Lord Myners
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Lord Myners
My Lords, I congratulate the noble Lord, Lord Fowler, not only on securing this debate but on the campaign that he has waged for such a long time on press responsibility and accountability. I have three interests to declare. First, I was chairman of the Guardian for 10 years. I am hugely proud of the work that Nick Davies and Alan Rusbridger have done in exposing what has allegedly happened at News International, particularly against the opposition of many others in the media, including the Press Complaints Commission. Secondly, I have worked with Mr Jeremy Darroch, the chief executive of BSkyB. I will come to that subject in a moment. Thirdly, I have met Mr Rupert Murdoch only once in my life. That was in 1990 when he came to me in the City, desperate to raise additional funds as he had almost landed News Corp on the rocks as a result of foolhardy financing strategies. I did not save him by providing more money but others did.
I have very little to add to the general debate to which noble Lords have already contributed. Proper process will now be followed here in the United Kingdom and elsewhere to investigate questions of criminality, morality and probity. Your Lordships’ House has adopted the right moderate tone today. However, I cannot avoid noting that the Prime Minister and the Government vacillated on many issues to do with News International at every critical decision moment and had to be dragged to the right decision when it was so obvious that there was no alternative, rather than providing the leadership that we might have expected. The Secretary of State for Culture, Media and Sport bent over backwards to do everything he possibly could to facilitate the acquisition of BSkyB by News International. He took every possible action to ensure that the matter did not go to the Competition Commission but rather negotiated in private with the Murdochs and with News International. That was clearly a very poor judgment by the Secretary of State.
I was going to say that I was sad that the noble Baroness, Lady Buscombe, was not in her place. She then appeared in her place and she has now again departed from her place. I think she might follow that same chain of events in terms of the chairmanship of the Press Complaints Commission because it is clear that the Press Complaints Commission, as the noble Lord, Lord Stoneham, said, needs a completely fresh start with a new vigour and intention, which is clearly not there. I felt for the noble Baroness, Lady Buscombe, when I watched her being interviewed by Mr Andrew Neil on BBC television, but it was clear that the Press Complaints Commission has become an apologist for the newspaper industry rather than a vibrant and independent body performing the role that we would expect. I am afraid that the noble Baroness, Lady Buscombe, must fall on her sword if the Press Complaints Commission is to be given a fresh start.
Other things need to be done. The Communications Act 2003 is clearly, with hindsight, deficient: the public interest test is too narrow, as are the restrictions placed on cross-media ownership. That Act did not anticipate the advent of digital media and consequently it needs to be revisited as soon as possible. In the mean time, Ofcom needs to look seriously at the fit and proper test, and in particular to articulate the criteria and processes that will be applied in the future in exercising “fit and proper” as a test because there is a lack of specificity and clarity. We also need to address the issue of privacy. We are reminded at this time of the importance of ensuring that the BBC continues to be properly funded in order to provide an independent and reliable source of information and comment.
I want to focus on corporate governance. The governance of News Corp, an American company, is not a matter of great concern to this House. The company is run on hereditary principles and is controlled by the Murdoch family, even though they have a modest equity interest in the business as a result of the use of shares with super-voting rights. The board of News Corp has clearly been very ineffective. However, I want to turn our attention to the board of BSkyB, a company in which News Corp has a 39 per cent equity interest. This company is chaired by Mr James Murdoch. A significant number of the directors on the board of BSkyB are related to News Corp or do not pass the test of independence as defined by the Financial Reporting Council’s governance code. Mr DeVoe, Mr Evans, Mr Mockridge and Mr Siskind have all previously worked for News International while Mr Leighton and Mr Nasser are judged not to be independent by length of service. Clearly, the proportion of BSkyB board directors represented by those who speak for, or are sympathetic to, the interests of News International is disproportionate to the equity ownership that News Corp and News International have in that company. BSkyB will announce its profit figures on 29 July. I urge the board of BSkyB to reflect over the next fortnight on the governance of that company as a matter of priority and—this is important—to consult with other shareholders.
BSkyB’s corporate governance page on its website talks about all the normal committees that you would expect there to be in a public company—the Audit Committee, the Nominations Committee and the Remuneration Committee. It also has a committee that I have never seen before—the Bigger Picture Committee. It is not entirely clear what the Bigger Picture Committee does but it is pretty clear what the Bigger Picture Committee should now be doing. All directors of BSkyB, in accordance with best advice from the Financial Reporting Council, should stand for re-election at the annual general meeting this summer, including Mr James Murdoch. The board should seek to persuade Mr Murdoch that it is no longer appropriate for him to chair this company. There are sufficient doubts about his business judgment. His investments in MySpace and AP Dow Jones, the large loss consequent on the investment in ITV, and the settlements that he now admits he entered into without fully understanding the facts, are surely all reasons why it is no longer appropriate for Mr James Murdoch to chair BSkyB. There is, fortunately, an excellent alternative in Mr Nicholas Ferguson, the senior independent director of BSkyB, who is a man of great integrity and wisdom. I should add that Mr James Murdoch intends to move to New York, which makes it even more difficult to believe that he is the right person to chair a British broadcaster.
The shareholders of BSkyB other than News Corp hold 60 per cent of the voting rights. It is within their power to secure these changes and ensure that in future News Corp’s representation on the board of BSkyB is proportionate, but not so great that it can dominate the board of directors. It is important that BSkyB in these circumstances establishes an appropriate distance from News Corp as a shareholder. Fortunately, at last year’s annual general meeting, a number of major institutional investors did vote against Mr James Murdoch’s re-election as a director—Aviva, Baillie Gifford, Legal & General, and Co-operative Asset Management. I hope that they will again be given the opportunity to vote on Mr Murdoch and will again conclude that they should vote against his re-election; and I hope that others will join them. One of the things that we learnt from the banking crisis was that the failure of boards was at the heart of what went wrong in those companies, and the failure of shareholders who look after our savings and our pensions properly to engage was one of the great deficiencies. There is an opportunity here for the great investment institutions of Edinburgh, London and New York to show that they have had enough with the way that the Murdochs dominate BSkyB and they should ensure that the company has an independent board of directors and a truly independent chairman.
Baroness Garden of Frognal
My understanding is that Lord Justice Leveson will have the capacity to make that part of the inquiry. If I am wrong on that, I will come back to the noble Baroness.
There will also be recommendations on how future concerns about press behaviour, media policy, regulation and cross-media ownership should be dealt with by all the relevant authorities whether that is Parliament, government, the prosecuting authorities or the police.
The Deputy Prime Minister recently clearly set out the three guiding principles for future reform—my answer to the noble Baroness, Lady Kennedy, is yes. First, the freedom of the press is vital and that liberty and democracy are founded on freedom of expression. We have heard from all sides of the Chamber today how important your Lordships feel that freedom of expression and the freedom of the press are. Secondly, our media must be held to account ensuring they act within the bounds of the law and decent behaviour, with politicians and police equally accountable for their role. Thirdly, our free, accountable press must be plural, guaranteeing healthy competition and diverse debate. We have had inputs in the debate today from so many noble Lords who have first-hand experience of the press, all of whom made valuable contributions to the matters under discussion.
I now turn to BSkyB. As we know, News Corporation has withdrawn its bid to purchase the remaining 61 per cent of shares in BSkyB which it does not already own. This is a decision taken by News Corporation but, of course, it will have been aware of the strength of concern from both Parliament and the public about the bid and the circumstances surrounding it.
I want to make the point that the Culture Secretary has at all times sought and followed advice from the Office of Fair Trading and Ofcom, the independent and expert regulators. He has been as transparent as possible, publishing much more than required to do so by legislation and ensuring that he acted within the law. But of course I take note of the comments made by the noble and learned Baroness, Lady Scotland, in connection with that.
The future for News International in the UK is a matter for News International. The nature of our press at the moment is that anyone can start or run a newspaper and we do not impose any licensing scheme. This freedom means that, as well as our national newspapers, we have a great many smaller and more eccentric publications. We welcome the partisan approach that newspapers take but the key point for every publication—no matter how big or small—is that it must abide by the law of the land. We expect our newspapers to be truthful, not to mislead us and to observe standards of decent behaviour. The inquiry that is now under way will look at ways of ensuring that newspapers do that in future. Once again, as various noble Lords have reminded us, most journalists and people who work on newspapers are honourable and professional.
It has been disturbing to hear of the involvement of the police and we have heard some extraordinary things from the Met this week. We have had inputs from my noble friend Lady Doocey, the noble Lord, Lord Imbert, and others who have spoken about police involvement. Again, I echo their words of support for the courage and professionalism of the vast majority of people who work in the police force. We understand that the media and the police need to have a good working relationship. It is, for the most part, a mutually beneficial relationship but allegations have been made during this scandal that some corrupt police officers may have taken payments from newspapers in exchange for access to privileged information. These allegations have undermined that relationship, fractured public trust and led to a belief that that relationship can be too close.
The Metropolitan Police are as determined as we are that these police officers should be identified and referred to a fully independent investigation that will be convened by the Independent Police Complaints Commission. Additionally, the Home Secretary has commissioned a report from the Independent Police Complaints Commission on its experience of investigating corruption in the police service which will identify what lessons the police can learn through this affair.
The Prime Minister also reported on Wednesday that Sir Paul Stephenson is looking to invite a senior public figure to advise him on interaction with the media and the ethics that should underpin his force, including advising on how to ensure maximum transparency and public confidence, and how arrangements are working. We understand that the commissioner has committed to putting in place a system of recording and making available to the public the contacts of Metropolitan Police officers with journalists.
It is clear that the press will be under closer scrutiny than ever before, and we heartily welcome the inquiry led by Lord Leveson and wish him well as he begins his work. We would advise him, as my noble friend Lord Fowler has said, to use the great expertise in this House, including that which we have heard today in this debate.
Picking up on one or two points from the debate, as we came into the Chamber, the breaking news was of the resignation of Rebekah Brooks. Obviously, that is a matter for her and for News International but we do not see any reason why her resignation should interfere with her co-operation with next week’s culture Select Committee, the forthcoming inquiry or with ongoing police investigations.
The noble Lord, Lord Prescott, referred to the Metropolitan Police’s employment of Neil Wallis who was arrested yesterday. The Home Secretary is concerned about his employment and she is looking into the facts of that case. The noble Baroness, Lady O’Neill, and the noble Lord, Lord Davies, referred to privacy. A joint parliamentary committee is being set up to look at the issues that came out of the debate on super-injunctions and privacy. How that committee will work with the inquiry by Lord Leveson is a matter for them but it is an issue that has been taken up and action is being taken.
The noble Lord, Lord Davies, asked what is to happen while we wait for the outcome of the inquiry. The PCC is still in place, of course, and we heard from the noble Lord, Lord Grade, about its valuable work. However, we have also heard of other aspects from other noble Lords. The press is certainly aware of the much closer public scrutiny that it will now be undergoing, so we hope that, together, they will influence moves towards a more honourable press.
The noble Baroness, Lady Kennedy, mentioned the inquiry being conducted by Deputy Assistant Commissioner Sue Akers and expressed concerns about the level of resources it would receive. We understand that it is for the commissioner to decide the level of resources, but the Prime Minister has been personally assured by the commissioner that the investigation is fully resourced and that it will be thorough and robust. We understand that currently around 45 officers and staff have been assigned to it.
The noble Lord, Lord Myners, asked whether the Communications Act 2003 will be revisited. I can assure him that work is already under way and that new legislation will be brought forward in the future.
This has been an intense and rich debate, but if I have overlooked any questions or matters for reply, I apologise. I shall certainly endeavour to write to noble Lords—
Lord Myners
Perhaps I may ask one question before the noble Baroness reverts to her prepared text. I think that only one question was directly addressed to the Minister in the whole debate, and that was from my noble and learned friend Lady Scotland. It was about the future recording of contacts between Ministers and the press. Does the Minister agree that it was most unwise of the Prime Minister to accept hospitality and gifts from Ms Brooks over Christmas when one of his colleagues was involved in a judicial review of her employer? Does she also agree that the holding of a meeting in a flat above No. 10 does not render it a meeting that should not be recorded because it was held on private premises? Does she further agree that, in future, the Government need to be much more open about their own contacts with the press?
Baroness Garden of Frognal
My Lords, at this stage I would not wish to comment on the particular issues that the noble Lord has raised, but I can assure him that government Ministers have now all been asked to log their contacts with the media. That is ongoing, so for the future that should all be in place. If there is anything more to add, I shall write to noble Lords. I must apologise, as I am clutching a piece of paper to reply to this point. It would have been extremely remiss of me to sit down having left the question unanswered. Again, I apologise.
I thank all noble Lords who have contributed to the debate. It has been in the best traditions of your Lordships’ House. It was considered, incisive, informed and passionate, and the contributions have added a great deal to the national debate. All sides of the House have expressed the will to work together in this instance with, as the noble Baroness, Lady Royall, said, singleness of purpose. That message was echoed by her colleague, the noble and learned Baroness, Lady Scotland. All sides would wish that to be the case because we all have much to gain from the resolution of the unhappy matters that have been going on recently.
My final thanks add to those made to my noble friend Lord Fowler for bringing this debate about. We wish him every success in his continued endeavours.