Why Vince Cable should not get into bed with Rupert

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The desire of News Corporation to buy the 61 per cent of pay-TV operator BSkyB which it doesn’t already own goes straight to the heart of arguments about media plurality in a modern democracy, argues Lord Puttnam

Published: 23 September, 2010

IN November 1999, the then Trade Secretary Stephen Byers referred the proposed merger of media and telecom companies Cable and Wireless and NTL to the Competition Commission against the explicit advice of the Office of Fair Trading. 

There were many on the opposition benches who were astonished by the decision to refer the deal, given the OFT’s prior clearance.

As one disillusioned opposition MP said at the time, Mr Byers decision to refer “…coincided neatly with the interests of the Murdoch group.” 

He, like many others, suspected that Rupert Murdoch’s News Corporation had once again been at work behind the scenes, lobbying for a referral on the basis that it had little interest in seeing an enlarged and strengthened competitor in cable television threaten its stranglehold on pay-TV. 

Ten years on and    that same MP, Vince Cable, is now the Secretary of State at the Department for Business, Innovation and Skills and responsible for a far, far bigger decision involving the interests on News Corp. 

One which, should it go the wrong way, has the potential to do real and lasting damage to the health and vitality of British democracy.

The desire of News Corporation to buy the 61 per cent of pay-TV operator BSkyB which it doesn’t already own goes straight to the heart of arguments about media plurality in a modern democracy.

As Secretary of State, Vince Cable has the power to refer the deal to the independent media regulator Ofcom, who in turn have the capacity to refer it on to the Competition Commission.

It was precisely to protect such plurality that in 2002, as chairman of the Joint Scrutiny Committee on the Communications Bill, I along with colleagues from all sides of the House fought the government (and the official Opposition front bench) tooth and nail to ensure that provisions were inserted in the bill which gave the secretary of state the power to intervene and make referrals in relation to takeovers and mergers involving TV, radio and newspaper companies.

The opportunities to bundle together different media assets – such as The Times, Sky Sports, online movies from Fox and even maybe access to Murdoch’s rumoured newspaper for tablet computers – are far greater than they were when the plurality test was introduced.

And the potential for such “bundling” to become a means of driving out competition, most particularly through aggressive pricing strategies should be all too clear. 

A decade ago, the Office of Fair Trading found Murdoch’s News International guilty over a period of two years of deliberately selling The Times newspaper on a loss-making basis.

As Lord McNally said at the time: “What is good business for Mr Rupert Murdoch is not necessarily good sense for a healthy democracy or a diverse and healthy press.”

Those words remain equally true today, most particularly in an environment in which – as the News of the World phone-hacking scandal demonstrates – the boundary between what is judged legal   and illegal is being continually crossed. In a tabloid marketplace in which all sense of restraint would appear  to have been thrown to the wind.

It’s quite clear that  the imposition of competition law, and specifically the plurality test, is the only real safeguard we have against the abuse of media power and the continuing attempts to erode the diversity of informed opinion in our democracy.

For all these reasons, when it comes to moderating the ambitions of News Corporation, now is the time for Vince Cable and his cabinet colleagues to return to the principles many of them have so powerfully espoused over the last decade and more.

That wise and greatly missed politician, John Biffen, had it exactly right when he said in a speech a number of years ago: “Whenever you find a senior politician and a powerful media owner in private conclave, you can be certain that the aims of a healthy plural democracy are not being well served.”

• Lord Puttnam is a film-maker and Labour peer. This is an edited version of his article in Sunday’s Observer