy the additional public interest test. It is a one-off test. If, subsequently, the proportion of the national newspaper market obtained by the particular newspaper in question were to rise above the threshold, that would trigger off the consequences.

Lord Thomson of Monifieth: Perhaps the Minister can further clarify the matter. Would it mean that, after the noble Lords, Lord Stevens and Lord Hollick, have been outstandingly successful and the Express Group has gone beyond the 20 per cent. barrier, they would then need to divest themselves of either a newspaper or of their television holdings?

Lord Inglewood: That is correct. If they breach the mathematical test in such a way, that would be the case. In order to merge at all after the Bill has become enacted, it will be necessary to satisfy the public interest test to which I referred because of the involvement of a national newspaper. As I said, that is a one-off test. Thereafter, there is still the question of remaining below the threshold, whatever that might be. That will depend upon what Members of this and another place decide.

Perhaps I may now respond to the amendment moved by the noble Lord, Lord Donoughue. I am most grateful to the noble Lord for approaching the matter from an essentially enumerative perspective, although I wish that he had told us to which amendments he was speaking

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as he did so. The amendment seeks fundamentally to change the entire basis of our system of cross-media ownership controls, by comparing like with patently unlike. In our view, it is quite ludicrous to suggest that the Sun is equivalent to the Keswick Reminder. For those Members of the Committee opposite, I should point out that the noble Lord, Lord Judd, and probably the noble Lord, Lord Dubs, will be able to tell them about the latter, which is a local newspaper.

Of course, it is true that in market terms there is an overlap between national newspapers and those which are primarily local or regional. But, as I have consistently said throughout our debates on this schedule, we are not concerned in broadcasting legislation to regulate the operation of markets as such, particularly markets in newspapers. That is a matter for competition policy. Broadcasting legislation has, rightly, only sought to regulate newspapers seeking to buy into broadcasting. Newspaper markets and advertising markets are regulated under the normal operation of competition law, as I have already said. What concerns us in this context is the interaction between publications and broadcasters which play a key role in determining and debating the national news agenda. The local and regional newspapers pay little or no part in that process. Quite simply, I cannot accept that we should include them in the threshold calculations because to do so is self-evidently absurd, as I have already intimated.

Whatever the configuration of the media markets, there are substantially distinct national and sub-national news agendas, and plurality and diversity are separately desirable in each. Carlton and Central between them carry the ITV network to approximately 28 per cent. of TV homes. That ITV network is a major commentator on the national news for those viewers--viewers who form part of a national population where the Mirror Group has around 22 per cent. of national newspaper circulation. Similarly, the Mail Group has just under 68 per cent. of local circulation in the South West. It is equally undesirable for that group to have control of the West Country regional Channel 3 franchise. Similarly, again, the Guardian Media Group holds 27.8 per cent. of the newspaper market in the Manchester area. At that more local level it is wrong for them to own the dominant local radio station in Manchester. That is because democracy and public affairs operate at different levels--national, regional and local--and it is important that the citizen has some choice of independent sources of information. It is for those reasons that I am not persuaded of the merits of Amendment No. 156C.

I move on to deal with Amendments Nos. 156E and 156G. The noble Lord, Lord Donoughue, and the noble Baroness, Lady Jay, referred to certain specific provisions of the European Convention on Human Rights. We have not taken specific legal advice on those points, but it is not intended that the provisions we introduce will discriminate. We have explained the social policy and thrust behind them and are confident that they are defensible.

I am aware of counsel's opinion to which the noble Baroness and the noble Lord referred. If Members of the Committee would like us to form a considered

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opinion on that advice, the first condition that would have to be met would be the provision of a copy of such an opinion. I leave that thought with those concerned.

Whatever else can be said about our proposals, I should point out that we are not proposing a regime which is arbitrary--and I use that word in the sense that it is capricious. Our regime is inherently not arbitrary because the rules will be set in place and it will be possible for all those who wish to do so to ascertain the current position.

The noble Lord, Lord Donoughue, made it quite clear that his amendment which seeks to increase the newspaper market share threshold from 20 per cent. to 25 per cent. is intended to address a wrong that he perceives in the exclusion of the Mirror Group from controlling licences to provide Channels 3 and 5 and radio services. As Members of the Committee will know, the Bill currently prevents any national newspaper group from owning more than a 20 per cent. stake in the holders of such licences.

With the leave of the Committee, perhaps I may to a slight extent go over some of the remarks that I made previously. The position that we have adopted in allowing greater cross holdings between media is that those who enjoy a position of dominance in the national newspaper market should not also be allowed to become dominant broadcasters, and vice versa. As I explained, uniting these two sources for influencing opinion carries the risk of concentrating too much power in the hands of one organisation.

The 20 per cent. market share threshold was set after careful consideration of conditions in the market. It was not devised--and I must emphasise this point--because of its impact on any particular group or groups. Therefore, our proposals do not single out the Mirror Group. The latter are caught by provisions not because of who they are, but because of their ability to influence opinion. The group, in terms of its ability to reach the public, is the second largest national newspaper group in the United Kingdom after News International. The position we start from is that we are talking about national newspapers in this context. I want to be sure that the Committee is clear about that. That is our starting point in the consideration of these matters.

As I have already explained, media ownership regulation is about protecting the public interest in pluralism and diversity. The regime we propose seeks to ensure that we shall continue to enjoy the provision of news, information and entertainment from a wide variety of sources. It does not seek to regulate competition in the overall media marketplace because the ordinary mechanisms for securing fair competition--for which the Department of Trade and Industry and the Office of Fair Trading are responsible--apply to the media just as they do to other industries.

I believe it was the noble Lord, Lord Desai, who said that the figure of 25 per cent. is used for the purposes of regulating competition in markets. However, the point here is that we are not talking about regulating competition. The basis of the separate broadcast licence regulation system is precisely that, in broadcasting,

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levels lower than 25 per cent. of market share can affect plurality and diversity if they are allowed to control other sources of influence, whether within a particular medium or across the media as a whole. This is the approach which we have adopted throughout the Bill with a 15 per cent. audience share for the powerful broadcasting media and 20 per cent. circulation for the influential local and national newspapers; these being the levels that we believe represent the current tolerable levels of concentration.

Despite the 20 per cent. threshold, the Mirror Group will still be free to expand into cable, as it has already done, and to enter the satellite market, as indeed it is free to do now. It can do this either by setting up new businesses or by taking stakes in existing businesses. It is also free to establish itself as a programme provider through the independent production sector and to acquire stakes of less than 20 per cent. in those broadcasters it is forbidden to control. The Bill also--as we discussed at some length on a previous occasion--will create a new opportunity for the group in digital terrestrial television broadcasting.

The Government believe that the 20 per cent. threshold is right and have not been persuaded by any of the arguments which have been advanced so plausibly for raising it to 25 per cent.--or for that matter setting it at any other level. It would in our view be wrong to raise the threshold merely to benefit one particular media group. If any one group thinks that it is essential for it to be allowed into Channel 3, it is open to it to devise a strategy that will bring it below the 20 per cent. threshold. After all, is Paris worth the Mass? I hope that I have explained clearly and comprehensively the basis of our position in this regard and why we disagree with those on the Benches opposite in this matter.

6.30 p.m.

Viscount Astor: Before the noble Lord, Lord Donoughue, replies, I wonder whether he would be kind enough to answer one question. He said that the Government have imposed an arbitrary threshold. Does he not accept that any threshold by its nature has to be arbitrary? That is the nature of thresholds. What matters is that that threshold is based on good sense and sound logic, which I believe the 20 per cent. threshold is. The noble Lord's Amendment No. 156G which seeks to raise the threshold from 20 per cent. to 25 per cent. is exactly the opposite of sound logic because it would include one dominant newspaper chain and exclude another dominant newspaper chain. Is that not even more arbitrary and even more unfair--in his words--than the Government's position? The noble Lord must reply to those points to enable his amendment to make any sense.

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