Written Ministerial Statements
Tuesday 29 January 2008
Business, Enterprise and Regulatory Reform
Sky/ITV
The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): On 24 May 2007, my predecessor referred British Sky Broadcasting Group plc’s acquisition of a 17.9 per cent. stake in ITV plc to the Competition Commission under section 45(2) of the Enterprise Act. This meant the Competition Commission was required to undertake an investigation and to provide a report on the effects of the transaction on competition and also on its effects on the public interest consideration specified in the reference. This was the consideration set out in section 58(2C)(a) of the Enterprise Act relating to the need, in relation to every different audience in the United Kingdom (UK), for there to be a sufficient plurality of persons with control of the media enterprises serving that audience.
I received the Competition Commission’s final report on this matter on 14 December 2007 and published it on 20 December 2007. That report contains the Competition Commission’s decisions on:
whether a relevant merger situation has been created;
whether the creation of that situation has resulted, or may be expected to result, in a substantial lessening of competition within any market of the United Kingdom;
whether, taking account only of any substantial lessening of competition and any admissible public interest consideration, that situation operates, or may be expected to operate, against the public interest.
The Competition Commission is also required to recommend appropriate remedies to address any effects it finds are adverse to the public interest.
The Competition Commission has decided that a relevant merger situation has been created and that it results in a substantial lessening of competition in the UK market for all television. I am required under section 54(7)(a) of the Enterprise Act, to accept these decisions. The Competition Commission has concluded that the transaction is not likely to result in effects adverse to the public interest as it relates to the public interest consideration specified in the reference. Accordingly, the Competition Commission has concluded that overall, the transaction may be expected to operate against the public interest.
The Competition Commission has concluded that two remedies would be effective in addressing the substantial lessening of competition arising from this merger. These are:
(i) full divestment of the whole of BSkyB’s shareholding and
(ii) partial divestment with BSkyB being required to divest its shares down to a level below 7.5 per cent. combined with undertakings not to seek or accept representation on ITV's Board and not to re-acquire shares in ITV.
The Competition Commission has recommended the second of these on the grounds that partial divestment is less intrusive than full divestment and is, therefore, a more proportionate remedy.
whether to make no finding at all in the case—which I can do only if I decide that the public interest consideration specified in the intervention notice is not relevant to a consideration of the merger situation concerned —in which circumstance, the case would return to the Competition Commission for them to take final decisions; or
whether to make an adverse public interest finding—noting that in reaching a decision on this, I am required by section 45(6) of the Act to treat any anti-competitive outcome as being adverse to the public interest unless the outcome is justified by a relevant public interest consideration; and
what action should be taken to remedy, mitigate or prevent any of the effects adverse to the public interest which may result from the relevant merger situation. In reaching this decision, it may be noted that under section 55(3) of the Enterprise Act, I am required in particular, to have replied to the Competition Commission’s report and its recommendations on appropriate remedies.
I have today published my decisions in this case which are as follows:
the public interest consideration specified in the intervention notice set out in section 58(2C)(a) of the Act is relevant to a consideration of this case—meaning I am required to make a finding in this case;
I accept—as I am bound to—the Competition Commission’s decisions that a relevant merger situation has been created and that it results in a substantial lessening of competition in the UK market for all television.
I accept the Competition Commission’s conclusion that the transaction does not have an effect adverse to the public interest as it relates to the public interest consideration specified in the intervention notice—that being the one identified in section 58(2C)(a) of the Enterprise Act relating to the sufficient plurality of persons with control of media enterprises;
the transaction operates against the public interest taking account of the substantial lessening of competition within the UK market for all television;
I find that, in accordance with the Competition Commission’s recommendations, the following remedies should be imposed: partial divestment of BSkyB’s shares in ITV down to a level below 7.5 per cent. combined with undertakings not to seek or accept representation on ITV’s board, not to divest the shares to an associated person and not to re-acquire shares in ITV.
In reaching my decisions in this matter, I have had regard to the provisions of the relevant legislation and have given careful consideration to the report I received from the Competition Commission, including the annexes to the report and summaries of the submissions made by the parties and by third parties that are contained in those reports. I have also considered carefully the additional representations my Department subsequently received from both the principal parties and from third parties. In relation to the appropriate time period within which the necessary divestment of shares should be completed, I considered the representations made to me, together with the recommendation on this matter contained in the Competition Commission’s report sent to me on 14 December. My decision on this matter is consistent with the Competition Commission’s recommendation which was excised from the published version of the report.
Under section 120 of the Enterprise Act 2002, any person aggrieved by this decision has four weeks within which to apply to the Competition Appeal Tribunal for a review of the decision.
I have separately decided to accept a request from BSkyB not to disclose to any party other than BSkyB the period of time within which the necessary divestment of shares is to be completed. BSkyB argued that wider disclosure of this information was not necessary and could be unduly prejudicial to their legitimate commercial interests. ITV argued conversely that the period should be made public. On balance, having consulted the Competition Commission and the Office of Fair Trading about their practice in similar cases and recognising there are arguments on both sides, I have decided it is right not to disclose the information. The specified divestment period will begin from the date that suitable divestment undertakings are finalised.
I have placed a copy of the full decision document in the Library of the House.
Environment, Food and Rural Affairs
Agriculture and Fisheries Council
The Secretary of State for Environment, Food and Rural Affairs (Hilary Benn): I represented the United Kingdom at this month’s Agriculture and Fisheries Council in Brussels.
The chairman of the Council set out the Slovenian presidency work programme for the next six months. It includes: preparing for the CAP health check; progressing on the cotton support scheme; dairy quotas; work on amendments to the single common market organisation and the animal byproducts regulations; implementation of EU forest action plan; illegal, unreported, and unregulated (IUU) fishing; and a stock recovery plan for herring in West Scotland.
The Council reached unanimous political agreement on a presidency compromise text on a package of measures designed to simplify the system of cross-compliance. I voted in favour of the compromised text as the package met our negotiating objectives including the abolition of the 10-month rule relating to land used by farmers to support their annual SPS payment claim.
The Council held a discussion, based on a presidency questionnaire, on the Commission’s communication on the CAP health check. I welcomed the Commission’s initiative as an important opportunity to further modernise the CAP and stressed need for greater ambition specifically in full decoupling and the dismantling of all market instruments.
Under any other business, the Agriculture Commissioner updated Council on the state of play in the WTO negotiations. The Council took note of an update provided by the Fisheries Commissioner on the discussions regarding the Fisheries Partnership Agreement between the EU and Mauritania.
Belgium, supported by a few member states, called on the Commission to find a solution to problems encountered with the new legal provisions for the
withdrawal of surplus fruit and vegetables in the transitional year of 2008 following reform of the regime in 2007. The Agriculture Commissioner agreed to bring forward transitional measures to allow the free distribution of surplus fruit and vegetable to charitable institutions and schools.
Justice
Ministry of Justice (Reorganisation)
The Secretary of State for Justice and Lord Chancellor (Mr. Jack Straw): I am today announcing a new structure for the Ministry of Justice which will help to deliver further improvements in our core aims: reducing re-offending and creating more efficient, effective offender management services in custody and the community; improving access to justice and the effective administration of the justice system; building an effective relationship with the judiciary and delivering constitutional reform; and working for a just and democratic society. The changes underline our commitment to public protection, strengthening closer working between prisons and probation and making the most of public funds while creating the right conditions for the delivery of the whole of the Ministry of Justice’s wide agenda.
The Ministry of Justice was established on 9 May 2007. It brought together the former responsibilities of the Department for Constitutional Affairs with the National Offender Management Service from the Home Office and the trilateral Office for Criminal Justice Reform. The new Department has a wide ranging remit with major delivery responsibilities for prisons and probation, the courts and tribunals, legal aid and more, as well as important policy responsibilities ranging from constitutional reform and devolution, democracy and human rights to the justice system. When the Department was set up, the then permanent secretary commissioned a review to develop proposals for a new structure and ways of working to equip the Department better to deliver on its aims and priorities.
Two further important pieces of work have fed into this review—Lord Carter’s report on prisons, on which I reported to the House on 5 December 2007 (Official Report, column 827) and the work to develop a partnership relationship with the judiciary, which I reported to the House on 23 January 2008 (Official Report, column 54WS). The changes to the structure of the Ministry of Justice which I am announcing today are the fruit of all of this work. The permanent secretary of the Ministry of Justice will be providing further detail to staff about the changes.
The new top structure of the Department will come into place on 1 April with the more detailed changes being implemented over the next few months to provide a coherent structure for managing the Department’s key challenges—on public protection and reducing re-offending, constitutional reform, and access to justice. This streamlined top structure and new ways of working will help the Department to implement Lord Carter’s recommendations on
offender management services, to take forward the new partnership relationship with the judiciary and to focus more clearly on its key policy and delivery challenges. We have taken a robust approach to removing duplication and improving efficiency.
A key element of these changes is to drive forward the next stage in offender management. The National Offender Management Service (NOMS) was created in 2004 and has already brought a greater degree of coherence to offender management. Re-offending rates are down, successful drug treatments and offending behaviour programmes are up, community payback is thriving, and prolific offenders and those posing a high risk of harm are now subject to end-to-end offender management. The structure I am announcing today will allow NOMS to build on this success and take forward Lord Carter’s proposals for streamlining management structures and reducing overhead costs. We will bring NOMS and the Prison Service together, and streamline the headquarters so as to improve the focus on frontline delivery of prisons and probation and improve efficiency. The chief executive of the restructured NOMS will run public prisons and manage performance across the sector, through service level agreements and formal contracts with probation boards and trusts, private prisons and other service providers. Having commissioning and performance management for both prisons and probation in a single organisational structure will further drive forward joined-up offender management and deliver essential savings.
The new Director General for Criminal Justice and Offender Management Strategy will set the strategic direction for offender management and regulate the increasingly diverse range of providers and work with the judiciary on the proposals for a sentencing commission.
The chief executive of the Office for Criminal Justice Reform will report to this Director General, which will enable OCJR to strengthen joint working between the police, Crown Prosecution Service and HMCS together with prison, probation and youth justice services. My right hon. Friend the Home Secretary, my right hon. and noble Friend the Attorney-General and I have reaffirmed our commitment to OCJR continuing as a distinct trilateral team, supporting the three criminal justice departments and the National Criminal Justice Board as well as local criminal justice boards.
Changes to the regional organisation of offender management will be implemented on a phased basis to merge the roles of area manager in the prison service and regional offender managers in NOMS. A new single regional manager will commission prison and probation services, from public, private and third sector providers. These individuals will have authority to deliver national policies in ways which meet the needs of their regional contexts. And in turn, individual prison governors and probation boards and trusts will have the authority they need to determine how best to deliver what is required of them. We plan to introduce this structure in London and in Wales from April and complete these changes in all regions over the next 12 to 24 months.
A new Democracy, Constitution And Law Director General will bring together work on the governance of Britain agenda for constitutional reform, launched by
my right hon. Friend the Prime Minister in a Green Paper last July, including a possible new British Bill of Rights and responsibilities, leading work on constitutional reform, democratic engagement, devolution and information management for government. It will also provide legal services to the Department and lead work on law reform policy.
Responsibilities for justice issues will be under a new Access to Justice Director General, who will lead a group which brings together the courts and tribunals with legal aid and regulation of the legal profession.
Under the new partnership model, which the Lord Chief Justice and I announced on 23 January a new board for HMCS, with an independent, non-executive chair, will hold the chief executive to account and facilitate the working of the new partnership relationship with the judiciary. HMCS staff will have a joint duty to the Lord Chief Justice and to me as Lord Chancellor for the effective and efficient operation of the courts. The Access to Justice Director General will ensure that the excellent work on streamlining the courts is linked more effectively with modernisation elsewhere in the justice system, including in legal aid and regulation of the legal profession.
Finally, a new Corporate Performance Director General will bring together the key cross-cutting functions in the Ministry of Justice to ensure that one of the largest Departments in Whitehall has cost-effective shared services and professional support.
The changes that the permanent secretary and I are announcing today set the high level structure for the Department. The new structure will provide the Department with a sharper focus on its key priorities, including public protection, reducing re-offending and improving relations with the judiciary, while streamlining leadership across the whole of the Department’s agenda. The new structure will ensure a more joined-up approach to issues of justice and constitutional reform and with a clearer focus on efficiency through the removal of duplication and overlapping responsibilities. There is much work to be done on the detail of these changes before the top structure comes into effect in April. I know that our key partners will want to contribute their thoughts on how this should be done and the Department has set up an email address for comments over the next four weeks: communications@justice.gsi.gov.uk . I should, of course, be very happy to have comments from hon. and right hon. Members and noble Lords.
Prime Minister
Intelligence and Security Committee
The Prime Minister (Mr. Gordon Brown): I am grateful to the Intelligence and Security Committee for its valuable work and its latest annual report (Cm 7299). Following consultation with the Committee over matters that could not be published without prejudicing the work of the intelligence and security agencies, I have today laid the report before the House. I have also laid before the House today the Government’s response to this report (Cm 7300). Copies of the report and the response have been placed in the Libraries of both Houses.
In addition, following appropriate consultation and in accordance with section 10 of the Intelligence Services Act 1994, I have appointed my right hon. Friend the Member for Derby, South (Margaret Beckett) as Chair of the Intelligence and Security Committee. I am grateful to my right hon. Friend the Member for Torfaen (Paul Murphy) for his distinguished leadership of the Committee in providing effective and independent parliamentary oversight of the work of the security and intelligence agencies.
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