HC Deb 30 June 1983 vol 44 cc721-91 4.39 pm
The Secretary of State for the Home Department (Mr. Leon Brittan)

I beg to move, That this House approves the White Paper on the Development of Cable Systems and Services (Cmnd. 8866). The White Paper, which was published on 27 April, reflects the considerable work undertaken since the publication of the report of the Prime Minister's information technology advisory panel in March 1982. That report brought to public notice the benefits to the United Kingdom of promoting the development of wideband cable systems.

The opportunities that cable expansion presents have become apparent. Until now, scarcity of channels has dominated attitudes towards broadcasting. Cable has changed all that, because it creates the possibility of greater increases in choice for the viewer. More important still, it offers new scope for a wide range of two-way services. Over time, that will yield important economic benefits in the form of more efficient working methods, swifter business transactions and higher productivity. Cabling Britain will be an investment in tomorrow's growth and jobs, and in the country's future.

The Government's role is to create conditions in which those opportunities can be maximised. We cannot guarantee that the potential benefits of cable can ultimately be fully realised, but we believe that it is not for the Government to be satisfied that the future success of cable is assured before taking the steps that can allow expansion to take place. Our task is not to make constant judgments about what forms of economic activity may or may not succeed and then to give the go-ahead only to those which we believe to be viable. Rather, it is to establish the financial and regulatory framework within which customer satisfaction and economic progress can be achieved while the public interest is safeguarded.

What is clear about cable is that many people believe that the demand exists and can be met profitably, and that in the process the country as a whole will reap the benefits to which I have referred. The Government believe that those who not only predict a bright future for cable, but who are prepared to make the investment to bring it about, should be encouraged rather than inhibited. If they succeed, we shall all gain. If they fail, it is part of the risk that private enterprise assumes in a market economy. The investment and the risk are theirs alone, and they do not look to the state for aid or subsidy.

Nevertheless, we have recognised all along that the Government must take some issues into account when judging how unfettered the freedom should be. If we are to contemplate the expansion by market forces of television-type entertainment, it is entirely right that we should reflect on the implications that that has for our system of public service broadcasting. It is for that reason that, when the report of the information technology advisory panel was published 15 months ago, my right hon. Friend and predecessor, Viscount Whitelaw, set up an independent inquiry into the broadcasting policy aspects of cable expansion, under the chairmanship of Lord Hunt of Tanworth. As the House knows, the White Paper is largely founded on the inquiry's report, which we debated last December.

Our broadcasting policy has been based, inevitably, on the need to make the best use, in the public interest, of the limited frequencies that are available for television and radio services to the public. That has meant much regulation and control. With the possibility of many more channels and far wider choice, the regulation and control required are much reduced. An important distinction must be made between control in the form of the imposition of positive requirements and control in the form of the imposition of negative limitations.

If only one television channel is available, it is reasonable to impose a positive requirement that it should offer a carefully balanced service of information, education and entertainment, catering for as wide a range of interests as possible. However, the more channels there are, the less justification there is for imposing such requirements. However, that does not mean that unfettered freedom should be given to cable programmes.

There are two reasons why, although we should no longer make detailed, positive demands of the new services, some defensive constraint is still necessary. First, the analogy of publishing has been used to defend a policy of total liberalisation for cable use. But, as the Hunt inquiry concluded, that falls down because there is a real difference between the act of going out to buy a book or magazine of one's choice, and the turning of a switch on a television set bringing programmes direct into the family living room. There must be a more careful setting of standards in the latter case than in the former.

Secondly, for some time to come, cable will serve only a minority of the population. If, during that period, it were allowed to cream off, from the broadcasting services available to all, the attractive programmes for which cable subscribers were prepared to pay, that would not be defensible. To avoid that, the Hunt inquiry recommended some safeguards to protect those viewers solely reliant on public service broadcasting. The safeguards, with some modifications, are set out in the White Paper.

We cannot be sure—indeed, no one can be sure—at this stage how cable will develop and what effects its expansion might have in the long term on public service broadcasting. However, the evolution of our broadcasting system is inevitable, and we should not try to restrict its development to the pattern of the past. Therefore, our concern is to establish a framework for a flexible, orderly future development, while preserving the value of what we already have. That is the approach of the White Paper.

We shall bring before the House in this Session a Bill based on the proposals in the White Paper. It will set up the new cable authority and give it the powers to grant franchises for the operation of cable systems and to supervise, albeit with a light touch, the services that they provide. Therefore, the House will have a full opportunity in due course to consider the details of the future regulation of cable and of the cable authority's constitution, powers and procedure.

My object today in moving the motion that the House approves the White Paper is not to set its proposals in concrete or to restrict the right of Parliament to decide the contents of the legislation. But the Government believe it important that Parliament should approve the broad framework of our legislative proposals and the limited steps that we propose to take in the meantime before legislation is enacted.

Chapter 8 of the White Paper explains why, to maintain the momentum for the expansion of cable systems, we have concluded that we should not wait for an Act of Parliament before industry can make a start in developing cable technology and new cable services. We have done much during the past 15 months to encourage thinking and planning for the future of cable. New companies have been formed, and many existing companies have built up teams of experts to undertake technical planning. Detailed proposals have been worked out for new cable systems and services. It would be a tragedy if, by saying to industry that nothing further can happen until an Act of Parliament is on the statute book and the cable authority can start to take decisions, we failed to take advantage of that interest, enthusiasm and commitment.

I shall return to the details of the Government's interim proposals, but, first, I should review briefly what the White Paper proposes overall. Chapter 2 deals with cable technology, on which my hon. Friend the Minister for Information Technology can expand. However, the most important technological points are well understood. They are that the Government will not for the moment prescribe either the cable material to be used or the system design to be adopted. It will be for cable providers to decide whether to use coaxial cable or optical fibre, and whether to lay their systems on a tree-and-branch design or a star-switched basis. However, underground ducts must be laid in a star configuration to allow for future conversion to that design, which has longer-term attractions. The approach is to avoid inhibiting development by too much interference, while providing for and encouraging future progress.

Chapter 3 deals with the new cable authority, which will he responsible for the general promotion of cable development, for the grant of franchises for the operation of local cable systems, for the general regulation of programme services and for the oversight of cable operators and their performance. The Government accepted the recommendation of the Hunt inquiry that those were tasks for which a new central body was required.

The White Paper, like the Hunt report, proposes that the cable authority will not exercise constant scrutiny of the activities of cable operators. I have explained why I think that that is right. Supervision will be kept to the minimum. In addition to dealing with any complaints that operators may not be conforming to the conditions of their licences, the cable authority will have some specific interests—for example, on the use of British material, which I shall come to in a moment—and will need to assure itself that operators live up to the promises on which the franchise was awarded.

Chapter 4 sets out in more detail what the franchising and licensing process will comprise. The cable authority will be responsible for deciding on the areas for each franchise. It will be required to advertise each franchise and to consider competing bids. Paragraph 65 of the White Paper sets out the criteria against which franchise applications should be judged.

Chapter 4 also lays down the restrictions that the Government propose to place on the ownership of cable operators. Those are designed to avoid the political or religious domination of local systems or control by foreign companies. The cable authority in addition will be obliged to prevent the undue concentration of power and influence by existing media groups, so that, for example, the company which holds the ITV franchise for a particular area will not be allowed to control a cable system in the same area, though we do not rule out minority participation. Monopoly power in broadcasting is, I am sure, a proper source of concern to Government and so a proper subject for regulation.

Chapter 4 also deals with the sanctions available to the cable authority. In the last resort, the authority can refuse to renew a franchise or even deprive the operator of his franchise at any time. Short of the ultimate sanction, the cable authority can forbid the showing of certain programmes or, if it considers the operator's performance less than satisfactory, to bring him within a closer measure of supervision by requiring, for example, the advance submission of programme schedules or programmes themselves.

Chapter 5 deals with some of the central issues of broadcasting policy that the Government considered in the light of the Hunt inquiry's recommendations. Some modifications to the Hunt proposals were thought appropriate. In some cases those are moves for more restriction, in others for less.

In the former category comes our proposal for advertising. The Hunt inquiry proposed no restrictions on it. The Government accept that cable should in general have greater freedom to use advertising, provided that comparable standards apply in its content. But the Government believe that it would be wrong to remove the restrictions on advertising on ITV and that, where cable services are of a kind analogous to ITV, the same restrictions should apply.

Foreign programme material is another matter on which we intend to place more stringent obligations on cable operators than Hunt proposed. The cable authority will be required to ensure that cable programmes use a proper proportion of British material, which is exactly the same obligation that the Broadcasting Act 1981 places on the IBA. The interpretation of what constitutes a proper proportion will be a matter for the cable authority itself, but it will be required to take into account the plans of cable operators in that respect before granting a franchise, and to work towards a progressive increase in the proportion of British material as cable establishes itself and production capability rises. Those changes are all on the side of greater restriction. There are others in the opposite direction.

We feel able to take a less restrictive attitude than Hunt suggested towards the means by which cable operators charge for their programme services. The inquiry considered that the risk of popular events being creamed off to cable, to the detriment of ordinary television viewers, pointed to a complete ban on pay-per-view arrangements, at least for the time being. However, it is common ground that there is scope for a good deal of pay-per-view which would add to the choice available to cable viewers without in any way diminishing the availability of popular events to the broadcast service. So we propose that pay-per-view should be allowed subject to the cable authority ensuring that no cable programme is offered on a pay-per-view basis if the result is to deprive the broadcast viewer of an event customarily shown on an existing channel. That protection will be underpinned by a ban on exclusive rights for a number of specified events of national importance. The approach is again to maximise choice and new viewing opportunities without jeopardising existing viewers' interests.

Mr. John Gorst (Hendon, North)

Would my right hon. and learned Friend make it quite clear that if a cinema film were denied to the main channels because pay television offered more for it, that would be perfectly reasonable and acceptable, even though it was not consistent with what he has said?

Mr. Brittan

We are not envisaging such a position. The cable authority will not allow a cable programme to have something if it deprives the broadcast viewer of an event customarily shown on an existing channel. What my hon. Friend has in mind would not come within that.

Mr. Roy Hattersley (Birmingham, Sparkbrook)

The question asked by the hon. Member for Hendon, North (Mr. Gorst) is the one that must be answered—although I think that the hon. Gentleman and I will come down on different sides of the argument. The term "customarily shown" presumably means that cable could not take over "Coronation Street" and deprive parts of the country that usually enjoy that programme of the opportunity to see it. As "Chariots of Fire" is not customarily shown on television, presumably cable companies could acquire that film and deprive certain parts of the country of the opportunity to see it.

Mr. Brittan

I am not sure that I can accept the right hon. Gentleman's example of what would be covered. However, the right hon. Gentleman is right to say that if a perfectly ordinary film, which could not be described as being customarily shown on an existing channel, is bought by cable television, that would be all right.

Chapter 6 covers a number of other programming matters, most of which have not been the subject of controversy, but I should mention two points in particular which have. The White Paper proposes that cable systems should be obliged to carry all broadcasting services, including future services of direct broadcasting by satellite. That is because the Government take the view that broadcasting services should, as far as possible, be available to everyone in the United Kingdom, and the small number of frequencies available to us are allocated by the Government on that basis. I am aware of the strength of feeling in some parts of the cable business about certain of the implications of that rule, and my right hon. Friend the Minister of State at the Home Office will be meeting representatives of the industry to discuss those issues further. But I must make it clear that we think it right that those connected to cable systems should have access to the same range of services as those equipped with individual aerials. Therefore we have a firm commitment to the principle that cable must carry existing and future broadcast services.

The other programme in question, which gave rise to controversy—

Mr. Michael Marshall (Arundel)

Does my right hon. and learned Friend consider the cable authority as a means by which a fair rate might be determined between the BBC and the cable companies? There will be a problem about the BBC's commission payable to cable companies under the "must carry" principle, on the basis that we do not have a willing buyer and a willing seller position.

Mr. Brittan

As my hon. Friend knows, the proper amount to be paid will have to be discussed and negotiated. The White Paper envisages the possibility of arbitration in the last analysis if agreement cannot be reached. For those broadcasting services that are not provided free—that is, provided on the basis of either a licence fee or advertising for which there is a subscription—a fee will have to be paid which will have to be negotiated.

The other programming question that gave rise to controversy related to taste and decency. Hunt proposed that the normal rules might be waived in relation to cable subscription channels which could be locked electronically to stop unsuitable material being seen by children. The Government's view on that is quite clear. All cable channels must observe the same taste and decency requirements to which the broadcasting authorities are subject, and there will be no exception. Moreover, cable channels will be made subject to the Obscene Publications Acts. I should emphasise that the liability of cable operators to the law of the land and to the sanctions of the cable authority will relate only to cable-originated programmes. We do not suggest that they should be held in any way responsible for those broadcast services that will be relayed by cable under the "must carry" obligation.

Chapter 7 deals with the telecommunications implications of cable expansion. With regard to chapter 8, I have already explained why the Government think it essential to move forward now without waiting for legislation. I shall now explain what we propose to do and for what it is that we seek Parliament's approval.

Sir Edward Gardner (Fylde)

There is one important point relating to the choice of cable. Does my right hon. and learned Friend agree that we lead the world development in optical fibre? Without wanting the Government to impose restrictions on which cable should be chosen, can my right hon. and learned Friend assure the House that every encouragement will be given, without slowing down the development of cable television, to persuade the companies to adopt optical fibre.

Mr. Brittan

It will be for the companies to decide, but my hon. and learned Friend is right in pointing out the advanced nature of British involvement in this development. The measure of the Government's regard for it is shown by the significant extent of the public money being put behind it.

Clearly, the general development of cable cannot be undertaken until the statutory framework is in place and the new cable authority can start its work. Moreover, we are anxious that we should not take steps now that will preempt its decisions or narrow the options open to it. What we have in mind in the intervening period are very limited steps of two kinds.

The first would be the grant of licences under existing ministerial powers for up to about 12 new cable pilot projects which would make a significant contribution to new cable technology. The second would be the grant of licences to existing cable operators to start providing new programme services on their cable systems. I shall deal with both of them in turn.

Once the White Paper has been debated by this House and in another place, the Government intend to invite applications for the installation and operation of new cable systems. It will be for applicants to identify the area that they would like to cable in this way. We do not wish to pre-empt the decisions of the cable authority about how large a franchise area might be, so the White Paper makes it clear that we shall expect applicants for pilot project licences to limit themselves to identifiable and self-contained communities of not more than about 100,000 homes. We shall not be inviting competitive applications for specified areas, nor shall we be initiating local consultations about which applicant is the best to provide services in that area, but that does not mean that applications will readily be granted.

Only a limited number of licences are on offer and the maximum number will not necessarily be granted. One of the purposes of interim licensing is to encourage the development of British technology.

Mr. Sydney Bidwell (Ealing, Southall)

What about the proposal for aiming programmes towards ethnic minority communities? Will that idea be firmly in the mind of the Government schemes envisaged in the White Paper as dealing with such matters? Such communities may not rise to the 100,000 homes that the right hon. and learned Gentleman mentioned, and this point may be difficult to sort out.

Mr. Brittan

For the reasons that I have given, it would be inappropriate in cable for there to be positive obligations about programme content such as exist for public services broadcasting. Plainly, in considering licence applications, all aspects of the proposals will be taken into account.

The applications that succeed will be those that offer the most positive contribution to the application of advanced technology in this area and at the same time a comprehensive range of programme services — that relates to the point made by the hon. Member for Ealing, Southall (Mr. Bidwell)—and the capability for two-way so-called interactive services. I recognise that it is exceptional that a start should be approved before legislation is passed. Such a step is only justified in the case of applications that clearly meet the criteria that I have defined, and would amount to the exercise of powers that undoubtedly exist, rather than the grant of fresh powers.

The second kind of licensing raises less sensitive questions. We are here dealing with cable systems that already exist, and no question of pre-empting the statutory franchising process arises. I shall be prepared to license cable operators to start providing additional programme services to their customers and, if necessary, to permit them to stop carrying BBC and ITV services on their cable so long as they provide their current subscribers with alternative means of receiving those services without extra charge.

Apart from allowing cable operators to make better use of the systems that they have, there is an important reason why we should allow an early start to the provision of new services. Programmes are going to be the key to cable's success. Programme providers need not only to gain experience of putting together new packages that the public will be prepared to buy but to be able to reach a potential audience of a size that might justify attractive and almost inevitably expensive programming. The first new cable systems could not provide that kind of audience, but the existing commercial cable systems, which reach about 1⅓million households in the United Kingdom, could make all the difference.

I recognise that the regulation of programme services, on both new pilot projects and existing systems, involves certain problems in advance of the institution of the cable authority. For example, I shall not be prepared to allow new kinds of sponsored programmes or programmes provided by pay-per-view until the cable authority exists to exercise its judgment in the relevant fields. I do not think that those limitations will represent a serious inhibition on cable during the comparatively short period of my direct responsibility for cable operators' licences.

Mr. Stanley Orme (Salford, East)

Why is the Home Secretary going ahead at such a speed when the White Paper says that the new technology will not be available at the earliest until 1985, and possibly 1986 or 1987?

Mr. Brittan

I do not consider that 1985 is that far ahead when compared with the substantial preparations that are involved. I said earlier that considerable work and a great momentum offer opportunities to British industry. Therefore, with the careful controls that I described and the limitation that I propose in the pre-legislative exercise of my powers, it is right to give full speed ahead for a major development for British technology and consumer choice.

Mr. John McWilliam (Blaydon)

Where did the Secretary of State get that information about British technology? Is he aware that the major technological advances are in American tree-and-branch systems, which he is proposing to introduce? Does he wish to increase the bandwidth beyond that which is already available in existing technology?

Mr. Brittan

I do not accept that that is so. My hon. Friend the Minister for Information Technology will be able to expand on that aspect of the matter. What is proposed at the moment involves major opportunities for British technology, and it will not be difficult to establish the details of that.

Finally, I should say something about the future timetable. As soon as both Houses of Parliament have debated the White Paper, we shall invite applications for both kinds of licence that I have described. We shall also make notes of guidance available to potential applicants. As a number of groups are already in an advanced stage of planning for new cable systems and have had two months to prepare since the White Paper was published, we shall ask for all applications to be submitted by the end of August. Those applications will be assessed by the Department of Trade and Industry and by the Home Office, and we hope that decisions will be announced and licences granted by November.

Over the same period, we shall also be granting licences for additional services on existing systems, although we shall not impose a final date by which those applications should be received. I expect that the cable Bill will be introduced before Christmas. As the White Paper suggests, we hope to be able, while the Bill is before Parliament, to set up the cable authority in a shadow form to give advice on the supervision of the new cable services which may then be in operation and to prepare the ground for the new system which will come into force on the enactment of the Bill.

I believe that the White Paper offers a positive and constructive approach which will enable us to seize the opportunities that technological innovation presents to us. The full programme of cabling can start once Parliament has had a proper opportunity to consider the terms of the Bill that we shall bring forward in this Session. In the meantime, I hope that Parliament will approve the first limited steps proposed in the White Paper which will ensure that time is not wasted in encouraging industry to get ahead and, indeed, to keep ahead of our competitors. I commend the White Paper to the House.

5.11 pm
Mr. Roy Hattersley (Birmingham, Sparkbrook)

I begin with two propositions that I hope are sufficiently banal to commend themselves to the whole House. First, it seems clear that the technological, economic and, indeed, social revolution that the cable system represents is irresistible. Secondly, it would be neither right nor sensible to attempt to stand in the path of that irresistible force.

However, I am deeply sceptical about both the speed and the size of the economic effects that some of the proponents of a cable system have predicted for its introduction. There were welcome notes of realism in the Home Secretary's speech, as there were in the White Paper, especially in their predictions of the result of the revolution, compared with what was said by the Minister for Information Technology in a debate in the previous Parliament and in Edinburgh last summer and, above all, with what was said by the Prime Minister at that extraordinary event at the Barbican in which she took part six months ago.

Even allowing for the modified aspirations, I accept that the cable revolution is substantial and irresistible. Nothing that I say today is intended to be an expression of vain regret that cable has come or a simple statement of Luddism in the face of a desirable change.

However, what I have to say is an attempt to influence the course that the cable revolution will take. The history of industrial innovation, from the spinning jenny, through the cotton gin to the computer, confirms that sudden changes have to be carefully regulated if society is to avoid the dire economic and social consequences that they can bring about.

The White Paper makes some references to regulations and the Home Secretary was prudent to make as much of them as he could. I am delighted that substantial increases in broadcasting safeguards have been added since our debate in December and that much of the rather strange broadcasting laissez-faire approach of the Hunt committee has been properly ditched and rightly abandoned.

Notwithstanding that, problems remain about how the cable revolution is to come to this country, not least because the Government stick obdurately and unthinkingly to their prejudice about the ownership and management of the system. The details of the creation of the system and the technicalities involved will be dealt with later by my right hon. Friend the Member for Salford, East (Mr. Orme), but I must say something about an unsubstantiated and unqualified assertion that appears in the introduction to the White Paper and in its summary as if it were a statement of irrefutable principle.

The White Paper says three times that cable investment should be privately financed and market led". I note that Conservative Members nod sagely as I repeat those words. Perhaps as the debate continues, some of them will seek to justify and substantiate those words, rather than merely assert them, because in the White Paper there is assertion and nothing else.

Some of us might ask why it is so obviously the case that cable investment should be privately financed and market led. The answer may be self-evident to Government dogmatists and the private interests that want to make a fortune out of exploiting the most profitable cable areas, but, in terms of the national interest, it is by no means self-evident that "privately financed and market led" is the proper answer.

I hope that the Minister for Information Technology will, uniquely—for no one else has done it—attempt to answer my question at the end of the debate. I hope that he will also clarify another point. The substantial paragraphs in the White Paper that talk about the obligations of private financing and private companies seem to include some ambiguity about how far the "market led" principle is to be applied.

I understand that the authority will be able to say to potential cable providers that they should edge out from their area of choice into areas of less financial desirability. I offer an example that I hope is at least as apposite as the example that I used when I intervened during the Home Secretary's speech. If someone says, "We want to lay cable only in the profitable urban area of greater Newcastle," will the authority be able to say, "You will not obtain the franchise unless you extend the provision of cable to the less profitable areas of Northumberland and Durham."? I give that example, because it is not clear from the White Paper what the regulation implies. Whatever it implies, I fear that it does not answer our fundamental doubts and our anxiety about the private enterprise development of the cable system.

The White Paper proposes that companies should be largely empowered to install cable systems in areas that they determine. There may be some informal guidance from the new authority about the size of the area or its boundaries; the cable authority may produce something called an indicative plan. Presumably, when the time for franchising comes, the authority will be able to choose the offer that, in its judgment, covers the appropriate areas and best meets the social obligations.

Essentially, however, the decisions on which areas are to receive cable will be for the private companies that lay the cable. As a result, cable, with all its benefits, real and imaginary, will appear only in certain selected areas. There will be no national network and I fear that, in at least one of its manifestations, the fact that cable appears only in scattered and patchy areas will result in a deterioration in the broadcasting systems received by the rest of the country.

Mr. Brittan

indicated dissent.

Mr. Hattersley

The Home Secretary shakes his head. I am willing to give way if he wishes to tell me that I am wrong and I shall listen later to the arguments of the Minister for Information Technology, but I do not know how an argument can be constructed that does not suggest that if a cable system can make profitable bids for the best and most popular programmes, so that they are shown only in the limited parts of the country where cable operates, the rest of the country, including for example the constituency of Caithness and Sutherland, which I had the good fortune to visit three weeks ago — to no great purpose—will be denied what other areas, already more fortunate in many respects, enjoy.

I shall make the Opposition's position clear. We believe in the creation of a single common carrier committed to the provision of a national network. We believe that that common carrier should be British Telecom. The move towards a national service would, of course, take some time. Does the Home Secretary intend or believe that there should ever he a national cable system? I ask him that question, because one assumes from the White Paper that there never will be a national cable system, although in his speech the Home Secretary talked about cable "initially" covering only part of the country. Does he believe that the initial period will ever be over? Does he believe that there will be a time when the boons and benefits—I say again, real and imaginary—will be available to the country as a whole? Does he even aspire to a national network?

I know that, in part, the right hon. and learned Gentleman's answer to my question is that that must be determined by the private companies which decide whether cable is worth financing in some of the more remote or less profitable areas. His objection to the scheme that we put forward—a national cable carrier run and financed by British Telecom—comes in two forms. The first concerns money, and the second concerns the enthusiasm in the White Paper, which the Home Secretary repeated, for a plurality of ownership—different firms doing different things in different ways.

I want to say a word about both those objections. I regard the money argument as absurd. If it is profitable for a number of private companies to cherry-pick—I think that is the phrase—areas of profitability and say, "Here we can make money out of a cable system," why cannot British Telecom be allowed to make the same judgment and make money out of some limited cable system? The only thing that prevents that is the absurd conventions of Treasury accounting, which regards the economic activity of a publicly owned corporation as different from the economic activity of a private limited corporation. It is either that, or simple, old-fashioned Conservative dogma which says that it is the duty of a public authority to lose money and that of a private company to make money.

Mr. Brittan

Surely the only advantage claimed by the right hon. Gentleman for a public authority, as opposed to a private authority, doing it is that the public authority would do something different. It would provide a service which in private enterprise terms would not be profitable. Therefore, what the right hon. Gentleman is suggesting, if he is suggesting anything, is that public money should be spent in a non-profitable way and that the taxpayers' money should be used for that purpose, rather than for other purposes for which it is used at present. I find that indefensible.

Mr. Hattersley

The implication of what the right hon. and learned Gentleman has just said—he has answered the question that he would not answer before—is that he does not intend to have a national cable system, but that he intends to have it only where it is profitable for private companies to provide it. That is the clear implication.

I put another question to the right hon. and learned Gentleman. Why is it that in a profitable area he should choose to deny the rights of operation to the public corporation when he knows perfectly well, in either cable or other activities, that the public corporation will be left to do those things out of which private enterprise cannot make money? We on these Benches believe that if, in the initial stages, there is money to be made from a limited cable operation, it seems only reasonable that the private companies that are required to run into deficit for other necessary features of our national life should be allowed to compete for it, and should be allowed to make a profit.

The Minister for Information Technology (Mr. Kenneth Baker)

I think that the right hon. Gentleman, not intentionally, is misleading the House. He said that British Telecom would be denied the right to participate. We are not denying BT the right to participate in cable. It has asked for a total monopoly to establish a national network. We find that unacceptable. If it wishes to participate as a partner with other companies and consortia, it can do so. We are not denying it the right to be part of that. We have said that it must participate in consortia.

Mr. Hattersley

The hon. Gentleman should not treat the House so disingenuously. If BT is to be allowed to participate on a fair basis it should be able individually to compete as a single unit against private companies. All that it can do is to pick up a few bits left over from private consortia. The Minister knows that, and he should regard that as undesirable.

Sir Geoffrey Johnson Smith (Wealdon)

The right hon. Gentleman has not got it right.

Mr. Hattersley

I assure the hon. Member for Wealdon (Sir G. Johnson Smith) that in terms of consortia and single bidding I have got it absolute!) right, and the companies that he works for and advise him will confirm that, if he asks them.

I come to the other criticism that has been made, and will be made, of the Opposition's plan — that there should be plurality, and that a different sort of company should be allowed to compete in different ways. I should find that much more convincing if the Government were really going for plurality of ownership and intended to avoid the one area of local monopoly that in my opinion they seem likely positively to encourage—the rights and abilities of one organisation both to own and provide the cable and to provide the broadcasting that goes through the cable. If the Government really wanted plurality whereby there can be proper control, they would insist, as we have urged them to insist, and as they now refuse to insist, on a division between the ownership of the cable and the production and the broadcasting of the programmes that go down the cable.

It is our belief that if a single company owns the system and owns its use for broadcasting, the idea that the authority can control and have a real influence over the standard and quality of the broadcasting that is produced is a myth and a chimera. In the real world, the not very authoritative cable authority will find it almost impossible to say to a broadcasting company, "We do not approve of the programmes that are going out from you," when that authority knows that that broadcasting company, in part or in whole, owns the system through which the alternative company would subsequently have to broadcast. The companies would have two simultaneous powers—an ability to dominate the area, and an ability to ignore the cable authority's wishes. That, I think, is what would happen if we had a cable authority with much sterner powers and a much greater ability to regulate than the one that we are at present offered.

The White Paper's description of the authority is a fascinating study for those who are interested in the machinery of Government. We are told that the authority is to be set up after close consultation between the two Secretaries of State. I shall not ask the Minister of State to tell us which other Secretaries of State consult but not very closely. It is the only time in the Government document that we have been promised close consultation, and I assume that it must be a throw-back to the days of less happy co-operation between previous Ministers, when there was a conflict between the two Departments about whether the technological argument should prevail or whether the standards that the previous Home Secretary wanted to be preserved should be the primary consideration. Although there have been some improvements in the standards and protection provided, in our opinion they do not go as far as we should like. Indeed, the White Paper does no more than promise that the new authority will exercise some oversight of the services provided.

Of course, at the time of the cable rush, the time when the most profitable areas are cable-ised, this authority will not even be in existence and the franchises will be handled by the Home Office. I say no more, because I wish to make no allegations about the Government's integrity in these matters, but the thought of the Government giving out profitable franchises to a group of people determined to make substantial profits from them, and the decisions about how the money should be allocated being in the Government's hands alone, fills me with foreboding.

Mr. Brittan

Foreboding about what?

Mr. Hattersley

I am filled with foreboding that the Government will fulfil their traditional role and think of the interests of the people who make a profit, rather than the interests of the people from whom the profit is made.

Mr. Tim Brinton (Gravesham)

As I understand the Government's plans, as outlined by my right hon. and learned Friend, during the interim period, until we have Second Reading and the authority is appointed, the franchises are to be given on a pilot basis of no more than 100,000 subscribers. Will the right hon. Gentleman say where the profit is in those 100,000 subscribers?

Mr. Hattersley

If it is to be privately financed and market led, the rules of private finance and market leadership mean that if there is no profit there is no company. That is the gravamen of the Government's argument. That is the argument that the Home Secretary must have advanced to his Ministers because it is they who say that profit must determine these matters and that if there is no profit, there is no company. I am saying something quite different and I shall proceed to say that in terms of the standards that we want to see preserved for broadcasting when cable comes in.

I am sure that my forebodings about the period before the authority is set up are not reflected in the forebodings that cable companies have about the rigours that they will have to face after the authority is created. The White Paper says that the powers used by the authority will be light and flexible and will be reactive rather than interventionist". I want to ask the Government some specific and direct questions about what that means for the authority.

Some regulations that the Government intend to apply must be welcomed. If the 25 channels are to exist in some areas it is clearly right that four must carry the national services. That is a substantial improvement on what has gone before. I admit at once that the idea that there should be an adult channel with a preposterous device known as the decency key was never something that the Government would have accepted. When the previous Home Secretary said that he had to consider these matters and should not be rushed into a decision I told him that I had no doubt at all that he would reject them. I am glad that my view has been confirmed. I do not understand how such a preposterous idea ever saw the light of day. I am glad that it is being abandoned with some derision as well as disapproval.

That does not stop our concern about standards in general, the protection of the British film and television industries, the results of the way in which the enterprises are to be financed and the national effect of local cable systems when some areas are without them. I want to deal with those four areas of concern briefly but individually.

First, there is to be no general requirement on content or balance. That is a relaxation of the rules governing the present programme companies. It will be argued, and it is an irresistible argument, that if there is to be an almost infinite number of channels broadcasting a perhaps infinite permutation of programmes, it is impossible to ask any authority to preview every programme and advertisement. I welcome the Government's intention—I hope that the Minister of State will confirm my interpretation of what the Home Secretary said — that the authority will, if there is particular anxiety about one cable service, be empowered to operate one of the IBA rules and say that it is so concerned about what is being done that it requires the programmes and advertisements to be submitted in advance of their being broadcast. That is wholly desirable and I congratulate the Home Secretary on including it in the White Paper.

That there cannot be previewing and pre-vetting of all programmes and advertisements is an argument not for washing the Government's and the authority's hands of any regulation, but for laying down some comparatively firm, though not rigid, rules about what the non-previewed programmes should be and how the obligations of good broadcasting should be observed. If there is to be a light touch, and the Government expect the authority to be reactive rather than interventionist without saying what the authority will react against or in what direction the touch is likely to push individual companies, that is an invitation to deterioration in the standards of broadcasting which I regret.

I told the House a year ago that if we were to be presented with a policy which simply says that there is the ultimate and major sanction of the right to refuse the renewal of a licence in six, eight or 10 years, by which the authority will exercise its real control over broadcasting. I would regard that as being no sanction at all. Again, I admit freely that the right occasionally to pre-vet and preview is a great improvement, but as we are talking about many, channels, it is not enough. Some criteria ought to be laid down and the companies ought to be told that they are, in general, the standards to which they ought to aspire. The nature and tone of the White Paper is vague—I believe intentionally vague—about regulations and criteria. It is certainly vague about British material and its use.

The British film and television industries are given none of the safeguards that they believe themselves to need, and without which they will be lost. The authority will be required to see that a proper proportion of British material is used. However, what is a proper proportion? It is clear from the White Paper that it will not be a large proportion at the beginning of the operation of cable. The White Paper says that, ideally, the amount of British material will increase as the years go by. That means that at the beginning of cable operation we shall have a large amount of cheap foreign material. The Secretary of State is less of a realist and more of an optimist than I take him to be if he thinks that cable can get off the ground with cheap foreign material and suddenly improve its standards and change its ways after five years. If we start off with cheap foreign rubbish, we shall end up with it. That is one of the arguments against doing what the Government seem to us to be doing for reasons about which we can only speculate — rushing into this with an extraordinary speed.

If the Government were prepared to take a more sensible view of the time scale, it would not only be a great bonus to modern technology but would enable them to come to a sensible decision about the British content of the programmes once they are on the air.

Mr. Clement Freud (Cambridgeshire, North-East)

Why does the right hon. Gentleman think that there would be such a general compulsion to watch cheap foreign rubbish?

Mr. Hattersley

Because I fear that that is the experience of cable in other countries. Supporters of cable constantly tell us that its glory is in those areas where it produces a 24-hour news and current affairs programme. In fact, such programmes find themselves in difficult financial straits. The hon. Gentleman, who I suspect goes to New York rather more often than I do, will, if he sees cable television there, see many channels which both he and I would regard as rubbish. It is not regarded as foreign rubbish there but it would be were it to be shown in the United Kingdom. I have no doubt that there would be many such programmes on cable.

The New York experience also relates to an omission from the White Paper. My hon. Friend the Member for Ealing, Southall (Mr. Bidwell) asked about programmes for ethnic minorities. We have been told constantly that the second glory of cable television is that it will enable programmes to be produced for minorities who are normally neglected on national networks. Parts of the White Paper hint at that and suggest that in a peculiar way the cable systems will be local broadcasting with pictures. If that is to be the case, as American experience shows, there must be regulations requiring the cable companies to accommodate the minorities who ought to have channels. As I understand the White Paper, that is not provided, and I shall be grateful if the Minister of Stale will clarify that point.

Mr. Michael Shersby (Uxbridge)

I am interested in the right hon. Gentleman's point about British content. How does he see that being protected by means of, for example, some sort of quota system or some other mechanism of the type with which we have been familiar in the British film industry? Will he expand on that important point?

Mr. Hattersley

I have offered one answer and I repeat it. The White Paper implies that British industry is not yet ready to meet demands and that cable must try to adjust to British industry when it is. Rather than rush into it, it would be sensible to give British industry time to prepare to meet the new demands made upon it. Then I would go to a figure which will have to be decided after negotiation without which the British film and television industries will labour under a terrible disadvantage.

Our principal concern about the general regulators relates to the national provision rather than the local provision. The Government at least make a bow in that direction in paragraph 114 of the White Paper which states: The Government shares the concern of the BBC and the IBA that cable should not lead to an impoverishment of the range and quality of programmes now provided on the four nationally available television channels. We agree that it "should not"; the question is whether it will or will not. The Government say: This applies in particular to sporting events. It applies to sporting events in one sense. I am determined and enthusiastic to support the Government view that the cup final should be available throughout the United Kingdom, although I am less concerned about the Grand National. If we limit ourselves to sporting events that will be much to the disadvantage of some parts of the country which want a universally high level of broadcasting, but will not get it through cable.

It is all very well to say that the trooping of the colour will be available and that the state opening of Parliament can be enjoyed in every home in the land, as I am sure it always is, but people want to enjoy other things which may not be available to them under the cable system, particularly as it is proposed to be financed in the White Paper.

I have already used films as an example. Under pay-as-you-view it will be possible for pay-as-you-view companies to out-bid the national networks for all types of the most desirable programmes. As a result the most desirable programmes will go to the homes of pay -as-you-view subscribers, who will be in two categories. The first will consist of people who can afford pay-as-you-view and the second of people who live in areas where pay -as-you-view is available. Not only will people in the rest of the country not have pay-as-you-view, but they will not be able to watch desirable programmes and their service will deteriorate. That is undesirable because often the most profitable and popular programmes are those which should be broadcast nationally. To deny them to a large part of the country seems wrong.

Mr. Michael Marshall

Is not the reality that the programmes, after being sold to and used by the cable companies, will be sold to the networks? Surely that will be the second stage in a commercial operation.

Mr. Hattersley

If that is the second stage it will create a different social and geographical hierarchy. It will create two nations. Some people will pay extra and receive something special while the generality of people will not pay extra and will not receive something special. We are opposed to additional divisions in a society that should be united rather than split.

Since Hunt was published, there have been improvements in regulation and control. I welcome them, but other improvements are necessary. We shall continue to press for them when the Bill goes through the House.

5.43 pm
Sir Paul Bryan (Boothferry)

I declare an interest as a director of Granada Television. I wish to review the attitude of industry, on the eve of legislation, to the prospects of cable. That attitude has changed markedly in the last couple of years. The development reminds me of what has happened to trade with China since it opened its gates to the West. That opening provoked a Klondike-type rush of business people to Peking. They all returned with optimism but no signed orders. The predicted flood of business has been reduced to a healthy stream from which sound businesses are making reasonable profits.

When the Government first announced their plans for cable, Americans and Canadians came here in numbers to see the form. They have all gone home. The executives of some large British concerns, after attending seminars, setting up working parties and visiting America, have decided to let others start first. The City's ardour for cable has cooled. None of that is disastrous. It may even be healthy, but the Minister may have to take steps to help maintain what the previous Home Secretary described as the momentum of our cable policy.

The main brake is not only the huge scale of investment required but the current calculation that it will take eight years to receive a return on investment, and three to four years to achieve a positive cash flow.

The latest American experience is discouraging. There are plenty of "pa and ma" cable operators which continue to make a steady living with fairly unsophisticated plant. However, companies trying to expand in a big way with multi-channel interactive equipment are having to slow down their expansion. Indeed, the general presumption that money can be made automatically out of the television screen has received some ugly dents in America and in Britain in the last year or two.

I am not suggesting that we should take drastic steps to put courage into faint-hearted investors, but the Minister should look again at some of what seem at first sight to be small restrictions which tend to make people delay entering the cable business.

I cannot understand why the first 10 or 12 operators which are to receive franchises before legislation are to be denied the advantages of pay-per-view. Any potential investor in cable will be watching that first bold dozen like a hawk. It is essential to the momentum of the Government's policy that those operators get off to a promising start.

Income from advertising and basic fees will develop slowly, but pay-per-view could bring in some early money and at the same time stimulate the subscriber rate. As is almost suggested in the White Paper, perhaps those companies will be able to have pay-per-view once the legislation is passed, and the interim period will be spent in getting off the air. If that is so, why not give the companies pay-per-view from the start, on the assumption that soon they will be under the authorities' control?

Another aim of granting interim licences should be to test the market — to find out what the public are prepared to pay for and how much they are prepared to pay for it. Many interested parties and potential investors, the ITV companies among them, will be watching not only the financial fortunes of the interim licence holders but their programme experience. The interim is an important experimental period.

The White Paper proposal that ITV companies should not be cable franchise holders for any part of their existing ITV franchise areas is an anti-monopoly stance that is superficially sound but nonsense in practice. About 3 million homes are located in the Granada Television franchise area. If Granada were given a franchise for cablecasting 100,000 homes—the maximum allowed for interim licences — it might hope to glean 30,000 subscribers. That is 1 per cent. of all the homes in its television franchise area. That makes the White Paper's phrases such as prevention of a concentration of power in a particular area and the need to secure a diversity of ownership of cable television in the country as a whole look ridiculous.

The cost of cabling 100,000 homes has been estimated at about £14 million. Therefore, a television company is unlikely to have more than a part-share of the franchise, and that makes the element of monopoly even more derisory. We can set against that objection—if it can be called an objection — the positive advantages of the availability of experienced staff and of local knowledge, which is an important feature of all ITV companies and is highly desirable in a cable company.

I support that objection of the Cable Television Association of Great Britain to paragraph 129 of the White Paper, which lists among the "must carry" obligations of the cable operator the requirement to carry direct broadcasting of BBC satellite services free of charge to the broadcaster. In their strategy for cable television, the Government have always aimed—rightly—to protect the existing broadcasting services, but it has never before been understood that cable television would have to provide free facilities for new commercial competing broadcasting services.

Under paragraph 129, one commercial enterprise would be forced by Government ruling to provide free facilities to a competitor. By the time the BBC is broadcasting its pay-per-view service from satellite, a cable operator might already be using a similar—and perhaps in its view superior—service from some other source. He would, therefore, not be attracted by the assumption in paragraph 129 that the cable operator would be recompensed by a higher tariff for the basic package. That is a rash assumption, for the BBC offering might not even improve the basic package. What is more, the operator might not want to impose a higher tariff. If a broadcaster by DBS wants to use cable to distribute his broadcasts, he should pay for the service and not expect to be able to impose it.

Incidentally, the BBC is buying its way into DBS on what may turn out to be a Concorde of a satellite. If its costs are to be recovered, its pay-per-view may be uncompetitive, for others may be able to buy space on low-powered satellites more cheaply. New companies could also be ahead of the BBC in that field. Mr. Murdoch has recently bought a new company with a transponder on the first European communications satellite. That company could produce a rival pay-television package several years ahead of the BBC. The advantage of being first in the market has been well illustrated by the BBC's success on breakfast television, and in America by Home Box Office, which is more profitable than the later arrivals.

After seeing the web of restrictions and local authority regulations under which American cable operators struggle, it is refreshing to see the Government's genuine attempts in the White Paper to make local authority control as light as possible. That is an encouragement to the investor, who is wary of controls of any sort. However, a careful study of the controls and standards to be laid down by the cable authority makes it plain that they are not very different from those imposed or maintained by the IBA. That leads one to believe that when the Government are forced to define the obligations for the purposes of legislation, they may look much more forbidding than they do in the White Paper. I would value the Minister's comments on that point when he replies to the debate.

The Home Secretary will have learnt, from taking the Broadcasting Bill through the House of Commons, that the details of that Bill had a marked effect on Channel 4, as indeed they were meant to do. However, those who complain about the low ratings of Channel 4 do not realise that they are almost entirely due to the obligation laid by the Act on that channel to provide minority programmes. Minority programmes are, by definition, programmes that attract small audiences.

Mr. Tim Rathbone (Lewes)

It is said that some of the difficulties faced by Channel 4 and its lack of commercial success have been caused much more by the relationship between it and the Independent Television Companies Association, and by the lack of advertising push that has been provided for it, than by the programmes.

Sir Paul Bryan

That can be argued, but I am simply saying that the legislation had considerable influence—as it was meant to have—and that it will be equally influential in this case.

Both ITV and BBC television have settled down fairly satisfactorily on the 14 per cent. ration of foreign material. That is due not merely to the altruism of the employers — who could no doubt make more money by using more cheap foreign material—but to the strong views held on the subject by the relevant unions. With cable it will he different. Many other unions interested in the general development of cable will be involved, and the trade unions' objections to foreign material will probably be less acute.

The authority faces a difficult problem. On the one hand, it will have to stimulate the use of Britain's considerable programme-making resources. On the other hand, there will be in the early days a thirst for programme material that can be satisfied only by America. When I visited America, I was impressed by the endless supply of material available to cable operators. Such a supply will certainly not be available here.

Finally, I ask the Minister not only about the general role of British Telecom in cable television but about its capability as a business partner in the dozens of consortia of which it will presumably be a part. I keep meeting people who are talking to BT, but no one seems to have reached any firm agreement with it. How is BT organised to deal practically with what should be a very large part of its business? Is there a special new department devoted to cable television, under a chief executive? BT should be issuing special viability studies to attract investment, but so far the traffic all seems to be going the other way.

5.58 pm
Mr. Donald Anderson (Swansea, East)

I take up the point made by the hon. Member for Boothferry (Sir P. Bryan) that the investors are all wary of controls. Surely, however, it is up to the Government to ensure that public interest is safeguarded in rapidly developing key areas. The hon. Gentleman said that he was impressed by the endless supply of material available in the United States. My limited experience there has been that, although the supply appears to be endless and the variety is great, the real choice is strictly limited because of the tawdry nature of the material. I share the concern of my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) about the need for balance, regulations and clearly defined criteria.

The demand is irresistible. The problem is timing. Why is there such haste? If we do not take adequate measures now, the horse will run away with us. I welcome the changes that have been made since the publication of the Hunt committee report. The Government reacted well to the debate last December. For example, the absurdity of the electronic lock suggestion has been made clear.

I want to make only three, I hope speedy, points. The first concerns local identity. Given the speed of development of cable systems, one fears that the desire for local identity, which will become more and more strong in our country, may be threatened by some sort of soap opera saturation. I hope that the cable authority will have, as one of its criteria for franchises, the proviso that a bidding group will have a minimum local content in its programmes. I also hope that it will uphold the desirability of operators having ties with the areas that they serve, and that the criteria in paragraph 65 covering the selection of operators will bear the need for that local input very much in mind.

In particular, if an applicant says in his bid that a certain proportion of, for example, education programmes will be broadcast, what measures will be taken to ensure that that promise is kept? Like my right hon. Friend the Member for Sparkbrook, I must ask whether it is the Government's ultimate aim to have United Kingdom-wide cable system coverage, or whether that will be left totally to the market, with the dangers that have been described of a two-nation approach. It is a simple question: is that the ultimate aim? Will the Government seek, so far as is practicable, to ensure that that is carried out?

Secondly, I notice the Government's intention to exclude religious bodies from the ownership of systems. No doubt the Government are aware that in February this year the Synod of the Church of England voted that religious bodies should not be excluded from the ownership of cable operating systems, or, indeed, the leasing of channels. Just as in the past it would have been intolerable if churches had been excluded from the printing press, so it would be intolerable now if churches were excluded from such future television developments.

One knows the argument that sects such as the Moonies might seek to take over channels in that way, but that is not the experience in the United States of America, even though there are extremely rich sects there. Such sects need to create a dependency upon them and I do not believe that that can be achieved by television. Therefore, that objection has been overstated. Before the Government return finally to the House, I must ask them to consult more fully with Christian and other religious bodies in this country and to reconsider whether it makes sense to exclude all religious bodies from participating in the use of this new technology.

Mr. Freud

What does the hon. Gentleman think would happen if a cable was given to a religious movement? Would he expect it to do religious services 24 hours a day, or would he expect it to share the services with some other body?

Mr. Anderson

Of course, such a body would accept commercial criteria, just like any other organisation. It would be absurd to expect 24 hours of hymn singing. There would be a commercial input to programme schedules and part of it would contain a religious theme. I think that that would be acceptable to the broad range of opinion in the country. I am sure that such programmes could be worked out on a practicable basis.

Finally, I should like to deal with the adequacy of the sanctions proposed against violence and pornography on the new cable television channels. My principal concern is that the Government's programme standards pertaining to taste and decency are inadequate. Sanctions will be needed against those operators who seek to debase our society with violent or pornographic material. I need not stress the effect, on young people in particular, of viewing violent and pornographic material. On Monday this week, the Central Criminal Court heard a case in which a young man at least claimed to have been incited to rape as a result of viewing such material. We should bear in mind the psychological damage that can be done to children and other viewers.

Clearly the only way to stop such material is to introduce a clear threat of severe penalties against the champions of smut and violence, who no doubt want to descend on the British cable market and who will not exercise any self-control, because they are propelled solely by the profit motive. They are quite unconcerned about the effects on their victims, and that should be a concern of Government. According to the Government's proposals, the cable authority will have powers similar to those of the BBC and IBA in relation to standards on decency. That, prima facie, is the proper approach, yet it must be spelt out clearly that there are adequate sanctions against the violation of BBC and IBA standards. The authority's sanction is limited, although I note that it is said that it can exercise the premature withdrawal of an authority's licence.

The second form of control is the Obscene Publications Act 1959. As the Government concede, there is no certainty that it applies in any event to cable systems, and that needs to be pursued. The Government will know that there is great concern about the strength of the Act. Eminent men such as Lord Denning have held that in many ways it misfires. I hope that the Government will make it clear that the cable authority is empowered to revoke the licence of any operator who violates the BBC and IBA criteria on taste and decency. That would not pose any danger to legitimate programming and would only follow a series of sanctions, which would certainly include warnings and, perhaps, fines. However, I notice that the Government reject that.

The Government should carefully inquire into the means of controlling direct broadcasting systems to prevent the circumvention of the cable authority's control over operators. That will involve some international agreements that are capable of checking international cable satellite conglomerates.

This is an exciting new development, and we now stand on its threshold. It will revolutionise our viewing. We have a responsibility to ensure that such technology is not perverted, that public standards are maintained and that Government assume responsibility for the helpless in our society, and for children and women who are often the victims of sexual abuse. I hope that the Government will see the challenge as real, and that they will properly meet it in the guidelines set out for the authority.

6.8 pm

Mr. Robert Key (Salisbury)

In the year 1275, Salisbury first sent Members to Parliament. Thus, 708 years on, it is with some humility that I address the House for the first time.

It is not irrelevant that in this debate on high technology wideband cablecasting we should glance back in time for a moment. Those first Members of Parliament were, like us, concerned with communication between people. As a former schoolmaster, I might even be allowed to indulge my belief that the written word has lost some of its beauty and authority in the age of electronic communication.

During the recent general election, I dare say that many prospective hon. Members, like me, were occasionally assassinated in the press. In just a couple of sentences of election fever my personal history was rewritten on the back page of The Times. My origins were removed from Wiltshire to the home counties, by some journalistic miracle my profession changed from teacher to chartered accountant, and I was remarried to someone called Fiona. It was perhaps not surprising that the same newspaper claimed in its first list of new Members of Parliament that I had "no biography available". I know not why, but, as I learnt subsequently, the South China Morning Post carried a more accurate account of the goings on in Salisbury than The Times.

So it is with relief that I can now rely on the unerring accuracy of Hansard and my local newspapers to report my efforts on behalf of the electors of Salisbury. I thank them for their confidence, and, even though I received an absolute majority of the votes cast, I consider it my duty and a privilege to represent also the interests of the minorities who did not vote for me, or who chose, sadly, not to vote for anyone.

To my 1,100 or so active workers who on polling day turned the wheels of democracy on my behalf, I express my heartfelt thanks. I salute my immediate predecessor, Sir Michael Hamilton. A man of the greatest courtesy and sensibility, he will be hard to follow and he is much missed by his many friends here and in Salisbury.

The people of Salisbury have always been stouthearted and forward-looking. They have always understood the meaning of good communications, and taken advantage of it. The Romans focused a network of roads on Old Sarum, but the Norman bishops moved away and founded the city of New Sarum on the valley trade routes. Grateful, of course, for its episcopal innovators, Salisbury also has a long tradition of disagreement with its bishops, usually over local taxation, but more recently over the defence of the realm. But I would not wish on our current gentle pastor the fate of his predecessor, who in 1450 was pursued by a mob and murdered on Salisbury plain. Nor would I wish on the gentle vet who is our mayor the fate of his predecessor, John Halle, who was committed to the Tower of London for using violent language.

That we know such facts is a tribute to the accuracy of language and records. In Salisbury, education and the enriching of our cultural life are taken very seriously indeed. Our citizens may be employed in agriculture, engineering—much of it based on high technology—and the commercial and professional services on which they depend, or in tourism, transport, the armed services, defence establishments and our over-criticised, often under-valued Civil Service, but what they all have in common is the will and the skill to seize on new technology and use it sensibly.

Salisbury is not particularly well served by local radio or television—it is peripheral to many stations. There must be many towns and cities in a similar position—dwarfed numerically by larger neighbours, but founts of unique benefit to the life of wider regions.

In supporting the introduction of cable systems, I should like to draw to the attention of the House paragraph 58 of the White Paper, which deals with franchise areas. The Government must be held to their proposal to give the cable authority the duty to take into account natural community groupings. Cable operators should do more than cream profits from limited services in densely populated areas. They should assume wider responsibilities in developing all the opportunities offered by inter-active systems, both geographically and in the variety of services offered. Local business and industry should benefit, but so should our schools, colleges, theatres, concert halls and sports facilities and last, but by no means least, our families in their homes.

In a recent survey, 71 per cent. of people said that they wanted more choice on television and 59 per cent. wanted channels for local news and local features. The demand is there and should be met. The White Paper strikes the right balance between over-regulation, which would kill the project, and a free-for-all, which would damage the high quality of much of the existing BBC and ITV output.

British television, both technically and artistically, enjoys an unrivalled international reputation for creativity and we are poised to capture a world lead in a new generation of direct broadcasting by satellite and interactive wideband cable systems. We must not miss our chance. Whatever else my constituents may or may not wish me to say on their behalf, they did not send me to this place to impede progress. Nor will I.

6.14 pm
Mr. Clement Freud (Cambridgeshire, North-East)

I should like to begin by congratulating the hon. Member for Salisbury (Mr. Key) on his maiden speech. He read it with verve and he will be a better man for getting a maiden speech off his chest. As Julius Caesar wanted to say, "Let me have men around me who are my sort of shape." I welcome the hon. Gentleman to the House. I was particularly pleased to hear him refer to the courtesy of his predecessor, Sir Michael Hamilton, who, when I was a very young Member of Parliament and spoke in Salisbury, berated me for not having telephoned him and had him invite me to dinner or to stay the night. It is such cross-party courtesies that make the House of Commons the good place that it is. I welcome the hon. Gentleman to it.

I do not want to involve myself in the argument between cable being a licence to print money or a place in the queue for Carey street, but I wish to remind the House that, in the United States, where I have spent some time and watched much television, cable is not watched solely by the rich or the well-heeled—on the contrary, it is watched by a broad spectrum of people from both sides of the social divide.

I am concerned about the pilot scheme, as one is rightly concerned about Parliament giving the go-ahead before the traffic lights have been built. I doubt whether any of the dozen pilots, if a dozen pilots can be found, will do much for television or cable, although they will, of course, be in an advantageous position when legislation is passed. We should be concerned about that. Programme production for a limited number of people — like 100,000 — is not commercially viable and what the Minister thought a useful indicator may turn out to be a twelve-headed deterrent albatross to those that follow. What is almost certain is that the quality of the programmes produced by the pilots will not be as good as we shall hope the quality of the programmes will be when legislation is passed.

I wish briefly to mention advertising, because there is, among many hon. Members and specifically among right hon. and hon. Members on the Opposition Benches, a belief that advertising directed at a specific market is somehow wrong or bad. I should like to remind those hon. Members that this is exactly what happens in trade papers. One of the strengths of cable television is the advantage of being able to buy a slot within a programme in which none actually wants to advertise. This will bring new advertisers into the business and make for much more effective and cost-effective advertising. There is no reason why a saucepan manufacturer should not buy a slot in a cookery programme, although I would, had the Government not properly changed their mind on the Hunt recommendation, have been worried had a sex aid company been allowed to advertise in a pornographic film.

Inherent conflicts are involved in cable television which do not appear to have been recognised explicitly and which are not therefore fully worked out in the White Paper. The first conflict is between entertainment and technology. The second concerns the respective claims of commercial interest and social duty or well-being; the third is between public broadcasting and the cable service. But before expanding on that, I wish to make a few introductory comments relevant to all those central conflicts.

Is there an audience waiting for cable television? I am not sure. If there is, I wonder how new it will be, or whether it will simply be composed of viewers drawn from existing channels, cinemas, newspapers or spectator events, which will be the poorer for A. I should like to know what the Minister thinks will make them watch cable television when they already have so many other claims on their attention with so little time in which to watch. I know from the industry that about twice as much material is recorded as is actually watched. People turn on their video recorders to tape breakfast television; when they get home they cannot watch because the news, "Coronation Street", and other evening programmes are being shown.

We have witnessed the problems of Channel 4 and TV-am, but nearly everyone now has access to public broadcasting. Extra programmes via cable will face a considerable problem in supplementing the existing network, given the high quality of British television. Let us not forget that one of our concerns must be to retain the quality of British television, however innovative we may become.

In the United States, cable companies have not proved beyond doubt that lots of people are waiting to be connected. On the contrary, there is a high disenchantment factor, because more than 60 per cent. of people who subscribe in the United States decide that the cable service's standard offer is inadequate to retain their support.

That brings me to the first conflict that I mentioned. The first real promise by cable is to provide good, self-selective home entertainment for those paying subscriptions to the competing cable channels. As I have said, there must be doubts about the size of the audience. The real reason for going ahead with cable is not so much that proposed by the Home Secretary as that proposed by the Minister for Information Technology. Cable can revolutionise the way we work and the way we think about work. That is the area that the Minister, who has done so much to foster debate on the cable issue, is putting forward. He is attempting to usher in this revolution somewhat on the back of entertainment technology, which is why the White Paper proposes that companies providing star systems should receive longer franchises than those using tree-and-branch layouts. That is important and must be recognised. It is the criterion not of quality, but of technology.

The paradox is that while the entertainment element may prove to be minimal, it is essential to legislate in advance of it, but legislation, while necessary to protect public broadcasting and private sensibilities, must not put technology into such a straitjacket that the other revolution is forestalled.

This leads to the second conflict between the claims of commerce and the claims of civic duty. Here again, the interests of the profit-seeking entrepreneur will be at odds with those of the community as a whole. Presumably, both require maximum access to great sporting and other events. We must legislate to ensure that these do not go to the highest commercial bidder. In this respect, the provision in the White Paper is wholly inadequate. We must balance the opportunity for enterprise with the claims of all the viewers.

Underlying these is the third area of relations between cable and public service television. People who receive only the latter must be protected, but the former must not be rendered unprofitable. Cable must supplement public television. If it fails to do so, it will fail commercially.

We must be careful not to put its commercial success above the duties of the public networks. This conflict seems to come to a head in the new regulating authority. Given what was said earlier about the slackness or absence of regulations in broadcasting entertainment at present and the local nature of the cable link-up, it seems that cable will differ from public broadcasting in respect of localness.

My doubts concern the extent to which the White Paper recognises the local element, for the authority makes inadequate provision for local representatives to grant franchises, oversee programmes or adjudicate complaints. Paragraph 68 refers to a duty to consider local views before awarding a franchise". That is inadequate, as is taking account of the range and diversity of the services proposed and of the arrangements for community programmes and local access in paragraph 131. Something more than that is required. I should like to see regional advisory bodies for the regulatory authority. This is already the case for local radio, where such bodies determine the franchises, monitor the programme content and do it very well indeed. I pay tribute to the local ILR bodies.

Secondly, among the "criteria for selecting operators" I should like to see the inclusion in paragraph 65 of some mention of local participation. By that I do not mean that local people should be forced to take a stake, because by and large if something is profitable, they will, and if it is not profitable, they must not be made to. It is not enough to propose to ensure that what is provided matches local needs and thus supplements national public broadcasting.

Thirdly, more must be done about the amount of foreign programme content. There is a current limit of 14 per cent. on BBC and ITV. While I accept the Minister's reluctance to lay down a percentage at the very beginning, I hope that his aim will be similar to that 14 per cent., for that would ensure that we produce much of the new material ourselves. If we are to have rubbish on cable television, let it be our own rubbish.

I salute the Minister for overruling Hunt on porn—that sounds like a film advertised in Piccadilly circus. It is right that he should have overruled the absurdity of child-proof devices on pornographic films. If people are really desperate to see pornographic films, they should put on their grubby mackintoshes and go out and find them.

6.27 pm
Sir Geoffrey Johnson Smith (Wealden)

I declare an interest as a non-executive director of the London Weekend television holding company and unremunerated governor of the British Film Institute.

I agreed with much of what the hon. Member for Cambridgeshire, North-East (Mr. Freud) said, but I do not want regional authorities advising anyone. We are moving into a whole new scene. If it were a restricted supply of cable television, as we have been used to with existing companies, I could see the need for the proliferation of guidance from appointed bodies, just as we have seen in recent decades, but this is a new scene. If I were to suggest that we should go into book publishing after years of domination by the medieval Church and the state, and that local government advisory services should be established, I am sure that the hon. Gentleman would scream that it would be nonsense, yet that may well happen as we move into the era of cable. It will lead to the proliferation of channels and systems of the sort that hitherto did not apply to the more established networks. I shall develop that argument later.

As the hon. Gentleman said, cable is being introduced not because we think that the British public are burning for more television, although I suspect that the public are dissatisfied with the choice that they have. British television produces some excellent products, but it also produces its quota of good old British rubbish. The trouble with much of British television is that if one wants to watch interesting programmes, or has a minority interest in a particular form of entertainment, instruction or information, they are generally screened outside peak hours. To a large extent, that is why the British public have invested in home video recorders—to cater for the taste that they decide, rather than be subjected to the taste decided for them by the programme planners of the existing broadcasting organisations. The public have voted with their money. The range of choice is extremely limited. It is high time that that was changed so that we have something more akin to the freedom that we enjoy when purchasing periodicals and books.

Basically, this argument is not about television. We are cabling Britain because, as my hon. Friend the Minister for Information Technology knows, this is one way in which we can extend information technology. If television can help provide some of the money for investment, jolly good luck.

I congratulate the Government on the White Paper. I congratulate particularly Lord Hunt, who provided the basis of the White Paper. Much of it has stood, although there are some things which the Government have changed. I congratulate my hon. Friend the Minister for Information Technology, who showed a great deal of imagination in the whole process.

The Government have moved quickly, but not recklessly, as some critics feared. Despite all the criticism that was levelled and fears that were raised some 18 months ago, it is interesting to note that the White Paper has been well received. I hope that that will encourage the Government to maintain their momentum. The Government have taken into account the reasonable reservations and criticisms that were expressed at the end of last year. They have certainly laid the foundations on which suitable legislation could and should be prepared.

I welcome particularly the decision to set up a cable authority. I recognise that there will be a freeing of the market and that there is a need for some authority unfettered by direct responsibility to other media. The rejection of the so-called adults' channel was surely right. The idea of an electronic lock was really only an infantile concept, which is one reason why the former Home Secretary was able to claim that it would not prevent his grandchildren from picking it The Government were right also to accept that the new cable authority should give weight to the cable companies' plans for using programmes of British and European Community origin. I doubt whether they would restrict the number to as low as 14 or 15 per cent. We have seen many programmes on British television which emanated from America. If this step helps the companies to raise revenue —I think that this will be essential, because setting up cable television is a very expensive business—I do not mind. However, there should be continuous pressure to move towards British and Community products.

There is a general acceptance of the principle of the quota system without laying down a hard and fast percentage. Cable television will have strong economic implications for London Weekend, other commercial companies and radio companies. I am glad that the White Paper will permit pay-per-view cable television and sponsorship and, therefore, cable companies will be less dependent on advertising revenue, which is not a bottomless pit. In this context, I welcome the Government's affirmation that the commercial television companies will be allowed a stake in cable television.

The White Paper confirms my opinion that it should be possible to embrace the new cable and satellite technology. The two go together. However, we shall not be discussing satellites very much in this debate today. We are not necessarily destroying the standards of broadcasting which we have so successfully established. I have no doubt that we shall be taking risks. There will be financial risks for those who wish to invest their money, and certainly cultural risks, because no one knows for certain what the future holds. Cable will not go away. I have no doubt that its development, supported by satellite television, can offer a stimulating challenge and exciting opportunities which should make for not just a wider variety of programmes, but programmes of minority and specialist interest during peak hours or at times chosen by the individual. I think that that is very important.

We have only recently been made aware of the potential offered by the new technology. It is interesting to see how the media have responded already. They do not take the rather Luddite, and certainly old-fashioned and unreconstructed Socialist approach, which I do not think can really be in the mind of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) who led for the Opposition, that somehow cable is an evil and should be managed by a national organisation.

The right hon. Gentleman knows as well as I do that the film industry has come to terms with the new situation. It sees the market as no longer being in the cinema. No one minds if one has to spend a bomb in the west end to watch "Octopussy" before it comes on television three years later. The public accept that there are one, two, three or four tiers of distribution. Britain may be divided in the eyes of the Socialists, but it is not in the eyes of the public. They do not think that distribution has any political or social context. It is just the way programmes are marketed which the public have accepted. Why should they not accept the new situation to which I refer? The film industry sees its market in terms of cinema, then television and now in terms of home video and cable.

In the future, it will be pay-TV, cable and satellite. I have talked to some of the most respected people in the film business like David Puttnam. None of them worry about the advent of cable. They see it, and satellite broadcasting, as a great opportunity. There are opportunities for the established theatre too. Sir Peter Hall thinks that cable provides a great opportunity for a wider distribution of the productions of the excellent National Theatre.

The BBC, however conservative it may have sounded —at times it almost sounded a bit grumpy and patrician — is coming to terms rapidly with the new circumstances. It is producing for the home video market and has done a wonderful deal with the unions. I am glad that it has been able to do so. The BBC is involved with pay-cable as a scheduler and operator for Visionhire for an experimental period of two years. The BBC has turned to a finance house with the Royal Opera house and signed up to record and sell Covent Garden productions of operas and ballets which can be seen in the United States, but not here with the same frequency. It is involved in direct broadcasting by satellite and sees itself as an important provider of news and other types of programmes, linking DBS with cable TV.

Following a rather sour reception, the IBA recognises that independent television should also be able to contribute to cable programmes as a cable programme provider terrestially and through off-air satellites.

The scene is set. We have a new Parliament, and the White Paper and all we want now is the legislative framework. The Government have already received a number of representations from interested groups. Many of them will no doubt be dealt with in Committee, but before the Government's views become too stuck I should like to draw the attention of Ministers—one of whom has come to the task fairly freshly—

Mr. Kenneth Baker

It is quality that counts.

Sir Geoffrey Johnson Smith

I am thinking of the Home Office. I should like to draw the Home Secretary's attention to a few points upon which I hope he and his colleagues will reflect. They should continually recognise that cable is not just another broadcasting channel. I was to some extent reassured by the Home Secretary's comments when he opened the debate. I want to emphasise that this is different. The right hon. Member for Sparkbrook seemed to say that it was just an extension of public service broadcasting. We know that it is not. Cable requires an entirely different approach and a large amount of money. It is not just a licence to print money. I believe that it and the Minister's plans for it could be killed if it is smothered by too many restrictions and regulations.

The White Paper stresses rightly the need for a small but well qualified cable authority which will have a light touch but remain in the background. There are a formidable number of rules, caveats and regulatory practices which could affect financial viability and investment confidence. That is the main reason why a number of people associated with cable, and to a lesser extent satellite, do not want the Home Office to be the Department to which the authority is accountable. They argue that cable is not public service broadcasting by another name and needs a Ministry which comprehends the inter-relationship of entrepreneurial skills, new technolgy and finance as does my hon. Friend the Minister for Information Technology.

The Government recognise that further thought is required to avoid unnecessary overlapping by the Home Office, the Department of Trade and Industry and the Office of Telecommunications. In my opinion, the social and cultural effects of cable and satellite broadcasting are too important to be left to Ministers — however enlightened they may be — whose prime interests rest with Departments whose responsibilities are trade and technology.

For years it has been the Home Office which, insofar as any Department of State can so act, has acted as the nation's conscience. In broadcasting and other matters it has rightly interested itself in decency and standards. The Home Office is called upon to consider moral and ethical values in many areas of our national life and the extent to which they should be reflected in drafting and implementing legislation. Over the years it has acquired great expertise in this delicate area. If at times we feel that it is unnecessarily fussy, we should at least be thankful for its efforts to sustain and reinforce the more permanent values in our national life.

On paragraph 74 of the White Paper, I share the cable companies' concern about the Government's intention to make it a mandatory requirement on the cable authority to readvertise franchises at the end of the first term of 12 years. As the White Paper states, of course, no company should expect to have a prescriptive right to a franchise in perpetuity. Nevertheless, the companies face huge start-up costs and the franchises are serious risk investments. As I have said, it should not be forgotten that the franchises are not a licence to print money. I believe that it would help to generate investment confidence and to encourage cable operators if they knew that operators who behaved could normally hope to have their franchise renewed. In short, let the cable authority have a permissive but not a mandatory power to cause a franchise to be readvertised.

Secondly—here I am indebted to an hon. Friend who has worked in and is very well informed on technical matters — there is some evidence that the 20-year franchise for the switched star system is not financially attractive. I should be grateful if my hon. Friend the Minister would comment on that. It is argued that the payback period is too short and that companies can make a fair return on their investment only if they sell it off at the end.

Concern has been expressed to me by commercial television companies about whether the Government have considered adequately the financial implications of backing direct broadcasting by satellite in the context of an early start for cable services. If the Government hope to benefit the aerospace industry by encouraging the introduction of DBS services, they must consider whether those services can be made profitable, as there is a view that they would be pre-empted in the market place by other paid services distributed by land line or by the low-power satellites which can start much sooner. That, too, must be heeded.

The Independent Broadcasting Authority seems reluctant to allow the independent television companies to participate in the planned cable programme distribution services expected to start in 1984 because of a technicality in their contracts which permits the IBA to prohibit contractors from engaging in satellite broadcasting activities, although it could be argued that distribution is not broadcasting. The IBA position seems to be—I put it no higher than that—that it will not allow contractors to become involved in these schemes unless they guarantee that they will participate in IBA-licensed DBS services in 1986, by which time the companies feel that some of the market will have been pre-empted.

There are other objections, especially in relation to the "must carry" principle. The existing cable companies do not object to it, but it is felt that it would be unfair for the new satellite programmes to be carried as a prescriptive right of the satellite operators. I note that the brief distributed by the BBC expresses some sympathy with the cable operators' fears about the cost of implementing the "must carry" provision in relation to satellite programmes. I hope that the Government will consider that, too.

I could raise many other points, but I am conscious of the wish of other hon. Members to participate in this short debate. Those points are no doubt already well known to the Minister. I refer not least to the wish of some local authorities to have some say or to be consulted before pilot schemes are decided upon. Some of these important points will undoubtedly be made on Second Reading of the Bill. Meanwhile, I return to my original point in saying how pleased many of us are that the Government have moved on this matter with such commendable speed and in such a responsible way.

6.44 pm
Mr. John McWilliam (Blaydon)

This is my first opportunity to say how pleased I am to speak under your chairmanship, Mr. Deputy Speaker.

I congratulate the hon. Member for Salisbury (Mr. Key) on his interesting maiden speech. I am sure that we shall hear a great deal more from him. We always need good contributions on education and I am delighted to welcome the hon. Gentleman to the House.

The debate so far has been interesting, not least for the difficulty in working out how to refer accurately to hon. Members who have spoken, when all their constituencies seem to have changed. I especially enjoyed the speeches of the hon. Members for Wealden (Sir G. Johnson Smith), Cambridgeshire, North-East (Mr. Freud) and Boothferry (Sir P. Bryan), all of whom highlighted different facets of the subject which were worthy of careful consideration but had not been considered in depth in the previous debate on this issue in December last year.

I, too, declare an interest. I am sponsored by the Post Office Engineering Union. I also declare an even greater interest, in that it is 26 years to the day since I was signed on as a civil servant to begin a two-year youth course as a telecommunications engineer. I have tried to continue that interest, although I have now been a Member of Parliament for four years, and it is in that context that most of my remarks will be made.

The proposals to expand cable television in Britain were originally made in March 1982 when the Government published a report from their information technology advisory panel. The Government were so enthusiastic about the subject that they immediately set up an inquiry under Lord Hunt to consider the broadcasting implications of cable and allowed it just six months to carry out the task. Since then, however, the initial euphoria about cable television has become rather more sober and it has taken the Government longer to respond to the Hunt recommendations than it took for the recommendations to be produced. In my view, that is no bad thing and the White Paper is a distinct improvement.

With regard to having a common carrier and the widest possible access to cable, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) highlighted the problem of the haves and the have-nots, which still transcends anything that the Government have been prepared to say in the debate on this matter. I shall return to that in due course.

The White Paper is a combination of faith and fudge. The Government's problem is that they wish to see cable as a stimulant to the economy and a promoter for interactive two-way services, but are not prepared to provide any public money or to give any mandatory role to British Telecom, which is the only organisation with the expertise, the wayleaves and the cable ducts. If the whole exercise is to be funded by private capital and carried out by private companies, the regulatory framework must be weak if it is to attract the investment and entertainment services which must dominate the interests of the people who would want that money to be available. Thus, to keep alive the Government's hope that cable will encourage interactive services, which is the element of faith, Ministers have had to make all kinds of compromises on the regulatory arrangements, which is where the element of fudge comes in.

That is clear with regard to programming. There will be no limit on the amount of foreign programming, but the cable authority will have a duty to work towards a progressive increase in the proportion of British programming. There will be no requirement to provide programmes of a high general standard in all respects which is the present obligation on the IBA network, but adult channels—that means pornography—should not be available. I do not want pornography coming over on cable or anything else. I agree with that. I want to be able to switch on my television set at home, irrespective of whether my daughters are in the same room. I think that all other hon. Members want the same. The fact remains that, as the hon. Member for Cambridgeshire, North-East said, we could be stuck with rubbish. I disagreed with him when he said that he would rather that the rubbish was our own than foreign. I should much prefer not to have to have rubbish.

There are more compromises on finance. Pay-per-view will be permitted, but cable operators will not be allowed to offer programmes on that basis if it entails the BBC or ITV being deprived of an event that it has normally covered. I am a Socialist. I believe that that is right. I wonder why Conservative Members are so pleased with it. I congratulate the Minister on that. However, on the Conservative analysis of how economies operate, where is the incentive? If a viewer can see something on good old Auntie, what the blazes is the point of paying to see it on cable?

Cable advertising, which is similar to that on independent television and radio, will be restricted under the IBA rules. However, classifed advertising and channels that are wholly or mainly devoted to advertising will be excluded from that limitation. Does that mean that the Minister is proposing some form of local televised Exchange and Mart? What will be the reaction of the people who produce Exchange and Mart when that market is taken away from them and their jobs disappear?

There is more fudge in the choice of technology. Cable providers will be free to provide the old tree-and-branch system or the new switched-star system, but tree systems will be licensed for only 12 years, whereas switched-star systems will obtain 20-year licences. I agree with the Minister that we need switched-star systems. I was extremely interested in what the hon. Member for Wealden said about companies' attitudes to their ability to finance such a system. The 12-year licence will not be a strong disincentive because, if the system is laid—even if it is tree-and-branch in a switched-star configuration —companies will have an automatic right to the extra eight years if they stick in the other advantage after 12 years. There does not seem to be a strong incentive to move to technology that we should examine.

Cable providers will be free to provide the old coaxial cable or the new optical fibre cable, but the Government are providing £55 million of support for the development of a fibre optics industry. We have already heard that there will not be any incentive to go fibre optic initially on any part of the new network. That is strange, as it is an area in which we have a definite world lead. It seems that there are incentives for what we cannot export, but not for what we can export.

The thickest fudge occurs in the complicated interrelationship between cable television and telecommunications. British Telecom will not be given the exclusive right to provide cable systems. It will not even he given automatic participation in each cable consortium. However, between them, BT and Mercury will have the exclusive right to link local cable systems and to provide voice telephony services on local systems.

All cable operators will be allowed to carry non-voice traffic in competition with the BT and Mercury networks, but, because of the importance to BT and Mercury revenue of providing high density data services in the main business locations, for the first 12 years cable operators in the City of London, the boroughs of Westminster and Camden and the business centres of Manchester and Birmingham, who want to provide data services will be allowed to do so only in collaboration with BT or Mercury. I agree with that, but it seems strange, bearing in mind what the Minister will tell us on Second Reading of the Telecommunications Bill.

The big shortcoming of the White Paper is that it does not tell us anything about financial happenings in other countries that have developed cable services. We know why. Next to no profits have been made out of any cable developments so far. What is more, those who have been unfortunate enough to watch cable television in the United States have seen why. Despite what the hon. Member for Cambridgeshire, North-East said, tree-and-branch gives a worse picture.

We should also consider our ability to export. The Government tell us that we cannot go ahead because no switches will be available for switched-star networks and that they will not insist on them. However, Rediffusion insists that it already has a switch that is available and in production — system 8. Indeed, BT has ordered one, which it will receive next year. I am glad to see the Minister nodding. Moreover, development on the production of those switches is continuing. This is where the biggest problem with the White Paper rests. Paragraph 23 says: There are indications that switched systems technology would offer British industry an early opportunity for exports; so might teletext techniques. However it is generally accepted that although pilot scale switched systems could be available earlier, a fully tested and reliable star switched system using coaxial cable could not be installed on a production basis before mid 1985; an optical fibre switched system would not be available for a year or so after that. It is now mid-1983, but Conservative Members are complaining that they do not want to wait until mid-1985 for the switch. They want to go ahead using what Lord Hunt euphemistically called "off-the-shelf" technology. In layman's language, that means obsolete technology. Conservative Members are not prepared to wait, encourage and enforce the development of systems that will continue to give us the type of lead that we have already developed in switched technology and optical fibre technology. We can support and export those technologies.

Other people want them. But no. Because it appears that a couple of bob can be made from existing cable systems, and because it appears that a few people wish to do a cheapie—for that is what we are talking about—on existing tree-and-branch networks, with no possibility of realistic reactive use, because such reactive use would be so slow that it would not be worth while, the Government are willing to sacrifice the development and export potential of British industry just for the sake of two years.

Perhaps the Government had an excuse for doing that in December last year. It was clear to all of us then that there was pressure for an election, and it was clear that the pressure was not being damped down by the Cabinet Office. It was also clear that there might be a change of Government. However, after the general election, they have no excuse. They have five clear years, with a large majority, and there is no excuse for the impatience that they are showing to the House and to the country. If they were prepared to wait, they would be acting in the interests of the development of the data communication system, because a cable system cannot be profitable just on entertainment and needs the other services. But they are prepared to sacrifice the potential for export and the development of British industry. I cannot forgive them for that.

7.1 pm

Mr. Roger Gale (Thanet, North)

Today I represent for the first time the constituents of North Thanet who sent me here. I hope that during my speech I can make it clear that this debate relates directly to their needs, which I shall always seeks to advance.

The Isle of Thanet is steeped in history. It can claim to have provided the foundation of the English language, but despite that in recent years it has been largely ignored. On looking through our Library of 150,000 books I found only one volume that mentioned the Isle of Thanet, and that was written in Middle English. However, our librarians are not easily defeated. They acquired for me a copy of a book called "The Bulwark Shore". In that book I found "Margate-Kiss Me Quick!, but even that is behind the times because now we do it more slowly and enjoy it more.

North Thanet is a new constituency made up from two parts of north-east Kent. I pay tribute to my predecessor, Mr. Rees-Davies, who represented the old seat of Thanet, West. He overcame considerable physical difficulties, and for 30 years gave to the House and to his constituents the benefit of his considerable and colourful debating skills and knowledge.

I also pay tribute to my hon. Friend the Member for Canterbury (Mr. Crouch), who contributed the village of Herne and the seaside town of Herne Bay to my constituency. My hon. Friend has always said that it is one of his favourite places, and I understand why. I am proud to represent it in this its 150th glorious year.

In Herne Bay and Margate I am fortunate to have two of the finest seaside resorts in the country. In 1780, Margate was described as a "place of gaiety and dissipation". It was there that the discreet bathing machine was introduced. Modern Margate has other, but equally attractive, dissipations to offer the holidaymaker.

Two-thirds of my constituency is grade 1 agricultural land. North Thanet has the finest arable land in Europe, and the farmers, through hard work, grow three crops a year on it. The remaining third of my constituency is seaside towns and villages. The air is good and the people are healthy and long-lived.

For many, the North Thanet coast represents a retirement dream. For that reason, many of my constituents are elderly and have special needs. The House will know of the old lady who, in her 97th year, was asked what life was like. She replied quickly, "Very good, when you consider the alternative." However, behind that riposte lies a sad truth. Many of our old people are discarded by their families and now live in homes. I do not decry our old people's homes and hospitals—in North Thanet, they are run with affection, dedication, compassion and care—but in many other societies those old people, with their vast wealth of humour and experience, would be cared for within the family unit and revered. If in saying that I, too, am suggesting a return to some Victorian values, I see no shame in that.

If we are to embrace our grandparents within the family home, we must encourage our young to stay. In North Thanet that means new industries and the jobs that they will provide. In times of danger, the Isle of Thanet has always been in the front line, but since the war we have been neglected for too long. My hon. Friend the Member for Thanet, South (Mr. Aitken) and I look forward to the day when, under this Government, the port of Ramsgate will enjoy free port status and all the benefits that that will bring.

I look forward to the day when Margate and Herne Bay will have marinas that will attract money and visitors from the Continent. I also look forward to the day when, in North Thanet, a science park developing new technologies, and feeding on the university of Kent, will bring vitality and prosperity to my constituency. All those advances will be brought about not through handouts but through private enterprise — and so they should be. I hope to mention all those matters in the House in the coming months, but to turn those dreams into reality we must have better communications.

The road to my constituency, the Thanet way, must be improved. I shall raise that matter at the proper time and place with my right hon. Friend the Secretary of State for Transport and with my hon. Friend the Under-Secretary of State, the hon. Member for Wallasey (Mrs. Chalker). Upon that road depends the entire economic future of the Isle of Thanet.

With your licence, Mr. Deputy Speaker, and with the tolerance of the House, I have, like the rolling English drunkard, rambled round my shire, but now I come to the subject of today's debate. Communications means more than road and rail — it means the development of advanced technology. If Britain is not to be left behind, it must take boldly a great leap forward, and it must take that leap soon. As Jack Kennedy said, we must stop looking at things as they are and complaining, "Why?" We must look at things that have never been and ask, "Why not?"

The projected cable system discussed in the White Paper represents the most dramatic potential that Britain has had for many years. The opportunity that it offers, not only for the relay of leisure programmes but for the carrying of information for education and trade, is huge. I hope that at the end of the debate the House will give cable television a resounding go-ahead. However, I wish the House to consider three issues arising from the White Paper—two by omission and one by inclusion.

With regard to the "must carry" obligation placed upon franchise holders and detailed in paragraph 129, it is entirely proper that a cable operator should be required to carry the existing terrestrial broadcast channels. Those channels — BBC 1 and 2, ITV and Channel 4 — are already broadcast from earth and together make up our public service broadcasting. However, we must also consider the difference between broadcasting and what has become known as "narrowcasting", which is the true purpose of cable television. Under existing plans, a cable operator will be required to carry not only the BBC and ITV channels but a further five DBS channels.

Hon. Members in the Chamber understand cable television, but others who read the report of the debate may not. The House should imagine a pipeline containing perhaps 25 smaller pipes, each capable of carrying a single service. Four of those pipes will be taken by existing BBC and ITV services. I am not a television engineer but I understand that the nature of DBS is such that to feed five of them into the cable network would take not five but nine further small pipes because of the bandwidth used.

The effect of the proposals in the White Paper would tie up more than half the channels available to franchise operators before they even start work. Paragraph 165 states: The Government does not believe that it should intervene in the commercial judgments which the industry itself should take. In shackling the franchise holder to so many predetermined channels, we are in danger of contradicting that statement.

The House should consider two omissions from the White Paper. It pays scant regard, if any, to the true potential of local community programming, which is what "narrowcasting" is all about. "Narrowcasting" represents a genuine opportunity to satisfy local and minority demands. The mention of minorities immediately raises the spectre of a lunatic fringe pressure group, subversive programming and even of Big Brother. At best, community television has become synonymous with amateurism and poor quality.

The House has often—sometimes with justification—accused the media of bias. From the Opposition Benches the cry is usually against the press; from the Government Benches it is traditionally the BBC and ITV which bear the brunt of criticism. We have looked for reds behind the microphones and for jackboots in Printing House square.

My experience as a broadcaster has led me to believe that output is, more often than not, directly related to input. We should be looking not at the messenger but at the message itself. We shall not get the balance right by tampering with the electoral system or by censorship. The recent election has shown that if the message is good it will be well received; if not, it will be rightly rejected.

We should set aside our natural fears and look at the true potential for local programming in cable television. In my constituency it will provide a service for the elderly and will allow charitable and other voluntary organisations access to air time to talk directly to the community that they seek to serve. It will provide a genuinely local service, catering for small numbers, that people want, yet there is no provision for that in the White Paper. That is a serious omission.

I mentioned DBS earlier. It will be with us within two years, but what authority will control it? No suitable authority currently exists. If there is to be a relationship between cable and DBS, surely a new authority should represent both. If so, the cable authority needs to be established now. That should be a priority. With those provisions we have a wonderful opportunity.

I said earlier that I wished to see my constituents in the front line of technology. It is a catchment area entirely suited to such a bold advance. I ask that the Isle of Thanet should be one of the first areas to receive a franchise. What better than to build a new road and to lay beneath it Britain's first new cable system?

7.14 pm
Mr. Stuart Randall (Kingston upon Hull, West)

I compliment the hon. Member for Thanet, North (Mr. Gale) on his maiden speech. He obviously has a great understanding of his constituency. I am sure that he will make a magnificent contribution in the House. I say that with great humility, having been an elder statesman for only six days—I made my maiden speech last Friday. The hon. Gentleman must have experienced a sense of awe on coming into the Chamber, but he delivered his speech with more confidence than I was able to do.

I wish to repeat what my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said, that cable is irresistible. It will provide new and exciting opportunities if we handle it correctly. It will create a new industry and new jobs, and will generate economic activity. Obviously, many technological benefits will emerge. The justification for the cable system is almost entirely the entertainment aspect. I presume that that is because the demand can be more easily understood and quantified. However, the White Paper shows that the major benefit to the economy will emerge from the interactive systems and services that will be available. It will embrace systems for both the office and the home.

The White Paper suggests demand for interactive facilities will be a long-term matter, but we could be in for a shock. I am sure that there is a large, latent demand for wideband transmission facilities in Britain. The incredible rate of technological development now taking place will create a great demand for wideband facilities. We must encourage the manufacturers and suppliers of terminal equipment and the other new products that will be needed to support the cable system. By doing so we will ensure that demand will be stimulated in that area.

The major benefit that could come from the cable system would be an improvement in the quality of life. People will be able, for example, to work from home rather than having to commute by train to such places as London. That will provide a shorter working week so that people can spend more time with their families. That improvement in the quality of life must be at the forefront of our deliberations. We must ensure that the Government take a strong lead in ensuring that the cable system furthers that aim; we cannot expect the suppliers of technology to take that into account, as their main motivation is profit.

I have had several years' experience in the information technology industry. Government intervention can cause manufacturers to bring forward development time scales, to change product programmes and to do many things that would benefit the industry. The Government can play a valuable role. However, I do not advocate armies of civil servants making the decisions centrally. We must create a sensible framework for the benefit of the system. If the Government cause the interactive systems to move ahead rapidly, there is no doubt that we shall fend off many foreign competitors who appear to be doing so well in the information technology area.

I notice also that the White Paper refers to pilot schemes. These will provide an opportunity for the Government to lead the way in the developments in the cable system. I hope that the Government will find sufficient funds and be generous in providing them, as that will enable imaginative and innovative pilot schemes to be run. When the schemes are selected, I hope that account will be taken of regional factors.

The White Paper suggests that the cable system will generate new economic activity. Where will this new activity be? Ten years hence, how will the system have developed? How many jobs will have been created and what sort of economic activity, and where will this have happened? Where will the cable providers be located? What about the cable operators and the programme providers and the builders of all the new products—the terminal products, the high technology products, and so on —and where will they be located? We are talking about generating a new industry, about new companies and about new products, but where will they be located? I am worried that they will all go to the south-east. In my constituency of West Hull we have tremendous problems of economic and social deprivation and I should like to see many of these new developments and technologies being built there. Will we in the regions, particularly the north, get a slice of the cake? If all the cake goes to the south-east there will be many wasted opportunities. I hope that the Minister will be able to make a statement about what the Government intend to do for the regions with the opportunities in these new developments.

7.22 pm
Mr. Michael Shersby (Uxbridge)

I listened with great interest to the speech of the hon. Member for Kingston upon Hull, West (Mr. Randall) and agree that the provision of cables and the associated materials is of vital importance to the country. I am sure that he will understand if I do not follow him in great detail on that point, as I wish to develop others.

I warmly congratulate my hon. Friend the Member for Thanet, North (Mr. Gale) on an excellent maiden speech. It is the first time in my 10 years or so in the House that I have had the opportunity of following a Conservative maiden speech. I cannot think of a more pleasant occasion and I congratulate my hon. Friend not only on the excellence of his speech and the well-informed manner in which it was delivered, but on being able to bring to the debate his experience as a broadcaster, which is particularly helpful and brings an important dimension to our deliberations. I join him in hoping that the road from Thanet to Westminster, which has brought him here, will be improved and will carry the cables to which he referred. I am sure that the electors of his constituency will look forward to hearing much more from him on the subject in the years to come, as will his colleagues on both sides of the House.

I support in general the Government's proposals in the White Paper on the development of cable television. It is essential that we keep well ahead in this technological progress. It will provide much additional pleasure and useful information for the public, and the jobs that we need so badly. However, I have two caveats. I hope that when my hon. Friend the Minister for Information Technology replies to the debate he will be able to give me some assurances on these important points.

My first concerns the impact of cable television on feature films. In so far as cable televison provides entertainment, especially in the form of feature films, Parliament must be careful to ensure that the legitimate interests of the industries producing, distributing and exhibiting feature films in cinemas and theatres are not unfairly or unreasonably damaged. The Hunt committee report that preceded the White Paper took the view that there should be a reasonable interval between the cinema exhibition of a feature film and its showing on television, and that in the case of cable television no feature film should be shown within 12 months of its registration. The Cinematograph Exhibitors Association, I understand, considered that anything less than a 12-month interval would be disastrous to cinema exhibition.

The House knows that there has been a disastrous spell of poor cinema admissions in the United Kingdom over recent years. Last year, they fell by 26 per cent., and takings by 19 per cent., and more closures are threatened. Just recently, things have begun to look up. The success of "ET" and "Ghandi" pushed up last December's admissions by 27 per cent. against December 1981. The new Bond film "Octopussy" took £113,000 at the Odeon, Leicester Square in its first nine days and "The Return of the Jedi", showed in 67 different cinemas, took £1,756,977 in its first fortnight.

I mention this because the cinema industry has been threatened not only by the fall-off in demand in past years but by video piracy. I have had the honour and the opportunity to introduce a Bill designed to make video piracy illegal. That was followed up by a Bill introduced by Sir John Eden, who until recently represented Bournemouth, West. Parliament has taken important steps to protect the cinema industry, and the revenue that the Chancellor of the Exchequer should get from the menace of video piracy.

Despite all that, The Standard today reports on its front page: Reward offer as video pirates cash in on film. The great Jedi rip-off. Thousands of copies of the latest Star Wars epic Return of the Jedi are flooding the video black market despite a big security operation. Many of the pirate videos were made from a copy of the film stolen from a cinema at Hastings. Jedi producer George Lucas has personally arranged a £5,000 reward for information leading to the arrest of the thieves. Video piracy is an enormous problem, and the House has taken steps to try to prevent it.

I remind my hon. Friends that that is only one threat to the cinema industry. The other is that cable television, unless properly regulated, could damage an industry that not only employs many people but provides one of our most creative industries, one of which we are justly proud and which is a large earner of foreign currency. It would be tragic if this recrudescence as a result of these superb films, which can lead to new jobs and prosperity in the British film industry, were ruined by irresponsibility in the use of feature films by cable television. The value of the cinema box office revenue for films is indisputably far greater than its box office revenue from television.

Not only is this a matter of economics, exports and jobs; there is also the social impact. The cinema provides an attraction for youthful audiences in the 14 to 24-year-old group and anything that can help to keep this group attracted to harmless leisure pursuits such as cinema going and out of conflict with the police is surely to be encouraged. Every hon. Member will be able to cast his or her mind back to those days when an evening or afternoon visit to the cinema was one of the attractions of life, and one that provided endless harmless and pleasurable activity. I grew up in my constituency of Uxbridge, and as a young man I had the pleasure of enjoying three cinemas. Today, there are no cinemas in Uxbridge.

The cinemas that have closed are monuments to the loss of an entertainment that was enjoyed by many of us. However, I am happy to say that, as a result of a campaign that I have been waging, I hope that the Odeon will reopen soon and that many youngsters will be able to enjoy happy evenings at that cinema.

Cable television could bring with it a revival of the idea of putting films on television on a pay-as-you-view basis. The showing of a film on cable telvision could be confined to those who put the necessary coins in the slot in advance. That could be particularly damaging to the film industry and might even render the suggested 12-month delay inadequate. I hope that my hon. Friend the Minister for Information Technology will take that into account.

In a speech to the Cable Television Association on 13 November 1979, my noble Friend, Viscount Whitelaw of Penrith, the former Home Secretary, said: Before any such service was authorised, however, it would be necessary to draw up adequate safeguards to guard against possible damaging effects to the existing 'off air' broadcasting services and to protect the film and cinema industry". I hope that in implementing the White Paper and bringing forward the necessary legislation, the Government will pay full regard to the words of Viscount Whitelaw.

My second caveat about the White Paper is connected with programme standards. Paragraphs 132 and 133 refer to programme standards, taste and decency and are welcome as far as they go, but I do not believe that they go far enough. I should like to have seen a reference to balance in programmes and I want my hon. Friend the Minister for Information Technology seriously to consider the establishment of a programme complaints commission to deal with cable television, in the same way that off-air broadcasts and television are covered by the Broadcasting Complaints Commission established by the Broadcasting Act 1980.

Under the 1980 Act the commission has to consider and adjudicate on complaints of unjust or unfair treatment in sound or television programmes actually broadcast by a broadcasting body … or … unwarranted infringement of privacy in, or in connection with the obtaining of material included in, sound or television programmes actually so broadcast. I have seen the complaints commission in operation on several occasions. I was a successful complainant to the previous BBC complaints commission in connection with an interview that I gave on a London radio programme and a close colleague of mine successfully complained to the commission set up under the 1980 Act.

There must be protection for individuals, corporations, industries, trade unions, political parties and anyone else who could be unfairly attacked and for whom there may be no redress unless an appropriate provision is inserted in the legislation. Such is the power of radio and television that once an offending piece has been transmitted most of the damage has been done and it is difficult to get redress, even if one complains successfully to the complaints commission.

The worst that can happen is that the director, interviewer or presenter involved will get a mild rocket and his or her promotion prospects may be affected. However, that is not much of a sanction, because people move from one programme to another and a sanction applied to an individual working for the BBC probably does not have much effect when he moves to another programme company.

The time has come for the House to make it clear to the Government that there must be a programme complaints commission with strong teeth and the power to apply effective sanctions. It is not enough for the cable authority to be able to warn a company or threaten eventually to withdraw its licence if it continues to transmit material that is injurious to individuals, who may be seriously harmed by what is transmitted.

The public must have confidence in the new arrangements and believe that what is transmitted on cable complies with acceptable standards of taste and decency and that if persons are injured by what is transmitted they will be able to go to a commission which could, if necessary, prevent an operator from transmitting material or take other tough sanctions to ensure that standards of decency are maintained, that there is proper balance in programmes and that those responsible for putting out programmes have regard to the enormous damage that can be done to others unless standards are properly observed.

I make my suggestions with the benefit of much experience. I hope that my hon. Friend the Minister for Information Technology will take them on board and that, while going along with what the White Paper calls the light touch and perhaps standing back from unnecessary interference with operators, he will recognise that it is vital to establish a complaints commission.

I welcome the White Paper. We are at the beginning of an exciting new era. If we get it right, we can bring enormous pleasure to millions of people, provide work for industry and ensure that our systems are the best in the world. However, let us make sure that we do not forget the industry that made these wonderful creations possible and that we do not damage the film industry. Let us also make sure that we adopt standards that are beyond reproach and are consistent with what we believe to be fair, reasonable and decent.

7.38 pm
Mr. Gerald Bermingham (St. Helens, South)

Like the hon. Member for Uxbridge (Mr. Shersby), I began my cinema life with a jam jar on Saturday morning and graduated to the two-and-ninepenny seats on Saturday evening. I found there a world of excitement and escape, and it is a world which I still enjoy. The British cinema industry has brought immense pleasure to many people over the years.

If the cable system is allowed to accelerate and expand quickly, as is, perhaps, envisaged by the White Paper, the cinema industry will be at risk. I do not believe that the 12-month delay for the showing of films on cable television is long enough. In places such as my constituency, which are well away from the great cities, we often do not get films in our cinemas until 12 months after they have been screened in the major cities. If the films are to be screened on the cable vision system or on the television system, there is a disincentive to the local cinema to screen them. With the death of the local cinema, there goes from rural life one more little part that keeps the rural community together. Although I do not represent a rural community, I have lived in one, and I fully appreciate what the hon. Member for Uxbridge said.

I also agree with the hon. Gentleman on another matter, and that is the right to reply. I nearly took my courage in my hands and intervened to ask him openly whether he believed in the right to reply, because, as a practising lawyer, I know that redress through the courts is long, slow, costly and painful. It never makes good the damage, because the damage is done at the time.

Mr. Shersby

Perhaps the hon. Gentleman will forgive me if I intervene in his speech. I believe that the right of reply should seriously be considered where the Broadcasting Complaints Commission has upheld a complaint that it has considered. At present, if one makes a complaint, and it is upheld, the best that one can expect is a paragraph in The Listener. The Listener is an excellent publication, but it does not reach as many as saw the original programme on television. It would be important if the right of reply were one of the sanctions to be exercised by the complaints commission.

Mr. Bermingham

Like the hon. Gentleman, I believe that the right to reply is a fundamental right and should perhaps be extended. I do not believe that we should have to wait until the complaint is justified before the right of reply arises. There must be a balance within the programme itself, and when someone is the subject matter of an attack at least some fair warning should be given and some consideration given to his right of reply there and then. Of course, the damage is done as soon as the programme goes out over the air.

I want to address my remarks to chapter 6 of the White Paper. During the Home Secretary's speech at the beginning of this debate, in response to an intervention by the hon. Member for Ealing, Southall (Mr. Bidwell), I began to wonder, "How does a cable system seek to serve, for example, a minority?" The test of any commercial cable system is, of course, commercial viability, but I do not see how that test can apply to programmes destined for various ethnic groups, such as Ukranians, Latvians, Filipinos and Somalis. It was once calculated that in the city of Sheffield there were 116 or 126 different ethnic groups within one conurbation. The commercial viability of supplying programmes to a small ethnic group widely spread over the country is virtually nil. If commercial viability is to be the test of the programme, many ethnic minorities will not be served by the new cable vision system. I hope that the Minister will bear that in mind when these matters are given further consideration.

Paragraph 132 of chapter 6 worries me considerably. On the subject of a positive obligation to ensure programmes of 'a high general standard in all respects, and in particular in respect of their content and quality' that applies to the IBA", it says: To do so would blur the distinction between public service broadcasting and cable services, and involve the Authority too closely in the contractual relationship between the cable operator and his subscribers. Nor could the Authority adequately give effect to such an obligation without there being a tighter regulatory regime than the Government considers appropriate. In the Government's view cable has the potential for increasing the range of good quality services available to the public and this will best be encouraged by giving the public the opportunity to determine what he is willing to buy. With great respect to the Government, I suggest that that is a recipe for disaster and poor taste, because unless one regulates the quality, balance and output of stations supplying through the cable system, there will be a free-for-all system that will lead by gentle and subtle persuasion down the sort of dangerous road that much of the television of the past few years in this country has gone.

It is interesting that we debate this subject here today about eight days after there appeared in The Times on 22 June what I can only describe as a critical survey report by various teachers of television for children. It described Mr. Everett's programme as "Cheap smut" and Dallas as "Emotions trivialised", and so on. No doubt most hon. Members have seen that report. Again, in The Times Educational Supplement on 24 June comments of the same kind were made, saying that television companies tended to trivialise sex and failed to realise the influence that they are having upon the children of this land.

I do not seek to be a moral purist, but I am a realist, and I realise that when a child comes home from school — or any young person, or any of us — he tends to switch on the box. I am as avid an addict of television as anyone in the House. However, we are conditioned by what we see. It is just like the old Pavlovian trick. Pavlov taught his dogs to do anything that he wanted — by inducing fear and by rewards. If a child turns on the television and gets a diet of diluted smut—if I may put it that way — trivialised sex, and glorification in violence, and it is on 16 channels instead of four, there is that much more danger in our society, and it is that aspect of the matter that causes me great concern.

I am also worried when there is not a balance within the programme content itself. Unless there is a carefully controlled balance, children — who, after all, are the next generation, and who are said to be our greatest watchers of television, although I sometimes wonder, looking at some of my hon. Friends, whether some of us do not qualify in the competition occasionally — are subtly influenced. One does not have to be a great psychologist to realise that when one visits a school and talks to the children, whereas 10 or 15 years ago the subject matter was not always what was on television the previous night, it is nowadays.

It is therefore with mixed feelings that I welcome the White Paper. I welcome the spread of knnowledge and the spread of anything that makes society better and more enjoyable, but I have serious reservations about the effect on the film industry and about the control and balance of these programmes. The Government cannot abrogate their duties and responsibilities in this matter, and when the Bill comes before the House it should contain safeguards for the content and balance, the right of reply and individual liberties. Perhaps that is too strong a word, but on second thoughts I do not believe it is too strong. We have to control and balance the way in which we provide entertainment for the citizens of our land.

7.48 pm
Mr. Peter Griffiths (Portsmouth, North)

First, I apologise to the House for my absence during part of the debate this afternoon. There was a presentation downstairs of material which was of particular interest to my constituency, and I had to share my time between that and this debate.

I welcome the proposals and recommendations in the White Paper, not least because I have reason to believe that the area in which my constituency is based may well be one of those that would be considered commercially viable for the introduction of a cable television system.

I draw attention to that at the beginning of what I have to say because I sensed from the speech of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and those of other Labour Members this afternoon that they believed that cable television would in some way be the prerogative of the wealthy. Research that has been carried out on behalf of those who intend to introduce cable systems if they can obtain the franchises does not show that the areas that they will choose will be the wealthy suburbs. They will be looking at areas where the population is densely packed and where there is the greatest penetration of television ownership, and, even more significantly, that of video recorders. That is not in the affluent suburbs but in the outer areas of large cities.

Therefore, it would be wrong for anyone to give the impression that in some way cable television will be the prerogative of the middle class or well-to-do. Like any other form of entertainment or information, it will be selected by people of all categories. From the purely commercial point of view, it is the densely populated areas that will be chosen for early penetration. It will not necessarily be concentrated in the south of England, even though that is where my constituency happens lo be.

I add a word in support of what was said by my hon. Friend the Member for Uxbridge (Mr. Shersby) about the influence of cable television on the cinema industry. We should recognise that the cinema film is a different art form from the film which is produced for transmission by television. The art of cinema film making is worth preserving for public exhibition as opposed to private viewing in the home. I accept that cinemas, by their provision of facilities, and the cinema industry, in the production of suitable films, have to be able to meet the competition of other forms of entertainment out of their own skill, ability and resources. Nevertheless, it would be undesirable if, at a time when one might see cable television being given an enthusiastic reception, the showing of films on cable television, either be fore they had been shown in the cinema or contemporaneously, were to lead to a fall in cinema audiences and revenue.

I disagree with one point that my hon. Friend made. He appeared to suggest that he objected more to films being shown on pay-as-you-view systems than he did to the basic package of cable television generally. That is wrong. The showing of a film to a restricted audience on a pay-as-you-view basis would not destroy its commercial viability. Undoubtedly, a film that has been shown on television —we are talking about cablevision being required to carry the four basic terrestrial channels — has no commercial viability whatever.

A clear establishment of a rule is necessary. There is probably the need for a 12-month period from the time when a film is shown in the cinema and its being made available on a pay-as-you-view channel. But the period between the introduction of a film in the cinema and the time at which it appears on broadly available cable television or any other broad-scale transmission should be more than one year. As I understand it, the Cinematograph Exhibitors Association has, in its representations to the Home Office, said that while the 12-month rule is acceptable in the pilot areas and for pay-as-you-view schemes, it is not acceptable for cablevision as a whole. I understand that its representation contains the phrase: We would wish a three-year rule to apply to general transmission. The danger is the further closure of cinemas. While in large cities that may be sad but not necessarily tragic, in areas which have only one cinema to serve the population its loss would mean the complete unavailability of the art form of the cinema film to the people there.

We should remember that the audience that visits the cinema today is largely made up of the younger age groups and the very elderly. They will probably not be among those who will wish to watch films in their home, even if they are available via cable broadcasting. It would be sad if we were to take away from the younger age groups the opportunity to find their entertainment outside their homes. We need to encourage elderly people to get out of their homes, even in these days when they are sometimes frightened by stories of the dangers of streets at night, to enjoy going to the cinema with a friend.

It is important to ensure that we do not damage the cinema production industry by reducing the revenue which accrues from the showing of cinema films. It would be a sad day for the British cinema industry if we were on the one hand to push it towards the production of films for showing on the small screen, and on the other hand to reduce the revenue that was available from the cinema.

Having talked about the cable broadcasting system as a form of entertainment, I want to dispute what was said by the hon. Member for Kingston upon Hull, West (Mr.Randall). I am sorry that he is not here to hear my strictures. I understood him to say that cable television would basically be a form of entertainment, but that is not so. It will be important as a form of entertainment but, more simply, it will provide more programmes. I welcome that. I often find that I have little enough choice in my television viewing when I have time to devote to that pastime.

What is revolutionary about cable television is its potential for interactive services. Over the next 10 or 20 years that could revolutionise most of the traditional ways in which people make their retail purchases. We shall find that the siting of many retail firms will change and the idea will return of deliveries to the home from warehouses outside city centres, from which people will be able to buy directly. We shall have opportunities for interactive relationships with banks and other commercial institutions. That will be different, whereas the provision of entertainment will be simply more of what we already have.

I welcome the Government's approach to franchising. It will help the service to be introduced as quickly as possible and for it to respond to the needs of the localities that it serves. I welcome the words "the light touch" used by my right and learned Friend this afternoon. It is important not to impose national regimentation. In that respect I disagree with the right hon. Member for Sparkbrook who made a comment which I was too shocked to note in full. I understood him to say that the history of technological development from the spinning jenny to the computer showed the need for state control and enterprise. If we had had such control we should still be decidng whether to build the prototype spinning jenny. The most successful computer firms in the world have been founded on private enterprise. It would be wrong for any new development in information technology to be shackled to a national system.

If, the right hon. Member for Sparkbrook was referring to national availability when he spoke of a national system, I should agree with him. I should like cablevision to be available across the country. It has taken a long time for us to try to ensure that television is available throughout the country, but some areas are still without it. A national system of cable broadcasting would stifle a new and exciting development at birth.

The White Paper, in paragraph 129, says that any cable system must carry direct broadcasting by satellite. That is an odd proposal. I recognise the need for the four basic channels to be provided as widely as possible, but broadcasting by satellite, which is probably financed by advertising, will be a direct competitor of the cable television operator. There is no reason why a cable television operator should be required to carry the commercial programmes, financed by advertising or sponsorship, of his direct competitors. If the operator is required to do that, he should charge the broadcaster rather than the person who receives the cable programme.

The suggestion is that the revenue should be obtained by increasing the cost of the so-called basic package. The broadcaster by satellite will have all the advantages of the cable television company's investment without any of the risks. I do not see why we, as the nation's representatives, should show favour to one particular kind of commercial broadcasting. If commercial broadcasting by satellite is to be carried by cable, that should be a normal commercial transaction. The cable operator and the broadcaster by satellite should come to an agreement.

I bow to no one in my determination to ensure that cablevision meets the highest artistic standards and the highest standards of quality. I do not want public decency to be debased. I cannot understand why X-rated films should be broadcast on television at all. It is difficult to understand why X-rated films should be put out by cable television.

I trust that that new category of restricted films will be regarded as unsuitable for cablevision. It is important that from the beginning we establish a high standard of acceptability for cablevision if we are to seek a national coverage. I welcome the Government's decision not to have a soft porn channel. I hope that soft porn will not be allowed to spread across the other channels. It should be left to the cinemas where people can choose to go and pay. I trust that the Opposition will not continue to damn cablevision with faint praise. We are facing an exciting opportunity. Its introduction involved no political advantage to either side. Cablevision will be profitable.

I regret that the Government are not pressing more firmly that from the beginning we should use fibre optics. If we insisted on using fibre optics it would give a great boost to the manufacturers. It would also be a boost to British Telecom, which the Opposition would like to take a wider part in cable television. British Telecom has access to fibre optics cable in considerable quantities.

I am glad that British Telecom is a partner in the consortium being put together in my area. That public enterprise, which perhaps one day will be a private enterprise, is not being excluded. If we had insisted on fibre optics and a star switching system from the beginning we should have avoided the need to replace part of the cable system relatively soon.

Those who install a cablevision system will have to invest large amounts of money in a venture for which there is no guarantee of success. I hope that we shall avoid saddling them with responsibilities which discourage them. I am worried about the suggestion that, for example, the Obscene Publications Acts should apply to cablevision. They do not apply to broadcasting at present. I do not see how cable operators can be held reponsible for breaches of copyright, breaches of the criminal law or defamation if they originate in channels which the operator is forced to carry. If such offences originate there the operators should be absolved from blame.

If an operator produces a cable broadcast system and operates wisely and well and if there are few complaints but much praise it should be normal for the original franchise to be renewed at least once. I think that it will be very difficult to persuade operators to invest at the necessary level in those parts of the country that are less commercially attractive if there is a threat that, even if they do a satisfactory job, their franchise may not be renewed at the end of the first period simply because some other group has come along.

I welcome one of the most exciting developments in information and education for many years. I trust that we shall all wish it godspeed and will see a speedy implementation of the ideas that we are discussing.

8.11 pm
Mr. Tom Clarke (Monklands, West)

This has been a most interesting debate, and the public would expect no less. Last year was Information Technology Year. That led to a great deal of public discussion, not least on cable systems. The Opposition want to encourage such public awareness, if only because, despite what the hon. Member for Portsmouth, North (Mr. Griffiths) has just said, we are not opposed to cable television but are keen to ensure that, with a method of communication as influential as cable television will be, the public will have a say at some stage in questions of production and accountability.

I have no particular interest to declare. The House might be interested to know that before I came here just over a year ago I was employed for some time by the Scottish Council for Educational Technology, which incorporates the Scottish Film Council. The Scottish Film Council was set up in 1934 as a voluntary body, but the organisation has developed so greatly and the demands upon it have increased so much that the title has been changed to embrace educational technology. The work of that organisation involves information technology, so we have in Scotland a large organisation which has played an interesting role in the development of communications and takes a keen interest in the matters we are debating.

There have been astonishing developments in science and technology, and these are reflected in the great and complex matters that we are discussing. It is not just a question of the number of channels to be made available; it is possible to offer every viewer his or her own personal channel. Such will be the opportunities provided by the development of cable television. Cable television offers a service such as we have never known, but it also offers — and indeed demands — the acceptance of responsibilities for the way in which the service is conducted. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) has said, we do not want to see a gap between the media rich and the media poor. Decisions should not be based simply on where people live or where the population is concentrated. People will be paying for the service, and therefore ability to pay must enter into our considerations of how the service should be provided and how available it should be.

Having read the White Paper and listened to the debate, I am interested in a number of the problems. We have not addressed ourselves sufficiently to the need for safeguards. I am also concerned, as are a number of hon. Members, about the film industry. The hon. Member for Uxbridge (Mr. Shersby) and the hon. Member for Portsmouth, North dealt with that problem very well. We cannot simply dismiss the problem of the British film industry. We cannot say that there will not be a challenge, or that we can deal with it when cable television comes. The British film industry will face a very serious problem.

The hon. Member for Uxbridge pointed out how difficult it might be to retain quality in film production when the film industry is faced with video, with development of cable television and with a challenge to its own standards which those of us who wish the British film industry well do not welcome. When my right hon. Friend the Member for Sparkbrook made a similar point, I thought that I noticed signs of dissent on the Treasury Bench. I found that surprising.

I understand that Mr. Iain Sproat, the former hon. Member for Aberdeen, South, who until the election was a junior Minister at the Department of Trade, was undertaking a review of the British film industry. The White Paper has been published and the Government have put forward their views to the House, but we have not yet heard the recommendations of the film review and, indeed, the Minister has not yet addressed himself to the problems that he inherited from the former junior Minister, which are described in that review. I hope that when the Minister considers the future of cable television and the review of the film industry he will take account of the representations of the various bodies involved in film production and the presentation of film, and of those interested in all aspects of film in Britain.

I am also worried about the amount of power we are giving to the cable operator. I share the concern of a number of hon. Members on both sides of the House who have asked whether British production will stand a chance against the multinationals who will have much greater access to British markets—to our screen and our homes. It is not ignoble to put up a defence for British film productions in that context. I am not worrying only about overseas competition. We all have a responsiblity to encourage British productions and to give people the impression that their industry is worth while, that we are with them in trying to keep their markets, and that we oppose unfair competition from the multinationals.

Several hon. Members have expressed an interest in the rights of viewers. The viewers have a right to see that the quality of programmes and presentation is preserved. They have family responsibilities which we cannot simply disregard as irrelevant to the free market.

Reference has been made to the Hunt report, which has had a substantial influence on the Government's thinking, although clearly the Government have not accepted all its recommendations. The composition of the Hunt report worried me. I did not believe that it was representative of the people we have been discussing—those involved in production and presentation, the viewers themselves, the various community groups, the ethnic minorities and so on. The Government's response also worries me. One of my most important points is that I am not convinced that the Government have seized the problem of impartiality to a degree that is reasonable within a democratic society.

The Hunt report discussed impartiality and said: We are satisfied that news, whether it be national or local, should be presented with accuracy and impartiality. Comment, however, is a matter that we think could well be allowed greater latitude on cable, but not to the extent that there is a political bias across a cable system as a whole. Impartiality in community access channels should mean only impartiality in allowing access. Those allowed access would be under no obligation to be impartial. Similarly, individual channels could carry programmes provided by special interest groups, for example, political or religious organisations. However we think it would be wrong if the amount of programming by political parties and religious groups was solely dependent on their ability to raise money and for this reason we recommend that they should not have their own cable channels. That may well be a reasonable conclusion, but, as has been said, even the IBA has its reservations about it. In response to that paragraph and to other aspects of the report, the IBA said: The regulatory body proposed by the inquiry would 'remain in the background'. For such a body we would certainly not put ourselves forward. It would be impotent in itself and damaging to those other bodies which are charged with a real task. If the IBA takes that view, it concerns me. I say that frankly, because the IBA's interpretation of its charter and the BBC's interpretation of the demand for impartiality took a bit of a knock, to say the least, during the recent general election.

I do not seek to make party political points, because presumably the next election is a long way away —unless, of course, we can do something about it. However, it is reasonable to analyse the way in which the general election was presented. I have been left very much in a quandary as to how the IBA — and the BBC, for that matter—can justify the impartial status that the public are encouraged to believe they adopt.

I shall cite a couple of examples. The other day the right hon. Member for Down, South (Mr. Powell) said that the election had been fought or presented not so much on issues as on what was happening in the various opinion polls. There is much to be said for that view. I cannot understand how the various broadcasting organisations can justify, for example, the taking of the one poll by The Sun. It was a telephone poll of women voters. I cannot understand how that could be presented and exaggerated out of all proportion to imply that it showed that the alliance had a 0.5 per cent. lead over Labour. No doubt that may have been factually correct. Nobody can challenge the fact that it was a poll. No doubt it was admitted that it was a poll of women and of those with telephones. However, it was not made clear that voters are not all women and do not all have telephones.

The clear message was given that there were patterns to be seen. Throughout the campaign people were given the impression that the Conservatives would win, it was a matter of trying to manoeuvre the alliance into second place. That may be thought of as an exaggeration but as a mere taxpayer and as someone who pays a licence, may I say that I took grave exception to the fact that on, I think, the Sunday before the election, cameras were sitting outside a certain home in the Borders for several hours because the candidate there happened to be having a meeting on strategy. No doubt all hon. Members had meetings on strategy that day, but none of us felt it right to call on television and on the expensive resources of ITN and the BBC. If those responsible for the existing broadcasting networks think that that was an impartial presentation of important events, it makes me all the more worried that some sections of the House are prepared to give even greater "freedom" and "latitude" to those responsible for cable television.

It is not just a question of presenting news. People are entitled to have facts presented to them in a way that they can study and consider. They are entitled to a more in-depth consideration of important and controversial issues than some of the broadcasting systems adopt. That must be said now, instead of waiting until the arrival of cable television, when any complaints will be seen as influencing those responsible for licensing and so on.

There will be a great transformation by the year 2000. Therefore, we must look well beyond the 1980s and into the distant future. So far, the discussion has understandably centred on job losses and, perhaps, on the number of channels. However, future quality is of the utmost importance. The growth of technology coincides, as we know, with a crisis in broadcasting. Although all those cameras were made available for non-events during the election campaign, we have been told that the BBC's revenue is falling further behind the amount needed to retain existing services at a time of rapidly rising production costs. We are also told that commercial companies are under pressure.

In broadcasting generally, and particularly in cable television, there should be a link between innovation and culture. I am not sure that that is reflected in the White Paper as firmly as I should have liked. As my hon. Friend the Member for Ealing, Southall (Mr. Bidwell) said, we shall be dealing with new social groups and with their views and aspirations, and their rights to express them. The ecology group, the women's movement, the various ethnic groups and so on, are perfectly entitled—as are the individual communities that will receive cable television—to feel that they have a part to play not only in the reception of cable television but in the sort of programmes broadcast.

We should address ourselves not only to the new electronic techniques but to the human and social implications of their use. Cable television should not add, as my right hon. Friend the Member for Sparkbrook said, to division and fragmentation within our society. Two-way communications should involve all the people and should not be used to extend the privilege of expression.

I do not wish to see urban areas against rural areas; I do not wish to see the battle that we saw in Committee on the Telecommunications Bill repeated in our attitudes to cable television. Those who can afford information technology should not be pitched against those who cannot. I do not wish to see the greater extension of social divisions. Of course, it is true that communication means power. That is self-evident, but it should be a power responsibly influenced and responsive to the views of the great mass of the people.

Cable television is not only an interesting technological development; it has an important and essential social responsibility. Aneurin Bevan, who was quoted several times during the debate on the Gracious Speech, said that we should have an interest over the commanding heights of the economy. My fear is that we do not have even what democrats would regard as a reasonable amount of influence over the commanding heights of communications. I believe that the White Paper represents a setback even for those aspirations. As I believe that cable is vital for our future, and as democracy is so fragile, I regret that those principles were omitted from the White Paper.

8.31 pm
Mr. Tim Brinton (Gravesham)

I have said before in debates on cable that I still bitterly regret the fact that the word "television" or even "vision" must enter into our calculations. I see cable and the introduction of this new technology as totally different from the broadcast television that we watch today. I hope in the next few minutes to comfort the hon. Member for Monklands, West (Mr. Clarke), who was annoyed that a camera crew waited all day to take pictures of a certain eminently newsworthy item during the election. Because we have only four channels today, that event of itself was news on all four channels. If we develop cable—I shall try to avoid the words "vision" or "television" as much as I can—in the way in which I should like to see it developed and we have multiple channels feeding into each household, which might of course have one or two screens, the people of this country will have so much choice that they will not be faced on four limited channels by that one news conference, which so much irritated the hon. Gentleman.

Mr. Orme

I have followed the hon. Gentleman's argument closely. In the United States and Canada, where there are 10 or 11 channels, the main news items are concentrated in two or three channels. Those channels are watched consistently.

Mr. Brinton

But there is always the choice of the other channels. The national news on the main popular channels will inevitably carry the same stories. What we are not sure of, once cable has been introduced, is how many people will watch the national news. Today, the national news programmes at 9 o'clock on BBC and 10 o'clock on ITV are in the top 10 viewing figures. Once we have multiple channels, I believe that there will be dramatic changes. Obviously the popular programme—the "Dallas" of the day — will have a large viewing figure. The "home box office" with the popular feature film will have a large viewing figure. Provided that we get it right, the increased opportunities will allow for opinions of all sorts to be radiated on those multiple channels. Inevitably, some channels will be more popular than others.

I, too, welcome the approach in general of the White Paper and look forward to the legislation. Like several of my hon. Friends, including my hon. Friend the Member for Thanet, North (Mr. Gale) who made an excellent maiden speech, I enter a caveat about the effect of the "must carry" rule on direct broadcasting by satellite. If one looks at the figures mentioned by my hon. Friend, one sees that my argument about multiple channels comes under considerable threat. I am told that relaying the four terrestrial channels takes up 16 per cent. of the 25-channel network. When one relays five direct broadcast satellite channels, going to C-MAC varied to A-MAC form for cable, one takes up 10 more channels. For many years it will also be necessary to relay direct broadcasting services in a transcoded-to-Pal form, absorbing a further five channels.

On that calculation, six channels will be left to provide the multiple choice which I am so anxious to achieve. A genuine worry is whether it is right or wrong—I say wrong—to compel the programme operators on cable to take direct broadcasts by satellite. It is correct that they should take the terrestrial channels, but we should seriously reconsider this other point, otherwise much of the purpose of this cable exercise will go down the drain.

The hon. Member for Monklands, West and many others are worried about the future of the film industry.

Mr. Peter Griffiths

Assuming that we have the requirement to carry these programmes, does my hon. Friend agree that this is a key argument for the use of fibre optics rather than coaxial cable? With fibre optics there are virtually unlimited opportunities, whereas with coaxial the number of potential channels is strictly limited.

Mr. Brinton

I agree entirely with my hon. Friend. I shall perhaps say something about the encouragement of fibre optics later. It is a road that I would go down.

Many hon. Members have expressed anxiety about the future of the film industry as a result of the introduction of cable. I accept the point of my hon. Friend the Member for Uxbridge (Mr. Shersby) about the problems faced by the cinema exhibitors. I do not to the same extent take the point about the future of British film production. In fact, I take the opposite view, that if cable is introduced properly it will be the salvation of the British film producing industry.

As my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) rightly said, the feature film is a different animal from the "quickie" film made for television. It is a painstaking operation from conception to birth, and sometimes takes three or four years. That is something for which television operation is not at present geared.

There is undoubtedly a slow merging between the independent television film producer, who makes film for television over a longer time than the big companies, and the film originally made for the cinema. I believe that in a few more years we shall see the end, perhaps sadly for some, of the celluloid frame-by-frame and that instead we shall be working almost entirely in video tape principles, even to the extent of making feature films of the care and artistic value that we all agree is necessary.

I foresee other changes, in the sense that the feature film will be specially made with that loving care for the benefit of the home screen, because that will become worth while with pay-as-you-view, subscription television and all the other things that have been mentioned today.

I do not want to see the cinemas go. Other hon. Members have referred to their social value and importance in getting the young and elderly out of their homes to meet in a darkened room to look at a large screen and have the experience of being together. I believe that the cinema competitors have to move ahead with the times. They have an answer in their own hands through, oddly enough, the introduction of cable. Why can they not think of using the cable in their cinemas? They could have massive events up and down the country. People would gladly pay to see the big films which could be radiated through the wire to their cinemas. Those who do not want to go would be able to stay at home and have a multiple choice of programmes.

The various representations that have been made to us cover many subjects. However, we have not heard today about the problems of copyright. The music industry and many others are concerned about the coming of cable. When my hon. Friend the Member for Uxbridge introduced his first Bill covering video piracy, many of us made the point that this was only a first stage. In concert with the bringing to birth of cable, there must be a review of the British film industry. There must be a complete overhaul of copyright to cover satellites and cable. We must look again at the Obscene Publications Act 1964. If the Act is to apply to cable, what about broadcasting television, to which it does not apply? We must work very hard on this subject and get it right.

The BBC and the IBA are understandably anxious about their future when faced with competition. I remember that in the mid-1950s the BBC faced competition with very much — dare I say this in the politest terms to my former employers? — the same script as it is now, except that the names have been changed to face cablevision. When that competition arrived, the BBC became more efficient and productive, and its programmes became better. I believe that that is what cable can do now to the existing programme broadcasters.

It all depends on the authority which we hope to create in a few months' time. If that authority is independent and separate from the Government and other interests and manages the light touch that is talked about, but which could quickly become heavy in legislation, the cable experiment will work and in 10 years we shall have a new system of communications.

8.43 pm
Mr. Tim Rathbone (Lewes)

I want to pick up the point that my hon. Friend the Member for Gravesham (Mr. Brinton) was making and to allay some of the fears expressed from the Opposition Benches. I believe that too much has been made of the conflict of interests between cinema and cable and between cinema and television. The two media are linked. The people who are producing spectacular films are dependent upon their being a success in the cinema and then a success on television. I believe that too much worry has been expressed on both sides of the House about the way that cablevision will exacerbate a problem which does not really exist.

Many of the comments from the Opposition Benches are almost identical to those made in the debates which took place before the advent of independent television some years ago. The same fears were expressed then about what commercial television was to do to the people. There was complete abdication then of all responsibility for the viewing habits within the home by those who have control in the home—the parents. There were claims that it would be a medium for the benefit of the rich and that the poor were not going to be able to enjoy it; that it would pander to bad taste and would not enhance good taste. However, we have all seen how, since its launch, independent television has been the most enormous success and, in many instances, has taken over leadership from the already excellent BBC.

I have a word of praise for my hon. Friend the Minister for Information Technology. Without his thrust, vitality and encouragement, we should not be debating the advent of cable today. He has raised the threshold of awareness of what cable can do to bring enjoyment into the home and provide eventually interactive services which can change the home in a way that none of us at the beginning of the last Parliament would have considered possible. I pay tribute also—I do not believe that anyone has so far—to Lord Whitelaw for the way in which as Home Secretary he contributed to the successful pushing through —sometimes, it is said, against the wishes of some of his own best advisers—of the cable television Bill and the White Paper that we have been considering. My right hon. and learned Friend the new Home Secretary has picked up the reins excellently this afternoon.

I must raise with the Minister an anxiety that I expressed when the White Paper was published some months ago—the size of the control areas which are being allowed in the 12 or so regions that will be on test. It is difficult to see how, on the basis of an area of 100,000 homes—not connections—commercial viability can be measured, particularly with regard to the attraction of advertising to, and its placing in, those areas and because of the lack of pay television during the test period. It may also be difficult to assess the attractions of different forms of programming on so small a number of viewers as will be inevitable in 100,000 homes.

Contrary to the argument that has been put forward by every Opposition speaker, it seems to me that this country has missed out over and over again by delaying putting our inventions into practical operation. We feel always that the time is not right or that the development has not been honed to a perfect point. Therefore, our developments and inventions are often whipped off, developed and turned into going concerns abroad while we lose the advantage of such developments and of the financial returns that developing and marketing offer.

Running through all the speeches has been the importance—rightly expressed—of the need to maintain the present values and the ability of people to enjoy those values to the same degree after the advent of cablevision.

I agree with the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) that cable should not lessen the requirements and obligations of local broadcasting, any other contractual obligations or those which have been built up in commitments made by the existing television stations when submitting for licences to broadcast. The Hunt report warned of this, and it is especially important in rural areas where cable is unlikely to be economically viable in the short term and indeed may never become truly viable.

I was greatly reassured by the Home Secretary's assurance that the same kind of argument would be applied to the withdrawal of the present cable feed of BBC and ITV programming by those who now provide those services without an absolute assurance that those who now receive their BBC and ITV programmes in that way would not receive them on a direct feed basis unless reception was as good as that which they now enjoy. Acceptance of the necessity for good reception is important because one of the motives for having a cable feed of present programming into the home is the fact that reception would otherwise be poor.

Contrary to the contentions of some of my hon. Friends, I believe that there is no difficulty about the requirement for the carriage of direct broadcasting from satellites in the same way as the requirement for the carriage of BBC and ITV programmes. It is not a contradiction for there to be such a requirement and for the operation to be commercially based. Of course it must be commercially based. There is no lack of market guidelines on which to base such a commercial price list, as it were. Innumerable market guidelines are available for anyone in the television or film industry to determine the prices to be charged to third parties and third countries for programming made or bought for the home market and then sold off. That is not an unaccustomed aptitude and many have made a good living from it.

The local programming element in broadcasting today must be watched to ensure that it is not hurt by cable. The independent television companies and the BBC are too prone to regard local broadcasting as regional broadcasting. To take an example from my own area, the people of western east Sussex and eastern west Sussex are in the middle of a long, slim television area with two broadcasting points, one in Kent, which serves my hon. Friend the Member for Gravesham (Mr. Brinton) very well and one in Hampshire which serves the people to the west of me very' well, but those in the central area are not well served by either the BBC or the ITV in terms of local programming, local news coverage or, in the case of ITV, local advertising which may be the meat of an independent commercial station.

Mr. Anderson

Is the hon. Gentleman aware that local considerations are not among the criteria for the granting of franchises?

Mr. Rathbone

That is precisely my concern, for without that and with the propensity of the existing broadcasting companies to go regional, localisation would not be a thrust of the programming provided by the new cable systems.

The other main instrument for the control of quality and the provision of the kind of programming that people in a given area want is the control mechanism itself. I endorse the Government's decision to establish a cable authority but, as others have said, I believe that to be effective such an authority must be like the IBA, at least at a long arm's distance from the Home Office but, unlike some of the IBA companies, also at a long arm's distance from the IBA. It is crucial that members of tie cable authority should have a commitment to cable. That cannot possibly be achieved if there is too close a link with the Home Office or with existing authorities.

As I mentioned in an intervention, it is because of rather too close links between the operations of Channel 4 and the Independent Television Companies Association that Channel 4 has not been as commercially viable as many of us had hoped and continue to hope that it will be. The rules as they are applied by the IBA to programme content and, through the ITCA, on advertising content are well drawn as guidelines for the type of rules that are needed for cable feed. I emphasise that because some people believe that the rules are too narrowly drawn and that they will too closely circumscribe the programme and advertising content of cable programming. We must be careful about stepping too far away from the codes of practice and standards as drawn up by the ITCA.

We have managed to establish the best television broadcasting in the world through the BBC and have built on that by establishing the best commercial television broadcasting through the independent television companies. Through the instrument of this White Paper and its eventual execution, we shall once again be able to lead the world in cablevision and the high technology services that can be provided by it once it has been developed. I wish the Government well in their endeavours.

8.56 pm
Mr. Hugh Dykes (Harrow, East)

As I am one of the last hon. Members to speak in this debate, it is inevitable that I shall touch on some subjects that have already been dealt with. I do not wish to be repetitive, but several important elements have emerged in the debate and my hon. Friend the Minister will no doubt refer to them in his winding-up speech.

My hon. Friend the Member for Lewes (Mr. Rathbone) referred to the work that our hon. Friend the Minister for Information Technology has done. Without hesitation, the House pays tribute to him for the marvellous lead that he has given, through his departmental efforts, to industry and all aspects of commercial endeavour, both this year and last, for the development of cable television.

The House appreciates the fact that my right hon. and learned Friend the Home Secretary opened the debate. That symbolises the primary importance of the subject and the fact that the Home Office will take the lead in the formation of cable television, especially at the beginning of this complicated exercise. As the technology takes over from some of the statutory and social requirements of the structure, perhaps the Department of Trade and Industry will later assume the leading role in practical terms.

We have the type of leadership from the Home Office that all pragmatic observers of the scene appreciate. I also welcome the Government's alert approach and the speed with which they have acted, notwithstanding the complexities of the subject. It is praiseworthy that matters have been tackled with a feeling, not of undue haste, but of the need to get on with it. I welcome what my right hon. and learned Friend said about setting up a timetable for the submission of interim franchise applications and the eventual granting of those franchises. Time is short, but that will help to concentrate minds constructively and healthily. I hope that the right decisions are produced.

I am sure that the House welcomes the White Paper, especially some parts of it. We look forward to the Brill and the guidance notes that will be issued to applicants. It is a pity that the response of Opposition Members has been so grudging and ungracious. Once again the Opposition have missed the point. With such an extremely risky new venture, we must provide the necessary encouragement to the commercial interests to produce strong applications and the best results.

I welcome the introduction of cable television, for a reason that has not been mentioned in the debate. I am still keen on the ideas of Keynes, which can link easily and felicitously with the Conservative view of political and economic life. There will be much fiscal and investment activity during the cable-laying effort and the multiplier effects that will flow from it. The unfolding of the franchises is bound to have a beneficial effect on the economy, other things being equal.

The debate was enhanced by maiden speeches from my hon. Friends the Members for Thanet, North (Mr. Gale) and for Salisbury (Mr. Key). Both contributions were excellent.

There are three aspects to the new venture — the cable-laying effort, how the operators and franchise holders will perform, and the nature of the cable authority. Much has been said about the latter two areas especially and I shall not go over the ground at length again. The second aspect will also come logically to the Chancellor of the Exchequer and the Treasury and will involve the fiscal and financial inducements accorded to the franchise holders and those involved in cable laying for the long-term depreciation of the massive amounts of equipment that will be necessary to get the service off the ground.

Will expenditure on those risky and pioneering activities be offsettable against any revenues, or simply against the revenue accruing directly from cable activity? The nature of the risk and the danger of a low return mean that the main applicants will probably be a series of well spread consortia. I declare a tangential interest in that I may be involved in advising one consortium, but nothing has yet been decided. The spread of interests and the danger of a marginal return mean that we shall not get the necessary results unless we give the necessary encouragement.

With broad support for the White Paper, and special support for some aspects, I must refer to several matters that are in danger of being a deterrent to applicants. The paradox is the reverse of what the Labour party suggested through its official spokesman, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). He expressed the fear — we all share the view — of poor quality programmes and referred to the United States of America. The Labour party wishes the new system to be simply a public agency, but that has no chance of getting off the ground. We must make the exercise sufficiently profitable for the operators and franchise holders to encourage the development of high quality programmes. If we do not, the same thing will happen here as happened so visibly in the United States, where the public agencies impinged on the organisation of the effort. Public decision-making had a depressive effect on profitability, and there was a sharp decline in the quality of programmmes because the operators had to try to scrape some profit out of the great jungle of restrictions imposed on them.

It may be of interest to my hon. Friend the Minister if I quote from a recent edition of the magazine New Media Markets. It refers to an Amendment Bill, which has been presented by Senator Barry Goldwater of Arizona, which seeks to reduce the onerous conditions imposed on cable operators in America by local agencies. The local configuration does not apply to our much more unitary economic and political society, but I shall quote item 4 of the main provisions of the amendment, which is trying to make life a little easier for the operators who may make no profits at all. That is why I am worried that the franchise will fall automatically after 12 years instead of permissively, which perhaps the Government will reconsider.

Item 4 states: Cable operators should not live under the threat of the loss of a franchise when due for renewal, simply by virtue of new applicants offering"— I here add the word "apparently"— more attractive terms or a better service. Specific guidelines for franchise renewal would oblige a city council"— that is the United States pattern, not ours— to renew unless the current incumbent has committed a felony or grossly abused the privilege of providing the service. The threat of non-renewal has become the best (but over-used) weapon of control by cities over cable operators, and has been a substantial discouragement to investment. I hope that the Government will re-examine the matter.

I share the anxieties expressed by a number of hon. Members about paragraph 129. The more I read and reread that paragraph, the more I think it is a bit of a muddle. It is not clear who should pay whom. The BBC, in its briefing material for the debate, rightly emphasised not only that it is not against the development of cable, but that it is quite happy to make what it calls commission payments to the cable television operators in recognition of the carrying of its services.

The same considerations apply to any of the DBS configurations that will be run through the cable television providers. I hope that paragraph 129 will be reconsidered by the Government. It is intolerable that those faced with the danger of a marginal return on their investment, even over a long period, should carry the services free. The DBS operators could find that their total advertising revenue rises and that their area of visibility doubles, for example, but with no additional payment accruing to the cable franchise. That would be most unfair.

A number of important conclusions have arisen in the debate and will undoubtedly be aired again when the subject is debated in another place and when the Bill is presented to the House. I agree with my hon. Friends the Members for Lewes and for Gravesham (Mr. Brinton) that Britain has the best television service in the world. It is interesting how the service has developed in a way that is difficult to describe. Even the experts are nonplussed, although glad and gratified. We have a unique combination of a high public service content and sense of responsibility with a successful and variety-laden independent service, the two providing the competitive edge one to another.

In recent years, ITV has often overtaken BBC in the quality of its public service-oriented programmes. But, at the same time, each helps the other to improve. That can have a beneficial effect on the nature of cable television. I do not envisage it being similar to that in the United States, for a whole host of complicated and interrelated reasons. I hope that the Government will have the courage to give the necessary commercial inducement without it being a licence to spend money in the crude aggressive sense, and without the public responsibility being overlooked and forgotten. The operators should be allowed at least a reasonable rate of return and enough money to amortise their investment and expand their physical capital investment over a sufficiently long period.

I remember the arbitrary ITA contract changes, such as Television Wales and West being replaced by Harlech. It was an arbitrary move that did not go down well with those involved, or do much to help the quality of the industry. We must avoid that when the franchises are renewed or changed after 12 years. There is a good example of experience and historical practice in what we have developed in two or three decades.

I hope that my hon. Friend will have time to deal with some of my points. As has been said in the debate, the type of person serving on the cable authority will be important. I can see the great and the good forming the overwhelming majority of the cable authority. If the authority is to have the light touch referred to in the White Paper—rightly, Conservative Members welcome that — and the pragmatic, sensible but nonetheless publicly responsible attitude — that special combination that we have developed in British television—we must have people who are commercially oriented but who also have a sense of public responsibility. There are plenty of such people around who can be found without bringing out those rather tired old professorial figures from various professions and dusting them down. Such people have been used before on public agencies, and they would run a stuffy and over-interventionist authority.

I wish the Government well in the development of the cable authority and I congratulate them on their sense of enterprise and initiative. I hope, too, that in the final development of the control of advertising, both in quality and nature, we tend, if we can, to shy away from sponsorship through the public mechanism. That brings problems, and I hope that we stick to our old traditional British way of advertising on the new channels.

9.11 pm
Mr. Stanley Orme (Salford, East)

This has been an important and interesting debate. Before turning to the subject of the debate itself, it is my pleasure to congratulate two new hon. Members who made excellent maiden speeches this afternoon. The hon. Member for Salisbury (Mr. Key) made an amusing and effective speech, as did the hon. Member for Thanet, North (Mr. Gale). They were both allowed a great deal of latitude in their maiden speeches, and no doubt they will not find it as easy in the future to say some of the controversial things that they did today. We await what they have to say in future debates. They are both obviously knowledgeable in this subject and made an important contribution to our debate.

I wish to make it clear at the outset that the Labour party is not against technological developments such as cable, as my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said. The new era is with us and we must be part of it. In many instances we are in the forefront, not least in production. I assume that the Minister for Information Technology will deal with this in some detail.

I agree with those hon. Members who say that, while the television side of cable is important, it is only part of the picture. There are industrial, educational and information sides of the technology, which in many instances are far more important than the development of television, which will give us many more channels, but not much new technology. We shall see the development of information technology, with computers going into the home so that one can transmit as well as receive information. An entirely different world is being created. Interesting experiments are now taking place in towns such as Milton Keynes.

The Government rushed into publication with the White Paper. It seems that they need to be seen to be promoting technology; in reality, they are doing little. Decisions taken now will reverberate through industry for decades. Therefore, it is vital that decisions are reached sensibly and with regard to the national interest and not hastily with a view only to quick profits.

According to the White Paper, fibre optic technology could be used on a wide scale after 1985 and the most advanced star-switched systems, using fibre optics, could come into general use after 1986–87. Therefore, if the introduction of cabling were delayed until 1986, it could be launched in Britain in a planned way, using fibre optics — indeed, based on fibre optics — the technology in which, as the White Paper says, Britain is prominent. As I said in my intervention in the Home Secretary's speech, the time scale is important, but the development of new technology is even more important.

Thanks to the research and development work of British Telecom, the United Kingdom is pre-eminent in that area. If the cabling of Britain were to be planned and organised with the national interest as the paramount concern, we would have an orderly launch and the introduction of an advanced star-switched system and we would be among the first countries to have that. We are not dragging our feet or lagging behind other advanced countries.

We could plan an assault on the world markets for equipment and start to regain our place as a supplier of information technology equipment. That will not happen if we move in the piecemeal manner proposed by the Government. Indeed, if we miss the opportunity the result will, as foreseen by the recent NEDC report, be a balance of payments deficit in information technology equipment of £1 billion by 1990. That is most likely if the development of cable in Britain is left to commercial and market forces, as outlined in paragraph 24 of the White Paper.

Another reason for a standardised national and planned fibre optic, star-switched system is that it is similar to the system used for telecommunications networks and, before long, most telecom systems in Britain will be fibre optic.

The main potential of cabling is for new advances in telecommunications. The fact that it is beginning with entertainment must not be allowed to obscure its long-term potential.

The sensible course is to install a system that can be developed and not tied to the limited needs of entertainment. The Government propose that the underground ducts should be capable of taking a star layout, but that implies heavy conversion costs at some time in the future. Suppose the tree method were installed in the ducts and the star system subsequently proved itself to be greatly superior. What would it cost to transfer the systems? We could go for the new system now. The tree system is used in the United States, but it will want that replaced by more modern technology. If we came in with more modern technology at the start we would be in the forefront of new developments.

In July 1982 the Government set up a technical working group on standards for wideband cable systems, under the chairmanship of Dr. Tony Eden. The only published results of that working group is the one-page report in the White Paper. The availability of standards is vital for the construction of cable systems. How can we go ahead without them?

I hope that the Minister will respond to my questions. If he cannot do so this evening, I know that he will write to me later. What draft standards have been sent to the British Standards Institution? That is an important question to which we are entitled to have an answer. When will draft standards be sent to the BSI covering two-way data services and direct broadcasting by satellite? What is the present stage of the BSI consultative procedures on those draft standards that are now available? When will all the standards be finalised and agreed? Those are important questions, and I hope that the Minister will reply at the earliest opportunity.

The Government should stop and think carefully about our national objectives before plunging into piecemeal cabling on the lines proposed in the White Paper, because the economics of cable are very uncertain. As we have seen from Channel 4 and commercial breakfast television, new television stations are no longer a licence to print money. In the United States cable companies are having great financial difficulties, and in Britain we have the highest penetration in the world of video recorders —almost all imported at the moment. That has had an impact on viewing, on the cinema, and on the entertainment industry generally.

It is worth noting that by 1985 there will be 50 per cent. market penetration of video recorders in this country. Moreover, by 1985, satellite television broadcasting on at least two channels in Britain will provide even more competition for cable. Our market can take only so many hours of viewing per day. As I said in an earlier intervention, the fact that there are more channels does not necessarily mean widening the viewing. In the United States, viewing still tends to concentrate on the major networks, as opposed to smaller presentations. So in some instances cable companies may be hard-put to make money. The Government may reply that it is all private money, put up by entrepreneurs who know the vistas, but such a free-for-all may not be in the national interest. Some companies may prosper, but others will go to the wall. When they do, we shall be left with patchy coverage and added difficulty in building a national network for uses other than entertainment.

The cable companies seem to be in a rush to enter the free-for-all. Once direct broadcasting by satellite is in operation, it will be more difficult for new cable systems to be established. They also want to cash in now to use off-the-shelf, mainly imported technology that will be fast outdated. As with the negligible attention to standards in the White Paper, so only one page is devoted to manpower, and that is very vague. There is little evidence that there will be a growth in real and lasting jobs. The White Paper's only reference to possible job losses as a result of cable expansion is the sentence that as in all cases of technological change, short term problems could occur, adversely affecting jobs in particular sectors, places and types of work". Yet the Greater London council, in its report "The cabling of London", forecast that job losses in the entertainment sector and in consumer goods production could total 25,000 by 1990. Once again, this hastily produced White Paper takes no account of the long-term consequence of cabling. The Government must produce a detailed study of job creation and losses before they go ahead with their proposals.

The previous Secretary of State for Industry set objectives for his Department. Although they have largely been overlooked, they included the aims of gearing research and development to the United Kingdom's needs and developing awareness and rapid adoption of key technologies. Is the Minister ready to reaffirm that policy for his Department? From those aims, one would imagine that the Government's intention would be to construct a broadband national network as the basis for a coherent broadcasting, telecommunications and information technology strategy. Provided initially for television entertainment, the network could be developed to sustain future communications services using the latest British technology. Will the Secretary of State for Trade and Industry abandon the aims established by his predecessor, or will he merely continue to ignore them at the expense of the national interest?

The Secretary of State for Trade and Industry should look at the example set by France. That country has not rushed in for a quick return but has looked to the future and to its needs and interests. One city is to be cabled using optic fibre cable, a star system and every available type of terminal. It will all be provided for by the French national telephone company. After a trial period of three years, France will assess the results and decide on a standard system to be applied throughout the country. That is what we are asking the British Government to do.

British Telecom's role in the provision of cable is crucial. We have always advocated that BT should be the universal provider of cable—the common carrier. BT already has the ducts, cabinets and wayleaves. It has the experienced installation and maintenance staff. It leads the world in the best technology and fibre optics and has the experience of cabling for entertainment, as witnessed by the Milton Keynes experiment. It could cope with the investment programme required for a rolling national programme of cable installation. The installation cost, about £3 billion over 10 years, would represent only one tenth of BT's investment programme.

BT's purchasing policy would mean that United Kingdom manufactured equipment would be installed. Some private companies would almost certainly want to buy obsolete American equipment off the shelf. If BT is not to be designated the common carrier, it would be in the national interest if it were the cable provider for each franchise area. We favour mandatory participation for BT in every cable consortium. Some proposed consortia, for example Merseyside Cablevision, include BT as the cable provider and that will make sense to others because BT will carry the cost of physically cabling the franchise area and the roads will not have to be dug up and relaid.

Mercury may also be a partner in some franchises as a cable provider. As the House knows, the Labour party is opposed to the creation of Mercury and it is our policy to bring it into public ownership. We note that links between local cable systems will be provided by Mercury or BT. The Government recognise the importance of business traffic by cable in some areas; that is, the transmission of data and information from business to business. That traffic is crucial to BT. A cable company could cream off all that business and severely damage BT's commercial prospects.

The Government have recognised that problem by giving limited protection to BT and Mercury in certain areas—in the city of London, the boroughs of Camden and Westminster and the business centres of Manchester and Birmingham.

If the new cable system is to be seen as the communications network for the next century, the decision that BT is not involved implies the inevitable demise of BT. It may take 15 years or 75 years, but BT will inevitably become tomorrow the equivalent of British waterways today. That is the risk in the Government's proposals. They will wreck the most important element in Britain's information technology strategy.

The Financial Times summed up the White Paper's proposals in the headline: Backing for quick action, private finance and light controls. That is the formula for throwing away Britain's place in a very important industrial development. I therefore ask my right hon. and hon. Friends to vote against the White Paper.

9.30 pm
The Minister for Information Technology (Mr. Kenneth Baker)

This is the third debate that we have had on cable in little over a year. One of the pleasures this time is that we have been able to listen to many new voices. I welcome, first, the newest voice—that of the Home Secretary. The two previous debates were initiated by his predecessor, my right hon. and noble Friend Viscount Whitelaw. I pay tribute to his energy and enthusiasm for the cable revolution. My right hon. and noble Friend is not a natural watcher of TV. The only television programme about which I heard him comment was the Miss World show. However, he recognised the great opportunity for British industry and British programme creation and therefore spurred the Home Office into action and managed to put it into a trot.

My right hon. and learned Friend the present Home Secretary was in those days the Chief Secretary to the Treasury. I am glad to say that he did not take a strong view one way or another when I put the cable proposals to him in the last Parliament because I was not asking for a penny of public money. The Chief Secretary was, therefore, neutral. That is a gain in the manoeuvring of Governments. He was neither benign nor malign, but neutral. I am glad to see his conversion from neutrality to enthusiasm.

I congratulate two of my hon. Friends on their maiden speeches. First, my hon. Friend the Member for Salisbury (Mr. Key) made a witty and good speech. He told us that in the potted biography that appeared in The Times he was married to the wrong woman and instead of being called a teacher he was called a chartered accountant. It is possible to correct the first error, but it is difficult to overcome the stigma at the beginning of a political career of being called a chartered accountant. He put forward a strong case for Salisbury to be a cable area. He called it a natural franchise area. I am sure that his constituents will be well pleased with his advocacy.

I also congratulate my hon. Friend the Member for Thanet, North (Mr. Gale), who spoke movingly about his constituency and about the problems of the lonely and elderly people there. He also mentioned the new industries and the science park that he would like to be established on the Isle of Thanet. He told the House that he had been in broadcasting and was a professional. I sometimes think that the House is composed of a small number of people who have been in TV and a large number who want to be on TV. My hon. Friend's professionalism and interest will enliven our debates on cable and broadcasting.

This is our third debate on cable in little over a year. The House and the Government have moved at considerable speed in trying to make the cable revolution a reality. I made the first speech on cable in October 1981. The Prime Minister's information technology advisory panel's report on cable appeared in March 1982. Since then, there has been a significant and welcome public debate on the implications of cable. I pay tribute again to the Prime Minister's six IT advisers. They produced a report in a short space of time, and the Opposition criticised them for that. What choice do the Government have when they want to move ahead quickly into an important and complicated area? I could have advised the Prime Minister to establish a Royal Commission. It would have sat for a year, deliberated for another year, and reexamined its proposals for another year. It would have become bogged down. We in Britain have a talent bordering on genius for smothering good ideas and institutionalising torpor.

I therefore chose the route that I thought would get things moving, and they have certainly done so. We have kept up the pace. We have also given ample time for public debate. On 20 April last year we had a debate on direct broadcasting by satellite and cable. On 2 December last year we had a debate to discuss the findings of the Hunt report. There was a discussion following the oral statement accompanying the White Paper on 27 April. Since then we have had the election. After today's debate here and discussion in another place, we will be able to approve the setting up of the first 12 pilot systems.

We have moved at this pace because there are benefits for the consumer, the economy and industry. For the consumer, cable will not just mean more entertainment. It will not mean another 30 or 40 channels of entertainment. It will mean greater choice, and a real chance for minority interests to air their views and for local community groups to produce their own programmes. It will mean a wide range of educational programming not yet really available on television. It will mean interactive services such as home shopping and home banking. The television set will no longer be simply a rather passive electronic receiver in the sitting room. It will enable the viewer to communicate.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) mentioned developments in the area of sport. The right hon. Gentleman is known to be interested in cricket. Live coverage of the NatWest Trophy cricket match between North Hampshire and Wiltshire appeared on cable television in Swindon yesterday. I doubt whether the cricketers of Wiltshire will ever aspire to see BBC or ITV cameras at their ground. Cable makes it possible for the local team to be seen on television in the local area. Yesterday's relay went out to 10,000 homes in Swindon. As cable expands, many other towns will have an opportunity of genuine local television programming. As a strong supporter of Yorkshire county, the right hon. Gentleman will welcome that opportunity. [HON. MEMBERS: "Hear, hear."] The right hon. Gentleman has some friends. I believe that before the right hon. Gentleman aspired to lead his party, his boyhood ambition was to be captain of Yorkshire cricket team. As Yorkshire now lies fifteenth out of 17 in the county cricket table, I do not know which would be the worst job.

There would of course be opportunities for channels for ethnic minorities. It has been suggested that in certain towns cable television will enable ethnic minorities to receive religious programmes, or films and entertainment. Cable is a way of bringing the individuals in an audience together as a mass, and I would also expect that aspect to be developed.

Mr. Bermingham

The point to be made in relation to the commercial test is that if a small minority is widespread the cost of supplying it will be relatively prohibitive. The commercial companies would not put on the programmes because there would be no commercial gain.

Mr. Baker

The reverse is true. If an ethnic minority is widespread throughout the country and there is compatibility between the systems— as there will be, because of national standards — a national programme can address that geographically diverse audience through cable. That is, of course, one of the advantages of cable. Several of my hon. Friends asked me about the "must carry" rule. My hon. Friends the Members for Gravesham (Mr. Brinton), for Boothferry (Sir P. Bryan), for Wealden (Sir G. Johnson Smith) and for Thanet, North asked about the implications for cable operators of the "must carry" rule, as described in paragraphs 126 to 129 of the White Paper. The effect of the requirement is that cable operators will be obliged to make provision on their systems for the four existing broadcasting services and for all five of the DBS channels allocated to this country by international agreement. Conservative Members have argued strongly against that.

The Government recognise that, in developing their policy in this area, a careful balance will have to be struck between the interests of the cable operators, individual DBS operators, the electronics industry and consumers. As my right hon. and learned Friend the Home Secretary has already said, we shall be holding discussions with interested parties, with a view to agreeing an arrangement which, while maintaining the integrity of the "must carry" principle, is consistent with the expansion of DBS and yet does not impose unreasonable burdens on the cable industry. So that the House is not misled as to the scale of these difficulties, it may be helpful if I make two further points of clarification on the problems that have been identified in the course of the debate.

So far as the commercial difficulties are concerned, paragraph 129 makes it clear that in the case of any DBS service that is financed by means of a subscription fee appropriate financial arrangements will need to be negotiated between the broadcaster and the cable operator. By that, we mean financial arrangements that are acceptable to both sides. Where agreement cannot be reached, provision will be made for arbitration, so that the cable operator can be assured that he will receive a fair recompense.

It is therefore not the case that cable operators are being asked to carry all DBS services without receiving any financial remuneration from the DBS operator. Several of my hon. Friends mentioned the complexity of the two methods of transmission that would use the cable band width. On the technical side, it is important to appreciate that, although paragraph 129 requires cable operators to make available DBS services over their systems, it does not specify the transmission standard that should be used for this purpose. The Government have already decided on MAC as the vision standard for transmitting DBS services, but the form in which it is to be relayed on cable systems has not yet been stated.

The suggestion that the cable operator will have to transmit DBS signals in both PAL and MAC form is only one of a number of options that the Government will be exploring with the interested parties that I have identified.

Mr. McWilliam

Has the Minister taken care to ensure that there will be sufficient British-manufactured MAC sets when that innovation becomes available, or will we have to rely on Japanese imports yet again?

Mr. Baker

The former Home Secretary made the decision on the transmission standard of MAC last year in order to give silicon chip manufacturers in Britain the chance to design chips to go into MAC sets.

I was asked a wide variety of questions during the debate and I shall try to deal with as many as I can. The right hon. Member for Salford, East (Mr. Orme) asked about the standards in the Eden committee. The Eden technical working group has already completed draft standards for three out of the four main services which we know are within the potential capability of wide-band cable systems. We expect further draft standards to be completed by the end of September. As each draft standard is completed, it will be passed to BSI which, in accordance with normal practice, will issue it for public comment. I do not expect this process of drafting standards to inhibit progress of cable pilot projects. If the right hon. Gentleman feels that I have not answered the other points that he raised, he should let me know and I will answer them in correspondence with him.

The hon. Member for Swansea, East (Mr. Anderson) asked about religious programming and religious channels on cable. The development of cable will provide new opportunities for religious programming. The Government have no wish to inhibit that. Channels devoted to religious matters will be allowed. What the White Paper says is that particular channels ought not to be controlled by individual religious groups or, indeed, by individual political groups.

Mr. Anderson

Is it correct that participation is possible but not control?

Mr. Baker

That is a possibility, but, if I am wrong, I will write to the hon. Gentleman.

My hon. Friend the Member for Boothferry (Sir P. Bryan) asked about ITV participation. Although the White Paper stresses the undesirability of an ITV contractor also being the cable franchise holder in the same area, it does not rule out participation in a cable operating company by the local ITV contractor and leaves it to the cable authority to decide what scale of participation will be acceptable. In different areas, the White Paper makes it clear that the objection to an ITV contractor being a cable operator would not apply.

I was also asked about pay-per-view for pilot projects. As the House knows, we have decided to reverse the recommendation of the Hunt committee against pay-per-view. I was asked when this could come into operation for the pilot projects. I should like to make it clear that the pilot projects will be able to have pay-per-view once the cable authority has been set up and assumes control. Although we shall be licensing the pilot projects this year, it is bound to be some time before operators are ready to start providing services over the new systems. In practice, the absence of pay-per-view, while my right hon. and learned Friend the Home Secretary retains responsibility for licensing, is unlikely to constitute a significant restriction on operators' activities.

My hon. Friend the Member for Uxbridge (Mr. Shersby) referred to the need for a programme complaints commission for cable. I remind him that the cable authority will be there to deal with complaints about inadequate programme standards; for example, in the area of good taste and decency. The White Paper also says that in preparing legislation the Government will consider whether the Broadcast Complaints Commission's powers to investigate unjust or unfair treatment or an infringement of privacy should be extended to cable.

My hon. Friend the Member for Lewes (Mr. Rathbone) touched on the size of the cable areas and suggested that 100,000 was too small and not viable. That is not the view expressed to us by various people interested in investing in cable. In fact, some have made proposals for areas of less than 100,000. By relaxing the controls on the existing cable operators we will be creating a market for programming, not just for an audience of 1,200,000 but for a very much wider audience.

One of the reasons why I have been such a strong enthusiast for cable is that there are clear industrial advantages. Cable consortia are already being formed to bid for franchises in many parts of the country, from Scotland to the Solent. Only a few weeks ago, the formation of Cablevision Scotland was announced— a consortium including the British Linen Bank, Ferranti, Grampian Television and Press Construction. Cablevision Scotland joins a long list of consortia and companies that are actively interested in bidding for cable franchises—Clyde Cablevision, Solent Cablevision, Merseyside Cablevision, Rediffusion, Pearson Longman and many others. These companies are truly the pioneers of cable television and I pay tribute to their courage and foresight.

There has also been great stimulation to the programme makers and distributors. Goldcrest recently announced the formation of a joint company to distribute feature films to cable systems via low power satellite. The involvement of a company that has done so much to revitalise the British film industry encourages hope that much of what we will see on cable will be high quality British material. Several Members have asked about the film industry, including my hon. Friend the Member for Portsmouth, North (Mr. Griffiths). As a result of the changes of responsibilities between the Departments of Trade and Industry, I have assumed responsibility for the film industry and the review that my former hon. Friend, Mr. Iain Sproat, started.

From the views that have been expressed to me by the film industry, it is already quite clear that it looks on pay TV in America as an enormous source of creating better and more films. That is one of the things that cable television will bring. After all, we are very good at making films and television programmes, and cable will create the opportunities.

Mr. Michael Marshall

My hon. Friend is painting an encouraging picture, but will he assure House that he sees the way ahead, bearing in mind the activities of the Post Office Engineering Union? It must be said that, with regard to competition for British Telecom in the case of Mercury, actions that have been taken to hold that back have been somewhat worrying. Is there any parallel in cable development?

Mr. Baker

Perhaps I can touch upon that in a moment, as I should like to deal with the argument of the right hon. Member for Salford, East that British Telecom should be the sole provider of cable. However, paragraph 186 of the White Paper refers specifically to what my hon. Friend has said. It states: But in deciding which cable operators to franchise … it will be necessary to take particular account of the need to ensure that business services offer a high standard of reliability and are not liable to disruption and also that proposed arrangements for interconnection with national networks will be fully implemented". I am sure that both British Telecom and the POEU will take those words to heart.

I am sure that the equipment side of the industry is gearing itself up. Racal has done a deal with Oak Industries of California to make sophisticated decoding equipment and to provide cable systems. Cabletime, an American company, has developed its switched system here and will be producing it here. It is also working with the Water Research Council to see whether cable can be laid in water systems.

Rediffusion has drawn on its long experience of narrow band cables and, as several hon. Members have said, has invested in a switched system which will be in production in 1984 and in full production in 1985.

As to the United Kingdom manufacturers of cable, this is an industry in which we have a world lead. Fibre optics was invented in Britain in 1966—[HoN. MEMBERS: "By BT".} It was not invented by BT. In fact, it was invented by two mathematicians working in a private laboratory in Middlesex. I am glad to say that we still have a world lead in this technology, which is why we have spent £55 million in support of the British fibre optics industry.

GEC's subsidiary Telephone Cables Limited has started production of fibre optics cable and plans to expand its operations. STC, the world leader in submarine cables, is developing major production facilities. Only two weeks ago, Optical Fibres Limited, a subsidiary of BICC and Corning of Canada, opened a new plant at Deeside in north Wales. More than £15 million has been invested in that plant.

Mr. John Gorst (Hendon, North)

Does my hon. Friend anticipate, and, if so, will he welcome, any infusion and help from the United States in respect of technology or any other cable services?

Mr. Kenneth Baker

Yes, most certainly. We encourage overseas investment in cable companies provided that they do not take controlling interests. Industry was geared to this. Before the White Paper was published I spoke to nearly all the companies in Great Britain involved in cable, equipment manufacture, distribution or programming. The clear message to me was, "Don't let the momentum run down. The momentum has been generated. Don't take it so slowly that we put our plans on to the back burner and don't develop the equipment and the factories." That is why the Government have taken this matter at speed.

We could have followed the advice of the Opposition and delayed taking any further action until the cable authority had been established in autumn next year. We could have had another winter of debate, a spring of reflection and a summer of reappraisal, but the opportunities would have been lost. These opportunities do not exist in great new industries for ever. They have to be seized quickly. The opportunities for new jobs and greater investment will come, broadly, from newer industries. That is the lesson that we are learning. We are having to learn it quickly. We must learn to apply new technologies to the older industries.

In the movement to begin cabling we have created a whole new area of opportunity. I do not believe that the Labour party would have seized this opportunity. The Opposition believe that the Government's role should be one of intervention. We are utterly opposed to that. The Government's free hand, in contrast to the rigid controls proposed by the Opposition, would do more for choice and allow private sector companies to make the investment.

I believe that cable will flourish in this country only if it is funded and driven by the private sector. It is not for Government to invest in cable and to dictate the pace at which it can be received. That is the argument of the hon. Member for Blaydon (Mr. McWilliam), reinforced by the shadow spokesman on trade and industry, the right hon. Member for Salford, East. What I have said tonight shows clearly that British industry is well prepared for the advent of cable. There is no doubt that it is up to British companies to make the most of these opportunities. The Government's role is to create the right atmosphere for British companies to seize these opportunities. The Government allow a free hand. Opposition Members should welcome these developments, but their support tonight has been lukewarm and suspicious. Today's Labour party seems unable to comprehend the opportunities that the future holds for British industry. Time and time again, when faced with the march of technology, the Opposition seek refuge in the old dogmas. They should welcome the challenge of the future. Instead, they want to delay to regulate and, above all, to nationalise. In their manifesto they planned to Promote the development and use of new information and communication services to support a wider democracy. However, the small print shows that they wanted to extend nationalisation into electronics and to make cable a state monopoly of British Telecom. That is the policy on which the Opposition fought the election and it was rejected. Does anyone other than the Labour party still believe after nearly 40 years of nationalisation that state control is the way to increase popular choice or make an industry more accountable to its customers? A state monopoly in the new cable industry would be a disaster. This is an international market—if British companies are not making equipment and programmes first then French, German and American companies will—and to beat the competition we must encourage innovation and enterprise. If cable is nationalised now, it will be strangled at birth.

Great Britain has enormous strength in this area. Our research is second to none. Our television programmes are the best in the world and our film industry is enjoying a boom. The Government are determined to maintain and build on our achievements. Cable is in its infancy. The consumer is ready: all the signs are that he wants the new services that cable will offer. British industry cannot afford to spurn the opportunity that we have created. We have shown that we have the talent, technical ability and finance to succeed. If the House seeks now to shackle us and put obstacles in the way of this great opportunity, there will be fewer jobs. There are jobs in cabling, in the manufacture of equipment and in the making of programmes. I hope that the House will support this White Paper.

Question put:

The House divided: Ayes 182, Noes 59.

Division No. 6] [10 pm
Alexander, Richard Clark, Hon A. (Plym'th S'n)
Amess, David Clark, Michael (Rochford)
Arnold, Tom Clarke Kenneth (Rushcliffe)
Ashby, David Clegg, Sir Walter
Atkins Robert (South Ribble) Colvin, Michael
Baker, Kenneth (Mole Valley) Conway, Derek
Baker, Nicholas (Dorset N) Coombs, Simon
Baldry, Anthony Cope, John
Batiste, Spencer Couchman, James
Beaumont-Dark, Anthony Cranbourne, Viscount
Bellingham, Henry Currie, Mrs. Edwina
Blackburn, John Dicks, T.
Boscawen, Hon Robert Dorrell, Stephen
Bottomley, Peter Douglas-Hamilton, Lord J.
Bowden, Gerald (Dulwich) Dunn, Robert
Bright, Graham Dykes, Hugh
Brinton, Tim Evennett, David
Brittan, Rt Hon Leon Eyre, Reginald
Brooke, Hon Peter Fallon, Michael
Brown, M. (Brigg & Cl'thpes) Favell, Anthony
Bruinvels, Peter Fenner, Mrs. Peggy
Bryan, Sir Paul Finsberg, Geoffrey
Buchanan-Smith, Rt Hon A. Fookes, Miss Janet
Buck, Sir Antony Forsyth, Michael (Stirling)
Carlisle, Kenneth (Lincoln) Forth, Eric
Carttiss, Michael Franks, Cecil
Freeman, Roger Neubert, Michael
Freud, Clement Newton, Tony
Gale, Roger Nicholls, Patrick
Galley, Roy Norris, Steven
Gardiner, George (Reigate) Onslow, Cranley
Glyn, Dr. Alan Oppenheim, Philip
Goodlad, Alastair Ottaway, Richard
Gorst, John Page, Richard (Herts, SW)
Greenway, Harry Pattie, Geoffrey
Gregory, Conal Peacock, Mrs Elizabeth
Griffiths, Peter (Portsm'th N) Percival, Rt Hon Sir Ian
Hamilton, Hon A. (Epsom) Powell, William (Corby)
Hamilton, Neil (Tatton) Powley, John
Hanley, Jeremy Price, Sir David
Hargreaves, Kenneth Proctor, K. Harvey
Harris, David Raffan, Keith
Harvey, Robert Rathbone, Tim
Havers, Rt Hon Sir Michael Rhys Williams, Sir Brandon
Hawkins, C. (High Peak) Robinson, Mark (N'port W)
Hayes, J. Roe, Mrs Marion
Hayward, Robert Rowe, Andrew
Hickmet, Richard Ryder, Richard
Howard, Michael Sackville, Hon Thomas
Howarth, Alan (Stratf'd-on-A) Sayeed, Jonathan
Howarth, Gerald (Cannock) Shaw, Sir Michael (Scarb')
Howells, Geraint Shepherd, Colin (Hereford)
Hunt, David (Wirral) Sims, Roger
Hunt, John (Ravensbourne) Smith, Tim (Beaconsfield)
Hunter, Andrew Soames, Hon Nicholas
Hurd, Rt Hon Douglas Spence, John
Jackson, Robert Spencer, D.
Jenkin, Rt Hon Patrick Stanbrook, Ivor
Johnson-Smith, Sir Geoffrey Stern, Michael
Jones, Gwilym (Cardiff N) Stevens, Lewis (Nuneaton)
Jones, Robert (Herts W) Stevens, Martin (Fulham)
Key, Robert Stewart, Andrew (Sherwood)
King, Roger (B'ham N'field) Stradling Thomas, J.
Knight, Gregory (Derby N) Sumberg, David
Knowles, Michael Taylor, John (Solihull)
Lang, Ian Terlezki, Stefan
Lawler, Geoffrey Thompson, Donald (Calder V)
Lawson, Rt Hon Nigel Thompson, Patrick (N'ich, N)
Lee, John (Pendle) Thorne, Neil (Ilford, S)
Lilley, Peter Thurnham, Peter
Lloyd, Peter, (Fareham) Townend, John (Bridlington)
Lord, Michael Twinn, Dr Ian
Luce, Richard van Straubenzee, Sir W.
Macfarlane, Neil Viggers, Peter
MacKay, Andrew (Berkshire) Waddington, David
Major, John Wakeham, Rt Hon John
Mallins, Humphrey Walden, George
Malone, Gerald Wall, Sir Patrick
Maples, John Wallace, James
Marland, Paul Waller, Gary
Mates, Michael Wardle, C. (Bexhill)
Mather, Carol Watson, John
Maude, Francis Watts, John
Mayhew, Sir Patrick Wells, Bowen (Hertford)
Meadowcroft, Michael Wheeler, John
Meyer, Sir Anthony Wolfson, Mark
Miller, Hal (B'grove) Wood, Timothy
Mitchell, David (Hants, NW) Woodcock, Michael
Moore, John Young, Sir George (Acton)
Morris, M. (N'hampton, S.)
Moynihan, Hon C. Tellers for the Ayes:
Murphy, Christopher Mr. Tristan Garel-Jones and
Neale, Gerrard Mr. Douglas Hogg.
Anderson, Donald Corbyn, Jeremy
Atkinson, N. (Tottenham) Cowans, Harry
Barron, Kevin Davies, Ronald (Caerphilly)
Beckett, Mrs. Margaret Dixon, Donald
Bermingham, Gerald Dormand, Jack
Boyes, Roland Fatchett, Derek
Caborn, Richard Field, Frank (Birkenhead)
Clarke, Thomas Gould, Bryan
Cocks, Rt Hon M. (Bristol S.) Hamilton, W. W. (Fife Central)
Cohen, Harry Harman, Ms Harriet
Cook, Frank (Stockton North) Harrison, Rt Hon Walter
Hattersley, Rt Hon Roy Pike, Peter
Hogg, N. (C'nauld & Kilsyth) Powell, Raymond (Ogmore,
Home Robertson, John Randall, Stuart
Hoyle, Douglas Redmond, M.
Hughes, Robert (Aberdeen N) Rees, Rt Hon M. (Leeds S)
Hughes, Sean (Knowsley S) Robinson, G. (Coventry AM)
Lloyd, Anthony (Stretford) Rogers, Allan
McCartney, Hugh Skinner, Dennis
McDonald, Dr Oonagh Smith, C.(Isl'ton S & F'bury
McKay, Allen (Penistone) Spearing, Nigel
McKelvey, William Straw, Jack
McWilliam, John Thompson, J. (Wansbeck)
Madden, Max Tinn, James
Marek, John Welsh, Michael
Mason, Rt Hon Roy Winnick, David
Millan, Rt Hon Bruce Young, David (Bolton SE)
Miller, Dr M. S. (E. Kilbride)
Nellist, David Tellers for the Noes:
O'Neill, Martin Mr. Frank Haynes and
Orme, Rt Hon Stanley Mr. Lawrence Cunliffe.
Patchett, Terry

Resolved, That this House approves the White Paper on the Development of Cable Systems and Services (Cmnd. 8866).

Back to
Forward to