Sky/21st Century Fox: Merger House of Commons


Sky/21st Century Fox: Merger

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that really does provide first class educational materials and will

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happily host visits by schools and colleges here. Statement the

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Secretary of State for culture, media and sport. Karen Bradley. I

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came to this House on March six to give an update on the proposed

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merger between 21st Century Fox and Sky. At that time, I said I was

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minded to issue a European it intervention notice on the basis

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that I believe there to be public interest considerations are set out

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in the enterprise act 2002 that may be relevant to this proposed merger

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and which warrant further investigation. The grounds on which

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I was minded to intervene where as explained at that time, media

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plurality and commitment to broadcasting standards. I also

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confirmed that in line with guidance, I would be inviting

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further representations in writing from the parties and gave them until

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last Wednesday to provide these. Having carefully considered the

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representations from the parties, and the other representations I have

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received, I can now tell the House but today, I have issued a European

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intervention notice on the grounds of media plurality and commitment to

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broadcasting standards. I have written to the parties, Ofcom and

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competition markets authority informing them of my decision. The

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representations from 21st Century Fox highlighted areas where it

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contested the position taken in my letter, none of the representations

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have led me to dismiss concerns I have regarding the two public

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interest rounds I previously specified. I believe it still

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remains important giving the issues raised and wholly appropriate for me

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to seek comments of advice from Ofcom on these public interest

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considerations and from jurisdiction issues. I note over all the parties

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have welcomed a thorough regulatory review and that is what will now

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happen as a result of the intervention notice I've issued.

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Since mine decision, I've received over 700 representations from third

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parties, the vast majority of which supported intervention. A number of

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these called for me to create a new public interest considerations which

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would require a fit and proper assessment of the parties to take

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place as part of the intervention process. They also argued it should

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be made clearer matters of corporate governance, accountability and

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conduct should be and could be taken into account in assessing this

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merger. These issues relate to questions about the application of

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the fit and proper test by Ofcom and I will come to these shortly. As I

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previously set out, this decision will trigger action by Ofcom to

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assess and report to me on the public interest grounds I've

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specified. For the Competition and Markets Authority to report to me

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jurisdiction. They each have 14 working days to prepare these

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reports. This means will expect their reports by Tuesday 16th May. I

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will then resume my decision-making role in relation to the merger. To

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be clear, this interfering period and indeed any time after that until

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a final decision on the merger is taken, is subject to the constraints

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that apply to my role. I'm sure you understand I cannot nor can any

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other member of this Government comment substantively on the case as

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it proceeds. I will keep the House updated once I've considered the

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reports of Ofcom and the CMO. What I will comment on is that much of the

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discussion in the debate last week here and in the other place focused

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on the question of Ofcom's assessment of whether a licensee is

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fit and proper, including the ongoing duty which forced Ofcom

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under the broadcasting act 1990 and 1996. I've received representations

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from the honourable member for West Bromwich East and from Doncaster

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North as well as a number of other parties on adding fit and proper as

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a new public interest consideration in the enterprise act. I want to

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assure them I have very carefully considered the argument they have

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put forward. The grounds set out in the enterprise act allowing for

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intervention media mergers are aimed at ensuring plurality of the media,

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which is essential to a healthy democracy, something and are members

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of this has Duport. It is the view I fully endorse. I'm also clear the

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question of whether someone is fit and proper to hold a broadcasting

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licence is a different requirement and one that quite rightly sits with

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the independent regulator Ofcom. On Monday this week, Ofcom announced it

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will conduct its fit and proper assessment at the same time it would

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consider any public interest test in response to my decision to intervene

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in the merger. This means Ofcom will conduct its assessment within the 14

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working days it has to report to me on the public interest I've

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specified in the intervention notice. -- 40 working days. It will

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provide reassurance to those with concerns. That this is a matter

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which Ofcom will now consider before the merger takes place. I trust as

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before that this update is helpful to members and this statement is an

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opportunity to debate this issue but at the same time respecting the

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limits of what I can say as I mentioned earlier, given my ongoing

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role in relation to this merger. I commend this statement to the House.

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I thank the Secretary of State for her statement. She says she will go

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ahead with what she indicated she was going to do last week. It might

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not sound like the big deal but it's more than the Chancellor and Prime

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Minister managed yesterday. On the side of the House, we welcome the

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fact that the Secretary of State is intervening. She will have noticed

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that 21st Century Fox is happy also in a letter to her last week, they

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said, I quote, we welcome a thorough and thoughtful review. I have no

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doubt that is sincere and 20 this -- 21st Century Fox are thrilled. And

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that they will seek not to challenge it or impede any element of the

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Ofcom investigation. If they do, I trust she will make a new referral

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to put it beyond doubt that Ofcom could investigate what it needs to.

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Can she confirmed that in her view, the broadcasting standards ground of

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a referral gives Ofcom the power to investigate any corporate Government

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issues affecting 21st Century Fox, including the phone hacking scandal,

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any cover-up of illegality at News International, the rehiring of

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people responsible for governance failures and ongoing sexual

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harassment claims in the United States? Is it her view Ofcom should

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examine those issues? The Secretary of State referred to representations

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made by me and my right honourable friend, the member for Doncaster

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North and by others, about adding fit and proper of the new public

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interest consideration. She has regrettably chosen to reject those

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representations. I welcome the announcement that Ofcom will conduct

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a fit and proper assessment at the same time as considering the public

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interest test specified today. I have two concerns. The first is that

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there is only 40 days to conduct this assessment. Is she confident it

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can get to the bottom of all these issues in such a short time? And

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2012 Ofcom report on James Murdoch found his conduct repeatedly fell

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short of the exercise of responsibility to be expected of him

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as CEO and chairman, contained an important caveat. It said the

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evidence available to date does not abide a reasonable basis to find the

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new of widespread wrongdoing or criminality at News of the World.

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The reason for that lack of evidence was that Ofcom did not have the

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power to gather the evidence it needed. News Corporation, 21st

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Century Fox's predecessor company, was involved in one of the biggest

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corporate scandals and one of the biggest corporate governance

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failures of modern times. Just a few years ago. Many of the questions of

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corporate governance failures in 21st-century's predecessor company

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and much of the evidence of the role of James Murdoch within those

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failures, can only be answered by going ahead with part two of the

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Levenson enquiring Ofcom does not have the power to obtain documents

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and compel witnesses to appear before it. If it not the case that

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the easiest way of getting to the bottom of the corporate governance

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questions we all want answered, is to hold on enquiry in public using

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powers with terms of reference which have already been announced by

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Conservative Prime Minister as a promise to the victims of phone

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hacking, namely Levenson part two? Perhaps if I can address the final

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point he's made as I did last time I was at the dispatch box on this

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matter, namely the issue Levenson. He will know the consultation that

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we launched that closed in January is subject to a judicial review and

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therefore, I'm unable to comment on the consultation or any aspects of

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that enquiry. I'm pleased he welcomes the decision to refer this

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merger. I think it's important I make a couple of points in response

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to his questions. He made the point about broadcasting commitment to

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standards and whether it could look at corporate governance. I was clear

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that the corporate governance was one of the issues on which I was

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referring the matter to Ofcom. Therefore I would expect them to

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look at that. Ofcom is clearly an independent regulator and I've made

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the decision to refer to Ofcom but it is for Ofcom to decide what

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evidence they want to look at. They are open to look at whatever

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evidence they feel is appropriate to make their decision. He talked about

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the fit and proper test and I did carefully consider the

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representations made but I think it's important and independent

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regulator looks at fit and proper and the Government has a grounds on

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which to intervene under the enterprise act. Those two should be

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kept separate and we should not seek Government stepping in to where the

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regulator quite rightly should sit. He asked whether Ofcom have the time

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and resources and the ability to gather the evidence they need and I

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have been assured by them they have the time to do this and the ability

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to gather the evidence they need. I look forward to letting them get on

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with the job. It clearly sensible to ask regulator to examine this bid,

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will my right honourable friend agree that this transaction

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represents an ?11.7 billion investment by an international

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company enjoyed British broadcaster and that such is a fantastic vote of

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confidence that the UK will remain an international centre of

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broadcasting long after we leave the EU?

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He has significant experience in matters of culture, media and sport.

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He is right to say that the UK is a global Britain and will remain

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global Britain, open to business to the whole world after we have left

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the European Union. I would like to thank the Secretary of State for

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advanced sight of her statement. I'm pleased she will intervene in the

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merger of Sky/Fox and investigate the deal. We have voiced our support

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for media clarity and our commitment to broadcasting standards. There are

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valid concerns about this merger which will increase the influence of

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Rupert Murdoch on his family in the media and UK. There are now Bob

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reaches for broadcasting standards by Fox and the failures of News

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Corporation in the past. Many highlight the fact that part two of

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the Levenson enquiry -- inquiry has yet to be convinced -- commenced. We

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should be mindful way the previous bid courted such controversy and

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failed. At the same time it should be acknowledged that television is a

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daft thing to changes and competition and some will argue that

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investment in sky-macro might allow them to thrive and compete with

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competitors such as Netflix and Amazon prime. -- Sky. Ofcom will

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investigate on broadcasting standards as well as conducting a

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proper assessment. This will provide the Secretary of State with the

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recommendations on how to proceed. I look forward to Ofcom's conclusions.

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I refer to my earlier comments regarding the Levenson enquiry. I

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look forward to seeing the report from Ofcom to enable me to use my

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judicial role to make a fair and transparent decision in this matter

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it appears to me that the mention of the word, Murdoch, gets people

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frothing at the mouth. When James Murdoch was chairman or Chief Exec

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of Sky, we have seen their company grow to 20,000 people being employed

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in this country. Does she believe with me that sky -- Sky is an

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important part of this country and this merger has been proposed shows

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the confidence that the rest of the world has in Britain's original

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productivity and feature? Can I thank my honourable friend for his

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comments. It is important we have media plurality which is why I have

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asked -- asked Ofcom to look at this merger and make a decision on the

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grounds of the enterprise act whether media plurality is affected

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by the merger. I also am very optimistic that post Brexit, the UK

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broadcasting industry will continue to thrive and be the world leading

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broadcasting industry that it is today. Camera welcome the Secretary

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of State's decision to refer this bid. Many of us believe that if you

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look at the conduct of the Murdoch's and the power they already have, it

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is not in the public interest for them to take over Sky and have full

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control. On this question of fitness which she has thought about a lot,

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the Ofcom review took 15 months to look at the fitness of the

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Murdoch's. She is expecting them to report back to her within 40 days

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and there is a question of timescale and powers as my honourable friend

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said. Can she sure is that if Joan this period Ofcom seek more time or

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more powers to do this fitness required, she will grant their

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request? Ofcom have assured me they do have the time and powers they

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need and I look forward to seeing their report in due course. Does my

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right honourable friend agree with me that the freedom of press and

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press ownership is a bastion of our liberties and it is far Ofcom,

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objectively, not subjectively, to define, as a narrow turn of arts, a

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fit and proper person? It is not for ministers and politicians to get

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involved in this. He made the point that I concluded having considered

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the representations. There needs to be a distinction between the work of

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the independent regulator in determining fit and proper persons

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to hold broadcasting license versus their role of the Secretary of State

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when it comes to determining whether a media measure can go ahead under

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the terms of the enterprise act. Having encourage the Secretary of

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State to take this course of action, can I welcome the fact that she has

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done it and she deserves credit for doing the right thing. Many years

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ago I served on what was the standing committee of the enterprise

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Bill and as I recall, these provisions in this process was

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something supported by all parties at the time. It strikes me that in

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light of this experience, it might be appropriate that the conclusion

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of it to revisit whether we have the processes that we really need to win

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sure the ends that we want to achieve? If you would like to make

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representations to me regarding the enterprise act and areas where he

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feels there could be changes made in light of changing broadcasting and

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consuming habits, I would of course look at those carefully. I agree

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with the Secretary of State's view that the decision on whether is

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someone is fit and proper person should be the decision of an

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independent regulator, not a politician. Does she believe this is

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consistent with our goals of not politicising broadcasting landscape?

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I agree and it is the conclusion I reached when looking at the

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representations I received. Recognising and respecting what the

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Secretary of State has told the House and keeping the House up to

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date, we all appreciate that. Can I say it isn't a question any kind of

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vendetta against Mr Murdoch but it would be simply unacceptable that

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the amount of media ownership he already controls should be

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increased. That is the position and that is why I hope the right

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decision will be taken at the end of the day. These are matters that

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Ofcom will look at and I look forward to seeing their report. I

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welcome my right honourable friend's statement today but could she assure

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me that this question plurality is not one that is just examined

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occasionally one big merger like this comes up which is kept

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constantly under review by Ofcom and her departments? Ofcom have a

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responsibility to consider on a regular basis the fit and proper

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test for holding a broadcasting licence but clearly when we are

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looking at the whole media landscape and we have questions earlier about

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the status of Channel 4, the issue of media plurality is at the

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forefront of my mind when looking at what is the right decision to take

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regarding the future of Channel 4 and all matters regarding the media.

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I received a huge number of e-mails on this issue from many constituents

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and I work the intervention she details in her statement today.

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Press is important to democracy and I wanted to put on record that she

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understands the depth and strength of feeling on this issue and I look

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forward to hearing from her in due course. She will not be surprised

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that I suspect I have received more e-mails even than she has on this

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matter and I have taken note of them. I think the decision by my

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right honourable friend will be welcomed by all parties to this

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proposed merger and across the country. One of the considerations

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is the short time frame that Ofcom has to do this review. Will she take

:20:57.:21:04.

an interim report from Ofcom? There is any obstruction or need to extend

:21:05.:21:09.

the period of time, she will look sympathetically at that so Ofcom can

:21:10.:21:15.

do the proper job that we want? He makes an interesting suggestion that

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I have been in -- been reassured they have the time and resources

:21:22.:21:27.

required to be able to produce a report in 40 working days. For all

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parties, we want to make sure there is sufficient time and scrutiny but

:21:32.:21:37.

actually we can give certainty in a reasonable time frame so that the

:21:38.:21:44.

parties can get on with business as usual whatever that might be. I

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congratulate the Secretary of State on the decision she has made.

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Historically, what successive governments have done, says Mrs

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Thatcher, they have decided Rupert and James Murdoch fit and proper

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persons because they are newspapers that can support them in general

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elections. The concentration of ownership is the problem here. Sky

:22:07.:22:12.

now has four times as much money every year to spend as the BBC, so I

:22:13.:22:17.

hope we will end up with the position where we maintain that

:22:18.:22:23.

diversity in the British ecology. A strong BBC not being bullied by

:22:24.:22:29.

Murdoch and Sky. Am getting worried because this is the second time the

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honourable gentleman has been working with Government which does

:22:33.:22:36.

slightly concerned me. I do take note of the comments he has made. I

:22:37.:22:47.

welcome today's statement as many of my constituents who have been in

:22:48.:22:50.

contact with me regarding this matter and I'm sure they will be all

:22:51.:22:55.

happy the bid has been referred to the regulators. With the secretary

:22:56.:23:00.

agree that given Britain is one of the most concentrated media

:23:01.:23:03.

environments in the world with three companies controlling 71% of

:23:04.:23:09.

national newspaper circulation and five companies in command of 81% of

:23:10.:23:14.

local newspaper titles, now is an ideal time to properly reviewed the

:23:15.:23:23.

media landscape in Britain. I am proud of the incredibly diverse,

:23:24.:23:26.

free press that we have in this country. It is something I want to

:23:27.:23:30.

preserve and make sure we can enable. We have questions about

:23:31.:23:36.

local newspapers and I want to see local newspapers thrive and others.

:23:37.:23:41.

It is very important we make sure through this process that we do

:23:42.:23:47.

about plurality of media and broadcasting and that is why I have

:23:48.:23:53.

asked Ofcom to look at this issue. I welcome the Secretary of State's

:23:54.:23:58.

decision. You have to be a fit and proper person in order to be

:23:59.:24:00.

licensed as a London hackney carriage driver. With that in mind,

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it is not just a question of the amount of influence that the

:24:09.:24:13.

Murdoch's already have, it is their association with so much corruption

:24:14.:24:19.

and illegality that has gone on and even now is still being uncovered.

:24:20.:24:22.

It is incredulous that they are being considered to have 100%

:24:23.:24:27.

controlling share of Sky and this must not be allowed to go one. I'm

:24:28.:24:33.

sure Ofcom will have heard the honourable gentleman's comments. I

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hope his comments about fit and proper persons the taxi driving was

:24:39.:24:42.

not a reflection of experience he has had in the himself. Could I

:24:43.:24:49.

congratulate the Secretary of State on the way she is handling this

:24:50.:24:53.

which is better than any Secretary of State since 2010. When it comes

:24:54.:25:04.

to Levinson, she says she can't respond to any questions we have

:25:05.:25:09.

because it is under judicial review. When is that judicial review going

:25:10.:25:13.

to be resolved so we might come back to the issue of Levinson to? It is a

:25:14.:25:21.

matter for the courts and I am in their hands. Order. I will take the

:25:22.:25:31.

point of order now. There are a couple of Select Committee

:25:32.:25:33.

statements coming but we can await those with bated breath. Let's hear

:25:34.:25:41.

the point of order. In a section headed making commitments on the

:25:42.:25:47.

floor of the House, paragraph 23 of the Cabinet Office guide to making

:25:48.:25:53.

legislation published in 2015 in July 2015, it is stated parliament

:25:54.:25:58.

will hold ministers to any commitments they make on the floor

:25:59.:26:02.

of the House which are recorded in hands arts. Ministers must take care

:26:03.:26:06.

German debates not to make any commitments for which they do not

:26:07.:26:09.

have collective agreement. My

:26:10.:26:11.

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