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Any Other Business

Murdoch, Balls, Huhne and Satan: is it possible they’re all related?

16 July 2011

12:00 AM

16 July 2011

12:00 AM

Murdoch, Balls, Huhne and Satan: is it possible they’re all related?

The debate about whether Rupert Murdoch and Satan are one and the same person has distracted attention from the worrying state of the economy. But gruesome statistics and forecasts are stacking up
like the blizzard-stricken aircraft in Die Hard II, and waiting on the tarmac to greet them with a mad glint in his eye is shadow chancellor Ed Balls, the only man in Britain whose career prospects
would catapult upwards out of a double-dip — and for my money, the only one who makes both Rupert and Satan look cuddly as puppies.

What numbers are circling up there, or lurking down here unnoticed, while the hacking scandal fills every cranny of news space? For a start, one in three finance directors of major UK companies now
believes we’re likely to slip back into recession, while most estimates for growth in the April-June quarter go no higher than the British Chambers of Commerce’s figure of 0.3 per cent,
far below what would be needed to achieve full-year forecasts by both the Bank of England and the Office for Budget Responsibility of 1.7 per cent. A more probable outcome is that we will struggle
even to match the sluggish 1.3 per cent achieved last year.

Meanwhile the manufacturing sector, until recently the great hope for recovery, seems to be stalling, a modestly busy May having merely made up for a very slack April. Retailers had a slightly more
lucrative month than expected in June but sales were still down on last year and, as I wrote last week, shops are still closing everywhere. The fact that the private sector has created half a
million new jobs in the past year, making up for many of the jobs lost so far as a result of public sector cuts, is no guarantee that the trend will continue. And inflation now looks certain to go
above 5 per cent in the autumn — though for many of us that will feel more like 10 or 15 per cent — as huge increases in gas and electricity bills start to bite.

All of which means that the Chancellor, George Osborne, knocked back by lack of growth in tax revenues, is likely to miss his deficit reduction targets and take a series of flying headbutts from
his Labour shadow when normal debate resumes after the Murdoch frenzy and the summer break. But it does not mean — as Balls will repeatedly urge us to believe — that Osborne’s
deficit-reduction strategy is fundamentally wrong. He’s doing the right thing, but against fierce external headwinds and without much help from some of his coalition colleagues.

An OECD report this week highlighted slowdowns in almost all the major western economies as well as China, India and Brazil. In the US, only 18,000 new jobs were created in June. In Europe, fear
reigns and paralysis threatens as the debt tornado changes course towards Italy and Spain.

Worse still, we’re all at the mercy of oil and natural gas prices, which have a life of their own. The Libyan conflict and the Fukushima earthquake (which sharply increased Japanese demand
for liquefied natural gas to replace nuclear capacity) are just two factors no one foresaw, while Europe’s pipeline politics remain under the whim of the Russian prime minister Vladimir Putin
— one of the few people on the planet who makes Ed Balls look cuddly.

Hot air from Huhne

And then there are the internal troubles we could do without, high among which I include energy secretary Chris Huhne with his White Paper on electricity market reform calling for massive
investment in renewable energy sources — which means nuclear power stations that will face years of protest and spiralling cost before they ever get built, showpiece windfarms that will never
work efficiently, and domestic bills that will rise inexorably to pay for it all.

Huhne has dismissed that latter assertion as ‘extraordinarily rubbish’, but can you really see yourself in 20 years’ time snuggling up and saying ‘Thank goodness that wise
Mr Huhne made us invest in Europe’s cleanest and cheapest generating capacity. Now we can afford carbon-neutral holidays as well’? No, neither can I. The truth is that volatile global
energy prices have become a permanently disruptive economic force. We just have to cope with the consequences as they come, and politicians are dishonest to pretend it can ever be otherwise.

Worcester man

Enough with the global economic forecasting, let’s get back to the big question of the day: are Rupert and Satan related? On this one I’d like to feel I stand four-square with Boris
Johnson against the massed ranks of self-righteous, self-serving, BBC-whipped Murdoch bashers. The octogenarian media tycoon is not all bad, I say, and he still deserves credit for the way he faced
down the print unions and gave Fleet Street a new future in the 1980s. A book on my shelf, published in 1991 and titled Murdoch: The Decline of An Empire, illustrates another reason why we should
treat this ruthless old bruiser with respect, however stained his moral escutcheon: his record of resilience when the world is against him is second to none. Twenty years ago he owed a total of $8
billion to 146 banks around the world and was haemorrhaging cash on Fox and Sky and heaven knows what else. Those who wished him ill declared that he was finished, but he fought back to confound
them — and I suspect, even at 80, he’ll do so again.

I admit I’m biased partly because Murdoch and I read the same subject, PPE, at the same Oxford college, Worcester, albeit a generation apart. ‘Would we have been friends if we’d
been students together?’ is a useful question to ask about any prominent figure whose persona seems to have been overtaken by hostile caricature. At Worcester, Murdoch kept a bust of Stalin
on his mantelpiece, was blackballed for the Rustics cricket team in which I once played, politicked avidly in the Labour Club, and was contemptuous of the idle, washed-out English ruling class
which I certainly aspired to join. So I’m guessing we wouldn’t have been the best of pals. But still I have a sneaking admiration for him.

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