George Osborne is under pressure to reveal if he held a private meeting with Rupert Murdoch days before the Treasury imposed a £650m budget cut on the BBC.
Whitehall speculation about the alleged meeting – which would raise fresh questions about the closeness of the relationship between the Conservatives and the Murdoch empire – has prompted Labour to write to Mr Osborne demanding he release full details of his contact with the News Corp boss.
Sources told The Independent that the Chancellor is said to have met Mr Murdoch shortly before the BBC’s Director-General, Lord Hall, was informed of the Government’s plan to force the Corporation to accept full financial responsibility for free TV licences for over-75s.
The alleged meeting is said to have taken place in Downing Street in late June.
Although the Treasury publishes quarterly details of ministers’ external meetings, confirmation of any recent discussion between Mr Murdoch and Mr Osborne is unlikely to be made public before next year and may not include specific dates.
Chris Bryant, the shadow Culture Secretary, wrote to Mr Osborne asking for a “fast-tracked” release of official “transparency data” involving his meetings with senior media executives.
The Labour frontbencher said there was a “public interest” in the information being published straight away, because of the potentially substantial economic benefits that could come to News Corp’s UK and international businesses from a shrunken and less powerful BBC.
Mr Bryant’s letter asks the Chancellor for “a list of all meetings, correspondence or phone calls you have had with Rupert Murdoch since the election [May 2015], along with notes of what was discussed in those conversations.”
Mr Bryant, a former member of the Culture, Media and Sport Select Committee who was instrumental in helping expose criminal wrong-doing inside Mr Murdoch’s News of the World, told the Chancellor he would also be sending a Freedom of Information Act request to the Treasury.
What does five more years of the Tories mean for Britain?
What does five more years of the Tories mean for Britain?
1/8 Welfare payments will be slashed
One of the most controversial parts of the Conservative manifesto was to cut benefits for the working age poor by £12 bn over the next three years. But during the campaign they only said where £2 bn of these savings would come from. That leaves £10 bn still to find. Some experts think the only way they can close that gap is by means testing child benefit – with millions of families losing out
2/8 There will be tax cuts for those in work and those who die
The Tories will increase the threshold at which the 40p rate of tax becomes payable to £50,000 by 2020. They haven’t said so but it is also likely that at some point in the next five years they will abolish that 45p rate of tax altogether for the highest earners. They also want to increase the effective inheritance tax threshold for married couples and civil partners to £1m
3/8 There will be an in/out EU referendum in 2017
The next two years are going to be dominated by the prospect of a referendum on Britain’s membership of the EU. First off David Cameron has the daunting task of negotiating a deal with other EU leaders an acceptable deal that he can sell to his party so he can go into the referendum campaigning for a ‘yes’ vote. This may be unachievable and it is possible that the Tories may end up arguing to leave. Opinion polls show Britain is divided on EU membership, one poll this year showed 51% said they would opt to leave compared to 49% who would vote to stay in
4/8 There will be more privatisation of the NHS
Having won the election the Tories now have a mandate to go further and faster reforming the NHS. In order to make cost savings there is likely to be greater private involvement in running services, while some smaller hospitals may lose services they currently provide like A&E and maternity units
5/8 There will be many more free schools – and traditional state schools will become a thing of the past
The Tories plans to create 500 new free schools and make 3,000 state schools become academies. They will also carry on reforming the Department of Education and remove more powers from local authorities over how schools are run
6/8 On shore wind farms will be a thing of the past and fracking will be the future
Government spending on renewable energy is under real threat now the Lib Dems are no longer in power with the Tories. Subsidies are likely to be slashed for off-shore wind farm and other green energy supplies. Meanwhile there will be generous tax break for fracking as ministers try and incentivise the industry to drill for onshore oil and gas
7/8 There maybe more free childcare – but not necessarily
In the campaign the Tories pledged to double the amount of free early education for three- and four-year-olds from 15 hours a week to 30. The extra hours would only be offered to working families where parents are employed for at least eight hours a week. However they have not said where the money will come from to fund the pledge
8/8 Workers' rights could be reduced
The Tories want to slash business regulation, merge regulator and cut costs. The Lib Dems stopped them from reducing the employment rights of workers in power – but these are now under threat
However he appealed to Mr Osborne to release details of any Murdoch meetings “in good faith and in the public interest, rather than being forced to do so by the Act”.
Lord Hall was told about the switch of responsibility from the Department for Work and Pensions to the BBC for free over-75s television licences in the last week of June. The official announcement, he was told, would be part of the 8 July Budget.
The Independent has been told of concerns that an Osborne-Murdoch meeting took place ahead of the initial discussion with Lord Hall.
Days of negotiations followed, involving Mr Osborne, the Culture Secretary John Whittingdale, Lord Hall, and the CEO of the BBC Trust Rona Fairhead.
Lord Hall described the government talks as “very, very hard”. Although the Corporation lost £650m from its budget, the deal included measures to ease the BBC’s pain. These included pegging licence fee funding to inflation, abolishing its broadband rollout contributions by 2021, and an agreement on new revenue streams for iPlayer. The deal was heavily trailed in a leading UK Sunday newspaper owned by Mr Murdoch.
The Chancellor himself, appearing on the BBC ahead of his Budget, accused the Corporation of harbouring “imperial ambitions” and indicated that the BBC’s investment in its website would come under government scrutiny.
He said: “You wouldn’t want the BBC to completely crowd out national newspapers”.
Mr Murdoch’s son James, heir to his father’s media empire, used similar language in a 2009 speech at the Edinburgh Television Festival.
He told an audience that the BBC’s dominance and ambitions were “chilling” and complained of “free news” on the BBC website making it “incredibly difficult” for other organisations in that market.
The Government’s Green Paper on the BBC’s future was published after the Budget. Despite Mr Whittingdale saying he wanted the Corporation to “thrive”, leading BBC figures and executives said the organisation would become “less popular and much-diminished”, with parts of its popular music radio stations likely to close and an array of its mass-market television programmes to be abolished in a forced return to restricted public-service broadcasting.
A senior Whitehall source with experience in the City, told The Independent: “It’s unlikely that any global media company could have written a better script on the planned demise of the BBC. The assumption is that new markets will open, new players will enter, and a state-sponsored giant will end up in a much smaller box.”
The Independent asked News UK, Mr Murdoch’s UK print division, for details of any recent meetings with the Chancellor. A spokeswoman, after checking with News Corp in New York, said details of such meetings were not given out.
The Treasury said that, in line with other government departments, it regularly published details of ministers’ external meetings. The statement added: “Details of the Chancellor’s meetings in June will be published in due course.”
News Corp and the BBC: The worst of enemies
The BBC is a £5bn annual business, with its 20,000 staff engaged in radio, television, and online enterprises and programming, making it the world’s largest broadcaster outside China.
Although the corporation retains the public service ethos developed by Lord Reith in its first 1920s Charter, the vast range of BBC business in the 21st century makes it a dominant force in nearly every sector of UK and international media.
The industry assumption is that, regardless of how much BBC output is already commissioned from independent production companies, any government intent to shrink the reach of the BBC will deliver a new competitive era in broadcasting.
Those expected to benefit from a reduced BBC footprint include BSkyB, where News Corp remains the largest shareholder, ITV, where falling audience numbers remain a concern, Channel 4 and others. Reducing the BBC’s influence across the UK would also open up an attractive market for global media players, especially those from the United States and Europe.
The BBC’s network television channels, its news operation, multiple radio stations, and huge range of local radio and TV output, dwarf all competitors and make forecasting the impact of any gradual demise difficult.
But one target is already in the Government’s cross-hairs. The BBC website, still mostly free, is widely seen by newspapers, both international and domestic, as a state-funded barrier to future expansion.
News UK’s The Times and other online titles have paywalls.
But if the BBC website – which costs UK taxpayers £174m a year – was forced to restrict its audience or begin charging, the commercial assumption is that this is the game-changer Mr Murdoch has been pushing for, and may now have helped deliver.
The mogul and No 10: The many meetings
At the Leveson inquiry it was revealed that Rupert Murdoch is no stranger to Downing Street.
Before Mr Murdoch’s bid for full control of BSkyB in 2010-11 he met David Cameron twice. The first meeting took place shortly after the 2010 election and was initially described as an opportunity for Britain’s new Prime Minister to thank the proprietor for his help during the election. Mr Murdoch told the parliamentary media select committee that when he visited Mr Cameron in July 2010, he entered by No 10’s back door.
However in the wake of the phone-hacking scandal, the Prime Minister published details from his diaries of meetings with media executives and editors.
It was revealed that the two men met seven times over the first two years of the Cameron premiership. Throw in Murdoch lieutenants going to No 10 and the meeting count jumps to 26 for that slim timeframe.
News UK now says that details of who Mr Murdoch sees in private are not disclosed.