Examination of Witnesses (Questions 1680
- 1699)
WEDNESDAY 23 JANUARY 2008
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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