What a difference a few hours make in the life of a Coalition. The day began with a mild headache for the Government, brought on by some indiscreet remarks by the Business Secretary, Vince Cable, to two undercover reporters in which he laid out various tensions between Liberal Democrat and Conservative ministers.
But by mid-afternoon the headache had turned into a full-blown migraine, when it emerged that Mr Cable had also told the reporters that he had personally "declared war" on the newspaper tycoon Rupert Murdoch. The day ended with Mr Cable still (just about) in his job, but humiliatingly stripped of any role in deciding on whether Mr Murdoch's controversial £12bn bid to take majority control of the satellite broadcaster BSkyB should be allowed to proceed.
By coincidence, that very bid received the green light from the European Commission yesterday, but that is merely one hurdle that needs to be cleared. Last month, Mr Cable, exercising his powers as Business Secretary, referred the bid to the UK media regulator Ofcom, which is scheduled to publish its report on the proposed merger by the end of this month. After that, it would have fallen to Mr Cable to decide whether or not to refer the bid to the Competition Commission. Now the decision will be taken by the Culture Secretary, Jeremy Hunt.
It was inevitable that Mr Cable would, at the very least, be stripped of his responsibility for media ovesight from the moment his intemperate words about Mr Murdoch emerged. Mr Cable clearly thought he was expressing his views in confidence. The journalistic ethics of the sort of entrapment techniques employed by The Daily Telegraph are highly questionable. But that is now academic. The damage has been done.
Mr Cable's language with reference to the media tycoon has shattered any confidence that he would have made the decision on the BSkyB bid in the spirit of political impartiality that was needed. If he had not been removed from his oversight role and had blocked the bid, the Government might have been open to legal action by News Corporation.
Yet the events of yesterday should not result in the deal being waived through by the Government. There remain strong grounds for believing that this merger would diminish media plurality in Britain. Mr Murdoch would gain access to BSkyB's lucrative revenue streams, which would enable him to cross-subsidise his UK newspaper interests. It would also provide an opportunity for Mr Murdoch to "bundle" subscriptions to his newspapers with sales of BSkyB satellite packages. It would be immensely difficult for rivals to compete with that.
These are not idle fears. Mr Murdoch has a record of acting in an anti-competitive manner in the past. And the present fragile state of the media market, with advertising revenues flowing from print to online, increases the potential for him to do so again.
These were choppy political waters even before Mr Cable churned them up with his comments. It beggars belief that the Business Secretary is the only figure in Government circles with an agenda. The Prime Minister's communications chief, Andy Coulson, is one of Mr Murdoch's former editors. And it is believed that Mr Coulson was brought on board by David Cameron, in part, to curry favour with his former employer.
Mr Cable's unwise words have gravely damaged his career and rocked the Coalition. The shockwaves are likely to continue for some time. But none of this must be permitted to distract attention from the main danger on the landscape: a more homogenised and less competitive media in Britain.Reuse content