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Cameron’s Murdoch missteps

There are only so many times that a prime minister can afford to be completely wrong.

All prime ministers leave office reviled. That is because, like inveterate gamblers, they can't step away from the table until every last penny of their political capital is spent. So David Cameron will eventually be so disliked as to be unelectable; the only questions for his opponents are when and why.

The phone-hacking scandal offers some clues. Cameron has been wounded by the affair but not grievously. The main villains of the saga are the journalists who violated the privacy of traumatised families and the media bosses who allegedly covered up systemic criminality in their newsrooms. The Prime Minister has a tan­gential connection to those allegations through Andy Coulson, his director of communications from May 2007 to January 2011, and editor of the News of the World when hacking was out of control. On 8 July, Coulson was arrested on corruption charges. That leaves a whiff of complacency and bad judgement around Cameron - but no politician ever died of a whiff.

Nonetheless, the Prime Minister's political antennae have malfunctioned. Partly the problem was that he flew into the crisis late, arriving from Afghanistan when the grim hacking revelations had already dominated a full 24-hour news cycle. Cameron then seemed to suffer from jet-lagged judgement. He failed to summon moral outrage to chime with the public's sense of affronted decency. He meandered towards the announcement of a judge-led inquiry. He recoiled from explicit demands that Rebekah Brooks, News International's chief executive, resign. He set the government against News Corporation's bid for 100 per cent ownership of BSkyB only when it became clear that the Lib Dems would support an opposition motion in parliament against the deal. Throughout, he seemed to be taking his cues from Labour.


The riposte from Cameron's aides is that blunt moralism is a luxury enjoyed by opposition politicians, while governments must take more nuanced positions. The Prime Minister's friends point out that he had to be mindful of the legal complexities surrounding the BSkyB bid. "There is this awkward thing called due process," says one loyal MP. In the eyes of the public, however, Cameron ended up in the same place as Ed Miliband, only a week late.

Why the delay? Sheer disbelief at the scale of the allegations is one reason. Downing Street was "visibly shell-shocked", according to a witness inside the operation. Even George Osborne was stunned. Senior Lib Dems have been surprised by his hesitation. "George's usual ruthlessness hasn't been on show," one says. Another problem was the calculated reluctance to denounce News International prematurely, when loyalty had proved the safest course of action in the past. As an aide bluntly puts it, "You're in government, you're a Conservative and everything you know about politics is saying don't mess with the Murdoch press."

Cameron was also held back by a long-held prejudice about how seriously phone-hacking ought to be taken. Until the latest round of revelations, he was persuaded that the whole thing was a tedious obsession of Labour MPs and the Guardian newspaper. When asked about it in private, he was dismissive. It was never the subject of angry letters to Downing Street, he would say. It was not an issue raised in focus groups; therefore, it was not an issue. That was when the alleged targets were mostly celebrities. Once murder victims and soldiers' bereaved families were involved, Cameron recognised the new public mood of revulsion. Yet he did not have a ready store of pent-up anger to unleash in a way that could sound authentic.

Meanwhile, he stayed stubbornly loyal to Coulson. On the day of his former aide's arrest, he told a press conference that cutting a trusted ex-colleague loose would make him "a pretty unpleasant" person. The Tory MPs whom I have spoken to seem torn over the question of what this reveals about Cameron's character. They admire it as an act of chivalry, while recognising that, to the public, it risks coming across as the sound of a man in a hole still digging. MPs from all sides have been struck by the contrast with the expenses scandal. Then, too, there was a surge of public anger and a competition among party leaders to snatch the moral high ground. Cameron won that race by sounding resolute at the key moment. This time, Miliband has pulled off a similar trick.

Public scorn

There is another, more instructive comparison with Cameron's and Osborne's handling of the 2008 financial crisis. When Lehman Brothers collapsed and global finance looked precarious, the Conservative leadership was similarly stunned. Everything their party background had taught them about efficient markets and deregulated capitalism - the intellectual legacy of Thatcherism - suddenly looked uncertain. They were rattled and it showed.

Formulating a response to the expenses scandal was easy. MPs were caught with their fingers in the till, so slam it shut. The unravelling of Rupert Murdoch's credibility and the exposure to public scorn of his relationship with top politicians is as conceptually challenging for Cameron and Osborne as the revelation of market failure in the banking crisis.

A senior government adviser compares it, somewhat grandiosely, to the moment in the Renaissance when people realised that the earth revolved around the sun. "In terms of recent history, imagining a world without Murdoch is the equivalent of a Copernican revolution." That casts Cameron as a bewildered sailor, struggling for a moment to navigate the high political seas without News International on board.

He will recover his poise and grab back some political initiative, just as he did after the financial crisis, but the moment of numb hesitation was revealing. There is an intellectual rigidity about this Prime Minister. He governs fluently and affably when everything is proceeding as he thinks it ought to, following the ancient laws of establishment politics. He is quickly disorientated when those laws are challenged. Such brittleness will eventually be his undoing. There are only so many times a leader can be completely wrong about the defining issues of the times before people decide that he is not a real leader at all.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

This article first appeared in the 18 July 2011 issue of the New Statesman, India

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The Conservatives have failed on home ownership. Here's how Labour can do better

Far from helping first-time buyers, the government is robbing Peter to pay Paul

Making it easier for people to own their own first home is something to be celebrated. Most families would love to have the financial stability and permanency of home ownership. But the plans announced today to build 200,000 ‘starter homes’ are too little, too late.

The dire housing situation of our Greater London constituency of Mitcham & Morden is an indicator of the crisis across the country. In our area, house prices have increased by a staggering 42 per cent over the last three years alone, while the cost of private rent has increased by 22 per cent. Meanwhile, over 8200 residents are on the housing register, families on low incomes bidding for the small number of affordable housing in the area. In sum, these issues are making our area increasingly unaffordable for buyers, private renters and those in need of social and council housing.

But under these new plans, which sweep away planning rules that require property developers to build affordable homes for rent in order to increase the building homes for first-time buyers, a game of political smoke and mirrors is being conducted. Both renters and first-time buyers are desperately in need of government help, and a policy that pits the two against one another is robbing Peter to pay Paul. We need homes both to rent and to buy.

The fact is, removing the compulsion to provide properties for affordable rent will be disastrous for the many who cannot afford to buy. Presently, over half of the UK’s affordable homes are now built as part of private sector housing developments. Now this is going to be rolled back, and local government funds are increasingly being cut while housing associations are losing incentives to build, we have to ask ourselves, who will build the affordable properties we need to rent?

On top of this, these new houses are anything but ‘affordable’. The starter homes would be sold at a discount of 20 per cent, which is not insignificant. However, the policy is a non-starter for families on typical wages across most of the country, not just in London where the situation is even worse. Analysis by Shelter has demonstrated that families working for average local earnings will be priced out of these ‘affordable’ properties in 58 per cent of local authorities by 2020. On top of this, families earning George Osborne’s new ‘National Living Wage’ will still be priced out of 98 per cent of the country.

So who is this scheme for? Clearly not typical earners. A couple in London will need to earn £76,957 in London and £50,266 in the rest of the country to benefit from this new policy, indicating that ‘starter homes’ are for the benefit of wealthy, young professionals only.

Meanwhile, the home-owning prospects of working families on middle and low incomes will be squeezed further as the ‘Starter Homes’ discounts are funded by eliminating the affordable housing obligations of private property developers, who are presently generating homes for social housing tenants and shared ownership. These more affordable rental properties will now be replaced in essence with properties that most people will never be able to afford. It is great to help high earners own their own first homes, but it is not acceptable to do so at the expense of the prospects of middle and low earners.

We desperately want to see more first-time home owners, so that working people can work towards something solid and as financially stable as possible, rather than being at the mercy of private landlords.

But this policy should be a welcome addition to the existing range of affordable housing, rather than seeking to replace them.

As the New Statesman has already noted, the announcement is bad policy, but great politics for the Conservatives. Cameron sounds as if he is radically redressing housing crisis, while actually only really making the crisis better for high earners and large property developers who will ultimately be making a larger profit.

The Conservatives are also redefining what the priorities of “affordable housing” are, for obviously political reasons, as they are convinced that homeowners are more likely to vote for them - and that renters are not. In total, we believe this is indicative of crude political manoeuvring, meaning ordinary, working people lose out, again and again.

Labour needs to be careful in its criticism of the plans. We must absolutely fight the flawed logic of a policy that strengthens the situation of those lucky enough to already have the upper hand, at the literal expense of everyone else. But we need to do so while demonstrating that we understand and intrinsically share the universal aspiration of home security and permanency.

We need to fight for our own alternative that will broaden housing aspirations, rather than limit them, and demonstrate in Labour councils nationwide how we will fight for them. We can do this by fighting for shared ownership, ‘flexi-rent’ products, and rent-to-buy models that will make home ownership a reality for people on average incomes, alongside those earning most.

For instance, Merton council have worked in partnership with the Y:Cube development, which has just completed thirty-six factory-built, pre-fabricated, affordable apartments. The development was relatively low cost, constructed off-site, and the apartments are rented out at 65 per cent of the area’s market rent, while also being compact and energy efficient, with low maintenance costs for the tenant. Excellent developments like this also offer a real social investment for investors, while providing a solid return too: in short, profitability with a strong social conscience, fulfilling the housing needs of young renters.

First-time ownership is rapidly becoming a luxury that fewer and fewer of us will ever afford. But all hard-working people deserve a shot at it, something that the new Conservative government struggle to understand.