Sky/21ST Century Fox: Merger

Part of the debate – in the House of Commons at 11:38 am on 16th March 2017.

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Photo of Tom Watson Tom Watson Party Chair, Labour Party, Deputy Leader of the Labour Party, Shadow Secretary of State for Culture, Media and Sport 11:38 am, 16th March 2017

I thank the Secretary of State for advance notice of her statement. She says that she will go ahead with what she indicated she was going to do last week. That might not sound like a big deal, but it is more than the Chancellor and the Prime Minister managed yesterday.

Labour Members welcome the fact that the Secretary of State is intervening. She will have noticed that 21st Century Fox is happy, too. In a letter to her last week, it said:

“We welcome a thorough and thoughtful review”.

I have no doubt that that welcome is sincere, and that 21st Century Fox is thrilled by her decision. On that basis, I hope that it will seek not to challenge or impede any element of Ofcom’s investigation. If it does, I trust that she will make a new referral to put it beyond doubt that Ofcom can investigate what it needs to.

Can the Secretary of State confirm that the “broadcasting standards” ground of her referral gives Ofcom the power to investigate any corporate governance issues affecting 21st Century Fox, including the phone hacking scandal, any cover-up of illegality at News International, the rehiring of people responsible for governance failures, and ongoing sexual harassment claims in the United States? Is it her view that Ofcom should examine those issues?

The Secretary of State referred to representations made by me, my right hon. Friend Edward Miliband and others about adding “fit and proper” as a new public interest consideration, but she has regrettably chosen to reject them. I welcome Ofcom’s announcement that it will conduct a fit and proper assessment at the same time as considering the public interest test she has specified today, but I have two concerns about this. First, Ofcom has only 40 days to conduct the fit and proper assessment. Is the Secretary of State confident that it can get to the bottom of all these issues in such a short time? Secondly, the 2012 Ofcom report on James Murdoch, which found that his conduct

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

contained this important caveat:

“The evidence available to date does not provide a reasonable basis to find that” he

“knew of widespread wrongdoing or criminality at”

News of the World. The reason for that lack of evidence was that Ofcom did not have the power to gather the evidence it needed.

Just a few years ago, News Corporation, 21st Century Fox’s predecessor company, was involved in one of the biggest corporate scandals and one of the biggest corporate governance failures of modern times. Many of the questions about the failure of corporate governance failure within 21st Century Fox’s predecessor company, and much of the evidence of the role of James Murdoch within those failures, can be answered only by going ahead with part 2 of the Leveson inquiry. Ofcom does not have the power to obtain documents and compel witnesses to appear before it. Is not the easiest way of getting to the bottom of the corporate governance questions that we all want answered to hold an inquiry in public, using powers under the Inquiries Act 2005, with terms of reference that have already been announced by a Conservative Prime Minister as a promise to the victims of phone hacking—namely Leveson part 2?