Examination of Witnesses (Questions 2380
- 2399)
WEDNESDAY 2 APRIL 2008
Mr John Hutton MP and Andy Burnham MP
Q2380 Chairman:
It has happened, has it not?
Mr Hutton: It has never happened.
Q2381 Chairman:
Not in your time but it has certainly happened in the past, has
it not?
Mr Hutton: Yes, but we are talking about the
current legislative framework.
Q2382 Lord Inglewood:
In the context of dealing with the public interest test, are you
bound by the findings of fact by the Competition Commission?
Mr Hutton: I am bound to accept their findings
in relation to competition, yes.
Q2383 Lord Inglewood:
What about public interest?
Mr Hutton: I have the ultimate authority to
make a decision and the power to make a decision in relation to
the public interest question. That decision comes back to me from
the Competition Commission but technically I then make the determination.
The point I am trying to make is that in the circumstances of
this framework I think it would be impossible.
Q2384 Lord King of Bridgwater:
I think the answer you gave on conflict of interest was an interesting
one and I do find it slightly to accept. I know we cannot talk
about the present case but you can think of a similar sort of
case where, if you have taken a certain decision, a lot of allegations
would have been made as to why it had been made in favour of somebody
who was thought to be extremely powerful and whose support was
of great importance to government. Entirely respecting your integrity
in the way in which you would approach these issues, the basic
conflict of interest does lie there, does it not?
Mr Hutton: Secretaries of state, as you know,
act always on the proper advice of officials and there was proper
and independent advice given to the secretary of state at the
time about the circumstances of this potential intervention. Of
course the secretary of state at the time did the right and proper
thing ahead of the determination, whether to make intervention,
of actually seeking the advice of Ofcom and OFT. The secretary
of state acted in entirely the proper way and to be visibly acting
in the proper way by seeking the advice of independent, competent
regulatory authorities. On the basis of that advice he then made
his intervention. I think it was done carefully and in the right
way. Clearly there is a relationship between politicians and the
media, of course that is so. It is sometimes a difficult and controversial
set of relationships and we all understand that. Having looked
very carefully at all of the papers in relation to this case and
then having had to make a determination myself in relation to
this case because the former secretary of state is now the chancellor
I remain absolutely convinced that the process and the procedure
worked properly and fairly and we acted consistently—I believe
this very strongly—to make sure that when the allegation
of potential conflict of interests would be made—which it
inevitably would be—we could properly justify every step
of the process and every step of the action that was taken.
Andy Burnham: From memory this regime was one
that was subject to considerable debate within Parliament; it
was not necessarily part of a bill so it was not the Government's
preferred solution. I think it was Lord Puttnam who pushed very
strongly for a regime of this kind and I think, as John Hutton
is saying, because the issues raised go to the heart of our democracy
it is right that a democratically elected politician has a role
in this process. That is what Parliament determined but, as John
is describing, there is then a very carefully constructed process
that ensures propriety and probity all the way through.
Q2385 Chairman:
You do have a choice of remedies, do you not?
Mr Hutton: Yes.
Q2386 Chairman:
You indicated that you did not have any discretion but you do
at the end of the day because competition gives you that choice.
Mr Hutton: I can have discretion, yes. On this
particular case again I had a discretion to make in relation to
one aspect of the remedy that was being proposed which I exercised.
In this case it was not to disclose the time period in which the
shares should be disposed, which I felt was right. It is true
that the secretary of state, in relation to all aspects of public
interest intervention, has the final say. As I said, in a process
that has been established and with the acknowledged expertise
of the Competition Commission, it is almost impossible to imagine
a set of circumstances where, having had the full and proper inquiry
with everyone having the opportunity to put forward their case,
the secretary of state would then march off in a totally different
direction and make a totally different decision. That would potentially
bring the process into some disrepute.
Q2387 Lord King of Bridgwater:
Can I give you one scenario? You might be privy, as secretary
of state, to information that came to you from perhaps intelligence
agencies and others. There are some thoroughly undesirably people
around in this world at the moment with a huge amount of money
operating behind various fronts of one sort or another. There
may be considerations which are not in the public domain and which
are not available to the Competition Commission which might require
you to use your own judgment as to whether it was desirable or
not.
Mr Hutton: I said it is almost impossible to
imagine a set of circumstances where a secretary of state would
take a different course than the one recommended by the Competition
Commission. I would assume that much of that information, particularly
in relation to the character of the individuals, is evidence of
a kind that you would expect normally to be available. If there
is sensitive intelligence information that is probably not going
to be put in the public domain that could conceivably be one set
of circumstances where it is just about plausible to imagine that
the secretary of state might want to take a view that is different.
However, I am reasonably confident that most of the information
that would be pertinent to the question of whether someone was
a fit and proper person to be in charge of a significant media
outlet would be generally available and therefore should be the
subject of evidence to the Competition Commission.
Q2388 Chairman:
You are basically saying that you are never really going to interfere
in what the Competition Commission say at the end of the process.
Why do you not just leave it to the Competition Commission? Why
do you need to have a role at the end at all? Then none of these
questions about potential conflicts of interests between politicians
and the final decision would arise.
Mr Hutton: Competition policy has been delegated
to the OFT and the Competition Commission because we are essentially
dealing with economic issues, market forces issues. In relation
to the public interest consideration I think we are dealing with
a qualitative different set of issues, they are not purely economic.
They have a political dimension in relation to how our democracy
prospers and thrives. That is why I think these decisions to refer
on these wider public interest grounds should probably be the
responsibility of ministers and not the regulatory authorities
because their jurisdiction is in relation to competition issues.
Q2389 Baroness McIntosh of Hudnall:
You have just said very clearly that the issues that arise from
public interest tests are qualitatively different from those that
arise from competition tests. Given that you may have to take
such decisions, are you content that the definitions of public
interest are sufficiently clear and robust? Secondly, do you think
that the notion of public interest is itself a mutable concept?
It could be argued, could it not, that what is in the public interest
may, from time to time, change. Are there ways in which the question
of public interest and how it is to be tested can be reviewed
and self-tested?
Mr Hutton: There are two parts to that question;
do I think the public interest test or the grounds for intervention
are properly identified in the Communications Act? I think they
are. I think they are pretty broad; I think they cover most of
the scenarios that we should be interested in and concerned about.
The Communications Act itself has a rather unique feature to it
which is this on-going built-in three yearly review. We have just
had the first report to the secretary of state recently. So I
think we have the opportunity in the legislation to keep the legislation
under review on a regular basis and I think it is right and proper
that we should do that, although it is the secretary of state
for Culture, Media and Sport's responsibility; he has responsibility
for the sector. We have significant interests in my department
too. The work of Ofcom is something that Andy and I both have
an interest in and it is quite clear to me that this whole world
of communications and media and so on is changing at a pace that
is breathtaking and it is incredibly hard to keep up. Certainly
in terms of the regulatory review ministers now have a very obvious
responsibility to ensure that this new framework that is only
three or four years old is actually working properly. The previous
regime lasted the best part of 35 years. I think it is difficult
to imagine that there will not at least be arguments for significant
change well before 35 years has passed, hence the Communications
Act.
Q2390 Baroness McIntosh of Hudnall:
We will come to questions about how this relates to issues of
citizenship so I will not pre-empt that by too much, but I would
be interested to know in what way you and your colleagues are
able to connect the questions of application of a public interest
test to other issues which this government and others have been
very concerned about which are to do with core values and how
the citizen is protected but also what the citizen's responsibilities
are. Do you place it in that context?
Mr Hutton: Yes we do and I think that is also
reflected in the definition of the public interest test in the
Communications Act itself, particularly the reference to people
having a genuine commitment to the attainment, in relation to
broadcasting, of the standard objectives set out in section 319
of the Act itself which are a very long list of the sorts of qualities
that we look for in people who have significant media interests
in the UK. I think there is reflection of that argument in the
legislation.
Q2391 Baroness McIntosh of Hudnall:
And in the way the legislation is reviewed?
Mr Hutton: That is more the responsibility of
the secretary of state for Culture, Media and Sport.
Andy Burnham: Absolutely. At the heart of our
concerns are the needs of the citizen and that is very clear in
Ofcom's remit. There is obviously a balance to be struck between
the needs of markets and needs of consumers on the one hand, and
the needs of the citizen on the other. That is absolutely at the
heart of the Act itself, of Ofcom's interpretation and use of
the Act and obviously the advice that they give to us.
Q2392 Lord Corbett of Castle Vale:
There has been continuing interest in meetings that take place
between government ministers and proprietors—newspaper proprietors
in particular—not always being able to get the information
that is being sought by either members of this House or the Commons
because there are exemptions as you will be aware of. Have either
of you had any discussions with any media proprietor about issues
involving media ownership or regulation?
Andy Burnham: I met recently with the Director
of Trinity Mirror and obviously from my point of view there
is a changing media landscape out there. It is very important
that we hear all views about the future of media in this country
and crucially, in my view, how we carry forward the best that
we have had in this country, particularly our news, into the new
era. In the short time I have been in the job of course I have
come into contact with people who own and operate media organisations.
Q2393 Lord Corbett of Castle Vale:
I am not interested in meeting someone for a drink. I asked specifically
about where there were any discussions on media ownership or regulation
when you met Trinity Mirror.
Andy Burnham: No, the discussion was of the
broad picture, the changing nature of the media world and, as
I say, the need to preserve what has been best about our media
going forward into the future. Coming back to the earlier discussion
John Hutton was having, I think it is a very different discussion
when there is a live issue. All ministers have responsibilities
under the Ministerial Code and in my experience they give very
careful regard to those matters. There is a Convergence Think
Tank which has been set up jointly by my department and John's
department which is looking at these questions in their very broadest
sense of the future, the correct balance of regulation and obviously
questions of ownership to preserve a plurality of voices. In my
mind there is a big difference between discussing that broad picture
and then discussing the nitty-gritty of a particular case or a
particular rule as it bears on a particular industry.
Mr Hutton: I have not had any such meetings.
Q2394 Lord Corbett of Castle Vale:
Quite clearly proprietors or editors on occasion are going to
seek meetings with ministers to discuss some particular issue
and there is nothing wrong with that kind of lobbying at all.
I accept, as I say, the difference that you have made between
general discussions about where the media is going and where the
changes are going on, and the specific lobbying campaigning. I
understand there is the Ministerial Code, but requests for those
meetings on specific issues touching on the press, whether it
is regulation or other aspects, how are those handled at your
level?
Mr Hutton: I have not had to handle any because
we have had no such requests for any such meetings. If there was
any suggestion that ministers were being directly lobbied about
a particular proposal or a desire on the part of one media organisation
to acquire another, I would be astonished if any such meeting
would take place on those terms. The advice to ministers would
be not to meet to discuss those issues because that could potentially
be the subject of an OFT or the Competition Commission or even
Ofcom report so I think ministers would be prevented from having
those direct conversations.
Q2395 Lord Corbett of Castle Vale:
To take a current example, Michael Grade has been banging on about
scope for having more advertising on Channel 3, even in terms
of closer together. If he were to phone up and ask to have a word
about this, what would your response be?
Andy Burnham: As John said before, I have a
responsibility generally for the media industry and the health
of the British media industry. As part of the broader policy discussions
that we have it is entirely proper in my view that I should speak
to and canvass opinion from players in that industry with a view,
as I say, to securing the health of the industry, but—this
goes back to Lady McIntosh's point—at all times at the front
of my mind is the need of the citizen in considering those issues.
I think that is entirely proper. Looking back to the Communications
Act the balance is constantly being struck between how can we
align the interests of the industry with the needs of the citizen
and I would say that regional production quotas for instance have
been a good example where the public policy intervention has stimulated
the growth and the competitiveness of the media industry in the
regions. That is a very positive thing and might be something
where you can align the two interests.
Q2396 Lord Corbett of Castle Vale:
I think you have just said that you would meet people and discuss
these issues and Mr Hutton said he would not.
Andy Burnham: I was talking about specific proposals
in relation to a company's plans to acquire another company. That
is a different matter.
Q2397 Baroness Scott of Needham Market:
Specific requests from members of both Houses have been turned
down on the grounds of the code on access to government information
and the two sections, exemption 2 and exemption 7, covering information
about internal discussion and advice, effective management of
public operations. Do you not think that from the outside it looks
a bit odd that your discussions are, on the one hand, of sufficient
importance to be exempt from the code and yet are not really important
enough to be known to the public? If they are important to be
exempted then surely people would want to know what was going
on. Are you comfortable that you are operating in a framework
that allows a certain amount of discussion but one in which parliamentarians
and other people can know what you are doing?
Andy Burnham: This is the government that passed
the Freedom of Information Act. There is plenty of information,
in my view, that is put into the public domain to enable parliamentarians
and others to form views about how policy is being formulated.
Ministers will make their own judgment basically and I think you
have to accept that ministers should make their own judgment in
accordance with the Ministerial Code whether it is right to hold
the meeting, what it is right to discuss at that meeting and,
if somebody asks, whether it is the best course of action to put
that into the public domain. I think ministers should use their
best judgment in those situations.
Q2398 Chairman:
Why should there be discretion between ministers on whether they
make it public or not?
Andy Burnham: If a parliamentary question is
tabled I think people do. I routinely publish, if people ask,
details of meetings held. I cannot envisage a situation where
I would not put that information forward. You have to allow ministers
to make their own judgment in these cases and there are obviously
provisions within the Freedom of Information Act whereby you can
protect the space within the Civil Service where advice may be
given freely and frankly by civil servants to ministers. I personally
feel that there should be maximum openness on this point. As far
as I am concerned, if people from the industry ask me for a meeting
I think I have a responsibility to meet them and listen to them
because they have a view that is important for me to hear about
the future of our media industry.
Q2399 Chairman:
Who was your meeting with from Trinity Mirror?
Andy Burnham: It was Sly Bailey.
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