Commons jubilant as News Corp drops bid for BSkyB

Thu, Jul 14, 2011, 01:00

BRITISH MPs were jubilant yesterday on hearing that News Corporation had abandoned its bid to take over fully satellite broadcaster BSkyB, hours before a Commons debate demanding they do just that.

Two hours ahead of the announcement prime minister David Cameron announced a two-pronged judicial inquiry into the News of the Worldhacking scandal.

It will comprise an investigation into police and press wrongdoing and a review of the regulation of the press. Politicians, editors, journalists and police officers will be required to give evidence under oath.

The head of the inquiry, Lord Justice Leveson, will begin work immediately on finalising its scope, Mr Cameron told the House of Commons yesterday, although already there are suggestions that the brief is too wide.

The inquiry will not be able to investigate the News of the World allegations until police investigations and possible prosecutions are completed. This could take up to two years – it is not yet clear if witnesses will demand legal representation.

The British public “want their politicians – all of us – to bring this ugly chapter to a close and ensure that nothing like it can ever happen again”, said Mr Cameron, who agreed the draft terms of reference on Tuesday night.

The decision to abandon the BSkyB bid could have major implications for Mr Murdoch’s empire, since the satellite broadcaster, which this year will make £1 billion in profits, is about to become even more profitable and was to have been the base for News Corporation’s expansion in Europe.

News Corp’s chief operating officer, Chase Carey, said: “We believed that the proposed acquisition of BSkyB by News Corp would benefit both companies but it has become clear that it is too difficult to progress in this climate.”

Labour leader Ed Miliband said News Corporation’s decision had been “a victory for people up and down the country”, who had “thought that it was beyond belief that Mr Murdoch could continue with his takeover after these revelations.

“It is these people who won this victory. They told Mr Murdoch: ‘This far and no further.’ Nobody should exercise power in this country without responsibility,” said Mr Miliband, who was roundly cheered by Labour MPs.

Mr Cameron met the Dowler family, whose murdered daughter Milly’s voicemail was hacked by the News of the Worldafter she went missing, minutes after he announced the judicial inquiry.

The family’s lawyer, Mark Lewis, said later: “This shows actually the power of the public to stand up to something, however big an organisation is, however big, however far-reaching, however worldwide, to stand up and say ‘something isn’t right’.”

Liberal Democrat business secretary Vince Cable, who lost control of media competition issues last December after he unwisely spoke to undercover Daily Telegraph reporters, was clearly delighted by yesterday’s outcome.

“I’m not treating this whole thing in a personalised way. What I am pleased about was that I did manage to refer the bid in autumn last year – if that hadn’t happened it would now be a done deal. People have known my views for a long time and I suspect they are now shared more widely,” he told his local newspaper.