Politics: Peers vow to fight on over Murdoch's newspaper pricing

A cross-party alliance of peers agreed last night to push on with a campaign to stop `predatory' price-cutting by Rupert Murdoch's Times newspaper. However, ministers signalled that they were not prepared to listen. Fran Abrams, Westminster Correspondent,

There is "something rotten at the heart of Britain's newspaper financing", the Liberal Democrat peer Lord McNally said last night as he promised to continue fighting for a change in the law.

Supported by Labour, Conservative and cross-bench peers,he argued that allowing the sale of the Times at 10p on Mondays distorted competition and threatened a proud tradition of diversity.

The issue went right to the heart of parliamentary democracy, he said, for true democracy required diversity which was now being threatened. "It seems in the newspaper industry it isn't enough for a victim to be bleeding. Apparently our present legislation requires a corpse before the Office of Fair Trading will act," he said.

Lord McNally said the newspaper industry generated revenue of pounds 700m a year but had overall losses of pounds 50m because it was not operating in a commercial way.

Robin Cook, the Foreign Secretary, Mo Mowlam, the Secretary of State for Northern Ireland, and Nigel Griffiths, the consumer affairs minister, had all called for action against Rupert Murdoch's pricing policy in the past, he said.

Lord Borrie, a Labour peer, former director-general of fair trading and non-executive director of Newspaper Publishing Plc, which publishes The Independent and Independent on Sunday, supported him. Price undercutting prevented papers from opening, he said.

"Who today would dare to start a new broadsheet newspaper as was done by Mr Andreas Whittam Smith and others when The Independent was started in 1986?" he asked.

Viscount Astor, a Tory frontbench spokesman, and Lord Ackner, a cross- bencher, both supported the calls for a change in the law.

Lord Haskel, the Government's trade and industry spokesman, said he had a lot of sympathy with Lord McNally and the other peers, but that it was a matter for the Office of Fair Trading and the courts rather than for the Competition Bill which they were seeking to amend. Sir Bryan Carsberg, the then director-general of fair trading, had ruled on this issue in 1993, saying that the Times's decision was a reasonable commercial strategy.

Lord McNally did not push the issue to the vote last night, at the Bill's committee stage, but gave notice that he would consult with peers from other parties and might do so when it reached its report stage.