"The Sunday Times" (Hansard, 31 October 1983)

§ Mr. Biffen

No. The decision not to refer this newspaper merger to the Monopolies and Mergers Commission was debated by the House on 27 January 1981. That decision was the subject of a memorandum published on 16 February 1981, copies of which were placed in the Library of the House. The memorandum gave an explanation of the basis on which I was required to consider in relation toThe Sunday Times whether the newspaper was economic "as a going concern and as a separate newspaper".

The memorandum also set out accompanying accounting figures for The Sunday Times; revenues, direct costs, fixed overheads, trading profits, interest on capital and profit or loss for the years 1975–78, with a corresponding estimate for 1980. These figures, which exclude certain revenues to which Mr. Harold Evans has referred in his recent book, were derived from an analysis by the Department of Trade's professional accountants, on the basis of whose advice I was satisfied (as I was required to be by the Fair Trading Act) that The Sunday Times was not economic as a going concern and as a separate newspaper.

Having further satisfied myself that the case was one of urgency, I concluded that I had discretion to grant consent to the transfer of the newspaper without a reference to the Commission. Consent was accordingly granted on 27 January 1981.

I do not consider that the material in Mr. Harold Evans' recent book "Good Times, Bad Times" adds significantly to the information available to me or my advisers at the time of the decision. In his book Mr. Evans has suggested that my decision was based on treatment of revenue and profits, interest charges and overheads which could not be justified.

As to revenue and profits, Mr. Evans is suggesting that I left out of account £4.6 million of revenue. That revenue is assumed to relate to ancillary activities comprising syndication (£187,000), contracts to print The Guardian (£1,439,000) and direct mail order activities, including Selective Marketplace Ltd. and The Sunday Times wine club (£3,056,000). The Department's accountants were aware of these figures, which were included as items in S. G. Warburg Ltd's. document prepared in connection with the sale of the companies. These items of revenue, however, were considered to arise from the non-newspaper business of the companies and most of them are so described as non-newspaper businesses by Mr. Evans himself.

There were other items of revenue relating to non-newspaper business of Times Newspaper Limited and included in the Warburg document which Mr. Evans does 298W not mention. All these items were left out of account as not being relevant to the test I had to consider under the Act, which was whether each newspaper was economic as a going concern and as a separate newspaper. It was for this reason that these items, together with other non-relevant information, were not included in the Memorandum which I laid before the House on 16 February 1981.

The determination of non-newspaper business was inevitably a matter of judgement. The £187,000 syndication revenue could be argued as relating to the newspaper business. But the larger part of this amount related to The Times rather than The Sunday Times and in any case would have had no significant effect on the overall decision.

As to the treatment of interest charges and the allocation of overheads, the basis of these was fully explained in my Memorandum. The latter was on a fair and reasonable basis; and interest charges were included in order to assess the economics of The Sunday Times in the light of the adequacy of the reward on capital.

For the convenience of Members, I am causing further copies of my memorandum of 16 February 1981 to be placed in the Library of the House.