Queen’s Speech
Debate between Baroness Rawlings and Lord Myners(12 years, 6 months ago)
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Lord Myners
My Lords, it is a pleasure to participate in a speech on the humble Address and in particular to welcome the maiden speech from the right reverend Prelate the Bishop of Durham, who has already warmed the House to his wisdom and sense of social responsibility. I also look forward to the maiden speech of the noble Lord, Lord Ashton of Hyde—another old Etonian added to the House and a former joint master of the Heythrop Hunt. He is therefore incredibly well informed, no doubt, on the Prime Minister’s thinking on so many policy issues.
The gracious and humble Address contains many good measures that I welcome. As an adopted person myself, I am particularly pleased to see that the Government are giving priority to adoption issues. I also welcome the comments from the Minister about board remuneration, although I continue to believe that the core issue requires institutional shareholders to take more seriously their responsibility in the appointment of the directors and members of remuneration committees. They should best achieve that by becoming members of board nomination committees.
I will concentrate on the economy and on the Bank of England. Mr Andrew Tyrie MP, the Chairman of the Treasury Select Committee, who is a wise and informed man, said in October 2011 that the Government needed:
“A coherent and credible plan for the long-term economic growth”.
He was right and that argument remains the same. As he observed at the time, many of the Government’s policies are downright contradictory. The noble Lord, Lord Skidelsky, in our debate on the European Communities (Amendment) Act 1993 held on 25 April, drew the attention of your Lordships’ House to chart 2.4 in the Treasury document, which clearly shows that the deficit is almost entirely due to the collapse in national output.
The engines that the Government assumed were going to drive growth are simply not working at the moment. Manufacturing activity is not picking up and business investment remains extremely low because of the absence of confidence in the economic outlook. The noble Lord, Lord Razzall, said that the jury was out on Project Merlin. I am afraid that he must have been out when the jury reported that the project has not worked, and the Government have admitted that by not renewing it. In fact, we know we are back in recession, and today’s Bank of England forecasts further confirm that, even though in the period immediately after the general election the economy was growing strongly. So noble Lords will recognise that we now have an economic management that has added incompetence to complacency. The Treasury team is too posh to comprehend what is going on and is now petulantly blaming others for its own failures. We have an economic policy that is devoid of intellectual coherence or economic endorsement—a mixture of assertion, dodgy definitions and flawed calculations.
Fortunately, external developments will give this Government the cover to change their economic policy if they so choose so as to give priority to raising demand and addressing the shortfall in output. They should take bold action to encourage housing, both private and social, which has a very positive contribution to make in its multiplier effect on the economy and on job creation. They should encourage investment in infrastructure. This is the time to say that we are going to build a third runway at Heathrow, push ahead with HS2, build more roads and invest in schools. It is a time when the cost of funding is low and when capacity is available—precisely when a Keynesian would expect the Government to be supplying demand into the economy. The Government should be encouraging capital allowances because they would have a much more immediate impact on the economy than cutting corporation tax, albeit that that is a good thing to do over time. Now is the time to invest in skills, and the time to introduce another temporary cut in VAT in order to encourage demand. However, the Government do nothing.
On the supply side we hear a great deal of talk about cutting red tape, yet we have heard today from the Minister about the groceries code adjudicator. I look forward to debating whether this is really going to be a priority for the country at this particular time. The Office for Budget Responsibility has shown us that the output gap is contracting, but the Government do not appear to be challenging its assertion, based on economic statistics on which we all know that it is extremely difficult to forecast.
Market confidence should not be of pressing concern and the Government should not hold back in addressing the need to push for growth. Interest rates are low because we have borrowed prudently in the past and there is an abundant supply of cash on corporate balance sheets, which at the moment, as the right reverend Prelate pointed out, is going into the gilt-edged market. However, the Government should not believe that these low interest rates are in some way an endorsement of the success of their policy. They are actually a clear message that the policy is not working. There are no growth opportunities to encourage investment.
We talk about monetary policy and quantitative easing. I believe that the Treasury should instruct the Government and the Bank of England to produce a report on the economic case for cancelling gilt-edged securities that have been acquired for value in the market so that they are not redeemed. Can the Minister tell us whether this has any different economic impact from holding them to redemption? The immediate impact of such a policy would not be to monetise debt but to address at a stroke one of the Government’s two fiscal objectives: reducing debt as a percentage of GDP.
The governor will not volunteer to do this. He said in his press conference about the inflation report that it would be “a whole lot easier” to contract the Bank’s balance sheet than to grow it. I do not see how he reaches that conclusion. If you look at the recent article in the Financial Times by Professor Tim Congdon, you will see that the Bank of England’s thinking on quantitative easing is becoming increasingly muddled.
Your Lordships’ House will debate the Financial Services Bill soon. This involves a remarkable—and ill considered—concentration of power in the hands of the governor. It will be unfair on the new governor for him to have as much authority as this Bill currently contemplates. Within the next 12 months the current governor will end a period of office that quite frankly is one of a considerable lack of distinction. I can see the Whip about to ask me to come to a close. The Whip allowed the noble Lord, Lord MacGregor, a little more leeway.
Baroness Rawlings
My Lords, I remind the House that the suggested length of contribution is seven minutes. Of course, that exempts noble Lords who speak after a maiden speech.
Lord Myners
I was referring to the noble Lord’s contribution to the debate as opposed to his endorsement of the right reverend Prelate, which he had completed at the point when we were allowed to leave the Chamber if we wished.
The current governor is probably the least distinguished since Walter Cunliffe, who served from 1913 to 1918. He has politicised the Bank of England and disregarded the outlook for inflation. We are introducing a policy of financial repression. When we debate the Financial Services Bill, we need to look very carefully at the additional authority and responsibilities that the Bill proposes to give to the governor.
Museums and Galleries
Debate between Baroness Rawlings and Lord Myners(13 years, 10 months ago)
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Lord Myners
My Lords, what action have the Government taken to encourage philanthropy?
Baroness Rawlings
The Government are well aware of the interest of the noble Lord, Lord Myners, in philanthropy, and the Secretary of State is aware of its importance in running alongside what the Government are doing. We have several projects and some meetings set up. The noble Lord will see these projects over the next couple of months which I trust will be to his liking.
Heritage: V&A Purchase Grant Fund
Debate between Baroness Rawlings and Lord Myners(13 years, 10 months ago)
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Baroness Rawlings
My noble friend Lady Gardner is absolutely right that Mr Hintze has been remarkable in supporting the V&A and other institutions, and long may that continue. Philanthropic giving is something that the Secretary of State for Culture, Olympics, Media and Sport is pursuing with great vigour. Such giving is becoming more and more important, and I hope that he will look into it further.
Lord Myners
My Lords, in addition to the government purchase grant fund, another major source of new acquisitions for the V&A and other galleries is gifts that are allocated to them under the acceptance in lieu scheme in respect of inheritance tax. Is there any reason why this arrangement should be limited to inheritance tax? Could it not be extended to other forms of personal tax, with appropriate controls, including in particular the new tax on non-doms that the Government are currently considering?
Baroness Rawlings
My Lords, the noble Lord, Lord Myners, has for some time been pursuing this issue, which we are all very interested in. We know that the matter is under discussion and I hope that the Treasury will come to a decision that is favourable for the arts and museums very soon.
Media: Ownership
Debate between Baroness Rawlings and Lord Myners
Baroness Rawlings
My Lords, I, too, congratulate the noble Lord, Lord Puttnam, on securing today’s debate. I am most grateful, too, to all noble Lords for their excellent speeches that were filled with so much experience on the importance of plurality in the media. I genuinely believe that this House is at its best in these debates.
The noble Lord has been over many years a strong and vocal advocate for the media in this House, particularly during the passage of the Communications Bill when he was instrumental in extending the power to intervene in mergers on public interest grounds to media mergers.
As we heard from the noble Lord, Lord Puttnam, this debate is particularly timely, with the Business Secretary announcing his intervention in News Corporation’s purchase of BSkyB. I will speak in more detail on this shortly, but I believe it is important to do this even-handedly against the backdrop of the media plurality regime.
Last month I had the pleasure of closing an excellent debate initiated by my noble friend Lord Fowler on the Lords Communications Committee’s report into digital TV and radio switchover. That debate focused on the changing nature of the media in a digital age, as the noble Baroness, Lady Howe, stressed, and I shall return to it. The media landscape is constantly changing. Its ability to influence the democratic debate and to inform citizens has grown considerably since the old days of Obadiah Slope. Therefore, the principles of plurality and impartiality in TV and radio remain very important. This is reflected in the rules and regulations with which the media ownership is governed. However, noble Lords would agree that there is a balance to be struck between protecting consumers and the democratic debate while promoting competition and supporting innovation. Media ownership rules, while providing a safety net for plurality, are by their definition inflexible. Indeed, it is this inflexibility which can sometimes even result in a reduction in plurality. This has arguably been the situation in local media, where markets have struggled for some time. Indeed, Ofcom’s 2009 review of all media ownership rules concluded that a number of the local and local cross-media ownership rules were no longer necessary and were constraining the local market. We agree with Ofcom’s recommendations and my right honourable friend the Secretary of State for Culture, Media and Sport recently announced that we shall shortly be bringing forward an order that proposes the removal of a number of local rules. We believe that these changes will have a positive impact on the plurality and diversity of news and information at the local level, which, as I have already said, is an essential part of a democratic society and a healthy media sector.
In addition to the statutory media ownership rules, there is a merger control regime which serves to make certain that mergers do not result in a loss of effective competition in markets. This protects the interests of consumers and promotes business competitiveness and growth. I say to the noble Baroness, Lady McDonagh, that News Corporation will be subject to all regulation, as will anybody else. Responsibility for regulating mergers rests with the independent competition authorities. For UK mergers, that is the Office of Fair Trading and Competition Commission. For larger mergers falling under European merger law, it is the European Commission under DG4. Many noble Lords, including the noble Baroness, Lady Jones, asked about bundling. This comes under all these aforesaid institutions.
Merger control is concerned with protecting competition. However, European law also recognises that Governments may take appropriate measures to protect certain other public interests that may arise from a merger. Any such exceptional action is tightly constrained in law and must be justifiable and proportionate. It is not a broad power enabling Governments to interfere as they wish and determine what mergers and acquisitions may or may not be allowed to proceed. Use of the power necessarily involves exercising a degree of discretion and judgment—a role that rightly falls to the Secretary of State rather than a regulator. All decisions are open to legal challenge and must be founded solely on the impact the specific merger might have on a specified public interest consideration. Extraneous factors may not be taken into account.
For mergers involving media enterprises, the public interest must be protected by there being no reduction in standards and quality, and sufficient range of different voices and owners. This complements the separate statutory ownership rules that impose absolute restrictions to prevent unacceptable concentration of media ownership. There is published guidance setting out how the power to intervene in media mergers will be used, and this must be given due regard in reaching decisions on whether to intervene.
As of today, there have been two interventions made in respect of media mergers. The first was made when Sky bought a 17.9 per cent stake in ITV plc. That merger was referred to the Competition Commission on competition grounds and on grounds of a potential impact on the plurality of persons with control of media enterprises. In the event, no action was taken on public interest grounds. However, the Competition Commission found that the transaction resulted in a substantial lessening of competition in the market and required Sky to reduce its shareholding in ITV to below 7.5 per cent.
The second intervention has been made today by the Secretary of State, who has now decided to intervene in respect of News Corporation’s plan to acquire the remaining shares of the BSkyB group. This will give it 100 per cent ownership. This means that Ofcom will provide an initial report by 31 December, examining whether there are substantive reasons to believe the merger may result in outcomes detrimental to the public interest as it relates to ensuring sufficient plurality of media ownership. On receipt of Ofcom’s report, the Secretary of State must then decide whether to refer the merger to the Competition Commission for a more in-depth investigation of the merger’s likely impact on the public interest. Many noble Lords, including the noble Baronesses, Lady D’Souza and Lady Howe, and the noble Lord, Lord Lipsey, mentioned that complaints, if any, should be on plurality, which is what we are debating today. The European Commission will examine separately whether the merger raises competition concerns, and take action as appropriate.
I can reassure the noble Baroness, Lady O’Neill, and the noble Lord, Lord Maclennan, that the plurality review will take place concurrently with the competition review. The two are, however, separate. It is possible for one to conclude that no action is required, while the other could conclude that some remedy was necessary.
Although I am sure all noble Lords already know them—as my noble friend Lord Fowler said—I should remind the House of the share of viewing figures on news audiences in multichannel homes. My noble friend Lord Lloyd-Webber referred to this in his entertaining speech. According to Ofcom, in 2009, the BBC news broadcasts averaged 19.6 per cent of the viewing audience, ITV took 14.5 per cent, and Sky News took 0.5 per cent.
I turn to questions from several other noble Lords. The noble Lords, Lord Gavron and Lord Myners, asked about future protection should News Corporation be successful with the merger but subsequently be taken over by an undesirable owner. I reassure noble Lords that the broadcasting Acts contain “fit and proper” tests: Ofcom may not grant a licence to someone unless they are a fit and proper person, and will do all it can to ensure that they do not retain their licence if it ceases to be satisfied that they are a fit and proper person. In addition, there are impartiality requirements that safeguard the information needs of citizens.
The noble Lord, Lord Borrie, was worried about Ofcom. He need not be. Ofcom, with all its responsibilities, will stay.
The noble Lord, Lord Myners, and several other noble Lords stressed the importance of the BBC. I agree with their comments that a strong and independent BBC is an essential part of the UK's media industry that is admired around the world. I will report back on his views of the BBC.
Lord Myners
My Lords, I wonder whether the Minister would be kind enough to give the House an assurance that there can be no continuing suspicion that the independence of the BBC will be placed at risk by the Government threatening to put further financial burdens on it, forcing it to bear the costs of services and of the provision of other broadcast-related activities that are currently paid for through government expenditure. A reassurance from the Minister on that point would do a great deal to buttress her defence of the independence of the BBC.
Baroness Rawlings
I thank the noble Lord, Lord Myners, for that question. In fact, I addressed it a couple of weeks ago. He can be totally reassured that the independence of the BBC will be untouched.
The noble Lord, Lord Judd, made a moving intervention on the importance of plurality, especially in Russia. I very much agree with him.
I turn to the requests for assurances on impartiality made by the noble Lords, Lord Razzall and Lord Smith, and by the noble Baroness, Lady Jones. The Government acknowledge the importance of impartiality requirements, especially for PSBs, and consider them an essential part of the regulatory framework, safeguarding the information needs of citizens. There are statutory impartiality obligations in the Communications Act which are supported by Ofcom’s standards code.
Finally, the media sector remains a very fast-moving market—ever more so with digital broadcasting and the internet. We are aware that the sector is in need of a review and intend to start this in the short-to-medium term, with a view to making changes in a new communications Bill. Any new legislation will have to be flexible in order to take account of the fast-changing market. I am sure that we will be watching with keen interest the developments on the News Corporation purchase of BSkyB.
This has been a fascinating debate. I repeat my thanks to the noble Lord, Lord Puttnam, and to all noble Lords who have given of their wisdom. In my position, it is right that I have listened very carefully and with great interest. Noble Lords know that I am here to clarify procedure: I am not in a position to take decisions.
I hope that I have spoken clearly and I repeat: all these decisions will be taken in time by the Secretary of State, the Competition Commission, Ofcom and the EU, and I trust that all noble Lords who have spoken respect those bodies.
We will no doubt be debating this issue again but, in the short time available to me today, I hope that I have answered the few questions or points raised. However, where I have been unable to respond directly to the noble Lords, Lord Birt, Lord Hollick, Lord Stevenson and Lord Parekh, I will of course write to them.