Joint Committee on The Draft Communications Bill Minutes of Evidence

Examination of Witnesses (Questions 934-939)



  Chairman: Welcome.

Lord McNally

  934. We have already commented that we have had very short time to digest this but at least the Committee can take credit that it was us that got it out of the Department—even belatedly. In this document, as well as producing, as I say, this marvellous easy-to-follow guide on how you do go through a newspaper merger, they have set out the public interest considerations and they are briefly (a) accurate presentation of views, (b) free expression of opinion, and (c) the maintenance of plurality and view. Does that seem to get it about right as far as you are concerned?
  (Mr Parker) Like a number of people before us, we only received this document extremely late yesterday evening and we have not had time to consider the full extent of its content. I think we would prefer to come back to you on it.

  Lord McNally: I think the Committee both sympathises and shares your indignation that this comes belatedly and under pressure, rather than being volunteered for full debate. We are involved in prelegislative scrutiny. But you will consider it. I think we are under some pressure ourselves as to the timing of such reactions.


  935. To put it mildly!
  (Mr Parker) It might be helpful to know how quickly you would like a reply because the same point has been made to witnesses before us.

  Chairman: It has to be by the middle of next week at the latest, I am afraid.

Lord Crickhowell

  936. In your evidence you comment on the level below which the merger provisions will not apply and you say it has not been defined. You argue that the new provisions coupled with the scope of markets for the purpose of competition law could lead to controls on mergers at quite local level, and that you will not be freed from the special regime "as promised". When and in what form was the promise made? How would you want to see it implemented in ways that will not circumscribe controls over regionally significant changes in newspaper ownership?
  (Mr Parker) On the specific promises that we were talking about I can quote one or two examples. Stephen Timms at a meeting on 13 June 2002 said, "The Communications Bill promised a less burdensome regime for newspapers and would remove the smallest local newspapers from regulation altogether". I also quote from Tessa Jowell who, in the draft Communications Bill policy in May 2002 said, "De minimis provisions will remove smallest local newspapers from the regulations altogether", so that is basically what we are reflecting in those comments. Those two specific examples reflect a number of comments that have been made to the Newspaper Society and its members through the last couple of years.

  937. You are obviously concerned that the promise is not being delivered, or is unlikely to be. We are perhaps in a bit of a quandary because we do not yet know how the final Bill is going to appear but what changes would you want to make sure that the promise is delivered, and that you are not too circumscribed at the regional level? We have had an earlier piece of evidence incidentally about the need to define what "local" and "regional" means, and you might comment on that too.
  (Mr Parker) I think in one of our earlier submissions to a consultation document we did suggest that newspapers with a circulation threshold of 100,000 copies would be the level, so that would be what we stated before.
  (Mr Newell) I think one of our principal concerns with the proposals is that there is the clothing of deregulation as it would apply to local and regional newspapers both in terms of local and regional newspaper transfers and the cross media ownership area but, as a matter of practice, as seen by local and regional newspaper publishers, the proposals as they stand are more regulatory in many areas than the current special regime that we operate under. One specific point that I would mention on this is that the proposals that stand at the moment are likely to apply to newspaper companies of all sizes. The current newspaper regime only applies to newspaper companies of a certain size and there is a danger that, with the overlay of the different regulatory bodies—there will be four bodies now concerned with newspaper transfer cases—the new regime will in particular catch and impact upon small independent newspaper companies who want to grow within their markets either in terms of purchasing newspaper companies adjacent to them or in terms of investing in radio. We see there to be a contradiction really in the government policy, on the one hand of wanting to liberalise and allow consolidation at an international and national level for media companies but, in this regard, a regime that had been promised to us as being deregulatory will, in practice, be more regulatory—for all newspaper companies. But the one point I do want to make is that it would have special significance to the smaller newspaper companies because, although we have been promised de minimis provisions, the way in which they would apply in practice, we believe, would catch very small newspaper transactions that are not caught at all at the moment.

  938. So you want some very specific provisions written in to prevent this? You want to have the rules defined so it is quite clear what the limits are, is that right?
  (Mr Newell) Our position is that we prefer to be subject to the rigorous new competition law as outlined by Mr Cruickshank this morning: we do not believe there is a case for a special regime but, if there is a special regime, the way it should apply should ensure that small transactions are unambiguously taken out of the regime.


  939. Are you suggesting that under the de minimis suggestions in the document those should possibly apply to circulation rather than turnover?
  (Mr Newell) That is the tradition we currently have. The law as it applies at the moment to newspaper mergers operates by reference to newspaper circulation, and the special regime at the moment only applies where the newspaper company has a combined paid for circulation in terms of its actual titles and those it is acquiring of over 500,000 copies. There is a mandatory reference if such a company is purchasing a title with paid for circulation of over 50,000. The new regime as outlined will potentially apply—and the Secretary of State will have a far wider discretion than at present—to all newspaper transactions, regardless of size, provided certain thresholds are met in relation to turnover and market share and, although we have been offered some comfort that it would not apply in circumstances in which the newspaper does not circulate in a substantial part of the United Kingdom, in fact the explanation that has been given on that is that the substantial part of the United Kingdom in practice can be a very small area indeed. Cambridge might be regarded as a substantial part of the UK.

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