Outlook: So much for a de-politicised mergers policy

ONLY ONE person will be smiling about Stephen Byers' daft decision to refer to the Competition Commission both Vivendi's stake in BSkyB and NTL's takeover of Cable & Wireless Communications, and that's the master puppeteer, Rupert Murdoch. Otherwise, it is a complete waste of Government time and money.

On neither count is there any obvious reason to refer these transactions other than Mr Murdoch's interest in seeing them scuppered, and unless Mr Byers is trying to punish the French for the beef ban, we can only assume that he has become a part of that purpose.

Mr Murdoch is publicly against Vivendi's attempts to forge an eventual merger of Canal+ with Sky, and his relationship with Vivendi's Jean-Marie Messier has become increasingly strained. It suits him down to the ground to have a spanner thrown in Mr Messier's works. Leave off, he's able to say to the French. I've got the British government behind me now.

If there's one irony in this decision, it is that the cable companies have been lobbying both in Brussels and London against such a tie-up too, in their case because the creation of such a European pay TV behemoth might disadvantage them in bidding for sports and film rights. Now their own cosy little carve up of the UK cable market has been referred as well.

In truth, however, there is even less of a case for referring the cable guys than Vivendi. There's no overlap in the franchise areas of NTL and C & W and against the mighty monopoly of Sky, their position pales into insignificance. Even combined they would have no more than 20 per cent of the pay TV market by revenue. Mr Byers went against the advice not just of the director-general of Fair Trading, John Bridgeman, in making this decision, but also the counsel of his closest officials. Why on earth would he do this?

One reason is that Sky thought it was unfairly treated when it was blocked from bidding for Manchester United, and if Mr Murdoch was to be put through the mill, so should everyone else. Given how luvvy-dovey New Labour is with the Murdoch mob, it cannot have taken much to convince Mr Byers that in all fairness others should be made to go through the hoops too.

It is hard to believe that the process of Government decision making could have become so cynical and open to commercial manipulation, even in a world where politicians live in awe of their media barons, but in the absence of a better explanation, we'll just have to suppose it's true. And this from a Secretary of State who says he wants to de-politicise merger policy.

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