Any idea that the humiliation of Murdoch has signalled the resurgence of regulatory and parliamentary power must be given short shrift. Two events today show how little has actually changed. It is almost incredible that James Murdoch received the unanimous support of the BSkyB board for continuing as chairman when he has acknowledged a major error of judgement in paying out over £1m in hush-money to prevent the phone-hacking scandal going viral and has in effect been accused of lying by top News International executives when he said that he had not been told about the crucial ‘for Neville’ email which would indicate he did in fact have knowledge about phone-hacking at the News of the World. The same day we are also told for the umpteenth time that bank lending to business has yet again fallen, contrary to their Project Merlin agreement with the Treasury. So who rules Britain? Certainly not the Government.
What was the BSkyB board doing when it waved through Murdoch Jr without even a single dissentient voice? Why did no-one complain that his executive duties at News Corp were hardly compatible with chairmanship of a large FTSE-100 company, let alone that his entanglements with the DCMS Select Committee suggested he was scarcely a ‘fit and proper person’ to go on controlling 39% of BSkyB? Media governance is still weak as dishwater. City fund managers remain disgracefully feeble at critical points like the present one, and their abject refusal to rock the boat contrasts starkly with Government claims of a new era of activist investment. If the institutional shareholders show such dereliction of duty, Ofcom should be given powers to intervene in the public interest.
It’s the same with the banks cocking a snook at the Treasury. In June the banks actually took back £3bn more than they lent out to business, totally contrary to their commitments made to Osborne under Project Merlin. Bank lending to SMEs was meant to reach £76bn and £190bn to business as a whole. The Bnk of England report in a fortnight will show that they have lamentably fallen short of this target, but because Osborne refused to impose any sanctions in the event of a shortfall (and perhaps, even worse, the banks would have refused to sign up if he had tried to do so), nothing will be done even though the Government owns over 80% of RBS and nearly 40% of Lloyds and clearly has the power to enforce their will. The banks continue to make monkeys out of the Government and financial governance int his country is a sick joke.