Hunt Is Accused by UK Opposition of 'Shabby Deal' Over BSkyB - BusinessWeek

March 03, 2011, 12:49 PM EST

By Thomas Penny

March 3 (Bloomberg) -- U.K. opposition Labour Party lawmakers accused Culture Secretary Jeremy Hunt of "a shabby deal" for giving preliminary approval for the takeover by Rupert Murdoch's News Corp. of British Sky Broadcasting Plc.

Hunt said today he sought and acted on independent advice in taking his decision to allow News Corp. to buy the 61 percent of Britain's biggest pay TV company it doesn't own. He denied that approval had been given in return for support by News Corp. newspapers for Prime Minister David Cameron's Conservative Party in last year's general election.

"This is a new low in British politics, where the Conservative Party was supported by Rupert Murdoch before the election and then they delivered this after the election," Labour lawmaker John McDonnell told the House of Commons in London. "Nobody believes the undertakings that have been given by Murdoch will be adhered to in the long term."

Hunt approved the takeover after News Corp. offered to spin off Sky News, BSkyB's 24-hour news channel, to address media concentration concerns. News Corp., which owns four of the largest newspapers in the U.K. including the Times and Sun, would hold 39.1 percent of Sky and be barred from raising its stake without government approval for 10 years. Hunt's decision averts a long, antitrust review of the takeover plans.

Chris Bryant, a Labour lawmaker who is suing London's Metropolitan Police over its investigation of phone hacking by Murdoch's News of the World newspaper, said Hunt told him a year ago that he had "made his mind up" about the deal.

Correspondence Published

Hunt, who pointed out that News Corp. newspapers supported Labour in elections in 1997, 2001 and 2005, said he had published all documents and correspondence relating to the deal to demonstrate the impartiality of the process and to fend off any legal challenge.

Labour's culture spokesman, Ivan Lewis, said the government had been "contemptuous of its responsibility to be impartial" and reminded lawmakers that Cameron had dinner with BSkyB Chairman James Murdoch, Rupert Murdoch's son, in December, while the government was going through the decision-making process.

"The prime minister has had no role in that process and was not aware of the culture secretary's decision before it was made and announced," Cameron's spokesman, Steve Field, told reporters today.

--Editors: Eddie Buckle, Andrew Atkinson

To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net