Sky/21st Century Fox: Proposed Merger

Lord Watson of Wyre Forest Excerpts

Monday 6th March 2017 Commons Chamber

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

I thank the Secretary of State for advance notice of this statement and for writing to me on Friday setting out her intentions. I am also extremely grateful that she has come to the House at the earliest possible opportunity following notification of the bid. I understand that she is in quasi-judicial mode and what that means. I hope, however, that she will listen carefully to the concerns about the merger that are being expressed both inside and outside this Chamber. The company names may have changed since the previous bid for Sky was withdrawn in 2011, but we are still dealing with media plurality, misconduct and the Murdochs.

The Secretary of State said that she is minded to intervene first on media plurality grounds. The bid would put an even greater amount of UK media power in the hands of the Murdoch family. It would make the Murdoch empire even bigger—we might call it empire 2.0—and Ofcom should look at the whole group of Murdoch-owned and controlled companies in assessing whether the Sky takeover would threaten media plurality.

The second ground on which the Secretary of State says she is minded to intervene is commitment to broadcasting standards. We need to be satisfied that the merged company would comply with the broadcasting code, just as we need to be confident that it would not be used by Rupert Murdoch or his family to promote their political views and interests. However, the most troubling issues raised by the proposed merger are not about the content of James Murdoch’s programming; they are about the content of his character.

The Secretary of State rightly referred to failures of corporate governance during the phone hacking scandal, but it is unclear whether those failings strictly fall under the heading of broadcasting standards, even though they are central to whether the merger should be approved. A commitment to a broadcasting standards test is not a fit and proper person test. Will Ofcom’s assessment of 21st Century Fox’s commitment to broadcasting standards include in its scope the following facts? Six senior employees of News International have been convicted of phone hacking and another of perverting the course of justice. Over 30 police and public officials have been convicted of accepting corrupt payments from employees of News International that were approved at a high level. One News International journalist has been convicted of making unlawful payments and another of handling stolen property—namely, a mobile phone belonging to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), from which private information was taken unlawfully by Sun journalists at the request of several Sun executives. The former editor and the former head of legal affairs at News of the World were held in contempt of Parliament for lying to a Select Committee during its investigation into phone hacking. The Standards and Privileges Committee cast further light on the culture of paying hush money to employees guilty of criminal offences to deter them from co-operating with the police and prosecution authorities. It therefore seems likely that a number of News Corporation employees gave false information under oath to the Leveson inquiry. News Corporation has admitted to another conspiracy to hack phones between 2005 and 2006 and a journalist has been convicted. News International has admitted phone hacking in several hundred claims so far and has made payments to victims and lawyers amounting to $600 million. And that is without mentioning the many outstanding civil claims against newspapers owned by News International, or the fact that allegations have been made in open court that James Murdoch was involved in the email deletion programme at News International that has made it more difficult to get to the truth. If those facts cannot be included in Ofcom’s assessment, the Opposition are ready to work with the Secretary of State to make sure that she can find a solution that deals with the gravity of wrongdoing in companies controlled by the Murdoch family.

Will the Secretary of State ask Ofcom to clarify whether it will conduct a full fit and proper person test before the merger is approved? Ofcom has already made an assessment of James Murdoch, in 2012, and found that, in relation to his time at News Group Newspapers during the period in which phone hacking took place, his conduct

“repeatedly fell short of the conduct to be expected of him as a chief executive officer and chairman.”

But Ofcom also said that

“the evidence available to date does not provide a reasonable basis to conclude that James Murdoch deliberately engaged in any wrongdoing.”

Why did Ofcom not have enough evidence to draw conclusions? Because the Leveson inquiry was not in a position to gather evidence.

If the Secretary of State is concerned about the past behaviour and corporate governance failures of News International, any case for not going ahead with part 2 of the Leveson inquiry collapses because the behaviour that she is so concerned about and that she wants to be investigated is precisely the behaviour that part 2 of Leveson is supposed to look into. We are still awaiting the results of the consultation on whether Leveson part 2 should go ahead, but I hope that the Secretary of State’s words indicate that she will show some courage by standing up to vested interests, doing the right thing and allowing the inquiry to proceed. She must not ask Ofcom to do its job with one hand tied behind its back.

[Karen Bradley]

I thank the hon. Gentleman for his response and assure him that Ofcom will not be doing any work with one hand tied behind its back.

I will address the Leveson inquiry and the consultation first. It is important to put it on the record that the consultation has closed but is subject to judicial review, which makes it difficult for me to make any further comment at this stage. On the evidence that Ofcom will look at, I make it clear that I am not ruling any evidence in or out. If I do decide to intervene, Ofcom will report to me on any matters it considers relevant. On the commitment to broadcasting standards, there is no exhaustive list of evidence—Ofcom can look at whatever it thinks right.

As I have said, Ofcom has sufficient powers and can investigate anything it thinks appropriate. I thank the hon. Gentleman for raising his points, which I am sure will be considered by Ofcom. Ofcom has a fit and proper person test for broadcasting licences. That test is different from the one that will be considered for the merger, but the same evidence may be relevant to both.

Finally, my letter sets out a number of matters that I consider relevant and as warranting further investigation, which includes facts that led to the Leveson inquiry, such as on corporate governance at News of the World. It will be open to Ofcom to look at all relevant areas, and I will not rule out any areas if I decide to intervene.