Examination of Witnesses (Questions 934-939)|
THURSDAY 4 JULY 2002
934. We have already commented that we have
had very short time to digest this but at least the Committee
can take credit that it was us that got it out of the Departmenteven
belatedly. In this document, as well as producing, as I say, this
marvellous easy-to-follow guide on how you do go through a newspaper
merger, they have set out the public interest considerations and
they are briefly (a) accurate presentation of views, (b) free
expression of opinion, and (c) the maintenance of plurality and
view. Does that seem to get it about right as far as you are concerned?
(Mr Parker) Like a number of people before us, we
only received this document extremely late yesterday evening and
we have not had time to consider the full extent of its content.
I think we would prefer to come back to you on it.
Lord McNally: I think the Committee both sympathises
and shares your indignation that this comes belatedly and under
pressure, rather than being volunteered for full debate. We are
involved in prelegislative scrutiny. But you will consider it.
I think we are under some pressure ourselves as to the timing
of such reactions.
935. To put it mildly!
(Mr Parker) It might be helpful to know how quickly
you would like a reply because the same point has been made to
witnesses before us.
Chairman: It has to be by the middle of next
week at the latest, I am afraid.
936. In your evidence you comment on the level
below which the merger provisions will not apply and you say it
has not been defined. You argue that the new provisions coupled
with the scope of markets for the purpose of competition law could
lead to controls on mergers at quite local level, and that you
will not be freed from the special regime "as promised".
When and in what form was the promise made? How would you want
to see it implemented in ways that will not circumscribe controls
over regionally significant changes in newspaper ownership?
(Mr Parker) On the specific promises that we were
talking about I can quote one or two examples. Stephen Timms at
a meeting on 13 June 2002 said, "The Communications Bill
promised a less burdensome regime for newspapers and would remove
the smallest local newspapers from regulation altogether".
I also quote from Tessa Jowell who, in the draft Communications
Bill policy in May 2002 said, "De minimis provisions will
remove smallest local newspapers from the regulations altogether",
so that is basically what we are reflecting in those comments.
Those two specific examples reflect a number of comments that
have been made to the Newspaper Society and its members through
the last couple of years.
937. You are obviously concerned that the promise
is not being delivered, or is unlikely to be. We are perhaps in
a bit of a quandary because we do not yet know how the final Bill
is going to appear but what changes would you want to make sure
that the promise is delivered, and that you are not too circumscribed
at the regional level? We have had an earlier piece of evidence
incidentally about the need to define what "local" and
"regional" means, and you might comment on that too.
(Mr Parker) I think in one of our earlier submissions
to a consultation document we did suggest that newspapers with
a circulation threshold of 100,000 copies would be the level,
so that would be what we stated before.
(Mr Newell) I think one of our principal concerns
with the proposals is that there is the clothing of deregulation
as it would apply to local and regional newspapers both in terms
of local and regional newspaper transfers and the cross media
ownership area but, as a matter of practice, as seen by local
and regional newspaper publishers, the proposals as they stand
are more regulatory in many areas than the current special regime
that we operate under. One specific point that I would mention
on this is that the proposals that stand at the moment are likely
to apply to newspaper companies of all sizes. The current newspaper
regime only applies to newspaper companies of a certain size and
there is a danger that, with the overlay of the different regulatory
bodiesthere will be four bodies now concerned with newspaper
transfer casesthe new regime will in particular catch and
impact upon small independent newspaper companies who want to
grow within their markets either in terms of purchasing newspaper
companies adjacent to them or in terms of investing in radio.
We see there to be a contradiction really in the government policy,
on the one hand of wanting to liberalise and allow consolidation
at an international and national level for media companies but,
in this regard, a regime that had been promised to us as being
deregulatory will, in practice, be more regulatoryfor all
newspaper companies. But the one point I do want to make is that
it would have special significance to the smaller newspaper companies
because, although we have been promised de minimis provisions,
the way in which they would apply in practice, we believe, would
catch very small newspaper transactions that are not caught at
all at the moment.
938. So you want some very specific provisions
written in to prevent this? You want to have the rules defined
so it is quite clear what the limits are, is that right?
(Mr Newell) Our position is that we prefer to be subject
to the rigorous new competition law as outlined by Mr Cruickshank
this morning: we do not believe there is a case for a special
regime but, if there is a special regime, the way it should apply
should ensure that small transactions are unambiguously taken
out of the regime.
939. Are you suggesting that under the de minimis
suggestions in the document those should possibly apply to circulation
rather than turnover?
(Mr Newell) That is the tradition we currently have.
The law as it applies at the moment to newspaper mergers operates
by reference to newspaper circulation, and the special regime
at the moment only applies where the newspaper company has a combined
paid for circulation in terms of its actual titles and those it
is acquiring of over 500,000 copies. There is a mandatory reference
if such a company is purchasing a title with paid for circulation
of over 50,000. The new regime as outlined will potentially applyand
the Secretary of State will have a far wider discretion than at
presentto all newspaper transactions, regardless of size,
provided certain thresholds are met in relation to turnover and
market share and, although we have been offered some comfort that
it would not apply in circumstances in which the newspaper does
not circulate in a substantial part of the United Kingdom, in
fact the explanation that has been given on that is that the substantial
part of the United Kingdom in practice can be a very small area
indeed. Cambridge might be regarded as a substantial part of the