Lord Puttnam
Main Page: Lord Puttnam (Labour - Life peer)
Lord Puttnam
To call attention to the case for maintaining a broad plurality of media ownership in the United Kingdom; and to move for papers.
Lord Puttnam
My Lords, I declare an interest as deputy chairman of Channel 4 and of Profero, a digital advertising agency. I had the honour of entering your Lordships’ House 13 years ago tomorrow. Since then, there have been three or four big issues with which I have consistently tried to engage, in part because they relate to experiences gained in my former life, but also because I believe they represent the type of issues upon which rests the future of the sort of society most of us would wish to live in. The subject of today’s debate is one of them. Another has been the issue of environmental sustainability. I mention this because in preparing for this afternoon’s debate it occurred to me that the issue at hand, media plurality, in some respects resembles that of climate change. Both concern our capacity to find a sustainable balance in a delicate ecosystem—one in which the true scale of the problem only becomes apparent when you sift through the evidence and consider what might be the ramifications of failing to act in a timely manner.
Why does media plurality matter? Here are a few wise words:
“A free and diverse media are an indispensable part of the democratic process. They provide the multiplicity of voices and opinions that informs the public, influences opinion, and engenders political debate. They promote the culture of dissent which any healthy democracy must have. If one voice becomes too powerful, this process is placed in jeopardy and democracy is damaged”.
Those wise words came from the Conservative Party in a 1995 report on media ownership. The report was endorsed by the Communications Committee of this House just two years ago under the chairmanship of the noble Lord, Lord Fowler, who helpfully offers continuity by contributing to today’s debate.
As some in the Chamber will recall—it is helpful for me to see the noble Lord, Lord Crickhowell, who steered me through the shoals of this issue, in his place—what we now term media plurality first surfaced as an issue of concern during the deliberations of the joint pre-legislative scrutiny committee on the draft Communications Bill in 2002. At that time it was made clear by the Front Bench on both sides of the House that our proposed amendments around media plurality were, unsurprisingly, vehemently opposed by both the broadcasters and the newspapers. Rather more surprisingly, they were believed, in the words of the late Lord McIntosh, answering for the Government, to be based on a “profound misconception”. By that time the official Conservative line was, I am sad to say, somewhat similar.
In truth, the only party that has consistently taken a thoughtfully independent position on this issue has been the Liberal Democrats. In this context, when I use the word “independent”, I am referring to the Lib Dem leadership having felt itself free of prejudicial outside influences. Earlier still, in an important debate on the predatory pricing of newspapers in 1998—an issue I will return to a little later—the noble Lord, Lord McNally, now the Justice Minister, reminded us that with regard to the media,
“concentration of power, married with the advance in technologies, offers a challenge to democratic governments and free societies which we have scarcely begun to address”.—[Official Report, 20/10/98; col. 1348.]
I am certain that his personal views have not changed. Many of us in the Chamber will hold our collective breath in the hope that the noble Lord, Lord Razzall, will confirm that his party has not found the pressures of coalition sufficient to force a change of heart. This morning’s announcement would indicate that we are in safe, or at least decisive, hands.
In proposing the original amendments on media plurality we sought to ensure that there was proper recognition on the statute book that diversity in the media is not reducible to a set of arguable facts regarding the relativity of market share; that the issue was too important to be expressed simply in the language of competition policy. In reality, what is at stake is far more than an issue of consumer interests within an equitably functioning marketplace. It concerns the overriding interest of the citizen, as that earlier quote from the Conservatives’ 1995 report made clear.
The purpose of this afternoon’s debate is to draw attention to the possibility that we are on the edge of a very slippery slope—one that could find us falling further and further under the influence of a single US-based owner with a highly questionable interest in the benefits of a diverse and flourishing plural media here in the United Kingdom. So why this debate and why now? The primary reason is that News Corporation yesterday notified the European Commission of its intention to purchase the 61 per cent of BSkyB that it does not presently own. As I have already mentioned, this morning we heard the welcome news that this proposal had been referred by the Secretary of State to Ofcom. It is my most sincere hope that the coalition’s proposed trimming of Ofcom’s powers will not result in any diminution of its capacity to exercise those powers in respect of important matters such as this.
There are of course several aspects to media plurality, notably the Government’s proposals to repeal the local cross-media ownership laws, but this afternoon I have time to focus only on the really big issue resulting from News Corporation’s power, reach and influence. It is my contention that if regulators and legislators in Europe and the UK remain supine and simply wave this proposed acquisition through, the consequences for the citizens as well as the political class in this country could become deeply troubling. The purchase of these shares would give News Corporation an unprecedented level of control over the UK media—one that to my mind has the potential to be extremely damaging, not just in respect of media plurality, but to informed democratic debate as a whole.
To put all this in perspective, I point out that the media research company Enders Analysis has predicted that, assuming no material changes to the newspaper market, News Corporation’s share of national press circulation alone will steadily increase to more than 40 per cent by 2014. That figure is worrying enough but it becomes a source of even greater concern when the corporation’s ambitions to take full control of BSkyB are brought into play, given Sky’s growing share of the total television market. It is something of a commonplace to assert that the Murdoch-owned press is obsessed with what it believes to be the outrageous size of the BBC and its apparent capacity for unchecked growth and influence. “Chilling” is how BSkyB’s chairman, James Murdoch, has described the scale and reach of the rival corporation. If he is right, it seems worth comparing the relative size of BSkyB and the BBC, not just now but by peering a little into the future—to 2016, the point at which the current licence fee comes up for renewal.
When I entered your Lordships’ House in 1997, Sky had revenues of £1.27 billion—just 63 per cent of the BBC’s then income from the licence fee when combined with the net benefit it receives from BBC Worldwide. BSkyB’s turnover in its last financial year to June 2010 was £5.9 billion, or 163 per cent of the BBC’s current income. Assuming a modest 5 per cent growth in 2016, when the BBC's current charter expires, BSkyB will have reached a turnover of a little over £8 billion, or around 220 per cent of the then projected total income of the BBC.
Sticking with James Murdoch’s description, I suggest that this truly is a chilling prospect leading to a disparity of scale in which all competition, not just the BBC, is frozen to death. The level of media dominance that would result from News Corporation’s ownership of 100 per cent of BSkyB, along with four national newspapers and a variety of other media assets, is one that would simply not be tolerated in almost any other developed democracy, certainly not in the United States where anti-trust laws and tough restrictions on foreign ownership render such levels of control utterly unthinkable. In fact, there appears to be no developed country in which one individual has such control, certainly when measured by market share of the newspaper and TV industries.
Prime Minister Berlusconi controls a proportion of the broadcasting sector in Italy and, for example, Bild has a very big share of newspaper sales in Germany, but nowhere is there the same degree of cross-media dominance as is already the case with News Corporation in the UK. There are, of course, those who will say that, in the age of the internet, such fears are less well grounded and that in the digital era the cornucopia of news, views and comment which are to be found on the web, reaching far beyond the established media outlets, render my concerns about a slippery slope increasingly irrelevant. But many others disagree, arguing that this is to overestimate the power of the blogosphere. As none other than Rupert Murdoch himself said in his recent Margaret Thatcher lecture:
“Bloggers can have a social role—but that role is very different to that of the professional seeking to uncover facts, however uncomfortable”.
So, deep pockets and the benefits of scale remain very significant advantages, even in the digital world. Equally, it is my belief that the opportunities to bundle together News Corporation’s media assets, such as the Times, the Sunday Times, the Sun, the News of the World, Sky subscriptions, online movies from Fox, along with mobile access to all of them, are far, far greater than anything dreamt of when the plurality test was first introduced. Sky already has a billing relationship with almost 10 million customers—a fantastic competitive advantage in an online world in which making people pay for content is one of the biggest challenges of all.
Where once it was his newspapers that subsidised Mr Murdoch's foray into television, it could soon be the other way around, with television underwriting both his newspapers and his somewhat belated attempt to come to terms with the internet. This raises one of the key challenges in this area of legislation as in my opinion competition authorities do not, or should not, make or shape public policy—they simply implement what is already on the statute book. That is why, as legislators, we need the power and flexibility to respond to events that may have been undreamt of when the statutes were originally framed. This is one of the reasons I have consistently argued in favour of post-legislative scrutiny.
During the passage of the 2003 Bill, I failed to get across to the Government the transformative power of cross-media promotion. I also failed to convince them of the need for an economic impact study into cross-media ownership—the very issue that makes the prospect of ever greater bundling such a very dangerous road to go down. Let me offer one recent example. According to the Independent, since Richard Desmond bought Channel 5 in July, the Daily Star and the Daily Express have mentioned that broadcaster 1,073 times. That compares to the year before the deal in which there were just 92 mentions. Now, of course, that could be a coincidence, but I simply ask: where should we in this country seek to draw the line between information and influence? The scope for ensuring that news in particular can be manipulated to reflect a prejudicial viewpoint across different media is considerable, especially since, if the other shareholders were driven out, News Corporation would have all but untrammelled control of Sky News. The potential for such bundling to become a means of reducing competition, most particularly through aggressive pricing strategies, should be all too clear. We should remember that a predatory pricing amendment was successfully passed by your Lordships’ House in 1998 only to be lobbied against and, to my way of thinking, inexplicably turned down in another place.
Of course, there are those who remain profoundly sceptical, doubtless including some in my own party, as well as one or two on the Benches opposite, arguing that once again the liberal chattering class is getting itself in a lather over its favourite straw man, and that in reality there is not that much to worry about. If this really is simply a conspiracy by the chattering class to stoke fear and trembling across the nation, why is it that a recent letter to the Secretary of State opposing the BSkyB takeover was signed by, among others, senior executives from the Telegraph Media Group, Associated Newspapers and British Telecom? This time it is not simply a question of the usual suspects.
I am aware that I am running out of time, so I will finish with this thought. If Mr Murdoch's intentions are entirely even handed and non-political, why is it that he was only the second person to visit our new Prime Minister, entering by the back stairs for what is reported to have been an unminuted meeting, while Mark Thompson, the director-general of the BBC, went through the front door for that meeting, every detail of which will doubtless be available through the Freedom of Information Act? There are those who will argue that media magnates have always used the power of their holdings to influence Governments of every hue. However, it is my belief that the situation we are now dealing with is unprecedented and if unchecked offers a genuine threat to plural, consensus-based democracy in this country. As earlier generations in this place might reasonably have put it, there is a point,
“at which forbearance ceases to be a virtue”.
Speaking last week on the telephone to the altogether admirable Peter Hennessy—soon to be a welcome addition to your Lordships’ House—we discussed the constitutional ramifications of this afternoon’s debate. He finished the conversation by reminding me that it would be a mistake to regard this simply as a media issue. “David”, he said, “this is about nothing less than the nature of 21st-century sovereignty”. I believe that he is right. The United Kingdom is not a banana republic and we do ourselves no favours whatever by appearing to behave like one.
Lord Puttnam
My Lords, I know that at this point it is entirely traditional to thank all noble Lords who have spoken, but it is hard for me to express the depth of my gratitude not just for the prescience and clarity of what has been said but for the extraordinary unanimity with which the views of this House have been expressed. It is invidious to pick out one particular person but my heart leapt with joy when the noble Lord, Lord Razzall, used the phrase “significant marker”. The coalition is an interesting experiment in government, and those of us who want it to be seen as a true coalition must be hugely encouraged by what he had to say this afternoon.
I also thank the noble Lord, Lord Fowler. He has been assiduous and utterly consistent in the furrow that he has ploughed. It cannot always have been entirely easy and I take my hat off to him for his consistency and depth of knowledge.
Lastly, in my judgment the speech of the noble Baroness, Lady O’Neill, was typically brilliant. If I may, I would like to take and extend something she said, because it is very important. She mentioned that during the passage of the Communications Bill in 2002 and 2003, we argued long and hard over Ofcom’s principal duties and the order in which they should appear. At the time, the noble Lord, Lord Currie, the chairman-designate of Ofcom, found the notion of juggling the duties towards the consumer and the citizen extremely difficult. Many pages of Hansard were devoted to this discussion and, in the end, it came out just as the noble Baroness, Lady O’Neill, said—with the interests of the citizen in first position and the interests of the consumer second.
However, if noble Lords scour those pages, they will find a number of references to something else. It is to the effect that, when these two duties are in conflict, the rights of the citizen shall be paramount. One problem that Ofcom, and indeed the Secretary of State, will face is that there is an inherent conflict and it will not be easy to disentangle. If officials go back and look at those debates, they will see that, despite the discomfort of some, it was made very clear that the rights of the citizen shall be paramount. Under any constitution, written or unwritten, that really should not have been cause for much of an argument. Noble Lords should note also the use of the words “where appropriate” and ask themselves the following question. In what circumstances is the prospect of an ever more dominant media player either desirable or appropriate? I think that this afternoon your Lordships have offered a pretty clear and unequivocal answer to that.
Again, I thank all those who have taken part in the debate and I am sure that we shall be hearing more on this subject.