Sky: 21st Century Fox Takeover Bid

Kevin Brennan Excerpts

Monday 12th December 2016 Commons Chamber

[Kevin Brennan (Cardiff West) (Lab)]

(Urgent Question): To ask the Secretary of State for Culture, Media and Sport if she will make a statement on 21st Century Fox’s bid to take over the remaining 61% of Sky.

[The Minister for Digital and Culture (Matt Hancock)]

As the House will know, Sky announced on Friday that it had received an approach from 21st Century Fox to acquire the 61% share of Sky that it does not yet already own. The announcement made it clear that the independent directors of Sky and 21st Century Fox have reached an agreement on price. However, the offer is subject to further discussion, and Sky has advised that there is no certainty at this stage that an offer will be made. The terms of any deal will obviously need to be agreed by the non-21st Century Fox shareholders of Sky. The announcement also said that under the takeover code, 21st Century Fox is required to set out its intentions by 6 January 2017.

The Secretary of State has powers to intervene in certain media mergers on public interest grounds, as set out in the Enterprise Act 2002. Government guidance on the operation of the public interest merger provisions under the Act indicates how the intervention regime will operate in practice and the approach that the Secretary of State is likely to adopt in considering cases. Any transaction will be looked at on its merits, on a case-by-case basis. The guidance makes it clear that the Secretary of State will aim to take an initial decision on whether to intervene within 10 working days of formal notification of the merger to the competition authorities, or of the transaction being brought to her attention. No such formal notification has yet been received.

The role of the Secretary of State is a quasi-judicial one, and it is important that she acts independently and is not subject to improper influence. It would be inappropriate for me or the Secretary of State to comment further on the proposed bid under the Act. In the light of Friday’s statement and given the role of the Secretary of State, the Department is putting in place procedures to ensure that her decision-making process is scrupulously fair and impartial should a decision be necessary. This will include guidance for other Ministers and officials on dealing with the parties to the bid or any other interested parties. We are of course aware of the wider interest of Parliament in these matters, and we will keep the House updated as appropriate within the legal framework.

[Kevin Brennan]

I thank the Minister for his response. Late on Friday, a new bid for Sky was revealed. Five years ago, an equivalent bid was abandoned, after Rupert Murdoch and News Corporation were engulfed in the phone hacking storm. At that time the House was united behind a substantive motion calling on Rupert Murdoch to withdraw his bid. The concerns back in 2011 were not only about the serious wrongdoing being uncovered in the phone hacking scandal but about the concentration of media power and ownership in fewer and fewer hands. I have re-read the motion—which we all supported, on both sides of the House—and nowhere does it say that we should sit quietly for five years and come back when we have forgotten all about it. We have not forgotten about it, and we also have not forgotten that when the Prime Minister stood on the steps of Downing Street this summer she said to the people of this country:

“When we take the big calls we will think not of the powerful, but you.”

This is a big call, so we need to know whose side the Government are on.

Ofcom’s original assessment was that the deal may

“operate against the public interest”.

Will the Minister commit the Government, here and now, to issuing a public interest intervention notice and referring the bid to Ofcom? Remember that, back in 2012, Ofcom’s assessment was that the chief executive officer of Fox, James Murdoch,

“repeatedly fell short of the exercise of responsibility to be expected of him as CEO and chairman.”

The Prime Minister met Rupert Murdoch in New York in September. Was the bid discussed then? Did she give him any assurances about the bid, or discuss his future support for her and/or for her Government?

I understand that, as the Minister said, this is a quasi-judicial decision, and that the words he says today will be scrutinised by some of the highest-paid lawyers on at least two continents. Nevertheless, will he assure us that the Secretary of State is prepared to stand up to powerful interests and ensure that this deal is properly and independently scrutinised?

[Matt Hancock]

I am grateful for the acknowledgment by the Opposition Front-Bench team that, owing to the quasi-judicial nature of the decision, procedures have to be followed properly. That is what we fully intend to do. Formal notification of this proposal has not been received, and the Secretary of State cannot make a decision prior to that. As I said, the rules are that she should aim to take such a decision within 10 days of formal notification.