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Sky: 21st Century Fox Takeover Bid

Volume 618: debated on Tuesday 20 December 2016

(Urgent Question): To ask the Secretary of State for Culture, Media and Sport to make a statement on the timetable of, and the approach of the Government to, 21st Century Fox’s bid to take over Sky now that the bid has been agreed, and whether the Government plan to refer the bid to the competition authorities.

As hon. and right hon. Members know, Sky plc announced on Friday 9 December that it had received an approach from 21st Century Fox Inc. to acquire the 61% of shares in Sky plc that it does not already own. The Minister for Digital and Culture, my right hon. Friend the Member for West Suffolk (Matt Hancock), made a statement on 12 December about the proposed bid and the process that would need to be followed. I recognise that this is an issue of significant interest to the public and that it has raised a lot of interest in Parliament, as well as being a significant issue for the parties concerned. It is very important I make it clear that the role I will play in this process is a quasi-judicial one. As the Secretary of State, I am able to intervene in certain media mergers on public interest grounds, as set out in the Enterprise Act 2002. Government guidance on the operation of the public interest merger provisions under the Act gives an indication of how the intervention regime will operate in practice and of the approach I will aim to take. The most important concern for me is that the integrity of the process is upheld. The guidance makes it clear that I will aim to take an initial decision on whether to intervene on public interest grounds within 10 working days of formal notification of the merger to the relevant competition authority.

No such formal notification has yet been made. Unless and until a formal notification is made to the relevant competition authority, I will not be taking any decisions in relation to the bid. It is for the parties formally to notify the relevant competition authorities. It is at that point that I will need to consider whether any of the public interests specified in the legislation merit an intervention. My decision on whether or not to intervene will be a quasi-judicial one, and it is important that I am able to act independently and that the process is scrupulously fair and impartial. Given that, it would be inappropriate for me to comment further on this proposed bid at this point if the integrity of the process is to be protected and everyone’s interests are to be treated fairly.

What I can say is that I understand the significant public and parliamentary interest in this matter, and I do not for a minute underestimate it. This is also clearly a significant issue for the parties to the bid. It is therefore crucial that the integrity of the process is protected. I will not be making any further comment on the process or the merits of the bid today, but I can confirm that this matter is being treated with the utmost seriousness and that, should the parties formally notify the bid to the relevant competition authorities, I will act in line with the relevant legislation, the guidance and the quasi-judicial principles.

I thank the Secretary of State for her reply. The urgency of the House considering this matter today is that we are going into recess until 9 January, and the bid may be notified to the Government at any time.

It is very important that the House understands the reality that in even launching this bid for 100% of Sky, the Murdochs are seeking to turn the judgment of this House, the regulator and indeed the country on its head. In 2011, this House unanimously urged the withdrawal of the bid for Sky by Rupert Murdoch. In 2012, Ofcom published a damning assessment of James Murdoch’s behaviour in the running of News International. That report stopped short of declaring Sky as unfit and improper to hold a licence only on the basis that the Murdochs were a minority—not 100%—owner of Sky, and that James Murdoch was no longer playing an executive role at Sky.

Today James Murdoch is back, as chairman of Sky and chief executive of 21st Century Fox. This bid shows the Murdochs have learned nothing and think they can get away with anything. If it was wrong for the Murdochs to own 100% of Sky in 2011 and 2012, it is wrong today. We have seen the convictions of their senior employees for phone hacking and perverting the course of justice, and of police and public officials for taking payments from News International employees. We are still yet to have part 2 of Leveson, which was supposed—I am quoting its terms of reference—to examine the

“corporate governance and management failures at News International”.

Why? Because this Government are seeking to ditch part 2 of Leveson. We all said across this House in 2011 that never again would we allow the Murdochs to wield unfettered power, yet here we are all over again.

May I ask the Secretary of State: first, has she read the Ofcom report of 2012 into James Murdoch, and will she tell us what she thought of its contents; secondly, will she tell us how this bid can even be considered to be in the realm of reality when part 2 of Leveson, specifically tasked with looking at the failures of News International, has not taken place; and thirdly, will she hear the message loud and clear that if the House were to return on 9 January to find the waving through of this bid, that would be totally and utterly unacceptable and fly in the face of the expressed will of the House and the country? Will she assure us today that this will not happen?

On the steps of Downing Street, the Prime Minister said she would stand up to the powerful. If ever there was a chance to prove it, it is today.

I do not for one second underestimate the huge public and parliamentary interest in this proposed merger, nor the importance of the issue to the parties concerned. But I must ensure, given my quasi-judicial role, that I protect the integrity of the process and ensure that, as and when a formal notification is given—if it is—it is properly considered. I will be making no further comments on the merits of the bid at this stage.

Will my right hon. Friend bear in mind that, contrary to the assertion of the right hon. Member for Doncaster North (Edward Miliband) in The Guardian, Sky’s share of the television news market is actually 5%, not 20%? Although there may well be a case for asking the regulator to look at this bid, does she recognise that it represents a £12 billion investment into a British company, and is a vote of confidence that Britain will remain a centre of international broadcasting after it leaves the European Union?

My right hon. Friend has significant interest in this area, having been an exceptionally good predecessor for me, but will, I know, understand the position I am in and that I cannot comment.

We have seen this bid before. I know that Christmas is a time for TV repeats, but this one was not a hit the first time round and is no more popular now. More than 135,000 people have already signed an online petition calling for the bid to be referred to Ofcom. The reasons for their concern are the same as those that caused the previous bid to be abandoned in 2011. Does the Secretary of State agree that it would be outrageous if the bid were pushed through over the Christmas holidays when Parliament is not sitting? Is she not even slightly embarrassed that on the one hand she is currently consulting to shelve part 2 of the Leveson inquiry, which would look at unlawful or improper conduct and management failings in parts of the Murdoch empire, and on the other is being asked to rule on whether that empire should be expanded?

Last week, the Minister for Digital and Culture told the House categorically that the Prime Minister had not discussed the bid at her recent New York meeting with Rupert Murdoch. Will the Secretary of State repeat that assurance? How does she know? Will she tell us what was discussed, because after all, Leveson recommended that those meetings be minuted?

Yesterday Rupert Murdoch wrote to The Guardian to say:

“I have made it a principle all my life never to ask for anything from any prime minister.”

Let us just pause to take that in for a moment. Members will recall John Major’s testimony to the Leveson inquiry, in which he recalled Rupert Murdoch asking him to change his party’s policy on Europe and warning that if the Conservatives would not change their European policies,

“his papers could not and would not support the Conservative Government.”

Does the Secretary of State believe Rupert Murdoch or the former Conservative Prime Minister, and what implication does the contradiction between them have for the application of the fit and proper person test?

I repeat that I cannot comment on the merits of the bid. I can say that, as and when a formal notification is made, there will be 10 days for me to make a decision as to whether to refer the proposed merger.

The hon. Gentleman talked about the Leveson process. I remind him that we have opened an open public consultation on that, which I hope he has responded to—I am sure he has. At the end of the consultation I will look at the responses as a separate matter.

The hon. Gentleman asked specifically about the meeting the Prime Minister held in September. She had a pre-arranged meeting with Wall Street Journal editors. Mr Murdoch dropped in to that meeting. I assure the hon. Gentleman that the proposed takeover was not discussed.

I am not entirely sure that a company controlled by Rupert Murdoch trying to buy another company largely controlled by Rupert Murdoch is of the great public interest that the Secretary of State seems to think it is. This is really all about the Labour party not liking Rupert Murdoch. If Richard Branson was in the same situation Opposition Members would not be saying a word about it. So may I ask the Secretary of State to ignore the siren voices on the Opposition Benches and not treat it with the great importance with which they think it should be treated? After all, the BBC controls huge amounts of TV news and national and local radio news, and we do not hear a peep out of the Opposition about that.

I know that my hon. Friend has strong views on these matters. I just repeat that I will not be making any comments on the merits or otherwise of the bid.

When these matters were last discussed, the Minister of State said that the plurality rules were clearly set out and the Secretary of State would follow them very carefully if she was required to make a determination. Now that the bid has been agreed—although no formal notification has been given—can the Secretary of State throw some light on the process? Does the separation of the Murdoch print and broadcast interests change the Government’s view of plurality since the last bid? How much weight will the Secretary of State give to that separation when considering whether a public interest intervention notice should be issued?

No formal notification has been made. At this stage I will be making no comment on the merits or otherwise of the bid.

May I note a hereditary interest in relation to the forces of the great Rupert Murdoch and commend my right hon. Friend for her proper even-handedness in dealing with this matter and her correct responses. May I also note that we have seen the true voice of socialist envy that, thanks to Rupert Murdoch, who risked his whole business on it in about 1990, Sky has provided incredible choice to millions of people. It is amazingly popular. Instead of decrying this wonderful achievement, we should be proud that it happened in Britain and that this huge investment is potentially coming into our nation. I hope that my right hon. Friend will bear that in mind and will not fall tempted by the siren voices of socialist ingrates.

I note my hon. Friend’s comments, but I repeat that I will not be making any comments on the merits or otherwise of the bid.

The Secretary of State is quite properly saying that she will not comment on the decision itself, but that does not mean that she cannot answer some of the questions that are being put to her today, and she should not hide behind that. So I ask her again: has she read the 2012 Ofcom report on the conduct of James Murdoch—yes or no?

I am sorry to disappoint the hon. Lady, but I will not be making any comments on the process, its merits or otherwise.

The Minister is at pains to tell us what she cannot do, and we respect that of course, but can she give us an assurance that she will use her office to ensure that there is a proper plurality of ownership of the media in this country, and that the views of this House, which have been clearly and frequently expressed, will also be respected at the end of this process?

I fully appreciate the level of interest in the matter. I am sure that the House will continue to debate these issues, and it is absolutely right that it should do so. It is equally important, as the right hon. Gentleman says, that I discharge my functions in line with the legislation and in accordance with my quasi-judicial role.

Is it not likely that Mr Murdoch had a point when he said—he was quoted earlier by my hon. Friend the Member for West Bromwich East (Mr Watson) from the Front Bench—that he had never asked

“for anything from any prime minister”?

Why should he? A Tory Government know what he wants and usually give it to him without any difficulty whatever.

It would not be appropriate for me to comment on the relationships that Prime Ministers of all parties over the years have had with members of the press.

The Secretary of State has made it very clear that she does not feel able to comment on the content of this decision because it is a quasi-judicial decision, but does she share my anxiety that the timing is all in the hands of Murdoch? She has a responsibility to respond within 10 days. It might not be an accident that he has chosen not to notify the bid at the moment, in order to ensure that Parliament cannot take a decision before she has to. What is she going to do about that, now or in future?

At the moment there is no decision to take. This is a decision that will be taken by me as the Secretary of State. I reassure the right hon. Lady that I will not be taking a break over Christmas, whether there is a formal notification or otherwise.

The hon. Member for North East Somerset (Mr Rees-Mogg) could not have struck a more wrong note with his remarks. No one on the Opposition Benches feels any envy for the Dowler family or any of the other victims of phone hacking. The Secretary of State cannot tell us what she is going to do, but the findings of Leveson part 2 may be relevant to the fit and proper person test. When she came to the House and announced that she intended to consult on it rather than just go ahead straightforwardly, did she have any inkling that this takeover bid was going to be made?

The first I knew about the takeover bid was at the same time as everyone else in the House, when it was announced in the press.

Given the concerns that have been raised about the timing, and the fact that it could well be that the Secretary of State will have to fulfil her quasi-judicial role during the recess, if she could not answer questions about what she has previously read today, will she ensure that when she does take a decision, on which she will be questioned in the House, she will be able to answer that she did read all of that relevant material? On understanding the parliamentary and public interest, does she accept that most of it goes to those points that are in the public interest grounds in the legislation?

I can assure the hon. Gentleman that I will fulfil my role exactly in line with the legislation and I will of course be answerable to Parliament in the decisions that I take.

I know that it is pointless to ask the Culture Secretary to give a view on the bid, but may I express to her the clear views about the bid of more than 100 constituents who have emailed me in recent days? Will she undertake to come back to the House on 9 January to give us an update?

I hear the hon. Lady’s comments about her constituents’ concerns. I will of course update the House as and when there is anything to say on the matter.

When the original bid was abandoned in 2011, the former Prime Minister said that it was the right thing to do for the country. Does the Secretary of State disagree with him and think that the time is now right? If not, will she please refer it to Ofcom?

My apologies, but I cannot answer that question at this stage. I have a quasi-judicial role in this process; I know that the hon. Lady has a legal background and will understand that. I simply cannot make comments at this stage.

I know that this question will not be answered, but I am asking it just the same. A substantial number of my constituents have contacted me in the past week about the bid, and they are all of the same opinion—that Mr Murdoch has too much influence over our media. Many would like to see his bid referred to Ofcom for that very reason. However, does the Minister agree that at the very least, any takeover should be delayed until the Leveson part 2 inquiry takes place?

With reference to the question asked by my hon. Friend the Member for Neath (Christina Rees) about the former Prime Minister David Cameron’s comment that the withdrawal of the decision was the right one, what assessment has the Secretary of State made about what might have changed between then and now?

I will be making no comments on any assessments that I have made at any time. I will be going through a full process in line with the legislation. I need to ensure the integrity of that process for all concerned.

We are all concerned that next year the leader of the free world will be a blunt-brained snake oil salesman who was elected by a prostituted press to whom truth is secondary and sometimes entirely irrelevant. Will the Secretary of State bear in mind the very strong views that we need to maintain in this country those qualities of balance and fairness that we have imposed on the BBC by statute? Will she bear in mind the grave danger of a prostituted press?

Does the Secretary of State agree that allowing the takeover might put pressure on, or take away, the diversity of our press? Is it the Government’s or the Secretary of State’s intention to ensure that we have a free press, not controlled by one person or one company?

I have a very specific role, which is set out in legislation. I will fulfil that role with the utmost integrity.

My constituents have also contacted me with their concerns about the bid, in particular the threat to the valued diversity of our press. Will the Secretary of State commit to addressing this point when she comes back to the House in the first week after the recess? Will she also confirm that if she has not yet read the 2012 Ofcom report on the conduct of James Murdoch she will have done so by the time we come back, and refer to its conclusions in her response?

I can assure the House that I will update the House as and when decisions are taken. I do understand that there is the utmost interest in this matter, but I have a quasi-judicial role and I cannot make any further comment at this stage.