ARNOLD SLATER/DAILY MAIL/REX. MONTAGE BY DAN MURRELL
Show Hide image

The case against the Murdoch empire

Why the billionaire’s bid for Sky should be opposed.

Water under the bridge? That was my gut reaction when – to no one’s great surprise – Rupert Murdoch announced last December that, once more, he wanted 100 per cent control of the broadcaster Sky. Murdoch’s media empire is, I thought to myself, less toxic than it was when it came within a whisker of securing the 61 per cent of the group that it did not already own in the summer of 2011. Then, parliament – in a wave of revulsion over the revelations about the extent of the criminal behaviour of journalists at News International, News Corporation’s British subsidiary – united to urge the parent company to withdraw its bid for what was then British Sky Broadcasting (BSkyB).

Murdoch has since done some things that, on the face of it, make a bid less objectionable than it was half a decade ago. He has, at least to a degree, split his company’s publishing arm from the more profitable entertainment division – although, in the end, all roads lead to Murdoch.

His organisation may have been slow to realise the enormity of the crisis at the heart of its British operations, but to its credit, it spent several hundred millions of pounds on the clean-up operation over phone-hacking and associated legal actions (we can argue elsewhere about the methods it chose). Legacy print circulations are generally on the slide, dwarfed by the new digital giants, possibly softening some of the arguments about plurality.

And then there is Murdoch’s achievement in building Sky, while also putting together the biggest newspaper group in the UK. Sky is, indeed, an extraordinary company and only the most churlish would deny
the role of both Murdoch and his son James in creating it.

Maybe, I thought, it’s time to forget the past and insist instead on a number of cast-iron safeguards. No one in their right minds would want Fox News, or any­thing like it, in the UK. So perhaps a deal could be contingent on Sky being forced in perpetuity to operate by the same standards of impartiality and fairness that are required of other broadcasters, both online and offline. It would be important to ensure a minimal overlap of executive control between Sky and other parts of the Murdoch empire. And Sky should have an independent board. There should be editorial guarantees . . .

But then I looked at my mental list of safeguards and saw that I was doing what policy­makers, regulators and politicians have done for nearly half a century in their dealings with Murdoch: assume that there are “normal rules” or binding agreements that could guarantee his future behaviour. Many such assumptions have proved meaningless over the years. Why should we assume that, at the age of 85, this particular leopard will change his spots? And a better question might be: is there any evidence that the old leopard even wants to change his spots? If he does, he has a funny way of showing it.

The meltdown at the heart of News Corporation in 2011 was spectacular. It was, in scale, the media equivalent of Enron’s collapse; or the BP/Deepwater Horizon oil spill; or the bailout of HBOS; or Volks­wagen’s emissions scandal. Normal companies, if caught in the middle of crises of this magnitude, strain to demonstrate as forcefully as possible that they have changed. The most visible way of doing so is to get rid of the people who oversaw the calamity, crime or corruption.

That seemed to be the assumption in legislators’ minds in 2011, when both houses of parliament rejected the idea that Murdoch should be allowed complete control of BSkyB. The then prime minister, David Cameron, and the Conservative leader in the Lords, Lord Strathclyde, used identical language to insist that those who were ultimately responsible for the “disgraceful” behaviour within News Corporation should never again run a UK media company.

“The people involved, whether they were directly responsible for the wrongdoing, sanctioned it, or covered it up, however high or low they go, must not only be brought to justice,” said each leader to their respective chambers on 13 July 2011. “They must also have no future role in the running of a media company in our country.”

Cameron’s statement came as he announced a huge and expensive two-part inquiry by Lord Justice Leveson into the ethics and standards of the media. The second part is – theoretically, at any rate – still supposed to look into the “corporate governance and management failures at News International” and other newspaper organisations.

Who did Cameron and Strathclyde have in mind when vetoing any future role in running a UK media company? The subsequent culture, media and sport committee report damned both Rupert and James Murdoch for ignoring, or failing properly to investigate, evidence of widespread wrongdoing and for the subsequent cover-up. Its report, published less than five years ago, added witheringly: “The integrity and effectiveness of the select committee system relies on the truthfulness and completeness of the oral and written evidence submitted. The behaviour of News International and certain witnesses in this affair demonstrated contempt for that system in the most
blatant fashion.”

The regulator Ofcom went further, finding that James Murdoch, who was the CEO and chairman of BSkyB from 2003 to 2012, “repeatedly fell short of the conduct to be expected of him” as a chief executive officer and chairman of News International from 2007 to 2012: “We consider James Murdoch’s conduct . . . to be both difficult to comprehend and ill judged.” That was just four and a half years ago.

Initially Rupert Murdoch behaved as any normal business leader would: one or two key executives were fired, even as a few others went to jail. Yet the two dominant figures within the company were – temporarily – simply removed from sight.

James Murdoch left the UK to run another bit of the family empire. Rebekah Brooks, who was running News International from 2009 and who had previously edited both the scandal-torn News of the World and the Sun, received a pay-off reported to be well north of £10m when she resigned in 2011, admitting a “deep sense of responsibility”.

She was cleared of criminal charges relating to phone-hacking less than three years ago. Both she and James Murdoch suggested in their defence that, in essence, the company was out of control while they were running it. Their period in quarantine did not last long. In September 2015, Brooks was given her old job back at News International, now rebranded as News UK. And Murdoch’s son James was – despite protests from investors – restored as Sky chairman in January 2016, while remaining the CEO of 21st Century Fox, which controls Sky as the biggest single shareholder with a 39 per cent stake. The message was hardly: “We’ve changed.” This was a piece of corporate trompe d’oeil.

***

Nor have other parts of the Murdoch empire been a source of much reassurance. Fox News, which some credit with helping to create the conditions for Donald Trump’s presidency, has been rocked by allegations about its corporate culture, which, in some ways, recall those at the heart of Murdoch’s British tabloid operations a decade ago.

The CEO and chairman of the company, Roger Ailes, was forced to resign in July last year with a reported $40m pay-off, following allegations of sexual harassment by current and former employees. As with the British tabloid newspapers, the company initially tried to buy its way out of trouble by offering multimillion-dollar pay-offs rather than confront the issue. (Ailes denied the allegations.) As in London, there are internal investigations being conducted by a law firm. And as in London, there is much speculation about what the senior management did or didn’t know at the time about the allegations against Ailes and about who signed off the various settlements.

More worryingly for the organisation, New York magazine’s Gabriel Sherman recently reported that the FBI has been investigating Fox News for months, looking at how the company structured these settlements “to hide them”. These look very similar to the News International payment to Gordon Taylor, the chief executive of the Professional Footballers’ Association, when the company realised its “one rogue reporter” phone-hacking defence could not possibly be true. An FBI finding against the Murdoch corporation would raise renewed questions about the “fit and proper” test of Sky’s directors.

Meanwhile, Rupert Murdoch is cosy with Donald Trump, having backed him in the presidential election. The executive chairman of News Corp recently sat in on Michael Gove’s Times interview with Trump.

And, even while the embers of Leveson Part I are still lukewarm, Murdoch executives have enjoyed easy access with British government representatives. A recent study found no fewer than 20 such meetings over a period of as many months – 18 of them with the prime minister, chancellor or culture secretary. Seven involved Rupert Murdoch and a further eight were with the News Corp CEO, Robert Thomson. No other media group has anything close to that level of access. Has the Murdoch empire been completely transformed since 2011, when both houses of parliament were so resolutely against allowing it to take full control of BSkyB?

In fairness to James Murdoch, he is part of the clean-up team at Fox and did not need much persuading to get rid of Ailes. But in no other company in the world would he be back in charge of a huge media corporation, let alone when a prime minister had explicitly argued against such a role. That is the exceptional nature of the organisation that Rupert Murdoch has built. It operates to different rules.

When Nick Davies did his extraordinary prolonged investigation into phone-hacking and the cover-up within News International, I discovered at first hand how frightened people were of the Murdoch organisation. Nick and I were repeatedly warned by sources within the organisation to expect retaliation. More importantly, the checks and balances that I assumed existed in British society failed, one by one. With a few distinguished exceptions, MPs, regulators, the police and other journalists found any excuse not to take this company on.

I could see the fear, and I had some sympathy. The Murdoch empire can be very aggressive – and, back then, some of its operations had few qualms about using illegal methods to dig the dirt on people while the high-ups hosted golden garden parties for the political and media classes.

I cannot believe that the criminal enterprise still continues. Yet my original gut instinct in December was wrong. I wouldn’t wish to see this enormously powerful and dominant company – run in such an exceptional and defiant way – get any more powerful or any more dominant.

Alan Rusbridger is a former editor of the Guardian and is the principal of Lady Margaret Hall College, Oxford

This article first appeared in the 09 March 2017 issue of the New Statesman, The return of al-Qaeda

Show Hide image

Why Jeremy Corbyn is a new leader for the New Times

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

During the 1970s, however, opposition to the social-democratic consensus grew steadily, led by the rise of the radical right, which culminated in 1979 in the election of Margaret Thatcher’s first government. In the process, the Thatcherites redefined the political debate, broadening it beyond the rather institutionalised and truncated forms that it had previously taken: they conducted a highly populist campaign that was for individualism and against collectivism; for the market and against the state; for liberty and against trade unionism; for law and order and against crime.

These ideas were dismissed by the left as just an extreme version of the same old Toryism, entirely failing to recognise their novelty and therefore the kind of threat they posed. The 1979 election, followed by Ronald Reagan’s US victory in 1980, began the neoliberal era, which remained hegemonic in Britain, and more widely in the West, for three decades. Tory and Labour governments alike operated within the terms and by the logic of neoliberalism. The only thing new about New Labour was its acquiescence in neoliberalism; even in this sense, it was not new but derivative of Thatcherism.

The financial crisis of 2007-2008 marked the beginning of the end of neoliberalism. Unlike the social-democratic consensus, which was undermined by the ideological challenge posed by Thatcherism, neoliberalism was brought to its knees not by any ideological alternative – such was the hegemonic sway of neoliberalism – but by the biggest financial crisis since 1931. This was the consequence of the fragility of a financial sector left to its own devices as a result of sweeping deregulation, and the corrupt and extreme practices that this encouraged.

The origin of the crisis lay not in the Labour government – complicit though it was in the neoliberal indulgence of the financial sector – but in the deregulation of the banking sector on both sides of the Atlantic in the 1980s. Neoliberalism limped on in the period after 2007-2008 but as real wages stagnated, recovery proved a mirage, and, with the behaviour of the bankers exposed, a deep disillusionment spread across society. During 2015-16, a populist wave of opposition to the establishment engulfed much of Europe and the United States.

Except at the extremes – Greece perhaps being the most notable example – the left was not a beneficiary: on the contrary it, too, was punished by the people in the same manner as the parties of the mainstream right were. The reason was straightforward enough. The left was tarnished with the same brush as the right: almost everywhere social-democratic parties, albeit to varying degrees, had pursued neoliberal policies. Bill Clinton and Tony Blair became – and presented themselves as – leaders of neoliberalism and as enthusiastic advocates of a strategy of hyper-globalisation, which resulted in growing inequality. In this fundamental respect these parties were more or less ­indistinguishable from the right.

***

The first signs of open revolt against New Labour – the representatives and evangelists of neoliberal ideas in the Labour Party – came in the aftermath of the 2015 ­election and the entirely unpredicted and overwhelming victory of Jeremy Corbyn in the leadership election. Something was happening. Yet much of the left, along with the media, summarily dismissed it as a revival of far-left entryism; that these were for the most part no more than a bunch of Trots. There is a powerful, often overwhelming, tendency to see new phenomena in terms of the past. The new and unfamiliar is much more difficult to understand than the old and familiar: it requires serious intellectual effort and an open and inquiring mind. The left is not alone in this syndrome. The right condemned the 2017 Labour Party manifesto as a replica of Labour’s 1983 manifesto. They couldn’t have been more wrong.

That Corbyn had been a veteran of the far left for so long lent credence to the idea that he was merely a retread of a failed past: there was nothing new about him. In a brilliant election campaign, Corbyn not only gave the lie to this but also demonstrated that he, far more than any of the other party leaders, was in tune with the times, the candidate of modernity.

Crises, great turning points, new conjunctures, new forms of consciousness are by definition incubators of the new. That is one of the great sources of their fascination. We can now see the line of linkage between the thousands of young people who gave Corbyn his overwhelming victory in the leadership election in 2015 and the millions of young people who were enthused by his general election campaign in 2017. It is no accident that it was the young rather than the middle-aged or the seniors who were in the vanguard: the young are the bearers and products of the new, they are the lightning conductors of change. Their elders, by contrast, are steeped in old ways of thinking and doing, having lived through and internalised the values and norms of neoliberalism for more than 30 years.

Yet there is another, rather more important aspect to how we identify the new, namely the way we see politics and how politics is conceived. Electoral politics is a highly institutionalised and tribal activity. There have been, as I argued earlier, two great turning points in postwar politics: the social-democratic era ushered in by the 1945 Labour government and the neoliberal era launched by the Tory government in 1979.

The average Tory MP or activist, no doubt, would interpret history primarily in terms of Tory and Labour governments; Labour MPs and activists would do similarly. But this is a superficial reading of politics based on party labels which ignores the deeper forces that shape different eras, generate crises and result in new paradigms.

Alas, most political journalists and columnists are afflicted with the same inability to distinguish the wood (an understanding of the deeper historical forces at work) from the trees (the day-to-day manoeuvring of parties and politicians). In normal times, this may not be so important, because life continues for the most part as before, but at moments of great paradigmatic change it is absolutely critical.

If the political journalists, and indeed the PLP, had understood the deeper forces and profound changes now at work, they would never have failed en masse to rise above the banal and predictable in their assessment of Corbyn. Something deep, indeed, is happening. A historical era – namely, that of neoliberalism – is in its death throes. All the old assumptions can no longer be assumed. We are in new territory: we haven’t been here before. The smart suits long preferred by New Labour wannabes are no longer a symbol of success and ambition but of alienation from, and rejection of, those who have been left behind; who, from being ignored and dismissed, are in the process of moving to the centre of the political stage.

Corbyn, you may recall, was instantly rejected and ridiculed for his sartorial style, and yet we can now see that, with a little smartening, it conveys an authenticity and affinity with the times that made his style of dress more or less immune from criticism during the general election campaign. Yet fashion is only a way to illustrate a much deeper point.

The end of neoliberalism, once so hegemonic, so commanding, is turning Britain on its head. That is why – extraordinary when you think about it – all the attempts by the right to dismiss Corbyn as a far-left extremist failed miserably, even proved counterproductive, because that was not how people saw him, not how they heard him. He was speaking a language and voicing concerns that a broad cross-section of the public could understand and identify with.

***

The reason a large majority of the PLP was opposed to Corbyn, desperate to be rid of him, was because they were still living in the neoliberal era, still slaves to its ideology, still in thrall to its logic. They knew no other way of thinking or political being. They accused Corbyn of being out of time when in fact it was most of the PLP – not to mention the likes of Mandelson and Blair – who were still imprisoned in an earlier historical era. The end of neoliberalism marks the death of New Labour. In contrast, Corbyn is aligned with the world as it is rather than as it was. What a wonderful irony.

Corbyn’s success in the general election requires us to revisit some of the assumptions that have underpinned much political commentary over the past several years. The turmoil in Labour ranks and the ridiculing of Corbyn persuaded many, including on the left, that Labour stood on the edge of the abyss and that the Tories would continue to dominate for long into the future. With Corbyn having seized the political initiative, the Tories are now cast in a new light. With Labour in the process of burying its New Labour legacy and addressing a very new conjuncture, then the end of neoliberalism poses a much more serious challenge to the Tories than it does the Labour Party.

The Cameron/Osborne leadership was still very much of a neoliberal frame of mind, not least in their emphasis on austerity. It would appear that, in the light of the new popular mood, the government will now be forced to abandon austerity. Theresa May, on taking office, talked about a return to One Nation Toryism and the need to help the worst-off, but that has never moved beyond rhetoric: now she is dead in the water.

Meanwhile, the Tories are in fast retreat over Brexit. They held a referendum over the EU for narrowly party reasons which, from a national point of view, was entirely unnecessary. As a result of the Brexit vote, the Cameron leadership was forced to resign and the Brexiteers took de facto command. But now, after the election, the Tories are in headlong retreat from anything like a “hard Brexit”. In short, they have utterly lost control of the political agenda and are being driven by events. Above all, they are frightened of another election from which Corbyn is likely to emerge as leader with a political agenda that will owe nothing to neoliberalism.

Apart from Corbyn’s extraordinary emergence as a leader who understands – and is entirely comfortable with – the imperatives of the new conjuncture and the need for a new political paradigm, the key to Labour’s transformed position in the eyes of the public was its 2017 manifesto, arguably its best and most important since 1945. You may recall that for three decades the dominant themes were marketisation, privatisation, trickle-down economics, the wastefulness and inefficiencies of the state, the incontrovertible case for hyper-globalisation, and bankers and financiers as the New Gods.

Labour’s manifesto offered a very different vision: a fairer society, bearing down on inequality, a more redistributive tax system, the centrality of the social, proper funding of public services, nationalisation of the railways and water industry, and people as the priority rather than business and the City. The title captured the spirit – For the Many Not the Few. Or, to put in another way, After Neoliberalism. The vision is not yet the answer to the latter question, but it represents the beginnings of an answer.

Ever since the late 1970s, Labour has been on the defensive, struggling to deal with a world where the right has been hegemonic. We can now begin to glimpse a different possibility, one in which the left can begin to take ownership – at least in some degree – of a new, post-neoliberal political settlement. But we should not underestimate the enormous problems that lie in wait. The relative economic prospects for the country are far worse than they have been at any time since 1945. As we saw in the Brexit vote, the forces of conservatism, nativism, racism and imperial nostalgia remain hugely powerful. Not only has the country rejected continued membership of the European Union, but, along with the rest of the West, it is far from reconciled with the new world that is in the process of being created before our very eyes, in which the developing world will be paramount and in which China will be the global leader.

Nonetheless, to be able to entertain a sense of optimism about our own country is a novel experience after 30 years of being out in the cold. No wonder so many are feeling energised again.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

0800 7318496