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Volume 729: debated on Tuesday 12 July 2011


Asked By

To ask Her Majesty’s Government whether they will suspend consideration of News Corporation’s bid for BSkyB until the conclusion of the police investigation into the involvement of News of the World journalists and those currently in positions of authority in News International in phone hacking.

My Lords, on 25 January the Culture Secretary said that he was minded to refer News Corporation’s proposed merger with BSkyB to the Competition Commission in the absence of any specific undertakings in lieu. News Corporation duly offered undertakings, on which the Culture Secretary has consulted. Yesterday, News Corporation withdrew these undertakings. The Secretary of State has therefore decided to refer the proposed merger to the Competition Commission. The commission can take up to eight months to report back.

My Lords, I thank the noble Baroness for that response, and should say that I have given her specific prior notice of my supplementary question, which is as follows. Every day we have fresh revelations of the appalling behaviour of News International, and today was no exception. The real question that the British public want to ask, and the question that I want to put specifically to the Minister, is: how and by whom will the test of whether News Corporation is a fit and proper company to own BSkyB be applied as part of the process of consideration of its bid?

My Lords, I am grateful to the noble Baroness for the prior notice of this question. She is absolutely right; it is important to realise that the fit and proper person test is not triggered simply by the proposed merger. Ofcom has an ongoing statutory duty to make certain that the holders of broadcasting licences are and remain fit and proper persons. This is a matter for Ofcom, which is taking its responsibility in this area very seriously and is already in touch with the relevant authorities. The Government have no role in its decisions. No doubt the Competition Commission will also want to consider whether Ofcom’s investigations raise any further points relevant to its assessment of the effect of the merger on plurality.

My Lords, are the Government entirely satisfied that their hands are now tied to the issue of media plurality, despite News Corporation’s failure to disclose its own nefarious activities? If so, does Section 67 of the Enterprise Act need urgent amendment? Might a way forward be to encourage Ofcom—there is no reason why it should not be so encouraged—to consider the fair and proper person test for continuing to hold a broadcasting licence under the Broadcasting Act 1990 as soon as the current investigations are sufficiently complete for it to form a view, and to delay a final decision on the acquisition until then?

My Lords, my noble friend makes some important points. I am sure that the Government will look at several amendments. The Secretary of State has returned this matter to the Competition Commission, and the review can take between 24 and 32 weeks, depending on the complexity of the case. The Competition Commission, confusingly for some, does not deal with actual competition. The European Union decided on 21 December 2010 that there was no competition problem. The Competition Commission’s decision, as my noble friend Lord Marks rightly says, will be based purely on plurality.

I am still puzzled by the timing of yesterday’s Statement. Were the undertakings offered by News International ever accepted by the Office of Fair Trading? If not, what was there to stop the Secretary of State at any time since 25 January referring the matter to the commission? Why did he wait until after the undertakings had been withdrawn to do so?

Because there were so many letters to him, the Secretary of State extended the period of consultation until Friday 8 March. He will be looking at all the answers. He is still looking at the answers. There will be quite a long delay. He does not know how long, but he does not want to be pushed into any quick decision because this is a very serious matter which everyone is quite rightly upset about.

My Lords, there seems to be a difficulty in this matter, because if the Competition Commission has to report within this relatively short time span, the prospect of the police investigation being finished in that time is zero, especially if we are to reach the conclusion of whatever prosecutions take place. Indeed, the judicial inquiry cannot do its work until after that process is completed, so it would be difficult for the inquiry by the Competition Commission to reach a balanced and wise conclusion because so much of the matter has to run on beyond that time. How will Ofcom take a view until the judicial matters are completed?

My Lords, the right reverend Prelate makes an extremely good point. At the moment there are six inquiries, including a police investigation and several others on which it is not possible to comment, that of the Home Affairs Select Committee and the two inquiries that the Prime Minister has announced. All those will have to be gone through. There is a timescale. As I said, the Competition Commission review will take between 24 and 32 weeks. Ofcom will then take a decision and make a recommendation to the Secretary of State, who will make the final decision.