Stuart Smith's Blog

I was disappointed by our business secretary Vince Cable’s party conference harangue. As advertised, there was lots in it about the evils of capitalism. Short-termism, “irrationality”, “market rigging” “bankers’ greed”, “killing the competition”, yes aplenty  (though that last bit turned out to be a direct quotation from the father of market economics, Adam Smith). But, despite searching high and low, I could find no reference anywhere to Rupert Murdoch, his son James, News International or NewsCorp.

This was very dismaying, after I had been promised by those elements of the media not owned by R Murdoch esquire that Cable’s speech – its deeper purpose that is – was a veiled attack on the Murdoch empire and its evil designs on UK media plurality. Either this was a delusion, or the “veiled” bit was so profound as to be obscure.

Whatever, I hold Claire Enders, the eponymous founder of media consultancy Enders Analysis, partly responsible. Enders gave intellectual respectability to the idea that Cable should stop Murdoch in his tracks by suggesting, a couple of weeks ago, that NewsCorp’s bid for the 60.9% of BSkyB it did not already own was merely a rite of passage to the media mogul becoming a UK Silvio Berlusconi.

Perish the thought. As far as I know Murdoch does not use Viagra, and even if he did, I’m sure he would not be careless enough to be caught with his trousers down. On a more serious note, the parallel scarcely applies. As a global media power, Murdoch need take no lessons from Berlusconi, with or without the rest of BSkyB in his pocket. On a political level, it’s just a non-starter. James as an MP, working his way up to prime minister? Don’t make me laugh. The Berlusconi tag was, of course, just a rhetorical device designed to capture headlines – which it duly did – as pressure builds on Cable to refer the bid. In her letter to Cable, Enders laid out more precisely what she fears: “News International papers and BSkyB channels, particularly Sky News, may merge into one stream of fact and opinion. If this occured, plurality would decline…”. In other words, wall-to-wall Fox Television beckons.

There is, I’m afraid, little if any correspondence between the Murdoch vilified by Enders and the critique of capitalism contained in Vince the rabble-rouser’s party speech. In fact, quite the opposite. No one can accuse a man who has been investing in Sky Television since 1989, and who bailed out – at the government’s behest – British Satellite Broadcasting in 1990 – as “short-termist”. And if – to use Cable-speak – this particular market is “rigged”, it’s because politicians and regulators do the rigging. The Murdoch clan welcome free competition: it would be, as the history of Sky shows, their opportunity to clean up.

Precisely to “rig” the media market still further Cable the business secretary  – as opposed to Cable the party orator – will feel compelled to refer the Sky bid to the Office of Fair Trading (once, of course, he has availed himself of the opinion of media regulator Ofcom). An inquiry by the European Commission – which is part of due process – would almost certainly not be enough to block it: the terms of reference would merely encompass the narrow lines of competition law. Time, then, to introduce a bit of “irrationality” and “rigging” into the workings of capitalism in order to achieve the desired outcome. And what better than a referral on the nebulous grounds of “public interest”, citing a threat to “media plurality”? Once the OFT has done its job, and passed the matter on to the Competition Commission, we can look forward to at least a year of obfuscation and procrastination as the regulatory authorities painfully crawl towards their negative verdict.