"Do Cameron and Osborne know what they're doing?"

That is the question voters will ask.

Jeremy Hunt is in trouble. The Culture Secretary’s statement in the House of Commons today has done nothing to dispel the impression that he allowed News Corp privileged insight into a process he was overseeing in a quasi-judicial capacity. A cache of emails released yesterday clearly indicates that, at least as viewed from the Murdoch side, Hunt was a collaborative partner in the process of ensuring smooth passage of the controversial bid to take 100% control of BSkyB. Hunt’s defence appears to be that such an impression is false and  derives from excitable embellishment by the emails’ author – News Corp’s European public affairs director Frederic Michel – encouraged by over-zealous briefing by Adam Smith, the minister’s own special adviser. Smith has resigned.

It is a flimsy line and a shabby one. The secretary of state is responsible for his advisor’s actions and it is simply not credible that so much information, briefings and encouragement were fed to Michel behind Hunt’s back. If the Spad behaved in a way that seemed to lubricate relations with News Corp it is because his boss instructed him to do so. That raises the question of what instructions Hunt had from his own boss – the Prime Minister.

Cameron will not want to lose Hunt. He is a loyal minister who has, until now, proved diligent and effective. Besides, any forced resignation carries a whiff of disorder and corruption. But, crucially, if Hunt goes, suspicious eyes turn automatically higher up the chain of command. We know that Cameron was close to James Murdoch and Rebekah Brooks. He found time in his busy schedule for Christmas lunches and Cotswolds rambles with the latter. If, as the emails strongly imply, the Culture Secretary saw facilitation of the BSkyB bid as part of his job description, it is reasonable to suppose he took that interpretation from Downing Street’s culture of wider Murdoch facilitation. Of course, Hunt’s case is egregious because he was supposed to be acting in a quasi-judicial role. The PM, meanwhile, is allowed to have friends in business and media and was not the one making the takeover decision. That, at least, would be Downing Street’s defence. Unless there is some evidence that Cameron instructed Hunt to satisfy News Corps’s appetites (and one has to presume he would never be so crass), the damage to Number 10 from this episode is limited.

There is damage nonetheless. Most people, I suspect, will not drill too deep into the exact nature of the government’s role in regulating the media, who was responsible for what, when and whether or not specific communications were therefore improper. Labour should be wary of getting too excited about an issue that is essentially retrospective – the BSkyB bid is dead, the Leveson inquiry has been established and will report in due course. Cameron is unlikely to be seen riding a News of the World-branded police horse down Whitehall any time soon.

The most problematic part of the whole business for Downing Street is the way it reinforces the impression that the government serves rich and powerful clients before attending to the interests of ordinary citizens.  This is rapidly becoming a theme in criticism of Cameron, from the “kitchen suppers” for donors to the Budget tax breaks for high earners.

Today’s grim economic news – the confirmation of a double-dip recession - will feed a wider sense of drift that is shaking people’s confidence in the government. When challenged on the growth crisis in parliament, Cameron fell back on the familiar refrain that the difficulty in getting the economy back on track is simply an expression of the scale of the mess bequeathed by Labour. The political returns from that line are diminishing fast. The economy was expanding when Cameron entered Downing Street; now it is shrinking. How is that not at least to some extent a consequence of his policies? And what is the plan to restart growth? He says borrowing more is not the answer, but as many of his Conservative critics point out, borrowing more is precisely what he and George Osborne are being forced to do.

Those economic problems dwarf the local crisis enveloping the Department for Culture, Media and Sport. They are connected in one crucial respect. Double-dip recession will provoke in many people’s minds the question of whether Cameron and Osborne know what they are doing. The reminder of cosy collaboration with billionaire media moguls provokes the question of whose side they are really on. The combination of those doubts in the public mind could be electorally ruinous.

David Cameron and George Osborne. Photograph: Getty Images.

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

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.