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"How are the mighty fallen". In considering the Murdoch affair, we must keep a grip on chronology. When it was alleged that the News of the World had hacked into Millie Dowler's mobile phone, the wheel of fortune revolved. AD – Ante Dowler – Rupert Murdoch was just about the most powerful man in the country. He and his senior acolytes were courted by almost every important politician. As he had already become a media megalith when they were all still kids, he found it increasingly hard to take them seriously, and was quite ready to indulge in sardonic saurine causticity at their expense.

Mr Murdoch also has a social chip about Britain – I suppose that Australians have to be forgiven that childish self-indulgence – which was easily activated by David Cameron. Poms were bad enough, but an Old Etonian pom: just the sort of expletive deleted who sent all those Aussie boys to their deaths at Gallipoli. The Murdoch/Cameron relationship was never an easy one.
Even so, everyone cultivated the old lizard, until the reversal of fortune.


Does this mean that there were illicit dealings over BSkyB? I do not believe it, for a number of reasons. First, it was mere happenstance that prevented Vince Cable from sitting in judgment on the Murdoch bid. If the government had set out to ease Mr Murdoch's path, a different Minister would have been in charge. Second, and especially after Dr Cable's embarrassments, Jeremy Hunt took his quasi-judicial role very seriously. I remember asking him a question without expecting much of an answer. My low expectations were fully justified. He told me that he would not even be discussing the matter with the Prime Minister. I strongly suspect that on this matter, Adam Smith – the special advisor – was not privy to his boss's thoughts.

As for Mr Smith's keeping in touch with Mr Michel: why not? (Mr Smth is, by the way, a bright and likeable fellow. I hope that all this does him as little damage as possible). At that stage, AD, there seemed every reason to maintain friendly relations with the Murdoch empire, almost as a matter of routine – as long as Mr Hunt was not compromised. Equally, when the news of the Murdoch bid broke, a lot of people were surprised to learn that Newscorp only owned a minority stake in BSkyB. The take-over was a financial transaction, not an editorial one. The Lefties who opposed it did not make a strong journalistic case. They were principally motivated by their dislike of Rupert Murdoch.

Then the roof fell in. But anyone trying to assess Adam Smith's actions must take account of the sequence of events. By acting as he did when he did, Mr Smith may have been guilty of excessive exuberance: nothing more.

As for Mr Hunt, we shall now see what he is made of. His rise has been rapid and almost effortless. That contributed to his difficulties. Up to now, there had been little political roughage in his diet; no indication that he would shortly have to fight for his career. However chastening in the short-term, the experience could toughen him up. In 1957, Harold Wilson made silly and groundless allegations that there had been a leak of an imminent increase in the Bank Rate (interest rates). The Tribunal of Inquiry slapped Wilson down, but he fought back, revealing hitherto unsuspected strengths as a Commons performer. Mr Hunt may now have a similar opportunity. After all, he has much less to fear from the facts.

Rupert Murdoch has a harder task. As far as one can tell, he still does not realise how much trouble he is in. He is like a fighting bull early in the tercio, charging around the ring, brushing aside darts, scattering picadors, gloriously unaware of imminent doom. Or perhaps it is more Napoleon in 1813: still formidable, a vicory or two in him yet, but inexorably driven back in retreat, to defeat.
The high-minded should take comfort from this: "Be ye never so high, the law is above you". Others will see it is a vindication of Lord Acton: "Absolute power corrupts absolutely".

But Conservatives should be aware of a bigger picture. Rupert Murdoch made a crucial contribution to the defeat of the Unions during the 1980s, which also helped the newspaper industry. Without Mr Murdoch, there would have been no Independent. He was a staunch ally of Margaret Thatcher, in the days when she was embattled – and saving the country. That is why the Left will never forgive him. It also entitles him to the gratitude of everyone who salutes her endeavours.

Gratitude will not be the uppermost emotion in No.10 at the moment. The Prime Minister has few options. He must simply learn the lessons of recent errors, hope that the bad luck will pass, tighten his political grip – and try to direct the voters' attention to the big picture. Everyone knows that the budget was unhelpful to Cornish pasties. How many people are aware that it also cut tax for 24 million people? It would also assist the PM if he could find an elegant way of side-lining House of Lords reform, which may be the most remarkable instance of political masochism in Parliamentary history.

It is hard enough to foresee the recent past, let alone predict the future. But I have a suspicion that this will be a year of crises: in the Eurozone, or the Middle East – or both. If that were to happen, forget pasties or phone-hacking. We would have some real worries.

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