HL Deb 07 July 1987 vol 488 cc647-62

5.45 p.m.

Lord Bonham-Carter rose to ask Her Majesty's Government why they consented to the sale of the Today newspaper to News International without a reference to the Monopolies and Mergers Commission.

The noble Lord said: My Lords, I regret very much that the Secretary of State is not here this evening. The debate is about a decision which he insisted was taken at his discretion. He was unable for constitutional reasons to participate in the debate in another place which took place yesterday. It seems to me all the more important that he should have taken an opportunity to explain the reason for his decision here today.

It was only as a result of an inquiry I made yesterday that I learnt that he would not be participating in this debate. I should add further that had he informed me I would have tried to change the date of the debate so as to suit his convenience. I have written to him to this effect and I said in my letter that I would raise the matter this evening. I should like therefore to condole with the noble Lord, Lord Beaverbrook, who has been put in a most unfortunate position. He can have no possible responsibility for the decision that was taken. I exempt him from all blame for it and for all the words he says in its defence.

I trust that we would be wrong to conclude from the absence of the Secretary of State that he regards the acquisition of Today by News International, without any reference to the Monopolies and Mergers Commission, as a matter of minor importance. In my view it is no such thing. It raises a number of matters of principle and practice which demand consideration.

It calls into question, for example, whether the Fair Trading Act 1973 does not require substantial amendment, particularly in respect of Sections 57 and 58, which deal with the press. It calls into question the Secretary of State's decision not to refer the purchase of Today by News International on the grounds that: (a) Today was not a going concern; and (b) the urgency was such that it would not admit of a reference to the Monopolies and Mergers Commission. Finally, we must also ask ourselves whether we share the Secretary of State's view of the public interest in this matter.

This Government's view of what is or is not a going concern is somewhat difficult to comprehend, but in the case of any newspaper it appears to be that if at any moment in its career it is losing money, at that particular moment it can be said to be not a going concern. Thus for a period rare in its whole career in 1981 the Sunday Times was losing money. The Sunday Times was therefore declared to be not a going concern and it was not referred to the Monopolies and Mergers Commission. Most people now agree that that was one of the most extraordinary decisions that has ever been taken. It is now making millions.

Today was acquired by Lonrho when it was losing money. It was acquired by Lonrho because it thought Today could make money. That is a much better definition of a going concern; something which has the prospect of making money. I share the view of the Financial Times that it is ludicrous for any businessman to, in its words: Value an asset at £38 million tonight and nothing tomorrow". That is the state of play so far as Lonrho and Today was concerned.

It is also said that the circulation of Today was rather small, 350,000—I should think about the same as the Independent —and only 2.5 per cent. of national daily sales. As the Independent pointed out, it takes Mr. Murdoch's share of total readership to 30.3 per cent. and, writes the Independent: It so happens when measuring market control that 30 per cent. is seen all over the world as the crucial point".

Moreover, let no one suppose that News International will be satisfied with a circulation of 350,000. This is merely something on which it will plan to build, and presumably its object is a circulation of something more like 750,000 or 1 million, and that will put Mr. Murdoch's share of national daily readership up even more.

We then move to the question of urgency. In answer to my questions on urgency in this House, the noble Lord, Lord Young of Graffham, said on 1st July (at col. 257 of Hansard): the noble Lord"— that is to say, me— mentioned 4 o'clock [as the time when the ultimatum ran out] and I wished to point out that there was no deadline by hour but that there was urgency if the newspaper were to continue". Again at col. 255: The case is not one of urgency just because there was a particular deadline, as the noble Lord, Lord Bonham-Carter, seemed to feel".

That is a slightly disingenuous reply, if I may so so. It is what is known as practising economy, because though it is true it is not the whole truth. Practising economy was justified by St. Thomas Aquinas—not by Sir Robert Armstrong, as some people seem to think—as not being a lie. To say that there was not a deadline at four o'clock is true, but there was a deadline at midnight that night.

The Minister goes on to claim that the deadline of midnight had no effect on his decision. But he also said that what governed him was the fact that at midnight the paper would be closed down. It seems to me that there is an extremely close relationship between the midnight deadline and the closing down, and the closing down and what he saw as the urgency of a decision. I was wrong to say that there was a deadline at four o'clock, and I apologise for that error.

Lord McIntosh of Haringey

My Lords, the noble Lord should not apologise. The deadline of four o'clock was imposed by the purchasers, not by the vendors. Both those deadlines have been forced on the Government and the Government have given way to both.

Lord Bonham-Carter

My Lords, I thank the noble Lord. It is a pretty sorry story. It is best summed up in the leader in the Independent, which says: On Tuesday evening Tiny Rowland and Rupert Murdoch, proprietors of national newspapers accounting for a substantial portion of the British market, arrived at the deal under which Mr. Murdoch could acquire the ailing Today newspaper. As a term of the agreement they had the effrontery to give Her Majesty's Ministers just one day to declare that that transaction need not be referred to the Monopolies and Mergers Commission as is normally the case. Yesterday afternoon, less than 24 hours later, Lord Young, the Secretary of State, duly obliged. Thus a Government freshly elected to office with a large majority is bent to the will of two formidable entrepreneurs". I believe that the noble Lord, Lord Young, with his long and successful business record, should have acquired the knowledge to deal with bluff and blackmail. But when he was accosted by two world-renowned street fighters with pistols in their hands he simply surrendered. He went on to claim that the pistols had nothing to do with his actions. I find it difficult to follow that sequence of events with any degree of conviction.

The behaviour of Lonrho and News International shows the minimum of respect for Her Majesty's Government. The behaviour of Her Majesty's Government shows the minimum of self-respect on their part. What it proves beyond all doubt is that the Fair Trading Act 1973 is inadequate when it comes to the big boys and in particular when it comes to Mr. Rupert Murdoch, who has carved out in the area which it covers a very large no-go area.

Finally I come to the question of public interest, for which the Secretary of State has a responsibility. When I raised this on the Statement last week the Secretary of State responded by saying that it was "not relevant in this case". That is at col. 258 of Hansard. The Chancellor of the Duchy of Lancaster on 1st July in another place said (at col. 507): However, those were not the issues"— whatever the issues were before— 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". That is a very different answer from that which we received in this House.

I would simply say that I cannot see that it is in the public interest that a further concentration of the ownership of the British national press should take place. I cannot see that the political imbalance of the press which already exists should be allowed to be exaggerated so easily. I cannot see that it is in the public interest that political discourse in the press should be so restricted to the statement of one point of view.

I do not understand why the party opposite should be so paranoid about the BBC, which at least, with all its weaknesses, tries to be impartial, and so indifferent to the partiality of 80 per cent., if not the whole, of the press, which is blatant and unqualified—except that perhaps on the other side of this House they think it is in their interests. I believe that that is a short-term view and it is not in the interests of this country.

Nor do I believe that it is in the public interest to frustrate the Fair Trading Act 1973, weak though it may be, by making it obvious beyond all doubt that if you are big enough, rich enough and powerful enough you can drive a coach and horses through it. It is at least open to question whether it is in the public interest that a foreign national should control over 30 per cent. of national daily sales in this country. Certainly it is not considered in the national interest in the case of television.

I conclude by quoting from the remarks of the chairman of the Press Council, who may perhaps be regarded as impartial in this matter and also as a man speaking with some authority. He said: There could hardly be a more obvious increase in concentration than acquisition of a fifth national newspaper by a group which already owns four. Newspapers which are for sale will often be vulnerable newpapers. To accept a tight timetable set by the owner and the potential buyer if that precludes proper examination by the Commission makes a mockery of the Fair Trading Act. The decision on Today following the similar one when The Times and The Sunday Times changed hands six years ago signals that newspaper buyers and sellers need not have a Monopoly Commission inquiry if they do not want one".

5.58 p.m.

Lord Ardwick

My Lords, may I too express my regret that the noble Lord, Lord Young, the Minister responsible, is not here today? Because he is a Member of this House he escaped yesterday the hard Scottish logic deployed with forensic force by my right honourable friend Mr. Smith in the other place, and the drubbing fell on the shoulders of the Chancellor of the Duchy of Lancaster. Our style, of course, is different in this House and our more refined strictures will fall upon the innocent noble Lord, Lord Beaverbrook.

Perhaps I may say that one of the compensations for the absence of the noble Lord, Lord Young, is that the debate is to be taken from that side of the House by the bearer of one of the most famous names in newspaper history, whom I, alongside Mr. Michael Foot, was happy to serve many years ago. I should like to remind the noble Lord that his grandfather did not enter into multiple ownership of national morning papers. He was content with one national daily newspaper, one national Sunday newspaper and a London evening newspaper. It was a very partial monopoly.

The noble Lord, Lord Young, was somewhat unfortunate in having to deal with a case of newspaper ownership within a few days of taking office in the department responsible. I am afraid that he has made a hash of it. I do not think he yet realises that his reputation has been harmed by either his naivety or his misjudgment. I have yet to meet a journalist who does not believe that he acted too swiftly, without sufficient inquiry, and apparently even without demanding safeguards for the title or the staff.

I find it difficult to believe, as does the noble Lord who opened this debate, that he was an innocent abroad in the jungle of the new Fleet Street (Fleet Street is no longer a geographical expression but a generic description of national newspaper publishing). After all, one of the qualifications for high office of the noble Lord, Lord Young, is that, unlike most Ministers, he has not been brought up in the sheltered workshop of Westminster but has lived in the rough world of business. One would have expected him to have the agility to sidestep even a couple of heavyweight tycoons such as Tiny Rowland and Rupert Murdoch. I am afraid that he misjudged the situation.

The verdict will be that the noble Lord was taken in by a bluff and that he submitted meekly to an imperious ultimatum. Surely if Lonrho had taken a decision that Today must be sold it could have let that fact be known to a variety of prospective bidders and made a social choice within the limitations of good business dealing. The Minister's defence that it was not a going concern will not wash. Nobody expects a newly-founded daily newspaper to be paying its way certainly within the first two years.

It is appropriate that the Question should be raised in this House by a Peer who is a member of the Alliance—I suppose that the Alliance still exists. My party had only a minority of the press in its support during the recent election campaign but it was a significant and powerful minority. The Alliance had only this one small-circulation newspaper, Today, giving anything like constant support. Now they have lost their one ewe lamb, and once again they can say that a David is to blame although he was not acquiring it for himself.

I have only serious objection to Mr. Murdoch's acquisition. He already enjoyed too large a section of the national daily press, and it was right for him to increase it only if there was no other means of keeping Today alive. If the paper had been sold to Mr. Maxwell, or to either the noble Lord, Lord Rothermere or Lord Stevens of Ludgate, it would have been equally regrettable. The cost was £38 million and, although that may sound a lot of money to you and me, it is a moderate sum in the newspaper world. The Fleet Street giants were not the only possible bidders.

However, the decision has been made. All we can do is to express our regrets and ask the Government to give serious consideration to the concentration of ownership of our national newspapers; concentration into a small number not of national but of multinational companies. A newspaper is of course a business but it is a business with social responsibility in a democracy. In Britain we have a newspaper situation which could be tolerated in no other country except perhaps Australia.

There is no general authority delegated by statute to anybody to decide whether or not it is in the public interest for a particular owner to acquire a newspaper. However, there is provision for a special case: that is, where a merger or acquisition would have the effect of bringing about a significant concentration of ownership, the sale of the newspaper should come under the legislation dealing with monopolies and fair trading. It is the statutory duty of the Secretary of State to determine whether prospective mergers should be referred to the Monopolies Commission. The defence of the Minister in the other place was that he had the right not to do so because the newspaper was trading at a loss, and its circulation was so small that the increase in the size of Mr. Murdoch's empire would be insignificant; almost imperceptible. Yet it is the principle of adding anything at all to so vast an empire that is disturbing. How many more unprofitable newspapers can these giant groups absorb?

The Monopolies Commission is supposed to report to the Government whether or not the transfer of newspaper ownership is in the public interest. However, before it can act it must be required to do so by the Secretary of State. After the incorporation of Times Newspapers into the Murdoch empire, the noble Lord, Lord McGregor of Durris, the chairman of the last Royal Commission on the press, made two proposals. One proposal was that the Minister's discretion as to whether or not a newspaper should be referred should be removed and that there should be an automatic reference. The other proposal was that the Monopolies Commission should devise a procedure for newspapers that would enable a decision to be reached with the necessary speed. Even if the Minister has referred this case, one can see that the slow procedure of the commission could have had an effect upon the frailties of Today which, over the weeks of an inquiry, could have increased to a point which might have prejudiced its revival if not its survival. Therefore speed is important.

I ask the Minister to give serious thought to the proposal of the noble Lord, Lord McGregor, and to consider giving up a duty which can bring him only trouble and tell both sellers and buyers that there will be a swift and immediate inquiry into any proposed change in the ownership of a newspaper of significant size.

6.7 p.m.

Lord Grimond

My Lords, I apologise for rising to speak without having put my name on the list. I know that at this time of night nothing is more depressing. However, my excuse is that I did not notice that my noble kinsman had tabled this important Question.

I should also like to ask why the Secretary of State is not here. Yesterday there was criticism in the other place that he could not answer there. Presumably, he was made a Member of Parliament—and we are part of Parliament—so that he could answer to Parliament on matters for which he is directly responsible. He might say that very few noble Lords have put their names to this debate; he might think that they are a pretty poor lot. However, I would point out that my noble kinsman was a governor of the BBC; that the noble Lord, Lord Ardwick, knows as much about the press as anyone in either House of Parliament; and that we shall have the views of the official Opposition. I find it very strange indeed that the Secretary of State, who was deliberately made a peer so that he may appear in your Lordships' House, is not here on this occasion.

I am here because, for many years, I was a trustee and director of the Guardian. During my time there the Guardian never made a profit. The group did, but not the Guardian. From time to time it was suggested that we should merge. I find it unbelievable that anyone with the experience of the noble Lord, Lord Young, should not know that all such suggestions are urgent. We were always told that there must be a decision the next day; otherwise, the whole matter would collapse. I find it inconceivable that he was taken in by these threats. It also seems extremely insulting. I should have thought that any Minister of the Crown, theatened in the way that he was by those engaged in this takeover, would, on that ground alone, have said, "I absolutely refuse to decide this matter now".

As already stated, I also find it unbelievable that the proposition was that Today was worth £38 million but that if a decision was not reached at once, it would be worth nothing at all. I find unbelievable, too—from my experience on the Guardian —the handling of the matter.

Reference has been made to the experience of the Sunday Times. The man who now complains that he was a member of a Stalinist Government—Mr. Biffen—gave permission for it to be taken over without any reference to the Monopolies and Mergers Commission.

Nearly all forebodings or prophecies about the press in my experience turn out to be wrong. We were constantly told in my time on the Guardian that London would be reduced to four daily newspapers at most, probably not even that. In fact, there are more newspapers now than were ever dreamt of. The Guardian makes a profit, believe it or not. I am profoundly sceptical about forebodings.

Looking to the future, we want to know what Mr. Murdoch is going to do with Today. I wrote at one time for the Sun. The Sun in those days was a reputable paper favouring the Labour Party. It was taken over. It is still called the Sun, but it is an entirely different proposition. We have had no indication of what Mr. Murdoch means to do with Today.

I want specifically to ask the Government whether they have had any undertaking that Today will survive at all. Secondly, have they had any undertaking that it will in fact employ the people who, it is said, might otherwise lose their jobs, and for how long. If the Government have such undertakings, are they enforceable?

My brief experience of the press has taught me that is no good looking to the good, the great and the successful to defend the freedom of the press. The people who defended the freedom of the Guardian were the working journalists past and present, who refused to be bullied and who were not taken in by the City of London. It is because of these people that the Guardian is still going today and is making a profit.

I must confess that I wholly support the pleas made by my noble kinsman and by the noble Lord, Lord Ardwick, that the Government should now look into the safeguards for the press. It is clear, as has been said, that they have no intention of referring to the Monopolies and Mergers Commission anything suggested by the major press barons. Therefore, we must have something else.

It may well be that hyprocrisy is the tribute which vice pays to virtue, but I think that hypocrisy in this case has overstepped the mark. Whatever one may think of the precise decision, the explanation for it and the handling of it have done immense harm not only, as has been said, to the reputation of the noble Lord, Lord Young, but to the faith of the public that we are really keen to have an independent and varied press.

6.13 p.m.

Lord McIntosh of Haringey

My Lords, in rising to speak on the Question and to thank the noble Lord, Lord Bonham-Carter, for introducing it, I must repeat the declaration of interest that I made last Wednesday in that Mirror Group Newspapers, one of the under-bidders for News UK, as I undertand it, has been and is a client of mine.

I must repeat also the strictures made by all noble Lords who have spoken so far on the absence of the Secretary of State. It has been expressed as a matter of regret that he should not be present in the House. I can assure your Lordships that it will be considered as much more than a matter of regret in another place. This was the Secretary of State's personal decision. He had the legal responsibility for the decision, which he did not shirk—let us be clear about that—but he must be answerable to Parliament. Secretaries of State, members of the Cabinet, who are responsible for decisions of this kind must be answerable to Parliament. It is bad enough that he should be answerable only to this House rather than to what I believe to be by far the most important body in our constitution. However, since he is answerable only to this House, he has no excuse for not being present at a time when his judgment is being, and has been, questioned.

The noble Lord, Lord Bonham-Carter, has made it clear that he would have been prepared to listen to any suggestion for a change in the time tabling the Question in order to accommodate the Secretary of State. No accommodation was made and as a result the Secretary of State has been in dereliction of his duty to this House and the Cabinet as a whole has been in dereliction of its duty to the country and to Parliament.

It is particularly regrettable because the noble Lord, Lord Young, when he first came into the House and became a Cabinet Minister, set himself up as the advocate of breaking down what he called barriers to business. One of those barriers is monopoly—in this case in economic terms strictly speaking oligopoly. It is certainly a barrier to business that any major concern, let alone one of such great public importance as the newspaper industry, should be in the control of no more than three or four people or three or four business groups. There cannot be any denying that the decision, the action that has been taken, in the past seven days has resulted in a worsening of the oligopoly situation in the newspaper industry.

In justifying his decision last Wednesday, the Secretary of State read out the ways in which he had to be satisfied in order to make a decision not to refer the matter to the Monopolies and Mergers Commission. He said that the newspaper concerned had to be not economic and a going concern. He said he had to be assured that it would continue as a separate newspaper and that it was a case of urgency. Your Lordships will note that all three of those conditions had to be satisfied if the Secretary of State was to be justified in his decision.

As we now learn, not one of those conditions is satisfied. It is clear that the definition of what is a going concern has been adapted both by News UK, the Lonrho subsidiary, and by Mr. Rupert Murdoch's News International to suit their purposes.

A newspaper starts up 15 months ago. It is fully expected that it will make losses in an early period. It is bought by Lonrho a very short time ago on the clear basis that Lonrho expects to make profits from it. What other reason does it have for buying a newspaper of that kind? It succeeds in its period of ownership in increasing circulation. It succeeds in reducing the losses incurred under the previous owners, and it succeeds in persuading not only Mr. Rupert Murdoch but also Mr. Robert Maxwell, and possibly the proprietors of Sunday Sport, that this is a going concern in the sense that they are willing to offer real money for it.

What other definition can there be of a going concern, in that responsible business people are willing to offer real money—in Mr. Murdoch's case, £38 million; in Mr. Maxwell's case, £10 million in cash and £19 million in guarantees? That is real money: that is evidence that the business is thought by some people to be a going concern.

It ill behoves the Secretary of State in those circumstances to fall for the argument put forward by Lonrho, which has a clear interest in seeing that there is no reference to the Monopolies and Mergers Commission, that this is not a going concern and that the conditions are satisfied.

Secondly, the Secretary of State had to be satisfied that the newspaper would continue as a separate newspaper. That may literally be the case. It may well be that the title Today will still be on the newstands in six or 12 months' time. But your Lordships should note that the editor of Today has already been appointed. His name is David Montgomery. He has been the editor of the News of the World. I know nothing whatsoever for or against him personally, but I note that he was the editor of a newspaper that has been a devoted supporter of this Government throughout this Government's life, and I note that he replaces an editorial team at Today which, as has been pointed out, comprised supporters of the Liberal/Social Democratic Alliance. Therefore, although the title may survive, the spirit behind the title is certainly not surviving, and the range of political opinion open to the readers of our national newspapers has certainly been diminished by this action. I therefore argue that the second condition has not been achieved.

Thirdly, there is the argument that this was a case of urgency. We have heard from Ministers in another place that the Lonrho board had decided in January of this year that it was going to close the title on 30th June if it did not see substantial improvements in the financial position of the newspaper. During the period between January and 30th June, executives of Lonrho and News International were making all sorts of encouraging sounds about the potential for survival of the Today newspaper. They were building up the newspaper, hyping it up, just as surely as at the end, when it became their financial interests to do so, they rubbished it and gave the impression that it was not a going concern.

As a result, we had not one but two deadlines put to the Secretary of State. The first was that of Lonrho, which said that if the sale was not made by midnight on 30th June the paper would cease production. The second deadline was put by Mr. Arthur Brittenden of News International, who said that unless the Secretary of State approved the deal by four o'clock on the afternoon of 1st July his offer—the offer of News International—would not go through. I would remind your Lordships that the unfortunate Secretary of State had to stand before this House soon after three o'clock, and the deadline therefore was less than 60 minutes away. That was the time he was allowed in which to capitulate to these entrepreneurs.

I want to make it absolutely clear that there is no personal fear or favour in these matters. The Secretary of State in answering questions last week appeared to think that had we been faced with a Maxwell bid we would have felt quite differently about it. I made it clear to him that that was not the case and that we would be as strongly opposed to a Maxwell bid as we have been to a Murdoch bid—although I had no apology from him for that allegation, which I consider to be quite damaging.

I also want to make it clear that I do not join in any of the aspersions which have been cast upon Mr. Rupert Murdoch. I know him. We were in the Oxford University Labour Club together; indeed we were both suspended from that club for canvassing together. But I have not met him since and I do not share any of the views about the unsuitability of foreign nationals owning newspapers in this country. There is nothing personal about this at all.

What is wrong is that somebody who already has over 30 per cent. of the national dailies and 30 per cent. of the circulation of the Sunday newspapers should be allowed to acquire another national newspaper, however small it may be at this time. The arguments about the size of the newspaper do not wash at all. I ask your Lordships to compare it with the Independent. If the various backers of the Independent, in whose integrity I have a good deal of faith, were approached by Mr. Murdoch, and if they were other than their own honourable selves, and Mr. Murdoch said, "Yes, you've got a good thing going here. I can make more money than you can and I can offer you more money than you will ever make by remaining backers of the Independent", and they succumbed—though I do not believe they would—would the Secretary of State then allow such a thing to go through, on the grounds that the circulation of the Independent is only 300,000 or so—that is just about the same as the circulation of Today —and on the grounds that the Independent is losing money, as indeed it is? It expected to be losing money at this stage of its existence. Nothing in the argument that has been put by the Secretary of State would protect the Independent from Mr. Murdoch, Mr. Maxwell or any other bidder who seeks to use national newspapers as a purely money-making business and not to recognise the public interest in this matter.

We have the Fair Trading Act of 1973 and we had these three Royal Commissions precisely because, as my noble friend Lord Ardwick said last week, newspapers are a business different from any other business. It is precisely for that reason that we have the provisions of the Act and the Monopolies and Mergers Commission. I echo the views of my noble friends: What the Government should be doing and what the noble Lord, Lord Beaverbrook, should be undertaking to do now is to implement the views of the McGregor Commission and say that it should not be in the hands of the Secretary of State to decide whether such a referral should be made or not. There should be an automatic referral in cases of this sort.

I say that in order to protect the reputations of all Secretaries of State and in particular to protect that of this Secretary of State. The Financial Times called his action "naÏve and undignified". That may be a proper thing for a newspaper to say. What I think it is proper for us to say here today is that he has made a disastrously bad use of the discretion open to him and has shown disastrously bad judgment about the real world in which he is supposed to be such an expert.

I sometimes wonder, looking at the 1973 Fair Trading Act, whether we have not been misled about the Act all along and whether in fact it was not a hybrid Bill—something which says in cases where it does not matter that there shall be a referral to the Monopolies and Mergers Commission, but when Mr. Rupert Murdoch makes an application in order to increase his empire in the newspaper world he shall be allowed a safe pass to do what he likes. That is not good enough and the Government should not be standing up to defend it.

6.26 p.m.

Lord Beaverbrook

My Lords, I apologise for the absence of my noble friend. I shall of course pass on to him the comments that have been made by your Lordships on that. However, I can assure the House that I have some passing knowledge myself of the newspaper industry and of its peculiar difficulties.

I have listened carefully to the speeches of the noble Lord, Lord Bonham-Carter, and of all the other noble Lords who have spoken. I should like to explain why my noble friend Lord Young took the decision that he did and which he outlined in his Statement to your Lordships last Wednesday.

The requirement of the legislation—the Fair Trading Act 1973—is that the consent of the Secretary of State for Trade and Industry is required for all newspaper mergers which either cause a newspaper proprietor's total circulation to rise to 500,000 or more averaged paid-for copies per issue or add further to a circulation of this size. The Act envisages that, generally speaking, this consent will not be given until the Secretary of State has received a report on the matter from the Monopolies and Mergers Commission.

The legislation does, however, recognise that circumstances may arise in which an MMC inquiry lasting up to three months—this is the period which the Act allows and it can be extended for a further three months—would be inappropriate. The exception which is relevant to the transfer of the Today newspaper is set out in subsection (3) of Section 58 of the Fair Trading Act. That provides that consent may be given without requiring a report from the commission if the Secretary of State is satisfied with regard to two matters. First, my noble friend must be satisfied that the newspaper being transferred is not economic as a going concern and as a separate newspaper. Secondly, he must be satisfied that if the newspaper is to continue as a separate newspaper, the case is one of urgency. If he is so satisfied, he may give this consent without awaiting a report from the commission.

In approving such a provision when the legislation was enacted, Parliament clearly foresaw that there would be cases where it would be quite wrong to insist on a report from the MMC before a decision as to consent was taken. There would be no point in commissioning such a report if its results would be quite academic. The Today transfer was such a case, and in this case my noble friend was provided with evidence which satisfied him both as to the economic position of the newspaper and as to the urgency of the case if the newspaper was to continue as a separate newspaper.

The economic position is quite clear. Regrettably, Today has been heavily loss-making since it began, and indeed this led to the transfer from its original owners to News (UK), a subsidiary of Lonrho, in 1986. In that transfer the then Secretary of State for Trade and Industry rightly exercised his power to give consent without awaiting a report from the Monopolies and Mergers Commission. He needed to act—and he did act—very quickly in order to ensure the paper's survival; and his decision at that time was generally welcomed.

Lord McIntosh of Haringey

My Lords, if the noble Lord will permit me, I complained about the fact that the Secretary of State was not here and that his right honourable friend the Chancellor of the Duchy of Lancaster was opening the debate in another place. The noble Lord is virtually reading from the same brief that the Chancellor of the Duchy of Lancaster used in another place. There are differences of words and differences in the language that Mr. Clarke used, but we are getting virtually the same story at second-hand both here and in another place. That is surely unacceptable.

Lord Beaverbrook

My Lords, I really cannot accept what the noble Lord says. The point is that the case has to be made to your Lordships today, and that is what I am doing. It is not a different case; it is exactly the same case. That case can only be put correctly in a certain way and that is what I am doing today. Second-hand or not, that is the way I am putting the case.

Since the transfer to Lonrho, Today has continued to make losses and my noble friend was provided with evidence that satisfied him quite clearly that Today was not economic as a going concern and as a separate newspaper.Today's expected losses of over £30 million for Lonrho's current financial year have been widely reported—in other words, over half a million pounds a week. Clearly a newspaper of the relatively small size of Today making losses on this kind of scale cannot by any stretch of the imagination be called economic as a going concern.

Lord Bonham-Carter

My Lords, perhaps the noble Lord will forgive me if I interrupt him. I may be very simple but I cannot understand how a business can be said to be not a going concern if someone is prepared to pay £38 million for it. How can that be?

Lord Beaverbrook

My Lords, the owners of the Today newspaper, the Lonrho Company, were simply unable to sustain the losses. If someone else is able to sustain the cost of that newspaper and it ensures the continuation of that newspaper, then that must be a good thing.

Losses of that magnitude also go to the heart of the question of urgency. As a matter of its commercial judgment Lonrho had concluded that they could not be allowed to continue and the evidence that my noble friend had before him included a formal resolution of the Lonrho board to the effect that in the absence of his consent by midnight on the 1st July, no further financial support would be given to News (UK), redundancy notices would be issued and Today would forthwith be closed.

Lord McIntosh of Haringey

My Lords, perhaps the noble Lord will give way again. He is quoting directly from col. 21 of yesterday's Hansard in another place—directly.

Lord Beaverbrook

My Lords, I am putting the case to your Lordships' House today and it is extremely important for all noble Lords that I put the case absolutely clearly. I make no apology for not paraphrasing what has been said perhaps before in another place.

Some noble Lords have suggested that the Lonhro board resolution was no more than a bluff. Others have suggested that my noble friend allowed himself to be constrained by a deadline set by the parties concerned. Others argue that whatever the financial and economic circumstances of the paper the matter should have been referred to the Monopolies and Mergers Commission.

The question before my noble friend was not so much whether the newspaper would or would not have closed at midnight on 1st July but rather whether it was at all reasonable—in the face of the evidence that he had before him—to expect that the paper would have continued during the time necessary for an examination by the Monopolies and Mergers Commission; namely, a period of several months. Noble Lords who suggest that it would have done so are suggesting not only that they disbelieve the decision of the Lonrho board—supported by a formal resolution made available to my noble friend—but also that Lonrho would have been prepared to accept continuing losses for the many weeks that an MMC inquiry would have taken. Indeed, the expectation goes further than that because noble Lords who argue that case also argue that a buyer would still have been around at the end of the period.

My noble friend was quite rightly not prepared to embark on a gamble of this kind. Faced with the facts, I suggest to your Lordships that it would have been quite irresponsible for him to have done so. By giving his immediate consent, my noble friend enabled Today to continue and secured the jobs of those who work in it.

I believe that there has been some misunderstanding of the position of Today in the newspaper field. Some noble Lords have spoken of it as though it were the shining jewel of the British newspaper industry. But it is a relatively new entrant in the newspaper world, with a very modest circulation: about 2.5 per cent. of the market for popular dailies and only about 1 per cent. of the market for national dailies and Sundays of all kinds. That was reflected in my noble friend's decision not to impose conditions on the transfer. It would have been quite inappropriate for him to have done so.

Nor is it right to treat Mr. Murdoch's newspapers as though they were all the same. Small as it is, Today is aimed at a market segment quite distinct from those of Mr. Murdoch's other newspapers. It competes with newspapers under other ownerships and indeed if it is successful under its new ownership it may bring more rather than less competition into the newspaper field.

This brings me to a further point. With the advent of the new technology, and with the long overdue reform of newspaper working practices, it is now easier than ever before for new newspapers to be established. Apart from Today, perhaps the most interesting example is the Independent. It can be done provided that the product is one that the customer wants to buy and read.

The noble Lord, Lord Bonham-Carter, brought up the matter of the Press Council statement. I too noted the statement by the Press Council on 2nd July expressing deep disappointment at the Secretary of State's decision not to refer the matter to the MMC. However, I feel that the council should concentrate on its principal task of upholding standards of journalism rather than criticising the operation of the Fair Trading Act.

The noble Lord, Lord Ardwick, asked me whether it might be appropriate to review the legislation affecting newspaper mergers and acquisitions. I am not convinced that there is any need for a major review of the newspaper merger controls but I am certainly ready to listen to what people say on this issue and to put the point to my noble friend.

The noble Lord also asked me about the possiblity of there being other bidders, but I must emphasise that it is not the Government's function to act as some kind of marriage broker. I am sure that your Lordships quite rightly would be the very first to complain if the Government attempted to intervene in press ownership in this way.

I hope that I have demonstrated to the House today that the action taken by my noble friend in this case was the correct and only sensible course. Taking advantage of the provisions in the Fair Trading Act for which Parliament had rightly foreseen a need, my noble friend satisfied himself that Today was not economic as a going concern and as a separate newspaper and further satisfied himself that the case was one of urgency. By his decision my noble friend has made possible the continuation of Today as a separate, independent newspaper.

Lord Grimond

My Lords, have the Government received an explicit and enforceable undertaking from News International that it will keep the paper going?

Lord Beaverbrook

My Lords, I have already said that my noble friend felt that it would be inappropriate in a case of such dire urgency to ask for any assurances on that point. However, the action that he took has ensured that Today is continuing to be published. The newspaper world is a tough one and I am sure that your Lordships will join me in wishing Today all the best under its new ownership.

Lord McIntosh of Haringey

My Lords, before the noble Lord sits down, in view of his failure to give any explanation whatsoever for the absence of the Secretary of State, he and the House ought to know that through the usual channels we shall be seeking an opportunity to raise this matter again. It cannot be acceptable to Parliament that a matter of such importance is dealt with at second hand both in another place and in this Chamber.