An influential Parliamentary Committee has today urged the Government not to pass legislation allowing non-European investors to buy UK media companies, recommending instead that ownership decisions be left up to the new super-regulator Ofcom.
The Joint Scrutiny Committee, chaired by Lord Puttnam, has concluded that the Government’s case for the abolition of the current media ownership regulations (see Draft Communications Bill Relaxes Cross Media Rules) is unsatisfactory and is suggesting that the issue of foreign ownership should be dealt with by Ofcom and the competition commission.
Lord Puttnam said: “We are far from rejecting the case for foreign ownership but are recommending that it should be explored further by Ofcom, when its is established an effective regulator.”
He added: “At the heart of our conclusions and recommendations about media ownership is the proposal for a new plurality test to be used in connection with mergers and take-overs across all media. In due course, if Parliament is satisfied that this powerful new weapon is being used effectively, the need for specific ownership restrictions set out in statute will greatly diminish.”
A ban on foreign ownership would effectively prevent Rupert Murdoch from buying Channel 5. However, the Committee has rejected accusations that it has a vendetta against the media mogul, saying: “Our recommendations are not in any way shape or form an attack on Rupert Murdoch, any large newspaper group or specific media owner.”
Speculation suggests that the Committee will face tough opposition from the Government, which appears unwilling to compromise on the issue (see
The Committee’s recommendations have been welcomed by former Culture Secretary, Chris Smith, who was influential in the creation of the Communications White Paper (see
DCMS: 020 7211 6200 www.culture.gov.uk
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