Commons clash as BSkyB deal moves closer

The Culture Secretary Jeremy Hunt has given provisional approval to the media deal after a public consultation over News Corp’s offer to hive off BSkyB’s Sky News as a separate company.

The offer to split off Sky News – originally revealed by Channel 4 News – is aimed at addressing concerns over media plurality in the UK. In addition to its stake in BSkyB, News Corp has a 37 per cent stake in the British national newspaper market.

Announcing the decision in the Commons,Mr Hunt said he had now received “more robust undertakings” from News Corp to further strengthen the editorial independence of Sky News.

“As amended, I believe that the undertakings will remedy, mitigate or prevent the threats to plurality which were identified at the start of this process,” he said. If nothing arose to change that view before midday on Friday, 8 July, he proposed to accept the undertakings in lieu of a reference to the Competition Commission.

“This seedy deal would shame a banana republic.” Labour MP Tom Watson

But the Labour MP Tom Watson accused the Minister of accepting assurances from a company – News Corp – which had “breached previous assurances” when it had taken over The Times, the Sunday Times, the Sun and the News of the World newspapers.

“I’m sure you will get your reward for this decision, that you will pay a very high political price,” he added. “This seedy deal would shame a banana republic.”

Mr Hunt gave his initiail aproval for the plans in March, when he announced the period of consultation. He says that none of the 40,000 responses to that consultation had provided new information to change this position.

However, a number of suggestions were made during the process which the Government believed would strengthen the separation. These include ensuring that Sky News has an independent director with senior editorial experience and a monitoring trustee to ensure News Corp complies with the deal.

Sky would also have to continue to “cross-promote” Sky News on its channels.

Read more: what does the BSkyB bid mean for Rupert Murdoch's empire?

Controversial deal

But News Corp’s deal to take over the 61 per cent of BSkyB that it does not already own remains controversial.

The bid has faced fierce opposition from rival media firms, including the publishers of the Guardian and the Daily Mail.

It was also taken out of Business Secretary Vince Cable’s hands when he told reporters posing as constituents that he had “declared war” on Murdoch.

The step forward in the deal is part of a busy week for Rupert Murdoch‘s News Corp. The company also sold the social networking site MySpace on Wednesday. It bought the site for $580m (£361m) in 2005, but unconfirmed reports suggest it may have sold the site, which has lost users to Facebook and Twitter, to Specific Media for as little as $35m (£22m).