Parliament & Politics: COMPETITION BILL: Peers fail in attack on price of papers

THE GOVERNMENT came under pressure to outlaw predatory pricing of newspapers yesterday when peers argued that cut-throat price wars of the kind waged by the likes of Rupert Murdoch threatened the lifeblood of democracy in this country.

Lord McNally, a Liberal Democrat peer, introduced an amendment during a debate on the Competition Bill that would impose new regulations on Mr Murdoch's UK newspapers.

Urging fellow peers to vote against the Government to protect the diversity and quality of British print media, he said: "Newspapers have to be treated differently by competition laws because of the importance of a diverse media for a healthy democracy ... media moguls are not self- regulated and we will have to contain them."

But Lord McNally's proposed tough rules, which are broadly similar to an earlier amendment accepted by the Lords and overturned by the Commons earlier this year, were defeated by 116 to 87.

In the debate, Lord Harris of High Cross, a crossbencher, said that price- cutting by The Times, owned by Rupert Murdoch's News International, was not the only reason that its circulation had increased over recent years, there were also issues of quality involved: "These are do or die issues ... we are not talking about baked beans but a sophisticated product ... what are we proposing , to put a newspaper like The Independent on a protected list?"

Lord Harris went on to dismiss the issue of predatory pricing as an "excitable distraction" from critics outraged by Mr Murdoch's success.

But Lord Borrie, also a crossbencher and a former director-general of the Office of Fair Trading, said The Times would have never been able to cut its price consistently over the years and coped with the costs of printing and marketing without the support of its sister papers. "If The Times put up its prices next week, would it retain all its readers?" he asked.

Baroness OppenheimBarnes, a Conservative peer, added: "I believe that every aspect of discriminatory discounting, when it is used as a blunderbuss to lead an opinion or wrongly to gain support, as no doubt is the case in the newspaper industry today, is wrong."

Lord Judd, a Labour peer, said the amendment was dealing with the "lifeblood of democracy. The most important element of this is information, the quality of information, and the reliability of the sources of information which the public rely on for the formulation of their attitudes towards the issues that confront the nation," he said.

"Anyone who cares about democracy must care about a pluralist media and a pluralist democracy."

But winding up, Lord Simon of Highbury, the Trade minister, argued that the Bill, which imposes a tough competition regime supervised by the Office for Fair Trading, contains provisions to cover any anti-competitive behaviour.

Earlier, peers threw out a measure to restrict voter choice in next year's European elections. Under the system of proportional representation people will vote only for a party list rather than individual candidates. The defeat by 165 votes to 140 threatens to disrupt the Government's congested legislative timetable.