Select Committee on Communications Minutes of Evidence

Examination of Witnesses (Questions 1680 - 1699)


Mr Andrew Neil

  Q1680  Chairman: We will come to this point.

  Mr Neil: So I do not think even that allows you to get away with it. I could have battled on. As you say, it came at a time when I wanted out anyway, so I was there for 11 years, he was tired of me, I was tired of him, I wanted to do other things, but on your question, if it had not come at that time and it had come earlier, I could have dug my heels in, I could have battled on, but I would have been the walking wounded pretty quickly. It would have been unpleasant for me, bad for the newspaper, bad for the staff as well.

  Q1681  Baroness Howe of Idlicote: But you have referred of course to Chinese walls and this sort of language which is used, not saying that what you are writing is damaging business interests, but that it is boring his readers. To what extent is that sort of thing not so obvious to everybody concerned?

  Mr Neil: Well, it was obvious to me. Here was The Sunday Times in the middle of one of the biggest disputes and journalistic investigations in 1994, involving the use of state aid to Third World countries for the Pergau Dam, involving corruption by Wimpey which was paying money into bank accounts owned by the ruling party in Malaysia. By the way, the courts eventually ruled that the Government had been completely breaching its own law on linking arms sales to Pergau Dam aid. Our story was absolutely right. We had the British Prime Minister on the run, we had the Malaysian Prime Minister up in arms, every other newspaper and media outlet was rushing to catch up with this superb piece of investigative journalism, and our proprietor found it boring. I think you can only draw your own conclusions at what I subsequently found out, that his business interests were threatened by this.

  Q1682  Baroness Howe of Idlicote: Legally, you and he did not have a relationship. You had a relationship in that you were the Editor, but could you have sued him?

  Mr Neil: I did not need to do that. He was happy to write a large cheque for me to go and I was happy to take it!

  Q1683  Lord King of Bridgwater: I would just say how refreshing it is and far more candid to have the views of an experienced ex-Editor with the obvious problems that are faced by current editors who are obviously very constrained by what they can say, and I just say that by way of preamble. This planet that you are talking about, which I entirely understand the concept of, is a bit bigger with Mr Murdoch because of course it is not just newspapers and being on the same planet in political thought, but it is being consistent and ensuring that the commercial interests also live on the same planet and can survive on the same planet. The illustration that followed on from Malaysia was China, was it not, where he was seeking, I think, television rights in China because he had dumped, I think, BBC World from Star TV because the Chinese were critical of the BBC. He sold The South China Morning Post and actually forbade half of HarperCollins from publishing East and West by Chris Patten because he thought that would upset the Chinese Government as well.

  Mr Neil: All of the above is true.

  Q1684  Lord King of Bridgwater: Did you find that there were commercial pressures, that, whilst you might have thought you were on the same planet in political thought, there were these commercial issues?

  Mr Neil: I had few problems on the commercial side with him. Can I make the general point that no newspaper group in this country, none, covers its own affairs well. If you want to find out the truth about the Scott Trust, do not read The Guardian. If you want to find out the truth about Sky Television, do not read The Times or The Sunday Times. Why we are saved from secrecy is because all the other newspapers will write about Murdoch's business interests, although the newspapers themselves, the ones he owns, will not write, so I think it is true of all newspaper groups. If you want to know the truth about Mr Desmond's pornography empire, I do not think you will find it in The Daily Express.

  Q1685 Lord King of Bridgwater: But, if you bring all of this together, the point which was made about him being a US citizen, the point made about his widening interests in the media throughout the world now, is it not becoming really almost impossible for him to keep in touch completely?

  Mr Neil: Yes.

  Q1686  Lord King of Bridgwater: It must affect the amount to which he can really get involved. Actually Britain is pretty small beer compared to where the real interest lies.

  Mr Neil: And he is bored with Britain now, and I think the intrusion and the interference, or I think a less loaded word would be "intervention", is a lot less now than it was in my day, including with the tabloids, because of the reason you give that the empire is so big, and he has now of course got a new toy which totally obsesses him which is The Wall Street Journal and he does not want to talk about anything else, but also because the early part of the 21st Century is a very different political landscape for him than the 1980s. In a sense, he does not have a dog in this fight. In the 1980s, it was Reagan and Thatcher, they could do no wrong and their enemies had to be seen off and it was vital that his newspapers were part of that fight and on the right side. For him, the difference today between David Cameron and Gordon Brown is de minimis and it is of really no importance to him anymore, nor does he have any more territorial demands in this country. Now, he has got his media empire here, Sky is safe, the newspapers are safe, there may be regulation at the edge that will upset him, but he is not really in this fight anymore. He is fighting other battles and actually that is why it is a rather good time, I suspect, to be a Murdoch editor in the United Kingdom, and it is great to have a proprietor that does not live above the shop, it is great to have one that is 3,000 miles away.

  Q1687  Lord Maxton: But he is passing it to James, his son. Does he interfere in the same way?

  Mr Neil: I do not know, but I assume that part of the reason he got the job was because of his DNA, so I am sure that part of it is in the DNA. I am not sure that he has the same strong views on politics as Mr Murdoch has.

  Chairman: Let us move on, and you mentioned the independent Board of The Times and The Sunday Times.

  Q1688  Baroness Thornton: I wanted to go back to that because you spoke slightly scathingly of them, I think.

  Mr Neil: No, very scathingly.

  Q1689  Baroness Thornton: In a way, my question is slightly redundant because you go on about why you did not contact them or use them when you thought you might have needed them.

  Mr Neil: First of all, let us just remind ourselves. It was a conceit invented by John Biffen and the Thatcher Government to allow Mr Murdoch to take over these papers in the first place, and it was put in place for that reason. It was not really put in place to protect the independence of the editors. Then you look at the kind of people who became these trustees, and I do not know who they are today, but in my time they were really just a bunch of establishment worthies and Murdoch policemen and they had no real role. There was one exception which was Alistair Burnett who really did know and helped me on one occasion. When I rather foolishly, although the story was entirely accurate, published the story, "Queen dismayed by uncaring Thatcher", which meant I had managed to pick a fight with both the Prime Minister and the Monarch in one day, the trustees then came into action. The trustees wanted my resignation and they petitioned Murdoch to get rid of me, and it was Alistair Burnett that dug his heels in and said, "Excuse me, the story's true and it is not our job to get the resignation of the Editor, it is our job to protect the Editor", so that was my only experience of them. Even if they had a more worthwhile role to play, as I say, in reality, in practice, no matter how good the trustees are or how supportive, if you and the proprietor have fallen out of love, your position is untenable over time.

  Q1690  Baroness McIntosh of Hudnall: Can I just follow that up a little bit because it is pretty clear that you do not have a lot of time for that sort of structure because you do not think it has any teeth.

  Mr Neil: No, I am saying that, even if it does have teeth, it is not a sustainable structure.

  Q1691  Baroness McIntosh of Hudnall: Well, fair enough. However, you did also allude to the great diversity of ways in which newspapers and other media outlets are owned in this country and they include independent trusts, so, for example, with The Guardian, to which you also alluded, there is no proprietor in the old-fashioned sense, so within that kind of structure, do you see any use there for the kind of internal regulatory function that an independent board can have in preserving editorial independence, and against whom is that board pitting itself?

  Mr Neil: The idea of the Scott Trust and a couple of trustees appointed by Rupert Murdoch as a fig-leaf are two entirely different things. The Scott Trust is a perfectly legitimate way of running a newspaper and, as you can see from the success of The Guardian and its on-line success globally, it works. That works. It is entirely different from the strong proprietor who controls the shares and the business of that company appointing a couple of trustees as a fig-leaf.

  Q1692  Baroness McIntosh of Hudnall: But, given the diversity of your experience in the newspaper industry, and it is a crude question, do you think that is a better way of running newspapers and making sure that there is balance and editorial independence or do you think it is just one way amongst others?

  Mr Neil: No, I think it is just one way. I think there is no better way. I think that a strong, vibrant and robust press comes out of having a diversity of ways of running newspapers. I think there are two important things about a newspaper market. One is that ownership should be widely spread and that is a job for regulators, no question about that, and regulation should stop concentration of ownership. Indeed in some areas in Britain we have already, I think, reached the limits of concentration, and I think Mr Murdoch should not be allowed to own any other newspapers, I think he is at the limit there, and within that diversity or lack of concentration of ownership, there should be diverse ways of running newspapers. I think we have that in this country which is why I would still maintain that we have the finest newspaper market in the world. There is nothing like the British newspaper industry.

  Q1693  Baroness McIntosh of Hudnall: If I can just play that back to you, you appear to be saying that the key to having a robust and effective spread of media outlets is diversity and what you also seem to be saying is that the only really important bit of regulation that there needs to be in effect is that which regulates ownership—

  Mr Neil: And stops concentration and ensures competition.

  Q1694  Baroness McIntosh of Hudnall: So would I be right in thinking that really everything else that is of a regulatory nature, whether it is internal or external, you think is largely unimportant compared with that?

  Mr Neil: I think that is more important than anything else. I think internal regulation is fine, and that is a matter for the newspaper and the business and how it is organised. I am very sceptical that any external regulation of setting up boards of trustees or having special rules will do anything except put us under licence and we managed to get rid of licences in the 18th Century.

  Q1695  Chairman: Therefore, on the basis of your argument, do you think that enough is being done to promote or preserve diversity of ownership in this country?

  Mr Neil: I have always thought that our regulatory authorities, when it comes to competition, lacked teeth and do not believe enough in competition compared to, say, which I am very influenced by, the role of the Anti-Trust Department of the Justice Department in the United States where competition is really a way of life. Too often in this country, competition, diversity, widespread ownership, not just in newspapers, but in all forms of business activity, are not given enough weight. I think things have got better, but I still do not think that we put competition and diversity at the heart of our regulatory structure. I remember having an argument with the Prime Minister when he was Chancellor of the Exchequer when I said to him that in America, if you are found to be involved in price-fixing, which in the past newspaper proprietors had been in this country, there had been conversations which in America would be illegal, and I said to Mr Brown, "If you do that in America, you go to jail", and one of the chief executives of a major airline had had a conversation on air fares with an equivalent and he ended up in jail. Mr Brown said to me, "Oh, but I don't think people would stand for that in this country", and I said to him, "No, the people you know wouldn't stand for it, the big businessmen and the establishment, but ordinary people would love it if you put someone in jail for trying to fix prices". Actually, I see that since then the law has been toughened up, though I do not take credit for that myself, but that attitude of the importance at the heart of regulatory policy of competition and diversity of ownership, I think, is key. You can get that right and get everything else wrong and still have a pretty good industry. If you get that wrong, you can have everything else right and it will not work.

  Q1696  Chairman: Is one of the reasons why there is, to use your phrase, "a lack of teeth" in the regulatory authorities and competition authorities over the years or is part of that reason that successive governments kind of wish to be in with the press and do not like actually offending the press, do not like being on the wrong side of the press?

  Mr Neil: No, I do not think that is the case at all. I think the case has been that successive governments of the Left and the Right have always wanted the option to let their definition of the public interest take precedence over the normal rules of competition. Otherwise, why would Tiny Rowland have been stopped from buying Harrods? There was no competition reason there at all, but they invented one, that he had some textile mill in India and there was a danger of vertical integration. Well, it is hard to stop laughing when you say that. Why was the Standard Chartered Bank stopped from buying the Royal Bank of Scotland in the 1980s? Because the Scottish political establishment wanted to do so, even though for competition reasons it would have been a blast of fresh air into what was then a rather fusty British banking system. It is the politicians, people like yourselves, who have always wanted to have your definition of the public interest as a backstop in case competition rules gave you a result you did not like.

  Q1697  Lord Inglewood: You said in response to a question that diversity of ownership was the crucial thing about ensuring a healthy and lively press as a whole, but that also surely depends upon a diversity of opinion and a diversity of demand in the marketplace, so is there not a risk, if politics coheres around the centre, that then everybody will be going for the same part of the marketplace and your press will become a great deal more inferior than it has been?

  Mr Neil: I do think that is a risk, but, in a sense, that is the press reflecting the way the country has gone. As our politics have become less ideological and people have coalesced around the centre, then the press itself has followed that and that is where people have gone. That seems to me to be inevitable, but we have proceeded in the past 45 minutes as if the press have existed in isolation and that there was nothing called `the Internet' that existed, and you will find a diversity of views on the Internet now which are often more exciting and more effervescent than in newspapers. In a sense, newspapers are now having to compete with that, and I have been involved in this myself. The rise of blogging and of opinion outside the mainstream has caused newspapers a problem because quite often these bloggers are more interesting than the editorials in the newspapers, so our newspapers, because we are competitive and because we are diverse in this country and because we take on challenges and we are not complacent, every newspaper is going around signing up bloggers now. In The Spectator we have invented our own coffee-house blogging section and that makes sure the opinions do not get too dull.

  Q1698  Lord King of Bridgwater: I was going to come on to that aspect, but just in finishing this point about competition, the reason why the powers are limited is often because of the commercial situation. Now, John Biffen, I think I am right in saying, used a clause in the Fair Trading Act when Murdoch bought The Times and The Sunday Times which exempted uneconomic businesses from referral. The point I am really making is that one of the ways in which people have been able to increase their scope beyond what many might have thought was reasonable in terms of share of ownership, and you think we have reached the limit, was that they said, "Well, if we don't take it over, they'll go bust anyway. If you want to keep these newspapers, we can do it". The lack of competition is partly financial, if there are enough people willing to get involved and with the funds willing to take it on, whereas are you left with Hobson's choice that this is the only chap who will take on a loss-making operation?

  Mr Neil: No, you were left with a political system that proved wholly inadequate to the choice that it faced. You had this rule at the time that the normal rules of concentration of ownership and competition could be sidestepped if it was said that the newspaper was going bust and that, without this person buying it, it would go out of business. You had that rule, not you personally, but the political establishment, the political authorities, but you had no way to divine whether the paper was going bust or not, you had no way to prove it. You simply took the word of Murdoch and the figures that he had, whereas a robust competition authority would have been able to establish for themselves whether that was really the case.

  Q1699  Lord King of Bridgwater: But am I not right actually that the same situation arose with the Thomsons?

  Mr Neil: Well, that was the Thomsons who were selling to Murdoch.

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