Skip to main content

Television: Sky and ITV

Volume 687: debated on Tuesday 28 November 2006

asked Her Majesty’s Government:

Whether they will consult the Office of Fair Trading or Ofcom on whether the recent stake taken by Sky Television in ITV is compatible with the competition provisions of the Enterprise Act 2002 or the public interest provisions of the Communications Act 2003.

My Lords, it is for the Office of Fair Trading to consider whether to conduct an investigation into the competition effects of this transaction. My department is in contact with both the OFT and Ofcom about the matter and will keep under review questions relating to the potential use of the Secretary of State’s powers under the Enterprise Act 2002 to require a public interest investigation.

My Lords, while thanking the Minister for his Answer, perhaps I may ask him to look at Early Day Motion 309 in the other place. It is an impressively all-party Motion which, among other things, asks

“whether the raid gives Sky the ability to materially influence ITV”,

says that that should be investigated, and

“believes a prima facie case exists for the Secretary of State to subsequently intervene and instruct Ofcom to undertake a public interest inquiry”.

Is that not wise advice? In fact, should we not go further? Is it not time that Ofcom carried out a full public inquiry into Sky’s many anti-competitive actions which are distorting our broadcasting market?

My Lords, there are two separate issues here regarding the OFT and Ofcom. First, the DTI remains in contact with the OFT about the transaction and will keep under review whether the Secretary of State could or should intervene on public interest grounds. Ofcom is looking at the other issue. It has announced that it is inviting comments from BSkyB and ITV on whether the transaction has resulted in a change of control in one or more of the licences held by ITV. If Ofcom were to conclude that such a change had occurred, it would review its effects on the content of programming. Those are two separate issues and both are being investigated.

My Lords, does the Minister accept that even a stake in ITV of less than 20 per cent adds undesirably to the abundance and concentration of power already in Mr Murdoch’s hands? Does he recall that in the debates on the Communications Act in this House and, no doubt, in the other place, we were concerned above all to seek the objective of a plurality of news and views? That is endangered by this latest move.

My Lords, I hear what my noble friend Lord Borrie says and very much take his views into account as he has such experience in the field. However, this is initially a matter for the regulatory authorities and we must let them conduct their investigation before we comment any further. The points which my noble friend mentions are initially a question for them.

My Lords, does the Minister agree that Mr Michael Grade may prove a more effective and rapid defender of ITV than Ofcom would be and that he is certainly the one that Rupert Murdoch did not foresee?

My Lords, I hope that noble Lords will agree that that is straying a little from the Question. What I can say is that I wish Michael Grade all the best in his new role.

My Lords, the Minister has played a straight bat, as I imagined he would. However, as the noble Lord, Lord Borrie, indicated, the public interest part of the Act was put in, much against the will of the Government and on the insistence of this House, for just this circumstance. The noble Lord, Lord Puttnam, described BSkyB as having,

“pulled off a brilliant stunt”.

If we are going to defend our broadcasting ecology, we have to be able to defend it against brilliant stunts, and Ministers have to take their responsibility. So far there is no sign of them taking that responsibility and every sign that they are prepared to hide behind regulators.

My Lords, I do not agree. I do not know how other Governments would act but this Government abide by the law as it is set out. Let me explain to the noble Lord, Lord McNally, how it works. An intervention by the Secretary of State is available only if a relevant merger situation for the purposes of the Enterprise Act 2002 has arisen that is relevant to a public interest consideration specified under Section 58 of that Act. It would not be appropriate to comment further on whether those circumstances have been met in this case. That is the law and that is what the Government are abiding by.

My Lords, does my noble friend agree that things have moved on in the world of broadcasting with all the changes going on and telephone, television, internet and 3G all coming together? Does he agree that, while that is going on, it is best left to the regulators and the market rather than to interference from the Government?

My Lords, the House will not be surprised to hear that I entirely agree with my noble friend—he makes a very fair and rational point. I only wish that more Members of your Lordships’ House would follow his example.

My Lords, the Minister rightly says that it is for the OFT to decide whether the deal is referred. This is a very important decision. Businesses frequently complain about how slowly the OFT moves. Of 37 inquiries under way at the end of last year, no fewer than six had been going on for more than three years and one for six. Can the Minister be confident that an investigation of Sky’s investment in ITV would report sufficiently quickly to be useful?

My Lords, the noble Lord makes a fair point. This is obviously an urgent and important matter. I can assure him that my department is looking closely at the matter and will try to get a resolution as soon as possible.

My Lords, given the sort of changes that my noble friend indicated, where advertising is flowing to the internet and there is broadcasting over the internet, why on earth do supposedly astute businessmen such as Rupert Murdoch and Richard Branson want to invest their money in ITV at all?

My Lords, I am not sure whether I should thank my noble friend for that question. All I can say is that this sort of investment decision is up to the businesses concerned and it is best to leave it to them.

My Lords, perhaps I may offer one constructive suggestion and question to the noble Lord. Why does he not reappoint the noble Lord, Lord Borrie, as director-general of fair trade? In my time as Secretary of State I found that he dealt with all questions promptly, sensibly and reasonably.

My Lords, I thank the noble Lord, Lord Tebbit, for that surprisingly constructive intervention. My noble friend Lord Borrie is a very talented Member of your Lordships’ House. There are also many other talented Members of your Lordships’ House.