by Bruce Page
A much fingered cliché says that the Troubles in Northern Ireland trace back to Cromwell’s time – maybe to Finn MacCool’s. In fact the province was largely calm in the mid-1960s: the IRA had officially renounced violence to pursue Marxist theorising. Political scientists and reporters knew that instability was developing, through Protestant determination to keep gerrymandered control of Catholic areas. But London ministers thought Ulster a faraway province of which they chose to know little. Then in 1969, without looking much ahead, they sent the Army to absorb turbulence caused by the Ulster statelet’s incompetence, and the IRA reappeared as the ferocious Provisionals. The years since have desperately tested the military, political and editorial institutions of the British Isles – and the fever remains undulant, only slowly declining. A part of our story concerns the ongoing collateral damage.
Ulster for British news media took over, as it were, from Vietnam, replacing pages heavy with massacre stories like My Lai and harsh portraits of strutting US generals or bewildered politicians. Counterinsurgency came home. Suddenly it was Britain’s own army being accused of crimes, against people who were legally subjects of the Queen. It was British soldiers being murdered by men whose relatives could well be neighbours of their own.
The Sunday Times and Insight were naturally drawn in because there were few ‘facts’ – little uncontested ‘news’ – about internment and hunger strikes, bombs in pubs, and shootings where some people saw ‘innocent victims’ and others saw ‘terrorist suspects’. This did not stop servants of the media finding simplicities, though the frankness of one man from the Daily Mail was unusual: ‘Why should I go and talk to some old women on a wet street corner when I’ve got a perfectly good story from the Army?’ Insight assumed that in a cloud of witnesses truth could yet be found.
In 2010, at a £200 million cost, the Saville Commission produced a report widely taken as the truth of what happened on 30 January 1972, when men of the Parachute Regiment fired on a Londonderry crowd, killing 13 of 29 people hit. Catholic sources claimed that that ‘Bloody Sunday’ was deliberate – designed by the British Cabinet to lure the IRA into combat and into decisive defeat. One Sunday Times reporter filed a story within days stating that case boldly, and naming the officers responsible.
Not since Peterloo had there been a comparable British event. Bloody Sunday stands alongside modern instances like Sharpeville, Tlatelolco, Lhasa, Kent State and Tiananmen Square – small death-tolls beside Hiroshima or the World Trade Towers (eleven at Manchester in 1819; three or five hundred in Beijing in 1989). But their distinction is that they are instances of authority killing its own subjects when they exercise that famous ‘right … peaceably to assemble, and to petition … for a redress of grievances’. They are characterised by a special sense of shock, and occur in the moment when hostility has not yet ruptured trust, before the descent into ethnic cleansing or uninhibited war.
Except that the government denied that such had been the case in Derry. Officially, the Paras had been faced with armed men who fired first; it had been a legitimate response to deadly attack. The Sunday Times neither published the story of murderous intent by Prime Minister Heath’s Cabinet nor accepted the official account – though enormous pressure went towards legitimising it, pressure which extended to corruption of the legal system. The government set up a tribunal under Lord Chief Justice Widgery, and it accepted many dubious, even absurd official claims – such as that the Paras had killed many IRA men whose bodies and weapons had been spirited away by their comrades. By such means, Lord Widgery constructed a verdict which shamefully endorsed the official fabrication, and became a significant barrier on the terrible road back towards civil existence.
Insight, after talking with many old women and soldiers, after combing hospital records and examining forensic data, published a 12,000-word report which said that Widgery was wrong: that the attack on the Paras was largely if not wholly fictional, and their shooting was ‘out of all proportion … [and] reckless in the extreme’. That at the time was a tough call for reporters to make against the Lord Chief Justice, the Cabinet and a good deal of misled British patriotism. Since then, the Saville Commission’s work – in the Ulster peace process – has shown that the paper erred only in caution. It is clear that the Paras had high-level backing for their Derry operation, though the lethality was reckless more than deliberate – suggesting that the Sunday Times’ suppression of the initial story was correct (though the US Army in Vietnam might not have got the benefit of any such doubt).
The merger creating Times Newspapers loaded into one corporate vehicle a noticeable part of the history and hopes of Britain’s democracy – a significant proportion of the assets likely to work as counterweights to abuses of power. Their history briefly set out is a benchmark against which to measure performance under Murdoch. The protection available for the protective assets themselves was Britain’s competition and merger legislation. This exhibited admirable principles and serious operational flaws built into it by one major party, and exploited by the other. Most political systems have a tradition of appointing expert commissions (Presidential or royal) to find remedies for actual or impending disasters. When ignoring advice, legislators like it to be the best available.
In 1961, a Conservative government was so alarmed by deaths and marriages in the newspaper industry as to set up a Royal Commission on the Press under Sir Hartley (later Lord) Shawcross. Looking back to the work of an earlier inquiry (1948), the Commission warned bluntly that ‘the nation would be in danger’ should the control of major newspapers become highly concentrated. It found that some sanguine people thought this unlikely to happen – but said that if they proved mistaken the knowledge might arrive too late for remedy. The Commission did not say just how much concentration might be safe. But the tenor of its report suggests a threshold far lower than has since been overstepped.
Rather than wait and see, the Commission recommended pre-emptive action, putting effective restraints on merger-and-acquisition activity in the newspaper industry. The law already presented conditional barriers against the controllers of valuable newspapers selling out to their competitors. Industrial societies vary in their attitude to market concentration: the British principle is that monopoly may be lawful if shown to generate economic returns which benefit consumers. But in the case of newspapers a second principle says that no increase in economic efficiency can justify reduction in diversity.
The Shawcross Commission’s recommendations focused on practical enforcement of these principles. Naturally, there was little to be done about an economically worthless, irredeemably unprofitable title. Eminent or not, it would have to go to any purchaser interested. But Shawcross practised commercial law, and knew how flexible value, profit and corporate structure could be in the hands of businessmen and their advisers. The Commission insisted that in merger proposals newspapers, not newspaper companies, must be considered. Otherwise, determined sellers might pop a rich paper into the same corporate shell as a lossmaker, and claim exemption for the ‘uneconomic’ company.
The next question was: who should investigate and pass judgment on newspaper-merger issues? The Commission was certain it would be wrong:
to follow the pattern of the Monopolies and Restrictive Practices (Inquiry and Control) Act 1948, under which an advisory body reports to Ministers but leaves the ultimate responsibility to Ministers and Parliament. The question whether a specific transaction should or should not be allowed to take place is, in our opinion, essentially a matter which should not be under the control of Parliament or the subject of party political considerations; it should be kept entirely free of Government responsibility or political association.
Shawcross and his colleagues recommended creating a Newspaper Amalgamations branch within the High Court, on call at any time to deal with proposed changes of ownership. This was a neat practical idea, requiring little in the way of specialised staff. The High Court has a regular body of judges who handle commercial an
d financial issues every day, experienced in commanding expert witnesses, analysing documents, giving decisions – and enforcing performance.
The provision they wanted was essentially simple: one demanding a pause for inspection whenever a sale of newspapers is proposed which will reduce diversity within a market. The sale may be approved, but only if there is no reasonable likelihood of danger to the public interest in presentation of news and expression of opinion. Quite often there isn’t. Very low levels of competition have been allowed in local and suburban newspapers. Most report the town hall decently, and offer space for the community’s disputes. What Shawcross proposed was a means to apply these principles when higher stakes lay on the table.
A Newspaper Mergers section appeared in the 1965 Monopolies and Mergers Bill, by which time Labour had replaced the Tories. The Secretary of State for Trade, Douglas Jay, conceded that political decisions were scarcely acceptable. But he rejected the High Court scheme because the issues might not be ‘justiciable’. This was mumbo-jumbo. A ‘justiciable’ matter is one a court is capable of handling, and the primary issues in a newspaper merger all concern the financial state of the businesses involved. Such things are the daily work of the High Court, and were they not ‘justiciable’ the economy would collapse. The secondary questions of accuracy and censorship concern – bluntly – the honesty or otherwise of newspaper bosses, and a courtroom is one of the few venues rigorous enough for that. There was no decent reason to reject the Royal Commission’s advice. It seems fair to assume simple distaste for loss of political leverage.
The Secretary of State decided that in spite of Shawcross’ warning his successors would send newspaper mergers for examination to the Monopolies Commission, which would provide recommendations for ministerial action. Anthony Barber for the Opposition thought the judicial approach would have been better, but that all might be well if the operational problems were carefully considered. Some of these were apparent from the first, and it is hard to believe any care was spent on them.
A recommendation of the Monopolies Commission (now Competition Commission) is almost binding on ministers, but it has nothing like the swift reflexes of a commercial court. It must assemble a fresh panel for every inquiry – reasonably enough, since it may have to study industrial products from antibiotics to x-ray lasers. (The newspaper industry, if morally Byzantine, is not in that sense complex.) And these panels dissolve once their recommendations are made; they have no capacity to follow up their work or check whether undertakings given to them are being honoured or disregarded.
Jay said Parliament could not make proprietors maintain a newspaper long if disposing of it better suited their financial desire. And his legislation foresaw that for unprofitable cases even the three or four months of Monopolies Commission reference might be too much. Nonetheless, the principle was supposed to be that a newspaper has social value – someone who has decided, for whatever reason, to give up running one should no longer have the right to decide its future. And so the legislation made reference to the Commission compulsory for any newspaper which could be considered a ‘going concern’.
This at least was a concession to Shawcross. The going-concern test is a much cleaner measure of economic value than current profitability. The auditors of a company may call it a going concern – however worthless – so long its owners will guarantee its debts. But this has only formal significance. Substantively, a business is a going concern if its assets and goodwill are worth more when kept together than when sold separately. The one situation in which merger approval could be given without investigation was that of a newspaper with no such value – one with assets which would fetch more if sold separately.
The debating record makes very clear why Parliament did not give discretion in the case of newspapers losing money at the time of sale. Members saw that economic fluctuations, bad management or mishap can turn a good business for the moment into a loss-maker. Further, an illusion of unprofitability is easily produced by switches in accounting philosophy, such as the treatment of returns on equity. The going-concern concept is clear, robust and in familiar use by accountants handling businesses in financial difficulty. It stimulates diversity where that is considered the essential purpose of the market; it makes it harder to stitch deals which concentrate power in fewer hands. The law’s principles had been refined admirably. But, without practical enforcement and public understanding, laws are readily corrupted. And nothing was done about that.
The creation of Times Newspapers Limited (TNL), to run both The Times and the Sunday Times as a subsidiary of the Thomson Organisation (via Thomson British Holdings – TBH), was the first issue for Jay’s new legislation. It was sent to the Monopolies Commission, investigated comprehensively and, somewhat reluctantly, approved. Times Newspapers, it was agreed, would have several nonexecutive ‘national directors’ to protect the independence of the editors. The standards and undertakings involved then would have disqualified News International and Rupert Murdoch from buying Times Newspapers in 1981. But, had they been enforced, the sale would anyway not have arisen: the Commission was led to expect no change in ownership until 1987 or later.
Much pseudo-history has gone into alleging that the precipitate, illegitimate sale to Murdoch was imposed on a worthy Thomson management by labour intransigence, that it was the only chance of saving something of the trust assumed in 1966. The London print workers of the time supported some of the nastiest, least competent union officials imaginable. But suggestions that this was the rare – the unique – case of perfectly asymmetric industrial morals derived at best from ignorance, and more often from gross self-exculpation. The efficient cause of the Thomson management’s fall was incompetence by certain of its leaders. Had the facts been known, even Mrs Thatcher’s government might have found it hard to leave the fate of democratic assets in such reckless hands.
It must be quickly said that little of this attaches to Lord Thomson himself. By the time of the merger he was an old man, with much assorted success behind him. He had built newspaper and radio businesses in North America. In television, oil exploration and colour publishing he had found ‘licences to print money’ where others saw only risk. He had enabled the rise of the Sunday Times, and this was so great that it realised his longstanding ambition to own The Times.
The merger was not a rescue. For both papers it was an option and not a requirement, and for this reason the Commission was basically reluctant to see the Times business taken over – its accounts at that time showed a profit, which has never since been the case. Thomson was grilled quite hard about editorial independence, and about risks to the independence of reporting and opinion. But in this respect there was an impressive lack of anything to be said against him, and though one member dissented, the majority had no concern.
The MMC believed that The Times could reverse its decline while remaining separate. But the majority accepted that quicker progress might be made with access to the capital resources and publishing expertise which had made the Sunday Times so formidable. It was an attractive idea, and the downside risk appeared remote: ‘Lord Thomson and his son told us that, if it proved necessary in order to keep The Times in being, they would be willing to put at its disposal the whole of their personal fortunes in this country’ The unequivocal sense of the pledge given to the MMC was that The Times would be provided with any necessary development capital, and, while no precise development plan was laid out, such investment would continue if necessary for twenty-one years.
No serious effort was made to fulfil these pledges. According to the History of The Times, Lord Thomson’s real intent was to spend no more than £5 million over five years. It is unlikely he was still sufficiently ‘hands on’ to know that such an amount was altogether inadequate to make The Times into a daily newspaper compatible with the Sunday Times – and that so far from improving The Times’ economics it was likely to worsen them, as indeed it did. But the Organisation’s senior executives cannot have been similarly unaw
are. The promises made to the MMC, says the History, were ‘reckless’.
Something should be said about The Times’ history: this is Volume VI, The Thomson Years, written by the historian John Grigg (Lord Altrincham) and published in 1993. Like earlier volumes, it contains lengthy accounts of editorial policy-analysis. But in this case they are interspersed with highly detailed passages on business operations. Grigg had comprehensive access to records at a time when the Murdoch management, having been in charge for eleven years, probably cared little about the reputation of their predecessors. Few contemporary documents reveal as much about news-media management. Grigg does not suggest, of course, that Thomsons’ financial loss in TNL was insignificant. But he does show that Thomsons brought it on themselves, by failing to make realistic investment plans for development of The Times, and trying to compensate for this by setting shortterm targets.
In the last year of independence The Times lost £3,000 on its daily publishing and made £149,000 from its three weekly supplements with their specialised advertising (chiefly educational) and other trading activities. The daily paper’s sale in the second half of 1966 averaged 273,248 about 10,000 behind the Guardian, then six years into the process of turning itself into a national newspaper. The Sunday Times in the same period averaged 1,236,007.
Having assigned his formidable lieutenants William Rees-Mogg and Harry Evans to edit The Times and the Sunday Times Hamilton set up his overall editorial and commercial strategy. His objectives were a Sunday Times with more pages, and a Times with circulation comparable to the Daily Telegraph, then as now the giant of broadsheet dailies, selling 1,354,146. An earnest of success, he thought, would be raising The Times’ circulation to 400,000 in four years; and he outdid his aim, for it reached 401,315 in the first half of 1968. This was in some ways more startling than the lift-off of the Lamb–Murdoch Sun, because the growth of the Telegraph and the Guardian was only modestly reduced.