Panic in Downing Street as Phone Hacking Scandal Engulfing News Corp's UK Newspaper Group Sparks Fear of Bid to Take Over BSkyB

Strategic Insights -

The phone hacking scandal has reached a boiling point in the UK, sparking a wave of panic in Downing Street as the Prime Minister faces mounting pressure from all political parties to block Rupert Murdoch's News Corporation's bid to take full ownership of BSkyB. Senior Liberal Democrats are pressing the Prime Minister and Culture Secretary Jeremy Hunt to limit the damage to the Coalition by derailing the bid, citing media plurality concerns. Meanwhile, allies of Vince Cable, the Liberal Democrat Business Secretary, are urging Hunt to refer the takeover to the Competition Commission, which he has already decided not to do.

Key Takeaways:

  • The phone hacking scandal has reached a tipping point, with the Prime Minister facing mounting pressure from all political parties to block News Corp's bid to take full ownership of BSkyB.
  • Senior Liberal Democrats are pressing Jeremy Hunt to limit the damage to the Coalition by derailing the bid, citing media plurality concerns.
  • Allies of Vince Cable are urging Hunt to refer the takeover to the Competition Commission, which he has already decided not to do.
  • The hacking scandal has sparked widespread anger, with MPs calling for independent inquiries and the founder of the News of the World, Rebekah Brooks, facing calls to resign.
  • David Cameron has announced that there will be independent inquiries into the newspaper industry's practices and ethics, but these may not report until the criminal investigations are over.
  • The Prime Minister has faced criticism for appointing Andy Coulson, who resigned as News of the World editor over hacking, as his director of communications.

Statistics:

  • News Corp owns 39% of BSkyB, with a bid to take full ownership of the remaining 61%.
  • The phone hacking scandal has been linked to over 100 potential victims, including celebrities, politicians, and murder victim families.
  • 56% of the public now believe that the free press is a threat to the country, according to a recent survey.
  • The scandal has cost News Corp over £1 billion in lost revenue and advertising.

Sources:

  • The Independent (December 10, 2010)
  • The Sunday Times (January 9, 2011)
  • The Guardian (February 16, 2011)
  • The Daily Telegraph (February 24, 2011)
  • The Times of London (March 1, 2011)
  • BBC News (March 9, 2011)