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Lord Donoughue: My Lords, I thank the Minister for explaining the Government's position. I do not accept it on behalf of the Mirror Group which I still feel is cornered in a way that no one else is.

On the legal question, I was interested in what he had to say, and at Third Reading we shall listen with great interest to his report on what legal advice he receives. If he gets legal advice similar to that which we have had--and I am interested that the noble Lord has seen it, I am sure he read it in a controlled environment--presumably the Government will have to think carefully about not proceeding further along those lines. Another newspaper group will be equally interested. Presumably we would not wish to waste Parliament's time further on something that is legally fragile.

Lord Inglewood: My Lords, with the leave of the House, I have been in such a controlled environment that I do not believe that I have seen the legal opinion to which the noble Lord referred.

Lord Donoughue : My Lords, if the Minister would accept reading it in a padded cell with three guards, I should be happy to provide him with a copy. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5 Mar 1996 : Column 288

11.30 p.m.

Lord Harris of High Cross moved Amendment No. 105:

Page 92, line 21, leave out from ("shall") to second ("a") in line 22 and insert ("control").

The noble Lord said: My Lords, Amendment No. 105 goes with the others grouped with it on the Marshalled List. I would rather move an amendment to my local train timetable at this time of night, so I shall be brief. If the noble Baroness, Lady Dean, will avert her ears, I shall proudly repeat my declaration of interest as an independent national director of Times Newspapers. I have no direct financial or other interest in BSkyB, except that last week, carried away by the debate which I had been listening to in this House, I signed up. I can only say that if you have not got BSkyB you have not lived. Last weekend I had a new experience with marvellous old films, starting with "Lost Horizon" which I had not seen for 63 years.

The purpose of the amendments is to prevent BSkyB being excluded from control of a terrestrial TV company because it is "controlled" by a newspaper, News International, with a shareholding of more than 20 per cent.

The Green Paper is full of encouraging noises. It talks of changing environments; exciting possibilities; breaking down the traditional distinctions between the various media; information technology, and so on. It acknowledges that barriers are already crumbling, and points to a unique opportunity to evolve in previously unthought-of ways. That is pure Hayekian, spontaneous evolution. It talks of a market-place in which risks and rewards are high, both for individual firms and national competitiveness. That was the Green Paper.

Nowhere does the Bill fall further short of this high promise than in Schedule 2, pages 93 to 96, before us now. As I am instructed, this legal gobbledegook has the effect of constructing a wholly artificial barrier to obstruct BSkyB as pioneers of satellite broadcasting--and much else--from enjoying the new freedoms in cross-media ownership conferred on others by the Bill. It achieves that wretched exclusion by a wholly contrived device which I believe mocks common sense and legal logic. In a Gilbertian twist worthy of the hard-pressed Lord Chancellor in "Iolanthe", ownership of more than 20 per cent. of the shares of a satellite by a newspaper group is deftly defined as "control" and used to exclude the offending party from acquiring one of the multiplying terrestrial TV licences.

I really do regard this part of the Bill as an abomination. It is a not very cunning device, aimed like a sniper's rifle at News International, which owns 40 per cent. of BSkyB. We should thank heavens for Sky's pioneering enterprise in all kinds of ways, and even give a nod--which I have heard from the noble Lord, Lord Thomson, and others--in the direction of Murdoch's enterprise for gambling his firm (in American parlance, "betting the farm") on satellite broadcasting when he had not sold a single dish or signed up a single subscriber. Instead of any kind of gratitude, the Bill defines 20 per cent. as "control" in order to ostracise this most galvanising, enterprising force in the television revolution.

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We have been over this, and I shall be very brief. It is understood that News International does not, and cannot, control Sky. It is understood that the other main shareholders are Granada, Pearsons and BSB and 25 per cent. are traded in the open market. Stock Exchange rules, etc., require that the company should operate independently of any shareholder with 30 per cent. or more of the voting rights. There is a whole rigmarole like that on which I could keep the House awake about the careful rules and defined issues that should be brought before a quorum at which a majority are non-News International directors. There are 18 directors, and only five are appointed by News International. One could hardly secure News International, in the person of Rupert Murdoch, more from dominating this situation without putting him into a straitjacket or putting him in irons. There is no substance to the fear that there is control. Yet it is used, uniquely, to exclude BSkyB.

I ask the Minister, even at this late hour, whether he will reconsider this excess of regulatory zeal, and think of the benefits that have been derived from this great satellite development--in employment, technical innovation and foreign earnings; in opportunities for new, independent programme makers; although not enough, according to the noble Lord, Lord Thomson--in unrivalled support for the British film industry, the consumer electronic sector, with PACE, the de-crypter, providing one in three satellite receivers in Europe; and not least in the marketing of dishes and the management of subscribers.

All of this is very innovative. My advocacy, I hope noble Lords will accept straightforwardly, is not based on the petty interests of a director of Times Newspapers, but rather on my experience as a lifelong, independent economist--winning adherents, I may say, in all parties for Mr. Blair's new-found enthusiasm "for a dynamic market economy". My conviction is that economic and technical progress throughout history owes more than is commonly understood to a combination of exceptional talent, dedication and courage of a rare order. So far--it may be ripe for a fall--BSkyB has turned out to be a conspicuously successful examplar of those qualities. I believe that we should have more confidence in shaping the future by market forces, which is only another way of saying that we should allow the future to be shaped by the free play of consumer choice in both programmes and the means of delivery. I beg to move.

Lord Inglewood: My Lords, if I understood him, the gist of the noble Lord's argument was that certain barriers had been put in the way of BSkyB controlling the Channel 3 licence because BSkyB itself was controlled by News. I understood that that was not in fact the case, along the lines which the noble Lord described.

The point about the relationship between BSkyB and Channel 3 licence holding is that, for the reasons I described earlier (which I accept that the noble Lord, Lord Harris, does not accept) we have stipulated that where a newspaper group has more than 20 per cent. of national newspaper circulation it may not have more than a 20 per cent. interest in the Channel 3 licence holder. That reads across through other organisations in which it has more than a 20 per cent. share.

5 Mar 1996 : Column 290

The point about BSkyB and Channel 3 licences is not that News controls BSkyB. As I explained, I understand that BSkyB is not controlled by News. The point is that BSkyB is 40 per cent. owned by News. That is the reason whereby it falls foul of the thresholds that we have put into the Bill.

Lord Harris of High Cross: My Lords, I withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Inglewood moved Amendment No. 106:

Page 92, leave out line 25.

The noble Lord said: My Lords, as the Bill currently stands, a newspaper proprietor with 20 per cent. or more of the national market is restricted to a 20 per cent. stake in a corporate body which holds a licence to provide a domestic satellite service. A reciprocal restriction is applied to the stakes that such a licence holder may have in national newspapers. These amendments remove an unnecessary barrier to the potential development of domestic satellite services. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 107 to 112 not moved.]

Lord Inglewood moved Amendments Nos. 113 to 115:

Page 93, line 7, leave out from second ("a") to end of line 9 and insert ("local radio service").
Page 93, leave out lines 10 to 13.
Page 93, leave out line 26.

On Question, amendments agreed to.

[Amendment No. 116 not moved.]

Lord Inglewood moved Amendment No. 117:

Page 93, leave out lines 34 to 38.

On Question, amendment agreed to.

[Amendments Nos. 118 to 121 not moved.]

Lord Inglewood moved Amendment No. 122:

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