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A Cameron-Murdoch alliance could devastate the BBC

Many Conservatives sympathise with James Murdoch's attack on the BBC as a state behemoth

Does the BBC have much to fear following James Murdoch's turn as Gordon Gekko at the Edinburgh International Television Festival?

In previous years the rhetorical excesses of his MacTaggart Lecture, which invoked George Orwell's Nineteen Eighty-Four to damn the BBC, could have been playfully batted away by the corporation's executives.

But this year, with a Tory party increasingly sceptical of the BBC's size and scale on the brink of power, the corporation faces the threat of a powerful alliance between Cameron's Conservatives and Murdoch's News Corporation.

If Cameron promises to cut the BBC's funding and to reverse what Murdoch described as its "chilling" landgrab he could secure the support of the Sun and the News of the World at the next election.

Murdoch may have delivered his speech to an audience of television executives, but it was dominated by his concern that the BBC's vast online presence prohibits any attempt to successfully charge for news websites.

Murdoch Sr has declared that he intends to charge for all his news websites by next summer and his papers are likely to line up behind those politicians who promise to curb the influence of the BBC.

The Conservatives have already demonstrated their willingness to challenge the successive licence fee increases the world's largest broadcaster has enjoyed under Labour.

In May, parliament voted on a Tory proposal to freeze the licence fee, with Cameron arguing that during the recession the BBC needed to do "more with less".

The proposal made little political impact and was easily defeated by 334-156 votes, but it set an important precedent. BBC executives are more troubled by Cameron's suggestion that the licence fee could be reviewed annually, exposing the corporation's £3.6bn annual income to unprecedented scrutiny.

Many Conservatives have great sympathy with Murdoch's call for the BBC to become "far, far smaller". Like him, a significant number believe that the continued expansion of the BBC even as its commercial rivals lose millions in advertising revenue is intolerable.

At a time when the government's Digital Britain report has argued that the licence fee should be "top-sliced" and shared with the BBC's competitors, the corporation finds itself unusually short of friends and increasingly vulnerable.

The BBC Trust's perfunctory response to Murdoch's harangue did little to raise morale within the broadcaster. Unless the BBC's leading figures begin to make the positive case for its funding far more effectively than they have done, they may be unable to prevent the formation of a potentially destructive alliance.