Minister flouts rules by meeting BSkyB

KIM HOWELLS, the competition and consumer affairs minister, has flouted government guidelines designed to prevent lobbying by interested parties during competition inquiries by lunching with Tony Ball, chief executive of BSkyB.

The meeting, which took place yesterday, is likely further to inflame the controversy that already surrounds the Competition Commission's dual probes into matters relevant to Rupert Murdoch's broadcasting company. It also runs directly counter to established rules at the Department of Trade and Industry and

Critics have already questioned the Government's motives last week in referring to the Competition Commission both Vivendi's purchase of a 25 per cent interest in BSkyB and NTL's acquisition of Cable & Wireless Communications, suggesting that the main purpose may have been to curry favour with the media magnate.

A DTI official yesterday confirmed that Mr Howells had met Mr Ball for an "informal" lunch, but said that the session had been arranged before the recent referrals. She added that the pair had not discussed issues relating to the cases, but refused to disclose what had been on their agenda.

She declined to comment on why the meeting was not cancelled after the two deals were referred to the Commission by Stephen Byers, Secretary of State for Trade and Industry.

The 1990 "Guide on DTI Procedures for Handling Reports" states that such meetings are to be avoided so that ministers are not unduly influenced.

It states: "Relevant ministers may not receive any representations in the period leading up to publication of the report." Further, it states that "it would inappropriate for ministers' views to be influenced by - inevitably partial - lobbying by particular interest groups because he is unable to secure views of others on the same points". Interested parties have the opportunity to put their views directly to the Competition Commission, the guidance notes point out.

Last Friday, Mr Byers referred Vivendi's purchase of a "material interest" in BSkyB to the Commission. The French company acquired the stake from Pathe, Pearson and Granada.

In a second case the same day, Mr Byers overruled the advice of the Office of Fair Trading to launch an investigation into NTL's pounds 8.5bn takeover of Cable & Wireless' residential cable network. Cable distribution is the main competitor to BSkyB's satellite network, and Sky had been lobbying heavily for a reference.