Rupert Murdoch. Photo: Getty
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The Murdochs' bid for Sky just hit a £100m bump in the road

The unexpected decision to get regulators to look at broadcasting standards makes a deal more uncertain.

Today is not a good day for the Murdoch family. Culture Secretary Karen Bradley’s decision to refer 21st Century Fox’s £11.7bn bid for the 61 per cent of Sky it does not already own adds both uncertainty and cost to a deal that many thought would sail through. 

For a start, it means that even if Fox – run by Rupert Murdoch's son James – eventually gets the all-clear it will have to pay the extra 10p per share it promised Sky shareholders back in December if the deal is not closed within a year. The CMA’s involvement scuppers any chance of the deal closing before the end of 2017 which could add an extra £100m to the cost.

Perhaps more significantly, Bradley has referred the deal to the Competition and Markets Authority not only on grounds of media plurality, but also, unexpectedly, on "broadcasting standards".

On plurality, Fox could argue that the rise of huge digital players such as Google, Facebook and Netflix means that the impact of one family controlling two of the UK’s most influential newspapers and its largest pay-TV provider (including its news channel) is no longer a huge threat.

But a review of broadcasting standards brings into play the way the Murdochs, in particular Rupert, have run both their UK newspapers and Fox News in the US.

That means Fox’s cosy relationship with US President Donald Trump and the string of sexual harassment allegations against the channel’s senior executives – which led to CEO Roger Ailes standing down – become relevant to whether the deal for Sky should go ahead. None of Fox’s recent history suggests a healthy corporate culture, and there also remain fears that a Fox-owned Sky News would try to replicate the US channel’s partisan approach.

And while in the UK Murdoch’s newspapers have tried to put the phone hacking scandal behind them, the almighty stink hasn't quite dissipated. MPs such as Ed Miliband and Vince Cable have referred to the scandal regularly in their entreaties for Bradley to scrutinise the deal closely, and campaigners such as Hacked Off are still kicking up a fuss with the help of celebrity backers including Hugh Grant and Steve Coogan.

Attempts to move on have not exactly been helped by the fact Rebekah Brooks is now back as chief executive of the Times and the Sun. She was acquitted of all charges related to phone hacking, but few have forgotten that she was in charge when the scandal broke.

And while the criminal trials are now over, civil claims that widen allegations beyond the News of the World to include the Sun are still running, with a new trial set to take place in January.

Involved parties have ten days to respond to Bradley's decision before it is finalised, but assuming it is all these issues will have to be thoroughly considered by a regulator that currently appears ill-equipped to do so. The Competition and Markets Authority has none of the media experience of communications regulator Ofcom, which itself raised concerns about the deal's impact on plurality earlier in the process. It’s likely the CMA will have to bring in experienced outsiders to help it make its decision, delaying the process further.

The deal may still get the green light eventually, but it’s proving a lot more difficult than the Murdochs would have expected nine months ago.

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The Universal Credit nightmare shows there’s nothing more dangerous than a good idea

The hardest thing to build into any benefits IT project is common sense.

The trouble with Universal Credit is that everyone thinks it’s a good idea. Labour has long backed the concept of rolling multiple benefits into one payment but studiously refused to implement it when in power. Why? Because it takes all the mess and complication that claimants have to navigate and transfers that to the government. It’s like Whitehall volunteering to find your next house, sort out the survey and fix the best mortgage for you. It sounds brilliant – and that should make you suspicious.

“I think it’s quite a good idea, having it all in one go,” says Jo Whitaker when I speak to her at home in Moulton, North Yorkshire. Unfortunately, the reality fell short. Diagnosed with breast cancer in late 2016, Whitaker had to give up her cleaning business as she underwent chemotherapy. She was told – oh, happy day! – that her local jobcentre was one of those testing Universal Credit ahead of its countrywide roll-out.

There was a catch. In order for her to claim Universal Credit, her existing child and working tax credits had to be stopped for six weeks, while her eligibility for the single monthly payment was assessed. She created an online “journal” to record her income and provide supporting evidence and was told that she could apply for an advance, which would have to be paid back later, to cover the time she spent waiting.

She received her payments in November and December, then ran into a problem. Whitaker, a mother of three, owns a house jointly with her ex-husband, but it was on the market and had no tenants. (She was renting elsewhere.) This seems to have given the jobcentre computer conniptions: did Whitaker have an asset that meant her housing benefit should be reduced, or not?

She received a demand in her “journal” a few days before Christmas: show us that you’re paying rent, or we’ll stop your benefits. “I was on my fifth round of chemo and I wasn’t well at all,” she says. “After Christmas, I couldn’t get hold of anyone to give me a straight answer. This went on for about a month.” The January payment didn’t come. Whitaker spent hours on the phone – her mother, listening to our call, chimes in to amplify this point – and she eventually received a letter admitting that it was a mistake to withhold her benefit. “I can remember being on the phone, crying my eyes out,” she says. “Chemo, it does your brain in. It was the last thing I needed. It was an absolute nightmare.”

Yet Jo Whitaker’s story is not a particularly extreme one. She is, she says, lucky to have a great support network, and she never felt truly helpless. Her business experience helped her budget and cope with rectifying the jobcentre’s error. I’ll also admit that when I heard she had a house, I thought: hang on, why is she claiming benefits when she has an asset? As she talked, the situation became clear. But this is the kind of detail that computer systems struggle to deal with: the hardest thing to build into any IT project is common sense.

Many aren’t as resilient as Whitaker. New figures from the Department for Work and Pensions show that around a quarter of new claimants wait more than six weeks for their first payment. And because Universal Credit is paid to tenants, rather than directly to landlords, it has significantly increased the number of people falling behind on their rent.

There’s a cruel double bind here. Most people claim benefits precisely because they are in difficult personal circumstances. They have lost their job, got sick, or broken up with a partner and had to move house. Those same circumstances make dealing with bureaucracy more challenging. When the computer says no, it doesn’t just take away one of half a dozen benefits; it can disrupt the only assistance people are getting.

The quiet unhappiness of Jo Whitaker’s story should worry the government. In 2015, the possibility of cuts to tax credits caused enough concern on the doorstep and in constituency surgeries that even Tory MPs quailed. George Osborne’s resulting fudge was to kick back the cuts, promising that “savings” would be found anyway as more people moved to Universal Credit.

The idea that this can be accomplished without people feeling noticeably poorer is optimistic. That it can be accomplished using the existing IT system is even more so. Universal Credit should be a pragmatic project, but it has always been politicised: first by Iain Duncan Smith’s evangelical insistence that he would “make work pay” (even though 60 per cent of UK households in poverty have at least one member who works) and then by his flouncing anger that the project was being used as a cover for “salami-slicing” the welfare budget. IDS must have been the last man in Britain to work out that Osborne wasn’t just pretending to be into austerity; he really loved it.

In 2013, the National Audit Office found that the Universal Credit programme was struggling with a “tight timescale, unfamiliar project management approach and lack of a detailed plan”. The Labour MP Margaret Hodge, then the chair of the public accounts committee, concluded that most of the £425m spent so far would have to be written off. The programme was “reset”.

That, in effect, is what Citizens Advice wants to happen again. The organisation is calling for a pause on the roll-out, which is scheduled to accelerate next month. “[It] is a disaster waiting to happen,” says its chief executive, Gillian Guy. “People face severe consequences, like visits from bailiffs and eviction, when they can’t pay their bills.”

Like Jo Whitaker, she believes that the “principles behind Universal Credit are sound”. But that won’t be a consolation to anyone left cold, hungry or homeless over Christmas. In politics, there’s nothing more dangerous than something that everyone thinks is a good idea. 

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left