Phone-hacking: the US reaction

How the papers in America have reacted to the scandal engulfing Rupert Murdoch's News International.

New York Times

This newspaper carried out a lengthy investigation into phone-hacking at the News of the World in September 2010. Today, Don Van Natta Jr and Ravi Somaiya allege that police officers had their phones hacked. These claims are particularly interesting on the day that police officers face a committee of MPs:

Shortly after Scotland Yard began its initial criminal inquiry of phone hacking by The News of the World in 2006, five senior police investigators discovered that their own cellphone messages had been targeted by the tabloid and had most likely been listened to.

The disclosure, based on interviews with current and former officials, raises the question of whether senior investigators feared that if they aggressively investigated, the News of the World would punish them with splashy articles about their private lives. Some of their secrets, tabloid-ready, eventually emerged in other news outlets.

Washington Post

Erik Wemple derides claims that the scandal will cause Murdoch's empire to crumble. Discussing News Corporation's annual report, he says:

One lesson from the report: Britain cannot threaten News Corp. It can harrumph; it can preach; it can launch "inquiries"; but it is too much of a little rancho to puncture News Corp...

As Murdoch himself boasts, 2010 was a good year for News Corp. Among the few dark corners of the document is this: "For the fiscal year ended June 30, 2010, the U.K. newspapers' revenues decreased 2% as compared to fiscal 2009, primarily due to lower circulation revenues..."

So here's a scenario: The British public outcry about News of the World, the Sun and the Times forces the company to bail on those properties all together. Good! News Corp. dumps money-losing/marginally profitable newspapers. At the same time, it retains its state-of-the-art British presses, printing the titles of any outfit that wants to distribute newsprint.

Boston Globe

Cassandra Vinograd speculates about the possible fall out of these UK-based allegations on Murdoch's US operations:

Legal analysts said yesterday it is possible Murdoch's US companies might face legal actions because of the shady practices at the News of the World. In the United States, Murdoch owns Fox News, The Wall Street Journal, and the New York Post, among other holdings.

They said Murdoch's News Corp. might be liable to criminal prosecution under the 1977 Corrupt Foreign Practices Act, a broad act designed to prosecute executives who bribe foreign officials in exchange for large contracts.

Los Angeles Times

Joe Flint wonders whether the same practices took place in the US:

So far, the fallout from the News of the World debacle has been mostly limited to Britain. However, as the coverage continues to intensify around the globe, it is giving new ammunition to critics of Murdoch and News Corp. in the United States.

"It is becoming increasingly clear this scandal was not perpetrated by a few rogue reporters, but was systematically orchestrated at the highest levels of News Corp.," said Melanie Sloan, executive director of the progressive advocacy group Citizens for Responsibility and Ethics in Washington, which has called for a congressional investigation of News Corp. "If Mr. Murdoch's employees can be so brazen as to target the British prime minister, then it is not unreasonable to believe they also might hack into the voice mails of American politicians and citizens."

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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A simple U-Turn may not be enough to get the Conservatives out of their tax credit mess

The Tories are in a mess over cuts to tax credits. But a mere U-Turn may not be enough to fix the problem. 

A spectre is haunting the Conservative party - the spectre of tax credit cuts. £4.4bn worth of cuts to the in-work benefits - which act as a top-up for lower-paid workers - will come into force in April 2016, the start of the next tax year - meaning around three million families will be £1,000 worse off. For most dual-earner families affected, that will be the equivalent of a one partner going without pay for an entire month.

The politics are obviously fairly toxic: as one Conservative MP remarked to me before the election, "show me 1,000 people in my constituency who would happily take a £1,000 pay cut, then we'll cut welfare". Small wonder that Boris Johnson is already making loud noises about the coming cuts, making his opposition to them a central plank of his 

Tory nerves were already jittery enough when the cuts were passed through the Commons - George Osborne had to personally reassure Conservative MPs that the cuts wouldn't result in the nightmarish picture being painted by Labour and the trades unions. Now that Johnson - and the Sun - have joined in the chorus of complaints.

There are a variety of ways the government could reverse or soften the cuts. The first is a straightforward U-Turn: but that would be politically embarrassing for Osborne, so it's highly unlikely. They could push back the implementation date - as one Conservative remarked - "whole industries have arranged their operations around tax credits now - we should give the care and hospitality sectors more time to prepare". Or they could adjust the taper rates - the point in your income  at which you start losing tax credits, taking away less from families. But the real problem for the Conservatives is that a mere U-Turn won't be enough to get them out of the mire. 

Why? Well, to offset the loss, Osborne announced the creation of a "national living wage", to be introduced at the same time as the cuts - of £7.20 an hour, up 50p from the current minimum wage.  In doing so, he effectively disbanded the Low Pay Commission -  the independent body that has been responsible for setting the national minimum wage since it was introduced by Tony Blair's government in 1998.  The LPC's board is made up of academics, trade unionists and employers - and their remit is to set a minimum wage that provides both a reasonable floor for workers without costing too many jobs.

Osborne's "living wage" fails at both counts. It is some way short of a genuine living wage - it is 70p short of where the living wage is today, and will likely be further off the pace by April 2016. But, as both business-owners and trade unionists increasingly fear, it is too high to operate as a legal minimum. (Remember that the campaign for a real Living Wage itself doesn't believe that the living wage should be the legal wage.) Trade union organisers from Usdaw - the shopworkers' union - and the GMB - which has a sizable presence in the hospitality sector -  both fear that the consequence of the wage hike will be reductions in jobs and hours as employers struggle to meet the new cost. Large shops and hotel chains will simply take the hit to their profit margins or raise prices a little. But smaller hotels and shops will cut back on hours and jobs. That will hit particularly hard in places like Cornwall, Devon, and Britain's coastal areas - all of which are, at the moment, overwhelmingly represented by Conservative MPs. 

The problem for the Conservatives is this: it's easy to work out a way of reversing the cuts to tax credits. It's not easy to see how Osborne could find a non-embarrassing way out of his erzatz living wage, which fails both as a market-friendly minimum and as a genuine living wage. A mere U-Turn may not be enough.

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