Murdoch: I did discuss BSkyB bid with Cameron

Murdoch's revelation contradicts Cameron's previous claims.

David Cameron has always denied discussing the BSkyB bid with James Murdoch but in his testimony to the Leveson inquiry, Murdoch has just revealed that the bid was raised at the famous Christmas dinner at Rebekah Brooks's home.

He told the inquiry that Cameron reiterated that Vince Cable's behaviour had been "unacceptable" (Murdoch contemptuously referred to Cable as having shown "acute bias"), adding:

I imagine I expressed the hope that things would be dealt with in way that was appropriate and judicial. It was a tiny side conversation, it was not a discussion.

His witness statement to the inquiry goes into more detail:

I recall speaking briefly to the Prime Minister on one occasion about the proposal. This was on Dec 23, 2010, at a dinner hosted by Rebekah and Charlie Brooks and attended by a number of other people.

It took place two days after responsibility for the matter had passed to the Secretary of State for Culture, Media and Sport, Jeremy Hunt, (from Vince Cable). On Dec 21 the Prime Minister’s office had issued a statement saying that: ‘The Prime Minister is clear that Mr Cable’s comments were totally unacceptable and inappropriate.’

I recall concurring with that view, and believe I would have appreciated assurances that the process would be handled objectively in the future.

Last year, Cameron told parliament: “I never had one inappropriate conversation”, adding that “[I] completely took myself out of any decision making about this bid”. A spokesman later added that Cameron had “not been involved in any of the discussions about BSkyB”.

Murdoch's insistence that it was "not a discussion" gives Cameron some wriggle room but one is left with the impression that the PM has not been entirely honest on this front.

The other revelation from Murdoch's appearance is that he also discussed the BSkyB bid with George Osborne. Here's the relevant extract from his witness statement:

My diary records an appointment with Mr Osborne on Nov 29, 2010, but I cannot recall whether that was the date on which I had the discussion with him.

I believe we discussed a number of matters, and that I expressed my concern at the slow progress with the regulatory process, my view that the investment would be good for Britain and also my view that there were no plurality issues raised by our proposal.

James Murdoch and David Cameron together in 2007. Photograph: Rex Features

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.