Digital Economy Bill

Baroness O'Neill of Bengarve Excerpts

Committee: 4th sitting (Hansard - continued): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Baroness Bonham-Carter of Yarnbury]

My Lords, my name is also attached to these amendments, and I support the noble Lord, Lord Puttnam. They add the necessary extra scrutiny needed for media mergers and ensure that Ofcom’s fit and proper test is effectively applied.

These amendments specify further grounds for the Secretary of State to refer media mergers to Ofcom. As the noble Lord, Lord Puttnam, mentioned, the existing plurality safeguards are no longer adequate. They do not deal with market dominance and they are not sufficient for protecting editorial independence of media outlets. It is vital for the media environment that no company possesses disproportionate power to influence public opinion or the political and policy-making process. Plurality safeguards are an essential part of protecting the public and decision-makers from media organisations which are allowed to expand without proper scrutiny.

Then there is the matter of Ofcom’s fit and proper test. As many noble Lords will know, Ofcom must supply a test of fitness and propriety to owners of broadcast licences. At the moment, this test is not spelled out. What we propose would add definition to the test, using the recommendations of Leveson 2. Taking the current Sky-Fox bid as an example, I believe that this would ensure that the present chief executive of 21st Century Fox, James Murdoch, would undergo proper scrutiny if he were to retain a senior position at Sky.

I echo the noble Lord, Lord Puttnam, in one of the letters to which he referred. How we deal with the concentration of power decides the kind of country we are. I, too, understood that that is what Theresa May said when she became Prime Minister. Now it is for her Government to follow the logic, evidence and facts, and accept these amendments. They do not bind the Government; they simply strengthen the merger and plurality regime already in place. They put appropriate and proportionate power in the hands of an independent regulator, Ofcom, in order to protect the interests of citizens and consumers.

To quote my friend, Sir Vince Cable:

“The public interest centres on plurality and fitness”.


These are beneficial proposals which have been carefully agreed through cross-party consideration. I hope that the Minister will recognise this and respond positively.

[Baroness O'Neill of Bengarve (CB)]

My Lords, I support this amendment. I remember well—and the noble Lord, Lord Puttnam has reminded us of it—that, in 2003, we had quite dramatic discussions in your Lordships’ House about the dual duties of Ofcom to the citizen and to the consumer. There was a bit of a wobble after Ofcom was set up, but since then it has properly seen itself as defending these two separate interests and not, as was initially suggested, merging them into the interests of a fictitious character called the citizen-consumer. That was an unfortunate, but brief, episode.

I believe the noble Lord, Lord Puttnam, hit the nail on the head when he said that this pair of amendments is highly congruent with the Government’s policy. Not merely has the Prime Minister spoken about acting in the interests of “you rather than the few”, she has also started to refer to “issues of corporate governance”. This is basically what this is about—the standards that we think are relevant in corporate governance.

This has been a very unhappy decade in which there have been failures of corporate governance in many sectors. I am a member of the Banking Standards Board, looking at the culture of the banks. I read every day about this culture and realise how vital is the requirement that only those who have passed fit and proper person tests come into positions of leadership and influence in the banking sector. I realise how important this also is for the media sector—indeed, it is perhaps more important.

As we have seen clearly in the last few weeks, with the presidential campaign in the United States, the media have changed hugely in this decade. We can get spiralling misinformation that is extremely difficult to stem once it gets a hold in social media; once it spreads with the rapidity which the greediest of proprietors could never have imagined. In this world, more than ever, serious corporate governance has to take account of the ethics, as well as the law, of the fitness and propriety of leadership, as well as the adequacy of regulation. I support the proposal that Ofcom get a clear grip on the fitness and propriety of those who lead the broadcasting industries.

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a very important debate on a very big issue. Its sharpness has been reinforced by the fact that we are currently in a process involving all the issues that have been referred to. Obviously, this will be reflected in the fact that the response will not be made by a Minister in the department which might have to deal with some of the results of the current proposals for a merger, and we respect that and understand the reasons for that.

The wonderful speech by my noble friend Lord Puttnam, which took us back to the origins of the Ofcom regime that we now have and reflected on points along the way, including the dark shadows cast by the events of 2011, gave a texture to this that makes it much more important. The noble Baroness, Lady O’Neill, spoke about the need to think about how all this interfaces into descriptions of the sort of country we want to live in and the sort of society that we can enjoy. The necessary handles on both policy and the implementation of that policy are very important.

At heart, the amendments are simple. They draw out in more detail and focus on issues which have been live ever since they were first introduced. Indeed, I recall discussions in your Lordships’ House on two Bills which dealt with issues that bore on this and for which we had debates of this type. That does not mean to say that this is ground that no longer needs to be tilled. It does, because in thinking about this we have to recognise some of the issues that have already surfaced in Committee today and throughout the Bill—that when we are talking about the media, particularly but not restricted to the digital media, we have to think very carefully about the pace of change and the adjustments that have to be made to the policy framework in order to achieve what will be proportionate and appropriate regulatory functions later on down the line.

The good thing about the amendments is that they make us think about the words that were used, which seemed appropriate at the time, in relation to the twin requirements: that we look at plurality in relation to media but also at control. If this were a simple case of looking at how a monopoly might influence outcomes and how consumers are treated, it would not be necessary, perhaps, to delve so deeply. The issues that are currently addressed by the CMA, for instance, are largely economic. They deal with prices. They deal with the way in which consumers are treated, but they are basically around whether or not the price has been artificially moved in order to favour the producer against the citizen. In that sense, we do not need to think too hard about some of the issues, although we can regret them, as we did in the debate in the dinner hour, which I was able to participate in, which focused almost exclusively on why consumers have disappeared from government, consumer interests are rarely referred to and there are not even consumer panels on the CMA. But that debate can be read in Hansard, and I am sure it will be of much interest to those who are interested in this point.

The amendments would go back over the grounds on which a PIIN is issued and make it clearer than it is currently that simple questions of plurality, which are readily gamed in terms of corporate structures these days—this issue was perhaps not so resonant at the time that the legislation was drafted—need to have a little bit more bite if they are to look at some of the detail that we want in this area. We have to look not just at the question of ownership and control in relation to a market-facing issue but at the way in which such an agglomeration can distort and change that market, which is not in the public interest. It is very important that we do that. There may well be a way of dealing with this under the existing legislation, but it would be so much easier if the amendment was accepted because it would take us down a line that was more focused on the particularity of the media arrangements.

Then there is the question of the fit and proper person test for those who have broadcast licences. The basic structure is there. Again, on reflection, it could be argued—and I think it has been demonstrated today—that without more concern about the issues which arise out of the merger, without more concern about how the operation will work in terms of who activates it, what exactly the issues are that will be looked at, what the proprieties are that we are concerned about, and where the ethical concerns are and all that, then it will not be as effective. I look forward to hearing from the Minister.

--- Later in debate ---

I hope, therefore, that the Minister can give us at least some indication that the department is looking at Irish press accountability, and will give us a judgment as to which approach they prefer and the recommendations they intend to make.

[Baroness O'Neill of Bengarve]

My Lords, it is late, and I do not want to repeat myself. I am sure that the noble Baroness, the noble Lord and the whole of that long Front Bench—almost as numerous as the rest of the House at this hour—know this issue not going to go away. This retrospective consultation does not do the Government honour. I hope that they will take some action.

[Baroness Jones of Whitchurch]

My Lords, again, given the lateness of the hour, I simply say that our views are well known, that we have supported the implementation of Section 40 in a number of previous debates in this Chamber, and on that basis we support the amendment.