HC Deb 01 July 1987 vol 118 cc502-10

4.6 pm

The Chancellor of the Duchy of Lancaster (Mr. Kenneth Clarke)

With permission, I should like to make a statement about the future of the Today newspaper.

Under the Fair Trading Act 1973 the consent of the Secretary of State for Trade and Industry is required for all newspaper mergers which concentrate into the hands of one newspaper proprietor newspapers having a paid-for circulation of 500,000 per issue. My right hon. and noble Friend's consent cannot normally be given without a report from the Monopolies and Mergers Commission. He can, however, give consent without such a report where he is satisfied that the newspaper concerned in the transfer is not economic as a going concern, is to continue as a separate newspaper and that the case is one of urgency.

My right hon. and noble Friend has received such an application for the transfer of the Today newspaper from Lonrho plc to News International plc. He is satisfied that this application meets the criteria that I have outlined and, taking account of all the relevant circumstances, he has decided that it is right for him to give his consent to it. He has accordingly consented to the transfer.

Mr. John Smith (Monklands, East)

Is the Chancellor of the Duchy aware that what he has announced is a breathtaking abdication of responsibility by the Secretary of State for Trade and Industry? Under the Act, such a takeover is illegal and void unless conditional or unconditional approval is given by the Secretary of State. In acceding to the pistol that was put at their head by the arrogant Mr. Murdoch, who required the Government's permission by 4 pm, the Government have betrayed their responsibilities to Parliament and the people by indulging Mr. Murdoch's whim.

Is the Chancellor of the Duchy aware that Mr. Murdoch already owns 32.2 per cent. of all of the circulation of daily newspapers and 35.2 per cent. of all the circulation of Sunday newspapers in this country? To allow him to gobble up Today without a single condition put in his way is breathtaking in its audacity. The Opposition would urge a referral, whoever was acquiring it in such a monopolistic manner. Should not the Chancellor of the Duchy invite the Secretary of State to review his decision so that some conditions can be put on the merger, if it is to be allowed? Why can we not have a referral so that this monopolistic situation can be thoroughly reviewed and examined in the public interest?

Mr. Clarke

My right hon. and noble Friend has referred himself clearly to his duties under the Fair Trading Act, has made an extremely responsible decision in the present circumstances and has taken account of the matters that he is supposed to when reaching his decision. This takeover has an effect on the circulation figures, but the title in question is a new one that has been recently established. It has 2.5 per cent. of the market and the company that is acquiring the title does not have a title in this part of the market, where titles such as the Daily Mail and the Daily Express are mainly in competition.

The right hon. and learned Gentleman and those who support him are themselves irresponsible if they assert that, whoever had been involved in the application, a referral would have been made. This newspaper is losing a substantial amount of money and is plainly at risk of closure. Its sister title, Today on Sunday, has already closed. A referral would have caused considerable delay and my right hon. and noble Friend had a resolution from the board of the company saying that it was its intention to close if the matter were referred. He made his decision, not because of that resolution, but because of the state of the title, which is losing large sums and because 500 jobs would be at risk if a referral were made and the newspaper closed.

I suggest that right hon. and hon. Members of the Opposition would have made an equally strong protest if a referral had been made and the newspaper had closed. Then they would have accused my right hon. and noble Friend of acting irresponsibly by gambling with the future of journalists, whose jobs have been secured by my right hon. and noble Friend's decision.

Mr. Kenneth Hind (Lancashire, West)

May I congratulate my right hon. and learned Friend on acting so quickly to save jobs? In view of the political slant of this newspaper and the fact that it supports the Liberal alliance, does he agree that to refer it to a commission dealing with mergers would not be appropriate?

Mr. Clarke

I am grateful to my hon. Friend for his support. It will be interesting to see what alliance Members have to say about mergers. The issue is not the political control of the newspaper but the position of the title, its future, jobs on Today and the public interest, which my right hon. and learned Friend has properly addressed.

Mr. Malcolm Bruce (Gordon)

Does the right hon. and learned Gentleman accept that we regard his statement as a disgraceful negation? Does he agree that to accept the 4 o'clock deadline was an outrage? His excuses are lame in the extreme. The way in which he replied to the hon. Member for Lancashire, West (Mr. Hind) perhaps explains why Government Members are so keen on the proposition and why the anger expressed from the Opposition Front Bench was so synthetic.

Does the right hon. and learned Gentleman accept that the national press in Britain is concentrated in the hands of two hard-line proprietors who represent an imposed political line which illustrates the most distasteful aspects of the two main political parties? Is that a tolerable and proper way to ensure choice or morality? Is he aware that the regional press which has to compete with the big battalions will not be cheering his announcement today?

Mr. Clarke

We were not working against a 4 o'clock deadline. The last resolution that we received from News International plc was that, in the absence of consent by midnight tonight, the title would be closed forthwith. My right hon. and noble Friend's decision was not determined by that. He had to address himself to his duty under the Fair Trading Act 1973 that this was an urgent case. A referral to the Monopolies and Mergers Commission would have caused a delay of weeks, during which time the company would have continued to lose substantial sums. The company asserted that it proposed to close the title. It would have been a gamble to make the referral in the hope that the title could survive long enough for its future to be sorted out given the Monopolies and Mergers Commission's recommendations.

The hon. Member for Gordon (Mr. Bruce) makes political points about the control of the newspaper but they are not the predominant or important factors. It is no good asserting that the decision is disgraceful if hon. Members will not face the reality that my right hon. and noble Friend has saved a newspaper title and preserved a substantial number of jobs.

Mr. Jonathan Aitken (Thanet, South)

In a calmer moment, will my right hon. and learned Friend give serious consideration to whether the time has come for us to abolish this embarrassing and increasingly meaningless non-referral of newspapers to the Monopolies and Mergers Commission? Does my right hon. and learned Friend recall that only a few months ago, in conditions of great gravity, financial hardship and urgency, The Sunday Times was not referred to the Monopolies and Mergers Commission? Before that, The Times acquisition was not referred to the commission; and before that The Sun was not referred. Can we at least give Mr. Murdoch a free pass and have done with it?

Mr. Clarke

I think that my hon. Friend's criticism is of the legislation and the way it began. The key point, to which my hon. Friend has no more an answer than the Opposition, is that it is beyond dispute that the newspaper is in serious financial difficulty. Its immediate future was imminently at risk. In those circumstances it was the duty of my right hon. and noble Friend to address himself to the facts, to the Fair Trading Act and its provisions arid to exercise his duty in the public interest — which I believe he has done.

Mr. Michael Foot (Blaenau Gwent)

Did the Secretary of State give any consideration whatsoever to lifting the so-called deadline imposed by Mr. Murdoch, so that the House of Commons and others could express a view? Was that ever considered? Does the Minister appreciate that, if that had been done, others would have had an opportunity to express their views? The decision brings the whole of the so-called anti-monopoly legislation into disrepute and people will have no faith in it. The Ministers said that Mr. Murdoch has no other newspaper in the same field. Does he mean that Today has not yet reached the degrading standard of journalism which Mr. Murdoch's other publications represent?

Mr. Clarke

The resolution of the board was before my right hon. and noble Friend and that is the only statement of the quality of a company that we have. He had to consider not just that resolution but whether the case was urgent. He had to weigh up the alternatives—a referral or a non-referral.

A referral would have taken weeks if not months and caused uncertainty while a solution was produced. The case was urgent, so it was necessary for my right hon. and noble Friend to work within his own timetable and come to a decision in time for it to be effective. As a result of his decision, Today will continue to be on sale and it will continue to be a title in the newspaper market. The editorial content of a newspaper is not a matter for my right hon. and noble Friend.

Mr. John Redwood (Wokingham)

Does my right hon. and learned Friend agree that it is significant that no other bidder publicly emerged to save the jobs? Does he further agree that it shows that rich Liberals, having discovered that such views lose them votes, are not prepared to have those views lose them money?

Mr. Clarke

I agree with my hon. Friend. There have been other bids and rumours of other bids which appear to have fallen through. That was not the resolution before my right hon. and noble Friend. A particular bid was referred to him, and he had to exercise his powers under the Act. In the circumstances, he was right to take the decision that he did.

Mr. Brian Wilson (Cunninghame, North)

Does the right hon. and learned Gentleman agree that the Murdoch press is already responsible for introducing a degree of mendacity and privacy invasion into the British media which is unknown in modern times? Does he agree that it is profoundly undemocratic to extend the influence of this American citizen over the British media and that it will be widely seen as a pay-off by the Conservative party to the Murdoch press?

Mr. Clarke

As I said a few moments ago, I have no doubt that, had my right hon. and noble Friend taken a decision which involved closure, he would have been accused, among other things, of a pay-off amongst the journalists on the Today newspaper who opposed the Government during the election campaign. He would be accused of taking his revenge by robbing them of their jobs. None of that came into his consideration.

Perhaps the hon. Member for Cunninghame, North (Mr. Wilson) was trying to pay a compliment to News (UK) Ltd. and Lonrho, and to the impartiality of newspapers under that ownership. The editor and previous editor seemed to be respected journalists. A new editor has been appointed to the title and I have no reason to believe that he is not an independent journalist. The public interest has been best protected by what we have done.

Mr. Martin M. Brandon-Bravo (Nottingham, South)

My right hon. and learned Friend and my Conservative colleagues are entitled to take a somewhat cynical view of the customary protestations of Opposition Members that they care about employment. Is it not a simple fact that the paper was losing £38 million a year and that 500 jobs were at risk, and that that was the Government's prime consideration?

Mr. Clarke

I agree with my hon. Friend. It is obvious that what influences Opposition Members most is whether they agree with what a newspaper says. My hon. Friend and I—and my right hon. and noble Friend who made this decision—are concerned about the jobs and about the future of a separate title in Fleet street, which might otherwise have folded and followed Today on Sunday into oblivion.

Mr. Tony Benn (Chesterfield)

Is the Minister aware that nobody will be at all surprised that, following the scurrilous campaigns waged by Mr. Murdoch in support of his colleagues, the Government have conceded immediately to his demands in this case? Is he further aware that nobody will take at all seriously his remarks about protecting jobs, as Today began with the tragedy at Warrington and is now to be bought by the man who slaughtered 5,000 jobs at Wapping? Therefore, any suggestion that the Government's decision is about protecting jobs will not be taken seriously. Is the Minister aware that Mr. Murdoch has cancelled without any consultation the house agreement between the journalists at Today and their previous proprietor and has imposed on them the house agreement that he imposed on the News International journalists? Journalists are being bought and sold like chattels. Is that the right hon. and learned Gentleman's definiton of the freedom of the press?

Mr. Clarke

Clearly, the right hon. Gentleman's opinions are mainly governed by his implacable prejudice against the proprietor of News International, who has acquired the Today title. Those prejudices are not relevant to this decision, and nor do the management of newspapers and the arrangements between newspapers and their journalists directly concern my right hon. and noble Friend. Furthermore, I have no evidence that the Today journalists will necessarily object to the arrangements to be made. Those matters will arise now that the merger is to go ahead and once the title is secured and the newspaper sets off under the new ownership.

Mr. James Hill (Southampton, Test)

Does my right hon. and learned Friend agree with me that the 32.3 per cent. ownership referred to by the right hon. and learned Member for Monklands, East (Mr. Smith) should be considered alongside the fact that our ex-Labour colleague, Mr. Maxwell, at presents controls 28 per cent? There was a rumour that he was to buy Today himself, which would have brought him well over the 33 per cent. mark. In fiscal terms, Mr. Murdoch is clearly a very brave man to give £40 million to a paper that is losing £38 million every year and he should be congratulated rather than derided.

Mr. Clarke

I agree with my hon. Friend. According to my figures, News International has 33 per cent. of the popular dailies, Mr. Maxwell's Mirror Group has 26 per cent., United Newspapers has 25 per cent. and the Associated Newspapers Group 14 per cent., whereas Today has only 2.5 per cent. Those figures give some indication of the impact on the market, or the concentration of power.

Mr. Eric S. Heffer (Liverpool, Walton)

Is the right hon. and learned Gentleman aware that the people of Liverpool will not take seriously the Government's talk about saving jobs? In two days' time, 750 News International workers will be made redundant, in spite of the fact that—unfortunately—they worked during the Wapping dispute. Therefore, people will not take any notice of the Government's claim that they are concerned about 500 jobs. Members of Parliament from the area made representations to the Government asking them to do something and only today I received a reply from them saying that they will not intervene in commercial decisions. The Government are in Murdoch's pocket and they do exactly what Murdoch wants.

Mr. Clarke

The difficult Liverpool case that the hon. Gentleman describes is beside the point, unless he seeks to deny that the closure of Today might have cost jobs. It seems obvious to me that, had my right hon. and noble Friend gambled with the future of the title, and had the board gone ahead with its stated intention of closing it, many jobs would have been lost. That is the issue to which we must address ourselves today.

Mr. David Sumberg (Bury, South)

Will my right hon. and learned Friend bear in mind the fact that the Opposition's synthetic anger comes from a party which wholeheartedly supported the rioters at Wapping? Will he remember that the Labour party's political prejudice has now been shown to extend to their being totally careless of the loss of 500 jobs?

Mr. Clarke

I agree with my hon. Friend. We are witnessing merely an extension of the policy of the Opposition who, as my hon. Friend said, have supported industrial action against the premises of News International that was illegal and sometimes violent. Now, because of their hostility to the proprietor of News International, they are prepared to be quite reckless about the jobs of the Today workers.

Several Hon. Members


Mr. Speaker

Order. For the reasons that I have already stated, I shall allow questions for a further five minutes.

Mr. Andrew Faulds (Warley, East)

Does not this abdication of responsibility underline the need for the House to examine the whole question of the ownership of the British press, which is coming increasingly under alien influences—in this case the malign influence of an Australian carpetbagger who, for his own commercial aggrandisement, has chosen to become an American citizen and who has managed to achieve a decline in the already appallingly low levels of the British popular press, as well as one of the quality papers?

Mr. Clarke

The application that my right hon. and noble Friend considered, and gave a proper legal judgment in, came from News (UK) Ltd. and Tiny Rowlands' Lonrho organisation. I repeat that most of the matters being raised by the Opposition are quite irrelevant, and none of them more so than the question of the nationality of one of the leading figures in one of the companies involved.

Ms. Clare Short (Birmingham, Ladywood)

Does not the Minister understand that the issue at stake here is not just a party political issue; it goes much wider and affects the quality of our democracy. The high concentration of ownership of the British media and the degrading pornography and lies spread throughout the press are a danger to the quality of our society. If the Minister will not make a reference to the Monopolies and Mergers Commission, will he agree that his Government should review the question of the concentration of ownership of the press for the sake of democracy, which is a bigger issue than his party or ours?

Mr. Clarke

I am sure that all hon. Members are concerned about the future of the newspaper industry and about the state of our democracy and so on. I am sure that we are all anxious to ensure that we obtain a truthful, accurate and reasonably independent press in this country. However, those were not the issues that had to be considered by my right hon. and noble Friend—except that he had to take a view of the public interest and to decide what was in the interests of achieving the best kind of press. In particular, he had to address himself to the immediate problem of a title that was losing a large amount of money and was under the threat of imminent closure. The company that owned it came to him with a proposal for a merger with another company intending to continue it as an independent title. I believe that, on a moment's reflection, people will understand that he came to the only sensible and responsible decision.

Mr. Mark Fisher (Stoke-on-Trent, Central)

Does not the Minister agree that a diversity of views and choice are essential for democracy and that, as my right hon. and learned Friend the Member for Monklands East (Mr. Smith) explained, concentrations of ownership must limit that diversity? Is he unaware that we are the only European country that does not have specific legislation to control concentrations of ownership in our press? Is he further unaware that the problem attacks our culture and our democracy as a whole and not simply the newspaper industry? Large areas of our media and our cultural industries—the film industry, publishing, radio, satellite and cable—are being concentrated in the hands of fewer and fewer companies, and that cannot be in the interests of our country.

Mr. Clarke

We all want to see diversity in our newspapers and a reasonable range of news, but what we are dealing with here is a critical and urgent situation that has arisen in the case of a new title only about 18 months old. It had won an extremely small stake in the market and was losing money so heavily that the board resolved that it was imminently about to close. It is certainly probable that, had my right hon. and noble Friend done as the Opposition have urged, we would simply have one less newspaper and 500 fewer jobs. I do not believe that that would serve the interests of democracy, the newspaper industry or the public.

Mr. Ron Leighton (Newham, North-East)

Is the Chancellor of the Duchy of Lancaster, who is new to his job, aware that previous royal commissions have warned against the danger of monopoly and recommended more diversity? If Rupert Murdoch, who is an undesirable alien if ever there was one, gets his hands on the Today newspaper, it will be a massive move towards monopoly. Does the right hon. and learned Gentleman recall that it was said that new technology would give extra diversity and that there would be new newspapers? If the first newspaper founded with new technology falls into the maw of Rupert Murdoch, that will extend the monopoly of our press. Can the right hon. and learned Gentleman remember the glib promises that Rupert Murdoch gave concerning The Sunday Times, but which he broke and which have been referred to by the Opposition? If monopolies and mergers legislation and the Monopolies and Mergers Commission will not deal with monopolies, what is the point of having the commission and that legislation?

Mr. Clarke

Had a Labour Secretary of State been faced with this application, he would not have been entitled to base his decision on dislike for the political views of the proprietor, dislike of the way in which an industrial dispute had been conducted by that firm or any other of those matters that have so taxed the Opposition. The right hon. and learned Member for Monklands, East (Mr. Smith), to avoid the obvious problem of asserting that he disliked Rupert Murdoch and News International, said that he would have referred any such application for that newspaper. However, all that that would produce is total closure. In fact, the right hon. and learned Gentleman would have to reject the type of arguments that have been urged by his Back Benchers.

Mr. David Harris (St. Ives)

Will my right hon. and learned Friend continue to reject completely the cant, humbug and insults from the Opposition Benches? Does he agree that there might be some point in making a reference to the Monopolies and Mergers Commission in this case if some other person wanted to buy Today? However, apparently no one else wants to buy it and therefore there is no possible point in making a reference to that commission. Does my right hon. and learned Friend accept that, in my case as a journalist, if I happened to work for the Today newspaper I would be glad that somebody such as Mr. Murdoch wished to buy it rather than nobody—for then I would be out of a job?

Mr. Clarke

There certainly was no other application before my right hon. and noble Friend. There have been repeated stories in the newspapers about other people being interested in the newspaper, but my right hon. and noble Friend has had to consider what was before him—an application from News International accompanied by a board resolution from News (UK) Ltd. stating that the paper would close at midnight tonight if the bid was referred. We looked at the finances of the newspaper and certainly there was the strong probability that the newspaper would not survive a reference while, at the same time, the Opposition indulged their political prejudices and other people tried to get bids together. My right hon. and noble Friend was faced with no other sensible choice.

Mr. David Winnick (Walsall, North)

Is the Minister aware that few people in the country will truly believe that the Government would have approved this deal had not Mr. Murdoch given total, loyal support to the Tory party over many years? Is the Minister aware that the relationship now between this Tory Government and Mr. Murdoch clearly smells of outright political corruption?

Mr. Clarke

I think that that is an outrageous allegation from the hon. Gentleman. [HON. MEMBERS: "It is true."' If any member of the public believes that this decision was taken solely because the Government are sympathetic to the views of Mr. Murdoch, he would be believing a total untruth. This morning and this afternoon, the Secretary of State has addressed himself to his legal duties under the Fair Trading Act 1973, the facts as they were presented to him and his judgment of them. His judgment was that it was urgently necessary to give consent to this application to avoid a closure and to make sure that a newspaper continued in existence.

Mr. Peter Thurnham (Bolton, North-East)

Does not the success of News International prove the folly of trying to protect restrictive practices, as advocated by the right hon. Member for Chesterfield (Mr. Benn)?

Mr. Clarke

If the right hon. Member for Chesterfield was allowed to determine industrial relations in the newspaper industry and had some of the industrial action that he has supported succeeded, we would have fewer newspapers in this country and a much more uncertain outlook for the press, democracy and all the other considerations that the Opposition have discussed. We are merely facing unreasonable political prejudice on the Opposition's part and that prejudice is trying to get behind a sensible, legal decision.

Mr. John Smith

Will the Chancellor of the Duchy of Lancaster define the section of the market to which he referred? Is it not the case that Today occupies the same section of the market that The Sun occupied before its purchase by Mr. Murdoch? If the Minister is so sincere about protecting jobs, why did he not make it a condition of consent that those jobs were protected?

Mr. Clarke

At the moment, Today is in the middle of the market. Obviously one cannot determine this, as, for a start, it is a matter of judgment. In my judgment, Today is in the same part of the market as the Daily Mail and the Daily Express. The security of those jobs will depend on the improved success of the title. The title obviously must win more circulation and readership and get itself into a more secure financial position. At the moment, it is uneconomic and is facing the threat of closure. My right hon. and noble Friend has rescued the paper from that threat.