'Blair: The poodle with two masters

The PM, the mogul and the secret agenda

Tony Blair flies to California this week to address the annual get-together of News Corporation - led by one Rupert Murdoch. From Europe to broadcasting, terrorism to the direction of the nation, what is the truth about one of the most intriguing relationships in British public life?

Gaby Hinsliff, political editor
Sunday July 23, 2006
The Observer

From its manicured golf course with the breathtaking ocean view, to its pampering spa, the Pebble Beach resort in California should be an ideal spot to unwind. But the guests checking in next weekend - globetrotting politicians, hotshot analysts and senior executives from Rupert Murdoch's mighty News Corporation - are not here to relax. They will gather for one of the media empire's legendary conferences, an intellectual beauty parade before one of the most powerful men on the planet.

Careers will be made and broken this weekend, millions staked or withheld. The man described by a Downing Street spin doctor as the hidden member of Tony Blair's cabinet is looking to the future: and the decisions Murdoch makes could change the way you read, watch, consume and, perhaps, even vote. Which is why Blair is going.

The fortunes of New Labour and News Corp have always been entwined, but just how closely is now emerging. The Observer can reveal the extraordinary efforts Blair and Murdoch make to conceal their relationship, even arranging clandestine meetings abroad because the tycoon regarded Downing Street as too public. Also clear for the first time is the belief among senior aides that Blair would have held a referendum on the euro had it not been for the Eurosceptic Murdoch newspapers.

It can also be disclosed that News International's latest lobbying offensive is against the BBC's bid for a significant rise in its licence fee. Murdoch fears the above-inflation increase would give the corporation an unfair advantage in developing new markets.

But does Murdoch really wield the unhealthy influence his enemies claim, skewing the British political debate thanks to the sheer number of his media outlets - or is he just one among many voices, and one that, so News Corp insiders protest, is often ignored by the Government? And can Labour keep his support once Blair steps down?

Gnomic utterances from the tycoon last month, indicating that he could back either Gordon Brown or David Cameron at the next election, have only intensified the battle for his affections. Asked on US television yesterday what he thought of Cameron, the brutal retort was 'not much' - but while Brown is still ahead in his esteem, the tycoon has doubts about him as well. 'He's sending a signal, which is, "My vote is up for grabs and you've got to work for it",' says one ex-minister.

At Pebble Beach they will ponder the future of the media in a digital era - and the future of the planet, with former presidential candidate Al Gore screening his film on climate change.

But this is also about Blair's future, and ultimately New Labour's. His invitation is partly a personal tribute, a signal that Murdoch wants an 'enduring relationship' with Blair once he leaves Downing Street. 'Being a friend of Rupert's is a very valuable thing in America,' says one of Murdoch's intimates, who argues the media magnate will want to offer the departing premier a job.

Choosing Blair also, however, avoids having to invite, and therefore endorse, either Brown or Cameron... just yet. Because for all its fabled power, Murdoch's flagship newspaper is now almost as nervous as Labour about its choice.

The Sun's reputation depends on backing winners and, unsure which way the electorate is now swinging, it knows if it picks the loser next time, it may end up looking like a chump. 'People are beginning to question whether it's got the political clout it had. If you call this wrong then I think a lot of people will say, "It's now dead as a political force,"' says one former News International executive. The two sides teeing off in California are more evenly matched than they look.

It was Neil Kinnock - convinced the Sun's hostility cost him the 1992 election - who persuaded Blair to take the tabloid seriously. Within months of Blair's coronation as leader of the Labour Party, the carefully courted Murdoch was telling his editors this was 'someone you could imagine people voting for'.

His blessing matters not just because a man who owns a paper that reaches 42 per cent of the reading market should know what makes people tick. Chasing the Sun's endorsement in 1997 after decades of support for the Tories symbolised New Labour's coming of age.

'It was what a party wanting to be in government would do,' explains one architect of the New Labour project. 'It continues to have a symbolic importance that is not actually because of Murdoch, because it's a right-of-centre newspaper and modern politics is about building coalitions.' The Sun wouldn't back any party that had not first captured its millions of readers, and wasn't therefore likely to succeed: it doesn't make winners, it adopts them.

The irony is that Murdoch himself is not party political at all: he is, says the ex-executive, driven by individuals rather than parties. If there's one thing Rupert looks for in people, it's courage, gut instinct, being prepared to stand out from the crowd. One of the reasons he has such respect and affection for Blair is that he's in a minority of about one on Iraq and Rupes thinks he's right. >>>cont.

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