"The Observer": Future (Hansard, 26 April 1984)

§ The Chancellor of the Duchy of Lancaster (Lord Cockfield)
My Lords, with the leave of the House, I shall now repeat the Answer which has been given to a Private Notice Question in another place. The Question is as follows: "To ask the Secretary of State for Trade and Industry what steps he proposes to take regarding the future of The Observer newspaper".
The reply by my right honourable friend is as follows: "None is required of me, unless a transfer of ownership falling within the scope of the Fair Trading Act 1973 is proposed. That Act provides that my consent is required to a transfer of a newspaper above a certain size to a newspaper proprietor. I may only give my consent after a reference to and report from the Monopolies and Mergers Commission, unless I am satisfied that the newspaper in question is uneconomic as a going concern, and either that the case is one of urgency or that it is not intended to continue it as a separate newspaper. I have received no application for any consent in relation to The Observer newspaper".
My Lords, that concludes the reply.

Lord Bruce of Donington
My Lords, is the noble Lord aware that that Answer is thoroughly unsatisfactory in that it does not deal with the principal part of the question, which relates to the preservation of the independence of The Observer newspaper? Is the noble Lord aware that there is a very widespread view that the unwillingness of the Government to take any steps to ensure the indepen-dence of this newspaper is because from their point of view it is unnecessary in that at least 12 of the 14 national dailies are owned and controlled by people who support their own party? Does he not agree that it would be a far more dignified posture for a Government in a democracy—albeit an elected dictatorship—and a much more honourable role to play, to take all possible steps to ensure that within this democracy there is real freedom of the press and that editors are not subjected to the whims and dictates of their owners and proprietors to the detriment of the impartiality of the news that they are supposed to publish?

§ Lord Harris of Greenwich
My Lords, is the noble Lord, Lord Cockfield, aware of the deep anxiety that I am sure is shared in all parts of the House about what is going on in relation to The Observer at the moment? 154 May I ask two questions which arise directly from Mr. Biffen's assurances given on 9th July 1981? First, is the noble Lord aware of the critical importance of the position of the independent directors, two of whom were in fact proposed by Mr. Rowland himself? Is the noble Lord also aware of the concern (which, I repeat, I am sure is shared in all parts of the House) about what we have read in the last 48 hours, that Lonrho is now withdrawing its advertising from The Observer and applying stringent new financial targets with the obvious intention of making the position of the editor untenable? Is the noble Lord aware that this is wholly unacceptable, given the clear statement made by the newspaper's independent directors? In the light of that, what do the Government propose to do about it?

§ Lord Cockfield
My Lords, I start with the comments made by the noble Lord, Lord Bruce of Donington. I should have thought that if these events illustrated anything it was, in fact, the existence of real freedom of the press in this country, and that this is an issue which is right out in the public arena. Nothing is being suppressed. An editor has taken a very firm stand.
As regards my right honourable friend the Secretary of State for Trade and Industry, he can only act, of course, within the powers conferred on him by the Fair Trading Act 1973. That Act provides that the Secretary of State can act only if an application for a consent has been made or if a transfer, or purported transfer, takes place. At the moment none of these events has occurred, and there is therefore no ground on which my right honourable friend could intervene in the matter. The noble Lord also referred to the number of newspapers supporting the Government. This, of course, is a recognition by a free press of the merits of the policies which are pursued by the present Government, and that is why we support the continuation of a free press.
May I now take the very legitimate and important points raised by the noble Lord, Lord Harris of Greenwich? There were special conditions inserted in the articles of association as a result of the decision taken by the then Secretary of State for Trade. I agree with him about the crucial importance of the position of the independent directors. That is written into the articles of association, and, in fact, the articles are drawn up in such a way that the independent directors have a locus standi if they wish to apply to the courts. If there is any breach of the articles of association that is a course of action which they will need to consider. It is not a question for the Government: it is a matter for the independent directors who were put in to safeguard the editorial independence of the newspaper.
As regards the policy, stated in newpaper reports, to be pursued by Lonrho in withdrawing advertising support and imposing stringent financial guidelines on the operation of the business, it is essentially a matter for the proprietor to decide what money he makes available for the company.

§ Lord Ardwick
My Lords, is the noble Lord aware that the free press which supports this Government also supported with equal vigour the Government of Mr. Heath and the Government of Mr. 155 Macmillan—Governments which seem to be repudiated by the present generation of Conservatives? On a more serious point, this is a dangerous moment in the life of a great newspaper. My instincts are naturally with the editor of that paper, for which I once worked. In this situation we must all tread delicately. Is the Minister aware that this is a newspaper which is esteemed by all journalists and which is loved by its readers, who hope that everything will be done, including, if necessary, using the good offices of the Government, to see that The Observer is maintained with its traditional independence and its high journal-istic style?

§ Lord Cockfield
My Lords, I entirely appreciate the points which have been very validly and properly made by the noble Lord. In a very judicial fashion we do need to be very careful in what we say now. I think it is important to draw attention to the fact that it was my right honourable friend the previous Secretary of State for Trade who insisted that the conditions safeguarding the editorial independence of The Observer newspaper were inserted in the articles of association. There is no reason at present to believe that there has been any breach of those articles of association, but if there is a breach there is a disputes procedure provided in the articles and in the last resort it is always open to the independent directors to consider whether or not to take legal action. However, we have not yet reached that stage and one would hope very much that we do not. I entirely echo the noble Lord's sentiments that at this stage it is not very wise to speculate too much about events which have not yet happened.

Lord Morris
My Lords, does my noble friend not agree that the true independence and freedom of the press is very much a matter for the courage and integrity of the journalists themselves, as has been made most manifest in the circumstances of this particular case? We should rejoice in that fact.

§ Lord Cockfield
My Lords, I entirely agree with my noble friend.

Lord Bruce of Donington
My Lords, is the noble Lord aware that on this side of the House we greatly appreciate the noble Lord's sentiments about the necessity for the freedom of the press? In those circumstances, will the noble Lord answer on behalf of the Government whether it is perhaps the Government's intention, since this is a matter of some urgency, to introduce legislation either here or in another place to protect the editors of newspapers from any kind of undue and improper pressure by their proprietors?

§ Lord Cockfield
My Lords, the existing legislation regarding newspaper mergers is very detailed and does provide adequate safeguards in the present circumstances. This is illustrated by the action which was taken by my right honourable friend the previous Secretary of State for Trade.

§ Lord Molloy
My Lords, will the noble Lord not agree that the apprehensions expressed on all sides of 156 the House, and to a degree the apprehensions he himself so very fairly submitted to the House, ought to be warning enough that there is grave concern at the present course of events? If he were to say loudly and clearly that there is an element of concern officially felt by the Government, that by itself might make a contribution towards resolving the problem that this great newspaper now faces.

§ Lord Cockfield
My Lords, I note what the noble Lord says, but I do not think it is right at this stage either for me or for the Government to intervene in this matter. The law makes provision for the matter to be dealt with in certain circumstances clearly specified in the law. I think we ought to allow it to rest at that for the moment.