Cable and Murdoch: it’s war

Expect Murdoch and his henchmen to unleash the forces of hell on the Business Secretary.

In a remarkable demonstration of his independence from David Cameron, Vince Cable has just referred Rupert Murdoch's BSkyB bid to Ofcom on grounds of plurality. Following News International's full-throated support for the Conservatives, Murdoch had hoped that the deal would be nodded through, but he didn't reckon with Cable.

Ofcom will now be required to investigate the bid and report back by 31 December.

The takeover bid has split the cabinet along party lines, and Tory ministers are said to be relaxed about the deal. But the speed with which the Business Secretary has acted (BSkyB officially notified the European Commission of the takeover bid on Wednesday) suggests that he's fully aware of the threat to media plurality.

As Mark Thompson recently argued in his impressive MacTaggart Lecture, Murdoch's bid, if successful, would lead to a "concentration of cross-media ownership" that would be unacceptable in the United States or Australia.

As the owner of the Sun, the News of the World, the Times and the Sunday Times, Murdoch already controls 37.3 per cent of UK newspaper circulation and, based on revenue, Sky is now the country's largest broadcaster, with an annual income of £5.4bn. If successful, News Corp's bid for the 60.9 per cent of BSkyB that it does not own at present would have disastrous consequences for media plurality.

Once the deal is complete, we can expect Murdoch to bundle his newspapers with Sky subscriptions in an attempt to offset falling circulation. As the media analyst Claire Enders has predicted, by the middle of this decade, the News Corp head could control 50 per cent of the newspaper and television markets, a concentration of ownership that would make even Silvio Berlusconi blush.

That Murdoch has a history of editorial intervention is not strictly relevant: it would be undesirable for any individual or company, however benevolent, to achieve such power. But it certainly raises the stakes.

Following its eight week public-interest assessment, Ofcom is likely to recommend a full investigation by the Competition Commission – something that could block the deal altogether. In the meantime, expect Murdoch and his henchmen to unleash the forces of hell against Cable.

George Eaton is political editor of the New Statesman.

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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.