News Corp. Closeness to Tories Highlighted by Split on Report

Yesterday’s split among lawmakers on the U.K. Parliament’s Culture Committee over whether to criticize Rupert Murdoch highlighted again the closeness between News Corp. and Prime Minister David Cameron’s Tory party.

Conservative panel members insisted their refusal to support a finding in a report on phone hacking scandal that Murdoch was “not a fit person” to run News Corp. was based on a lack of evidence he knew anything about illegal activities within the company. The danger for Cameron, facing local elections tomorrow, is that voters may conclude that his party is siding with the media mogul.

The prime minister is due to be questioned within weeks by the Leveson Inquiry into media ethics about his relationship with Murdoch and his 2007 decision to hire as his press chief Andy Coulson, who resigned from Murdoch’s News of the World tabloid over phone hacking. Culture Secretary Jeremy Hunt is fighting resignation calls over his own dealings with Rupert’s son James during News Corp’s failed takeover bid for British Sky Broadcasting Group Plc (BSY) last year.

“It’s very dangerous -- they’re going to suffer if they’re seen to be rooting for Rupert,” Tim Bale, professor of politics at Sussex University and author of “The Conservative Party: From Thatcher to Cameron,” said in an interview. “The Murdoch brand has always been toxic for some on the left, but now it’s permeated into the mind of the general public.”

Photographer: Simon Dawson/Bloomberg

Rupert Murdoch, chief executive officer of News Corp. Close

Rupert Murdoch, chief executive officer of News Corp.

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Photographer: Simon Dawson/Bloomberg

Rupert Murdoch, chief executive officer of News Corp.

Conservative lawmaker Louise Mensch attacked Tom Watson from the opposition Labour Party yesterday for introducing language into the report describing the News Corp. (NWSA) chairman as “not a fit person” to lead a major international company.

‘Fatally Damaged’

Mensch said the five Labour members of the committee and one Liberal Democrat who outvoted four Tories to add that line had gone beyond their mandate. The report’s “credibility is now fatally damaged,” she said.

It was an echo of News Corp.’s rebuttal of the committee’s previous report into phone hacking, published in 2010. Then, the company said Parliament had been “damaged and materially diminished” by the committee’s work. Yesterday, the company was more conciliatory, saying the committee’s report had revealed “hard truths.”

Cameron acknowledged the ideological identification between his party and Murdoch when he was defending Hunt to Parliament on April 30. Describing his efforts before the 2010 election to persuade the tycoon to switch his newspapers’ support to the Conservatives after 13 years of backing Labour, he said: “We were not trying to convince a center-right proprietor of a set of newspapers with solidly center-right views to change the position of a lifetime.”

Murdoch ‘Cheerleader’

Hunt was openly admiring of Murdoch, republishing on his website an interview in which Broadcast magazine described him as a “cheerleader” for the man. E-mails from a News Corp. lobbyist, Frederic Michel, to James Murdoch released by the Leveson Inquiry last week showed Hunt offering support when News Corp. bid for the shares of BSkyB it didn’t own.

While the decision to approve that deal was initially in the hands of Liberal Democrat Business Secretary Vince Cable, Hunt gave supportive interviews and had private contact with James Murdoch.

Once responsibility for deciding if the takeover should be allowed was transferred to Hunt at the end of that year, Hunt’s special adviser, Adam Smith, was in constant contact with Michel, explaining his boss’s thinking and leaking advance information on decisions. Smith resigned last week, and the revelations may yet cost Hunt his job.

‘Powerful Interests’

Labour leader Ed Miliband, who put Watson in charge of the party’s campaigns last year, is trying to ensure it costs Cameron his job as well. His response to the split committee vote linked it to the prime minister.

“There’s a pattern here, which is that Conservatives, the prime minister and others, seem to spend their time standing up for rich and powerful interests,” Miliband said in a statement yesterday. “We’ve got a Labour Party which is prepared to stand up to people, however rich they are, however powerful they are.”

While Cameron pointed out in Parliament this week that Labour leaders have spent their share of time courting Murdoch, this may not stop Miliband capitalizing on criticisms of News Corp.

When he was in opposition, Cameron managed to make the 2009 lawmakers’ expenses scandal into a crisis for the Labour government in the face of revelations about Tory lawmakers’ claims for money, including his own. According to Bale, Miliband is succeeding in pulling the same trick.

“It’s a really good analogy,” Bale said. “Both parties are wholly implicated, but one seems to be able to turn the whole thing to its advantage.”

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To contact the reporter on this story: Robert Hutton in London at rhutton1@bloomberg.net.

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net.

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