This changes everything. As Culture Secretary Jeremy Hunt said in the House in his statement this afternoon, News Corporation has withdrawn its proposed “undertakings in lieu” in relation to BSkyB. These were its undertakings, for instance “spinning off” Sky News to make it independent, and protect it from News Corp dominance.
Since it was that package of undertakings that led Hunt to say he was minded to let the deal through, it follows that he must now refer the bid to the Competition Commission. He is free to do so purely on grounds of media plurality. There can be no accusation that he’s acted unlawfully or departed from the proper legal procedure.
But why on earth would News Corp do this? As I wrote last week, the law was on the side of their bid. A couple of things occur to me.
First, in spite of the strength of their legal position, Rupert Murdoch and News Corp must have feared that, the political temperature on this issue being so high, there was a risk that ministers might feel obliged to “find a way” to block the bid, and try to call Murdoch’s legal bluff, or gamble that they might, just, successfully defend a judicial review in these extreme circumstances. Ofcom’s consideration of BSkyB’s “fitness” might just have provided some cover for ministers, as might any revised view from Ofcom or the OFT on the credibility of News Corp’s undertakings. There might even have been a very remote risk of ministers taking my advice and changing legislation urgently and getting clearance from the European Commission to rely on new public interest considerations. From News Corporation’s point of view, while today’s move puts the bid on the back burner (as many MPs have been demanding) it does not kill it; it leaves open the possibility that News Corp could once persuade the Competition Commission, as it persuaded the OFT and Ofcome, and that the bid could go through one day, when perhaps the heat has subsided. While we’re used to thinking about Rupert Murdoch’s power over government, the truth is government has a great deal of power over him. He might well choose to do them a favour rather than raise the stakes yet higher at this moment of danger for his whole empire.
From ministers’ point of view, the decision comes like a prayer being granted. It gets Jeremy Hunt completely off the immediate legal and political hook. His transparent decision to delay a decision – by relying on the number of responses he had to his last consultation – was not unsustainable in the short term politically, and in the longer term legally. This gives him much more room for manoeuvre. It allows him to give in to Ed Miliband’s demands, while saving a little face. It allows the government to avoid a vote in the Commons this week, in which most Liberal Democrats might well have voted with Labour.
So it suits both News Corporation, and the government. The question has to be: was this a deal? I suppose it’s conceivable that it was a decision taken unilaterally by News Corp, without consultation with anyone in government or the Conservative Party. That may even be true.
But in my view, one of the inquiries announced last week by the Prime Minister must look into all contact between News Corp and everyone and anyone in government and Parliament last week and this. The public must know if this was yet another stitch-up between News Corp and politicians.