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Lord Thomson of Monifieth: I must begin by apologising for the absence of my noble friend Lord McNally. One consequence of our newfangled family-friendly arrangements in the House is that those Members who have families to be friendly about, by sustaining them through work outside the House, sometimes find that difficult to combine with duties here. Sadly, I must take the place of my noble friend this morning.
I was not a member of the pre-scrutiny committee that did such great work, but I read with great interest the rather Socratic dialogue between the committee and the Government on the important issues of which the noble Lord, Lord Puttnam, has given us such an impressive analysis. The committee reports clearly and
admirably the Government's starting point on these very big issues. Paragraph 218 of the Joint Committee report states that,
- "competition law alone is not sufficient. It can address issues of concentration, efficiency and choice, but it cannot guarantee that a significant number of different media voices will continue to be heard, and it cannot address concerns over editorial freedom or community voice".
The Government repeated their commitment to the principle of plurality in their reply to the committee, and assured us that they considered carefully the committee's recommendation, which is now reflected in the series of amendments that the noble Lord, Lord Puttnam, has moved. As he said, the Government emphasised the unanimous view from business interests, particularly, that they wish the kind of certainty and precision that goes with normal competition law arrangements.
Well, businesses would say that, would they not—and they are right to say that, in their own interests. However, the difficulty that we face with the Bill is that the business of the media is a special kind of business and requires special legislative treatment. Purely mechanistic judgments of market share are not enough. They may be appropriate for baked beans or motor cars or the business, departmentally, of the DTI, but they are not enough for a business so closely associated with an influence on the quality of civil life. That is the business of the DCMS.
We believe and support the amendments on the basis that Ofcom should have a statutory right to intervention on a qualitative basis in terms of merger proposals. The Government have gone some way, I think, to recognising the special case of the media in their commentary on page 26 of their response. However, in our view they should now have second thoughts and should be ready to accept the spirit of this group of amendments tabled by the noble Lord, Lord Puttnam.
Lord Crickhowell: In supporting the noble Lord, Lord Puttnam, I want to make only two points. When we met in the Joint Committee, the guru on competition policy was Mr Andrew Lansley. He was our acknowledged expert. Indeed, he seems to have an almost encyclopaedic knowledge of the subject. With that knowledge he has a great faith in the effectiveness of competition policy. He believes that with the new legislation now in place most of the anxieties voiced in this Committee about possible takeovers and mergers can be covered by competition policy. However, I remain to be completely convinced that it is all going to work out quite like that. I think that we need to see how it works.
I think it worth noting that Mr Lansley, speaking on 30th January in Standing Committee E, actually acknowledged:
- "Some of us are in the awkward position of not yet being able to say what the final outcome on how competition policy will be exercised".
- "let Ofcom take its first review of media ownership rules, look at the changing scene and bring forward recommendations if it wishes to".—[Official Report, Commons Standing Committee E, 30/1/03; col. 871.]
- "My strong personal preference is not to put in ex ante rules, but to have a proper competition test, properly buttressed",
In an earlier Standing Committee sitting on the subject, Mr Lansley had said:
- "Essentially the Government have said that we do not need a plurality test because we have clear rules. However, in terms of future-proofing, flexibility and requiring businesses to justify themselves within the marketplace and, in the event of mergers, in a fashion that is responsive to whatever circumstances might arrive in years to come, and to respond to a public interest test, it is quite obvious that it would be far better to shift towards the exceptional public interest test and competition policy and, by extension, not keep specific rules".—[Official Report, Commons Standing Committee E, 30/1/03; col. 858.]
The other point is simply this. During our discussion, when the noble Lord, Lord Puttnam, sought the views of the committee, I said that I was not an expert in any way about the newspaper business and that I would like to hear the views of the noble Lord, Lord Hussey of North Bradley, who I know cannot be with us in Committee today but supports this amendment. He, after all, knows more about the newspaper business than most of us put together. He came out very strongly in favour of the particular recommendation of the Joint Committee. I took his advice and followed. Afterwards, he told me that he believed that this was one of the most important single recommendations made by the Joint Committee in the whole of its report. So this is an issue that I think unites very different points of view. I therefore warmly support the amendments tabled by the noble Lord, Lord Puttnam.
Lord Borrie: We have heard a most powerful and eloquent speech by the noble Lord, Lord Puttnam, and two further eloquent speeches by the noble Lords, Lord Thomson of Monifieth and Lord Crickhowell. They are all sponsors—the noble Lord, Lord Thomson, by way of being a delegate of the noble Lord, Lord McNally—of the amendment. I do not know how they feel about this, but I feel in a way that it is rather unfortunate that we are debating this matter somewhat prior to debating provisions that come just a little further on in the Bill—we shall get to them later today—dealing with newspaper mergers.
In those provisions dealing with mergers between newspapers, the Bill continues the very longstanding public interest concern in relation to newspaper mergers that have found expression in the law since the 1960s. Concentration of the press into too few hands was of course, before the more significant days of
television and radio, the important issue for public interest connected with democracy, because concentration of the press into too few hands can of course stifle expression of opinion and argument and distort the presentation of news. It was the Royal Commission on the Press, in 1963, that put it in that way. Since the 1960s newspaper mergers have been subject to a stricter form of control than other mergers and takeovers in this country, with the Monopolies and Mergers Commission, now called the Competition Commission, required to take account not just of economic considerations but of whether a merger would bring about a serious public interest concern relating to the presentation of news and the adequate free expression of opinion.I believe that the same sort of consideration which influenced people concerned with democracy in the 1960s in relation to the press now justifies a stricter control over cross-media mergers than is applicable to other goods and services. Amendment No. 280A proposes a reporting role by the Office of Fair Trading. It proposes that by amending the Enterprise Act, the Competition Commission, when faced with a reference concerning cross-media ownership, would be concerned not just with economic matters but with the much wider concern for plurality and diversity in the media.
The Government claim, as the noble Lord, Lord Thomson of Monifieth, pointed out a few moments ago, that a Competition Commission involvement in such cross-media mergers would lead to uncertainty. Indeed it would. One cannot deny that during a period of a reference there must be uncertainty as to the outcome—otherwise what is the point of the reference? However, I would suggest that that is a small price to pay for ensuring a free and diverse media. Once ownership is changed, it is exceedingly difficult to revert to square one; the damage may have been done.
I have recently received a letter from News International; others may have received the same letter. The letter wanted to contradict what it called a number of "myths" that were gaining currency about News International. One "myth" the letter mentions is that if foreign and cross-media ownership rules are removed, Rupert Murdoch would be allowed to buy Channel 5. The answer given by News International to that so-called myth is that the competition authorities will still have to examine the issues, and an illustration of this is the ongoing investigation by the Competition Commission into the Carlton/Granada merger and the ownership of ITV. However, as we all know, and certainly News International knows, that investigation is limited to competition or economic matters—that is, will the merger substantially lessen competition? As I understand it, the particular emphasis in the inquiry is being put on the matter of whether it will unduly reduce competition in the advertising market if that merger goes ahead.
There is no power in the Competition Commission or indeed in any other body at present to deal with the matter of whether diversity and plurality in the media will be adversely affected by Granada and Carlton
coming together, or indeed to consider the matter with which the noble Lord, Lord Puttnam, and the other proposers of the amendment are concerned—a balanced presentation of news and the free expression of opinion.Further on in its letter to me, News International said that there is a myth that it dominates the newspaper market. Anyone interested in competition policy knows that definitions of market are absolutely vital. It is perfectly true, as News International pointed out, that Trinity Mirror is the biggest newspaper publisher in the UK. As I expect most of us know, that is because Trinity Mirror has a large share in the regional and local newspaper field. In the letter, News International admits that 33 per cent of the national newspaper market is in its hands. To my mind, and in any economic and common-sense judgment, the national newspaper market is the most significant market when it comes to free expression of opinion, accurate presentation of news and the ongoing running of democracy in this country.
I think that everybody agrees that News International has a significant position in the national newspaper market. If it is possible for a merger to take place across the media, whereby that newspaper interest is able to achieve or seek a position of dominance, that should surely be examined from a much broader point of view than purely that of whether it significantly reduces competition. There should be an examination of the wide and accurate presentation of news and the diversity and free expression of opinion. I support the amendment.
11.30 a.m.
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