Proposed Media Mergers

Lord Watson of Wyre Forest Excerpts

Tuesday 5th June 2018 Commons Chamber

[Tom Watson (West Bromwich East) (Lab)]

I thank the Secretary of State for advance sight of the statement, for which I had a little more time to read than usual; I suspect that was a benefit of the usual delays caused by Heathrow airport. [Interruption.] I had to get that gag in.

This is a saga which we have been living through for 18 months. In December 2016, when 21st Century Fox announced its bid for Sky, the world looked very different: the Tories were riding high in the polls; the Prime Minister was popular, even among her own Back Benchers; we had a different Culture Secretary; and I was six stone heavier. I do not think that even the Murdochs would have anticipated the changes that have happened since then.

To her credit, the previous Secretary of State, the right hon. Member for Staffordshire Moorlands (Karen Bradley), took her time over the bid. She ensured that it was subject to the full gaze of regulatory scrutiny and did not just provide the rubber stamp that Fox hoped for. During that time, Fox found itself not only covering scandals but embroiled in scandals, with sexual harassment allegations and high-profile dismissals at Fox News. A rival bidder, Comcast, has come forward. The approval of both bids today means that this is not the end of the story.

The Murdochs will be relieved that the old order is at least starting to reassert itself. Even before today, the new Secretary of State was doing what they asked of him, dumping the promises made to the victims of phone hacking by announcing that Leveson 2 would not go forward. Why is that relevant to this announcement? Well, the information that Leveson 2 would have revealed about corporate governance failure on an industrial scale is entirely relevant to the question of whether the merger would be good or bad for Sky’s adherence to broadcasting standards. Let us remind ourselves that the most recent allegations in the civil litigation against News Group Newspapers claim that senior executives at the top of the empire were not just culpably ignorant, but knowingly complicit about criminal conduct going on at News Group papers. Leveson 2 would have looked at that. The European Commission raided the London offices of 21st Century Fox just a few weeks ago as part of an investigation into violations of EU anti-trust rules. The Murdochs will be grateful that the Secretary of State is less curious than the officials who raided that building.

We on the Labour Benches understand that there are many commercial and technical elements of this bid to consider, but for us the priority has been to safeguard the future of Sky News. From Kay Burley to Adam Boulton, Sky News has some of the best presenters on TV and has always been a beacon for independent and rigorous journalism. Our priority is protecting that and ensuring that Sky News thrives going forward. The Secretary of State has given his approval for the Fox bid today subject to Fox’s proposed remedy that Sky News be divested to Disney or a suitable alternative. We have serious concerns about that, including how we ensure the long-term future of Sky News as a UK-based independent organisation under this option. Were the Fox-Disney deal to fail, it could leave Sky News isolated from Sky and owned by a foreign company with few news interests in the UK. It is hard to see how that would be in the public interest. Does the Secretary of State really think that this proposal of divestment is in the best interests of Sky News, or would it become isolated and at sea? He made it clear that he had no concerns about the broadcasting standards. Is he concerned that the civil cases that are currently being brought against Murdoch papers such as The Sun will reveal corporate maladministration that could have altered his decision?

Fox made many undertakings to get to this stage. Will the Secretary of State take personal political responsibility if Fox’s bid is successful and the guarantees that it made are broken, bearing in mind that the CMA opinion, expressed earlier this year, was that this deal was against the public interest? With Comcast now in the ring, the future for Sky is uncertain. A bidding war is on the horizon. That might be good for shareholders, but it is the Minister’s duty to protect the interests of the public. Sky is a gem of British broadcasting and is respected worldwide. Its future and global reputation for excellence is at stake in this process, so it is right that, if there is any doubt about whether the proposed solution is workable, it is the duty of the Secretary of State to ensure that this merger is blocked.

[Matt Hancock]

As I said in the statement, the analysis that I announced today and have put in the Libraries of the House follows a scrupulous process of scrutiny not just by me and Ofcom, but by the CMA. No matter how long debates over Heathrow took, I am sure that the shadow spokesman has not yet had the chance to read the full 410 pages of the CMA report. It goes into great detail in answering several of the questions that he raised. When it comes to the question of Leveson, it does take into account everything that was disclosed during the Leveson process and, of course, that which was made public by the many court cases since and it has looked over this area rigorously. The CMA concludes that what matters most in the broadcasting standards test is that which is most recent, so while it does take past behaviour into account, it ensures that that which is most recent is also weighted. The behaviour that was described and found under the Leveson inquiry was some time ago, as we have debated already.

I agree with the hon. Gentleman very strongly about the value of Sky News. This is very important to the UK broadcasting environment. I agree that we must be confident that the proposed solution and undertakings that have been given are robust. That is what I will be seeking to nail down over the next fortnight before consulting formally on those undertakings.

I am seeking to strengthen the undertakings that were given to the CMA and that have been repeated to me. When I am confident that those undertakings will ensure the long-term sustainable future for high-quality independent broadcasting at Sky News, as we know it now, I will be prepared to consult on those undertakings, take them and live by that decision.