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Classic Fm

Volume 264: debated on Tuesday 24 October 1995

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Motion made, and Question proposed, That this House do now adjourn.— [Mr. Streeter.]

10.11 pm

I am grateful for the opportunity to initiate the debate, and especially grateful to my hon. Friend the Minister of State, Department of National Heritage for being in his place at this late hour. I seek to draw to the attention of the House the sword of Damocles, indeed the death threat, hanging over one of the success stories of the century.

A recent survey showed that Classic FM is the radio station most listened to by Members of Parliament. Perhaps far more importantly, it is the most listened to classical radio station in Europe. The Broadcasting Act 1990 allowed the birth of Classic FM, our first national commercial radio station. Such a station would not be viable, said the critics, if it did not succumb to the normal diet of pop music and prattle. The more optimistic gave the planned classical music station two years at most.

That was based on a belief that, as a nation of philistines, we would not be able to recognise excellence either in musical or in broadcasting terms. Instead, we have gained the success story of independent national radio. In three short years Classic FM has built up more than twice as many listeners as its nearest rival, Radio 3. Nearly 5 million listeners a week, 25 per cent. of whom are under 35, tune in to enjoy "the world's most beautiful music", in addition to news bulletins, travel, cookery, sport and financial programmes. Even Radio 4 was shaken to its core when its "Gardeners' Question Time" team crossed the Floor of the ether and joined Classic FM's "Gardening Forum".

Before I entered the House I co-founded a company offering a design, installation, manufacturing and investment service to radio stations in the far east, eastern and southern Africa, the Americas, the Soviet Union and the European Union. I therefore have a little practical experience of the broadcast sector, and an interest in seeing broadcasting—an industry in which British technology and expertise are the envy of the world—succeed.

Classic FM has occasionally been dismissed as lightweight or frivolous—a constant diet of "The Four Seasons" and the "1812 Overture", pundits have said. Nothing could be further from the truth. While I level no criticism at either Vivaldi or Tchaikovsky—

I am sure they will be relieved.

I am glad to know that I have support on the Government Benches. Every listener can now find something in the 23,000 tracks on the play list.

The Lucerne music festival—long considered to be one of the greatest of modern times—was brought to listeners in the United Kingdom for the first time this year by Classic. This success has been recognised, with Classic winning many awards since 1992, including the Sony national radio station of the year award. However, a good radio station should not be concerned merely with the music on the airwaves.

Committed to music education, Classic endeavours to encourage young musicians by providing a platform to reflect their lives, music and future careers. This commitment is backed by a charitable trust which raises funds for music education and child-related charities aimed at stimulating an appreciation of classical music.

All the nation's orchestras have links with Classic FM, with the Royal Philharmonic receiving substantial direct and indirect support. Broadcasting 24 hours a day, seven days a week, Classic FM has proved through its success that we are not quite the nation of philistines which some would have us believe and, more importantly, that classical music has much to offer any listener, regardless of his knowledge of the subject—something, I am afraid, that Radio 3 has been unable to achieve to date.

The right hon.Member for Manchester, Gorton (Mr. Kaufman), who is not in his place, has said that he fears that Radio 3 is now trying to imitate Classic FM. Imagine for a moment if it were to be the other way round. Does the right hon. Gentleman believe that Classic FM would be the success it is if it were organised by the BBC? I think not. Imitation being the sincerest form of flattery, I hope that Radio 3's shift in policy will mean that our public sector classical station now starts to provide a service that attracts listeners, as well as attracting public funds. I commend Radio 3's shift in programming. Paul Gambaccini has a knowledge of classical music to be revered, and not reviled, and the controller of Radio 3 showed insight in recruiting him. He has my congratulations.

Building on its success, Classic FM has started to expand. A glossy magazine based on the Classic format now sells more than 40,000 copies a month. The Government—rightly in my view—have encouraged broadcasters to go out and export what they produce, proving once again that we have the best broadcasting industry in the world.

Classic FM has responded to the Government's campaign with a pan-European network. There is already a sister station in the Netherlands and a licence for Stockholm, and the first ever national independent station in Finland has finally been agreed. Classic is now taking the first steps towards the American market by providing a consultancy and technology for a Classic FM franchise in partnership with the Department of Trade and Industry and the British embassy in the United States.

Those Members who believe that quality and commercialism are often mutually exclusive might also be interested to learn that, while Classic FM is reliant on advertising revenue, it has a policy which allows no more than three advertisement breaks an hour. Those who may believe that my opening remarks until now have sounded like an advertisement for Classic FM may appreciate benefits such as that policy.

I gave credit to the Broadcasting Act 1990, which allowed Classic FM to develop in the first place. However, as I am sure the House is aware, the Act has been accused of creating more problems than it solved. My right hon. Friend the Member for Putney (Mr. Mellor)—the former Secretary of State for National Heritage—stated:
"In developing the Bill, a small group of Ministers pursued, in private, a range of proposals. They should have known that, the moment that the proposals saw the light of day, they would have to beat a retreat from many of the points that had seemed so clear cut in a small room but would not appear so in the clear light of day before wider consultation."
One of the flaws in the Bill was the arrangement that national independent radio licences should be awarded on an eight-year basis. No provision is made within the Act for renewal, and there is also no requirement that a bidder would have to offer a similar programme to the existing station. There is no emphasis on quality in the bidding criteria. That could result in Classic FM being replaced by another higher bidder, offering an entirely different style of music. Could Blur be the replacement for Beethoven? Is that what we want?

The position for radio is in stark contrast to the provision made for independent television licences. The Act reads:
"A Channel Three licence shall continue in force for a period of ten years, and may be renewed on one or more occasions for a period of ten years, beginning with the date of renewal."
Despite the uncertainty, Classic FM is still thinking and planning ahead. The future of broadcasting is already cast to be an exciting time, with the introduction of digital broadcasting, which will enhance choice and technical quality for listeners and viewers and maintain Britain's reputation as a creative innovator and a technical leader.

The development of digital audio broadcasting will require co-operation between broadcasters, manufacturers and the Government, a process in which Classic is seeking to play a full role. Classic FM has welcomed the Government's proposals on digital terrestrial broadcasting and proposed, alongside NTL, an experimental DAB service for London, keeping Britain's technical standards at the high level which is envied by the rest of the world.

Establishing a digital network will, however, require substantial investment. Supporters of Classic have already invested more than £18 million, but attracting investment is made more difficult by the fact that Classic does not have a secure future at present. Seen from the perspective that Classic has only five years more air time guaranteed, investment in a digital service would result in a huge loss for the company. Classic must have a lifespan longer than this.

I do not seek privilege for Classic FM or any other station in its market in the future. I do, however, believe that the station should enjoy the same benefits of licence security as those operating Channel 3 television stations. There is no guarantee at present that a Classic-type licence will be advertised next time, and even if Classic is able to make a bid for a new licence, it will be up against new competition keen to build on the market that Classic has developed without any requirement to guarantee that quality in broadcasting will remain.

I am sure that many of my colleagues in the House were lobbied when Radio 4 long wave was threatened, and that was only one frequency of that popular station. Listeners become passionate about the stations that they listen to on a regular basis. The station, and the personalities that go with it, become a valuable part of people's day-to-day lives. I remind the House that Classic has built up more than 5 million listeners. Are we to tell them that their choice may disappear, to be replaced by yet another station devoted to the teen pop culture?

There can be no guarantees for Classic's future. However, if the changes that I have asked for tonight are implemented, the Radio Authority, and not the arbitrary wording of an Act, will be the judge of whether Classic FM continues broadcasting into the 21st century. The Radio Authority should be the arbiter of quality and public service. This makes sense and it will be yet another incentive for Classic to maintain its quality threshold and be an innovator in the market that it serves.

The chief executive of Classic, John Spearman, has said:
"I am sure that it was not the intention of Parliament to threaten the long term existence of Classic's success".
I agree. I therefore look to my colleague, the Minister of State, for action—action that will ensure that Classic is able to compete in the world broadcasting industry on a secure platform equal to that which our television companies enjoy; action that will enable Classic FM to invest in the technology necessary for the 21st century, and action that will ensure that Classic FM will be able to continue to add to the enjoyment of millions of listeners in the United Kingdom and abroad.

10.23 pm

I congratulate my hon. Friend the Minister for Mid-Staffordshire (Mr. Fabricant) on securing this debate. He is always extremely sharp in finding opportunities to express his views and effective in the way in which he does it. I congratulate him on the sincerity and passion with which he put a strong case. I join my hon. Friend in recognising and applauding the great success not merely of Classic FM but of the independent radio sector, which is one of this country's success stories. As a sector, independent radio is growing both in popularity and financial strength.

My hon. Friend mentioned the BBC. He may be interested to know that the audience research figures just published for the third quarter of 1995 show that the share of listening achieved by commercial radio was 2.3 per cent. ahead of that for the BBC. The Radio Authority's annual report agrees that commercial radio has now overtaken the BBC. Since the BBC had a head start of some 50 years, the independent radio sector has good reason indeed to be pleased with that performance in meeting the needs of listeners.

Listeners now have a greater range of choice available to them than ever and stations continue to proliferate. In this situation, and since listeners are not normally concerned about who owns a station as long as it provides what they want to hear, the Government have been able to simplify and liberalise the ownership regulations and we are committed to further liberalisation at the earliest legislative opportunity.

It should be remembered that there were no independent radio services in this country until 1973. At that point, the Government proposed introducing independent radio at both national and local level. It coincided, however, with a difficult period for the newspaper industry and the Government were persuaded that, as it would have been a direct competitor for advertising revenue, the introduction of independent national radio could have had unacceptable implications for the national press. It was, therefore, principally for that reason that independent radio came into being as a local service only.

Parliament debated the issue during the passage of the Cable and Broadcasting Act 1984, which, in the event, permitted the establishment of a transmitter network for a national service, but did not yet allow such a service to broadcast. Plans were, however, drawn up by the Independent Broadcasting Authority for the service to be speech-based, to compete with BBC Radio 4.

The Government's proposals for introducing independent national radio then featured in a 1987 consultative document, which suggested that it need not be limited to a single service, but ought to be capable of providing competition to the BBC in the areas of music, entertainment and sports coverage, as well as news and speech. On that basis, three networks were envisaged, and the ensuing Broadcasting Act 1990 provided for those to be introduced.

The 1990 Act requires the Radio Authority to secure a diversity of independent national radio services, of which
"one is a service the greater part of which consists in the broadcasting of spoken material"
"another is a service which consists, wholly or mainly, in the broadcasting of music which, in the opinion of the Authority, is not pop".
The third service is undefined.

The sector is of considerable economic and cultural importance. It quickly adjusted to the changes brought about by the 1990 Act and has also carved out a new and more secure environment for itself through internal changes. Independent radio is the United Kingdom's fastest-growing advertising medium. I understand, for example, that the sector is aiming for a 6 per cent. share of total UK advertising by the turn of the century, which represents a challenging target and demonstrates the confidence of the industry in the future.

As my hon. Friend mentioned, digital technology will play an important part in that future. The Government welcome the potential that such technology offers. It will improve the quality, ease and reliability of reception, and could also increase the range of choice for listeners and, in the longer term, might release valuable spectrum.

The BBC introduced digital audio broadcasting services in September. I am sure that the independent sector will be pleased to see the publicly funded broadcaster leading the way, taking the initial risks and bearing the inaugural costs of that major venture. The BBC estimates expenditure of about £11 million for the first phase of development alone. That should bring digital audio broadcasting to 60 per cent. of the population within four years. I am sure, however, that independent radio will not want to lag too far behind in taking up that new opportunity, and I know that Classic FM is keen to play its part.

Within the independent sector, the national radio stations—Talk Radio UK, Virgin and, of course, the first one, Classic FM—continue to go from strength to strength. Classic FM came on air in September 1992 and proved very successful from the outset. It is now the UK's fifth most popular station, with some 4.8 million listeners. As my hon. Friend mentioned, it has had considerable success overseas and has, I understand, further international ambitions.

I am well aware of the requests that we should take the opportunity of any legislation that might be proposed to alter the licensing procedures in the Broadcasting Act 1990. My hon. Friend has correctly pointed out that there is a difference between the radio and television licensing provisions and asked that incumbent operators should be given similar scope for licence renewal.

I understand the desire for parity between independent national radio services and the Channel 3 television companies, but the requirement for fresh competitive tender for the independent national radio licences was designed to keep services fresh and offer regular opportunities for new operators. It also recognised that national radio frequencies were at a premium. While the advent of digital audio broadcasting will allow for the provision of six independent national radio services as compared with the existing three, they will still be at a greater premium than their digital television counterparts.

The distinction between the arrangements for independent national radio and television licensing in the 1990 Act was drawn in recognition of the differences between the two media. Television stations, for instance, face considerably higher start-up costs to meet their more stringent licence conditions. Parliament considered that eight-year licences for radio stations offered sufficient scope for them to recoup their costs and to make a reasonable return on their investment. There was also the view that these arrangements would be more disruptive to viewers, if applied to television licensing arrangements, than to radio listeners.

Government policy is to provide regular opportunities for newcomers, to secure a proper return to the taxpayer for the use of a limited national resource and to encourage competition. At the same time, however, the Government recognise the need for those criteria to be balanced against acceptable levels of potential disruption for listeners. I can only assure the House and my hon. Friend that we are looking closely at these issues right now, but I cannot at this moment give any indication as to the outcome.

It is the nature of radio that safeguards its future. It has a unique appeal to the imagination. It has the ability to go anywhere with the consumer without intruding on their other activities, whether driving a car or relaxing at home. Research shows that listeners treat it as a friend. The loyalty with which listeners continue to respond to radio in the face of competing demands on everyone's time and attention demonstrates that radio has a solid future. The growth of commercial radio's audiences and revenue and the advantages which digital audio broadcasting offers signify that radio is not only secure but that radio is on the move.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes to Eleven o'clock.