Just Give Us Your Money And Die ….

“The InterGenerational Foundation” has been talking tosh, with their headline grabbing “25 million empty bedrooms” line.

I’ll declare an interest. I’ve lived alone, quite happily, in my own house for many years. I use the bedrooms. I’m middle-aged (born just after the baby boom).

But this current headline-grabbing scheme seems intent more on wealth-shifting – in line with their unsubstantiated statement that “British policy-makers have given undue advantages to the older generation at the expense of younger and future generations” – rather than actually freeing up bedrooms.

What all of these arguments conveniently choose to ignore is that although house prices were lower in the 1980s, that’s because interest rates were around 14%.
We didn’t have mobile phones, broadband, Sky rental, or X-boxes to maintain, though.
We had to save for a deposit, and hope that we were saving with a Building Society (yes, we had them in those days) who could free up some quota for us.

So … if you think you should have a mortgage at the moment, what are you going to do when the payments on it treble in a year ?

In many cases, we had to rent, or live with our parents, until we had enough deposit saved. And yes, that meant we had to actually get on with them.

But this is really why it’s tosh …

Don’t assume that if all these pensioners’ homes come on to the market, then you’ll be able to buy them. The banks will still want the same deposits, because you’re risky. So the houses will end up with buy-to-let landlords. Who will let them according to who can afford to pay the rent, rather than who will make best use of the bedrooms.

I will agree that stamp duty is a major drag on the market. not just for pensioners, but it does make buying a house a long-term commitment. As do all the other costs, such as Agents’ fees and solicitors’ costs, as well as the cost and sheer aggravation of moving.
All if these factors affect the ability of the buyer and the seller to agree an acceptable value.

But for many people, as well, their house represents their most significant asset. Ultimately it may be the way that they’ll pay for their care – as that covenant with the state seems to be broken. And now they’re being asked to sell that asset at the bottom of the market.

And if you think that the old people are being favourably treated, you haven’t been reading the news about (amongst others) Southern Cross.

I’d be amazed that the press give these bozos space, except that stirring up arguments sells copies.

And it reinforces my previous question – Why can nobody in Think Tanks actually Think ?

The Hottest Ticket in Town ..

“Mr Murdoch – at what point did you find out that criminality was endemic at the News of the World ?”

Tom Watson’s question (on the lines of “when did you stop beating your wife ?”) was one of the highlights of the Media, Culture and Sports SubCommittee meeting for me. Leaving aside the foam pie and Wendi’s impressive defence. One of the most fascinating days (for me) was played down by many of the media analysts – who were perhaps expecting more dramatic exposées and cross examination.

Because of everything else that’s scheduled, that was never going to happen.

But this was Round One. There was a lot of sparring, and – as the John Whittingdale (the Chairman) said later – it was important to get this information on the record. Because there’s going to be a long enquiry, there’s still a police investigation running, and probably a few court cases. So that position has been set down, and it’ll be difficult to change it (unless, presumably, there are more solicitors with document stashes waiting to be discovered).

Those same analysts were pointing out that there wasn’t much information gleaned by asking Rupert questions he couldn’t answer, and characterised it as a failure. I couldn’t disagree more. It clearly showed that the person responsible for the Corporate Governance of News Corp. didn’t know what was going on. People let him down. People he trusted – or people they trusted – didn’t pass on the message.

I wrote on this subject just over a week ago, but I don’t think most of the journos have cottoned on yet – they’re looking only at the words, rather than at the overall picture that’s painted.

It looks like this is already delivering results, as Jeremy Hunt says he’s “shocked” that people at the top didn’t know what was going on. That’s likely to be taken into account when Ofcom review the “fit and proper” status.

And that’s the thing about Corporate Governance. you’re supposed to have systems and processes that force these things up the line. And the significance of the Gordon Taylor pay-off wasn’t in the amount of that settlement alone – it was in the risk posed to the organisation from all of the other – several thousand – claims that were still in the pipeline.

That’s a risk that could have run (at that rate) into hundreds of millions of dollars. An unquantified potential liability that (perhaps) should have been reported in the company accounts.
And the Chairman knew nothing about it.
Or about the criminal activities which – it is alleged – had been rife throughout the paper.

Now, NotW may not form that great a part of the News Corp. empire, but it formed a significant and influential part of the UK media, so we’re entitled to expect it to be run properly. Or why should we entrust its owner with BSkyB – our biggest broadcaster ?

Taxing Questions

The other question I found interesting came from Jim Sheridan MP. He asked if the witnesses were were aware of any investigations into News International by the SFO. Or the FSA. Or HMRC. I suspect that it’s the last one that’s of particular interest.

Of course, it has been reported that NI has arranged its tax affairs so that it doesn’t pay tax in Europe. But that might not be the point – the point may well be that PAYE wasn’t deducted from the bungs to coppers and sleuths. This is more “fit and proper” stuff. And – as I wrote in that last post – it’s the stuff that put Capone away.

So I wouldn’t be surprised if Wapping is visited by a plague of Inspectors in the next few weeks.

Who’s to Blame ?

Fair Play to Rupert for coming back to finish the session.

Louise Mensch asked whether questions were being asked in the other News Corp companies. Apparently not. So … it’s being taken seriously, then.

“Have you considered suing Harbottle and Lewis”. “That’s a matter for the future” (James). Of course, if the solicitors were sued, they may find documentation to throw the blame straight back.
James said that the company’s confidence rested on 1) the Police ceasing their case 2) Harbottle and Lewis and 3) The PCC decision (SERIOUSLY ?)

Now, I’ve not been able to track this down on the rerun, but I seem to recall Rupert being asked who he thought was to blame. My recollection is that he blamed competitors for stirring things up.
If I’ve remembered right, that suggests that – at heart – it’s the disclosure he resents, rather than the original acts.
He doesn’t understand that he should have processes which drive these things to the attention of the News Corp. Board.
And ultimately, that may be the sin of omission that leads to the collapse of his UK business – including satellite broadcasting.

It’s a bit like a Wall coming down …

Wow.

Murdoch’s withdrawn his bid for the rest of BSkyB.

And there’s going to be an examination of his existing holding.

Lots of talk about “Corporate Governance” going on in the USA.

And a review into Press regulation.

I’m actually feeling a bit safer, and a little bit more liberated…

News International and Corporate Governance

Just a warning – this is going to be one of the duller, less sensational articles on this topic. But try and stick with me – the tax evasion charges that sent Capone down were technical.

Coming from a background in the banking sector (which is still reviled on a regular basis by “professional” journalists) one thing that has amazed me is that News International executives could claim that they had no knowledge of the activities of their underlings.

The reason why this seems so wrong is that News Corporation is a public company, quoted on the NASDAQ stock exchange. As such, investors would be entitled to expect the organisation’s management to have implemented systems of control.

However, such systems appear to have been totally lacking, and for an industry that is leaning on the importance of press freedom as a way of holding governments to account, that’s unacceptable. As Bob Dylan said “To live outside the law, you must be honest”. The impression we’re building is that the various editors of the News of the World (and possibly other titles in the group) were concerned only with whether there would be a libel action. Which – like any other court case – would be bought off out-of-court. You may recall the statement from James Murdoch:

“The Company paid out-of-court settlements approved by me. I now know that I did not have a complete picture when I did so. “

Me ? I’d be asking about whether he discharged his duty as an officer of the organisation. Corrupt or incompetent ?

National Treasure ?

I’ll just digress for a minute …

The last issue of the News of the World has been met with much nostalgia (much of it self-generated), glossing over the seedier “achievements” of this rag. I never bought a copy, and I don’t buy this.

And yes, it’s unfortunate that 240 journos have lost their jobs, many of whom may not have been implicated. But mine was one of 40,000 jobs (either gone already, or on the way) to have been lost from the organisation I worked for. Most of whom also worked hard, and weren’t to blame for the mistakes of corporate strategy.

And let’s get it clear. NotW didn’t die because of the Guardian or the BBC. It didn’t die because of MumsNet. It didn’t even die to protect Rebekah. It died because Murdoch wants to secure BSkyB. Those may have been the messengers, but the message was that the title was toxic – ordinary people were repelled by the actions of the organisation. Paul Mason’s article explains that very effectively.

Anyway, this sort of thing happens in the free market. It doesn’t come with a fairness option. Get used to it.

And let’s not kid ourselves that even under the current editor, all of these guys were soft and fluffy – read this story in the Shropshire Star.

Now, back to the main topic …

Corrupting and Corrosive

As I write, Ed Miliband has been running a press conference, in which he talks of the “systemic” and “cultural” failings of the organisation. This analysis resonates with my own feelings.

The influence of the Murdoch titles over the last 40 years has had a corrupting and corrosive impact on public life over the last 40 years. And the problem is that those who’ve grown up with that dynamic as the status quo can’t see a different world – one where a politician doesn’t need to fear that retribution for upsetting Murdoch or his underlings will be visited by humiliation.

And the culture of bullying and abuse of power wasn’t limited to “big boy” politicians, however. It was there in the workplace as well – as the massively Twittered “Harry Potter” incident evidenced.

Through all of this, there was no sign that they had the capacity to look in the mirror. These self-appointed and (to all intents and purposes) unregulated “guardians of freedom” would rail against an unelected judiciary (who were – as a result – less subject to bullying) without a hint of irony.

I’m sure that one thing that’s upset people is that there’s been virtually no sign of remorse or contrition from the organisation or its executives. No sign that they understand how ordinary people see this arrogance as compounding the crimes.

The historic use of threats and bullying (and some are – reportedly – still being made), of spin and misinformation, of admitting to the bare minimum, only after it has already been revealed – all of these suggest that they just don’t get it. They don’t understand why people are upset. They still think it’s just about damage limitation and message management – because that’s all they understand.

Regulation

The politicians keep backing off from this, but if Her Majesty’s Press wants to claim exemption from government interference as “The Fourth Estate” – with a duty of calling the government to account – then it has to be able to show that it exercises that duty responsibly.

However, it’s shown time and again that it won’t do that, and the PCC is still wheeling out excuses. Miliband’s assessment of them as a “toothless poodle” isn’t going to surprise too many…

There needs to be statutory regulation, with real powers. That framework should be “endowed” by – and answerable to – Parliament, as opposed to being under the control of government. OfCom seems to represent a suitable model, but the journos seem to keep trying to push our attention elsewhere …

Or maybe there’s a role for the Upper House here …

The American Impact

As I noted, NewsCorp is quoted on NASDAQ, and so is subject (together with all of its subsidiaries)  to US law. And one of the most interesting ones is the Foreign Corrupt Practices Act (“FCPA”) – which prohibits US organisations from bribing officials of foreign countries (from where they are, the UK is one of those). Interestingly, the UK has just caught up with the Bribery Act 2010 – although that won’t be retrospective.

The Telegraph has picked up that the impact of this could be enormous – potentially imposing a massive cost and effort on the whole of NewsCorp. If stories about 9/11 victims being hacked gains traction in the US, then the administration may reluctantly (heh) have to take a long, hard look at Fox News …

So when the NotW hacks paid off police and – as has just been announced – Royal Protection Officers, they just may have created a world of hurt for the parent company.

Fit and Proper ? BSkyB ?

Although he dominates the organisation, it’s NewsCorp that’s bidding for BSkyB, not Rupert Murdoch. So even Rupie himself (in theory) doesn’t necessarily come into the equation.

But the way that the corporation behaves, it’s culture and (on the most generous interpretation) the lack of control and management structures that you’d expect from a major corporation, should raise major doubts as to whether anyone can be convinced that their corporate structures and culture give us confidence in any assurances they may have made about (the key test of) plurality.

[Edit – adding conclusion]

Particularly as those assurances come from a company whose officers apparently:

• Lied to the PCC
• Misled Parliament
• (possibly) Lied under oath – in order to convict a man of perjury !

News International …

Well, this one’s been running and running …

With all of the other stuff that’s going on, the way that the other News International titles don’t really suggest massive corporate remorse.

Yesterday’s Times, for example, attacks the judiciary. Ironically, one of the few UK structures that hasn’t been corrupted (the politicians and police are both tainted).

And to read today’s article in the Sun, you’d think that it’s the allegations that are “disgusting” – rather the actions of the paper. It has the gall to drag out a quote citing the Daily Mail as the ‘worst “practioner in the dark arts”‘.

Of course, the other bulwark against the Murdoch empire’s total domination of the UK media is the BBC. Which also, of course, comes under fire on a regular basis.

It looks like Andy Coulson is going to be hung out to dry. Which will, of course, cause Dave a whole lot of embarrassment. And the News of the World is to shut – which is a shame for any honest journos. But at least Rebekah seems to be keeping her job – unless, of course, someone’s taken copies of the incriminating emails…

And now we can see the media starting to realise that there’s a real danger that this could lead to effective regulation of standards in the newspaper industry. So they’re starting to jostle for airtime to stress the importance of the Freedom of the Her Majesty’s Press.