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When the sky was the limit for Murdoch

While the attention of most people was focused on the illegal invasion of Iraq in 2003, legislation was making its way through Parliament that would open up media ownership and create the conditions for Rupert Murdoch’s empire to flourish in Britain.

The Communications Act 2003 received Royal Assent on 17 July 2003 and represented New Labour thinking about globalisation, markets and ownership. It allowed cross-media ownership – newspapers owning TV stations – and opened up the market to non-British companies.

“Ownership rules must reflect the reality of a global marketplace,” the then culture secretary Tessa Jowell told MPs.

Many of the media specific rules in force that prohibited particular accumulations of broadcast licences, or combinations of press and broadcasting interests were abolished. Media concentration was primarily to be dealt with on a case by case basis.

The secretary of state was given power to block any deals that might threaten “plurality” in any sector, although this measure was forced on the government by a revolt in the Lords led by Labour peer Lord Puttnam. The real clout went to a non-government body, the regulator Ofcom which itself was there to champion competition and the market as its first priority.

In his acute analysis about the political elite and its relationship to the media, and Murdoch in particular, John Harris notes how Margaret Thatcher cleared the way for his move into British television. But he adds that “as with so many things, the rot decisively started under New Labour”, saying:

The Murdoch factor undoubtedly informed swaths of New Labour politics: not least, an ingrained reluctance to embrace the more economically interventionist aspects of the European Union, and a reckless belief that Britain should always support American foreign policy, no matter how dangerous the consequences (never forget: all of Murdoch's newspapers loudly backed the invasion of Iraq).

He relates how two Labour MPs as far back as 1996 had mysteriously disappeared during a crucial vote on a clause in a Tory bill that gave Murdoch monopoly over the equipment required to watch BSkyB. The vote was tied 11-11, “Murdoch got his way – and we began our passage into that brave new TV world where BSkyB has a UK market share of 80%.”

Harris suggests that the price of cosying up to Murdoch was an electoral quid quo pro. He cites Blair’s press secretary Alastair Campbell who in his diaries refers to a meeting with senior News International figures: "I emphasised that they had to understand that there would be a big price to pay in the party if we restricted and curbed the natural desires of people to do something about Murdoch, and ultimately the Sun and News of the World really went for us.”

After Blair resigned in 2007, Murdoch’s papers began their shift away from New Labour and plumped for the Tories in 2009. David Cameron was feted and courted by Murdoch and took on Andy Coulson, first at the Tory Party and then in Downing Street. The rest, as they say, is history.

The British political regime is imploding and not just because some phones were hacked by unscrupulous journalists and investigations. It’s a case of one scandal too many because it follows the banking collapse, involving financiers close to and admired by New Labour, the MPs expenses scandal that undermined any residual trust in Parliament and attempts to offload the economic crisis on to the backs of ordinary people.

Harris is worried that the crisis might “actually push us into a deadening stand-off between most of those at the top, and a public who now simply trust no one at all”. He is right to be concerned. This is a profound moment for a political system that few have any faith in to sort out pressing problems. A plan for a truly democratic alternative to a corrupt, market state in thrall to corporate power is more urgent than ever.

Paul Feldman
Communications editor
19 July 2011

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