Cross-Media Ownership

HL Deb 02 April 1998 vol 588 cc380-4

3.17 p.m.

Baroness Miller of Hendon

asked Her Majesty's Government:

Whether they have any plans to amend the Fair Trading Act 1973 to give the Monopolies and Mergers Commission powers to order divestment when cross-media ownership concentrates an undesirable number of outlets in one set of hands.

Lord Haskel

My Lords, under our competition legislation, as set out in the Fair Trading Act 1973, the Monopolies and Mergers Commission's role is investigatory. It is not an order-making body as seems to be implied in the Question of the noble Baroness. The Government have no plans to provide it with such powers.

The particular restrictions on cross-media ownership to protect plurality and diversity are contained in the Broadcasting Act 1990, as revised by the Broadcasting Act 1996. As these amended provisions have been in force for only 16 months the Government have no plans to revise them at present.

Baroness Miller of Hendon

My Lords, I thank the Minister for his reply. Is he aware that in the 25 years since the Act was passed there has been a huge increase in the dissemination of news and views through terrestrial and satellite television, independent radio and the computer? Does he appreciate that Mr. Rupert Murdoch's media empire not only continues to control five national newspapers, but that he has substantially expanded the commercial power of his international television interests, particularly in sport, and that through cross-subsidies from television to print he is able to indulge in predatory pricing for The Times? In view of Mr. Murdoch's phenomenal power, will the Minister confirm that if there were any suspicion at all of prime ministerial patronage being sought in return for past, present or future editorial support, that would be a proper matter to be examined by the Neill Committee?

Lord Haskel

My Lords, I thank the noble Baroness for that simple question! We are aware of the huge increase in media activity. The Broadcasting Act was designed to take care of that. We are also aware of the cross-shareholdings. I seem to remember that the Director General of Fair Trading has had them investigated three times in the past 10 years. Regarding Mr. Murdoch and his relationship with the Prime Minister, I can assure noble Lords that there has been no improper action by the Prime Minister. It is certainly not a matter for the Neill Committee if the Prime Minister takes action in supporting a British company.

Lord Borrie

My Lords, bearing in mind the evident failure of News International to comply with the undertakings to respect editorial freedom and independence which were given in 1981 when The Times was purchased, and the Minister's response which indicated that the Monopolies and Mergers Commission may recommend divestment only if a reference is made to it, will my noble friend ask Her Majesty's Government to refer this matter to the MMC so that we shall know whether or not there was true compliance with what was said in 1981?

Lord Haskel

My Lords, under his current powers, the Director General of Fair Trading has written to the Guardian, Independent and Daily Telegraph newspapers seeking further information in support of their complaints of predatory pricing by The Times. He has asked for a reply by 8th April. On my noble friend's point about the independence of The Times, that is a matter for the independent directors of The Times. Judging from our debate on the Competition Bill, many of them seem to be Members of your Lordships' House.

Lord Jenkins of Putney

My Lords, does my noble friend think that aggressive price-cutting with the purpose of killing an opponent constitutes fair competition? If he does not think that it constitutes fair competition, what is he going to do about it?

Lord Haskel

My Lords, predatory pricing is a matter for legal and economic tests. Pricing is either predatory or it is not. The questions are the same in any market. It is a matter of fact, not a question of weighing the public interest, as the noble Lord seemed to imply. We do not need a special regime for newspapers in the Competition Bill to decide whether a dominant company is abusing its position by predatory pricing because predatory pricing should be stopped wherever it occurs.

Lord McNally

My Lords, when are Ministers going to accept that casuistry in their answers—

Noble Lords

Order!

Lord McNally

—that legalism in their answers is no response to genuine public and cross-party concern about the concentration of media power? Would it not be far better if Ministers left our Competition Bill unamended in another place—I hope that there may be an indication that this time we shall have the support of the Opposition Front Bench—or will the Government give time to Mr. Clive Soley to bring forward the Bill that he has proposed to deal with this matter, or will the Government pass the matter over to one of their many review committees? In any event, will the Government realise that the concentration of media power is of real public concern and that chirping "no, no, no" from Mr. Rupert Murdoch's top pocket is no ministerial response?

Lord Haskel

My Lords, the Government are certainly aware of the public concern about media ownership. Regarding the amendment to the Competition Bill, the Government will advise the other place of the content of that Bill when it is debated there. However, the Government have made it clear that in their view the amendment is not only unnecessary but, what is more, it is unworkable.

Lord Naseby

My Lords, in his Answer the noble Lord suggested that as only 16 months have elapsed since the passage of the last Broadcasting Act, there has been insufficient time to review the provisions, but the Government have now been in power for 11 months, so is the House to understand that the Government's present policy is that they are entirely satisfied with the current proportions of ownership?

Lord Haskel

No, my Lords. As I explained in answer to an earlier question, the Director General of Fair Trading is in correspondence with other newspapers, and there is currently a review of broadcasting and the cross-ownership of the broadcasting media. When that review is completed and when the DGFT has received a response from the other broadsheet newspapers, the Government will be able to make a more informed decision.

Lord Peston

My Lords, my noble friend referred to the independent directors of The Times. Does he by any chance have to hand a list of those independent directors and, if so, could be read it out to the House?

Lord Haskel

My Lords, I am afraid that I do not have that to hand, but I shall certainly write to my noble friend on that point.

Lord Steel of Aikwood

My Lords, when the spokesman for the Official Opposition referred to prime ministerial interference, was that a reference to the occasion when The Times was sold to Mr. Murdoch, because that seemed to me to be the time when there was improper interference? When the Government talk about pursuing British interests, will they bear in mind the two occasions on which the BBC's worldwide television service has been dropped from Mr. Murdoch's satellite simply because it has the inconvenient habit of portraying programmes of documentary fact?

Lord Haskel

My Lords, the sale of The Times to News International took place in 1981 when the matter of editorial independence was addressed by changing the company's articles of association. Consent to the transfer of The Times was given by the Secretary of State on that condition. His consent was dependent on the articles of association being amended to incorporate provisions to protect editorial independence. The amendment to the articles makes it clear that, in the event of any dispute between the editor and the directors of Times Newspapers, the matter has to be referred to the independent national directors whose decision shall be final and binding.

Baroness Oppenheim-Barnes

My Lords, will the noble Lord assist in this matter simply with a stroke of the pen by changing what he has described as a "review" into a "full-blooded inquiry", as is merited by the amount not only of public concern, but also of public suspicion? There should be no further delays in instituting such a change.

Lord Haskel

My Lords, that is not within my power, but I am sure that the inquiries by the Director General of Fair Trading will reveal exactly what the level of predatory pricing is.

Lord Stoddart of Swindon

My Lords, is my noble friend aware that if this House decides in due course to insist on their amendment, the Competition Bill will be at risk of delay for a year? Is he prepared to contemplate that or would the Government then be prepared to accept the amendment passed by this House?

Lord Haskel

My Lords, I am not aware that the Competition Bill would be at risk of being delayed for a year.

Baroness Miller of Hendon

My Lords, I totally accept what the noble Lord said about there being nothing improper about any telephone conversation regarding British business which the Prime Minister may make, but does the noble Lord nevertheless agree that having received a negative answer from the Italian Prime Minister to the effect that the company would not be interested in being sold to Mr. Rupert Murdoch, that has undoubtedly saved Mr. Murdoch a fortune given the amount of money that might have been required if he were to make a formal bid?

Lord Haskel

My Lords, any conversation which the Prime Minister may have had with the Italian Prime Minister is a private matter. Therefore, it is a matter of which I am unaware.

Baroness Park of Monmouth

My Lords, reference has been made to British business and British companies. I was under the impression that Mr. Murdoch was an American citizen. Is that correct?

Lord Haskel

My Lords, I was referring to the ownership and location of Times International and BSkyB.