Clegg urges BSkyB stake scrutiny

21 July 2011 Last updated at 17:07 GMT Mr Clegg defended the prime minister's handling of the BSkyB bid Nick Clegg has said media watchdogs must consider "very seriously" whether News Corporation is a suitable business to remain a shareholder in BSkyB.

The deputy prime minister said Ofcom must "show by their actions" that they are taking the issue seriously in the aftermath of phone-hacking revelations.

Lib Dem MPs have been urging the watchdog to apply its "fit and proper" test to News Corp's 39% share in Sky.

The firm dropped its bid to take full control amid political opposition.

Following allegations that the News of the World had hacked into the phones of murdered schoolgirl Milly Dowler and the families of 7/7 victims, all parties united to oppose the deal.

But three senior Lib Dem MPs wrote to Ofcom last week to press for it to examine News Corp's controlling stake in the broadcaster.

Ofcom has said it is "closely monitoring" the situation regarding alleged malpractice at News International - News Corp's UK newspaper arm - and investigations into what happened there.

The regulator has a statutory duty to satisfy itself on a continuing basis that the holder of a broadcasting licence is "fit and proper".

As part of this process, it has said it must "take account of News Corporation's conduct" in assessing whether BSkyB remains fit and proper as a licence holder.

Speaking at a news conference, Mr Clegg said this test should be "rigorously applied all the time and not just in a snapshot way".

"Ofcom have confirmed that they have got that ability to judge whether a media group is fit and proper or not," he said.

Continue reading the main story

I think we now have a once-in-a-generation opportunity to really clean up the murky practices and dodgy relationships which have taken root at the very heart of the British establishment”

End Quote Nick Clegg Deputy Prime Minister "And I very much hope that they will show by their actions that they are taking that very seriously".

"This fit and properness test has some meaning. There needs to be evidence quickly that the fitness and properness is applied on an ongoing basis to News International and other media organisations."

Ofcom has stressed it will not act on the basis of unsubstantiated allegations and will do nothing to prejudice any criminal proceedings.

But it has confirmed that it does have the power to act before the conclusion of a criminal investigation if it found a firm or directors were unfit to own a licence.

There have been no allegations made against BSkyB.

News Corp has said it remains committed to its stake in the firm - the UK's largest commercial broadcaster - and proud of its involvement in the firm.

'Murky practices'

Mr Clegg defended the prime minister's conduct during the course of News Corp's attempted bid after Mr Cameron insisted on Wednesday that he had removed himself from the process and had had no "inappropriate conversations" with any News Corp executives over the subject.

He confirmed he had questioned the appointment of former News of the World editor Andy Coulson as Mr Cameron's communications chief but added: "It was the prime minister's decision and the prime minister I think has been quite upfront about the fact that he is responsible for them."

It has emerged that Mr Coulson did not have the highest level of security vetting when he worked at Downing Street - having been subject to "security check" level, rather than the more rigorous "developed vetting".

Mr Clegg also said he hoped the judicial inquiry into what went on at the News of the World, other newspapers and the relationship between the press, police and politicians would lead to big changes.

"I think we now have a once-in-a-generation opportunity to really clean up the murky practices and dodgy relationships which have taken root at the very heart of the British establishment," he said.

Like Mr Cameron and Labur leader Ed Miliband, Mr Clegg has published details of all meetings he has had with newspaper editors, executives and proprietors in the past year.

Speaking at an event in Birmingham, Mr Miliband said the country "needed to look into its soul" after recent events and decide "what standards we want to set" in public life.

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News Corp withdraws bid for BSkyB

13 July 2011 Last updated at 14:46 GMT WATCH: Robert Peston says it will have been an "incredibly painful" decision for Murdoch

Rupert Murdoch's News Corporation has announced that it is dropping its planned bid to take full ownership of satellite broadcaster BSkyB.

The move came as the House of Commons prepared to vote for a motion supported by all major party leaders calling on Mr Murdoch to scrap the bid.

It follows a scandal over phone hacking at News Corp's UK newspaper group.

News Corp deputy chairman Chase Carey said the bid had become "too difficult to progress in this climate".

The scandal has already led to the closure of the UK's biggest-selling newspaper, the News of the World.

On Friday, Prime Minister David Cameron announced details of a public inquiry into phone hacking and media regulation.

Market reaction

"We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies, but it has become clear that it is too difficult to progress in this climate," said News Corp deputy chairman and president Chase Carey in a statement.

"News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it."

BSkyB's share price briefly dropped following the announcement, taking it down 4% for the day, before recovering to close 2% up.

The company's share price has fallen some 20% since peaking at 850p earlier this month, and is now trading at a level not seen since News Corp first announced its bid plans in June last year.

Following News Corp's announcement, BSkyB chief executive Jeremy Darroch said: "We remain very confident in the broadly based growth opportunity for BSkyB."

'Huge humiliation'

A spokesman for Mr Cameron welcomed the news: "As the prime minister has said, the business should focus on clearing up the mess and getting its own house in order."

The Labour leader, Ed Miliband, called it "a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal and the failure of News International to take responsibility".

Continue reading the main story Liberal Democrat deputy leader Simon Hughes said that "the sun is now setting on the Murdoch empire".

The BBC's business editor Robert Peston said: "It's a huge humiliation. This was [News Corp's] biggest investment plan of the moment. It was one of the biggest investments they've ever wanted to make.

"It is an extraordinary reversal of corporate fortune... And questions will now be asked whether this is the full extent of the damage to the empire."

News Corp already owns 39% of BSkyB, but may be compelled to give up even this minority stake if it is deemed not to be a "fit and proper" by regulator Ofcom following the conclusion of current police investigations.

Robert Peston added there had been "a lot of speculation" that Mr Murdoch might now want to sell his UK newspapers, but the current state of the industry made them less attractive to potential buyers.

"The question is, who is going to pay him the price that they are worth? He will not want to sell those papers at a loss."

Public inquiry

Mr Cameron has asked Lord Justice Leveson to oversee a public inquiry into the News of the World scandal and media regulation.

Continue reading the main story Culture, practices and ethics of the pressTheir relationship with the policeFailure of current regulationContacts made and discussions between national newspapers and politiciansWhy previous warnings about press misconduct were not heededIssue of cross-media ownershipIn a statement to the Commons, he said the inquiry would begin as "quickly as possible" and would be in two parts - an investigation of wrongdoing in the press and the police, and a review of regulation in the press.

The judge will have powers to call media proprietors, editors and politicians to give evidence under oath, the PM said.

Mr Cameron said those who sanctioned wrongdoing should have no further role in running a media company in the UK.

He said Lord Justice Leveson, assisted by a panel of senior independent figures, would make recommendations for a better way of regulating the press which "supports their freedom, plurality and independence from government but which also demands the highest ethical and professional standards".

He will also make recommendations about the future conduct of relations between politicians and the press.

Mr Cameron told MPs he would require all ministers and civil servants to record meetings with senior editors and media executives to help make the UK government "one of the most open in the world".

Mr Miliband welcomed the proposal, arguing it must be imposed retrospectively, so that he and Mr Cameron publish all details of meetings with media executives dating back to the last general election.

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Lord Justice (Sir Brian) Leveson became a barrister in 1970 and a QC 16 years later.

The 62-year-old was made a High Court judge in 2000 and appointed to the Court of Appeal in 2006. He was senior presiding judge there from 2006 to 2009 and now, as chairman of the Sentencing Council, is responsible for criminal sentencing policy in England and Wales.

Lord Justice Leveson is well known for being the barrister who led the prosecution case against serial killer Rose West, who was jailed in 1995 for the murder of 10 women and girls.

He was also the judge during the 2006 trial over the murder of 10-year-old London schoolboy Damilola Taylor.

The prime minister was previously criticised for meeting Rupert Murdoch, head of News Corporation, in Downing Street soon after the election, because Mr Murdoch did not walk through the front door.

Newspapers which did not support the government ran stories of "secret meetings".

Earlier at prime minister's questions, Mr Cameron said a "firestorm" was engulfing parts of the media and police, and those who had committed offences must be prosecuted.

Mr Miliband said it was an insult to the family of murdered schoolgirl Milly Dowler, whose phone was allegedly hacked, that Rebekah Brooks was still News International's chief executive.

Mr Cameron responded: "She was right to resign, that resignation should have been accepted. There needs to be root and branch change at this entire organisation.

"What has happened at this company is disgraceful - it's got to be addressed at every level."

In other developments:

Meanwhile, Labour's communications chief Tom Baldwin is facing renewed questions over claims he handled private information which was gained illegally during his years at the Times newspaper, another News International publication.

The former Conservative deputy chairman Lord Ashcroft makes the allegations in a blog posting on ConservativeHome, which he owns. Mr Baldwin has not responded to the claims.

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News Corp closer to buying BSkyB

30 June 2011 Last updated at 12:47 GMT News Corp already owns 39% of BSkyB The government has said it is "minded to accept" News Corp's assurances about the spin-off of Sky News, but is to consult on some fresh conditions.

The spin-off of Sky News is the key condition if News Corp is to be allowed to take full ownership of BSkyB.

The conditions include having an independent editorial director at Sky News board meetings and for Sky News to continue to be promoted on other Sky channels.

The consultation will run until 8 July.

After that date, the Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, will take a final decision on whether to allow the takeover or refer it to the Competition Commission.

Earlier advice from the Office of Fair Trading and media regulator Ofcom expressed concern about News Corp owning too much of the British media.

Continue reading the main story Torin Douglas BBC media correspondent

No-one can accuse the Culture Secretary of rushing into this.

It's over a year since News Corp announced it wanted to buy the 61% of shares in BSkyB it didn't already own.

It's three months since Jeremy Hunt - advised by regulators - indicated that News Corp could avoid a Competition Commission inquiry if it hived off Sky News into a separate company.

Now he's consulting for a further seven days on some slightly tougher conditions, including a requirement for Sky to continue to "cross-promote" Sky News on its channels.

Some time after 8 July, News Corp will be given clearance to proceed with its bid. At that stage, it becomes a battle over price.

A year ago, it bid 700 pence a share but BSkyB's share price has risen to around 850 pence.

Some of its shareholders want News Corp to pay much more.

Last June, News Corp offered 700 pence a share for BSkyB, but the board of BSkyB told it to come back with a higher offer.

Since then, BSkyB shares have risen significantly, and were 850p in early trading on Thursday.

Even if the takeover is cleared by the culture secretary next week, the deal could still stumble if a price cannot be agreed.

The company currently holds a 39% stake in BSkyB and owns the Sun and Times newspapers.

News Corp offered to spin off Sky News as an independent company, but continue to fund it, in order to prevent the takeover deal being referred to the Competition Commission.

Mr Hunt launched a consultation on the plans on 3 March, as a result of which he has added four extra conditions to the deal:

Sky News board meetings will be attended by an independent director with editorial experience when editorial decisions are to be madeA monitoring trustee will be appointed to make sure News Corp applies with its undertakings on Sky NewsOther Sky channels will continue to promote Sky NewsSky News' Articles of Association have to be approved by the secretary of state

The government received more than 40,000 representations in its consultation, but said there was nothing to change its earlier view that the spin-off of Sky News would make the BSkyB takeover acceptable.

The deal has been vigorously opposed by an alliance of other newspapers, including the publishers of the Guardian, the Daily Mail and the Daily Telegraph.

'Banana republic'

Mr Hunt was called to the House of Commons to answer an emergency question about BSkyB from former Labour MP Tom Watson.

"I'm sure the secretary of state will get his reward for this decision but he will pay a very high political price," Mr Watson said.

"This shady deal would shame a banana republic."

Mr Hunt responded by stressing that he had taken independent advice on the issue.

"I am perfectly well aware that on an issue like this, no-one is going to trust the motives of politicians," he said.

"That is why, at every stage, I have sought independent advice from Ofcom, the independent regulator, and from the Office of Fair Trading."

BBC business editor Robert Peston said the ruling meant that the culture secretary accepted that some of the critics of the deal were right, but that the criticisms were not enough for him to feel that he wants to block the takeover.

"He is, he thinks, taking steps to allay the concerns that Sky News will simply become another identikit voice within the News Corp stable rather than maintaining the kind of independence that it's had over many years," he said.

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